CASH 2017 Annual Report

133 The tax years ended September 30, 2014 and later remain subject to examination by the Internal Revenue Service. For state purposes, the tax years ended September 30, 2014 and later remain open for examination, with few exceptions. A reconciliation of the beginning and ending balances for liabilities associated with unrecognized tax benefits for the years ended September 30, 2017, and 2016 follows: September 30, 2017 2016 (Dollars in Thousands) Balance at beginning of year $ 525 $ 974 Additions for tax positions related to the current year 192 63 Additions for tax positions related to the prior years 31 — Reductions for tax positions due to settlement with taxing authorities — (372) Reductions for tax positions related to prior years (103) (140) Balance at end of year $ 645 $ 525 The total amount of unrecognized tax benefits that, if recognized, would impact the effective rate was $460,000 as of September 30, 2017. The Company recognizes interest related to unrecognized tax benefits as a component of income tax expense. The amount of accrued interest related to unrecognized tax benefits was $114,000 as of September 30, 2017. The Company does not anticipate any significant change in the total amount of unrecognized tax benefits within the next 12 months. NOTE 13. CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS In July 2013, the Company’s primary federal regulator, the Federal Reserve and the Bank’s primary federal regulator, the OCC, approved final rules (the “Basel III Capital Rules”) establishing a new comprehensive capital framework for U.S. banking organizations. The Basel III Capital Rules generally implement the Basel Committee on Banking Supervision’s (the “Basel Committee”) December 2010 final capital framework referred to as “Basel III” for strengthening international capital standards. The Basel III Capital Rules substantially revised the risk-based capital requirements applicable to financial institution holding companies and their depository institution subsidiaries, including us and the Bank, as compared to U.S. general risk-based capital rules. The Basel III Capital Rules revised the definitions and the components of regulatory capital, as well as addressed other issues affecting the numerator in banking institutions’ regulatory capital ratios. The Basel III Capital Rules also addressed asset risk weights and other matters affecting the denominator in banking institutions’ regulatory capital ratios and replaced the existing general risk-weighting approach, which was derived from the Basel Committee’s 1988 “Basel I” capital accords, with a more risk- sensitive approach based, in part, on the “standardized approach” in the Basel Committee’s 2004 “Basel II” capital accords. In addition, the Basel III Capital Rules implemented certain provisions of the Dodd-FrankAct, including the requirements of Section 939A to remove references to credit ratings from the federal agencies’ rules. The Basel III Capital Rules became effective for us and the Bank on January 1, 2015, subject to phase-in periods for certain of their components and other provisions. Pursuant to theBasel III Capital Rules, theCompany andBank, respectively, are subject to new regulatory capital adequacy requirements promulgated by the Federal Reserve and the OCC. Failure by our Company or Bank to meet minimum capital requirements could result in certain mandatory and discretionary actions by our regulators that could have a material adverse effect on our consolidated financial statements. Prior to January 1, 2015, our Bank was subject to capital requirements under Basel I and there were no capital requirements for our Company. Under the capital requirements and the regulatory framework for prompt corrective action, the Company and Bankmust meet specific capital guidelines that involve quantitativemeasures of the Company’s and Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s andBank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings and other factors.