INCOME TAXES

The components of income tax expense for the years ended March 31 are as follows:



$ in thousands	2017		2016
Income tax expense
Current - Federal	$	—	$	4
Current - State	119		124
Total income tax expense	$	119	$	128

The following is a reconciliation of the expected Federal income tax rate to the consolidated effective tax rate for the years ended March 31:



	2017					2016 Restated ⁽¹⁾
$ in thousands	Amount			Percent		Amount			Percent
Statutory Federal income tax expense (benefit) - Restated ⁽¹⁾	$	(929	)	34.0	%	$	(558	)	34.0	%
State and local income tax, net of Federal tax benefit - Restated ⁽¹⁾	119			(4.4	)	128			(7.8	)
General business credit - Restated ⁽¹⁾	11			(0.4	)	11			(0.7	)
Change in valuation allowance - Restated ⁽¹⁾	961			(35.2	)	774			(47.2	)
Other - Restated ⁽¹⁾	(43		)	1.6		(227		)	13.9
Total income tax expense	$	119		(4.4	)%	$	128		(7.8	)%

⁽¹⁾March 31, 2016 balances have been restated from previously reported results to correct for material and certain other errors from prior periods. Refer to Notes 1 and 19 for further detail.

Tax effects of existing temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are included in other assets at March 31 as follows:



$ in thousands	2017			2016 Restated ⁽¹⁾
Deferred Tax Assets:
Allowance for loan losses	$	2,147		$	2,230
Nonaccrual loan interest	373			67
Purchase accounting adjustment	1			3
Net operating loss carryforward - Restated ⁽¹⁾	17,551			16,550
New markets tax credit	2,207			2,207
Depreciation - Restated ⁽¹⁾	2,018			1,656
Market value adjustment on HFS loans	—			13
Unrealized loss on available-for-sale securities	792			139
Other - Restated ⁽¹⁾	810			709
Total Deferred Tax Assets - Restated ⁽¹⁾	25,899			23,574
Deferred Tax Liabilities:
Market value adjustment on HFS loans	68			—
Other	812			593
Total Deferred Tax Liabilities	880			593
Deferred Tax Assets, net - Restated ⁽¹⁾	25,019			22,981
Valuation Allowance - Restated ⁽¹⁾	(25,019		)	(22,981		)
Deferred Tax Assets, net of valuation allowance	$	—		$	—

⁽¹⁾March 31, 2016 balances have been restated from previously reported results to correct for material and certain other errors from prior periods. Refer to Notes 1 and 19 for further detail.

On June 29, 2011, the Company raised $55.0 million of equity. The capital raise triggered a change in control under Section 382 of the Internal Revenue Code. Generally, Section 382 limits the utilization of an entity's net operating loss carryforwards, general business credits, and recognized built-in losses upon a change in ownership. The Company is currently subject to an annual limitation of approximately $0.9 million, but has accumulated availability of $5 million as of March 31, 2017. The total cumulative availability over the carryover period (20 years) is $18.1 million. The Company has a net deferred tax asset (“DTA”) of approximately $25.0 million. Based on management's calculations, the Section 382 limitation has resulted in previous reductions of the deferred tax asset of $5.8 million. A full valuation allowance for the remaining net deferred tax asset of $25.0 million has been recorded. The valuation allowance was initially recorded during fiscal year 2011, and has remained as management concluded and continues to conclude that it is “more likely than not” that the Company will not be able to fully realize the benefit of its deferred tax assets.

At March 31, 2017, the Company had net operating carryforwards for federal purposes of approximately $39.4 million, for state purposes of approximately $50.9 million and for city purposes of approximately $44.6 million which are available to offset future federal, state and city income and which expire over varying periods from March 2027 through March 2037.

The Company has no uncertain tax positions. The Company and its subsidiaries are subject to federal, New York State and New York City income taxation. The Company is no longer subject to examination by taxing authorities for years before March 31, 2014. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination; with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.