INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

INCOME TAXES

Schedule of components of the federal income tax provision (credit)

The components of the federal income tax provision (credit) for the years ended December 31 are as follows (dollars in thousands):

	2013			2012			2011
Current tax expense (benefit)	$	—		$	—		$	314
Change in valuation allowance		(2,250	)		(3,000	)		—
Deferred tax expense (benefit)		1,847			2,078			784
Provision for (benefit of) income taxes	$	(403	)	$	(922	)	$	1,098

Summary of the source of differences between income taxes at the federal statutory rate and the provision (credit) for income taxes

     A summary of the source of differences between income taxes at the federal statutory rate and the provision (credit) for income taxes for the years ended December 31 is as follows (dollars in thousands):

	2013			2012			2011
Tax expense at statutory rate	$	1,882		$	2,096		$	1,127
Increase (decrease) in taxes resulting from:
Tax-exempt interest		(47	)		(49	)		(59	)
Change in valuation allowance		(2,250	)		(3,000	)		—
Other		12			31			30
Provision for (benefit of) income taxes, as reported	$	(403	)	$	(922	)	$	1,098

Schedule of major components of net deferred tax assets

The major components of net deferred tax assets at December 31 are as follows (dollars in thousands):

	2013			2012
Deferred tax assets:
NOL carryforward	$	6,737		$	7,149
Allowance for loan losses		1,585			1,774
Alternative Minimum Tax Credit		1,463			1,463
OREO Tax basis > book basis		138			1,025
Tax credit carryovers		672			672
Deferred compensation		152			185
Stock compensation		267			265
Depreciation		157			174
Intangible assets		33			60
Other		155			170
Total deferred tax assets		11,359			12,937
Valuation allowance	$	(760	)	$	(3,010	)
Deferred tax liabilities:
FHLB stock dividend		(103	)		(103	)
Unrealized gain on securities		(111	)		(476	)
Mortgage servicing rights		(452	)		(217	)
Total deferred tax liabilities		(666	)		(796	)
Net deferred tax asset	$	9,933		$	9,131