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## 9. Federal Income Taxes 

The components of income tax expense for the years ended December 31, 2013 and 2012 are as follows ( in thousands): 

<img src='content_image/195808.jpg'>

The components of the net deferred tax asset ( liability), included in other assets ( liabilities) on the balance sheet, consist of the following as of December 31, 2013 and 2012 ( in thousands): 

<img src='content_image/195810.jpg'>

<img src='content_image/195811.jpg'>

The provision for income taxes differs from that computed by applying statutory rates to income before income taxes primarily due to the effects of tax - exempt income, non - deductible expenses and incentive stock options. 

## 10. Transactions with Executive Officers, Directors and Affiliated Companies 

The Bank has had, and is expected to have in the future, banking transactions with its executive officers, directors, their immediate families and affiliated companies ( commonly referred to as related parties) on comparable terms with similar interest rates as those prevailing from time to time for other customers of the Bank. As of December 31, 2013 and 2012, related party loans totaled $ 4, 670, 000 and $ 8, 329, 000, respectively. During 2013, loan advances and repayments $^{totaled $}$1, 680, 000 and $ 5, 339, 000, respectively. 

