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## NOTES TO FINANCIAL STATEMENTS 

## 7. INTEREST-BEARING DEPOSITS  (Continued) 

Interest expense recognized on interest-bearing deposits for the years ended December 31, 2011 and 2010 consisted of the following: 

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## 8. INCOME TAXES 

The provision for income taxes for the years ended December 31, 2011 and 2010 consisted of the following: 

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The Bank’s reported amount of income tax expense differs from federal statutory rates due principally to California franchise taxes and the decrease in the valuation allowance on its deferred tax assets. 

