12.	INCOME TAXES

The Company files a consolidated income tax return with the Federal government and the State of Alabama. ALC files a Mississippi state income tax return related to operations from its Mississippi branches. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and the states in which it files for the years ended December 31, 2010 through 2013.

As of June 30, 2014, the Company had no unrecognized tax benefits related to federal or state income tax matters and does not anticipate any material increase or decrease in unrecognized tax benefits relative to any tax positions taken prior to June 30, 2014. As of June 30, 2014, the Company had accrued no interest and no penalties related to uncertain tax positions.

The consolidated tax expense (benefit) differed from the amount computed by applying the federal statutory income tax rate of 34.0%, as described in the following table:


	June 30, 2014			June 30, 2013
	(Dollars in Thousands)
Income tax expense at federal statutory rate	$	978		$	994
Increase (decrease) resulting from:
Tax-exempt interest		(145	)		(193	)
State income tax expense, net of federal income taxes		113			114
Other		(62	)		(59	)

Total	$	884		$	856

The Company had a net deferred tax asset of $8.5 million and $10.8 million as of June 30, 2014 and December 31, 2013, respectively. The reduction in the net deferred tax asset resulted primarily from decreases in deferred tax assets and liabilities related to book-tax timing differences associated with the provision for loan losses, OREO write-downs and increases in net unrealized gains on securities available-for-sale.