13. INCOME TAX EXPENSE

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

NOTE 13. INCOME TAX EXPENSE

The components of income tax expense were as follows:

	2018			2017			2016
Current expense	$	1,155		$	3,671		$	3,046
Deferred expense (benefit)		(55	)		(152	)		53
Adjustments to deferred tax asset due to change in federal tax rate		-			811			-
Total deferred (benefit) expense		(55	)		659			53
Total Income Tax Expense	$	1,110		$	4,330		$	3,099

The components of deferred taxes as of December 31, were as follows:

	2018		2017
Deferred Tax Assets:
Allowance for loan losses	$	1,096	$	1,265
Split Dollar Life Insurance		3		3
Nonqualified deferred compensation		564		546
Low income housing partnerships losses		279		203
Core deposit amortization		13		108
Other real estate owned		173		173
Net unrealized loss on securities available for sale		25		5
Unfunded pension benefit obligation		1,030		1,096
Total Assets	$	3,183	$	3,399

	2018		2017
Deferred Tax Liabilities:
Unearned low income housing credits	$	158	$	180
Depreciation		403		340
Prepaid pension		849		1,010
Goodwill tax amortization		564		559
Total Liabilities		1,974		2 089
Net Deferred Tax Asset (included in Other Assets on Balance Sheet)	$	1,209	$	1,310

The following table summarizes the differences between the actual income tax expense and the amounts computed using the federal statutory tax rates:

	2018			2017			2016
Tax expense at federal statutory rates	$	2,104		$	4,511		$	4,307
Increases (decreases) in taxes resulting from:
State income taxes, net of federal benefit		-			-			6
Partially tax-exempt income		(49	)		(59	)		(41	)
Tax-exempt income		(146	)		(212	)		(217	)
LIH and historic credits		(774	)		(633	)		(896	)
Deferred Tax Asset rate change		-			811			-
Other		(25	)		(88	)		(60	)
Total Income Tax Expense	$	1,110		$	4,330		$	3,099

The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions in accordance with accounting guidance related to income taxes.

The Company and its subsidiaries file federal income tax returns and state income tax returns. With few exceptions, the Company is no longer subject to federal or state income tax examinations by tax authorities for years before 2015.