11. Income Taxes

Income taxes for the years ended December 31 consisted of the following:

	2013			2012		2011
	(in thousands)
Current income tax provision:
Federal	$	7,008		$	6,403	$	3,781
State	2,329			2,026		1,386
Total current income tax provision	9,337			8,429		5,167

Deferred income tax provision (benefit):
Federal	(3,129		)	1,262		899
State	(621		)	298		345
Total deferred income tax provision (benefit)	(3,750		)	1,560		1,244

Total income tax provision	$	5,587		$	9,989	$	6,411

A reconciliation from statutory federal income taxes to the Company’s effective income taxes for the years ended December 31 are as follows:

	2013			2012			2011
	(in thousands)

Statutory federal income tax provision	$	5,103		$	8,760		$	5,774
California franchise tax, net of federal income tax effect	1,027			1,842			1,214
Other, including tax exempt income	(543		)	(613		)	(577		)
Total income tax provision	$	5,587		$	9,989		$	6,411

Deferred tax assets (liabilities) were comprised of the following temporary differences between the financial statement carrying amounts and the tax basis of assets at December 31:

	2013			2012
	(in thousands)
Deferred tax assets:
Accrued expenses	$	891		$	442
Net operating loss	3,353			3,673
Allowance for loan losses, net of bad debt charge-offs	3,336			3,390
Directors deferred compensation	1,896			—
Unrealized loss on available for sale securities	2,160			—
State taxes	858			765
Capital loss on mutual funds	—			281
Other-than-temporary impairment	684			2,180
Restricted stock and options expense	6			6
Other	—			147
Total deferred tax assets	13,184			10,884

Deferred tax liabilities:
Federal Home Loan Bank stock dividends	(306		)	(560		)
Deferred FDIC gain	(1,944		)	(2,367		)
Core deposit intangibles	(1,813		)	—
Depreciation	(216		)	(111		)
Unrealized gain on available for sale securities	—			(772		)
Other	(428		)	(187		)
Total deferred tax liabilities	(4,707		)	(3,997		)
Net deferred tax asset	$	8,477		$	6,887

At December 31, 2013, there was no valuation allowance against the Company’s deferred tax asset. The Company has a net operating loss carryforward of approximately $9.4 million for federal income tax purposes which expires in 2023. In addition, the Company has a net operating loss carryforward of approximately $942,000 for California franchise tax purposes. However, the state of California has suspended the net operating loss deduction utilization for the tax years 2009, 2010, 2011, and 2012. The net operating loss deduction for the state is now scheduled to expire in 2033. With the completion of the secondary offering in October 2003, the Company had an “ownership change” as defined under Internal Revenue Code Section 382. Under Section 382, which has also been adopted under California law, if during any three-year period there is more than a 50 percentage point change in the ownership of the Company, then the future use of any pre-change net operating losses or built-in losses of the Company are subject to an annual percentage limitation based on the value of the company at the ownership change date. The ownership change reduced the net operating loss carryforward for federal and state tax purposes. The annual usable net operating loss carryforward going forward is approximately $932,000 per year.

As of December 31, 2013, tax years for 2010 through 2012 remain open to audit by the Internal Revenue Service and 2008 through 2012 by various state taxing agencies. As of December 31, 2013, the Bank is not undergoing any examination by the California Franchise Tax Board.