Quarterly report pursuant to Section 13 or 15(d)

FEDERAL INCOME TAXES (Tables)

v2.4.0.6
FEDERAL INCOME TAXES (Tables)
 9 Months Ended
Sep. 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
September 30,
2012
 
 
Three Months
Ended
September 30,
2011
 
 
Nine Months
Ended
September 30,
2012
 
 
Nine Months
Ended
September 30,
2011
 
 
 
 
 
 
 
 
 
 
 
Current
 
$
275
$
(94
)
 
$
275
 
$
(176
)
Deferred (benefit) expense
 
---
94
 
 
---
 
 
 
176
 
 
$
275
$
---
 
 
$
275
 
 
$
---
 
 
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
September 30,
2012
 
 
Three Months
Ended
September 30,
2011
Nine Months
Ended
September 30,
2012
 
 
Nine Months
Ended
September 30,
2011
 
 
 
 
 
 
 
 
 
Statutory rate
 
 
35
%
 
35
%
 
35
%
 
 
35
%
Statutory rate applied to income before taxes
 
$
2,401
 
$
368
$
5,086
 
 
$
1,660
Add (deduct)
 
 
 
 
 
 
 
 
 
 
Change in valuation allowance
 
 
(1,761
)
 
(251
)
 
(4,056
)
 
 
(1,260
)
Tax-exempt interest income
 
 
(32
)
 
(4
)
 
(64
)
 
 
(4
)
Bank-owned life insurance
 
 
(73
)
 
(86
)
 
(230
)
 
 
(249
)
Other, net
 
 
(260
)
 
(27
)
 
(461
)
 
 
(147
)
$
275
$
---
$
275
$
---

Deferred tax assets and liabilities
The net deferred tax asset recorded included the following amounts of deferred tax assets and liabilities (dollars in thousands):
 
 
September 30,
2012
 
 
December 31,
2011
 
Deferred tax assets
 
 
 
 
 
 
Allowance for loan losses
 
$
9,194
 
 
$
11,074
 
Nonaccrual loan interest
 
 
996
 
 
 
839
 
Valuation allowance on other real estate owned
 
 
6,479
 
 
 
6,029
 
Net operating loss carryforward
 
 
4,325
 
 
 
7,673
 
Other
 
 
1,933
 
 
 
1,137
 
Gross deferred tax assets
 
 
22,927
 
 
 
26,752
 
Valuation allowance
 
 
(19,567
)
 
 
(24,026
)
Total net deferred tax assets
 
 
3,360
 
 
 
2,726
 
 
 
 
 
 
 
Deferred tax liabilities
 
 
 
 
 
 
Depreciation
 
 
(1,734
)
 
 
(1,758
)
Purchase accounting adjustments
 
 
---
 
 
(22
)
Unrealized gain on securities available for sale
 
 
(607
)
 
 
(204
)
Prepaid expenses
 
 
(669
)
 
 
(407
)
Other
 
 
(350
)
 
 
(335
)
Gross deferred tax liabilities
 
 
(3,360
)
 
 
(2,726
)
Net deferred tax asset
 
$
---
 
 
$
---