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INCOME TAXES | 6 Months Ended
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Jun. 30, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The Company files income tax returns in the U.S. federal jurisdiction, the Commonwealth of Pennsylvania and the State of Maryland. The Company is no longer subject to tax examination by tax authorities for years before 2014. The following table summarizes income tax expense for the three and six months ended June 30, 2018 and 2017.
| Three months ended June 30, |  | Six months ended June 30,
(Dollars in thousands) | 2018 |  | 2017 |  | 2018 |  | 2017
Current expense | $ | 125 |  |  | $ | 136 |  |  | $ | 348 |  |  | $ | 195 |
Deferred expense | 249 |  |  | 380 |  |  | 518 |  |  | 745 |
Income tax expense | $ | 374 |  |  | $ | 516 |  |  | $ | 866 |  |  | $ | 940 |
Income tax expense includes $10,000 and $222,000 related to net securities gains for the three months ended June 30, 2018 and 2017, and $181,000 and $223,000 related to net security gains for the six months ended June 30, 2018 and 2017. The base federal statutory rate used in determining the estimated annual effective tax rate for periods ending in 2018 is 21% and for periods ending in 2017 was 34%. The 21% base federal statutory rate became effective for the Company on January 1, 2018, as a result of federal tax reform legislation enacted in December 2017. SEC Staff Accounting Bulletin No. 118, issued in December 2017, provided for a measurement period that should not extend beyond one year from the tax reform legislation's enactment date for companies to complete the accounting under ASC 740, Income Taxes. In measuring the impact of the tax reform legislation on our net deferred tax asset in 2017, we estimated the income in 2017 for our limited partnership investments in affordable housing real estate partnerships and interest income on nonperforming loans. Any adjustment between our estimates and the actual amounts determined during the measurement period are not expected to have a material impact to our consolidated financial statements. The following table summarizes deferred tax assets and liabilities at June 30, 2018 and December 31, 2017.
(Dollars in thousands) | June 30, 2018 |  | December 31, 2017
Deferred tax assets: |  |  |
Allowance for loan losses | $ | 3,056 |  |  | $ | 2,919 |
Deferred compensation | 353 |  |  | 355 |
Retirement plans and salary continuation | 1,360 |  |  | 1,301 |
Share-based compensation | 629 |  |  | 597 |
Off-balance sheet reserves | 189 |  |  | 207 |
Nonaccrual loan interest | 296 |  |  | 258 |
Net unrealized losses on securities available for sale | 716 |  |  | 0 |
Goodwill | 30 |  |  | 39 |
Bonus accrual | 241 |  |  | 25 |
Low-income housing credit carryforward | 1,402 |  |  | 2,313 |
Other | 300 |  |  | 390 |
Total deferred tax assets | 8,572 |  |  | 8,404 |
Deferred tax liabilities: |  |  |
Depreciation | 410 |  |  | 488 |
Net unrealized gains on securities available for sale | 0 |  |  | 757 |
Mortgage servicing rights | 565 |  |  | 536 |
Purchase accounting adjustments | 243 |  |  | 251 |
Other | 149 |  |  | 122 |
Total deferred tax liabilities | 1,367 |  |  | 2,154 |
Net deferred tax asset, included in Other Assets | $ | 7,205 |  |  | $ | 6,250 |
The provision for income taxes differs from that computed by applying statutory rates to income before income taxes primarily due to the effects of tax-exempt income, non-deductible expenses and tax credits. At June 30, 2018, the Company had low-income housing credit carryforwards that expire through 2037.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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