Taxes on Income (Tables)

12 Months Ended

Dec. 31, 2012

Taxes on Income [Abstract]

Deferred Tax Assets and Liabilities

The tax effects of significant items comprising the Company's net deferred tax assets (liabilities) are as follows:

	December 31,
(In thousands)	2012			2011
Deferred tax assets:
Credit losses not currently deductible	$	4,391		$	5,016
State franchise tax		0			0
Deferred compensation		1,912			1,797
Net operating losses		7,773			9,581
Depreciation		518			344
Accrued reserves		194			164
Write-down on other real estate owned		3,283			2,873
Impairment loss on CMO's		0			1,214
Capitalized OREO expenses		793			1,371
Unrealized loss on AFS securities		0			209
Other		1,908			1,356
Total deferred tax assets		20,772			23,925
Deferred tax liabilities:
State Tax		(1,889	)		(2,245	)
FHLB dividend		(103	)		(201	)
Loss on  limited partnership investment		(1,695	)		(2,283	)
Unrealized gain on AFS		(458	)		0
Deferred gain SFAS No. 159 – fair value option		(2,819	)		(3,166	)
Fair value adjustments for purchase accounting		(123	)		(122	)
Interest on nonaccrual loans		(368	)		(101	)
Deferred loan costs		(602	)		(228	)
Prepaid expenses		(305	)		(408	)
Total deferred tax liabilities		(8,362	)		(8,754	)
Valuation Allowance		(2,686	)		(3,686	)
Net deferred tax assets	$	9,724		$	11,485

Income Taxes

Taxes on income for the years ended December 31, consist of the following:

(In thousands)
2012:	Federal			State			Total
Current	$	719		$	(416	)	$	303
Deferred		466			764			1,230
	$	1,185		$	348		$	1,533
2011:
Current	$	(1,468	)	$	2,151		$	683
Deferred		1,182			(3,580	)		(2,398	)
	$	(286	)	$	(1,429	)	$	(1,715	)

Effective Income Tax Rate Reconciliation

A reconciliation of the statutory federal income tax rate to the effective income tax rate is as follows:

	Years Ended December 31,
	2012			2011
Statutory federal income tax rate		34.0	%		(34.0	%)
State franchise tax, net of federal income tax benefit		3.0			(10.1	)
Tax exempt interest income		0			0
Low Income Housing – federal credits		(1.1	)		0
Cash surrender value of life insurance		(2.4	)		(1.4	)
Goodwill impairment		0			4.4
Valuation Allowance		(13.2	)		27.4
Other		(0.1	)		0
		20.2	%		(13.7	%)