(10)	Income Taxes

Income taxes consisted of the following (in thousands):

	Year Ended December 31,
	2012			2011
Current:
Federal	$	0		$	41
State		0			0

Total current		0			41

Deferred:
Federal		(1,508	)		(1,232	)
State		(259	)		(203	)
Change in valuation allowance		1,767			1,435

Total deferred		0			0

Total	$	0		$	41

The reasons for the differences between the statutory Federal income tax rate and the effective tax rate are summarized as follows (dollars in thousands):

	Year Ended December 31,
	2012						2011
	Amount			% of Pretax Loss			Amount			% of Pretax Loss
Income tax benefit at statutory rate	$	(1,597	)		(34.00	)%	$	(1,260	)		(34.00	)%
Increase (decrease) resulting from:
State taxes, net of Federal tax benefit		(170	)		(3.6	)		(134	)		(3.6	)
Change in valuation allowance		1,767			37.6			1,435			38.7

	$	0			0.0	%	$	41			1.1	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (in thousands).

	At December 31,
	2012			2011
Deferred tax assets:
Allowance for loan losses	$	421		$	71
Net operating loss carryforwards		6,887			5,919
Premises and equipment		132			109
Impaired securities		190			67
Foreclosed property expenses		650			442
Nonaccrual loan interest		399			298
Other		72			69

Gross deferred tax assets		8,751			6,975
Less: Valuation allowance		8,737			6,970
Net deferred tax assets		14			5

Deferred tax liabilities:
Loan costs		(14	)		(4	)
Prepaid expenses		0			(1	)

Deferred tax liabilities		(14	)		(5	)

Net deferred tax asset	$	0		$	0

During the years ended December 31, 2012 and 2011, the Company assessed its earnings history and trend over the past year and its estimate of future earnings, and determined that it was more likely than not that the deferred tax assets would not be realized in the near term. Accordingly, a valuation allowance was recorded and maintained against the net deferred tax asset for the amount not expected to be realized in the future.

At December 31, 2012, the Company had net operating loss carryforwards of approximately $17.2 million for Federal tax purposes and $28.2 million for Florida tax purposes available to offset future taxable income. These carryforwards will begin to expire in 2029. These carryforwards are subject to an annual limitation going forward under Internal Revenue Code Section 382 which became applicable with the sale of common stock that occurred during 2011.

The Company files U.S. and Florida income tax returns. With few exceptions, the Company is no longer subject to U.S. Federal or state and local income tax examinations by taxing authorities for years before 2009. The Company's 2009 Federal income tax return is currently under examination.