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Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

Note 14:      Income Taxes

 

The provision for income taxes includes these components:

 

    For The Year Ended December 31,  
    2011     2010     2009  
Taxes currently payable   $ (178,817 )   $ (645,161 )   $ 347,655  
Deferred provision (benefit)     836,845       (5,857,134 )     (1,008,043 )
Income tax expense (benefit)   $ 658,028     $ (6,502,295 )   $ (660,388 )

 

A reconciliation of income tax expense at the statutory rate to the Company's actual income tax expense is shown below:

 

    For The Year Ended December 31,  
    2011     2010     2009  
Computed at the statutory rate (34%)   $ 789,455     $ (7,519,272 )   $ (94,485 )
Decrease resulting from                        
Tax exempt interest     (328,603 )     (458,031 )     (370,944 )
Goodwill impairment     -       1,591,526       -  
BOLI Income     (125,889 )     -       -  
BOLI Surrender     216,631       -       -  
Penalty on Modified Endowment Contracts (MEC)     63,715       -       -  
Other     42,719       (116,518 )     (194,959 )
Actual tax expense (benefit)   $ 658,028     $ (6,502,295 )   $ (660,388 )

 

The Company or one of its subsidiaries files income tax returns in the U.S. federal and Ohio state and local jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years before 2008.

 

The Company accounts for uncertainties in income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the implementation of ASC 740, the Company did not become aware of any liability for uncertain tax positions that it believes should be recognized in the financial statements.

  

The tax effects of temporary differences related to deferred taxes shown on the balance sheets are:

 

    At December 31,  
    2011     2010  
Deferred tax assets                
Allowance for loan losses   $ 2,219,931     $ 2,250,143  
OREO Writedowns/Expense     192,519       270,416  
Accrued compensation and benefits     453,939       441,894  
Net deferred loan fees     100,844       93,730  
Mark to market adjustments     200,026       513,782  
Purchase accounting adjustments     30,145       57,621  
NOL carry over     3,888,931       4,755,310  
AMT credit carry over     201,638       282,639  
Other     220,214       180,430  
      7,508,187       8,845,965  
                 
Deferred tax liabilities                
Depreciation     (1,078,195 )     (1,424,244 )
Mortgage servicing rights     (958,780 )     (1,084,732 )
Unrealized gains on available-for-sale securities     (691,914 )     (611,750 )
Purchase accounting adjustments     (1,793,916 )     (1,881,443 )
Prepaids     (233,843 )     (175,248 )
FHLB stock dividends     (465,562 )     (465,562 )
      (5,222,210 )     (5,642,979 )
                 
Net deferred tax asset   $ 2,285,977     $ 3,202,986  

 

The NOL carry over of $11,438,000 begins to expire in 2024.

 

The Company performed a valuation analysis based on income projections of the deferred tax asset as of December 31, 2011. Based upon that analysis, no valuation reserve was required.