11. Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes Tables

Income taxes

	Year Ended December 31,
	2012			2011
	(In thousands)
Current federal tax expense (benefit)	$	369		$	–
Current state tax expense (benefit)		49			–
Deferred federal tax expense (benefit)		2,826			(4,873	)
Deferred state tax expense (benefit)		(654	)		(233	)
Change in valuation allowance		(62,811	)		5,106
Income tax expense (benefit)	$	(60,221	)	$	–

Income tax expense/(benefit)

	Year Ended December 31,
	2012			2011
	(In thousands)
Expense (benefit) at federal tax rate	$	3,215		$	(5,061	)
State taxes, net of federal income tax effect		1,190			(232	)
Other adjustments to tax reserve		(1,153	)		(366	)
Effect of change in state tax rate		(1,105	)		1,085
Change in valuation allowance		(62,811	)		5,106
Stock-based compensation		321			520
Other		122			(1,052	)
	$	(60,221	)	$	–

Deferred tax assets and liabilities

The tax effected cumulative temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2012 and 2011 are as follows:

	December 31,
	2012			2011
	(In thousands)
Deferred Tax Assets:
Finance receivables	$	10,840		$	3,073
Accrued liabilities		1,605			1,205
Furniture and equipment		213			102
NOL carryforwards		48,140			54,824
Built in losses		14,406			15,098
Pension accrual		2,080			3,401
AMT credit carryforward		695			282
Other		712			918
Total deferred tax assets		78,691			78,903
Valuation allowance		–			(61,693	)
		78,691			17,210
					$
Deferred Tax Liabilities:		$
FAS 91 deferred costs		(1,114	)		(513	)
Investment residual		(1,937	)		(1,697	)
Total deferred tax liabilities		(3,051	)		(2,210	)
Net deferred tax asset	$	75,640		$	15,000

Unrecognized tax benefits including interest and penalties

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits including interest and penalties for the year:

	2012			2011
	(In thousands)
Unrecognized tax benefit - opening balance	$	2,405		$	3,022
Gross increases - tax positions in prior period					543
Gross decreases - tax positions in prior period					–
Gross increases - tax positions in current period		250			–
Settlements		(153	)		–
Lapse of statute of limitations		(1,171	)		(1,160	)
Unrecognized tax benefit - ending balance	$	1,331		$	2,405