Income Taxes

12 Months Ended

Dec. 31, 2019

Note 21. Income Taxes

A reconciliation between the amount of total income taxes and the amount computed by multiplying income by the applicable federal income tax rates is as follows:


		2019		2018
Income taxes computed at the applicable federal income tax rate	$	1,088	$	1,201
Tax exempt municipal income		(74)		(89)
Income from life insurance		(196)		(42)
Nondeductible merger expenses		188		—
Nondeductible core deposit intangible amortization		—		65
Other, net		(33)		12
Income Tax Expense	$	973	$	1,147

The current and deferred components of income tax expense are as follows:


		2019		2018
Current tax expense	$	1,058	$	(1,156)
Deferred tax benefit		(85)		(9)
Income Tax Expense	$	973	$	1,147

Deferred tax assets have been provided for temporary differences related to the allowance for loan losses, recognition of loan fee income, adjustments related to the acquisition of VCB, and deferred compensation agreements. Deferred tax liabilities have been provided for temporary differences related to depreciation, unrealized securities gains, prepaid expenses, and adjustments related to the acquisition of VCB.

The net deferred tax asset was made up of the following:


		2019		2018
Deferred tax assets	$	1,637	$	939
Deferred tax liabilities		(2,389)		(434)
Net Deferred Tax (Liability) Asset	$	(752)	$	505

This amount has been included as part of other liabilities on the balance sheet as of December 31, 2019 and other assets on the balance sheet as of December 31, 2018.

The federal and Virginia income tax returns of the Company for 2016 to 2019 are subject to examination by the Internal Revenue Service and the Virginia Department of Taxation.