XML 175 R20.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2014
Notes |
Income Taxes | 12. INCOME TAXES Income tax provision (benefit) for the years ended March 31 consisted of the following (in thousands):
| 2014 |  | 2013 |  | 2012 |
Current | $ | 19 |  | $ | 29 |  | $ | (158 | )
Deferred |  | (15,100 | ) |  | - |  |  | 8,536 |
Total | $ | (15,081 | ) | $ | 29 |  | $ | 8,378 |
The tax effect of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at March 31, 2014 and 2013 are as follows (in thousands):
| 2014 |  | 2013 |
Deferred tax assets: |  |  |  |  |  |
Deferred compensation | $ | 105 |  | $ | 120 |
Loan loss reserve |  | 4,560 |  |  | 5,635 |
Accrued expenses |  | 203 |  |  | 221 |
Accumulated depreciation |  | 736 |  |  | 817 |
Deferred gain on sale |  | 532 |  |  | 327 |
Net operating loss carryforwards |  | 8,191 |  |  | 6,079 |
Net unrealized loss on securities available for sale |  | 332 |  |  | 522 |
Impairment on investment security |  | 150 |  |  | 233 |
REO expense |  | 1,681 |  |  | 3,889 |
Non-compete agreement |  | 80 |  |  | 93 |
Other |  | 465 |  |  | 395 |
Valuation allowance for deferred tax assets |  | - |  |  | (16,181 | )
Total deferred tax asset |  | 17,035 |  |  | 2,150 |
|  | 2014 |  |  | 2013 |
Deferred tax liabilities: |  |  |  |  |  |
FHLB stock dividend |  | (975 | ) |  | (1,035 | )
Purchase accounting |  | (9 | ) |  | (23 | )
Prepaid expense |  | (161 | ) |  | (175 | )
Loan fees/costs |  | (454 | ) |  | (395 | )
Other |  | (3 | ) |  | - |
Total deferred tax liability |  | (1,602 | ) |  | (1,628 | )
Deferred tax asset, net | $ | 15,433 |  | $ | 522 |
A reconciliation of the Company’s effective income tax rate with the federal statutory tax rate for the years ended March 31 is as follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
Statutory federal income tax rate |  | 34.0 | % |  | 34.0 | % |  | 34.0 | %
State and local income tax rate |  | 1.5 |  |  | 1.9 |  |  | 1.5 |
ESOP market value adjustment |  | (0.3 | ) |  | 0.8 |  |  | 0.1 |
Interest income on municipal securities |  | - |  |  | (0.2 | ) |  | 0.1 |
Bank owned life insurance |  | (4.4 | ) |  | (7.6 | ) |  | 0.9 |
Valuation adjustment |  | (365.9 | ) |  | (23.9 | ) |  | (72.5 | )
Other, net |  | (5.9 | ) |  | (3.9 | ) |  | (0.1 | )
Effective federal income tax rate |  | (341.0 | )% |  | 1.1 | % |  | (36.0 | )%
There were no sales of securities for the years ended March 31, 2014, 2013 and 2012. The tax effects of certain tax benefits related to stock options are recorded directly to shareholders’ equity. The Bank’s retained earnings at March 31, 2014 and 2013 included base year bad debt reserves, which amounted to $2.2 million, for which no federal income tax liability has been recognized. The amount of unrecognized deferred tax liability at March 31, 2014 and 2013 was $781,000. This represents the balance of bad debt reserves created for tax purposes as of December 31, 1987. These amounts are subject to recapture in the unlikely event that the Company’s banking subsidiaries (1) make distributions in excess of current and accumulated earnings and profits, as calculated for federal tax purposes, (2) redeem their stock, or (3) liquidate. Management does not expect this temporary difference to reverse in the foreseeable future. At March 31, 2014, the Company had a deferred tax asset of $7.8 million and $346,000 for federal and state net operating loss carryforwards, respectively, which will expire in 2032 and 2034. At March 31, 2014 and 2013, the Company had no unrecognized tax benefits or uncertain tax positions. In addition, the Company had no accrued interest or penalties as of March 31, 2014 or 2013. It is the Company’s policy to recognize potential accrued interest and penalties as a component of income tax expense. The Company is subject to U.S. federal income tax and income tax of the State of Oregon. The years 2010 to 2013 remain open to examination for federal income taxes, and years 2009 to 2013 remain open to State examination. The Company reversed its deferred tax asset valuation allowance as of March 31, 2014 due to management’s determination that it was “more likely than not” that the Company’s deferred tax assets would be realized. “More likely than not” is defined as greater than 50% probability of occurrence. A determination as to the ultimate realization of the deferred tax assets is dependent upon management’s judgment and evaluation of both positive and negative evidence, forecasts of future taxable income, applicable tax planning strategies, and an assessment of current and future economic and business conditions. The determination resulted from consideration of both the positive and negative evidence available that can be objectively verified. Considering the guidance in paragraphs 21-23 of Accounting Standards Codification 740-10-30, forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years. At March 31, 2014, the Company was in a cumulative loss position over a three year period which is considered a significant piece of negative evidence that is difficult to overcome. Accordingly, in its determination of deferred tax asset, the Company analyzed and evaluated the nature and timing of relevant facts and circumstances with respect to its cumulative loss. Management considered the fact that the Company was in a cumulative profit position over a two year period, with seven consecutive profitable quarters as part of its evaluation of the Company’s three year cumulative loss. Management also evaluated the unique and non-recurring loss evidence as an important consideration in its determination. While this loss occurred, the nature and timing of the components of the loss can be assessed as to whether these losses represent a continuing condition. Management determined that the steps taken to strengthen its credit risk management process have addressed the conditions that existed when the loans were created and the losses were incurred. The outcome of this evaluation is an important factor in management’s determination that positive evidence overcomes the existence of the cumulative loss in the recent past. Positive considerations also evaluated by management include the reduction of the inherent risk in the loan portfolio as indicated by the reduction of classified loans and associated credit costs, significant reductions in REO properties which contributes to lower REO holding costs, the Company’s profitable operating performance during the past two years, termination of regulatory agreements and orders, utilization of excess low yielding cash balances to purchase higher yielding investment securities and increase loans receivable balances, as well as the sustained improvement in the economic conditions at a national and local level. As management determined that positive evidence outweighed the negative, financial forecasts and projections were also developed to assess the Company’s capacity to realize the deferred tax assets. As a result of this analysis management concluded it was more likely than not that forecasted earnings performance would allow for the realization of the deferred tax assets in a timely manner. As of March 31, 2013, management determined that a deferred tax asset valuation allowance of $16.2 million was necessary, reducing its deferred tax assets to $522,000 which represented the amount related to the Company’s unrealized losses on its available for sale debt securities.

X
- Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration