Note (7)—Income taxes:

Allocation of federal and state income taxes between current and deferred portions is as follows:


	For the three months ended
			March 31,
	2018		2017
Current	$	—	$	—
Deferred		5,482		5,425
Total	$	5,482	$	5,425

Federal income tax expense for the three months ended March 31, 2018 and 2017 differs from the statutory federal rates of 21% and 35%, respectively, due to the following:

	For the three months ended
									March 31,
	2018					2017
Federal taxes calculated at statutory rate	$	5,300		21.0	%	$	5,305			35.0	%
Increase (decrease) resulting from:
State taxes, net of federal benefit		1,143		4.5	%		610			4.0	%
Benefit of equity based compensation		(736	)	-3.0	%		(195	)		-1.3	%
Municipal interest income		(201	)	-0.8	%		(366	)		-2.4	%
Bank owned life insurance		(12	)	0.0	%		(21	)		-0.2	%
Other		(12	)	0.0	%		92			0.6	%
Income tax expense, as reported	$	5,482		21.7	%	$	5,425			35.7	%

The components of the net deferred tax liability at March 31, 2018 and December 31, 2017, are as follows:

	March 31,			December 31,
	2018			2017
Deferred tax assets:
Allowance for loan losses	$	6,359		$	6,264
Amortization of core deposit intangible		832			759
Deferred compensation		3,711			6,158
Unrealized loss on available-for-sale debt securities		3,830			988
Other		5,501			3,599
Subtotal		20,233			17,768
Deferred tax liabilities:
FHLB stock dividends		(550	)		(550	)
Depreciation		(4,344	)		(4,115	)
Cash flow hedges		(866	)		—
Mortgage servicing rights		(24,274	)		(19,830	)
Other		(5,564	)		(5,131	)
Subtotal		(35,598	)		(29,626	)
Net deferred tax liability	$	(15,365	)	$	(11,858	)

For the first quarter of 2018, the Company has a federal net operating loss carryforward of approximately $6.9 million and state net operating losses of $5.8 million. The Company projects that it will fully utilize these losses during the remainder of 2018. If not utilized, the Federal net operating loss will carry forward indefinitely and the state net operating losses will begin to expire in 2030.

Tax periods for all fiscal years after 2013 remain open to examination by the federal and state taxing jurisdictions to which the Company is subject.