Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

(7) INCOME TAXES

The Company is subject to federal and applicable state corporate income taxes on its taxable ordinary income and capital gains. As a corporation taxed under Subchapter C of the Internal Revenue Code, the Company is able, and intends, to file a consolidated federal income tax return with corporate subsidiaries in which it holds 80% or more of the outstanding equity interest measured by both vote and fair value.

The following table sets forth the significant components of the Company's deferred and other tax assets and liabilities as of December 31, 2022 and 2021.

	December 31,
(Dollars in thousands)	2022			2021
Goodwill and other intangibles	$	(43,397	)	$	(43,894	)
Provision for loan losses		9,945			11,057
Net operating loss carryforwards (1)		3,730			12,167
Accrued expenses, compensation, and other assets		3,819			2,579
Unrealized gains on other investments		1,445			2,176
Total deferred tax liability		(24,458	)		(15,915	)
Valuation allowance		(2,295	)		(2,295	)
Deferred tax liability, net	$	(26,753	)	$	(18,210	)

(1)As of December 31, 2022, the Company had an estimated $11.1 million of net operating loss carryforwards, $1.7 million of which expires at various dates between December 31, 2026 and December 31, 2035, which had a net carrying value of $1.4 million of December 31, 2022.

The following table shows the components of the Company's tax (provision) benefit for the years ended December 31, 2022, 2021, and 2020.

	Year Ended December 31,
(Dollars in thousands)	2022			2021			2020
Current
Federal	$	(5,213	)	$	(3,550	)	$	—
State		(560	)		(1,563	)		(260	)
Deferred
Federal		(8,090	)		(13,686	)		7,702
State		(4,100	)		(5,418	)		2,632
Net (provision) benefit for income taxes	$	(17,963	)	$	(24,217	)	$	10,074

The following table presents a reconciliation of statutory federal income tax (provision) benefit to consolidated actual income tax (provision) benefit reported for the years ended December 31, 2022, 2021, and 2020.

	Year Ended December 31,
(Dollars in thousands)	2022			2021			2020
Statutory Federal income tax (provision) benefit at 21%	$	(14,249	)	$	(17,193	)	$	7,766
State and local income taxes, net of federal income tax benefit		(2,787	)		(3,363	)		1,518
Valuation allowance against net operating losses		—			(1,833	)		1,228
Change in effective state income tax rates and accrual		811			(1,691	)		(405	)
Income attributable to non-controlling interest		—			628			460
Non-deductible expenses		(1,987	)		(178	)		(453	)
Other		249			(587	)		(40	)
Total income tax (provision) benefit	$	(17,963	)	$	(24,217	)	$	10,074

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible pursuant to ASC 740. The Company considers the reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company’s evaluation of the realizability of deferred tax assets must consider both positive and negative evidence. The weight given to the potential effects of positive and negative evidence is based on the extent to which it can be objectively verified. Based upon these considerations, the Company determined the necessary valuation allowance as of December 31, 2022.

The Company has filed tax returns in many states. Federal, New York State, New York City, and Utah state tax filings of the Company for the tax years 2019 through the present are the more significant filings that are open for examination.