Quarterly report pursuant to Section 13 or 15(d)

FEDERAL INCOME TAXES (Tables)

v2.4.0.6
FEDERAL INCOME TAXES (Tables)
 6 Months Ended
Jun. 30, 2012
FEDERAL INCOME TAXES [Abstract]  
Components of income tax expense (benefit)
Income tax expense (benefit) was as follows (dollars in thousands):
 
 
 
Three Months
Ended
June 30,
2012
 
 
Three Months
Ended
June 30,
2011
 
 
Six Months
Ended
June 30,
2012
 
 
Six Months
Ended
June 30,
2011
 
 
 
        
 
 
 
 
 
 
 
Current
 
$
(176)
    
$
(80
)
 
$
(163)
  
 
$
(82
)
Deferred (benefit) expense
 
  
176
      
80
  
 
 
163
 
 
 
82
 
 
 
$
---
    
$
---
 
 
$
---
 
 
$
---
 
 
Reconciliation of 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 (benefit) 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,
2012
 
 
Three Months
Ended
June 30,
2011
    
Six Months
Ended
June 30,
2012
 
 
Six Months
Ended
June 30,
2011
 
 
 
            
 
 
 
 
 
Statutory rate
 
 
35
%
  
 
35
%
  
 
35
%
 
 
35
%
Statutory rate applied to income before taxes
 
$
1,115
 
  
$
840
    
$
2,685
 
 
$
1,292
  
Add (deduct)
 
 
  
 
  
 
  
 
  
 
  
 
 
 
  
 
Change in valuation allowance
 
 
(822
)
  
 
(654
)
  
 
(2,295
)
 
 
(1,009
)
Tax-exempt interest income
 
 
(20
)
  
 
(69
)
  
 
(32
)
 
 
(69
)
Bank-owned life insurance
 
 
(79
)
  
 
(88
)
  
 
(157
)
 
 
(163
)
Other, net
 
 
(194
)
  
 
(29
)
  
 
(201
)
 
 
(51
)
   
$
---
    
$
---
    
$
---
    
$
---
  

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,
2012
 
 
December 31,
2011
 
Deferred tax assets
 
 
 
 
 
 
Allowance for loan losses
 
$
9,513
 
 
$
11,074
 
Nonaccrual loan interest
 
 
953
 
 
 
839
 
Valuation allowance on other real estate owned
 
 
6,572
 
 
 
6,029
 
Net operating loss carryforward
 
 
5,982
 
 
 
7,673
 
Other
 
 
1,346
 
 
 
1,137
 
Gross deferred tax assets
 
 
24,366
 
 
 
26,752
 
Valuation allowance
 
 
(21,568
  
 
 
(24,026
)
Total net deferred tax assets
 
 
2,798
 
 
 
2,726
 
 
 
 
  
 
 
 
  
 
Deferred tax liabilities
 
 
  
 
 
 
  
 
Depreciation
 
 
(1,671
)
 
 
(1,758
)
Purchase accounting adjustments
 
 
---
  
 
 
(22
)
Unrealized gain on securities available for sale
 
 
(366
)
 
 
(204
)
Prepaid expenses
 
 
(407
)
 
 
(407
)
Other
 
 
(354
)
 
 
(335
)
Gross deferred tax liabilities
 
 
(2,798
)
 
 
(2,726
)
Net deferred tax asset
 
$
---
 
 
$
---