Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Taxes [Abstract]

Provision for income tax expense

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

	2013		2012		2011
Current:
Federal	$	1,145	$	666	$	210
State		44		2		2
		1,189		668		212
Deferred:
Federal		1,243		472		500
State		422		583		420
		1,665		1,055		920
	$	2,854	$	1,723	$	1,132

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, 2013 and 2012 consist of:

	2013		2012
Deferred tax assets:
Allowance for loan losses	$	4,176	$	3,847
Deferred compensation		316		382
Retirement compensation		1,423		1,311
Stock option compensation		252		349
Post retirement benefits		290		440
Current state franchise taxes		15		—
Non-accrual interest		141		51
Net operating loss		63		507
Tax credit carryovers		1,720		2,428
Investment securities unrealized loss		426		—
Other		19		345
Deferred tax assets		8,841		9,660
Deferred tax liabilities:
Fixed assets depreciation		1,291		1,055
FHLB dividends		260		260
Tax credit – loss on pass-through		223		297
Deferred loan costs		918		502
Current state franchise taxes		—		8
Investment securities unrealized gain		—		1,223
Total deferred tax liabilities		2,692		3,345
Net deferred tax assets (see Note 7)	$	6,149	$	6,315

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:

	2013			2012			2011
Income tax expense at statutory rates	$	2,801		$	2,166		$	1,290
Reduction for tax exempt interest		(191	)		(166	)		(173	)
State franchise tax, net of federal benefit		457			408			213
Cash surrender value of life insurance		(154	)		(155	)		(149	)
Solar credit amortization		(201	)		(359	)		(323	)
Other		142			(171	)		274
	$	2,854		$	1,723		$	1,132

Reconciliation of unrecognized tax benefits

During 2013 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, 2013	$	52
Additions for tax positions taken in the current period		2
Reductions for tax positions taken in the current period		—
Additions for tax positions taken in prior years		3
Reductions for tax positions taken in prior years		(27	)
Decreases related to settlements with taxing authorities		(18	)
Decreases as a result of a lapse in statue of limitations		—
Balance at December 31, 2013	$	12