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INCOME TAXES | 3 Months Ended
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Mar. 31, 2020
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 2016. The following table summarizes income tax expense for the three months ended March 31, 2020 and 2019:
|  |  |  |  | Three months ended March 31, |  |
|  |  |  |  | 2020 |  | 2019
Current expense |  |  |  |  | $ | 28 |  |  | $ | 21 |
Deferred expense |  |  |  |  | 1,011 |  |  | 211 |
Income tax expense |  |  |  |  | $ | 1,039 |  |  | $ | 232 |
The following table summarizes deferred tax assets and liabilities at March 31, 2020 and December 31, 2019:
(Dollars in thousands) | March 31, 2020 |  | December 31, 2019
Deferred tax assets: |  |  |
Allowance for loan losses | $ | 3,674 |  |  | $ | 3,418 |
Deferred compensation | 414 |  |  | 415 |
Retirement and salary continuation plans | 2,384 |  |  | 2,357 |
Share-based compensation | 574 |  |  | 631 |
Off-balance sheet reserves | 231 |  |  | 234 |
Nonaccrual loan interest | 720 |  |  | 697 |
Net unrealized losses on AFS securities | 3,749 |  |  | 127 |
Purchase accounting adjustments | 3,042 |  |  | 4,081 |
Bonus accrual | 167 |  |  | 493 |
Low-income housing credit carryforward | 115 |  |  | — |
Net operating loss carryovers | 1,759 |  |  | 1,872 |
Other | 629 |  |  | 672 |
Total deferred tax assets | 17,458 |  |  | 14,997 |
Deferred tax liabilities: |  |  |
Depreciation | 443 |  |  | 452 |
Mortgage servicing rights | 694 |  |  | 694 |
Purchase accounting adjustments | 1,471 |  |  | 1,599 |
Other | 275 |  |  | 275 |
Total deferred tax liabilities | 2,883 |  |  | 3,020 |
Net deferred tax asset, included in other assets | $ | 14,575 |  |  | $ | 11,977 |
At March 31, 2020, the Company had acquired federal and state net operating loss carryforwards of $11.1 million and $6.7 million, respectively, subject to annual loss limitation limits, that expire through 2037. A deferred tax asset is recognized for these carryforwards because the benefit is more likely than not to be realized. FASB ASC 740, Income Taxes, (“ASC 740”) clarifies the accounting for income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined in ASC 740 as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 was applied to all existing tax positions upon initial adoption. There was no liability for uncertain tax positions and no known unrecognized tax benefits at March 31, 2020 or December 31, 2019.

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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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