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Income Taxes
 12 Months Ended
Dec. 31, 2012
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 2009.

The net deferred tax asset at December 31, 2012 and 2011 consisted of the following components:

    December 31,
    2012   2011
    (in thousands)  
Deferred tax assets:        
Allowance for loan losses $ 2,236 $ 2,973
Deferred compensation   116   109
Accrued postretirement benefits   51   51
Home equity origination costs   35   36
Other than temporary impairment   876   876
Interest rate swap   216   197
Other real estate owned expenses   122   13
Other   351   125
  $ 4,003 $ 4,380
Deferred tax liabilities:        
Property and equipment $ 520 $ 566
Securities available for sale   1,970   1,681
  $ 2,490 $ 2,247
Net deferred tax asset $ 1,513 $ 2,133

 

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, 2012, 2011 and 2010 consisted of the following components:

        December 31,        
    2012   2011     2010  
        (in thousands)        
Current tax expense $ 2,209 $ 1,688   $ 1,381  
Deferred tax expense (benefit)   350   (317 )   (362 )
  $ 2,559 $ 1,371   $ 1,019  

 

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, 2012, 2011 and 2010.

December 31,
    2012     2011     2010  
          (in thousands)        
Statutory federal corporate tax amount $ 3,097   $ 1,936   $ 1,572  
Tax-exempt interest income   (563 )   (563 )   (544 )
Other   25     (2 )   (9 )
  $ 2,559   $ 1,371   $ 1,019