INCOME TAXES

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



$ in thousands	2018			2017
Income tax expense
Federal:
Current expense	$	174		$	—
Deferred benefit	(340		)	—
Total	(166		)	—
State: Current expense	133			119
Total income tax (benefit) expense	$	(33	)	$	119

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



	2018					2017
$ in thousands	Amount			Percent		Amount			Percent
Statutory Federal income tax expense (benefit)	$	1,638		30.8	%	$	(929	)	34.0	%
State and local income tax, net of Federal tax benefit	92			1.7		119			(4.4	)
Impact of income tax rate changes	3,283			61.7		—			—
Credit and NOL adjustments	(2,148		)	(40.4	)	—			—
Change in valuation allowance	(3,061		)	(57.5	)	961			(35.2	)
Other	163			3.1		(32		)	1.2
Total income tax (benefit) expense	$	(33	)	(0.6	)%	$	119		(4.4	)%

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	2018			2017
Deferred Tax Assets:
Allowance for loan losses	$	1,727		$	2,147
Nonaccrual loan interest	109			373
Deferred gain - sale leaseback transactions	2,006			295
Net operating loss carryforward	12,419			17,551
New markets tax credit	3,452			2,207
AMT credits	340			166
Depreciation	1,864			2,018
Unrealized loss on available-for-sale securities	1,105			792
Other	—			350
Total Deferred Tax Assets	23,022			25,899
Deferred Tax Liabilities:
Market value adjustment on HFS loans	54			68
Other	676			812
Total Deferred Tax Liabilities	730			880
Deferred Tax Assets, net	22,292			25,019
Valuation Allowance	(21,952		)	(25,019		)
Deferred Tax Assets, net of valuation allowance	$	340		$	—

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, 2018. 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 $22.3 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 valuation allowance for net deferred tax asset of $22.0 million has been recorded. The valuation allowance was initially recorded during fiscal year 2011, and has largely remained through March 31, 2018, 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 i--ts deferred tax assets. The tax legislation passed during the Company's fiscal year 2018 now permits a corporation to receive refunds for AMT credits even if there is no taxable income. As a result, at March 31, 2018, the valuation allowance was reduced by $340 thousand, the amount of the Company's AMT credits.

At March 31, 2018, the Company had net operating carryforwards for federal purposes of approximately $29.7 million, for state purposes of approximately $50.1 million and for city purposes of approximately $43.4 million which are available to offset future federal, state and city income and which expire over varying periods from March 2028 through March 2038.

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, 2015. 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.