INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

Components of deferred tax assets and liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities as of December 31, 2012 and 2011 are as follows (in thousands):

	2012		2011
Deferred tax assets:
Allowance for loan losses	$	6,325	$	2,474
Alternative minimum tax credit		1,300		1,158
Other		2,575		1,357
Total deferred tax assets		10,200		4,989
Deferred tax liabilities:
Premises and equipment		4,958		3,792
FHLB stock dividends		57		18
Unrealized gains on securities		5,914		3,993
Other		1,747		351
Total deferred tax liabilities		12,676		8,154
Net deferred tax liability	$	2,476	$	3,165

Components of income tax expense

Components of income tax expense are as follows (in thousands):

	2012		2011			2010
Current	$	2,128	$	1,055		$	2,001
Deferred expense (benefit)		1,651		(491	)		(1,033	)
Total income tax expense	$	3,779	$	564		$	968

Income tax reconciliation

The provision for federal income taxes differs from the amount computed by applying the U.S. Federal income tax statutory rate of 35% for 2012 and 34% for 2011 and 2010 on pre-tax income as follows (in thousands):

	December 31,
	2012			2011			2010
Taxes calculated at statutory rate	$	4,697		$	1,713		$	2,294
Increase (decrease) resulting from:
Tax-exempt interest, net		(988	)		(1,121	)		(1,293	)
Tax credits		-			-			-
Other		70			(28	)		(33	)
	$	3,779		$	564		$	968