INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Components of Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows (in thousands):



	2018			2017
Deferred tax assets:
Allowance for loan losses	$	3,660		$	5,860
Loss on transfer of loans to held-for-sale	—			1,266
Unrealized losses on securities	1,312			713
Write-down on assets held-for-sale	41			285
Core deposit intangible	283			153
Deferred compensation	310			358
Tax net operating loss carryforward	8,563			—
Other	635			667
Valuation Allowance	(11,056		)	—
Total deferred tax assets	3,748			9,302
Deferred tax liabilities:
Premises and equipment	1,315			1,589
Goodwill	1,540			1,321
FHLB stock dividends	73			57
Unrealized gains on cash flow hedges	224			226
Prepaid expenses	295			220
Purchase accounting adjustments on securities	229			392
Other	72			105
Total deferred tax liabilities	3,748			3,910
Net deferred tax asset	$	—		$	5,392

Components of Income Tax Expense

Components of income tax (benefit) expense are as follows (in thousands):



	2018			2017
Current	$	—		$	(1,719	)
Deferred benefit	(5,090		)	(4,474		)
Write-down of net deferred tax asset resulting from the Tax Cuts and Jobs Act	—			3,595
Change in valuation allowance	$	11,056		$	—
Total income tax (benefit) expense	$	5,966		$	(2,598	)

Income Tax Reconciliation

The provision for federal income taxes differs from the amount computed by applying the U.S. Federal income tax statutory rate of 21% on pre-tax income as follows (in thousands):



	December 31,
	2018			2017
Taxes calculated at statutory rate	$	(4,526	)	$	(5,026	)
Increase (decrease) resulting from:
Tax-exempt interest, net	(241		)	(524		)
Deferred compensation	(218		)	(315		)
Write-down of net deferred tax asset resulting from the Tax Cuts and Jobs Act	—			3,595
Change in valuation allowance	11,056			—
Other	(105		)	(328		)
	$	5,966		$	(2,598	)