TCF Bank 2014 Annual Report Download - page 89

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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, 2014:
Federal $ 55,062 $ 26,308 $ 81,370
State 2,087 11,147 13,234
Foreign 5,185 (23) 5,162
Total $ 62,334 $ 37,432 $ 99,766
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)
TCF’s effective income tax rate differed from the statutory federal income tax rate of 35.0% as a result of the following.
Year Ended December 31,
2014 2013 2012
Federal income tax rate 35.00% 35.00% 35.00%
Increase (decrease) resulting from:
State income tax, net of federal income tax 3.06 3.11 1.99
Non-controlling interest tax effect (0.92) (1.01) 0.64
Tax exempt income (0.76) (0.86) 0.55
Foreign tax effects (0.58) (1.13) –
Deferred tax adjustments (0.33) (0.30) 1.40
Civil money penalty –– (1.03)
Other, net (0.01) (0.11) 0.58
Effective income tax rate 35.46% 34.70% 39.13%
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, 2014 and 2013, TCF
has not provided U.S. deferred taxes on $48.1 million and $33.5 million, respectively, 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 $4.0 million and $2.7 million, as of December 31, 2014 and 2013, respectively, assuming full
utilization of related foreign tax credits.
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