INCOME TAXES

12 Months Ended

Dec. 31, 2011

INCOME TAXES [Abstract]

INCOME TAXES

NOTE J – INCOME TAXES

 The provision (benefit) for income taxes including the tax effects of securities transactions is as follows:

	Years Ended December 31,
	2011			2010			2009
				(In thousands)
Current:
Federal	$	770		$	241		$	(1,040	)
State		130			51			(203	)
Deferred
Federal		(787	)		(473	)		619
State		(121	)		(75	)		96
	$	(8	)	$	(256	)	$	(528	)

The difference between the total expected tax expense at the federal tax rate and the reported income tax expense is as follows:

	Years Ended December 31,
	2011			2010			2009
	(In thousands)
Tax (benefit) on income before income taxes	$	751		$	356		$	92
Increase (decrease) reslulting from:
Tax-exempt income		(706	)		(630	)		(548	)
Disallowed interest expense		27			30			30
State income taxes, net of federal benefit		86			34			(134	)
Other, net		(166	)		(46	)		32
	$	(8	)	$	(256	)	$	(528	)

The components of the net deferred tax included in the consolidated balance sheets are as follows:

	December 31,
	2011			2010
	(In thousands)
Deferred tax assets:
Other real estate expenses
and writedowns	$	1,055		$	651
Other		115			105
		1,170			756
Deferred tax liabilities:
Allowance for loan losses		(276	)		(175	)
Premises and equipment		(679	)		(1,367	)
Unrealized gain on securities
available for sale		(1,433	)		(735	)
Intangible asset		(1,042	)		(949	)
Other		(314	)		(314	)
		(3,744	)		(3,540	)
Net deferred tax (liability)	$	(2,574	)	$	(2,784	)