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Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The current and deferred components of income tax expense (benefit) were as follows:
For the years ended December 31,202020192018
Federal income tax
Current$4,923,000 $3,978,000 $4,407,000 
Deferred(262,000)336,000 (492,000)
4,661,000 4,314,000 3,915,000 
State franchise tax460,000 421,000 391,000 
$5,121,000 $4,735,000 $4,306,000 
The actual tax expense differs from the expected tax expense (computed by applying the applicable U.S. Federal corporate income tax rate to income before income taxes) as follows:
For the years ended December 31,202020192018
Expected tax expense$6,773,000 $6,355,000 $5,847,000 
Non-taxable income(1,808,000)(1,749,000)(1,699,000)
State franchise tax, net of federal tax benefit348,000 332,000 309,000 
Equity compensation(43,000)(45,000)(55,000)
Tax credits, net of amortization(144,000)(85,000)(85,000)
Other(5,000)(73,000)(11,000)
$5,121,000 $4,735,000 $4,306,000 
Deferred tax assets and liabilities are classified in other assets and other liabilities in the consolidated balance sheets. No valuation allowance is deemed necessary for the deferred tax asset. Items that give rise to the deferred income tax assets and liabilities and the tax effect of each at December 31, 2020 and 2019 are as follows:
 20202019
Allowance for loan losses$3,413,000 $2,444,000 
OREO9,000 — 
Accrued pension and post-retirement948,000 926,000 
Unrealized loss on derivative instruments1,865,000 345,000 
Unrealized loss on securities transferred from available for sale to held to maturity35,000 48,000 
Restricted stock grants270,000 203,000 
Core deposit intangible24,000 21,000 
Investment in flow through entities82,000 55,000 
Other assets87,000 — 
Total deferred tax asset6,733,000 4,042,000 
Net deferred loan costs(1,894,000)(1,669,000)
Depreciation(2,013,000)(1,434,000)
Unrealized gain on securities available for sale(1,332,000)(972,000)
Goodwill(161,000)(120,000)
Mortgage servicing rights(411,000)(325,000)
Unrealized gain on derivative instruments(554,000)(371,000)
Prepaid expense(195,000)(205,000)
Total deferred tax liability(6,560,000)(5,096,000)
Net deferred tax asset (liability)$173,000 $(1,054,000)

At December 31, 2020 and 2019, the Company held investments in four limited partnerships with related low income housing tax credits. The tax credits from the investments are estimated at $351,000 and $330,000 for the years ended December 31, 2020 and 2019, respectively, and are recorded as a reduction of income tax expense. Amortization of the investment in the limited partnership totaled $311,000 and $307,000 for the years ended December 31, 2020 and 2019, respectively, and is recognized as a component of income tax expense in the consolidated statements of income. The carrying value of these investments was $1,734,000 at December 31, 2020 and $1,951,000 at December 31, 2019, which is comprised of the Company's equity investment in the limited partnerships, and is recorded in other assets.
FASB ASC Topic 740, "Income Taxes," defines the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company's financial statements. Topic 740 prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service ("IRS") for the years ended December 31, 2017 through 2020.