Federal Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Federal Income Taxes [Abstract]

Provision for income taxes

The provision for income taxes consists of the following:

	Year Ended December 31,
(Dollars in thousands)	2012			2011			2010
Income Taxes:
Federal current expense (benefit)	$	0		$	7		$	(299	)
Federal deferred expense (benefit)		758			(292	)		(5,038	)
Valuation allowance		(816	)		829			5,855
Total Income Tax (Benefit)	$	(58	)	$	544		$	518

Summary of reconciliation of rate of taxes which are payable at federal statutory rate

A reconciliation of the rate of taxes which are payable at the federal statutory rate are summarized as follows:

(Dollars in thousands)	2012			2011			2010
Federal income taxes computed at the expected statutory rate	$	1,396		$	257		$	(4,774	)
Increase (decrease) in taxes resulting from:
Nontaxable dividend and interest income		(15	)		(37	)		(21	)
Increase in cash surrender value of life insurance – net		(300	)		(249	)		(209	)
Valuation allowance for deferred tax assets		(816	)		829			5,855
Surrender of bank owned life insurance & penalty		0			72			70
Other		(323	)		(328	)		(403	)
Federal income tax provision per consolidated financial statements	$	(58	)	$	544		$	518

Components of net deferred tax asset (liability)

The components of the Corporation’s net deferred tax asset (liability) at December 31 are as follows:

	2012			2011
	(In thousands)
Taxes (payable) refundable on temporary differences at statutory rate:
Deferred tax assets:
General loan loss allowance	$	4,130		$	4,941
Deferred loan fees		184			301
Deferred compensation		1,046			1,059
Other assets		1,357			1,264
Non-accrual interest		163			364
Unrealized loss on securities designated as available for sale		0			7
Tax credits and low income housing credits		2,134			1,739
NOL carry forward		1,341			1,549
Total deferred tax assets		10,355			11,224
Deferred tax liabilities:
FHLB stock dividends	$	(1,660	)	$	(1,660	)
Mortgage servicing rights		(1,103	)		(1,109	)
Book versus tax depreciation		(697	)		(887	)
Original issue discount		(708	)		(755	)
Unrealized gain on securities designated as available for sale		(51	)		0
Prepaid expense for FHLB advance restructure		(140	)		0
Purchase price adjustments		(128	)		(129	)
Total deferred tax liabilities		(4,487	)		(4,540	)
Valuation Allowance	$	(5,868	)	$	(6,684	)
Net deferred tax asset (liability)	$	0		$	0