Note

-Federal, State and Local Income Taxes:

In accordance with the requirements of the Income Tax Topic of the FASB's ASC, the Company's provision for income taxes includes the following:

	Fiscal Years Ended April 30,
($ in thousands)	2017			2016			2015
Current tax expense (benefit):
Federal	$	6,360		$	3,799		$	3,197
State and local		469			219			243
		6,829			4,018			3,440
Deferred tax expense (benefit):
Federal		(1,299	)		(839	)		(83	)
State and local		(412	)		(462	)		(154	)
		(1,711	)		(1,301	)		(237	)
Income tax provision:	$	5,118		$	2,717		$	3,203

Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The tax effect of temporary differences giving rise to the Company's deferred tax asset and deferred tax liability are as follows:

	Fiscal Years Ended April 30,
($ in thousands)	2017			2016
Federal tax benefit (liability):
Unrealized gains on securities available-for-sale	$	(249	)	$	(68	)
Capital loss carryforward		-			86
Operating lease exit obligation		151			58
Deferred professional fees		17			77
Deferred charges		402			250
Total federal tax benefit		321			403

State and local tax benefits:
Other - deferred charges		28			29
Total state and local tax benefits		28			29
Deferred tax asset, short term	$	349		$	432

	Fiscal Years Ended April 30,
($ in thousands)	2017			2016
Federal tax liability (benefit):
Deferred gain on deconsolidation of EAM	$	17,742		$	17,679
Deferred non-cash post-employment compensation		(619	)		(619	)
Depreciation and amortization		454			1,812
Other		(45	)		8
Total federal tax liability		17,532			18,880

State and local tax liabilities (benefits):
Deferred gain on deconsolidation of EAM		1,206			1,704
Deferred non-cash post-employment compensation		(42	)		(60	)
Depreciation and amortization		31			174
Deferred professional fees		(2	)		(15	)
Total state and local tax liabilities		1,193			1,803
Deferred tax liability, long term	$	18,725		$	20,683

The tax effect of temporary differences giving rise to the Company's long term deferred tax liability is primarily a result of the federal, state, and local taxes related to the

$50,510,000

gain from deconsolidation of the Company's asset management and mutual fund distribution subsidiaries, partially offset by the long term tax benefit related to the non-cash post-employment compensation of

$1,770,000

granted to VLI's former employee.

The Company uses the effective income tax rate determined to provide for income taxes on a year-to-date basis and reflects the tax effect of any tax law changes and certain other discrete events in the period in which they occur.

The overall effective income tax rates, as a percentage of pre-tax ordinary income for the

twelve

months ended

April 30, 2017,

2016

and

2015

were

33.05%,

27.15%

and

30.52%,

respectively. The Company's annual effective tax rate will change due to a number of factors including but

not

limited to an increase or decrease in the ratio of items that do

not

have tax consequences to pre-tax income, the Company's geographic profit mix between tax jurisdictions, new tax laws, new interpretations of existing tax laws and rulings and settlements with tax authorities. The fluctuation in the effective income tax rate during fiscal

2017

is primarily attributable to the attribution of

100%

of the gain on the sale of the Company's operating facility to

one

tax jurisdiction. The fluctuation in the effective income tax rate during fiscal

2016

is primarily attributable to the effect of the reduction in the allocation factors on the state and local deferred tax liability (primarily the gain on deconsolidation of EAM), reversal of excess income tax accruals established in past years that were resolved upon completion of the prior NYC and IRS audits and an increase in the domestic production tax credits. The fluctuation in the effective income tax rate during fiscal

2015

is primarily attributable to the write-off of the tax bases of goodwill.

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pretax income as a result of the following:

	Fiscal Years Ended April 30,
	2017			2016			2015
U.S. statutory federal rate		35.00	%		35.00	%		35.00	%
Increase (decrease) in tax rate from:
State and local income taxes, net of federal income tax benefit		-0.88	%		-3.39	%		-0.15	%
Effect of dividends received deductions		-0.33	%		-0.41	%		-0.40	%
Write off goodwill		-			-			-1.62	%
Domestic production tax credit		-0.17	%		-0.33	%		-0.44	%
Other, net		-0.57	%		-3.72	%		-1.87	%
Effective income tax rate		33.05	%		27.15	%		30.52	%

The Company believes that, as of

April 30, 2017,

there were

material uncertain tax positions that would require disclosure under GAAP.

The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing agreement which requires it to make tax payments to the Parent equal to the Company's liability/(benefit) as if it filed a separate return. Beginning with the fiscal year ended

April 30, 2017,

the Company will file combined income tax returns with the Parent on a unitary basis in certain states as a result of changes in state tax regulations. The Company does

not

anticipate any significant tax implications from the change to unitary state tax filing.

The Company’s federal income tax returns (included in the Parent’s consolidated returns) and state and city tax returns for fiscal years ended

2013

through

2016,

are subject to examination by the tax authorities, generally for

three

years after they are filed with the tax authorities. The Company favorably concluded certain tax audits during the

third

quarter of fiscal

2016

that provided the recognition of tax benefits resulting from a favorable outcome. The Company is presently engaged in a federal tax audit for the fiscal year ended

April 30, 2015

and a state tax audit for that period, but does

not

expect them to have a material effect on the financial statements.