INCOME TAXES

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income Tax Expense

Federal and state income tax expense and the statutory tax rate and the actual effective tax rate consist of the following:

TABLE 12.1

	Three Months Ended March 31,
(in millions)	2019			2018
Current income taxes:
Federal taxes	$	18		$	17
State taxes	2			2
Total current income taxes	20			19
Deferred income taxes:
Federal taxes	2			2
Total deferred income taxes	2			2
Total income taxes	$	22		$	21
Statutory tax rate	21.0		%	21.0		%
Effective tax rate	19.3		%	19.7		%

The effective tax rate for the three months ended March 31, 2019 and March 31, 2018 was lower than the statutory tax rate of 21% due to tax benefits resulting from tax-exempt income on investments, loans, tax credits and income from BOLI.

Deferred Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax purposes. Deferred tax assets and liabilities are measured based on the enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Net deferred tax assets were $60.5 million and $67.5 million at March 31, 2019 and December 31, 2018, respectively.