Quarterly report pursuant to Section 13 or 15(d)

FEDERAL INCOME TAXES (Tables)

v2.4.0.8
FEDERAL INCOME TAXES (Tables)
 6 Months Ended
Jun. 30, 2013
FEDERAL INCOME TAXES [Abstract]  
Income tax expense (benefit)
Income tax expense (benefit) was as follows (dollars in thousands):

 
Three Months
Ended
June 30,
2013
  
Three Months
Ended
June 30,
2012
  
Six Months
Ended
June 30,
2013
  
Six Months
Ended
June 30,
2012
  
 
 
 
 
 
Current
  
$
55
    
$
(176
)
  
$
55
    
$
(163
)
Deferred (benefit) expense
    
1,141
      
176
      
2,283
      
163
  
 
  
$
1,196
    
$
---
    
$
2,338
    
$
---
 
Difference between financial statement tax expense (benefit) and amount computed by applying statutory federal tax rate to pretax income
The difference between the financial statement tax expense and amount computed by applying the statutory federal tax rate to pretax income was reconciled as follows (dollars in thousands):

 
  
Three Months
Ended
June 30,
2013
    
Three Months
Ended
June 30,
2012
    
Six Months
Ended
June 30,
2013
    
Six Months
Ended
June 30,
2012
  
 
  
   
   
   
 
Statutory rate
    
35
%
    
35
%
    
35
%
    
35
%
Statutory rate applied to income before taxes
    
1,330
      
1,115
    
$
2,595
    
$
2,685
  
Add (deduct)
                                
Change in valuation allowance
    
---
      
(822
)
    
---
      
(2,295
)
Tax-exempt interest income
    
(50
)
    
(20
)
    
(96
)
    
(32
)
Bank-owned life insurance
    
(65
)
    
(79
)
    
(125
)
    
(157
)
Other, net
    
(19
)
    
(194
)
    
(36
)
    
(201
)
 
  
$
1,196
    
$
---
    
$
2,338
    
$
---
  
Deferred tax assets and liabilities
The net deferred tax asset recorded included the following amounts of deferred tax assets and liabilities (dollars in thousands):

 
  
June 30,
2013
    
December 31,
2012
  
Deferred tax assets
  
   
 
Allowance for loan losses
  
$
7,787
    
$
8,309
  
Nonaccrual loan interest
    
1,043
      
1,023
  
Valuation allowance on other real estate owned
    
5,887
      
6,356
  
Net operating loss carryforward
    
2,617
      
4,188
  
Unrealized loss on securities available for sale
    
774
      
---
  
Other
    
1,918
      
1,794
  
Gross deferred tax assets
    
20,026
      
21,670
  
Valuation allowance
    
---
      
---
  
Total net deferred tax assets
    
20,026
      
21,670
  
 
                
Deferred tax liabilities
                
Depreciation
    
(1,549
)
    
(1,693
)
Unrealized gain on securities available for sale
    
---
      
(517
)
Prepaid expenses
    
(308
)
    
(308
)
Other
    
(381
)
    
(372
)
Gross deferred tax liabilities
    
(2,238
)
    
(2,890
)
Net deferred tax asset
  
$
17,788
    
$
18,780