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