Income Taxes

The Company files income tax returns with the United States of America,the Commonwealth of Virginia and West Virginia. With few exceptions, the Company is no longer subject to federal, state, or local income tax examinations for years prior to 2015.

The net deferred tax asset at December 31, 2018 and 2017 consisted of the following components:



	December 31,
	2018		2017
	(in thousands)
Deferred tax assets:
Allowance for loan losses	$	1,141	$	922
Deferred compensation	92		72
Accrued postretirement benefits	23		23
Home equity origination costs	51		46
Nonaccrual interest	41		101
Securities available for sale	424		—
Credit carryforward	216		—
Other	54		53
	$	2,042	$	1,217
Deferred tax liabilities:
Property and equipment	$	508	$	506
Securities available for sale	—		71
	$	508	$	577
Net deferred tax asset	$	1,534	$	640

The Company has not recorded a valuation allowance for deferred tax assets because management believes that it is more likely than not that they will be ultimately realized.

Income tax expense for the years ended December 31, 2018, 2017 and 2016 consisted of the following components:



	December 31,
	2018			2017		2016
	(in thousands)
Current tax expense	$	1,713		$	3,094	$	2,346
Deferred tax (benefit) expense	(399		)	135		207
Deferred tax adjustment for enacted rate change	—			397		—
	$	1,314		$	3,626	$	2,553

The following table reconciles income tax expense to the statutory federal corporate income tax amount, which was calculated by applying the federal corporate income tax rate to pre-tax income for the years ended December 31, 2018, 2017 and 2016.



	December 31,
	2018			2017			2016
	(in thousands)
Statutory federal corporate tax amount	$	2,166		$	3,880		$	3,034
Tax-exempt interest (income)	(301		)	(417		)	(387		)
Officer insurance loss (income)	13			(92		)	15
Net tax credits	(605		)	(165		)	(126		)
Corporate tax rate change	—			397			—
Other, net	41			23			17
	$	1,314		$	3,626		$	2,553

The effective tax rates were 12.74%, 31.77%, and 28.62%, for years ended December 31, 2018, 2017, and 2016, respectively. The decrease in the 2018 effective tax rate resulted from two factors. First, the corporate income tax rate was reduced from 34% to 21%, effective January 1, 2018 as a result of the Tax Cuts and Jobs Act. The effective tax rate is also impacted by tax credits on qualified affordable housing project investments as discussed in Note 25 to the Consolidated Financial Statements as well as qualified rehabilitation credits. During the third quarter of 2018, one of the Company’s rehabilitation tax credit investments was finalized and the total amount of credits to be received was determined and certified. The increase in the 2017 effective tax rate resulted mostly from the Tax Cuts and Jobs Act that was signed into law on December 22, 2017. The Company's deferred tax assets and liabilities were adjusted at December 31, 2017, for the reduction of our applicable corporate income tax rate from 34% to 21%, effective January 1, 2018. This adjustment resulted in a write-down of our net deferred tax assets and an increase in our federal income tax expense of $397 thousand.