INCOME TAXES

The income tax expense in the consolidated statements of income consists of the following:



	For the Years Ended December 31,
(dollars in thousands)	2018		2017			2016
Current – federal	$	27,714	$	33,074		$	28,749
Current - state	1,375		5,230			3,550
Deferred - federal	496		3,874			2,460
Deferred - state	878		(5,069		)	(1,613		)
Remeasurement of deferred tax assets and deferred tax liabilities at reduced federal corporate tax rate	—		13,625			—
	$	30,463	$	50,734		$	33,146

The Company’s income tax expense differs from the amounts computed by applying the federal income tax statutory rates to income before income taxes. A reconciliation of the differences is as follows:



	For the Years Ended December 31,
(dollars in thousands)	2018			2017			2016
Federal income statutory rate	21		%	35		%	35		%

Tax at federal income tax rate	$	31,813		$	43,499		$	36,836
Change resulting from:
State income tax, net of federal benefit	1,965			(680		)	695
Tax-exempt interest	(3,095		)	(4,390		)	(3,916		)
Increase in cash value of bank owned life insurance	(382		)	(556		)	(607		)
Excess tax benefit from stock compensation	(602		)	(939		)	—
Nondeductible merger expenses	1,002			—			—
Other	(238		)	175			138
Remeasurement of deferred tax assets and deferred tax liabilities at reduced federal corporate tax rate	—			13,625			—
Provision for income taxes	$	30,463		$	50,734		$	33,146

The components of deferred income taxes are as follows:



	December 31,
(dollars in thousands)	2018		2017
Deferred tax assets
Allowance for loan losses	$	7,222	$	6,704
Deferred compensation	3,467		1,494
Deferred gain on interest rate swap	56		114
Unrealized loss on interest rate swap	—		80
Nonaccrual interest	107		5
Purchase accounting adjustments	13,144		5,631
Goodwill and intangible assets	—		4,909
Other real estate owned	2,980		3,203
Net operating loss tax carryforward	19,277		17,853
AMT credit carryforward	1,339		813
Unrealized loss on securities available for sale	2,792		508
FDIC-assisted transaction adjustments	2,501		—
Capitalized costs, accrued expenses and other	2,851		1,144
	55,736		42,458

Deferred tax liabilities
Premises and equipment	4,597		4,064
Mortgage servicing rights	3,716		1,885
Subordinated debentures	5,259		5,147
FDIC-assisted transaction adjustments	—		3,042
Goodwill and intangible assets	7,017		—
Unrealized gain on interest rate swap	21		—
	20,610		14,138

Net deferred tax asset	$	35,126	$	28,320

At December 31, 2018, the Company had federal net operating loss carryforwards of approximately $75.92 million which expire at various dates from 2027 to 2035. At December 31, 2018, the Company had state net operating loss carryforwards of approximately $70.20 million which expire at various dates from 2027 to 2035. The federal net operating loss carryforwards are subject to limitations pursuant to Section 382 of the Internal Revenue Code and are expected to be recovered over the next 17 years. The state net operating loss carryforwards are subject to similar limitations and are expected to be recovered over the next 17 years. Deferred tax assets are recognized for net operating losses because the benefit is more likely than not to be realized.

The Company did not record any interest and penalties related to income taxes for the years ended December 31, 2018, 2017 and 2016, and the Company did not have any amount accrued for interest and penalties at December 31, 2018, 2017 and 2016.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the various states. The Company is no longer subject to examination by taxing authorities for years before 2015.