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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Taxes [Abstract] |
Income Taxes | NOTE 16 – Income Taxes The components of income tax expense were as follows:
|  | For the years ended December 31,
(dollars in thousands) |  | 2018 |  |  | 2017 |  | 2016
Current income taxes: |  |  |  |  |  |  |  |
Federal |  | $ | 5,536 |  |  | 7,139 |  | 6,429
State |  |  | 990 |  |  | 573 |  | 548
Total current tax expense |  |  | 6,526 |  |  | 7,712 |  | 6,977
Deferred income tax expense (benefit) |  |  | (125 | ) |  | 2,904 |  | 356
Income tax expense |  | $ | 6,401 |  |  | 10,616 |  | 7,333
The following is a summary of the items that caused recorded income taxes to differ from taxes computed using the statutory tax rate:
|  | For the years ended December 31, |
(dollars in thousands) |  |  | 2018 |  |  | 2017 |  |  | 2016 |
Tax expense at statutory rate |  | $ | 6,025 |  |  | 8,281 |  |  | 7,129 |
Effect of state income taxes, net of federal benefit |  |  | 782 |  |  | 372 |  |  | 356 |
Exempt income |  |  | (34 | ) |  | (146 | ) |  | (162 | )
Effect of change in federal tax rate |  |  | - |  |  | 2,441 |  |  | - |
Effect of stock-based compensation |  |  | (248 | ) |  | (2 | ) |  | 160 |
Other |  |  | (124 | ) |  | (330 | ) |  | (150 | )
Income tax expense |  | $ | 6,401 |  |  | 10,616 |  |  | 7,333 |
Income tax expense for the year ended December 31, 2017 was impacted by the adjustment of our deferred tax assets and liabilities related to the reduction in the U.S. federal statutory income tax rate to 21% under the Tax Act, which was enacted on December 22, 2017. As a result of the new law, we recognized a provisional net tax expense totaling $2.4 million, as noted in the table above. During the fourth quarter of 2018, the Company completed its accounting for the income tax effects related to the Tax Act which resulted in no change to the provisional adjustment recorded in income tax expense in 2017. As a result of the Tax Act, deferred taxes as of December 31, 2018 and 2017 are based on the newly enacted U.S. statutory federal income tax rate of 21%, while deferred taxes as of December 31, 2016 are based on the previous federal income tax rate of 35%. The components of the deferred tax assets and liabilities are as follows:
|  | December 31,
(dollars in thousands) |  |  | 2018 |  | 2017
Deferred tax assets: |  |  |  |  |
Allowance for loan losses |  | $ | 3,310 |  | 3,260
Unrealized loss on securities available for sale |  |  | 244 |  | 121
Net deferred loan fees |  |  | 592 |  | 480
Deferred compensation |  |  | 1,280 |  | 1,124
Sale of real estate owned |  |  | 128 |  | 104
Accrued expenses |  |  | - |  | 16
Other |  |  | 130 |  | 136
|  |  | 5,684 |  | 5,241
Deferred tax liabilities: |  |  |  |  |
Property and equipment |  |  | 1,433 |  | 1,208
Hedging transactions |  |  | 112 |  | 88
Prepaid expenses |  |  | 107 |  | 99
Other |  |  | 12 |  | 64
|  |  | 1,664 |  | 1,459
Net deferred tax asset |  | $ | 4,020 |  | 3,782
The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions.

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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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