INCOME TAXES

12 Months Ended

Dec. 31, 2019

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


	For the Years Ended December 31,
(dollars in thousands)	2019		2018		2017
Current – federal	$	21,994	$	27,714	$	33,074
Current - state	5,328		1,375		5,230
Deferred - federal	19,639		496		3,874
Deferred - state	3,182		878		(5,069)
Remeasurement of deferred tax assets and deferred tax liabilities at reduced federal corporate tax rate	—		—		13,625
	$	50,143	$	30,463	$	50,734

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)	2019			2018			2017
Federal income statutory rate	21		%	21		%	35		%

Tax at federal income tax rate	$	44,433		$	31,813		$	43,499
Change resulting from:
State income tax, net of federal benefit	7,389			1,965			(680)
Tax-exempt interest	(2,911)			(3,095)			(4,390)
Increase in cash value of bank owned life insurance	(581)			(382)			(556)
Excess tax benefit from stock compensation	(108)			(602)			(939)
Nondeductible merger expenses	799			1,002			—
Other	1,122			(238)			175
Remeasurement of deferred tax assets and deferred tax liabilities at reduced federal corporate tax rate	—			—			13,625
Provision for income taxes	$	50,143		$	30,463		$	50,734

The components of deferred income taxes are as follows:


	December 31,
(dollars in thousands)	2019		2018
Deferred tax assets
Allowance for loan losses	$	9,596	$	7,222
Deferred compensation	3,459		3,467
Deferred gain on interest rate swap	39		56

Nonaccrual interest	107		107
Purchase accounting adjustments	21,104		13,144

Other real estate owned	4,556		2,980
Net operating loss tax carryforward	18,775		19,277
Tax credit carryforwards	3,701		1,655
Unrealized loss on securities available for sale	—		2,792
FDIC-assisted transaction adjustments	2,060		2,501
Capitalized costs, accrued expenses and other	4,840		2,535
Lease liability	10,619		—
	78,856		55,736

Deferred tax liabilities
Premises and equipment	12,211		4,597
Mortgage servicing rights	25,990		3,716
Subordinated debentures	7,226		5,259

Goodwill and intangible assets	15,756		7,017
Unrealized gain on securities available for sale	5,430		—
Unrealized gain on interest rate swap	—		21
Right of use lease asset	10,063		—
	76,676		20,610

Net deferred tax asset	$	2,180	$	35,126

At December 31, 2019, the Company had federal net operating loss carryforwards of approximately $74.47 million which expire at various dates from 2027 to 2035. At December 31, 2019, the Company had state net operating loss carryforwards of approximately $74.84 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 16 years. The state net operating loss carryforwards are subject to similar limitations and are expected to be recovered over the next 16 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, 2019, 2018 and 2017, and the Company did not have any amount accrued for interest and penalties at December 31, 2019, 2018 and 2017.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 federal taxing authorities for years before 2016 and state taxing authorities for years before 2015.