Income Tax

The components of income tax expense (benefit) are as follows:



	Years Ended December 31,
	2014		2013		2012
	(in thousands)
Current tax expense	$	21,565	$	21,581	$	21,218
Deferred tax expense (benefit)	14,646		5,413		(3,656		)
Total	$	36,211	$	26,994	$	17,562

Significant components of the Company’s deferred tax assets and liabilities are as follows:



	December 31,
	2014			2013 (1)
	(in thousands)
Deferred tax assets:
Allowance for loan and lease losses	$	26,341		$	27,196
Supplemental executive retirement plan	9,037			8,565
Stock option and restricted stock	1,177			917
OREO	1,101			7,929
Nonaccrual interest	68			2,354
Purchase accounting	15,272			15,551
Unrealized loss on investment securities	—			7,176
Net operating losses and credit carryforwards (1)	14,929			1,250
Other (1)	532			491
Total deferred tax assets	68,457			71,429
Deferred tax liabilities:
Asset purchase tax basis difference	(6,595		)	(7,754		)
FHLB stock dividends	(4,086		)	(4,159		)
Deferred loan fees	(4,691		)	(4,512		)
Unrealized gain on investment securities	(2,987		)	—
Depreciation	(5,394		)	(7,076		)
Total deferred tax liabilities	(23,753		)	(23,501		)
Net deferred tax asset	$	44,704		$	47,928

__________

(1) Reclassified to conform to current period presentation. The reclassification was limited to including previously reported amounts for net operating losses and credit carryforwards, which had been included in the row for other deferred tax assets into a separate row.

A reconciliation of the Company’s effective income tax rate with the federal statutory tax rate is as follows:



	Years Ended December 31,
	2014					2013 (1)					2012 (1)
	Amount			Percent		Amount			Percent		Amount			Percent
	(dollars in thousands)
Income tax based on statutory rate	$	41,225		35	%	$	30,454		35	%	$	22,297		35	%
Reduction resulting from:
Tax exempt instruments	(5,328		)	(5	)%	(4,113		)	(5	)%	(3,906		)	(6	)%
Life insurance proceeds	(1,352		)	(1	)%	(1,250		)	(1	)%	(1,001		)	(2	)%
Acquisition costs	448			—	%	1,362			2	%	—			—	%
Other, net (1)	1,218			2	%	541			—	%	172			—	%
Income tax provision	$	36,211		31	%	$	26,994		31	%	$	17,562		27	%

__________

(1) Reclassified to conform to current period presentation. The reclassification was limited to including previously reported amounts for tax credits in the row for other, net.

As of December 31, 2014 and 2013, we had no unrecognized tax benefits. There were no amounts related to interest and penalties recognized for the years ended December 31, 2014 and 2013. The tax years subject to examination by federal and state taxing authorities are the years ending December 31, 2014, 2013, 2012 and 2011. As a result of recent acquisitions, the Company has net operating loss carryforwards in the federal, Idaho and Oregon jurisdictions of of $30.7 million, $38.1 million and $13.5 million , respectively, which begin to expire in 2024 and federal and Oregon credit carryforwards of $561 thousand and $1.6 million, respectively. Federal credit carryforwards related to alternative minimum taxes, and have no expiration, while the Oregon credit carryforwards begin to expire in 2015. The amount of carryforwards that may be utilized annually is limited under Sections 382 and 383 as a result of changes in control. Management believes that these carryforwards will be used in the normal course of business, and as such, has not recorded a valuation allowance.