Income Taxes

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income Taxes

Note 9:  Income Taxes

The provision for income taxes includes these components:

	2011			2010
Taxes currently payable	$	449		$	1,537
Deferred income taxes		(295	)		(485	)
Income tax expense	$	154		$	1,052

A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense is shown below:

	2011			2010
Computed at the statutory rate (34%)	$	236		$	1,077
Increase (decrease) resulting from
Tax exempt interest		(55	)		(75	)
State income taxes		11			97
Other		(38	)		(47	)
Actual tax expense	$	154		$	1,052

The tax effects of temporary differences related to deferred taxes were:

	2011		2010
Deferred tax assets
Allowance for loan losses	$	2,259	$	1,881
Non-accrual loan income		299		171
Other		278		350
		2,836		2,402
Deferred tax liabilities
Depreciation		300		131
Mortgage servicing rights		407		463
FHLB stock dividends		132		148
Unrealized gain on available-for-sale securities		157		134
Other		329		286
		1,325		1,162
Net deferred tax asset	$	1,511	$	1,240

Retained earnings at December 31, 2011 and 2010 include approximately $1.9 million for which no deferred federal income tax liability has been recognized. This amount represents an allocation of income to bad debt deductions for tax purposes only. Reduction of amounts so allocated for purposes other than tax bad debt losses or adjustments arising from carryback of net operating losses would create income for tax purposes only, which would be subject to the then-current corporate income tax rate. The deferred income tax liabilities on the preceding amounts that would have been recorded if they were expected to reverse into taxable income in the foreseeable future were approximately $737,000 at December 31, 2011 and 2010.