Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Summary of income tax provision (benefit)

The income tax provision consists of the following for the years ended December 31:

	2012		2011		2010
			(restated)		(restated)
	(dollars in thousands)
Current
Federal	$	240	$	28	$	(900	)
State		212		23		(88	)
		452		51		(988	)
Deferred
Federal		1,803		842		1,741
State		403		317		419
		2,206		1,159		2,160

Total income tax provision	$	2,658	$	1,210	$	1,172

Summary of statutory federal income tax rate to income (loss)

The amount computed by applying the statutory federal income tax rate to income before taxes is less than the tax provision for the following reasons for the years ended December 31:

	2012						2011					2010
							(restated)					(restated)
	Amount			Percent of Pretax Income			Amount		Percent of Pretax Income			Amount		Percent of Pretax (Loss)
	(dollar in thousands)
Statutory Federal
income tax rate	$	2,171			34.0	%	$	939		34.0	%	$	861		34.0	%
State tax net of
Federal income
tax benefit		527			8.3	%		228		8.3	%		230		9.1	%
Other adjustments		(40	)		(0.7	)%		43		1.5	%		81		3.2	%
	$	2,658			41.6	%	$	1,210		43.8	%	$	1,172		46.3	%

Summary of deferred tax assets and deferred tax liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2012 and 2011 are presented below:

	2012			2011
				(restated)
	(dollars in thousands)
Deferred Tax Assets:
Allowance for loan losses	$	7,054		$	10,468
Loan charge-offs		1,902			-
Reserve on foreclosed real estate		1,151			1,420
Reserve for uncollected interest		641			540
Federal net operating loss carryforwards		-			390
State net operating loss carryforwards		278			249
Charitable contribution carryforwards		157			-
Other		12			102
Total deferred tax assets		11,195			13,169
Valuation allowance		(269	)		(216	)
Total deferred tax assets, net of valuation allowance		10,926			12,953

Deferred Tax Liabilities:
Federal Home Loan Bank stock dividends		(84	)		(83	)
Loan origination costs		(400	)		(321	)
Accelerated depreciation		(1,552	)		(1,437	)
Prepaid expenses		(182	)		(199	)
Total deferred tax liabilities		(2,218	)		(2,040	)

Net deferred tax assets	$	8,708		$	10,913