HAMILTON BANCORP, INC. (NASDAQ:HBK) Files An 8-K Other EventsItem 8.01 Other Events
On December 22, 2017, the president signed into law the Tax Cuts and Jobs Act (the "Act"). The Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Act reduces the corporate tax rate from a maximum of 35% to a flat 21% rate. The rate reduction will take effect on January 1, 2018.
As of September 30, 2017, Hamilton Bancorp, Inc. (the "Company") had a net deferred tax asset totaling $7.5 million. Under generally accepted accounting principles, the Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company's net deferred tax asset of $7.5 million was determined based on the current enacted federal tax rate of 34% prior to the passage of the Act. As a result of the reduction in the corporate income tax rate to 21% from 34% under the Act, the Company will revalue its net deferred tax asset at December 31, 2017. The Company estimates that this will result in a reduction in the value of its net deferred tax asset of approximately $2.2 million, which will be recorded as additional income tax expense in the Company's statement of operations for the third quarter of the fiscal year ending March 31, 2018.
Forward Looking Statements
This current report on Form 8-K contains forward-looking statements that involve risks and uncertainties that may be affected by various factors that may cause actual results to differ materially from those in the forward-looking statements. The forward-looking statements contained herein include those with respect to management's determination of the amount of its net deferred tax asset. The Company's operations and actual results could differ significantly from those discussed in the forward-looking statements. Some of the factors that could cause or contribute to such differences include, but are not limited to, changes in the economy and interest rates both in the nation and in the Company's general market area, federal and state regulation, competition and other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission, including "Item 1A. Risk Factors" contained in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2017.
About HAMILTON BANCORP, INC. (NASDAQ:HBK)
Hamilton Bancorp, Inc. is the holding company for Hamilton Bank (the Bank). The Company’s principal business activity is the ownership of the Bank’s capital stock and the management of the offering proceeds it retained in connection with the Bank’s conversion. The Bank is a federally chartered savings bank. The Bank’s business consists primarily of accepting deposits from the general public and investing those deposits, together with funds generated from operations, in one- to four-family residential mortgage loans, commercial real estate loans, commercial business loans, home equity loans and lines of credit, construction loans and consumer loans. It offers a range of deposit accounts, including certificate of deposit accounts, money market accounts, savings accounts, negotiable order of withdrawal (NOW) accounts and individual retirement accounts.