Note 15.

Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and the Commonwealth of Virginia. The Commonwealth of Virginia does not charge an income tax for regulated banking institutions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2010.

The expense (benefit) for income taxes consisted of the following.


Year ended December 31,	2013		2012
Current	$	139,822	$	253,421
Deferred		259,307		(42,949	)

	$	399,129	$	210,472

The reasons for the differences between the statutory Federal income tax rates and the effective tax rates are summarized as follows:


	2013			2012
Statutory rate		34.0	%		34.0	%
Increase (decrease) resulting from:
Tax exempt interest		-8.5	%		-12.8	%
Bank owned life insurance		-2.7	%		—
Other, net		1.8	%		2.0	%

		24.6	%		23.2	%

The components of the net deferred tax assets and liabilities included in other liabilities are as follows:


December 31,	2013			2012
Deferred tax assets
Allowance for loan losses	$	631,641		$	747,792
Interest on non-accrual loans		40,495			120,356
Mortgage servicing rights		196,909			—
Other real estate		476,496			236,610
Pension plan		—			3,276
Postretirement benefits		206,429			258,231
Deferred compensation		113,712			84,879
Stock-based compensation		18,301			10,215
Alternative minimum tax credit		96,428			174,997
Unrealized losses on available-for-sale securities		407,964			—
Other		2,913			272,942

Total deferred tax assets		2,191,288			1,909,298


Deferred tax liabilities
Unrealized gains on available-for-sale securities		—			(143,828	)
Pension plan		(27,120	)		—
Depreciation		(276,066	)		(305,010	)
Amortization of goodwill		(896,451	)		(860,950	)
Net deferred loan fees and costs		(171,882	)		(238,732	)
Other		(63,925	)		(63,591	)

Total deferred tax (liabilities)		(1,435,444	)		(1,612,111	)


Net deferred tax assets	$	755,844		$	297,187