8. INCOME TAXES

The provision for income tax expense for the three and six months ended June 30, 2017 and 2016 is as follows:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	(in thousands)				(in thousands)
Federal:
Current	$	(66)	$	4,614	$	1,048	$	8,158
Deferred		2,380		(3,925)		2,908		(2,487)
Federal income tax expense		2,314		689		3,956		5,671
State:
Current		(68)		1,072		150		1,347
Deferred		389		(1,064)		467		(526)
State income tax expense		321		8		617		821
Total income tax expense	$	2,635	$	697	$	4,573	$	6,492

The actual income tax expense differs from the “expected” income tax expense (computed by applying the combined applicable effective federal and state tax rates to income before income tax expense) as follows:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	(in thousands)				(in thousands)
Computed expected tax expense provision, at federal rate	$	2,538	$	663	$	4,327	$	6,052
State tax, net of federal tax benefit		194		11		376		544
Other		(97)		23		(130)		(104)
Total income tax expense	$	2,635	$	697	$	4,573	$	6,492

The Company files income tax returns in the U.S. federal jurisdiction and various states and local jurisdictions. Monarch National Holding Company (“MNHC”), a wholly owned subsidiary of the consolidated VIE, is currently under Federal audit for tax year 2015. As of June 30, 2017, except for the MNHC 2015 Federal income tax return audit, no other open tax years are under examination by the IRS or any material state and local jurisdictions

The Company adopted ASU 2016-09 in the first quarter of 2017 which requires the recognition of excess tax benefits and tax deficiencies within income tax (benefit) expense in the Consolidated Statements of Operations (see Note 2). The Company elected to apply this change in presentation prospectively from the beginning of fiscal year 2017, thus prior periods have not been adjusted. This adoption resulted in the recognition of $0.1 million of excess tax deficiencies recorded within income tax expense for the six months ended June 30, 2017. This change could create volatility in the Company's effective tax rate in future periods. During the six months ended June 30, 2016, excess tax benefits were recorded in shareholders’ equity within the Consolidated Balance Sheets instead of income tax expense within the Consolidated Statements of Operations.

As of June 30, 2017 and December 31, 2016, there are no uncertain tax positions.