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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense in the consolidated statements of income for the years ended December 31, 2019 and 2018, includes the following (in thousands):
|  | 2019 |  | 2018
Current tax expense |  |  |  |
Federal |  | $ | 5,143 |  |  | $ | 661 |
State |  | 974 |  |  | 141 |
Deferred tax expense related to: |  |  |  |
Federal |  | 678 |  |  | 1,992 |
State |  | 102 |  |  | 439 |
Total income tax expense |  | $ | 6,897 |  |  | $ | 3,233 |
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. The reasons for this difference are as follows (in thousands):
|  | 2019 |  | 2018
Federal income tax expense computed at the statutory rate |  | $ | 7,024 |  |  | $ | 4,481 |
State income taxes, net of federal tax benefit |  | 872 |  |  | 551 |
Nondeductible acquisition expenses |  | — |  |  | 138 |
Tax-exempt interest |  | (469) |  |  | (121) |
Tax benefit from stock options |  | (24) |  |  | (1,786) |
Other |  | (506) |  |  | (30) |
Total income tax expense |  | $ | 6,897 |  |  | $ | 3,233 |
During 2018, the Company recorded a tax benefit from stock options exercised during 2017. This reduced our tax provision by $1.6 million for the year ended December 31, 2018. Note 9. Income Taxes, Continued The components of the net deferred tax asset as of December 31, 2019 and 2018, were as follows (in thousands):
|  | 2019 |  | 2018
Deferred tax assets: |  |  |  |
Allowance for loan losses |  | $ | 2,688 |  |  | $ | 2,172 |
Fair value adjustments |  | 4,098 |  |  | 6,086 |
Unrealized losses on securities |  | — |  |  | 659 |
Unrealized losses on hedges or derivative securities |  | 79 |  |  | 280 |
OREO |  | 25 |  |  | 271 |
Deferred compensation |  | 976 |  |  | 833 |
Lease liability |  | 1,438 |  |  | — |
Federal net operating loss carryforward |  | 221 |  |  | 350 |
Other |  | 442 |  |  | 440 |
Total deferred tax assets |  | 9,967 |  |  | 11,091 |
Deferred tax liabilities: |  |  |  |
Accumulated depreciation |  | 1,610 |  |  | 1,875 |
Core deposit intangible |  | 2,971 |  |  | 3,332 |
Right of use asset |  | 1,435 |  |  | — |
Unrealized gains on investment securities |  | 139 |  |  | — |
Other |  | 332 |  |  | 286 |
Total deferred tax liabilities |  | 6,487 |  |  | 5,493 |
Net deferred tax asset |  | $ | 3,480 |  |  | $ | 5,598 |
The Company has a Federal net operating loss carryforward of $1.1 million acquired with the acquisition of Foothills Bancorp. This federal net operating loss does not expire. The income tax returns of the Company for 2018, 2017, and 2016 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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