Entity information:
NOTE 10 — Income Taxes
The provision for income taxes included in the accompanying financial statements consists of the following components:
     
Years ended December 31,
  
     
2017
    
2016
  
Current Taxes (Benefit)                          
Federal
       $ 192         $ 4    
State
         76           (5)    
          268           (1)    
Deferred Income Taxes                          
Federal
         (311)           (145)    
State
         (46)           (10)    
          (357)           (155)    
Impact of Deferred Tax Asset Restatement
         353           —     
Total Provision for Income Taxes
       $ 264         $ (156)    
 
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
The net deferred tax asset in the accompanying balance sheet includes the following amounts of deferred tax assets and liabilities:
     
As of December 31,
  
     
2017
    
2016
  
Deferred Tax Assets                          
Allowance for loan losses
       $ 490         $ 582    
Deferred compensation
         120           176    
Real estate owned
         —           10    
Non-accrual interest
         30           43    
Purchase accounting
         17           88    
Federal net operating loss carryforwards
         —           123    
State net operating loss carryforwards
         —           15    
AMT credit
         108           77    
Unrealized loss on available for sale securities
         133           67    
Charitable contribution carryforward
         235           —    
Other
         11           44    
Deferred Tax Assets
       $ 1,144         $ 1,225    
Deferred Tax Liabilities                          
Depreciation and amortization
         (17)           (78)    
FHLB stock
         (30)           (113)    
Other
         (7)           (14)    
Deferred Tax Liabilities
       $ (54)         $ (205)    
Net Deferred Tax Asset
       $ 1,090         $ 1,020    
 
On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Act”). The Act amends the Internal Revenue Code to reduce corporate tax rates and modify various tax policies, credits, and deductions. The Act reduces the corporate federal tax rate from a maximum of 35% to a flat 21% rate, which is effective for the Company beginning January 1, 2018. As a result of the tax rate reduction in the Act, the Company reduced its net deferred tax asset during the year ended December 31, 2017, by $353, which was recognized as additional income tax expense.
A summary of the sources of differences between income taxes at the federal statutory rate and the provision (credit) for income taxes follows:
     
Years ended December 31,
  
     
2017
    
2016
  
     
Amount
    
% of Pretax 
Income
    
Amount
    
% of Pretax 
Income
  
Reconciliation of statutory to effective rates                                                  
Federal income taxes at statutory rate
       $ 27           34.00%         $ 5           34.00%    
Adjustments for
                                                  
Tax exempt interest on municipal obligations
         (45)           -57.69%           (84)           -566.37%    
State income taxes, net of federal income tax benefit
         20           25.64%           (10)           -66.67%    
Increase in CSV of life insurance
         (67)           -85.90%           (67)           -445.83%    
Impact of Deferred Tax Asset Restatement
         353           452.56%           —           0.00%    
Other
         (24)           -30.77%           —           0.00%    
Provision (credit) for income taxes
       $ 264           337.85%         $ (156)           -1053.59%    
 
With few exceptions, the Company is no longer subject to federal or state examinations by taxing authorities for years before 2013.
At December 31, 2016, the Company had a state net operating loss carryover of approximately $270 that will expire in 2036. The Company had a federal net operating loss carryover of approximately $0 and $362 at December 31, 2017 and December 31, 2016, respectively, that will expire in 2036.