Note 14 - Income Taxes

12 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 14: Income Taxes

The provisions for income taxes for the years ended March 31, 2016 and 2015 consist of the following components:

	March 31,
	2016			2015
Current:
Federal	$	(19,684	)	$	111,039
State		(5,205	)		(16,776	)
Deferred income tax		446,580			(431,616	)
Total	$	421,691		$	(337,353	)

A reconciliation of the provision for taxes on income from the statutory federal income tax rate to the effective income tax rates follows:

	March 31,
	2016			2015
Tax at statutory federal income tax rate	$	111,886		$	(221,565	)
Tax effect of:
Tax-exempt income		(133,030	)		(160,891	)
State income taxes, net of federal benefit		67,785			(2,419	)
Nondeductible expenses and other		375,050			47,522
Income tax expense	$	421,691		$	(337,353	)

The following is a summary of the tax effects of the temporary differences between financial and income tax accounting that give rise to deferred tax assets and deferred tax liabilities as of March 31:

	2016			2015
Deferred tax assets:
Allowance for loan losses	$	688,066		$	679,643
Nonaccrual interest		194,900			216,259
Deferred compensation		156,164			218,424
Foreclosed real estate write down and holding costs		221,010			221,010
Deferred loan costs		35,070			45,911
Charitable contribution carryforward		38,101			33,953
Net operating loss carryforward		625,612			529,318
Stock based payment awards		64,799			45,609
Unrealized loss on investment securities available for sale		14,410			196,274
AMT credit carryover		169,728			170,033
Acquisition activity		969,105			-
Accumulated depreciation		-			43,078
		3,176,965			2,399,512
Valuation allowance on deferred tax asset		(21,218	)		(10,509	)
		3,155,747			2,389,003
Deferred tax liabilities:
FHLB stock dividends		67,245			67,245
Goodwill and other intangible assets		588,727			317,926
Accumulated depreciation		93,576
Other		52,858			41,982
		802,406			427,153
Net deferred tax asset	$	2,353,341		$	1,961,850

In management’s opinion, it is more likely than not that the Company will be able to realize the recorded net deferred income tax asset. This is based on management’s analysis, which includes projections of future taxable income as well as income taxes paid in prior years available for carryback. As of March 31, 2016, the Company recorded a valuation allowance related to the holding company’s State of Maryland net operating loss carryforward. As of March 31, 2016, the Company has a federal net operating loss carryforward of $1,427,451, which will expire during the year ending March 31, 2034.

The Company’s tax returns are subject to review and examination by federal and state taxing authorities. The Company’s tax returns are currently open to audit under the applicable statutes of limitations by the Internal Revenue Service for the years ended March 31, 2013 through March 31, 2016. In management’s opinion, the Company does not have any uncertain tax positions that are deemed material, and did not recognize any adjustments for unrecognized tax benefits.