Income Taxes

3 Months Ended

Mar. 31, 2020

(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 our deferred and other tax assets and liabilities as of March 31, 2020 and December 31, 2019.

(Dollars in thousands)	March 31, 2020			December 31, 2019
Goodwill and other intangibles	$	(45,423	)	$	(45,595	)
Provision for loan losses		20,748			19,198
Net operating loss carryforwards⁽¹⁾		24,327			22,607
Accrued expenses, compensation, and other assets		1,701			1,701
Unrealized gains on other investments		(7,130	)		(6,790	)
Total deferred tax liability		(5,777	)		(8,879	)
Valuation allowance		(462	)		(462	)
Deferred tax liability, net		(6,239	)		(9,341	)
Taxes receivable		1,126			1,516
Net deferred and other tax liabilities	$	(5,113	)	$	(7,825	)

(1)	As of March 31, 2020, the Company and its subsidiaries had an estimated $96,586 of net operating loss carryforwards, $1,712 of which expire at various dates between December 31, 2026 and December 31, 2035, which had a net asset value of $23,865 as of March 31, 2020.

The components of our tax benefit for the three months ended March 31, 2020 and 2019 were as follows.

	Three Months Ended March 31,
(Dollars in thousands)	2020			2019
Current
Federal	$	—		$	(869	)
State		(86	)		(823	)
Deferred
Federal		2,525			610
State		810			1,338
Net benefit for income taxes	$	3,249		$	256

The following table presents a reconciliation of statutory federal income tax (provision) benefit to consolidated actual income tax benefit for the three months ended March 31, 2020 and 2019.

	Three Months Ended March 31,
(Dollars in thousands)	2020			2019
Statutory Federal income tax (provision) benefit at 21%	$	3,412		$	(379	)
State and local income taxes, net of federal income tax benefit		638			(107	)
Change in state income tax accruals		(46	)		686
Change in effective state income tax rate		(378	)		—
Income attributable to non-controlling interest		(216	)		—
Non deductible expenses		(214	)		—
Other		53			56
Total income tax benefit	$	3,249		$	256

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 March 31, 2020.

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 2016 through the present are the more significant filings that are open for examination. Currently, the Company is undergoing various examinations covering the years 2016 to 2018.