NOTE 14, Income Taxes

The components of income tax expense for the current and prior year-ends are as follows:

(dollars in thousands)	2020			2019
Current income tax expense	$	1,155		$	728
Deferred income tax expense (benefit)		(634	)		352
Reported income tax expense	$	521		$	1,080

A reconciliation of the expected federal income tax expense on income before income taxes with the reported income tax expense for the same periods follows:

	Years Ended December 31,
(dollars in thousands)	2020			2019
Expected tax expense	$	1,241		$	1,877
Interest expense on tax-exempt assets		5			7
Low-income housing tax credit		(413	)		(440	)
Tax-exempt interest, net		(147	)		(201	)
Bank-owned life insurance		(176	)		(164	)
Other, net		11			1
Reported tax expense	$	521		$	1,080

The effective tax rates for 2020 and 2019 were 8.8% and 12.1%, respectively.

The components of the net deferred tax asset, included in other assets, are as follows:

(dollars in thousands)	2020		2019
Deferred tax assets:
Allowance for loan losses	$	2,017	$	2,029
Nonaccrual loans		9		17
Acquisition accounting		14		61
Net operating losses		643		677
Investments in pass-through entities		224		122
Bank owned life insurance benefit		68		64
Securities available-for-sale		-		21
Stock awards		97		67
Deferred compensation		397		347
Deferred loan fees and costs		443		-
Other		55		59
	$	3,967	$	3,464
Deferred tax liabilities:
Premises and equipment	$	363	$	345
Acquisition accounting		67		76
Deferred loan fees and costs		-		117
Securities available-for-sale		1,081		-
		1,511		538
Net deferred tax assets	$	2,456	$	2,926

The Company files income tax returns in the U.S. federal jurisdiction and the Commonwealth of Virginia. 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 2017.