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

Note 12 - Income taxes

 

The Company files income tax returns in the U.S. federal jurisdiction and the state of Virginia.  With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2009.

Income tax expense attributable to income before income tax expense is summarized as follows:

 

 

 

December 31,

 

 

 

2012

 

2011

 

Current federal income tax expense

 
$
1,045 

 
$
(98)

 

Deferred federal income tax expense (benefit)

 
(312)

 
195 

 

Tax credits

 
(190)

 
(190)

 

Income tax expense (benefit)

 
$
543 

 
$
(93)

 

Income tax expense differed from amounts computed by applying the U.S. Federal income tax rate of 34% to income before income tax expense as a result of the following:

 

 

 

2012

 

2011

 

Computed “expected” income tax provision

 
$
910 

 
$
172 

 

Increase (reduction) in income tax resulting from:

 

 

 

 

 

Non-taxable income

 
(186)

 
(86)

 

Non-deductible expenses

 
9 

 
11 

 

Tax credits

 
(190)

 
(190)

 

Income tax expense (benefit)

 
$
543 

 
$
(93)

 

 

 

The tax effects of temporary differences result in deferred tax assets and liabilities as presented below:

 

 

 

 

 

 

 

 

 

2012

 

2011

 

Deferred tax assets

 

 

 

 

 

  Allowance for loan losses

 
$
1,121 

 
$
1,223 

 

  Unrealized loss on available-for-sale securities

 

-

 
28 

 

  OREO

 
218 

 

-

 

  Non-accrual interest

 
293 

 

-

 

  Carryover of tax credits

 
243 

 
325 

 

Gross deferred tax assets

 
1,875 

 
1,576 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

 

 

 

  Depreciation

 
179 

 
169 

 

  Unrealized gain on available-for-sale securities

 
293 

 

-

 

  Other

 
20 

 
16 

 

  Prepaid expenses

 
16 

 
16 

 

Gross deferred tax liabilities

 
508 

 
201 

 

Net deferred tax asset

 
$
1,367 

 
$
1,375