Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

Note 6: Income Taxes

The following table summarizes the current and deferred components of income tax expense (benefit) for each of the three years ended December 31:

	2011			2010			2009
Current
Federal	$	4,763		$	4,148		$	5,013
State		176			196			190
		4,939			4,344			5,203
Deferred		(477	)		(212	)		(1,211	)
	$	4,462		$	4,132		$	3,992

The following table reconciles the expected federal income tax expense (computed by applying the federal statutory tax rate of 35%) to recorded income tax expense, for each of the three years ended December 31:

	2011			2010			2009
Computed tax expense	$	5,427		$	5,178		$	5,020
Increase (reduction) in income taxes resulting from:
Officers' life insurance		(88	)		(88	)		(91	)
Tax exempt interest		(1,015	)		(1,126	)		(1,052	)
State taxes, net of federal benefit		114			127			123
Other		24			41			(8	)
	$	4,462		$	4,132		$	3,992

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at December 31, 2011 and 2010 are summarized below. The net deferred tax asset, which is included in other assets, amounted to $411 at December 31, 2011 and $3,406 at December 31, 2010.

	2011				2010
	Asset		Liability		Asset		Liability
Allowance for losses on loans and other real estate owned	$	2,918	$	---	$	3,002	$	---
Deferred compensation		1,079	-	--		1,066	-	--
Unrealized gain or loss on securities available for sale	-	--		3,627	-	--		175
Unfunded retirement benefits		9	-	--		29	-	--
Depreciation	-	--		635	-	--		672
Deferred loan origination costs	-	--		468	-	--		537
Write down of impaired investments		1,644	-	--		1,180	-	--
Other		237		746		319		806
	$	5,887	$	5,476	$	5,596	$	2,190

The Company has determined that a valuation allowance is not required for its net deferred tax asset since it is more likely than not that this asset is realizable principally through the ability to carry-back to taxable income in prior years, future reversals of existing taxable temporary differences, and future taxable income.