. Income Taxes

For the years ended

December 31, 2017,

2016,

and

2015,

the current and deferred amounts of the income tax expense are summarized as follows:

	Year Ended December 31 ,
	201 7		201 6		201 5
	(In thousands )
Current :
Federal	$	59,433	$	28,788	$	31,587
State		28,278		22,364		26,396
Total Current	$	87,711	$	51,152	$	57,983

Deferred :
Federal	$	31,818		11,775	$	3,738
State		2,736		4,174		(1,734	)
Total Deferred	$	34,554	$	15,949	$	2,004
Total income tax expense	$	122,265	$	67,101	$	59,987

Temporary differences between the amounts reported in the financial statements and the tax basis of assets and liabilities give rise to deferred taxes. Net deferred tax

assets at

December 31, 2017,

and at

December 31, 2016

, are included in other assets in the accompanying Consolidated Balance Sheets and are as follows:

	As of December 31 ,
	201 7			201 6
	(In thousands )
Deferred Tax Asset s
Loan loss allowance, due to differences in computation of bad debts	$	37,157		$	51,192
Share-based compensation		2,630			4,729
Accrual for bonuses		630			6,095
Non-accrual interest		2,100			4,246
Write-down on equity securities and venture capital investments		2,561			4,437
Depreciation and amortization		1,564			8,334
State tax		6,783			6,426
Unrealized loss on interest rate swaps		1,158			1,763
Unrealized loss on securities available-for-sale, net		-			1,121
Investment in affordable housing partnerships		580			-
Basis difference in acquired assets		1,676			-
Tax credits carried forward		9,278			-
Net operating loss carried forward		18,375			-
Other, net		3,279			3,598
Gross deferred tax assets		87,771			91,941

Deferred Tax Liabilities
Deferred loan costs		(7,655	)		(8,695	)
Investment in affordable housing partnerships		-			(2,659	)
Basis difference in acquired assets		-			(4,841	)
Dividends on Federal Home Loan Bank common stock		(1,021	)		(1,322	)
Other, net		(3,758	)		(3,228	)
Gross deferred tax liabilities		(12,434	)		(20,745	)
Net deferred tax assets	$	75,337		$	71,196

Amounts for the current year are based upon estimates and assumptions and could vary from amounts shown on the tax return

s as filed.

In assessing the realization of deferred tax assets, management considers whether it is more likely than

not

that some portion or all of the deferred tax assets will

not

be realized. The ultimate realization of deferred tax assets is depend

ent on the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than

not

the Company will realize all benefits related to these deductible temporary differences

he Company had income tax refunds receivables of

$7.2

million at

December 31, 2017,

and

$14.6

million at

December 31, 2016

. These income tax receivables are included in other assets in the accompanying Consolidated Balance Sheets.

On D

ecember

22,

2017,

the Tax Cuts and Jobs Act, was enacted into law and as a result, during the

fourth

quarter of

2017,

the Company recorded

$23.4

million of additional income tax expense related to the revaluation of the Company’s deferred tax assets and a

$2.6

million pretax write-down of low income housing tax credit investments

The Company

’s tax returns are open for audits by the Internal Revenue Service back to

2014

and by the California Franchise Tax Board back to

2013.

It is reasonably possible that unrecognized tax benefits could change significantly over the next

twelve

months. The Company does

not

expect that any such changes would have a material impact on its annual effective tax rate.

Income tax expense results in effective tax rates that differ from the statutory Federal income tax rate for the years indicated as follows:

	Year Ended December 31 ,
	201 7					201 6					201 5
	(Dollars in thousands )
Tax provision at Federal statutory rate	$	104,407		35.0	%	$	84,770		35.0	%	$	77,384		35.0	%
State income taxes, net of Federal income tax benefit		20,616		6.9			17,250		7.1			14,656		6.6
Deferred taxes write-down due to Tax Cuts and Jobs Act		23,365		7.8			-		-			-		-
Excess deduction for stock option and RSUs		(3,146	)	(1.0	)		-		-			-		-
Non-taxable bargain purchase gain		(1,970	)	(0.7	)		-		-			-		-
Low income housing and other tax credits		(20,656	)	(6.9	)		(37,901	)	(15.6	)		(30,986	)	(14.0	)
Non-deductible stock options expense		-		-			3,469		1.4			-		-
Other, net		(351	)	(0.1	)		(487	)	(0.2	)		(1,067	)	(0.5	)
Total income tax expense	$	122,265		41.0	%	$	67,101		27.7	%	$	59,987		27.1	%