Income Tax

3 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Text Block]

NOTE 7. Income Tax

     The income tax expense for the three months ended March 31, 2013 was $2.6 million, compared with $4.2 million for the three months ended March 31, 2012. The quarter ended March 31, 2012 included tax expense of $2.1 million for the state deferred tax asset write-off related to a difference in applicable South Carolina tax laws for banks versus thrifts upon First Federal’s conversion to a state-chartered commercial bank. The effective tax rate for the three months ended March 31, 2013 was 33.36%, compared with 70.92% for the quarter ended March 31, 2012. The decrease in the comparable effective tax rate was principally due to the state deferred tax asset write-off in the quarter ended March 31, 2012 as well as higher tax-exempt income resulting from purchasing bank owned life insurance during the second half of 2012. The effective tax rate for the three months ended March 31, 2012 excluding the deferred tax asset write-down was 35.62%.

     At March 31, 2013, First Financial had a net deferred tax liability of $8.3 million, compared to a net deferred tax liability position of $3.6 million at December 31, 2012.