Income Tax

The components of income tax expense are as follows:



	Years Ended December 31,
	2016		2015		2014
	(in thousands)
Current tax expense	$	43,069	$	36,426	$	21,565
Deferred tax expense	1,846		6,367		14,646
Total	$	44,915	$	42,793	$	36,211

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



	December 31,
	2016			2015 (1)
	(in thousands)
Deferred tax assets:
Allowance for loan and lease losses	$	26,638		$	26,024
Deferred compensation (1)	16,232			14,716
Stock options and restricted stock	1,922			1,423
OREO	111			813
Nonaccrual interest	320			69
Purchase accounting	2,613			9,457
Unrealized loss on investment securities (1)	7,492			—
Net operating losses and credit carryforwards	8,597			11,467
Depreciation	1,059			—
Other	851			180
Total deferred tax assets	65,835			64,149
Deferred tax liabilities:
Asset purchase tax basis difference	(9,037		)	(9,058		)
FHLB stock dividends	(1,232		)	(1,232		)
Deferred loan fees	(5,126		)	(5,202		)
Unrealized gain on investment securities (1)	—			(30		)
Depreciation	—			(3,730		)
Other	(155		)	—
Total deferred tax liabilities	(15,550		)	(19,252		)
Net deferred tax asset	$	50,285		$	44,897

__________

(1) Reclassified to conform to the current period’s presentation.

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



	Years Ended December 31,
	2016					2015					2014
	Amount			Percent		Amount			Percent		Amount			Percent
	(dollars in thousands)
Income tax based on statutory rate	$	52,424		35	%	$	49,567		35	%	$	41,225		35	%
Reduction resulting from:
Tax exempt instruments	(7,433		)	(5	)%	(6,761		)	(5	)%	(5,328		)	(5	)%
Life insurance proceeds	(1,680		)	(1	)%	(1,554		)	(1	)%	(1,352		)	(1	)%
Acquisition costs	—			—	%	—			—	%	448			—	%
Other, net	1,604			1	%	1,541			1	%	1,218			2	%
Income tax provision	$	44,915		30	%	$	42,793		30	%	$	36,211		31	%

As of December 31, 2016 and 2015, we had no unrecognized tax benefits. Our policy is to recognize interest and penalties on unrecognized tax benefits in “Provision for income taxes” in the Consolidated Statements of Income. There were no amounts related to interest and penalties recognized for the years ended December 31, 2016 and 2015. As a result of recent acquisitions, the Company has net operating loss carryforwards in the federal, Idaho and Oregon jurisdictions of $18.4 million, $27.6 million and $170 thousand, respectively, which begin to expire in 2024 and federal and Oregon credit carryforwards of $404 thousand and $560 thousand, respectively. Federal credit carryforwards are related to alternative minimum taxes and have no expiration while the Oregon credit carryforwards begin to expire in 2017. 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.