Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

10. INCOME TAXES

Components of income tax expense for 2012, 2011, and 2010 are as follows:

	2012	2011	2010
Current expense (benefit)	$     428,433	$     177,369	$     885,689
Deferred taxes (benefit)	(  47,555)	109,834	(301,954)
Total income taxes	$     380,878	$     287,203	$     583,735

The reasons for the difference between the federal income taxes in the consolidated statements of income and the amount and percentage computed by the applying the combine statutory federal and state income tax rate to income taxes are as follows:

	2012		2011		2010
	Amount	%	Amount	%	Amount	%
Taxes at statutory income tax rate	$    788,788	34.0	$    594,436	34.0	$    829,584	34.0
Reductions in taxes resulting from exempt income	(397,596)	(17.1)	(299,120)	(17.1)	(258,179)	(10.6)
Other timing differences	(10,314)	(0.4)	(8,113)	(0.5)	12,330	0.5
Total income taxes	$   380,878	16.5	$    287,203	16.4	$    583,735	23.9

The sources of timing differences for tax reporting purposes and the related deferred taxes recognized in 2012, 2011, and 2010 are summarized as follows:

	2012	2011	2010
Nonaccrual loan interest	$9,265	$        (6,608)	$        (2,657)
Foreclosed assets expenses	(94,690)	(162,459)	(115,613)
Intangible asset amortization	0	0	(298,699)
Bad debt expense in excess of tax	86,733	(117,431)	(75,398)
Realized impairment (loss) gain on equity securities	0	369,733	(65,520)
Nonqualified retirement plan contribution / payments	0	0	9,347
Deferred compensation	0	0	0
Accretion of discounted bonds	8,057	31,323	25,943
Gain on disposition of discounted bonds	(8,272)	(40,635)	(36,213)
Book and tax depreciation difference	(48,648)	35,911	256,856
Total deferred taxes	$ (47,555)	$    109,834	$    (301,954)

	December 31
	2012	2011
Deferred tax assets:
AMT/Tax Receivable	$    347,203	$0
Nonaccrual loan interest	0	9,265
Foreclosed assets expenses	372,762	278,072
Intangible asset amortization	298,699	298,699
Bad debt expense in excess of tax	619,509	706,242
Realized loss on OTTI equity securities	900,947	900,947
Nonqualified retirement plan	(7,228)	(7,228)
Pension plan	571,276	713,359
Total deferred tax assets	3,103,168	2,899,356
Deferred tax liabilities:
Accretion on bonds and gain on discounted bonds	16,481	16,696
Book and tax depreciation difference	282,072	330,720
Unrealized gain on securities available for sale	225,997	474,877
Total deferred tax liabilities	524,550	822,293
Net deferred tax assets	$  2,578,618	$  2,077,063