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Income Taxes | 12 Months Ended
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Dec. 31, 2012
Income Taxes [Abstract] |
INCOME TAXES | ## NOTE 9 - INCOME TAXES The components of the provision for federal income taxes are as follows:
|  | Years Ended December 31, |
|  | 2012 |  | 2011 |  | 2010 |
|  | (In Thousands) |
Current |  | $ | 2,612 |  | $ | 2,683 |  | $ | 2,867 |
Deferred |  |  | 424 |  |  | (104 | ) |  | (205 | )
|  | $ | 3,036 |  | $ | 2,579 |  | $ | 2,662 |
Deferred income taxes reflect temporary differences in the recognition of revenue and expenses for tax reporting and financial statement purposes, principally because certain items, such as, the allowance for loan losses and loan fees are recognized in different periods for financial reporting and tax return purposes. A valuation allowance has not been established for deferred tax assets. Realization of the deferred tax assets is dependent on generating sufficient taxable income. Although realization is not assured, management believes it is more likely than not that all of the deferred tax asset will be realized. Deferred tax assets are recorded in other assets. Income tax expense of the Company is less than the amounts computed by applying statutory federal income tax rates to income before income taxes because of the following:
|  | Percentage of Income before Income Taxes |
|  | Years Ended December 31, |
|  | 2012 |  | 2011 |  | 2010 |
Tax at statutory rates |  | 34.0 | % | 34.0 | % | 34.0 | %
Tax exempt interest income, net of interest expense disallowance |  | (6.9 | ) | (7.5 | ) | (6.2 | )
Incentive stock options |  | 0.3 |  | 0.5 |  | 0.5 |
Earnings on life insurance |  | (1.2 | ) | (1.2 | ) | (1.1 | )
Other |  | 0.3 |  | 0.2 | ) | (0.5 | )
|  | 26.5 | % | 26.0 | % | 26.7 | %
The income tax provision includes $482,000, 331,000 and $152,000 of income taxes relating to realized securities gains for the years ended December 31, 2012, 2011 and 2010, respectively. The net deferred tax asset included in other assets in the accompanying balance sheets includes the following amounts of deferred tax assets and liabilities:
|  | 2012 |  | 2011 |
|  | (In Thousands) |
Deferred tax assets: |  |  |  |  |  |  |
Allowance for loan losses |  | $ | 1,871 |  | $ | 1,787 |
Deferred compensation |  |  | 500 |  |  | 501 |
Purchase price adjustment |  |  | 1,458 |  |  | 1,581 |
Other |  |  | 292 |  |  | 277 |
Foreclosed real estate valuation allowance |  |  | 48 |  |  | 183 |
Net operating loss carry forward |  |  | - |  |  | 263 |
Total Deferred Tax Assets |  |  | 4,169 |  |  | 4,592 |
Deferred tax liabilities: |  |  |  |  |  |  |
Premises and equipment |  |  | 334 |  |  | 282 |
Deferred loan fees |  |  | 213 |  |  | 264 |
Net unrealized gains on securities |  |  | 1,443 |  |  | 1,716 |
Total Deferred Tax Liabilities |  |  | 1,990 |  |  | 2,262 |
Net Deferred Tax Asset |  | $ | 2,179 |  | $ | 2,330 |
The Company recorded a deferred tax asset in the amount of $263,000 in 2011 related to a net operating loss carry forward resulting from its acquisition of North Penn Bancorp, Inc. The carry forward will expire in 2030 but it is expected that the Company will realize the tax benefit before expiration based on the Company's earning potential. The Company's federal and state income tax returns for taxable years through 2008 have been closed for purposes of examination by the Internal Revenue Service and the Pennsylvania Department of Revenue.

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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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