TWO Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The following table summarizes the tax provision (benefit) recorded at the taxable subsidiary level for the years ended December 31, 2013, 2012 and 2011:



	Year Ended December 31,
(in thousands)	2013		2012			2011
Current tax provision (benefit):
Federal	$	808	$	(4,586	)	$	4,731
State	5		3			—
Total current tax provision (benefit)	813		(4,583		)	4,731
Deferred tax provision (benefit)	83,598		(37,636		)	(5,837		)
Total provision for (benefit from) income taxes	$	84,411	$	(42,219	)	$	(1,106	)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The following is a reconciliation of the statutory federal and state rates to the effective rates, for the years ended December 31, 2013, 2012 and 2011:



	Year Ended December 31,
	2013					2012					2011
(dollars in thousands)	Amount			Percent		Amount			Percent		Amount			Percent
Computed income tax expense at federal rate	$	225,573		34	%	$	84,894		34	%	$	42,951		34	%
State taxes, net of federal benefit, if applicable	4			—	%	2			—	%	—			—	%
Permanent differences in taxable income from GAAP income	17,681			3	%	118			—	%	2,731			2	%
Dividends paid deduction	(158,847		)	(24	)%	(127,233		)	(51	)%	(46,788		)	(37	)%
Provision for (benefit from) income taxes/Effective Tax Rate⁽¹⁾	$	84,411		13	%	$	(42,219	)	(17	)%	$	(1,106	)	(1	)%

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(1)	The provision for (benefit from) income taxes is recorded at the taxable subsidiary level.

Schedule of Current and Deferred Tax Assets and Liabilities [Table Text Block]

The Company’s consolidated balance sheet, as of December 31, 2013 and December 31, 2012, contains the following current and deferred tax liabilities and assets, which are included in other liabilities and other assets, respectively, and are recorded at the taxable subsidiary level:



(in thousands)	December 31, 2013			December 31, 2012
Income taxes (payable) receivable
Federal income taxes (payable) receivable	$	(757	)	$	4,323
State and local income taxes (payable) receivable	—			—
Income taxes (payable) receivable, net	(757		)	4,323
Deferred tax (liabilities) assets
Deferred tax asset	14,927			46,727
Deferred tax liability	(54,341		)	(2,543		)
Total net deferred tax (liabilities) assets	(39,414		)	44,184
Total tax liabilities and assets, net	$	(40,171	)	$	48,507

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Components of the Company’s deferred tax assets and liabilities as of December 31, 2013 and December 31, 2012 are as follows:



(in thousands)	December 31, 2013			December 31, 2012
Derivative assets	$	(45,740	)	$	13,505
Trading securities	(1,380		)	(1,972		)
Mortgage servicing rights	(846		)	—
Capitalized start-up and organizational costs	515			148
Net operating loss carryforward	7,986			17,931
Capital loss carryforward	51			14,572
Total net deferred tax (liabilities) assets	$	(39,414	)	$	44,184