Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Note 9: Income Taxes

The provision for income taxes includes these components:

	2012		2011
	(In thousands)
Taxes currently payable	$	435	$	898
Deferred income taxes		111		(44	)
Income tax expense	$	546	$	854

A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense is shown below:

	2012			2011
	(In thousands)
Computed at the statutory rate (34%)	$	1,001		$	1,341
(Decrease) increase resulting from
Tax exempt interest		(231	)		(356	)
Earnings on bank-owned life insurance - net		(156	)		(187	)
Other		(68	)		56
Actual tax expense	$	546		$	854

The tax effects of temporary differences related to deferred taxes shown on the balance sheets were:

	2012			2011
	(In thousands)
Deferred tax assets
Allowance for loan losses	$	371		$	497
Stock based compensation		333			292
Allowance for losses on foreclosed real estate		101			182
Deferred compensation		655			668
Employee benefit expense		553			459
Intangible assets		54			66
Non-accrual loan interest		58			––
Alternative minimum taxes		79			186
Total deferred tax assets		2,204			2,350
Deferred tax liabilities
Depreciation		(277	)		(280	)
Deferred loan costs, net		(234	)		(249	)
Accretion		(8	)		(20	)
FHLB stock dividends		(583	)		(583	)
Mortgage servicing rights		(38	)		(57	)
Unrealized gains on securities available for sale		(177	)		(252	)
Total deferred tax liabilities		(1,317	)		(1,441	)
Net deferred tax asset	$	887		$	909