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INCOME TAXES
 9 Months Ended
Sep. 30, 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 and nine months ended September 30, 2020 and 2019:

Three months ended September 30,Nine months ended September 30,
2020201920202019
Current expense$2,040 $244 $2,495 $334 
Deferred expense(803)1,096 1,082 1,348 
Income tax expense$1,237 $1,340 $3,577 $1,682 

The following table summarizes deferred tax assets and liabilities at September 30, 2020 and December 31, 2019:
(Dollars in thousands)September 30,
2020		December 31,
2019
Deferred tax assets:
Allowance for loan losses$4,549 $3,418 
Deferred compensation507 415 
Retirement and salary continuation plans2,467 2,357 
Share-based compensation630 631 
Off-balance sheet reserves270 234 
Nonaccrual loan interest760 697 
Net unrealized losses on AFS securities40 127 
Purchase accounting adjustments2,318 4,081 
Bonus accrual471 493 
Interest Rate Swaps449 — 
Low-income housing credit carryforward345 — 
Net operating loss carryovers1,645 1,872 
Other724 672 
Total deferred tax assets15,175 14,997 
Deferred tax liabilities:
Depreciation465 452 
Mortgage servicing rights593 694 
Purchase accounting adjustments1,280 1,599 
Other275 275 
Total deferred tax liabilities2,613 3,020 
Net deferred tax asset, included in other assets$12,562 $11,977 

At September 30, 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 September 30, 2020 or December 31, 2019.