NOTE D - INVESTMENT SECURITIES

The following is a summary of the securities portfolio by major classification. All mortgage-backed securities and collateralized mortgage obligations represent securities issued by a government sponsored enterprise (i.e. Government National Mortgage Association, Federal Home Loan Mortgage Corporation or Federal National Mortgage Association) where the underlying collateral consists of conforming residential home mortgage loans.

	June 30, 2011
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
Securities available for sale:
U.S. government securities and obligations of U.S. government agencies	$	12,107,728	$	567,675	$	3,093	$	12,672,310
Mortgage-backed securities		34,594,183		1,499,625		22,645		36,071,163
Collateralized mortgage obligations		106,204,570		2,161,775		176,675		108,189,670
Municipals, non-taxable		37,797,823		956,295		167,167		38,586,951
Municipals, taxable		2,031,795		27,325		-		2,059,120
Corporate bonds		2,798,397		25,184		9,951		2,813,630
Marketable equity		462,210		107,438		40,114		529,534
	$	195,996,706	$	5,345,317	$	419,645	$	200,922,378

	December 31, 2010
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
Securities available for sale:
U.S. government securities and obligations of U.S. government agencies	$	9,346,395	$	492,005	$	-	$	9,838,400
Mortgage-backed securities		38,079,632		1,667,631		22,418		39,724,845
Collateralized mortgage obligations		76,553,621		2,022,287		126,224		78,449,684
Municipals, non-taxable		51,067,962		442,604		892,203		50,618,363
Municipals, taxable		-		-		-		-
Corporate bonds		2,777,457		15,665		24,322		2,768,800
Marketable equity		440,757		121,082		45,702		516,137
	$	178,265,824	$	4,761,274	$	1,110,869	$	181,916,229

The following tables show investments’ gross unrealized losses and fair values, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at June 30, 2011 and December 31, 2010. The June 30, 2011 unrealized losses on investment securities relate to one US Government agency, twelve collateralized mortgage obligations, one mortgage-backed security, six non-taxable municipal securities, one marketable equity security, and one corporate bond. The December 31, 2010 unrealized losses on investment securities relate to seven collateralized mortgage obligations, one mortgage-backed security, thirty-six municipal securities, two corporate bonds and one marketable equity security. The unrealized losses relate to debt securities that have incurred fair value reductions due to higher market interest rates since the securities were purchased. The unrealized losses will reverse at maturity or prior to maturity if market interest rates decline to levels that existed when the securities were purchased. Since none of the unrealized losses relate to the marketability of the securities or the issuer’s ability to honor redemption obligations, none of the securities are deemed to be other than temporarily impaired.

	June 30, 2011
	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Securities available for sale:
US Government securities	$	996,907	$	3,093	$	-	$	-	$	996,907	$	3,093
Mortgage-backed		2,179,799		22,645		-		-		2,179,799		22,645
Collateralized mortgage obligations		20,367,264		176,675		-		-		20,637,264		176,675
Municipals, non-taxable		4,180,353		167,167		-		-		4,180,353		167,167
Corporate Bond		943,040		9,951		-		-		943,040		9,951
Marketable equity		-		-		41,710		40,114		41,710		40,114

Total temporarily impaired securities	$	28,667,363	$	379,531	$	41,710	$	40,114	$	28,709,073	$	419,645

	December 31, 2010
	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
Securities available for sale:
Mortgage-backed	$	984,306	$	22,418	$	-	$	-	$	984,306	$	22,418
Collateralized mortgage obligations		7,274,222		126,224		-		-		7,274,222		126,224
Municipals, non taxable		27,738,632		823,580		1,006,202		68,623		28,744,834		892,203
Corporate bonds		1,831,230		24,322		-		-		1,831,230		24,322
Marketable equity		-		-		36,122		45,702		36,122		45,702

Total temporarily impaired securities	$	37,828,390	$	996,544	$	1,042,324	$	114,325	$	38,870,714	$	1,110,869

At June 30, 2011 and December 31, 2010, investment securities with a carrying value of $89,070,974 and $94,085,409 respectively, were pledged to secure public deposits, borrowings and for other purposes required or permitted by law.

The amortized cost and fair values of securities available for sale at June 30, 2011 are shown below by expected maturity. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
	cost		value

Due within one year	$	28,680,247	$	29,438,597
Due after one year through five years		107,523,911		110,417,139
Due after five years through ten years		39,713,927		40,553,369
Due after ten years		19,616,411		19,983,739
Other equity securities		462,210		529,534
	$	195,996,706	$	200,922,378

At June 30, 2011, the balance of Federal Home Loan Bank (“FHLB”) of Atlanta stock held by the Company is $9,606,100. The change in balance from $10,521,700 at December 31, 2010 is related to stock repurchases made by FHLB.