INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

INCOME TAXES

Summary of the entity's provision for income taxes

The following is a summary of our provision for income taxes (in thousands):

	For the year ended December 31,
	2012		2011		2010
Current
Federal	$	4,332	$	10,434	$	1,441
State		1,136		1,697		248
	$	5,468	$	12,131	$	1,689
Deferred
Federal		14,068		8,406		25,783
State		2,218		1,117		4,443
	$	16,286	$	9,523	$	30,226
Items charged or credited directly to stockholders' equity
Federal	$	206	$	123	$	—
State		38		20		—
	$	244	$	143	$	—
Income tax provision	$	21,998	$	21,797	$	31,915

Schedule of reconciliation of the statutory federal tax provision to income tax provision

A reconciliation of the statutory federal tax provision to our income tax provision in the accompanying statements of income is as follows (in thousands):

	For the year ended December 31,
	2012		2011			2010
Statutory federal provision (35%)	$	19,520	$	19,831		$	14,049
Federal tax provision attributed to predecessor shareholders		—		—			(13,754	)
Statutory state income tax provision, net of federal tax benefit		2,174		1,983			1,484
State tax provision attributable to predecessor shareholders		—		—			(1,453	)
Other		304		(17	)		2
Recognition of temporary differences upon change in tax status		—		—			31,587
Income tax expense	$	21,998	$	21,797		$	31,915

Schedule of deferred tax assets and liabilities

The tax effects of temporary differences between reported earnings and taxable earnings consisted of the following (in thousands):

	As of December 31,
	2012			2011
Deferred Tax Assets:
Compensation related	$	7,665		$	3,440
Allowance for risk-sharing obligation		4,470			5,743
Acquisition related(1)		7,979			1,670
Other		943			13
Total deferred tax assets	$	21,057		$	10,866
Deferred Tax Liabilities:
Mark-to-market of derivatives and loans held for sale	$	(11,606	)	$	(5,272	)
Recognition of mortgage servicing rights		(63,584	)		(45,343	)
Depreciation		(1,902	)		—
Total deferred tax liabilities	$	(77,092	)	$	(50,615	)
Deferred tax liabilities, net	$	(56,035	)	$	(39,749	)

(1)

As of December 31, 2012, acquisition related deferred tax assets consist of book-to-tax differences associated with basis step ups related to the amortization of goodwill recorded from the Acquisition and an acquisition made by one of the Company's predecessor entities, acquisition-related costs capitalized for tax purposes, and book-to-tax differences in intangible asset amortization. As of December 31, 2011, acquisition related deferred tax assets consist of book-to-tax differences associated with basis step ups related to goodwill recorded from an acquisition made by one of the Company's predecessor entities and book-to-tax differences in intangible asset amortization.