Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

NOTE 14 – Income Taxes

The components of income tax expense were as follows:

	For the years ended December 31,
(dollars in thousands)	2012			2011			2010
Current income taxes:
Federal	$	2,031			1,627			1,238
State		98			63			60
Total current tax expense		2,129			1,690			1,298
Deferred income tax benefit		(296	)		(857	)		(1,105	)
Income tax expense	$	1,833			833			193

The following is a summary of the items that caused recorded income taxes to differ from taxes computed using the statutory tax rate:

	For the years ended December 31,
(dollars in thousands)	2012			2011			2010
Tax expense at statutory rate	$	1,936			993			368
Effect of state income taxes		65			74			40
Exempt income and other		(168	)		(234	)		(215	)
Income tax expense	$	1,833			833			193

The components of the deferred tax assets and liabilities are as follows:

	December 31,
(dollars in thousands)	2012		2011
Deferred tax assets:
Allowance for loan losses	$	3,091		3,035
Net deferred loan fees		326		207
Interest on nonaccrual loans		617		625
Deferred compensation		577		408
Sale of real estate owned		212		235
Other		287		288
		5,110		4,798
Deferred tax liabilities:
Property and equipment		1,188		1,041
Unrealized gain on securities available for sale		607		536
Other		139		270
		1,934		1,847
Net deferred tax asset	$	3,176		2,951

The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions.