Entity information:
Income Taxes

The components of federal and state income tax expense for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):
 
 
2017
 
2016
 
2015
Current
 
 
 
 
 
 
Federal
 
$
9,825

 
$
11,375

 
$
7,357

State
 
2,719

 
2,953

 
1,841

Total Current
 
12,544

 
14,328

 
9,198

Deferred
 
 

 
 

 
 

Federal
 
2,047

 
(1,940
)
 
(84
)
State
 
451

 
(448
)
 
104

Total Deferred
 
2,498

 
(2,388
)
 
20

Total
 
$
15,042

 
$
11,940

 
$
9,218




Recorded income tax expense differs from the expected tax expense (computed by applying the applicable statutory U.S. federal tax rate of 35% to income before income taxes).  During 2017, 2016 and 2015, the Company was in a graduated tax rate position.  The principal reasons for the difference are as follows (in thousands):
 
 
2017
 
2016
 
2015
Expected income taxes
 
$
14,604

 
$
11,823

 
$
9,006

Effects of:
 
 

 
 

 
 

Tax-exempt income from bank owned life insurance
 
(573
)
 
(235
)
 
—

Other tax exempt income
 
(2,223
)
 
(1,577
)
 
(1,103
)
Nondeductible interest expense
 
28

 
21

 
11

State taxes, net of federal taxes
 
2,062

 
1,628

 
1,264

Other items
 
(266
)
 
280

 
41

Adjustment of deferred tax assets and liabilities for enacted change in tax laws
 
1,410

 
—

 
—

Effect of marginal tax rate
 
—

 
—

 
(1
)
Total
 
$
15,042

 
$
11,940

 
$
9,218




On December 22, 2017, the United States enacted certain tax reforms through the Tax Cuts and Jobs Act, which changes existing tax laws, most significantly a change in the statutory corporate tax rate from 35% to 21%. As a result of this enactment, the Company incurred additional one-time income tax expense of approximately $1.4 million during the fourth quarter of 2017, primarily due to remeasurement of deferred tax assets and liabilities.

Tax expense recorded by the Company during 2017, 2016 and 2015 did not include any interest or penalties. Tax returns filed with the Internal Revenue Service and Illinois Department of Revenue are subject to review by law under a three-year statute of limitations. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2014.

The tax effects of the temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below (in thousands):
 
 
2017
 
2016
Deferred tax assets:
 
 
 
 
Allowance for loan losses
 
$
5,694

 
$
6,599

Available-for-sale investment securities
 
941

 
3,680

Deferred compensation
 
749

 
1,030

Supplemental retirement
 
170

 
259

Core deposit premium and other intangible assets
 
664

 
691

Pass thru activities
 
126

 
—

Other-than-temporary impairment on securities
 
317

 
438

Stock Compensation Expense
 
—

 
194

Deferred Revenue
 
—

 
101

Purchase Accounting
 
475

 
1,791

Acquisition Costs
 
210

 
319

Other
 
596

 
966

Total gross deferred tax assets
 
9,942

 
16,068

Deferred tax liabilities:
 
 

 
 

Deferred loan costs
 
26

 
178

Intangibles amortization
 
3,685

 
4,467

Prepaid expenses
 
232

 
383

FHLB stock dividend
 
158

 
380

Depreciation
 
1,207

 
740

Deferred Revenue
 
58

 
—

Accumulated accretion
 
112

 
72

Mortgage servicing rights
 
240

 
387

Total gross deferred tax liabilities
 
5,718

 
6,607

Net deferred tax assets
 
$
4,224

 
$
9,461




Net deferred tax assets are recorded in other assets on the consolidated balance sheets. No valuation allowance related to deferred tax assets was recorded at December 31, 2017 and 2016 as management believes it is more likely than not that the deferred tax assets will be fully realized.