TCF Bank 2013 Annual Report Download - page 96

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Note 12. Income Taxes
The following table summarizes applicable income taxes in the Consolidated Statements of Income.
(In thousands) Current Deferred Total
Year ended December 31, 2013:
Federal $(38,206) $ 107,630 $ 69,424
State 7,686 3,941 11,627
Foreign 3,939 (645) 3,294
Total $(26,581) $ 110,926 $ 84,345
Year ended December 31, 2012:
Federal $ 6,646 $(129,082) $(122,436)
State 7,994 (18,416) (10,422)
Total $ 14,640 $(147,498) $(132,858)
Year ended December 31, 2011:
Federal $ (2,737) $ 56,144 $ 53,407
State 16,740 (5,706) 11,034
Total $ 14,003 $ 50,438 $ 64,441
TCF’s effective income tax rate differed from the statutory federal income tax rate of 35% as a result of the following.
Year Ended December 31,
2013 2012 2011
Federal income tax rate 35.00% 35.00% 35.00%
Increase (decrease) resulting from:
State income tax, net of federal income tax 3.11 1.99 4.01
Foreign tax effects (1.13) ––
Non-controlling interest tax effect (1.01) .64 (1.01)
Tax exempt income (.86) .55 (.82)
Deferred tax adjustments (.30) 1.40 (.04)
Civil money penalty –(1.03) –
Other, net (.11) .58 (1.10)
Effective income tax rate 34.70% 39.13% 36.04%
Beginning in the second quarter of 2013, TCF considered its undistributed foreign earnings to be reinvested indefinitely. As a
result, TCF recorded a $1.2 million benefit in 2013 to eliminate U.S. deferred taxes on its undistributed foreign earnings. This
assertion is based on management’s determination that cash held in TCF’s foreign jurisdictions is not needed to fund its U.S.
operations and that it either has reinvested or has intentions to reinvest these earnings. While management currently intends to
indefinitely reinvest all of TCF’s foreign earnings, should circumstances or tax laws change, TCF may need to record additional
income tax expense in the period in which such determination or tax law change occurs. As of December 31, 2013, TCF has not
provided U.S. deferred taxes on $33.5 million of its undistributed foreign earnings. If these undistributed earnings were
repatriated to the U.S. or otherwise became subject to U.S. taxation, the potential deferred tax liability would be approximately
$2.7 million, assuming full utilization of related foreign tax credits.
A reconciliation of the changes in unrecognized tax benefits is as follows.
(In thousands) 2013 2012 2011
Balance, beginning of year $4,230 $2,377 $2,464
Increases for tax positions related to the current year 394 449 273
Increases for tax positions related to prior years 362 1,781 605
Decreases for tax positions related to prior years (67) – (261)
Settlements with taxing authorities (39) (70) (84)
Decreases related to lapses of applicable statutes of limitation (176) (307) (620)
Balance, end of year $4,704 $4,230 $2,377
80