Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

NOTE 16 – INCOME TAXES

The Company and its subsidiary are subject to U.S. federal and state income tax.  The components of income tax expense for the years ended December 31, 2012 and 2011 are as follows:

(Dollars in thousands)		2012		2011
Current:
Federal	$	(22)	$	744
State		22		271
		-		1,015
Deferred:
Federal		(375)		(269)
State		46		(109)
		(329)		(378)
	$	(329)	$	637

The reconciliation of the statutory federal income tax at a rate of 34% to the income tax expense (benefit) included in the statements of income and comprehensive income for the years ended December 31, 2012 and 2011 is as follows:

(Dollars in thousands)	2012				2011
Federal income tax at statutory rate	$	138	34	%	$	1,056	34	%
Tax exempt interest		(398)	(98)			(399)	(13)
State income tax, net of federal income tax effect		45	11			106	4
Bank owned life insurance		(134)	(33)			(142)	(5)
Other		20	5			16	1
	$	(329)	(81)	%	$	637	21	%

The components of the net deferred tax asset at December 31, 2012 and 2011 are as follows:

(Dollars in thousands)	2012		2011
Deferred tax assets:
Allowance for loan losses	$	1,987	$	2,880
Deferred compensation		584		504
Foreclosed real estate		565		89
AMT credit		532		-
Intangible assets		34		40
Restricted stock		142		77
Other-than-temporary impairment		96		96
Other		254		131
Total deferred tax assets		4,194		3,817
Deferred tax liabilities:
Depreciation		(260)		(209)
Prepaid expenses		(151)		(154)
Unrealized gain on securities, available for sale		(237)		(480)
Total deferred tax liabilities		(648)		(843)
Net deferred tax asset	$	3,546	$	2,974