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 2013.

The net deferred tax asset at December 31, 2016 and 2015 consisted of the following components:



	December 31,
	2016		2015
	(in thousands)
Deferred tax assets:
Allowance for loan losses	$	1,525	$	1,678
Deferred compensation	117		116
Accrued postretirement benefits	40		47
Home equity origination costs	73		59
Other real estate owned valuation allowance	—		80
Nonaccrual interest	151		211
Securities available for sale	32		—
Other	193		120
	$	2,131	$	2,311
Deferred tax liabilities:
Property and equipment	$	814	$	812
Securities available for sale	—		522
	$	814	$	1,334
Net deferred tax asset	$	1,317	$	977

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, 2016, 2015 and 2014 consisted of the following components:



	December 31,
	2016		2015		2014
	(in thousands)
Current tax expense	$	2,346	$	2,001	$	1,926
Deferred tax expense	207		432		142
	$	2,553	$	2,433	$	2,068

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, 2016, 2015 and 2014.



	December 31,
	2016			2015			2014
	(in thousands)
Statutory federal corporate tax amount	$	3,034		$	3,172		$	3,131
Tax-exempt interest (income)	(387		)	(404		)	(454		)
Officer insurance loss	15			11			9
Net tax credits	(126		)	(105		)	(593		)
Other	17			(241		)	(25		)
	$	2,553		$	2,433		$	2,068

The effective tax rates were 28.62%, 26.08%, and 22.46%, for years ended December 31, 2016, 2015, and 2014, respectively.