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, 2015

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

The following table summarizes the tax (benefit) provision recorded at the taxable subsidiary level for the years ended December 31, 2015, 2014 and 2013:



	Year Ended
	December 31,
(in thousands)	2015			2014			2013
Current tax (benefit) provision:
Federal	$	(4,027	)	$	6,507		$	808
State	175			16			5
Total current tax (benefit) provision	(3,852		)	6,523			813
Deferred tax (benefit) provision	(12,638		)	(80,261		)	83,598
Total (benefit from) provision for income taxes	$	(16,490	)	$	(73,738	)	$	84,411

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, 2015, 2014 and 2013:



	Year Ended
	December 31,
	2015					2014					2013
(dollars in thousands)	Amount			Percent		Amount			Percent		Amount			Percent
Computed income tax expense at federal rate	$	166,502		35	%	$	32,691		35	%	$	225,573		34	%
State taxes, net of federal benefit, if applicable	114			—	%	10			—	%	4			—	%
Permanent differences in taxable income from GAAP net income	4,203			1	%	1,636			2	%	17,681			3	%
Dividends paid deduction	(187,309		)	(39	)%	(108,075		)	(116	)%	(158,847		)	(24	)%
(Benefit from) provision for income taxes/ Effective Tax Rate⁽¹⁾	$	(16,490	)	(3	)%	$	(73,738	)	(79	)%	$	84,411		13	%

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(1)	The (benefit from) provision for 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 sheets, as of December 31, 2015 and December 31, 2014, contain 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, 2015			December 31, 2014
Income taxes receivable (payable)
Federal income taxes receivable (payable)	$	5,216		$	(1,375	)
State and local income taxes receivable (payable)	—			—
Income taxes receivable (payable), net	5,216			(1,375		)
Deferred tax assets (liabilities)
Deferred tax asset	69,441			60,575			⁽¹⁾
Deferred tax liability	(25,123		)	(19,728		)
Total net deferred tax assets	44,318			40,847
Total tax assets, net	$	49,534		$	39,472

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(1)	Net of valuation allowance of $0.1 million.

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

Components of the Company’s deferred tax assets as of December 31, 2015 and December 31, 2014 are as follows:



(in thousands)	December 31, 2015			December 31, 2014
Available-for-sale securities	$	(8,673	)	$	—
Trading securities	—			(478		)
Mortgage servicing rights	6,363			4,494
Derivative assets and liabilities	(4,492		)	5,978
Other assets	3			16
Other liabilities	978			859
Intangibles	256			277
Alternative minimum tax credit	420			98
Net operating loss carryforward	8,177			9,448
Capital loss carryforward	41,286			20,155
Total net deferred tax assets	$	44,318		$	40,847