Income Taxes

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Income Taxes

NOTE E   INCOME TAXES

The components of the provision for income tax expense (benefit) are:

	2011			2010			2009
Current	$	90,383		$	(52,797	)	$	(193,165	)
Deferred		(52,211	)		(23,226	)		270,347
Total Provision for Income Taxes	$	38,172		$	(76,023	)	$	77,182

A reconciliation of income tax at the statutory rate to income tax expense at the Company's effective rate is as follows:

	2011			2010			2009
Computed Tax Expense (Benefit) at the Expected Statutory Rate	$	38,270		$	75,856		$	72,202
Katrina Tax Credits		—			(2,164	)		(35,513	)
Other Adjustments		(98	)		(149,715	)		40,493
Income Tax Expense for Operations	$	38,172		$	(76,023	)	$	77,182

Certain income and expense items are accounted for differently for financial reporting purposes than for income tax purposes. Provisions for deferred taxes are made in recognition of these temporary differences and are measured using the income tax rates applicable to the period when the differences are expected to be realized or settled.

The major temporary differences, which created deferred tax assets and liabilities, are as follows:

	2011			2010
Deferred Tax Assets:
Other Real Estate	$	201,713		$	199,748
Allowance for Loan Loss		212,372			195,757
Expenses Accrued for Books		10,200			—
Total Deferred Tax Assets		424,285			395,505
Deferred Tax Liabilities:
Section 481A Adjustment - Prepaid Expenses		(64,213	)		(84,563	)
Unrealized Gain on Securities		(299,697	)		(245,509	)
Fixed Assets		(443,004	)		(446,085	)
Total Deferred Tax Liabilities		(806,914	)		(776,157	)
Net Deferred Tax Liability	$	(382,629	)	$	(380,652	)

The Company had no amount of interest and penalties recognized in the consolidated statements of operations for neither the years ended December 31, 2011 and 2010, respectively, nor any amount of interest and penalties recognized in the consolidated balance sheets as of December 31, 2011 and 2010, respectively.

All tax returns have been appropriately filed by the Company. The Company’s tax filings are subject to audit by various taxing authorities. The Company’s Federal tax returns for 2008, 2009 and 2010 are subject to examination by the IRS, generally for three years after they were filed. As of December 31, 2011, management evaluated the Company’s tax position and concluded that the Company has taken no uncertain tax positions that require adjustment to the consolidated financial statements.