INCOME TAXES

The income tax expense in the consolidated statements of income consists of the following:



	For the Years Ended December 31,
(dollars in thousands)	2017			2016			2015
Current – federal	$	33,074		$	28,749		$	15,215
Current - state	5,230			3,550			1,026
Deferred - federal	3,874			2,460			(344		)
Deferred - state	(5,069		)	(1,613		)	—
Remeasurement of deferred tax assets and deferred tax liabilities at reduced federal corporate tax rate	$	13,625		$	—		$	—
	$	50,734		$	33,146		$	15,897

The Company’s income tax expense differs from the amounts computed by applying the federal income tax statutory rates to income before income taxes. A reconciliation of the differences is as follows:



	For the Years Ended December 31,
(dollars in thousands)	2017			2016			2015
Tax at federal income tax rate	$	43,499		$	36,836		$	19,860
Change resulting from:
Tax-exempt interest	(4,390		)	(3,916		)	(2,490		)
Increase in cash value of bank owned life insurance	(556		)	(607		)	(484		)
Excess tax benefit from stock compensation	(939		)	—			—
State income tax, net of federal benefit	(680		)	695			667
Remeasurement of deferred tax assets and deferred tax liabilities at reduced federal corporate tax rate	13,625			—			—
Other	175			138			(1,656		)
Provision for income taxes	$	50,734		$	33,146		$	15,897

Net deferred income tax assets of $28,320,000 and $40,776,000 at December 31, 2017 and 2016, respectively, are included in other assets. The components of deferred income taxes are as follows:



	December 31,
(dollars in thousands)	2017		2016
Deferred tax assets
Allowance for loan losses	$	6,704	$	8,731
Deferred compensation	1,494		1,648
Deferred gain on interest rate swap	114		296
Unrealized loss on interest rate swap	80		342
Nonaccrual interest	5		17
Purchase accounting adjustments	5,631		13,444
Goodwill and intangible assets	4,909		7,488
Other real estate owned	3,203		6,244
Net operating loss tax carryforward	17,853		26,414
AMT credit carryforward	813		813
Unrealized loss on securities available for sale	508		665
Capitalized costs, accrued expenses and other	1,144		680
	42,458		66,782

Deferred tax liabilities
Depreciation and amortization	4,064		6,188
Mortgage servicing rights	1,885		1,412
Subordinated debentures	5,147		9,428
FDIC-assisted transaction adjustments	3,042		8,978
	14,138		26,006

Net deferred tax asset	$	28,320	$	40,776

At December 31, 2017, the Company had federal net operating loss carryforwards of approximately $70.32 million which expire at various dates from 2029 to 2035. At December 31, 2016, the Company had federal net operating loss carryforwards of approximately $72.37 million which expire at various dates from 2028 to 2035. At December 31, 2017, the Company had state net operating loss carryforwards of approximately $69.71 million which expire at various dates from 2028 to 2035. At December 31, 2016, the Company had state net operating loss carryforwards of approximately $73.27 million which expire at various dates from 2033 to 2034 . The federal net operating loss carryforwards are subject to limitations pursuant to section 382 of the Internal Revenue Code and are expected to be recovered over the next 12 to 18 years. The state net operating loss carryforwards are subject to similar limitations and are expected to be recovered over the next 11 to 18 years. Deferred tax assets are recognized for net operating losses because the benefit is more likely than not to be realized.

The Company did not record any interest and penalties related to income taxes for the years ended December 31, 2017, 2016 and 2015, and the Company did not have any amount accrued for interest and penalties at December 31, 2017, 2016 and 2015.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the various states. The Company is no longer subject to examination by taxing authorities for years before 2014.

The Company has completed its accounting for the effects of the Tax Cuts and Jobs Act of 2017 on its deferred tax assets and deferred tax liabilities. In the course of normal operations, the Company is required to make reasonable estimates for certain tax items which could not be fully determined at year-end, but will be finalized when its tax return is filed in 2018. However, the Company does not believe that any adjustments resulting from the finalization of the tax return will have a material impact on its financial statements.