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, 2019

Schedule of Components of Income Tax Expense (Benefit)

The following table summarizes the tax (benefit) provision from continuing operations recorded at the taxable subsidiary level for the years ended December 31, 2019, 2018 and 2017:



	Year Ended
	December 31,
(in thousands)	2019			2018		2017
Current tax provision:
Federal	$	8,684		$	52	$	492
State	2,668			1		57
Total current tax provision	11,352			53		549
Deferred tax (benefit) provision	(24,912		)	41,770		(11,031		)
Total (benefit from) provision for income taxes	$	(13,560	)	$	41,823	$	(10,482	)

Schedule of Effective Income Tax Rate Reconciliation

The following is a reconciliation of the statutory federal and state rates to the effective rates, for the years ended December 31, 2019, 2018 and 2017:



	Year Ended
	December 31,
	2019					2018					2017
(dollars in thousands)	Amount			Percent		Amount			Percent		Amount			Percent
Computed income tax expense at federal rate	$	65,184		21	%	$	(518	)	21	%	$	104,215		35	%
State taxes, net of federal benefit, if applicable	2,108			1	%	1			—	%	37			—	%
Permanent differences in taxable income from GAAP net income	702			—	%	28,414			(1,152	)%	1,208			—	%
Dividends paid deduction	(81,554		)	(26	)%	13,926			(565	)%	(115,942		)	(39	)%
(Benefit from) provision for income taxes/ Effective Tax Rate⁽¹⁾	$	(13,560	)	(4	)%	$	41,823		(1,696	)%	$	(10,482	)	(4	)%

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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

The Company’s consolidated balance sheets, as of December 31, 2019 and December 31, 2018 contain the following current and deferred tax liabilities and assets, which are included in other assets, and are recorded at the taxable subsidiary level:



(in thousands)	December 31, 2019			December 31, 2018
Income taxes receivable
Federal income taxes receivable	$	17,539		$	690
State and local income taxes receivable	—			—
Income taxes receivable, net	17,539			690
Deferred tax assets (liabilities)
Deferred tax asset	23,756			17,196
Deferred tax liability	(19		)	(18,333		)
Total net deferred tax assets (liabilities)	23,737			(1,137		)
Total tax assets (liabilities), net	$	41,276		$	(447	)

Schedule of Deferred Tax Assets and Liabilities

Components of the Company’s deferred tax liabilities and assets as of December 31, 2019 and December 31, 2018 were as follows:



(in thousands)	December 31, 2019			December 31, 2018
Available-for-sale securities	$	(19	)	$	19
Mortgage servicing rights	23,110			(18,333		)
Derivative assets and liabilities	67			33
Other assets	12			9
Other liabilities	463			652
Intangibles	90			101
Net operating loss carryforward	7			16,354
Capital loss carryforward	7			28
Total deferred tax assets (liabilities)	23,737			(1,137		)
Valuation allowance	—			—
Total net deferred tax assets (liabilities)	$	23,737		$	(1,137	)