INCOME TAXES	3 Months Ended
Mar. 31, 2019
INCOME TAXES
INCOME TAXES	17. INCOME TAXES Changes in Kentucky Tax Law As a financial institution doing business in Kentucky, the Bank is subject to a capital-based Kentucky bank franchise tax and exempt from Kentucky corporate income tax. In March 2019, however, Kentucky enacted HB354, which will transition the Bank from the bank franchise tax to a corporate income tax beginning January 1, 2021. The current Kentucky corporate income tax rate is 5%. As of March 31, 2019, the Company recorded a deferred tax asset, net of the federal benefit, of $350,000 due to the enactment of HB354. Subsequent to quarter end, in April 2019, Kentucky enacted HB458. HB458 allows for combined filing for the Parent Company and the Bank. The Parent Company had previously filed a separate company return and generated net operating losses, for which it had maintained a valuation allowance against the related deferred tax asset. HB458 also allows for certain net operating losses to be utilized on a combined return. The Parent Company expects to file a combined return beginning in 2021 and to utilize these previously generated losses. The estimated tax benefit to reverse the valuation allowance on the deferred tax asset for these losses is expected to be approximately $794,000 and will be recorded in the second quarter of 2019.

17. INCOME TAXES

Changes in Kentucky Tax Law

As a financial institution doing business in Kentucky, the Bank is subject to a capital-based Kentucky bank franchise tax and exempt from Kentucky corporate income tax. In March 2019, however, Kentucky enacted HB354, which will transition the Bank from the bank franchise tax to a corporate income tax beginning January 1, 2021. The current Kentucky corporate income tax rate is 5%. As of March 31, 2019, the Company recorded a deferred tax asset, net of the federal benefit, of $350,000 due to the enactment of HB354.

Subsequent to quarter end, in April 2019, Kentucky enacted HB458. HB458 allows for combined filing for the Parent Company and the Bank. The Parent Company had previously filed a separate company return and generated net operating losses, for which it had maintained a valuation allowance against the related deferred tax asset. HB458 also allows for certain net operating losses to be utilized on a combined return. The Parent Company expects to file a combined return beginning in 2021 and to utilize these previously generated losses. The estimated tax benefit to reverse the valuation allowance on the deferred tax asset for these losses is expected to be approximately $794,000 and will be recorded in the second quarter of 2019.