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Income Taxes
6 Months Ended
Jun. 30, 2011
Income Taxes  
Income Taxes

Note 5. Income Taxes

In accordance with FASB ASC Topic 740, "Income Taxes," we provide for the recognition and measurement of deferred income tax benefits based on the likelihood of their realization in future years. As of June 30, 2011, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required.

 

The current quarter effective tax rate decreased significantly due to a higher percentage of tax-exempt interest relative to pre-tax earnings in the quarter ended June 30, 2011, as compared to the quarter ended June 30, 2010.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There were no uncertain tax positions recognized for the quarters ended June 30, 2011 and 2010.

Tax years 2007 through 2010 are subject to examination by the federal and state taxing authorities. In July 2011, the Company was notified by the Internal Revenue Service of an examination to be conducted for tax year 2009.