Entity information:
INCOME TAXES
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "TCJA") resulted in significant changes to the U.S. tax code, including a reduction in the maximum federal corporate income tax rate from 35% to 21%, effective January 1, 2018. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income at the time of enactment of such change in tax rates. Accordingly, the Company was required to revalue its deferred tax assets and deferred tax liabilities to account for the future impact of lower corporate tax rates on these deferred amounts. The Company performed a preliminary analysis as of December 31, 2017 and recorded an estimated $14.3 million impact for this one-time non-cash charge to the statement of income. The ultimate impact may differ from this estimate due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the TCJA.
The components of the expense and benefit for income taxes for the periods presented are as follows:
 
Years Ended December 31,
 
2017
 
2016
 
2015
 
(Dollars in thousands)
Current income tax expense:
 
 
 
 
 
Federal
$
24,036

 
$
39,528

 
$
23,610

State
3,800

 
6,013

 
3,441

Total current income tax expense
27,836

 
45,541

 
27,051

Deferred income tax expense (benefit):
 
 
 
 
 
Federal
24,795

 
9,161

 
(19,157
)
State
1,534

 
1,203

 
(2,238
)
Total deferred income tax expense (benefit)
26,329

 
10,364

 
(21,395
)
Total income tax expense (benefit)
$
54,165

 
$
55,905

 
$
5,656


A reconciliation of the expected income tax expense or benefit at the statutory federal income tax rate of 35% to the Company’s actual income tax expense or benefit and effective tax rate for the periods presented is as follows:
 
Years Ended December 31,
 
2017
 
2016
 
2015
 
Amount
 
%
 
Amount
 
%
 
Amount
 
%
 
(Dollars in thousands)
Tax expense (benefit) at federal income tax rate
$
62,776

 
35.00
 %
 
$
54,537

 
35.00
 %
 
$
20,667

 
35.00
 %
Increase (decrease) resulting from:
 
 
 
 
 
 
 
 
 
 
 
Bank-owned life insurance
(3,186
)
 
(1.78
)%
 
(1,817
)
 
(1.17
)%
 
(1,614
)
 
(2.73
)%
Stock compensation and excess tax benefit
(20,098
)
 
(11.21
)%
 
234

 
0.15
 %
 
729

 
1.23
 %
Dividends received deduction
(1,631
)
 
(0.91
)%
 
(1,919
)
 
(1.23
)%
 
(2,104
)
 
(3.56
)%
GFB NUBIL Revaluation
—

 
—
 %
 
—

 
—
 %
 
(4,954
)
 
(8.39
)%
NOL Valuation Allowance
—

 
—
 %
 
—

 
—
 %
 
(9,061
)
 
(15.35
)%
State tax, net of federal benefit
3,528

 
1.97
 %
 
4,777

 
3.07
 %
 
1,619

 
2.74
 %
Federal tax rate change
14,301

 
7.97
 %
 
—

 
—
 %
 
—

 
—
 %
Other
(1,525
)
 
(0.85
)%
 
93

 
0.06
 %
 
374

 
0.62
 %
Total
$
54,165

 
30.19
 %
 
$
55,905

 
35.88
 %
 
$
5,656

 
9.56
 %

Deferred income tax assets and liabilities reflect the tax effect of estimated temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for the same items for income tax reporting purposes.
The significant components of the net deferred tax assets and liabilities for the periods presented are as follows:
 
December 31,
 
2017
 
2016
 
(Dollars in thousands)
Deferred tax assets:
 
 
 
Excess tax basis over carrying value of assets:
 
 
 
Other real estate owned
$
1,456

 
$
12,991

Total
1,456

 
12,991

Excess carrying value over tax basis of liabilities:
 
 
 
Repo Loans
—

 
324

Total
—

 
324

Net operating loss carry forward:
 
 
 
Federal
5,755

 
9,287

State
534

 
921

Total
6,289

 
10,208

Amortization
11,717

 
21,555

Depreciation
—

 
660

Unrealized losses on securities available for sale
—

 
2,509

Allowance for loan losses
11,087

 
12,807

Non-qualified stock options and restricted stock
3,869

 
7,695

Other
469

 
2,696

Gross deferred tax assets
34,887

 
71,445

Valuation allowance
—

 
—

Gross deferred tax assets, net of valuation allowance
34,887

 
71,445

Deferred tax liabilities:
 
 
 
Loans
(947
)
 
(7,542
)
Depreciation
(239
)
 
—

Restricted securities
(1,475
)
 
(2,260
)
Unrealized gains on securities available for sale
(3,594
)
 
—

Other
(1,589
)
 
(252
)
Gross deferred tax liabilities
(7,844
)
 
(10,054
)
Deferred tax assets (liabilities), net
$
27,043

 
$
61,391


At December 31, 2017, the Company had deferred tax assets for federal and state net operating losses of $5.8 million and $534 thousand, respectively. The federal and state net operating loss carryforwards are attributable to the acquisition of Great Florida Bank and are subject to an annual limitation. These deferred tax assets for net operating losses will expire in years 2028 through 2034.
The Company records a valuation allowance to reduce its deferred tax assets if, based on the weight of available evidence, both positive and negative, for each respective tax jurisdiction, it is more likely than not that some portion or all of such deferred tax assets will not be realized. Management believes the Company will realize the benefits from certain federal and state net operating loss carryforwards and as such, in 2015, reversed the valuation allowance of $9.1 million previously provided on the deferred tax assets for federal and state net operating loss carryforwards. The reversal of the valuation allowance on the deferred tax assets was recognized as a reduction of income tax expense.
The Company is subject to U.S. federal income tax as well as state income tax for Florida and New York.
The Company had no uncertain tax positions at December 31, 2017, 2016 or 2015. The Company’s policy is to classify interest and penalties associated with income taxes within other expenses. The Company did not incur interest or penalties associated with income taxes at December 31, 2017, 2016 or 2015.