10. Income Taxes

Current and deferred income tax expense (benefit) provided for the years ended December 31 consisted of the following:

(in thousands)	2018			2017		2016
Current
Federal	$	2,517		$	9,460	$	13,101
State		6,224			4,046		4,832
Total Current		8,741			13,506		17,933
Deferred
Federal		5,622			11,154		(1,607	)
State		(160	)		1,451		(229	)
Total Deferred		5,462			12,605		(1,836	)
Total Provision for Taxes	$	14,203		$	26,111	$	16,097

The total provision for income taxes differs from the federal statutory rate as follows:

	2018						2017						2016
(in thousands)	Amount			Rate			Amount			Rate			Amount			Rate
Tax Provision at Federal Statutory Rate	$	12,543			21.0	%	$	19,068			35.0	%	$	16,037			35.0	%
Interest on Obligations of States and Political
Subdivisions exempt from Federal Taxation		(338	)		(0.6	%)		(617	)		(1.1	%)		(675	)		(1.5	%)
State and Local Income Taxes, Net of Federal Income
Tax Benefit		4,791			7.9	%		3,573			6.5	%		2,992			6.5	%
Bank Owned Life Insurance		(434	)		(0.7	%)		(696	)		(1.3	%)		(731	)		(1.6	%)
Low-Income Housing Tax Credit		(1,624	)		(2.7	%)		(1,546	)		(2.8	%)		(1,201	)		(2.6	%)
Out of Period Adjustment		(802	)		(1.3	%)		-			0.0	%		-			0.0	%
Bargain Purchase Gain		-			0.0	%		-			0.0	%		(641	)		(1.4	%)
Deferred Tax Asset Remeasurement		-			0.0	%		6,256			11.5	%		-			0.0	%
Other, Net		67			0.1	%		73			0.1	%		316			0.7	%
Total Provision for Taxes	$	14,203			23.8	%	$	26,111			47.9	%	$	16,097			35.1	%

The components of net deferred tax assets as of December 31 are as follows: The net deferred tax assets are reported in Interest Receivable and Other Assets on the Company’s Consolidated Balance Sheet.

(in thousands)	2018			2017
Deferred Tax Assets
Allowance for Credit Losses	$	15,877		$	14,962
Accrued Liabilities		7,444			7,421
Deferred Compensation		11,207			8,996
State Franchise Tax		1,307			850
Acquired Net Operating Loss		715			756
Fair Value Adjustment on Loans Acquired		300			242
Fair Value Adjustment on ORE Acquired		108			108
Unrealized Loss on Securities Available-for-Sale		1,800			373
Low-Income Housing Investment		412			470
Other		7			17
Total Deferred Tax Assets	$	39,177		$	34,195
Deferred Tax Liabilities
Premises and Equipment		(2,226	)		(1,361	)
Securities Accretion		(229	)		(164	)
Leasing Activities		(17,215	)		(12,389	)
Core Deposit Intangible Asset		(1,560	)		(247	)
Prepaid		(116	)		(964	)
Other		(1,000	)		(944	)
Total Deferred Tax Liabilities		(22,346	)		(16,069	)
Net Deferred Tax Assets	$	16,831		$	18,126

The Tax Cuts and Jobs Act of 2017, which lowers the Company’s previous 35% federal corporate tax rate to 21%, was signed into law by President Trump on December 22, 2017. In accordance with the ASC Topic 740, Income Taxes, companies must recognize the effect of tax law changes in the period of enactment. As a result, the Company was required to re-measure its deferred tax assets (DTA) and deferred tax liabilities (DTL) at the new tax rate of 21%. This onetime re-measurement resulted in a $6.3 million increase in the Company’s income tax provision in 2017. Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred tax assets are expected to be deductible, Management believes it is more likely than not we will realize the benefit of the remaining deferred tax assets. The net deferred tax assets are reported in Interest Receivable and Other Assets on the Company’s Consolidated Balance Sheet.

The Company and its subsidiaries file income tax returns in the U.S. federal and California jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by the tax authorities for the years before 2014.