Federal Income Taxes (Tables)

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Provision for Income Taxes

The provision for income taxes consists of the following:

	3 months ended					9 months ended
(In thousands)	September 30, 2013		September 30, 2012			September 30, 2013			September 30, 2012
Income Taxes:
Federal deferred expense (benefit)	$	171	$	(63	)	$	165		$	(57	)
Current tax expense		0		0			0			0
Valuation allowance		0		10			(5,868	)		(21	)
Total Income Tax (Benefit)	$	171	$	(53	)	$	(5,703	)	$	(78	)

Summary of Reconciliation of Rate of Taxes Payable at Federal Statutory Rate

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

	3 months ended						9 months ended
(In thousands)	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Federal income taxes computed at the expected statutory rate	$	305		$	146		$	570		$	442
Increase (decrease) in taxes resulting from:
Nontaxable dividend and interest income		0			(1	)		0			(15	)
Increase in cash surrender value of life insurance – net		(53	)		(128	)		(160	)		(237	)
Valuation allowance for deferred tax assets		0			10			(5,868	)		(21	)
Other		(81	)		(80	)		(245	)		(247	)
Federal income tax provision per consolidated financial statements	$	171		$	(53	)	$	(5,703	)	$	(78	)

Components of Net Deferred Tax Asset (Liability)

The components of the Corporation’s net deferred tax asset (liability) at September 30, 2013 and December 31, 2012 are as follows:

Taxes (payable) refundable on temporary differences at statutory rate:
(In thousands)	September 30, 2013			December 31, 2012
Deferred tax assets:
General loan loss allowance	$	3,288		$	4,130
Deferred loan fees		208			184
Deferred compensation		1,421			1,046
Other assets		1,281			1,357
Non-accrual interest		208			163
Unrealized loss on securities designated as available for sale		449			0
Tax credits and low income housing credits		2,429			2,134
NOL carry forward		2,080			1,341
Total deferred tax assets		11,364			10,355
Deferred tax liabilities:
FHLB stock dividends	$	(1,659	)	$	(1,660	)
Mortgage servicing rights		(1,396	)		(1,103	)
Book versus tax depreciation		(687	)		(697	)
Original issue discount		(673	)		(708	)
Unrealized gain on securities designated as available for sale		0			(51	)
Prepaid expense for FHLB advance restructure		(618	)		(140	)
Purchase price adjustments		(128	)		(128	)
Total deferred tax liabilities		(5,161	)		(4,487	)
Valuation Allowance	$	0		$	(5,868	)
Net deferred tax asset (liability)	$	6,203		$	0