Income taxes

The approximate provision for income taxes for the years ended December 31, 2016, 2015, and 2014 was as follows (dollars in thousands):



	2016			2015			2014
Current:
Federal	$	(801	)	$	(582	)	$	(185	)
State	(160		)	(111		)	(30		)
	(961		)	(693		)	(215		)
Deferred	(9,607		)	(11,820		)	37
(Provision) for income taxes	$	(10,568	)	$	(12,513	)	$	(178	)

The provision for income taxes results in effective tax rates which are different than the federal income tax statutory rate. A reconciliation of the differences for the years ended December 31, 2016, 2015, and 2014 is as follows (dollars in thousands):



	2016			2015			2014
Expected federal income tax provision/credit at statutory rates	$	(9,569	)	$	(11,582	)	$	(1,370	)
State income taxes, net of federal effect	(1,293		)	(1,456		)	(179		)
Effect of nontaxable income, net	779			643			489
Reversal of valuation allowance	15			4			—
Tax affected disallowed merger costs	(369		)	—			(974		)
Rate change for deferred taxes	195			(353		)	1,687
Other, net	(326		)	231			169
(Provision) for income taxes	$	(10,568	)	$	(12,513	)	$	(178	)

The income tax provision in 2016 represents a 38.7% effective tax rate on the Company’s $27.3 million of pretax income. This rate differs from statutory rates due primarily to a revaluation of net deferred tax assets, mainly related to an anticipated change in our applicable state rate at the time the net DTA will be utilized and additional tax effect of nontaxable income arising from bank-owned life insurance and municipal securities, less the impact of tax affected disallowed merger costs related to the 2016 acquisitions and pending merger with First Interstate. Other differences to the effective tax rate were related to normal recurring permanent differences and tax credits.

The significant components of the net deferred tax assets and liabilities at December 31, 2016 and 2015 were as follows (dollars in thousands):



	2016			2015
Deferred tax assets:
Reserve for loan losses and unfunded loan commitments	$	10,431		$	8,961
Deferred benefit plan expenses, net	13,663			12,768
Federal and state net operating loss and other carryforwards	14,840			28,068
Tax credit carryforwards	3,419			2,427
Allowance for losses on OREO	441			651
Accrued interest on non-accrual loans	125			169
Purchased intangibles	4,870			5,390
Fair value of acquired assets/liabilities	2,698			1,563
Other	1,464			575
Deferred tax assets	51,951			60,572
Valuation allowance for deferred tax assets	(59		)	(74		)
Deferred tax assets, net of valuation allowance	51,892			60,498
Deferred tax liabilities:
Accumulated depreciation and amortization	2,755			2,070
Deferred loan fees	1,240			1,233
FHLB stock dividends	289			2,242
Net unrealized gains (losses) on investment securities available-for-sale	(653		)	994
Purchased intangibles	2,395			2,543
Other	694			743
Deferred tax liabilities	6,720			9,825
Net deferred tax assets (liabilities)	$	45,172		$	50,673

The Company recorded an income tax provision of $10.6 million, $12.5 million, and $0.2 million in 2016, 2015, and 2014, respectively.

At December 31, 2016, the Company had deferred tax assets of $10.7 million and $4.1 million for federal and state net operating loss (“NOL”) carry-forwards, respectively. Also, the Company had deferred tax assets of $0.0 million, $3.4 million and $0.0 million for charitable contribution carry-forwards, federal and state tax credits, respectively. At December 31, 2015, the Company had deferred tax assets of $22.1 million and $6.0 million relating to federal and state NOL carry-forwards, respectively. Also, the Company had $0.0 million, $2.3 million and $0.2 million relating to charitable contribution carry-forwards, federal and state tax credits, respectively.

At December 31, 2016, the deferred tax assets above correspond to federal and state NOL carry forwards available of $30.7 million and $82.0 million, respectively. The NOLs are available to offset future taxable income through 2034. Also, at December 31, 2016, the Company had no charitable contributions carry-forwards and federal and state credits of $3.4 million and $0.0 million, respectively, which will expire between 2028 and 2036.

In estimating DTA, management considers whether it is more likely than not that some portion or all of the DTA will or will not be realized. The Company’s ultimate realization of the DTA is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. Management considers the nature and amount of historical and projected future taxable income, the scheduled reversal of deferred tax assets and liabilities, and available tax planning strategies in making this assessment. The amount of deferred taxes recognized could be impacted by changes to any of these variables.

The valuation allowance for deferred tax assets as of December 31, 2016 and 2015 was $0.1 million. The DTA valuation allowance relates to state attributes that will expire without benefit.

The Company files a U.S. federal income tax return, state income tax returns in Idaho, Oregon, and other state and local income tax returns in various jurisdictions.

The Company has evaluated its income tax positions as of December 31, 2016 and 2015. Based on this evaluation, the Company has determined that it does not have any uncertain income tax positions for which an unrecognized tax liability should be recorded. The Company recognizes interest and penalties related to income tax matters as additional income taxes in the consolidated statements of income. The Company had no significant interest or penalties related to income tax matters during the years ended December 31, 2016, 2015 or 2014.