Note (7)—Income taxes:

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

	For the three months ended
	June 30,
	2018		2017
Current	$	2,195	$	4,047
Deferred		5,599		2,527
Total	$	7,794	$	6,574

	For the six months ended
			June 30,
	2018		2017
Current	$	2,195	$	4,047
Deferred		11,081		7,952
Total	$	13,276	$	11,999

Federal income tax expense differs from the statutory federal rates of 21% for the three and six months ended June 30, 2018 and 35% for the three and six months ended June 30, 2017 due to the following:

	For the Three Months Ended
									June 30,
	2018					2017
Federal taxes calculated at statutory rate	$	6,270		21.0	%	$	6,234			35.0	%
Increase (decrease) resulting from:
State taxes, net of federal benefit		1,543		5.2	%		741			4.2	%
Benefit of equity based compensation		(15	)	-0.1	%		20			0.1	%
Municipal interest income, net of interest disallowance		(207	)	-0.7	%		(376	)		-2.1	%
Bank owned life insurance		(13	)	0.0	%		(21	)		-0.1	%
Stock offering costs		141		0.5	%		—			0.0	%
Other		75		0.2	%		(24	)		-0.2	%
Income tax expense, as reported	$	7,794		26.1	%	$	6,574			36.9	%

	For the Six Months Ended
									June 30,
	2018					2017
Federal taxes calculated at statutory rate	$	11,570		21.0	%	$	11,539			35.0	%
Increase (decrease) resulting from:
State taxes, net of federal benefit		2,686		4.9	%		1,351			4.1	%
Benefit of equity based compensation		(751	)	-1.4	%		(175	)		-0.5	%
Municipal interest income, net of interest disallowance		(408	)	-0.7	%		(742	)		-2.3	%
Bank owned life insurance		(25	)	0.0	%		(42	)		-0.1	%
Stock offering costs		141		0.3	%		—			0.0	%
Other		63		0.0	%		68			0.2	%
Income tax expense, as reported	$	13,276		24.1	%	$	11,999			36.4	%

The components of the net deferred tax liability at June 30, 2018 and December 31, 2017, are as follows:

	June 30,			December 31,
	2018			2017
Deferred tax assets:
Allowance for loan losses	$	6,865		$	6,264
Amortization of core deposit intangible		898			759
Deferred compensation		4,448			6,158
Unrealized loss on available-for-sale debt securities		4,563			988
Other		3,222			3,599
Subtotal		19,996			17,768
Deferred tax liabilities:
FHLB stock dividends		(550	)		(550	)
Depreciation		(4,322	)		(4,115	)
Cash flow hedges		(930	)		—
Mortgage servicing rights		(28,518	)		(19,830	)
Other		(5,969	)		(5,131	)
Subtotal		(40,289	)		(29,626	)
Net deferred tax liability	$	(20,293	)	$	(11,858	)

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.