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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes |
Income Taxes | ## Note 11 — Income Taxes The current and deferred amounts of income tax expense for the years ended December 31, 2011, 2010 and 2009, respectively, are as follows:
|  | 2011 |  | 2010 |  | 2009
|  | (Dollars in Thousands)
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 3,818 |  |  | $ | (27 | ) |  | $ | (19 | )
State |  |  | 187 |  |  |  | 198 |  |  |  | 146 |
Subtotal |  |  | 4,005 |  |  |  | 171 |  |  |  | 127 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 2,157 |  |  |  | (191 | ) |  |  | 824 |
State |  |  | 1,249 |  |  |  | 242 |  |  |  | (5 | )
Subtotal |  |  | 3,406 |  |  |  | 51 |  |  |  | 819 |
Income tax expense |  | $ | 7,411 |  |  | $ | 222 |  |  | $ | 946 |
Reconciliation between the amount of reported income tax expense and the amount computed by applying the statutory Federal income tax rate is as follows:
|  | 2011 |  | 2010 |  | 2009
|  | (Dollars in Thousands)
Income before income tax expense |  | $ | 21,337 |  |  | $ | 7,226 |  |  | $ | 4,717 |
Federal statutory rate |  |  | 35 | % |  |  | 34 | % |  |  | 34 | %
Computed "expected" Federal income tax expense |  |  | 7,468 |  |  |  | 2,457 |  |  |  | 1,604 |
State tax, net of Federal tax benefit |  |  | 933 |  |  |  | 291 |  |  |  | 93 |
Bank owned life insurance |  |  | (363 | ) |  |  | (417 | ) |  |  | (393 | )
Tax-exempt interest and dividends |  |  | (595 | ) |  |  | (75 | ) |  |  | (334 | )
Tax on Bank Owned Life Insurance policy surrender gain |  |  | — |  |  |  | 539 |  |  |  | — |
Reversal of unrealized tax benefit & interest |  |  | — |  |  |  | (2,551 | ) |  |  | — |
Other, net |  |  | (32 | ) |  |  | (22 | ) |  |  | (24 | )
Income tax |  | $ | 7,411 |  |  | $ | 222 |  |  | $ | 946 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax asset and deferred tax liability at December 31, 2011 and 2010 are presented in the following table:
|  | 2011 |  | 2010
|  | (Dollars in Thousands)
Deferred tax assets: |  |  |  |  |  |  |  |
Impaired assets |  | $ | 2,820 |  |  | $ | 2,621 |
Allowance for loan losses |  |  | 3,810 |  |  |  | 3,358 |
Employee benefit plans |  |  | 13 |  |  |  | 59 |
Unrealized losses on securities available-for-sale |  |  | 1,154 |  |  |  | 3,462 |
Pension actuarial losses |  |  | 2,150 |  |  |  | 1,566 |
Other |  |  | 512 |  |  |  | 656 |
Federal AMT Credits |  |  | 854 |  |  |  | 3,874 |
NJ NOL |  |  | 373 |  |  |  | 1,258 |
NJ AMA credits |  |  | 210 |  |  |  | 213 |
Total deferred tax assets |  | $ | 11,896 |  |  | $ | 17,067 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  | $ | 303 |  |  | $ | 298 |
Market discount accretion |  |  | 43 |  |  |  | 29 |
Deferred loan costs, net of fees |  |  | 397 |  |  |  | 435 |
Purchase accounting |  |  | 40 |  |  |  | 62 |
Total deferred tax liabilities |  |  | 783 |  |  |  | 824 |
Net deferred tax asset |  | $ | 11,113 |  |  | $ | 16,243 |
Based on the Corporation's historical and current taxable income and the projected future taxable income, management believes it is more likely than not that the Corporation will realize the benefit of the net deductible temporary differences existing at December 31, 2011 and 2010, respectively. At December 31, 2011, the Corporation has no federal income tax loss carry forwards, and has state income tax loss carry forwards of approximately $6.4 million, which have expirations beginning in the year 2014. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, the projected future taxable income, and tax planning strategies in making this assessment. During 2011 and 2010, based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the Corporation believes the net deferred tax assets are more likely than not to be realized. The Corporation's federal income tax returns are open and subject to examination from the 2008 tax return year and forward. The Corporation's state income tax returns are generally open from the 2007 and later tax return years based on individual state statute of limitations.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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