Entity information:
NOTE 13, Income Taxes

On December 22, 2017, the Tax Act was signed into law. Among other things, the Tax Act permanently reduced the corporate tax rate to 21% from the prior maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate tax rate to 21%, companies are required to revalue their deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the fourth quarter of 2017. The Company continues to evaluate the impact on its 2017 tax expense of the revaluation required by the lower corporate tax rate implemented by the Tax Act.  During the fourth quarter of 2017, the Company recorded $1.2 million in additional tax expense based on the Company's preliminary analysis of the impact of the Tax Act. The Company's preliminary estimate of the impact of the Tax Act is based on currently available information and interpretation of its provisions. The actual results may differ from the current estimate due to, among other things, further guidance that may be issued by U.S. tax authorities or regulatory bodies and/or changes in interpretations and assumptions that the Company has preliminarily made. The Company's evaluation of the impact of the Tax Act is subject to refinement for up to one year after enactment per the guidance under ASC 740, Accounting for Uncertainty in Income Taxes, and the Securities and Exchange Commission's Staff Accounting Bulletin 118.

The components of income tax expense for the current and prior year-ends are as follows:

  
2017
  
2016
  
2015
 
  
(in thousands)
 
Current income tax expense
 
$
20
  
$
179
  
$
281
 
Deferred income tax benefit
  
(117
)
  
(19
)
  
(227
)
Reported income tax expense (benefit)
 
$
(97
)
 
$
160
  
$
54
 
 
A reconciliation of the expected federal income tax expense on income before income taxes with the reported income tax expense for the same periods follows:

  
Years Ended December 31,
 
  
2017
  
2016
  
2015
 
  
(in thousands)
 
Expected tax expense (34%)
 
$
(43
)
 
$
1,345
  
$
1,254
 
Interest expense on tax-exempt assets
  
23
   
15
   
22
 
Low-income housing tax credits
  
(412
)
  
(384
)
  
(274
)
Tax-exempt interest
  
(628
)
  
(608
)
  
(654
)
Bank-owned life insurance
  
(263
)
  
(270
)
  
(301
)
Impact of Tax Act
  
1,221
   
-
   
-
 
Other, net
  
5
   
62
   
7
 
Reported income tax expense
 
$
(97
)
 
$
160
  
$
54
 

The effective tax rates for 2017, 2016, and 2015 were -77.0%, 4.0%, and 1.5%, respectively.

The components of the net deferred tax asset, included in other assets, are as follows:

  
December 31,
 
  
2017
  
2016
 
  
(in thousands)
 
Deferred tax assets:
      
Allowance for loan losses
 
$
1,984
  
$
2,803
 
Interest on nonaccrual loans
  
82
   
71
 
Other real estate owned
  
-
   
349
 
Pension - other comprehensive income
  
-
   
1,272
 
Bank owned life insurance benefit
  
55
   
94
 
Charitable contributions carried forward
  
2
   
1
 
Net unrealized loss on securities available-for-sale
  
225
   
896
 
Unexercised nonqualified options
  
-
   
36
 
Alternative minimum tax
  
1,344
   
1,019
 
Deferred benefits and compensation
  
139
   
256
 
Other
  
179
   
89
 
  
$
4,010
  
$
6,886
 
         
Deferred tax liabilities:
        
Depreciation
 
$
(404
)
 
$
(822
)
Accretion of discounts on securities
  
-
   
(1
)
Deferred loan fees and costs
  
(295
)
  
(325
)
Pension
  
-
   
(740
)
   
(699
)
  
(1,888
)
Net deferred tax assets
 
$
3,311
  
$
4,998
 

The Company files income tax returns in the U.S. federal jurisdiction and the Commonwealth of Virginia. 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.