Note 3.

Securities

Debt and equity securities have been classified in the balance sheets according to management’s intent. The amortized costs of securities available for sale and their approximate fair values at December 31, 2014 and 2013 follow:

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value

2014
Government-sponsored enterprises	$	3,500,000	$	1,170	$	4,640	$	3,496,530
Mortgage-backed securities		25,592		715		-		26,307
Corporate bonds		300,000		-		45,000		255,000
Equities and mutual funds		552,635		42,900		9,567		585,968
	$	4,378,227	$	44,785	$	59,207	$	4,363,805

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value

2013
Government-sponsored enterprises	$	3,500,000	$	795	$	2,030	$	3,498,765
Mortgage-backed securities		32,099		1,022		-		33,121
Corporate bonds		550,000		-		99,000		451,000
Equities and mutual funds		535,326		43,260		11,770		566,816
	$	4,617,425	$	45,077	$	112,800	$	4,549,702

Restricted equity securities were $618,109 and $676,799 at December 31, 2014 and 2013, respectively. Restricted equity securities primarily consist of investments in stock of the Federal Home Loan Bank of Atlanta (“FHLB”) and Community Bankers Bank (“CBB”). These investments are carried at cost. The FHLB requires financial institutions to make equity investments in the FHLB in order to borrow money. The Company is required to own the stock so long as it borrows from the FHLB. CBB stock is classified as restricted due to the transfer restrictions placed on the ownership of the stock by the issuer.

At December 31, 2014 and 2013, substantially all government-sponsored enterprises securities were pledged as collateral on public deposits and for other purposes as required or permitted by law. The mortgage-backed securities were pledged to the FHLB.

Maturities of mortgage-backed bonds are stated based on contractual maturities. Actual maturities of these bonds may vary as the underlying mortgages are prepaid. The investment in equities and mutual funds by nature have no maturity date and are classified as due in one year or less.

The scheduled maturities of securities (all available for sale) at December 31, 2014, were as follows:

	Amortized Cost		Fair Value

Due in one year or less	$	1,552,635	$	1,586,427
Due after one year through five years		2,810,353		2,761,699
Due after five years through ten years		5,846		5,998
Due after ten years		9,393		9,681
	$	4,378,227	$	4,363,805

The Company had realized losses of $1,670 from the sales of equity and mutual fund investment securities for the year ended December 31, 2014, and realized gains of $9,206 from the sales of equity and mutual fund investment securities for the year ended December 31, 2013. Total proceeds from the sales amounted to $131,403 and $63,937 in 2014 and 2013, respectively.

The following tables show investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at December 31, 2014 and 2013. These unrealized losses on investment securities are a result of volatility in interest rates and market fluctuations and relate to government-sponsored enterprises, corporate bonds issued by other banks and equities and mutual funds at December 31, 2014, and corporate bonds issued by other banks at December 31, 2013.

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
2014
Government-sponsored enterprises	$	1,995,360	$	4,640	$	-	$	-	$	1,995,360	$	4,640
Corporate bonds		-		-		255,000		45,000		255,000		45,000
Equities and mutual funds		69,129		5,592		107,999		3,975		177,128		9,567
	$	2,064,489	$	10,232	$	362,999	$	48,975	$	2,427,488	$	59,207

2013
Government-sponsored enterprises	$	1,497,970	$	2,030	$	-	$	-	$	1,497,970	$	2,030
Corporate bonds		-		-		451,000		99,000		451,000		99,000
Equities and mutual funds		245,218		11,770		-		-		245,218		11,770
	$	1,743,188	$	13,800	$	451,000	$	99,000	$	2,194,188	$	112,800

Management considers the nature of the investment, the underlying causes of the decline in the market value and the severity and duration of the decline in market value in determining if impairment is other than temporary. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Based upon this evaluation, there are two securities in the portfolio with unrealized losses for a period greater than 12 months. We have analyzed each individual security for Other Than Temporary Impairment (“OTTI”) purposes by reviewing delinquencies, loan-to-value ratios, and credit quality and concluded that all unrealized losses presented in the tables above are not related to an issuer’s financial condition but are due to changes in the level of interest rates and market volatility. No declines are deemed to be other than temporary in nature.