Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

INCOME TAXES

NOTE K – INCOME TAXES

Income tax provision (credit) consists of the following (in thousands):

	2012			2011		2010
Current	$	1,552		$	809	$	546
Deferred		(122	)		150		175
Total income tax provision	$	1,430		$	959	$	721

The deferred income tax provision (credit) consists of the tax effect of temporary differences, including a credit of $207,000 in 2010 resulting from the utilization of net operating loss carryforwards.

Income tax provision calculated at the statutory federal income tax rate of 34% differs from actual income tax provision as follows (in thousands):

	2012			2011			2010
Income tax at statutory rate	$	1,965		$	1,483		$	1,298
Tax-exempt interest income, net		(358	)		(311	)		(289	)
Earnings on life insurance assets, including gain from proceeds in 2010		(113	)		(118	)		(172	)
Low income housing partnership tax credits		(127	)		(127	)		(127	)
Write-off capital loss carryforward		—			—			60
Change in valuation allowance		—			—			(54	)
Other items, net		63			32			5
Totals	$	1,430		$	959		$	721

Deferred tax assets and liabilities consist of the following at December 31 (in thousands):

	2012			2011
Deferred tax assets:
Allowance for loan losses	$	1,425		$	1,134
Deferred compensation and supplemental retirement liability		835			769
Pension liability		259			170
Nonaccrual loan interest		292			252
Tax credit carryforwards		387			655
Stock based compensation		189			175
Other		172			157
Total deferred tax assets		3,559			3,312
Deferred tax liabilities:
Mortgage servicing rights		(423	)		(329	)
Goodwill		(211	)		(211	)
Purchase accounting adjustments		(533	)		(646	)
Net unrealized gain on available for sale securities		(413	)		(465	)
Depreciation		(310	)		(296	)
Other		(165	)		(124	)
Total deferred tax liabilities		(2,055	)		(2,071	)
Net deferred tax assets, included in other assets	$	1,504		$	1,241

At December 31, 2012, the Company has available alternative minimum tax credit carryforwards of $387,000, which may be utilized in the future to the extent computed regular tax exceeds the alternative minimum tax.

The Company and its subsidiaries file U.S. federal and certain state tax returns. In general, tax returns are no longer subject to tax examinations by tax authorities for years before 2010.

The Company believes that it had no significant uncertain tax positions as of December 31, 2012 and 2011.