Income Taxes

The Company files income tax returns with the United States of America and the Commonwealth of Virginia. With few exceptions, the Company is no longer subject to federal, state, or local income tax examinations for years prior to 2010.

The net deferred tax asset at December 31, 2013 and 2012 consisted of the following components:



	December 31,
	2013		2012
	(in thousands)
Deferred tax assets:
Allowance for loan losses	$	1,866	$	2,236
Deferred compensation	125		116
Accrued postretirement benefits	51		51
Home equity origination costs	41		35
Other than temporary impairment	30		876
Interest rate swap	148		216
Other real estate owned expenses	116		122
Other	381		351
	$	2,758	$	4,003
Deferred tax liabilities:
Property and equipment	$	533	$	520
Securities available for sale	283		1,970
	$	816	$	2,490
Net deferred tax asset	$	1,942	$	1,513

The Company has not recorded a valuation allowance for deferred tax assets because management believes that it is more likely than not that they will be ultimately realized.

Income tax expense for the years ended December 31, 2013, 2012 and 2011 consisted of the following components:



	December 31,
	2013		2012		2011
	(in thousands)
Current tax expense	$	1,198	$	2,209	$	1,688
Deferred tax expense (benefit)	1,190		350		(317		)
	$	2,388	$	2,559	$	1,371

The following table reconciles income tax expense to the statutory federal corporate income tax amount, which was calculated by applying the federal corporate income tax rate to pre-tax income for the years ended December 31, 2013, 2012 and 2011.



	December 31,
	2013			2012			2011
	(in thousands)
Statutory federal corporate tax amount	$	3,246		$	3,097		$	1,936
Tax-exempt interest (income)	(495		)	(563		)	(563		)
Officer insurance (income) loss	(82		)	7			11
Net tax credits	(312		)	—			—
Other	31			18			(13		)
	$	2,388		$	2,559		$	1,371

The effective tax rates were 25.02%, 28.09%, and 24.08%, for years ended December 31, 2013, 2012, and 2011, respectively.