Income Tax

The components of income tax expense are as follows:



	Years Ended December 31,
	2017		2016		2015
	(in thousands)
Current tax expense	$	42,724	$	43,069	$	36,426
Deferred tax expense	22,431		1,846		6,367
Total	$	65,155	$	44,915	$	42,793

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



	December 31,
	2017			2016
	(in thousands)
Deferred tax assets:
Allowance for loan and lease losses	$	18,315		$	26,638
Deferred compensation	9,539			16,232
Stock options and restricted stock	1,438			1,922
OREO	521			111
Nonaccrual interest	163			320
Purchase accounting	—			2,613
Unrealized loss on investment securities	5,992			7,492
Net operating losses and credit carryforwards	7,259			8,597
Depreciation	—			1,059
Other	985			851
Total deferred tax assets	44,212			65,835
Deferred tax liabilities:
Asset purchase tax basis difference	(5,709		)	(9,037		)
FHLB stock dividends	(782		)	(1,232		)
Deferred loan fees	(4,505		)	(5,126		)
Purchase accounting	(9,088		)	—
Depreciation	(1,581		)	—
Other	(2,036		)	(155		)
Total deferred tax liabilities	(23,701		)	(15,550		)
Net deferred tax asset	$	20,511		$	50,285

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



	Years Ended December 31,
	2017					2016					2015
	Amount			Percent		Amount			Percent		Amount			Percent
	(dollars in thousands)
Income tax based on statutory rate	$	62,262		35	%	$	52,424		35	%	$	49,567		35	%
Reduction resulting from:
Tax exempt instruments	(8,485		)	(5	)%	(7,433		)	(5	)%	(6,761		)	(5	)%
Life insurance proceeds	(3,351		)	(2	)%	(1,680		)	(1	)%	(1,554		)	(1	)%
Acquisition costs	825			1	%	—			—	%	—			—	%
Deferred tax asset revaluation	12,210			7	%	—			—	%	—			—	%
Other, net	1,694			1	%	1,604			1	%	1,541			1	%
Income tax provision	$	65,155		37	%	$	44,915		30	%	$	42,793		30	%

As of December 31, 2017 and 2016, 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, 2017 and 2016. As a result of recent acquisitions, the Company has net operating loss carryforwards in the federal, Idaho and Oregon jurisdictions of $24.8 million, $26.9 million and $144 thousand, respectively, which begin to expire in 2024 and federal credit carryforwards of $450 thousand. Federal credit carryforwards relate to alternative minimum taxes and have no expiration. 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.

The Company’s 2017 results included the impact of the enactment of the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017. The law includes significant changes to the U.S. corporate tax system, including a Federal corporate rate reduction from 35% to 21%. In 2017, the Company applied the newly enacted corporate federal income tax rate of 21% resulting in an approximately $12.2 million increase in tax expense from the re-measurement of its net deferred tax assets. The final impact of the tax rate change may differ due to changes in assumption made by the Company or actions the Company may take as a result of tax reform.