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INCOME TAXES | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The following table summarizes the current and deferred components of income tax expense (benefit) for each of the years ended December 31, 2019, 2018 and 2017:
(in thousands) |  | 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |  |
Federal tax expense |  | $ | 2,639 |  |  | $ | 6,775 |  |  | $ | 8,705 |
State tax expense |  | 550 |  |  | 1,230 |  |  | 1,039 |
Total current tax expense |  | 3,189 |  |  | 8,005 |  |  | 9,744 |
Deferred tax expense |  | 1,020 |  |  | (443 | ) |  | 2,898 |
Impact of federal tax reform enactment |  | — |  |  | — |  |  | 3,988 |
Total income tax expense |  | $ | 4,209 |  |  | $ | 7,562 |  |  | $ | 16,630 |
The following table reconciles the expected federal income tax expense (computed by applying the federal statutory tax rate of 21%, 35% for years prior to 2018) to recorded income tax expense for the years ended December 31, 2019, 2018 and 2017:
|  | 2019 |  | 2018 |  | 2017
(in thousands, except ratios) |  | Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
Statutory tax rate |  | $ | 5,633 |  |  | 21.00 | % |  | $ | 8,505 |  |  | 21.00 | % |  | $ | 14,918 |  |  | 35.00 | %
Increase (decrease) resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State taxes, net of federal benefit |  | 547 |  |  | 2.04 |  |  | 908 |  |  | 2.24 |  |  | 986 |  |  | 2.31 |
Tax exempt interest |  | (1,375 | ) |  | (5.13 | ) |  | (1,315 | ) |  | (3.25 | ) |  | (2,074 | ) |  | (4.87 | )
Federal tax credits |  | (282 | ) |  | (1.05 | ) |  | (125 | ) |  | (0.31 | ) |  | (130 | ) |  | (0.3 | )
Officers' life insurance |  | (431 | ) |  | (1.61 | ) |  | (382 | ) |  | (0.94 | ) |  | (538 | ) |  | (1.26 | )
Acquisition costs |  | — |  |  | — |  |  | — |  |  | — |  |  | 89 |  |  | 0.21 |
Stock-based compensation plans |  | (20 | ) |  | (0.07 | ) |  | (120 | ) |  | (0.3 | ) |  | (241 | ) |  | (0.57 | )
Impact of federal tax reform enactment |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,988 |  |  | 9.36 |
Other |  | 137 |  |  | 0.51 |  |  | 91 |  |  | 0.23 |  |  | (368 | ) |  | (0.86 | )
Effective tax rate |  | $ | 4,209 |  |  | 15.69 | % |  | $ | 7,562 |  |  | 18.67 | % |  | $ | 16,630 |  |  | 39.02 | %
The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at December 31, 2019 and 2018 are summarized below. The net deferred tax asset, which is included in other assets, amounted to $3.9 million at December 31, 2019 and $9.5 million at December 31, 2018. The significant components of deferred tax assets and liabilities at December 31, 2019 and December 31, 2018 were as follows:
|  | 2019 |  | 2018
(in thousands) |  | Assets |  | Liabilities |  | Assets |  | Liabilities
Allowance for loan losses |  | $ | 3,507 |  |  | $ | — |  |  | $ | 3,085 |  |  | $ | — |
Deferred compensation |  | 3,383 |  |  | — |  |  | 3,242 |  |  | — |
Unrealized gain or loss on securities available for sale |  | — |  |  | 1,858 |  |  | 2,641 |  |  | — |
Unrealized gain or loss on derivatives |  | 307 |  |  | — |  |  | 685 |  |  | — |
Depreciation |  | — |  |  | 1,722 |  |  | — |  |  | 1,517 |
Deferred loan origination costs |  | — |  |  | 862 |  |  | — |  |  | 725 |
Non-accrual interest |  | 381 |  |  | — |  |  | 374 |  |  | — |
Branch acquisition costs and goodwill |  | — |  |  | 712 |  |  | — |  |  | 784 |
Core deposit intangible |  | — |  |  | 1,231 |  |  | — |  |  | 1,309 |
Acquisition fair value adjustments |  | 2,223 |  |  | — |  |  | 3,171 |  |  | — |
Prepaid expenses |  | — |  |  | 311 |  |  | — |  |  | 215 |
Interest rate cap premium amortization |  | — |  |  | — |  |  | — |  |  | 257 |
Mortgage servicing rights |  | — |  |  | 703 |  |  | — |  |  | 721 |
Equity compensation |  | 468 |  |  | — |  |  | 335 |  |  | — |
Prepaid pension |  | — |  |  | 359 |  |  | — |  |  | 366 |
Contract incentives |  | 1,167 |  |  | — |  |  | 1,658 |  |  | — |
Right of use asset |  | — |  |  | 2,253 |  |  | — |  |  | — |
Lease liability |  | 2,273 |  |  | — |  |  | — |  |  | — |
Other |  | 160 |  |  | — |  |  | 217 |  |  | — |
Total |  | $ | 13,869 |  |  | $ | 10,011 |  |  | $ | 15,408 |  |  | $ | 5,894 |
The Company has determined that a valuation allowance is not required for its net deferred tax asset since it is more likely than not that this asset is realizable principally through future taxable income and future reversal of existing temporary differences. The Company is subject to income tax in the U.S. federal jurisdiction and also in the states of Maine, New Hampshire and Massachusetts. The Company is no longer subject to examination by taxing authorities for years before 2016. On December 22, 2017, H.R.1, commonly known as the Tax Cuts and Jobs Act (the “Act”), was signed into law. The Act included several provisions affecting the Company's federal income tax expense, including the reduced federal income tax rate from 35% to 21% effective January 1, 2018. As a result of this rate reduction, the Company was required to re-measure, through income tax expense in the period of enactment, the deferred tax assets and liabilities using the enacted rate at which these items are expected to be recovered or settled. The re-measurement of the Company's net deferred tax asset resulted in additional 2017 income tax expense of $4.0 million.

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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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