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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Taxes |
Income Taxes | NOTE 12: Income Taxes Principal components of income tax expense as reflected in the Consolidated Statements of Income are as follows:
|  | Year Ended December 31, |
(Dollars in thousands) |  | 2019 |  | 2018 |  | 2017 |
Current taxes |  | $ | 4,728 |  | $ | 3,889 |  | $ | 1,989 |
Deferred taxes |  |  | 354 |  |  | 632 |  |  | 9,405 |
|  | $ | 5,082 |  | $ | 4,521 |  | $ | 11,394 |
Income tax expense for the years ended December 31, 2019, 2018 and 2017 differed from the federal statutory rate applied to income before income taxes for the following reasons:
|  | Year Ended December 31, |
|  |  | 2019 |  |  | 2018 |  |  | 2017 |
(Dollars in thousands) |  | Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent |
Income tax at statutory rates |  | $ | 5,026 |  | 21.0 | % | $ | 4,734 |  | 21.0 | % | $ | 6,288 |  | 35.0 | %
State income taxes |  |  | 695 |  | 2.9 |  |  | 575 |  | 2.6 |  |  | 348 |  | 1.9 |
Tax-exempt interest income |  |  | (476) |  | (2.0) |  |  | (592) |  | (2.6) |  |  | (1,162) |  | (6.5) |
Carrying cost of tax-exempt assets |  |  | 23 |  | 0.1 |  |  | 18 |  | 0.1 |  |  | 32 |  | 0.2 |
Share based compensation |  |  | (126) |  | (0.5) |  |  | (103) |  | (0.5) |  |  | (284) |  | (1.6) |
Income from bank-owned life insurance |  |  | (149) |  | (0.6) |  |  | (89) |  | (0.4) |  |  | (151) |  | (0.8) |
Investments in qualified housing projects |  |  | (93) |  | (0.4) |  |  | (85) |  | (0.4) |  |  | (135) |  | (0.8) |
Merger related expenses |  |  | 96 |  | 0.4 |  |  | — |  | — |  |  | — |  | — |
Remeasurement of net deferred tax assets |  |  | — |  | — |  |  | — |  | — |  |  | 6,643 |  | 37.0 |
Other |  |  | 86 |  | 0.3 |  |  | 63 |  | 0.3 |  |  | (185) |  | (1.0) |
|  | $ | 5,082 |  | 21.2 | % | $ | 4,521 |  | 20.1 | % | $ | 11,394 |  | 63.4 | %
The Tax Cuts and Jobs Act of 2017, which was signed into law on December 22, 2017, permanently lowered the federal corporate income tax rate to 21 percent from the previous maximum rate of 35 percent, effective January 1, 2018. In the year ended December 31, 2017, as a result of the reduction in the federal corporate income tax rate, the Corporation recorded a one-time remeasurement adjustment to its net federal deferred tax asset of $6.64 million, which was recognized in income tax expense. The Corporation’s net deferred income taxes totaled $11.2 million and $12.2 million at December 31, 2019 and 2018, respectively. The tax effects of each type of significant item that gave rise to deferred taxes are:
|  | December 31, |
(Dollars in thousands) |  | 2019 |  | 2018 |
Deferred tax asset |  |  |  |  |  |  |
Allowances for loan losses and OREO losses |  | $ | 8,227 |  | $ | 8,567 |
Nonqualified defined contribution plan |  |  | 3,247 |  |  | 2,925 |
Fair value adjustments related to business combinations |  |  | 1,053 |  |  | 1,643 |
Share-based compensation |  |  | 863 |  |  | 825 |
Lease liabilities |  |  | 667 |  |  | — |
Reserve for indemnification losses |  |  | 645 |  |  | 663 |
Interest on nonaccrual loans |  |  | 226 |  |  | 346 |
Cash flow hedges |  |  | 24 |  |  | — |
Net unrealized loss on securities available for sale |  |  | — |  |  | 365 |
Other |  |  | 1,559 |  |  | 1,415 |
Deferred tax asset |  |  | 16,511 |  |  | 16,749 |
Deferred tax liability |  |  |  |  |  |  |
Goodwill and other intangible assets |  |  | (2,818) |  |  | (2,838) |
Depreciation |  |  | (972) |  |  | (1,024) |
Right of use assets |  |  | (664) |  |  | — |
Defined benefit plan |  |  | (423) |  |  | (620) |
Net unrealized gain on securities available for sale |  |  | (415) |  |  | — |
Cash flow hedges |  |  | — |  |  | (74) |
Deferred tax liability |  |  | (5,292) |  |  | (4,556) |
Net deferred tax asset |  | $ | 11,219 |  | $ | 12,193 |
The Corporation files income tax returns in the U.S. federal jurisdiction and several states. With few exceptions, the Corporation is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2016.

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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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