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INCOME TAXES
12 Months Ended
Dec. 31, 2012
INCOME TAXES  
INCOME TAXES

NOTE 11 - INCOME TAXES

 

The following temporary differences gave rise to the net deferred tax asset position at December 31, 2012 and 2011:

 

(In Thousands)

 

2012

 

2011

 

Deferred tax assets:

 

 

 

 

 

Allowance for loan losses

 

$

2,590

 

$

2,432

 

Deferred compensation

 

484

 

477

 

Pension

 

2,384

 

2,258

 

Loan fees and discounts

 

153

 

409

 

Investment securities allowance

 

782

 

1,292

 

Low income housing credit carryforward

 

3,528

 

3,250

 

Capital loss carryforward

 

230

 

 

Other

 

1,182

 

963

 

Total

 

11,333

 

11,081

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

Unrealized gain on available for sale securities

 

5,236

 

1,501

 

Bond accretion

 

170

 

483

 

Depreciation

 

369

 

355

 

Amortization

 

827

 

751

 

Total

 

6,602

 

3,090

 

Deferred tax asset, net

 

$

4,731

 

$

7,991

 

 

The current low income housing credit carryforward and capital loss carryforward will expire in ten and three years, respectively.  The Company fully anticipates being able to use the carryforwards.

 

No valuation allowance was established at December 31, 2012 and 2011, because of the Company’s ability to carry back capital losses to recover taxes paid in previous years and certain tax strategies, together with the anticipated future taxable income as evidenced by the Company’s earning potential.

 

The provision or benefit for income taxes is comprised of the following for the year ended December 31, 2012, 2011, and 2010:

 

(In Thousands)

 

2012

 

2011

 

2010

 

Currently payable

 

$

2,726

 

$

2,370

 

$

1,625

 

Deferred provision

 

(128

)

(457

)

(243

)

Total provision

 

$

2,598

 

$

1,913

 

$

1,382

 

 

A reconciliation between the expected income tax or benefit and the effective income tax rate on income before income tax provision or benefit follows for the year ended December 31, 2012, 2011, and 2010:

 

 

 

2012

 

2011

 

2010

 

(In Thousands)

 

Amount

 

%

 

Amount

 

%

 

Amount

 

%

 

Provision at expected rate

 

$

5,592

 

34.00

%

$

4,854

 

34.00

%

$

4,186

 

34.00

%

Decrease in tax resulting from:

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt income

 

(2,235

)

(13.59

)

(2,141

)

(15.00

)

(2,061

)

(16.74

)

Tax credits

 

(737

)

(4.48

)

(737

)

(5.16

)

(705

)

(5.73

)

Other, net

 

(22

)

(0.13

)

(63

)

(0.44

)

(38

)

(0.31

)

Effective income tax provision and rate

 

$

2,598

 

15.80

%

$

1,913

 

13.40

%

$

1,382

 

11.22

%