INCOME TAXES

The provision for federal income taxes consists of (in thousands):



	2018		2017		2016
Income taxes currently payable	$	2,721	3,018		3,515
Revaluation of net deferred tax liability	—		(224	)	—
Deferred income tax provision (benefit)	228		1,478		928
Provision for income taxes	$	2,949	4,272		4,443

A reconciliation between the statutory income tax and the Company's effective tax rate follows:



	2018		2017		2016
Statutory tax rate	21.0	%	34.0	%	34.0	%
Increase (decrease) resulting from -
Tax exempt interest	(3.1	)%	(6.0	)%	(6.3	)%
Tax exempt income on bank owned life insurance	(0.9	)%	(1.7	)%	(1.5	)%
Revaluation of net deferred tax liability	—	%	(1.3	)%	—	%
Captive insurance premium income	(0.9	)%	(0.9	)%	—	%
Other – net	0.5	%	0.7	%	0.1	%
Effective tax rate	16.6	%	24.8	%	26.3	%

Deferred tax assets and liabilities, included in the Consolidated Balance Sheets with other assets in 2018 and accrued interest and other liabilities in 2017, consist of the following at December 31 (in thousands):



	2018			2017
Deferred tax assets:
Allowance for loan losses	$	849		715
Net unrealized losses on investment securities available-for-sale	1,240			707
Fair value adjustment on loans acquired from mergers	723			238
Deferred compensation	706			760
Other	432			471
	3,950			2,891
Deferred tax liabilities:
Depreciation of premises and equipment	(1,551		)	(1,672	)
Amortization of intangibles	(1,499		)	(1,030	)
Prepaid expenses	(243		)	(210	)
Deferred loan fees	(1		)	(1	)
FHLB stock dividends	(216		)	(216	)
Fair value adjustment on securities acquired from mergers	(6		)	(9	)
	(3,516		)	(3,138	)
Net deferred tax (liabilities) assets	$	434		(247	)

As of December 31, 2018 and 2017 there were no unrecognized tax benefits and the Company does not anticipate the total amount of unrecognized tax benefits will significantly change within the next twelve months. There were no amounts recognized for interest and penalties in the consolidated statements of income for the three-year period ended December 31, 2018.

The Company is no longer subject to examination by federal tax authorities for years before 2015.

The Tax Cuts and Jobs Act ("Tax Act") was enacted on December 22, 2017. Among other changes, the Tax Act reduced the US Federal corporate tax rate from 35% to 21%. At December 31, 2017, the Company had 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 21%.