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Income Taxes

12 Months Ended

Mar. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes

The U.S. Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. The Tax Act includes a broad range of tax reform including changes to tax rates and deductions that were effective January 1, 2018. The decrease in the enacted corporate tax rate to be applied when our temporary differences are realized or settled ultimately resulted in a one-time revaluation of our net deferred tax asset of $3.1 million with a corresponding charge to income tax expense. The effects of the Tax Act increased income tax expense to a level that reduced net income to a net loss for both the three months ending December 31, 2017 and twelve months ending March 31, 2018.

The provision for income taxes consists of the following for the years ended March 31:

		(In thousands)
		2018				2017				2016
Current:
Federal		$	1,705			$	4,563			$	6,964
State			340				724				1,054
Total current			2,045				5,287				8,018
Deferred:
Federal			1,847				(1,688	)			(254	)
State			369				(268	)			(38	)
Total deferred			2,216				(1,956	)			(292	)
Income tax expense		$	4,261			$	3,331			$	7,726

The net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes are reflected in deferred income taxes. Significant components of the Company’s deferred tax assets consist of the following as of March 31:

		(In thousands)
		2018				2017
Allowance for credit losses not currently deductible for tax purposes		$	5,811			$	7,742
Share-based compensation			266				487
Interest rate swap agreements			—				(6	)
Other items			212				282
Deferred income taxes		$	6,289			$	8,505

The provision for income taxes reflects an effective U.S tax rate, which differs from the corporate tax rate for the following reasons:

		(In thousands)
		2018				2017				2016
Provision for income taxes at Federal statutory rate		$	976			$	3,059			$	7,037
Increase (decrease) resulting from:
State income taxes, net of Federal benefit			491				297				660
Tax Reform – Rate Change			3,127				—				—
Other			(333	)			(25	)			29
Income tax expense		$	4,261			$	3,331			$	7,726

The Company’s effective tax rate increased to 134.71% in fiscal 2018 from 38.11% in fiscal 2017. The effective rate was 38.43% in fiscal 2016.

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- 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
-URI http://asc.fasb.org/topic&trid=2144680

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