Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

Note 11: Income Taxes

The Company files United States federal income tax returns, and Virginia and West Virginia state income tax returns. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2008.

Allocation of income tax expense between current and deferred portions is as follows:

	Years ended December 31,
	2012			2011			2010
Current		$	5,064		$	4,665		$	3,660
Deferred expense			181			582			563
Total income tax expense		$	5,245		$	5,247		$	4,223

The following is a reconciliation of the "expected" income tax expense, computed by applying the U.S. Federal income tax rate of 35% to income before income tax expense, with the reported income tax expense:

	Years ended December 31,
	2012			2011			2010
Computed "expected" income tax expense	$	8,047		$	8,010		$	6,927
Tax-exempt interest income		(2,554	)		(2,517	)		(2,556	)
Nondeductible interest expense		139			146			195
Other, net		(387	)		(392	)		(343	)
Reported income tax expense	$	5,245		$	5,247		$	4,223

The components of net deferred tax assets, included in other assets, are as follows:

	December 31,
	2012			2011
Deferred tax assets:
Allowance for loan losses and unearned fee income	$	3,219		$	3,159
Valuation allowance on other real estate owned		73			210
Deferred compensation and other liabilities		2,176			1,788
Discount accretion of securities		19			---
Total deferred tax assets	$	5,487		$	5,157
Deferred tax liabilities:
Fixed assets	$	(317	)	$	(266	)
Deposit intangibles		(1,039	)		(912	)
Other		(31	)		(138	)
Net unrealized gains on securities available for sale		(1,102	)		(1,425	)
Total deferred tax liabilities		(2,489	)		(2,741	)
Net deferred tax assets	$	2,998		$	2,416

The Company has determined that a valuation allowance for the gross deferred tax assets is not necessary at December 31, 2012 and 2011 because the realization of all gross deferred tax assets can be supported by the amount of taxes paid during the carryback period available under current tax laws.