NYCB 2017 Annual Report

117 The following table summarizes changes in the liability for unrecognized gross tax benefits for the years ended December 31, 2017, 2016, and 2015: December 31, (in thousands) 2017 2016 2015 Uncertain tax positions at beginning of year $33,487 $30,456 $24,779 Additions for tax positions relating to current-year operations 4,332 1,304 3,827 Additions for tax positions relating to prior tax years 1,398 1,997 2,935 Subtractions for tax positions relating to prior tax years (5,101) (270) (963) Reductions in balance due to settlements (435) -- (122) Uncertain tax positions at end of year $33,681 $33,487 $30,456 The Company and its subsidiaries have filed tax returns in many states. The following are the more significant tax filings that are open for examination: • Federal tax filings for tax years 2014 through the present; • New York State tax filings for tax years 2010 through the present; • New York City tax filings for tax years 2011 through the present; and • New Jersey tax filings for tax years 2013 through the present. In addition to other state audits, the Company is currently under examination by the following taxing jurisdictions of significance to the Company: • New York State for the tax years 2010 through 2014; and • New York City for the tax years 2011 and 2012. It is reasonably possible that there will be developments within the next twelve months that would necessitate an adjustment to the balance of unrecognized tax benefits, including decreases of up to $20 million due to completion of tax authorities’ exams and the expiration of statutes of limitations. As a savings institution, the Community Bank is subject to a special federal tax provision regarding its frozen tax bad debt reserve. At December 31, 2017, the Community Bank’s federal tax bad debt base -year reserve was $61.5 million, with a related federal deferred tax liability of $12.9 million, which has not been recognized since the Community Bank does not expect that this reserve will become taxable in the foreseeable future. Events that would result in taxation of this reserve include redemptions of the Community Bank’s stock or certain excess distributions by the Community Bank to the Company. NOTE 10: COMMITMENTS AND CONTINGENCIES Pledged Assets The Company pledges securities to serve as collateral for its repurchase agreements, among other purposes. At December 31, 2017, the Company had pledged available for sale mortgage-related securities and other securities with carrying values of $917.2 million and $346.0 million, respectively. At December 31, 2016, the Company had pledged mortgage-related securities and other securities held to maturity with carrying values of $1.6 billion and $346.7 million, respectively. In addition, the Company had $30.1 billion and $29.4 billion of loans pledged to the FHLB-NY to serve as collateral for its wholesale borrowings at the respective year-ends. Loan Commitments and Letters of Credit At December 31, 2017 and 2016, the Company had commitments to originate loans, including unused lines of credit, of $1.9 billion and $2.1 billion, respectively. The majority of the outstanding loan commitments at those dates were expected to close within 90 days. In addition, the Company had commitments to originate letters of credit totaling $339.4 million and $324.3 million at December 31, 2017 and 2016.