Income Taxes	3 Months Ended
Mar. 31, 2013
Income Taxes	*12. Income Taxes* As of December 31, 2012, the Company had federal net operating loss carryforwards of $23.9 million that were generated through December 31, 2012. If not utilized to offset future taxable income, $4.8 million of the net operating loss carryforwards will expire in 2030, $8.8 million will expire in 2031, and $10.3 million will expire in 2032. For the quarter ending March 31, 2013, the Company utilized an estimated $2.8 million of the federal net operating loss carryforwards expiring in 2030 to offset federal taxable income generated during that period. As of March 31, 2013, net deferred tax assets, without regard to any valuation allowance, of $30.8 million were recorded in the Company’s Consolidated Balance Sheet, a portion of which includes the after-tax impact of net operating loss carryforwards. This net deferred tax asset is fully offset by a valuation allowance as a result of uncertainty surrounding the ultimate realization of these tax benefits. The need for a valuation allowance is based on the Company’s cumulative tax losses over the previous four years, net operating loss carryforward limitations as discussed below, the level of projected future taxable income and available tax planning strategies. We consummated a private placement on October 7, 2010 and subsequent follow-on offering in January 2011 through which we received $113.9 million of gross proceeds from the sale of common stock (“Private Placement”). The Private Placement was considered a change in control under the Internal Revenue Code and Regulations. Accordingly, the Company was required to evaluate potential limitation or deferral of our ability to carryforward pre-acquisition net operating losses and to determine the amount of net unrealized pre-acquisition built-in losses which are subject to similar limitation or deferral. Under the Internal Revenue Code and Regulations, net unrealized pre-acquisition built-in losses realized within five years of the change in control are subject to potential limitation, which for the Company is October 7, 2015. Through that date, the Company will continue to analyze its ability to utilize such losses to offset anticipated future taxable income as pre-acquisition built-in losses are ultimately realized. As of March 31, 2013, the Company currently estimates that future utilization of built-in losses of $53 million generated prior to October 7, 2010 will be limited to $1.1 million per year. In addition, the Company currently estimates that $8.0 million to $9.0 million of the tax benefits related to built-in losses may not ultimately be realized. However, this estimate will not be confirmed until the five-year limitation period expires in October 2015. For the three months ended March 31, 2013 and March 31, 2012, income tax provisions of $813 thousand and $517 thousand, respectively, were recorded. The provision for income taxes for the three months ended March 31, 2013 included $99 thousand for state income tax, $56 thousand for federal alternative minimum tax and $658 thousand to increase the net deferred tax asset valuation allowance to offset higher net deferred tax assets arising from changes in the market values of investment securities available for sale. The provision for income taxes for the three months ended March 31, 2012 reflected an increase in the net deferred tax asset valuation allowance as a result of higher net deferred tax assets arising from changes in the market values of investment securities available for sale.

12. Income Taxes

As of December 31, 2012, the Company had federal net operating loss carryforwards of $23.9 million that were generated through December 31, 2012. If not utilized to offset future taxable income, $4.8 million of the net operating loss carryforwards will expire in 2030, $8.8 million will expire in 2031, and $10.3 million will expire in 2032. For the quarter ending March 31, 2013, the Company utilized an estimated $2.8 million of the federal net operating loss carryforwards expiring in 2030 to offset federal taxable income generated during that period.

As of March 31, 2013, net deferred tax assets, without regard to any valuation allowance, of $30.8 million were recorded in the Company’s Consolidated Balance Sheet, a portion of which includes the after-tax impact of net operating loss carryforwards. This net deferred tax asset is fully offset by a valuation allowance as a result of uncertainty surrounding the ultimate realization of these tax benefits. The need for a valuation allowance is based on the Company’s cumulative tax losses over the previous four years, net operating loss carryforward limitations as discussed below, the level of projected future taxable income and available tax planning strategies.

We consummated a private placement on October 7, 2010 and subsequent follow-on offering in January 2011 through which we received $113.9 million of gross proceeds from the sale of common stock (“Private Placement”). The Private Placement was considered a change in control under the Internal Revenue Code and Regulations. Accordingly, the Company was required to evaluate potential limitation or deferral of our ability to carryforward pre-acquisition net operating losses and to determine the amount of net unrealized pre-acquisition built-in losses which are subject to similar limitation or deferral. Under the Internal Revenue Code and Regulations, net unrealized pre-acquisition built-in losses realized within five years of the change in control are subject to potential limitation, which for the Company is October 7, 2015. Through that date, the Company will continue to analyze its ability to utilize such losses to offset anticipated future taxable income as pre-acquisition built-in losses are ultimately realized. As of March 31, 2013, the Company currently estimates that future utilization of built-in losses of $53 million generated prior to October 7, 2010 will be limited to $1.1 million per year. In addition, the Company currently estimates that $8.0 million to $9.0 million of the tax benefits related to built-in losses may not ultimately be realized. However, this estimate will not be confirmed until the five-year limitation period expires in October 2015.

For the three months ended March 31, 2013 and March 31, 2012, income tax provisions of $813 thousand and $517 thousand, respectively, were recorded. The provision for income taxes for the three months ended March 31, 2013 included $99 thousand for state income tax, $56 thousand for federal alternative minimum tax and $658 thousand to increase the net deferred tax asset valuation allowance to offset higher net deferred tax assets arising from changes in the market values of investment securities available for sale. The provision for income taxes for the three months ended March 31, 2012 reflected an increase in the net deferred tax asset valuation allowance as a result of higher net deferred tax assets arising from changes in the market values of investment securities available for sale.