Income Taxes

12 Months Ended

Dec. 31, 2011

(12)	Income Taxes

The components of income tax expense (benefit) for the years ended December 31, 2011 and 2010 are as follows:

	2011		2010
Current:
Federal	$	-	$	-
State		1,679		1,378

Total		1,679		1,378

Deferred:
Federal		314,233		(944,228	)
State		89,707		(158,582	)

Total		403,940		(1,102,810	)

Total income tax expense (benefit)	$	405,619	$	(1,101,432	)

Total income tax expense (benefit) differed from the amount computed by applying the statutory federal income tax rate of 34% to pretax income (losses) as follows:

	2011			2010
Income tax (benefit) at statutory rate	$	541,194		$	(660,039	)
Increase (decrease) resulting from:
Tax exempt interest		(175,319	)		(320,022	)
Interest disallowance		5,686			14,242
State income tax net of federal expense (benefit)		60,675			(103,755	)
Premium amortization on tax exempt investment securities		2,431			9,684
Cash surrender value of life insurance		(37,303	)		(39,359	)
Other, net		8,255			(2,183	)
	$	405,619		$	(1,101,432	)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2011 and 2010 are as follows:

	2011		2010
Deferred tax assets:
Loans, principally due to the allowance for loan losses	$	1,087,893	$	1,264,575
Net operating loss carry forward		1,906,176		2,947,985
Other real estate, principally due to differences in carrying value		1,574,158		1,005,639
Intangible assets		172,466		195,410
Deferred compensation		374,539		342,781
Investment securities available for sale		-		284,060
Alternative minimum tax credit		53,147		-
Other		139,279		40,140
Total deferred tax assets		5,307,658		6,080,590
Deferred tax liabilities:
Premises and equipment, principally due to difference in depreciation		56,651		99,303
Investment securities available for sale		216,755		-
Discount accretion		3,150		3,162
Other		511		48,071
Total deferred tax liabilities		277,067		150,536
Net deferred tax asset	$	5,030,591	$	5,930,054

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. Based upon the level of historical taxable income and projection for future taxable income over the periods which the temporary differences resulting in the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 136, 172

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 43, 44, 45, 46, 47, 48, 49

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

-Paragraph h

-Article 4

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 9

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 15

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.4-08.(h))

-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

+ Details

UNITED BANCORPORATION OF ALABAMA INC 10-K