Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Provision for income tax expense

The provision for income tax expense consists of the following for the years ended December 31:

	2012		2011		2010
Current:
Federal	$	666	$	210	$	(60	)
State		2		2		12
		668		212		(48	)
Deferred:
Federal		472		500		(87	)
State		583		420		142
		1,055		920		55
	$	1,723	$	1,132	$	7

Deferred tax assets and liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2012 and 2011 consist of:

	2012		2011
Deferred tax assets:
Allowance for loan losses	$	3,847	$	4,610
Deferred compensation		382		440
Retirement compensation		1,311		1,218
Stock option compensation		349		350
Post retirement benefits		440		330
Current state franchise taxes		—		1
Non-accrual interest		51		9
Net operating loss		507		734
Tax credit carryovers		2,428		2,751
Other		345		311
Deferred tax assets		9,660		10,754
Deferred tax liabilities:
Fixed assets depreciation		1,055		1,173
FHLB dividends		260		260
Tax credit – loss on pass-through		297		313
Deferred loan costs		502		525
Investment securities unrealized gains		1,223		505
Current state franchise benefit		8		—
Total deferred tax liabilities		3,345		2,776
Net deferred tax assets (see Note 7)	$	6,315	$	7,978

Reconciliation of income taxes computed at federal statutory rates

A reconciliation of income taxes computed at the federal statutory rate of 34% and the provision for income taxes is as follows:

	2012			2011			2010
Income tax expense at statutory rates	$	2,166		$	1,290		$	908
Reduction for tax exempt interest		(166	)		(173	)		(290	)
State franchise tax, net of federal benefit		408			213			102
Cash surrender value of life insurance		(155	)		(149	)		(139	)
Solar credit amortization		(359	)		(323	)		(387	)
Other		(171	)		274			(187	)
	$	1,723		$	1,132		$	7

Reconciliation of unrecognized tax benefits

During 2012 the Company recognized a decrease for unrecognized tax benefits. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance at January 1, 2012	$	83
Additions for tax positions taken in the current period		1
Reductions for tax positions taken in the current period		—
Additions for tax positions taken in prior years		47
Reductions for tax positions taken in prior years		—
Decreases related to settlements with taxing authorities		(79	)
Decreases as a result of a lapse in statue of limitations		—
Balance at December 31, 2012	$	52