Entity information:
Income Tax
The components of income tax expense are as follows:
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
 
 
(in thousands)
Current tax expense
 
$
42,724

 
$
43,069

 
$
36,426

Deferred tax expense
 
22,431

 
1,846

 
6,367

Total
 
$
65,155

 
$
44,915

 
$
42,793


Significant components of the Company’s deferred tax assets and liabilities are as follows:
 
 
December 31,
 
 
2017
 
2016
 
 
(in thousands)
Deferred tax assets:
 
 
 
 
Allowance for loan and lease losses
 
$
18,315

 
$
26,638

Deferred compensation
 
9,539

 
16,232

Stock options and restricted stock
 
1,438

 
1,922

OREO
 
521

 
111

Nonaccrual interest
 
163

 
320

Purchase accounting
 
—

 
2,613

Unrealized loss on investment securities
 
5,992

 
7,492

Net operating losses and credit carryforwards
 
7,259

 
8,597

Depreciation
 
—

 
1,059

Other
 
985

 
851

Total deferred tax assets
 
44,212

 
65,835

Deferred tax liabilities:
 
 
 
 
Asset purchase tax basis difference
 
(5,709
)
 
(9,037
)
FHLB stock dividends
 
(782
)
 
(1,232
)
Deferred loan fees
 
(4,505
)
 
(5,126
)
Purchase accounting
 
(9,088
)
 
—

Depreciation
 
(1,581
)
 
—

Other
 
(2,036
)
 
(155
)
Total deferred tax liabilities
 
(23,701
)
 
(15,550
)
Net deferred tax asset
 
$
20,511

 
$
50,285


A reconciliation of the Company’s effective income tax rate with the federal statutory tax rate is as follows:
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
 
 
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
 
 
(dollars in thousands)
Income tax based on statutory rate
 
$
62,262

 
35
 %
 
$
52,424

 
35
 %
 
$
49,567

 
35
 %
Reduction resulting from:
 
 
 
 
 
 
 
 
 
 
 
 
Tax exempt instruments
 
(8,485
)
 
(5
)%
 
(7,433
)
 
(5
)%
 
(6,761
)
 
(5
)%
Life insurance proceeds
 
(3,351
)
 
(2
)%
 
(1,680
)
 
(1
)%
 
(1,554
)
 
(1
)%
Acquisition costs
 
825

 
1
 %
 
—

 
—
 %
 
—

 
—
 %
Deferred tax asset revaluation
 
12,210

 
7
 %
 
—

 
—
 %
 
—

 
—
 %
Other, net
 
1,694

 
1
 %
 
1,604

 
1
 %
 
1,541

 
1
 %
Income tax provision
 
$
65,155

 
37
 %
 
$
44,915

 
30
 %
 
$
42,793

 
30
 %

As of December 31, 2017 and 2016, we had no unrecognized tax benefits. Our policy is to recognize interest and penalties on unrecognized tax benefits in “Provision for income taxes” in the Consolidated Statements of Income. There were no amounts related to interest and penalties recognized for the years ended December 31, 2017 and 2016. As a result of recent acquisitions, the Company has net operating loss carryforwards in the federal, Idaho and Oregon jurisdictions of $24.8 million, $26.9 million and $144 thousand, respectively, which begin to expire in 2024 and federal credit carryforwards of $450 thousand. Federal credit carryforwards relate to alternative minimum taxes and have no expiration. The amount of carryforwards that may be utilized annually is limited under Sections 382 and 383 as a result of changes in control. Management believes that these carryforwards will be used in the normal course of business, and as such, has not recorded a valuation allowance.
The Company’s 2017 results included the impact of the enactment of the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017. The law includes significant changes to the U.S. corporate tax system, including a Federal corporate rate reduction from 35% to 21%. In 2017, the Company applied the newly enacted corporate federal income tax rate of 21% resulting in an approximately $12.2 million increase in tax expense from the re-measurement of its net deferred tax assets. The final impact of the tax rate change may differ due to changes in assumption made by the Company or actions the Company may take as a result of tax reform.