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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 components of income tax expense for the years ended December 31, 2019 and 2018, are as follows:
In thousands | 2019 |  | 2018
Federal: |  |  |
Current | $ | 5,169 |  |  | $ | 4,036 |
Deferred | 122 |  |  | 388 |
| 5,291 |  |  | 4,424 |
State: |  |  |
Current | 338 |  |  | 479 |
Deferred | 16 |  |  | 69 |
| 354 |  |  | 548 |
| $ | 5,645 |  |  | $ | 4,972 |
Reconciliations of the statutory federal income tax to the income tax expense reported in the consolidated statements of income for the years ended December 31, 2019 and 2018, are as follows:
| Percentage of Income before Income Taxes
| 2019 |  | 2018
Federal income tax at statutory rate | 21.0 | % |  | 21.0 | %
State income taxes, net of federal benefit | 1.0 | % |  | 1.6 | %
Tax-exempt income | (1.5 | )% |  | (1.7 | )%
Earnings on investment in bank-owned life insurance | (0.8 | )% |  | (0.9 | )%
Rehabilitation and low-income housing credits | (1.0 | )% |  | (1.1 | )%
Reduction of federal tax rate | — | % |  | — | %
Other | 0.5 | % |  | (0.3 | )%
| 19.2 | % |  | 18.6 | %
The provision for federal income taxes includes $0 and $46,000 of income taxes related to net gains on sales of securities in 2019 and 2018, respectively. Rehabilitation and low-income housing income tax credits were $281,000 and $287,000, during 2019 and 2018, respectively. Components of deferred tax assets and liabilities at December 31 were as follows:
In thousands | 2019 |  | 2018
Deferred tax assets: |  |  |
Allowance for loan losses | $ | 2,995 |  |  | $ | 3,054 |
Available for sale securities | — |  |  | 409 |
Accrued deferred compensation | 941 |  |  | 884 |
Pension | 2,033 |  |  | 2,207 |
Other-than-temporary impairment | 43 |  |  | 43 |
Nonaccrual interest | 194 |  |  | 192 |
Deferred director fees | 664 |  |  | 589 |
Acquisition accounting | 377 |  |  | 785 |
Other | 604 |  |  | 602 |
| 7,851 |  |  | 8,765 |
Deferred tax liabilities: |  |  |
Deferred loan fees | 94 |  |  | 101 |
Available for sale securities | 391 |  |  | — |
Prepaid pension benefit cost | 4,154 |  |  | 4,289 |
Prepaid expenses | 129 |  |  | 130 |
Accumulated depreciation | 221 |  |  | 347 |
Goodwill/intangibles | 1,181 |  |  | 1,056 |
| 6,170 |  |  | 5,923 |
Net Deferred Tax Asset included in Other Assets | $ | 1,681 |  |  | $ | 2,842 |
The Corporation did not have any uncertain tax positions at December 31, 2019 and 2018. The Corporation’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Income. Years that remain open for potential review by the Internal Revenue Service are 2016 through 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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