Income Tax

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Tax

Note 12: Income Tax

	2012			2011
Income tax expense
Currently payable
Federal	$	480		$	357
State		(32	)		(28	)
Deferred
Federal		312			(212	)
State		99			(14	)
Total income tax expense	$	859		$	103
Reconciliation of federal statutory to actual tax expense
Federal statutory income tax at 34%	$	1,656		$	638
Effect of state income taxes		45			(28	)
Tax exempt interest		(367	)		(345	)
Bargain purchase gain		(336	)		—
Cash value of life insurance		(104	)		(110	)
Other		(35	)		(52	)
Actual tax expense	$	859		$	103
Effective tax rate		17.6	%		5.5	%

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:

	2012			2011
Assets
Allowance for loan losses	$	1,358		$	1,523
Deferred compensation		455			412
Purchase accounting adjustments		834			29
Non-accrual interest		111			60
Real estate held for sale		237			120
AMT		89			112
Other		72			20
Total assets		3,156			2,276
Liabilities
Depreciation and amortization		(572	)		(849	)
Loan fees		(184	)		(183	)
Mortgage servicing rights		(259	)		(244	)
Federal Home Loan Bank stock dividends		(92	)		(87	)
Prepaid expenses		(220	)		(157	)
Available-for-sale securities		(1,053	)		(1,008	)
Pension and employee benefits		(64	)		(55	)
Intangibles		(192	)		(2	)
Other		(102	)		(48	)
Total liabilities		(2,738	)		(2,633	)
	$	418		$	(357	)

As of December 31, 2012, the Company had approximately $89,000 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.