Deferred Tax Asset Valuation AllowanceDuring the third quarter and first nine months of 2010, the Company established valuation allowances of $3.7 million and $12.2 million, respectively, against its existing net deferred tax assets. The Company’s primary deferred tax assets relate to its allowance for loan losses, interest on non-accruing loans and net tax operating loss carryforwards. Under generally accepted accounting principles, a valuation allowance must be recognized if it is “more likely than not” that such deferred tax assets will not be realized. In making that determination, management is required to evaluate both positive and negative evidence including recent historical financial performance, forecasts of future income, tax planning strategies and assessments of the current and future economic and business conditions. The Company performs and updates this evaluation on a quarterly basis.
HMN Financial, Inc. Announces Third Quarter Results
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