14. INCOME TAXES

Income tax expense for the three and nine months ended September 30, 2017 and 2016 was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016

	(Dollars in thousands)

Income tax expense (benefit) for the period	$	$ 5,895	$	($4,831)	$	$ 16,822	$	($1,757)
Effective Tax Rate		34.1%		35.0%		34.8%		33.3%

The effective tax rates differ from the statutory federal tax rate of 35% largely due to the nontaxable earnings on bank owned life insurance and tax exempt interest income earned on certain investment securities and loans, less state tax expense, net of federal effect, and other non-deductible expenses.

Net deferred tax assets totaled $14.0 million at September 30, 2017 and $11.3 million at December 31, 2016. No valuation allowance was recorded against deferred tax assets as of those dates, as management believes it is more likely than not that all of the deferred tax assets will be realized because they were supported by recoverable taxes paid in prior years.