Entity information:
Income Taxes
The Company files income tax returns in the U.S. federal jurisdiction and the states of Virginia and North Carolina.  With few exceptions, the Company is no longer subject to U.S. federal, state, and local income tax examinations by tax authorities for years prior to 2014.
The components of the Company's net deferred tax assets (liabilities) were as follows (dollars in thousands):
 
December 31,
 
2017
 
2016
Deferred tax assets:
 
 
 
Allowance for loan losses
$
3,047

 
$
4,480

Nonaccrual loan interest
444

 
610

Other real estate owned valuation allowance
150

 
199

Deferred compensation
835

 
1,335

Net unrealized losses on securities
226

 
81

Acquisition accounting adjustments
1,283

 
3,215

Accrued pension liability
170

 
100

Other
488

 
796

Total deferred tax assets
6,643

 
10,816

 
 
 
 
Deferred tax liabilities:
 
 
 
Depreciation
761

 
1,030

Accretion of discounts on securities
24

 
113

Core deposit intangibles
267

 
602

Trust preferred fair value adjustment
349

 
581

Other
201

 
243

Total deferred tax liabilities
1,602

 
2,569

Net deferred tax assets
$
5,041

 
$
8,247

The provision for income taxes consists of the following (dollars in thousands):
 
Years Ended December 31,
 
2017
 
2016
 
2015
Current tax expense
$
7,355

 
$
6,125

 
$
4,279

Deferred tax expense
724

 
882

 
1,741

Deferred tax asset adjustment for tax rate change
2,747

 
—

 
—

Total income tax expense
$
10,826

 
$
7,007

 
$
6,020


A reconcilement of the "expected" Federal income tax expense to reported income tax expense is as follows (dollars in thousands):
 
Years Ended December 31,
 
2017
 
2016
 
2015
Expected federal tax expense
$
9,126

 
$
8,158

 
$
7,371

Tax impact from enacted change in tax rate
2,747

 
—

 
—

Nondeductible interest expense
85

 
94

 
78

Tax-exempt interest
(949
)
 
(1,265
)
 
(1,338
)
State income taxes
296

 
296

 
222

Other, net
(479
)
 
(276
)
 
(313
)
Total income tax expense
$
10,826

 
$
7,007

 
$
6,020


Income tax expense for 2017 includes a downward adjustment of net deferred tax assets in the amount of $2,747,000, recorded as a result of the enactment of the Tax Reform Act on December 22, 2017. The Tax Reform Act reduced the corporate federal tax rate from 35% to 21% effective January 1, 2018.