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8. Income Taxes
 12 Months Ended
Dec. 31, 2012
Income Tax Disclosure [Abstract]  
8. Income Taxes

(8) Income Taxes

 

The provision for income taxes in summarized as follows:

 

(Dollars in thousands)                  
    2012     2011     2010  
Current   $ 1,800       2,141       512  
Deferred     (213 )     (678 )     (523 )
Total   $ 1,587       1,463       (11 )

 

The differences between the provision for income taxes and the amount computed by applying the statutory federal income tax rate to earnings before income taxes are as follows:

 

(Dollars in thousands)                  
    2012     2011     2010  
Pre-tax income at statutory rate (34%)   $ 2,509       2,251       622  
Differences:                        
Tax exempt interest income     (1,168 )     (1,052 )     (721 )
Nondeductible interest and other expense     52       62       58  
Cash surrender value of life insurance     (149 )     (101 )     (87 )
State taxes, net of federal benefits     324       233       (8 )
Nondeductible capital losses     -       49       99  
Other, net     19       21       26  
Total   $ 1,587       1,463       (11 )

 

The following summarizes the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities.  The net deferred tax asset is included as a component of other assets at December 31, 2012 and 2011.

 

Deferred tax assets:            
Allowance for loan losses   $ 5,560       6,401  
Accrued retirement expense     1,409       1,213  
Other real estate     628       454  
Other     362       204  
Total gross deferred tax assets     7,959       8,272  
                 
Deferred tax liabilities:                
Deferred loan fees     794       1,082  
Premises and equipment     417       655  
Unrealized gain on available for sale securities     3,581       1,964  
Total gross deferred tax liabilities     4,792       3,701  
Net deferred tax asset   $ 3,167       4,571