Entity information:
Income Taxes
 
The deferred taxes consist of (in thousands):
 
 
December 31,
 
 
2017
 
2016
Deferred tax asset:
 
 

 
 

Allowance for credit losses
 
$
42,560

 
$
55,525

State net operating loss carryforwards
 
26,981

 
20,570

Other real estate owned
 
1,905

 
9,845

Stock options and restricted stock
 
5,929

 
9,675

Loans
 
12,762

 
36,770

Deferred compensation
 
6,918

 
8,556

Tax credit carryforwards
 
40,197

 
32,262

Bonus accrual
 
2,172

 
4,877

Other items
 
1,797

 
666

Total deferred tax asset
 
141,221

 
178,746

Valuation allowance
 
—

 
—

Total deferred tax asset, net of valuation allowance
 
141,221

 
178,746

Deferred tax liability:
 
 

 
 

Equipment leasing
 
(127,465
)
 
(152,282
)
Premises and equipment
 
(17,250
)
 
(25,015
)
Mortgage servicing rights
 
(62,091
)
 
(76,468
)
Deferred income from FDIC-assisted transactions
 
(20,895
)
 
(46,443
)
Deferred loan costs
 
(7,555
)
 
—

Investment securities
 
(5,933
)
 
(7,270
)
FHLB stock dividends
 
(2,195
)
 
(3,221
)
Core deposit intangible
 
(9,023
)
 
(15,516
)
Other items
 
(3,683
)
 
(893
)
Total deferred tax liability
 
(256,090
)
 
(327,108
)
Net deferred tax liability
 
(114,869
)
 
(148,362
)
Net unrealized holding gain on investment securities available for sale
 
(959
)
 
(3,296
)
Net deferred tax liability
 
$
(115,828
)
 
$
(151,658
)

 
The Company’s Illinois net operating loss carryforwards totaled $358.2 million at December 31, 2017 and begin to expire in 2023 through 2028.  The Company's tax credit carryforwards include federal alternative minimum tax credits of $29.1 million with an indefinite carryforward period and general business credits of $11.0 million with expiration dates occurring in 2029 through 2037. Management has determined that is more likely than not that the deferred tax assets, including the net operating loss carryforwards, as of December 31, 2017, will be realized and that no valuation allowance is required. The Company also had other state net operating loss carryforwards totaling $1.7 million at December 31, 2017, which do not begin to expire until after 2028.

On December 22, 2017, H.R.1, originally known as the “Tax Cuts and Jobs Act” (the "Tax Reform Legislation") was enacted into law. This new tax legislation, among other changes, reduced the Federal corporate income tax rate from 35% to 21% effective January 1, 2018. As required under ASC Topic 740 "Income Taxes," the Company re-measured its deferred tax assets and liabilities at December 31, 2017 for the Tax Reform Legislation, which resulted in a tax benefit of $104.2 million in the year ended December 31, 2017. This re-measurement as of December 31, 2017 was determined to be a reasonable estimate and provisional only for the income tax effects on certain fixed assets and lease investments as the related deferred tax liabilities continue to be assessed.


Income taxes attributable to continuing operations consist of (in thousands):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Current expense (benefit):
 
 

 
 

 
 

Federal
 
$
12,346

 
$
26,081

 
$
30,283

State
 
6,994

 
7,204

 
3,355

Foreign
 
157

 
42

 
—

 
 
19,497

 
33,327

 
33,638

Deferred expense (benefit):
 
 
 
 
 
 
Federal
 
(45,401
)
 
37,690

 
28,765

State
 
10,679

 
8,227

 
10,808

Foreign
 
—

 
—

 
—

 
 
(34,722
)
 
45,917

 
39,573

 
 
$
(15,225
)
 
$
79,244

 
$
73,211


 
The reconciliation between the statutory federal income tax rate of 35% and the effective tax rate on income from continuing operations follows (in thousands):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Federal income tax expense at expected statutory rate
 
$
101,085

 
$
88,683

 
$
81,256

Increase (decrease) due to:
 
 

 
 

 
 

Tax exempt income, net
 
(17,164
)
 
(18,214
)
 
(16,909
)
Tax benefit resulting from change in tax rates
 
(106,563
)
 
—

 
—

State tax expense net of federal impact
 
11,487

 
10,030

 
9,205

Stock-based compensation excess tax benefits
 
(3,195
)
 
(2,330
)
 
—

Non-deductible contingent consideration
 
138

 
1,026

 
158

Non-includable increase in cash surrender value of life insurance
 
(1,889
)
 
(1,432
)
 
(1,191
)
Non-deductible merger expense
 
—

 
298

 
360

Adjustment of unrecognized tax benefit
 
94

 
1

 
(969
)
Other items, net
 
782

 
1,182

 
1,301

Income tax expense
 
$
(15,225
)
 
$
79,244

 
$
73,211


 
ASC Topic 740, "Accounting for Uncertainty in Income Taxes" provides guidance on financial statement recognition and measurement of tax positions taken, or expected to be taken, in tax returns.

A reconciliation of the change in unrecognized tax benefits from January 1, 2017 to December 31, 2017 is as follows (in thousands):
 
 
Unrecognized Tax Benefit
Without Interest
 
Interest on unrecognized
Tax Benefit
 
Total Unrecognized Tax
Benefit Including Interest
Balance at January 1, 2017
 
$
17

 
$
2

 
$
19

Increases for tax positions of prior years
 
113

 
—

 
113

Decreases related to prior year tax positions
 
(17
)
 
(2
)
 
(19
)
Balance at December 31, 2017
 
$
113

 
$
—

 
$
113


 
The whole amount of unrecognized tax benefits would affect the tax provision and the effective income tax rate if recognized in future periods.  The Company elects to treat interest and penalties recognized for the underpayment of income taxes as income tax expense, to the extent not included in unrecognized tax benefits.
 
The Company’s federal income tax returns are open and subject to examination for the 2014 tax return year and forward.  The Company’s various state income tax returns are generally open for the 2013 tax return year and forward based on individual state statutes of limitation.  The Company is currently under examination by federal and state taxing authorities.