. Income Taxes

The components of income tax expense

from operations are as follows:


December 31, (In thousands)	20 17		201 6		201 5
Currently payable	$	6,502	$	5,556	$	3,662
Revaluation of deferred income taxes resulting from change in statutory tax rates		5,869		-		-
Deferred		270		885		1,631
Total income tax expense	$	12,641	$	6,441	$	5,293

An analysis of the difference between the effective income tax rates and the statutory federal income tax rate follows.


December 31,	201 7			201 6			201 5
Federal statutory rate		35.0	%		35.0	%		35.0	%
Changes from statutory rates resulting from:
Revaluation of deferred income taxes resulting from changes in statutory tax rates		24.1			-			-
Tax-exempt interest		(4.1	)		(4.6	)		(5.8	)
Nondeductible interest to carry tax-exempt obligations		.1			.2			.2
Premium income not subject to tax		(1.4	)		(1.3	)		(1.5	)
Company-owned life insurance		(1.6	)		(1.5	)		(1.6	)
Other, net		(.1	)		.1			(.2	)
Effective tax rate on pretax income		52.0	%		27.9	%		26.1	%

The tax effects of the significant temporary differences that comprise deferred tax assets and liabilities at

December 31,

2017

and

2016

are as follows:


December 31, (In thousands)	201 7		201 6
Assets
Allowance for loan losses	$	2,058	$	3,285
Deferred compensation		135		236
Postretirement benefit obligations		3,605		5,825
Other real estate owned		621		1,303
Self-funded insurance		114		232
Paid time off		472		815
Depreciation		1,059		1,630
Intangibles		806		1,878
Unrealized loss on available for sale investment securities, net		933		1,811
Other		147		239
Total deferred tax assets		9,950		17,254
Liabilities
Prepaid expenses		-		153
Federal Home Loan Bank stock dividends		621		1,035
Deferred loan fees		523		846
Other		31		52
Total deferred tax liabilities		1,175		2,086
Net deferred tax asset	$	8,775	$	15,168

The Tax Cuts and Jobs Act ("Tax Act") was enacted on

December 22, 2017.

Among other changes, the Tax Act reduces the US Federal corporate tax rate from

35%

21%.

December 31, 2017,

the Company has substantially

completed its accounting for the tax effects of enactment of the Tax Act. For deferred tax assets and liabilities, amounts were remeasured based on the rates expected to reverse in the future, which is now

21%.

The Company continues to analyze certain aspects of the Tax Act and further refinements are possible, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts, although management does

not

expect these adjustments to materially impact the financial statements.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than

not

that some portion or all of the deferred tax assets will

not

be realized. The ultimate realization of deferred tax asse

ts is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than

not

the Company will realize the benefits of these deductible differences at

December 31, 2017.

The Company had

unrecognized tax benefits at year-end

2017,

2016,

and

2015

and did

not

recognize any increase in unrecognized benefits during

2017

relative to any tax

position taken in

2017.

The Company’s policy is to record the accrual of interest or penalties relative to unrecognized tax benefits, if any, in its income tax expense accounts. There was

amount accrued for interest at

December 31, 2017

and

2016.

penalties were accrued or recorded during any year in the

three

years ended

December 31, 2017.

The Company files U.S. federal and various state income tax returns. The Company is

longer subject to income tax examinations by taxing authorities for the year

s before

2014.