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Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]  
Income Taxes

NOTE 9. Income Taxes

The Company files income tax returns with the United States of America and the Commonwealth of Virginia. With few exceptions, the Company is no longer subject to federal, state, or local income tax examinations for years prior to 2008.

The net deferred tax asset at December 31, 2011 and 2010 consisted of the following components:

  December 31,
    2011   2010
  (in thousands)
Deferred tax assets:        
Allowance for loan losses $ 2,973 $ 2,418
Deferred compensation   109   116
Accrued postretirement benefits   51   49
Accrued pension benefits   -   147
Home equity origination costs   36   45
Other than temporary impairment   876   846
Interest rate swap   197   57
Other real estate owned expenses   13   39
Other   125   243
  $ 4,380 $ 3,960
Deferred tax liabilities:        
Property and equipment $ 566 $ 458
Securities available for sale   1,681   796
  $ 2,247 $ 1,254
Net deferred tax asset $ 2,133 $ 2,706

 

The Company has not recorded a valuation allowance for deferred tax assets because management believes that it is more likely than not that they will be ultimately realized.

Income tax expense for the years ended December 31, 2011, 2010 and 2009 consisted of the following components:

          December 31,        
    2011     2010     2009  
          (in thousands)        
Current tax expense $ 1,688   $ 1,381   $ 1,667  
Deferred tax (benefit)   (317 )   (362 )   (652 )
  $ 1,371   $ 1,019   $ 1,015  

 

The following table reconciles income tax expense to the statutory federal corporate income tax amount, which was calculated by applying the federal corporate income tax rate to pre-tax income for the years ended December 31, 2011, 2010 and 2009.

          December 31,        
    2011     2010     2009  
          (in thousands)        
Statutory federal corporate tax amount $ 1,936   $ 1,572   $ 1,515  
Tax-exempt interest income   (563 )   (544 )   (505 )
Other   (2 )   (9 )   5  
  $ 1,371   $ 1,019   $ 1,015