Note 2 - Income Taxes

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Text Block]

2.         INCOME TAXES

The Company’s effective tax rate decreased to 29.5% for the six-month period ended June 30, 2012, compared to 37.1% for the same period in 2011.  The effective tax rate decreased to 22.9% for the three- month period ended June 30, 2012, compared to 36.8% for the same period in 2011.  The effective tax rates for the three and six-month periods ended June 30, 2012, are lower than the rates in the same periods of 2011 primarily due to a reduction of state income taxes reducing current balances by $45,000, as well as an adjustment to income taxes of $575,000 for decreases in deferred state tax rates resulting from legislative changes.  The Company also recorded federal tax credits of $87,000 and $198,000 during the three and six-month periods ended June 30, 2012, respectively.

The unrecognized tax benefit as of June 30, 2012, was $350,000, excluding interest of $22,000 and no penalties.  The full unrecognized tax benefits, if recognized, would favorably impact the effective income tax rate.  The Company believes it is reasonably possible that the total amount of unrecognized tax benefits could decrease during the next 12 months due to the expiration of the U.S. federal statute of limitations associated with certain other tax positions.  The Company accrues interest and penalties related to uncertain tax position in the statements of income as income tax expense.