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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense in the consolidated statements of income for the years ended December 31, 2018 and 2017, includes the following (in thousands):
|  | 2018 |  | 2017
Current tax expense |  |  |  |  |  |
Federal |  | $ | 661 |  |  | $ | 1,962 |
State |  | 141 |  |  | 428 |
Deferred tax expense (benefit) related to: |  |  |  |  |  |
Federal |  | 1,992 |  |  | 1,441 |
State |  | 439 |  |  | 158 |
Change in tax rate |  | — |  |  | 2,440 |
Total income tax expense |  | $ | 3,233 |  |  | $ | 6,429 |
The income tax expense is different from the expected tax expense computed by multiplying income before income tax expense by the statutory income tax rate of 21 percent in 2018 and 34 percent in 2017. The reasons for this difference are as follows (in thousands):
|  | 2018 |  | 2017
Federal income tax expense computed at the statutory rate |  | $ | 4,481 |  |  | $ | 3,891 |
State income taxes, net of federal tax benefit |  | 551 |  |  | 491 |
Nondeductible acquisition expenses |  | 138 |  |  | 364 |
Tax benefit from stock options |  | (1,786 | ) |  | — |
Change in tax rate |  | — |  |  | 2,440 |
Other |  | (151 | ) |  | (757 | )
Total income tax expense |  | $ | 3,233 |  |  | $ | 6,429 |
During 2018, the Company identified an error in the computation and disclosure of deferred taxes for 2017. The error resulted from exclusion of a tax benefit from non-qualified options exercised in 2017. The Company has elected to correct the error in its current year financial statements which reduced tax provision by approximately $1.6 million for the year ended December 31, 2018. Note 8. Income Taxes, Continued The components of the net deferred tax asset as of December 31, 2018 and 2017, were as follows (in thousands):
|  | 2018 |  | 2017
Deferred tax assets: |  |  |  |  |  |
Allowance for loan losses |  | $ | 2,172 |  |  | $ | 1,561 |
Fair value adjustments |  | 6,086 |  |  | 4,829 |
Unrealized losses on investment securities |  | 659 |  |  | 424 |
Unrealized losses on hedges |  | 280 |  |  | — |
Foreclosed real estate |  | 271 |  |  | 301 |
Deferred compensation |  | 833 |  |  | 849 |
Federal net operating loss carryforward |  | 350 |  |  | — |
Other |  | 440 |  |  | 849 |
Total deferred tax assets |  | 11,091 |  |  | 8,813 |
Deferred tax liabilities: |  |  |  |  |  |
Accumulated depreciation |  | 1,875 |  |  | 1,194 |
Core deposit intangible |  | 3,332 |  |  | 1,945 |
Other |  | 286 |  |  | 223 |
Total deferred tax liabilities |  | 5,493 |  |  | 3,362 |
Net deferred tax asset |  | $ | 5,598 |  |  | $ | 5,451 |
The Company has a Federal net operating loss carryforward of $1.7 million acquired with the acquisition of Foothills Bancorp. This federal net operating loss does not expire. The income tax returns of the Company for 2017, 2016, and 2015 are subject to examination by the federal and state taxing authorities, generally for three years after they were filed.

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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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