Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

INCOME TAXES

NOTE 14—INCOME TAXES

The provision for income taxes (credit) consists of the following:

		September 30,			September 30,			September 30,
	2011			2010			2009
Current expense	$	2,925		$	3,332		$	1,875
Deferred expense (benefit)		(385	)		(788	)		(806	)
TOTALS	$	2,540		$	2,544		$	1,069

Effective tax rates differ from federal statutory rate of 35% applied to income before income taxes due to the following:

		September 30,			September 30,			September 30,
	2011			2010			2009
Statutory tax	$	4,115		$	4,037		$	2,419
Effect of nontaxable interest		(1,198	)		(1,062	)		(1,060	)
Bank owned life insurance, net		(183	)		(158	)		(172	)
Effect of nontaxable life insurance death proceeds		(16	)		(179	)		(32	)
Other		(178	)		(94	)		(86	)
ACTUAL TAX	$	2,540		$	2,544		$	1,069

Deferred tax assets (liabilities) are comprised of the following:

		September 30,			September 30,
	2011			2010
Deferred tax assets:
Allowance for credit losses	$	3,437		$	3,257
Security valuation		1,775			1,771
Deferred and accrued compensation		457			314
Deferred loan fees and costs		461			432
Capital loss carryover		11			11
Post-retirement benefits		165			165
Other		234			214
Gross deferred tax assets	$	6,540		$	6,164
Deferred tax liabilities:
Depreciation	$	(781	)	$	(753	)
Net unrealized gain on securities available for sale		(4,336	)		(1,566	)
Federal Home Loan Bank dividends		(482	)		(482	)
Prepaid expenditures		(67	)		(93	)
Other		(5	)		(16	)
Gross deferred tax liabilities		(5,671	)		(2,910	)
NET DEFERRED TAX ASSET	$	869		$	3,254

No valuation allowance for deferred tax assets was recorded at December 31, 2011 and 2010. The capital loss carryover of $33 thousand, which can be used to offset future capital gain income, expires on December 31, 2013.

At December 31, 2011 and December 31, 2010, the Company had no unrecognized tax benefits recorded. The Company does not expect the amount of unrecognized tax benefits to significantly change within the next twelve months.

There were no penalties or interest recorded in the income statement for the years ended December 31, 2011, 2010 and 2009 and no amounts accrued for penalties or interest as of December 31, 2011 and 2010.

The Company is subject to U.S. federal income tax. The Company is no longer subject to examination by the federal taxing authority for years prior to 2008. The tax years 2008—2010 remain open to examination by the U.S. taxing authority.