Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Summary of income tax provision (benefit)

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

	2013			2012

Current
Federal	$	-		$	240
State		2			212
		2			452
Deferred
Federal		(5,272	)		1,803
State		(1,323	)		403
		(6,595	)		2,206
Valuation allowance		15,303			-

Total income tax provision	$	8,710		$	2,658

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:

	2013						2012
	Amount			Percent of Pretax Income			Amount			Percent of Pretax Income

Statutory Federal income tax rate	$	(5,595	)		34.0	%	$	2,171			34.0	%
State tax net of Federal income tax benefit		(872	)		5.3	%		527			8.3	%
Valuation allowance change		15,303			(93.0	)%		-			-
Other adjustments		(126	)		0.8	%		(40	)		(0.7	)%
	$	8,710			(52.9	)%	$	2,658			41.6	%

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, 2013 and 2012 are presented below:

	2013			2012

	(dollars in thousands)
Deferred Tax Assets:
Allowance for loan losses	$	4,737		$	7,054
Loan charge-offs		1,982			1,902
Reserve on foreclosed real estate		1,499			1,151
Reserve for uncollected interest		247			641
Federal net operating loss carryforwards		7,923			-
State net operating loss carryforwards		1,499			278
Charitable contribution carryforwards		242			157
Other		-			12
Total deferred tax assets		18,129			11,195
Valuation allowance		(15,572	)		(269	)
Total deferred tax assets, net of valuation allowance		2,557			10,926

Deferred Tax Liabilities:
Federal Home Loan Bank stock dividends		(84	)		(84	)
Loan origination costs		(541	)		(400	)
Accelerated depreciation		(1,654	)		(1,552	)
Prepaid expenses		-			(182	)
Other		(278	)		-
Total deferred tax liabilities		(2,557	)		(2,218	)

Net deferred tax assets	$	-		$	8,708