Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

Note 10. Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and the state of Virginia.  With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2008.

The components of the net deferred tax assets included in other assets at December 31, 2011 and 2010 are as follows:

	2011		2010
Deferred tax assets:
Allowance for loan losses	$	2,287,629	$	2,144,446
Securities available for sale		708,746		1,099,301
Impairment on securities		784,861		883,214
Interest on nonaccrual loans		63,700		15,336
Accrued vacation		141,501		133,450
SERP obligation		413,936		446,673
Accumulated depreciation		8,917		130,951
Restricted stock		151,748		123,208
Other		441,276		291,680
		5,002,314		5,268,259
Deferred tax liabilities:
Other		1,158		780
		1,158		780
Net deferred tax assets	$	5,001,156	$	5,267,479

The Company has not recorded a valuation allowance for deferred tax assets as management feels it is more likely than not, that they will be ultimately realized.

Allocation of federal income taxes between current and deferred portions is as follows:

	Year Ended December 31,
	2011			2010			2009
Current tax expense	$	1,554,001		$	1,947,326		$	2,030,384
Deferred tax (benefit)		(118,646	)		(854,412	)		(874,440	)
	$	1,435,355		$	1,092,914		$	1,155,944

The reasons for the difference between the statutory federal income tax rate and the effective tax rates for the three years ended December 31, 2011 are summarized as follows:

	2011			2010			2009
Computed "expected" tax expense	$	1,887,942		$	1,618,472		$	1,554,962
Decrease in income taxes resulting from:
Tax-exempt interest income		(379,844	)		(421,749	)		(369,404	)
Other		(72,743	)		(103,809	)		(29,617	)
	$	1,435,355		$	1,092,914		$	1,155,941