Note 10 - Income Taxes

3 Months Ended

Mar. 31, 2012

Note 10:

Income Taxes

Deferred income tax assets and liabilities are computed annually for differences between the financial statement and federal income tax basis of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the period in which the differences are expected to affect taxable income. A valuation allowance is established when necessary to reduce the deferred tax assets to the amount expected to be realized. The Company commenced operations in the second quarter of 2009, and, as expected, has incurred operating losses during the development period and the first three years of operations. Any potential deferred tax benefit from the anticipated utilization of net operating losses generated during the development period and the first few years of operations has been completely offset by a valuation allowance. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

The components of the Company’s net deferred tax assets, included in other assets, are as follows (dollars in thousands):

	March 31, 2012			December 31, 2011
Deferred Tax Asset:
Net deferred tax assets	$	1,777		$	1,743
Less: valuation allowance		(1,777	)		(1,743	)
Total net deferred tax asset	$	—		$	—

There are no material uncertain tax positions requiring recognition in the Company’s condensed consolidated financial statements. The Company does not expect the total amount of unrecognized tax liabilities to increase significantly over the next twelve months. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. The Company does not have any amounts accrued for interest and penalties at March 31, 2012 or December 31, 2011 and is not aware of claims for any such amounts by the federal income tax authorities.

Additionally, the Company has a deferred tax liability recognized related to the unrealized gain on available-for-sale investment securities which is reported in the “interest payable and other liabilities” section on the interim condensed consolidated balance sheets.

- 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 Statement of Financial Accounting Standard (FAS)

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

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Reference 5: 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 6: http://www.xbrl.org/2003/role/presentationRef

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+ Details

GRAND RIVER COMMERCE INC 10-Q