Entity information:
13)
Income Taxes

The provision for income taxes for the year ended December 31, 2017, 2016 and 2015 consists of the following:
 
 
 
Years ended December 31,
 
 
 
2017
  
2016
  
2015
 
 
 
(In Thousands)
 
Current:
         
Federal
 
$
13,028
   
12,255
   
8,061
 
State
  
2,362
   
2,643
   
1,342
 
 
  
15,390
   
14,898
   
9,403
 
Deferred:
            
Federal
  
2,960
   
1,084
   
(447
)
State
  
119
   
480
   
293
 
 
  
3,079
   
1,564
   
(154
)
Total
 
$
18,469
   
16,462
   
9,249
 
 
The income tax provisions differ from that computed at the Federal statutory corporate tax rate for the years ended December 31, 2017, 2016 and 2015 as follows:
 
 
 
Years ended December 31,
 
 
 
2017
  
2016
  
2015
 
 
 
(Dollars In Thousands)
 
Income before income taxes
 
$
44,433
   
41,994
   
25,819
 
Tax at Federal statutory rate (35%)
  
15,552
   
14,698
   
9,037
 
Add (deduct) effect of:
            
State income taxes net of Federal income tax benefit
  
1,613
   
2,030
   
1,063
 
Cash surrender value of life insurance
  
(632
)
  
(619
)
  
(496
)
Non-deductible ESOP and stock option expense
  
380
   
268
   
181
 
Tax-exempt interest income
  
(449
)
  
(529
)
  
(552
)
Non-deductible compensation
  
280
   
254
   
154
 
Stock option write off
  
-
   
773
   
-
 
Deferred tax asset revaluation
  
2,644
   
-
   
-
 
Stock compensation
  
(1,074
)
  
(517
)
  
-
 
Other
  
155
   
104
   
(138
)
Income tax provision
  
18,469
   
16,462
   
9,249
 
Effective tax rate
  
41.6
%
  
39.2
%
  
35.8
%

The significant components of the Company's net deferred tax assets (liabilities) included in prepaid expenses and other assets are as follows at December 31,
2017 and 2016:
 
 
 
December 31,
 
 
 
2017
  
2016
 
Gross deferred tax assets:
 
(In Thousands)
 
Fixed assets
 
$
480
   
729
 
Compensation agreements
  
-
   
27
 
Restricted stock and stock options
  
466
   
638
 
Allowance for loan losses
  
3,451
   
6,109
 
Repurchase reserve for loans sold
  
159
   
183
 
Real estate owned
  
993
   
1,529
 
Nonaccrual interest
  
305
   
531
 
Capital loss carryforward
  
-
   
21
 
Unrealized loss on impaired securities
  
23
   
36
 
Other
  
192
   
313
 
Total gross deferred tax assets
  
6,069
   
10,116
 
Gross deferred tax liabilities:
        
Unrealized gain on securities available for sale, net
  
(11
)
  
(81
)
Mortgage servicing rights
  
(119
)
  
(894
)
FHLB stock
  
(232
)
  
(303
)
Deferred loan fees
  
(703
)
  
(820
)
Deferred liabilities
  
(1,065
)
  
(2,098
)
Net deferred tax assets
 
$
5,004
   
8,018
 

The Company had a Wisconsin net operating loss carry forward of $26,000 at December 31, 2017 which will begin to expire in 2028. The Company has no capital loss carryforwards as of December 31, 2017.
 
Under the Internal Revenue Code and Wisconsin Statutes, the Company was permitted to deduct, for tax years beginning before 1988, an annual addition to a reserve for bad debts. This amount differs from the provision for loan losses recorded for financial accounting purposes. Under prior law, bad debt deductions for income tax purposes were included in taxable income of later years only if the bad debt reserves were used for purposes other than to absorb bad debt losses. Because the Company did not intend to use the reserve for purposes other than to absorb losses, no deferred income taxes were provided. Retained earnings at December 31, 2017 include approximately $16.7 million for which no deferred Federal or state income taxes were provided.  Deferred income taxes have been provided on certain additions to the tax reserve for bad debts.
 
The Company and its subsidiaries file consolidated federal and combined state tax returns. One subsidiary also files separate state income tax returns in certain states.  The Company is no longer subject to state income tax examinations by certain state tax authorities for years before 2013 or subject to federal tax examinations for the years before 2014.

As a result of the Tax Cuts and Jobs Act that was enacted into law on December 22, 2017, the Company revalued its net deferred tax asset to reflect the reduction in its federal corporate income tax rate from 35% to 21%. This revaluation resulted in a one-time income tax expense of approximately $2.7 million during the fourth quarter of 2017.  The revaluation is subject to adjustment in future periods.