Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and the state of Virginia and various other states. With few exceptions, the Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years prior to 2012.

The Company believes it is more likely than not that the benefit of deferred tax assets will be realized. Consequently, no valuation allowance for deferred tax assets was deemed necessary at December 31, 2015 and 2014.

Net deferred tax assets consist of the following components as of December 31, 2015 and 2014:



(Dollars in thousands)	2015		2014
Deferred tax assets:
Allowance for loan losses	$	3,756	$	4,007
Deferred compensation	647		613
Interest rate swap	99		98
Other real estate owned	257		256
Property and equipment	49		—
Other	2,028		1,833
Total deferred tax assets	$	6,836	$	6,807
Deferred tax liabilities:
Deferred loan costs, net	$	317	$	125
Securities available for sale	965		2,050
Property and equipment	—		55
Total deferred tax liabilities	$	1,282	$	2,230
Net deferred tax assets	$	5,554	$	4,577

The provision for income taxes charged to operations for the years ended December 31, 2015, 2014, and 2013, consists of the following:



(Dollars in thousands)	2015		2014		2013
Current tax expense	$	2,606	$	1,160	$	2,315
Deferred tax expense (benefit)	109		1,181		(384		)
Total income tax expense	$	2,715	$	2,341	$	1,931

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income for the years ended December 31, 2015, 2014, and 2013, due to the following:



(Dollars in thousands)	2015			2014			2013
Computed "expected" tax expense	$	3,585		$	3,374		$	2,749
Increase (decrease) in income taxes resulting from:
Tax-exempt income	(829		)	(959		)	(1,037		)
Low income housing tax credits	(120		)	(211		)	(6		)
Other, net	79			137			225
	$	2,715		$	2,341		$	1,931