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Income Taxes | 12 Months Ended
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Dec. 31, 2012
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] |
Note 9. | Income Taxes
Cornerstone files consolidated income tax returns with its subsidiary. Under the terms of a tax-sharing agreement, the subsidiary’s allocated portion of the consolidated tax liability is computed as if they were reporting income and expenses to the Internal Revenue Service as a separate entity. Income tax expense in the consolidated statements of income for the years ended December 31, 2012, 2011 and 2010, consists of the following:
|  | 2012 |  |  | 2011 |  |  | 2010 |
Current tax expense (benefit) |  | $ | 960,750 |  |  | $ | 77,279 |  |  | $ | (522,382 | )
Deferred tax expense (benefit) related to: |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses |  |  | (255,287 | ) |  |  | 509,358 |  |  |  | (1,030,423 | )
Other |  |  | (127,863 | ) |  |  | (398,437 | ) |  |  | 17,508 |
Income tax expense (benefit) |  | $ | 577,600 |  |  | $ | 188,200 |  |  | $ | (1,535,297 | )
The income tax expense is different from the expected tax expense computed by multiplying income before income tax expense by the statutory federal income tax rates. These differences are reconciled as follows:
|  | 2012 |  |  | 2011 |  |  | 2010 |
Expected tax at statutory rates |  | $ | 673,085 |  |  | $ | 414,206 |  |  | $ | (2,122,558 | )
Increase (decrease) resulting from tax effect of: |  |  |  |  |  |  |  |  |  |  |  |
State income taxes, net of federal tax benefit |  |  | 84,928 |  |  |  | 52,263 |  |  |  | (267,817 | )
New market tax credits |  |  | (180,000 | ) |  |  | (277,500 | ) |  |  | (112,500 | )
Impairment of goodwill |  |  | - |  |  |  | - |  |  |  | 973,131 |
Other |  |  | (413 | ) |  |  | (769 | ) |  |  | (5,553 | )
Income tax expense (benefit) |  | $ | 577,600 |  |  | $ | 188,200 |  |  | $ | (1,535,297 | )
The components of the net deferred tax asset, included in other assets, are as follows:
|  | 2012 |  |  | 2011 |
Deferred tax assets: |  |  |  |  |  |  |  |
Deferred compensation |  | $ | 104,709 |  |  | $ | 110,724 |
Deferred loan fees |  |  | 107,143 |  |  |  | 38,370 |
Allowance for loan losses |  |  | 1,471,054 |  |  |  | 1,215,767 |
Foreclosed assets |  |  | 1,770,380 |  |  |  | 1,711,688 |
|  |  | 3,453,286 |  |  |  | 3,076,549 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | 83,150 |  |  |  | 90,269 |
Life insurance |  |  | 204,386 |  |  |  | 204,386 |
Net unrealized gain on securities available for sale |  |  | 907,797 |  |  |  | 704,153 |
Other |  |  | 6,990 |  |  |  | 6,284 |
|  |  | 1,202,323 |  |  |  | 1,005,092 |
Net deferred tax asset |  | $ | 2,250,963 |  |  | $ | 2,071,457 |
ASC Topic 740, “Income Taxes,” clarifies the accounting for uncertainty in tax positions. ASC Topic 740 requires that Cornerstone recognize in its financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Cornerstone recognized no interest and penalties assessed by taxing authorities on any underpayment of income tax for 2012, 2011 or 2010.

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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 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 2: 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 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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 5: 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 6: 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 7: 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 8: 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 + Details
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