TCF Bank 2012 Annual Report Download - page 100

A reconciliation of the changes in unrecognized tax benefits is as follows.
(In thousands) 2012 2011 2010
Balance, beginning of year $2,377 $2,464 $2,857
Increases for tax positions related to the current year 449 273 562
Increases for tax positions related to prior years 1,781 605 –
Decreases for tax positions related to prior years – (261) (251)
Settlements with taxing authorities (70) (84) –
Decreases related to lapses of applicable statutes of limitation (307) (620) (704)
Balance, end of year $4,230 $2,377 $2,464
The total amount of unrecognized tax benefits that, if recognized, would affect the tax provision and the effective tax rate
was $1.1 million and $1 million at December 31, 2012 and 2011, respectively. TCF recognizes interest and penalties related to
unrecognized tax benefits, where applicable, in income tax expense. TCF recorded an increase in interest and penalties of $77
thousand and $22 thousand, net of tax effects, during 2012 and 2011, respectively, and a reduction in interest and penalties
of $154 thousand, net of tax effects, in 2010. Interest and penalties of approximately $317 thousand and $240 thousand were
accrued at December 31, 2012 and 2011, respectively.
TCF’s federal income tax returns are open and subject to examination for 2009 and later tax return years. TCF’s various
state income tax returns are generally open for 2008 and later tax return years based on individual state statutes of
limitation. Changes in the amount of unrecognized tax benefits within the next twelve months from normal expirations of
statutes of limitation are not expected to be material.
The significant components of the Company’s deferred tax assets and deferred tax liabilities are as follows.
At December 31,
(In thousands) 2012 2011
Deferred tax assets:
Net operating losses and credit carryforwards $146,741 $ 16,316
Valuation allowance (7,362) (5,094)
Allowance for loan and lease losses 92,461 92,031
Stock compensation and deferred compensation plans 25,769 23,464
Accrued expense 4,628 3,469
Other 8,778 6,462
Total deferred tax assets 271,015 136,648
Deferred tax liabilities:
Lease financing 293,470 304,996
Premises and equipment 21,819 20,505
Loan fees and discounts 21,056 21,938
Prepaid expenses 9,565 9,092
Securities available for sale 7,075 32,568
Goodwill and other intangibles 5,307 5,532
Investments in FHLB stock 2,628 2,509
Other 3,796 6,385
Total deferred tax liabilities 364,716 403,525
Net deferred tax liabilities $ 93,701 $266,877
The net operating losses and credit carryforwards at December 31, 2012, consist of federal net operating losses of $117.8
million and federal credit carryforwards of $5.7 million that expire in years 2027 through 2032, state net operating losses of
$14.6 million that expire in years 2013 through 2032, and charitable contribution carryforwards of $1.3 million that expire in
years 2016 through 2017.
{ 84 } { TCF Financial Corporation and Subsidiaries }