Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and the states of Virginia and North Carolina. 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 2016.

The components of the Company's net deferred tax assets were as follows (dollars in thousands):



	December 31,
	2019		2018
Deferred tax assets:
Allowance for loan losses	$	2,841	$	2,868
Nonaccrual loan interest	490		460
Other real estate owned valuation allowance	120		69
Deferred compensation	1,184		832
Net unrealized losses on securities	—		1,147
Acquisition accounting adjustments	3,670		734
Accrued pension liability	50		36
NOL Carryforward	456		—
Net unrealized loss on cash flow hedges	573		180
Other	601		420
Total deferred tax assets	9,985		6,746

Deferred tax liabilities:
Depreciation	1,079		759
Accretion of discounts on securities	—		24
Core deposit intangibles	1,669		208
Net unrealized gains on securities	799		—
Other	574		238
Total deferred tax liabilities	4,121		1,229
Net deferred tax assets	$	5,864	$	5,517

The provision for income taxes consists of the following (dollars in thousands):



	Years Ended December 31,
	2019		2018		2017
Current tax expense	$	3,793	$	5,090	$	7,355
Deferred tax expense	1,068		556		724
Deferred tax asset adjustment for tax rate change	—		—		2,747
Total income tax expense	$	4,861	$	5,646	$	10,826

A reconcilement of the "expected" federal income tax expense to reported income tax expense is as follows (dollars in thousands):



	Years Ended December 31,
	2019			2018			2017
Expected federal tax expense	$	5,411		$	5,927		$	9,126
Tax impact from enacted change in tax rate	—			—			2,747
Nondeductible interest expense	67			69			85
Tax-exempt interest	(478		)	(504		)	(949		)
State income taxes	149			337			296
Other, net	(288		)	(183		)	(479		)
Total income tax expense	$	4,861		$	5,646		$	10,826

Income tax expense for 2017 includes a downward adjustment of net deferred tax assets in the amount of $2,747,000, recorded as a result of the enactment of the Tax Cuts and Jobs Act on December 22, 2017 (the "Tax Reform Act"). The Tax Reform Act reduced the corporate federal tax rate from 35% to 21% effective January 1, 2018.