Income Tax

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income Tax

Note 9: Income Tax

	2011			2010
Income tax expense (benefit)
Currently payable
Federal	$	357		$	639
State		(28	)		40
Deferred
Federal		(212	)		(119	)
State		(14	)		(8	)
Total income tax expense	$	103		$	552
Reconciliation of federal statutory to actual tax expense (benefit)
Federal statutory income tax at 34%	$	638		$	976
Effect of state income taxes		(28	)		21
Tax exempt interest		(345	)		(282	)
Cash value of life insurance		(110	)		(112	)
Other		(52	)		(51	)
Actual tax expense	$	103		$	552
Effective tax rate		5.5	%		19.2	%

The cumulative net deferred tax asset (liability) is included in the balance sheets in other assets and other liabilities, respectively. The components of the asset (liability) are as follows:

	2011			2010
Assets
Allowance for loan losses	$	1,523		$	1,448
Deferred compensation		412			387
Purchase accounting adjustments		29			30
Pension and employee benefits		-			19
Non-accrual interest		60			43
Real estate held for sale		120			5
AMT		112			-
Other		20			9
Total assets		2,276			1,941
Liabilities
Depreciation and amortization		(849	)		(794	)
Loan fees		(183	)		(185	)
Mortgage servicing rights		(244	)		(224	)
Federal Home Loan Bank stock dividends		(87	)		(92	)
Prepaid expenses		(157	)		(180	)
Available-for-sale securities		(1,008	)		(253	)
Pension and employee benefits		(55	)		(253	)
Other		(50	)		(40	)
Total liabilities		(2,633	)		(1,768	)
	$	(357	)	$	173

As of December 31, 2011, the Company had approximately $112,000 of alternative minimum tax credits available to offset future federal income taxes. The credits have no expiration date.

Retained earnings include approximately $2,100,000 for which no deferred income tax liability has been recognized. This amount represents an allocation of income to bad debt deductions as of December 31, 1987 for tax purposes only. Reduction of amounts so allocated for purposes other than tax bad debt losses or adjustments arising from carryback of net operating losses would create income for tax purposes only, which income would be subject to the then-current corporate income tax rate. The unrecorded deferred income tax liability on the above amount was approximately $714,000.