NYCB 2017 Annual Report

114 NOTE 9: FEDERAL, STATE, AND LOCAL TAXES The following table summarizes the components of t he Company’s net deferred tax asset (liability) at December 31, 2017 and 2016: December 31, (in thousands) 2017 2016 Deferred Tax Assets: Allowance for loan losses $ 46,239 $ 75,605 Compensation and related benefit obligations 13,010 27,877 Acquisition accounting and fair value adjustments on securities (including OTTI) -- 14,455 Acquisition accounting and fair value adjustments on loans (including the FDIC loss share receivable) -- 7,496 Non-accrual interest 818 4,791 Restructuring and retirement of borrowed funds 1,105 6,957 Net operating loss carryforwards 2,967 5,664 Other 15,953 18,351 Gross deferred tax assets 80,092 161,196 Valuation allowance ---- -- Deferred tax asset after valuation allowance $ 80,092 $ 161,196 Deferred Tax Liabilities: Amortizable intangibles $ (1,704) $ (1,655) Acquisition accounting and fair value adjustments on securities (including OTTI) (17,090) -- Undistributed earnings of subsidiaries (19,003) -- Mortgage servicing rights (1,794) (65,975) Premises and equipment (12,907) (19,310) Prepaid pension cost (24,324) (30,962) Leases (78,682) (65,214) Other (9,385) (10,691) Gross deferred tax liabilities $(164,889) $(193,807) Net deferred tax asset (liability) $ (84,797) $ (32,611) The deferred tax liability represents the anticipated federal, state, and local tax expenses or benefits that are expected to be realized in future years upon the utilization of the underlying tax attributes comprising said balances. At December 31, 2017, the net deferred tax liability is included in “Other liabilities” in the Consolidated Statements of Condition. At December 31, 2016, the net federal deferred tax liability is included in “Other liabilities,” and the net state and local deferred tax asset i s included in “Other assets” in the Consolidated Statements of Condition. At December 31, 2017, the Company had a New York City net operating loss carryforward in the amount of $44.9 million available through 2035. The net operating loss carryforward is available to offset future taxable income. The Company has determined that all deductible temporary differences and net operating loss carryforwards are more likely than not to provide a benefit in reducing future federal, state, and local tax liabilities, as applicable. The Company has reached this determination based on its history of reporting positive taxable income in all relevant tax jurisdictions, the length of time available to utilize the net operating loss carryforwards, and the recognition of taxable income in future periods from taxable temporary differences.