At December 31, 2014, the Company had federal, state and local net operating loss carryforwards (NOLs) totaling approximately $25,200,000 expiring through 2029, with a future tax benefit of approximately $9,000,000. At December 31, 2014 and 2013, $4,743,000 and $5,659,000, respectively, was recorded as deferred tax assets on the Company’s balance sheet.  During the year ended December 31, 2014, as a result of income (before taxes) for the year of $2,709.000, $943,000 was recorded as income tax expense and the deferred tax assets were reduced by $916,000 to $4,743,000.  To the extent that the Company earns income in the future, the Company will report income tax expense and such expense attributable to federal income taxes will reduce the tax asset reflected on the balance sheet.  Management will continue to evaluate the recoverability of the NOL and adjust the deferred tax asset appropriately.  Utilization of NOL credit carryforwards can be subject to a substantial annual limitation due to ownership change limitations that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions. The 2014 provision for income taxes includes an approximate $17,000 benefit arising from a reclassification adjustment for a previously unrealized loss on a security classified as available-for-sale and its related realized loss in the year ended December 31, 2014.

The principal components of the net deferred tax assets are as follows:

The reconciliation between the taxes as shown and the amount that would be computed by applying the statutory federal income tax rate to the income before income taxes is as follows:

While only the tax returns for the four years ended December 31, 2014 are open for examination for taxes payable for those years, tax authorities could challenge returns (only under certain circumstances) for earlier years to the extent that they generated loss carry forwards that are available for those or future years.