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 for income taxes consisted of the following (in thousands):


Year ended December 31,	2014		2013
Current	$	499	$	140
Deferred		58		259

	$	557	$	399

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


	2014			2013
Statutory rate		34.0	%		34.0	%
Increase (decrease) resulting from:
Tax exempt interest		-8.3	%		-8.5	%
Bank owned life insurance		-3.1	%		-2.7	%
Other, net		0.7	%		1.8	%

		23.3	%		24.6	%

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


December 31,	2014			2013
Deferred tax assets
Allowance for loan losses	$	661		$	632
Interest on non-accrual loans		47			40
Mortgage servicing rights		—			197
Other real estate		397			477
Pension plan		222			—
Postretirement benefits		262			206
Deferred compensation		141			114
Stock-based compensation		25			18
Alternative minimum tax credit		—			96
Unrealized losses on available-for-sale securities		—			408
Other		11			3

Total deferred tax assets		1,766			2,191


Deferred tax liabilities
Unrealized gains on available-for-sale securities		(23	)		—
Pension plan		—			(27	)
Depreciation		(218	)		(276	)
Amortization of goodwill		(928	)		(896	)
Net deferred loan fees and costs		(134	)		(172	)
Other		(67	)		(64	)

Total deferred tax (liabilities)		(1,370	)		(1,435	)


Net deferred tax assets	$	396		$	756