SECURITIES AVAILABLE FOR SALE

9 Months Ended

Sep. 30, 2013

SECURITIES AVAILABLE FOR SALE

SECURITIES AVAILABLE FOR SALE

NOTE 2 — SECURITIES AVAILABLE FOR SALE

The amortized cost and fair values of securities with gross unrealized gains and losses as of the dates indicated are summarized as follows:

	September 30, 2013
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
U.S. government agency obligations	$	33,289,782	$	37,910	$	(989,282	)	$	32,338,410
State and municipal securities	43,183,706		564,238		(1,287,982		)	42,459,962
Other securities(1)	248,501		—		—			248,501
Mortgage-backed: residential	35,121,137		239,624		(582,307		)	34,778,454
	$	111,843,126	$	841,772	$	(2,859,571	)	$	109,825,327

	December 31, 2012
U.S. government agency obligations	$	19,596,009	$	212,845	$	(15,352	)	$	19,793,502
State and municipal securities	35,068,040		1,375,995		(40,112		)	36,403,923
Other securities(1)	248,501		—		—			248,501
Mortgage-backed: residential	31,468,831		427,194		(61,871		)	31,834,154
	$	86,381,381	$	2,016,034	$	(117,335	)	$	88,280,080

(1) Includes a Certificate of Deposit in the amount of $245,000

Unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2013 and December 31, 2012, are summarized as follows:

	September 30, 2013
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
U.S. government agency obligations	$	24,554,823	$	(989,282	)	$	—	$	—		$	24,554,823	$	(989,282	)
State and municipal securities	22,919,534		(1,287,982		)	—		—			22,919,534		(1,287,982		)
Mortgage-backed: residential	21,831,542		(523,921		)	2,163,098		(58,386		)	23,994,640		(582,307		)
	$	69,305,899	$	(2,801,185	)	$	2,163,098	$	(58,386	)	$	71,468,997	$	(2,859,571	)

	December 31, 2012
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
U.S. government agency obligations	$	1,490,123	$	(15,352	)	$	—	$	—		$	1,490,123	$	(15,352	)
State and municipal securities	6,952,889		(40,112		)	—		—			6,952,889		(40,112		)
Mortgage-backed: residential	13,828,613		(57,637		)	329,715		(4,234		)	14,158,328		(61,871		)
	$	22,271,625	$	(113,101	)	$	329,715	$	(4,234	)	$	22,601,340	$	(117,335	)

Management evaluates the investment portfolio on at least a quarterly basis to determine if investments have suffered an other-than-temporary decline in value. In addition, management monitors market trends, investment grades, bond defaults and other circumstances to identify trends and circumstances that might impact the carrying value of equity securities.

At September 30, 2013, the Company had 91 securities in an unrealized loss position which included: 16 agency securities, 51 state and municipal securities, and 24 mortgage-backed securities.  This is an increase of 68 securities in an unrealized loss position from 23 securities at December 31, 2012.  The unrealized losses resulted from changes in market interest rates and liquidity, not from changes in the probability of contractual cash flows.  The Company does not intend to sell the securities, and it is not more-likely-than-not that the Company will be required to sell the securities prior to recovery of the amortized cost.  Full collection of the amounts due according to the contractual terms of the securities is expected; therefore, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2013.

The amortized cost and fair value at September 30, 2013, by contractual maturity, are shown below. Maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be called or repaid without any penalties. Additionally, an item in our other securities category has no stated maturity.  Therefore, stated maturities are not disclosed for these items.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	10,766,056	$	10,782,542
Due after one year through five years	13,177,868		13,221,540
Due after five years through ten years	31,108,951		30,016,439
Due after ten years	21,665,613		21,022,851
Other securities - non-maturing	3,501		3,501
Mortgage-backed: residential	35,121,137		34,778,454
	$	111,843,126	$	109,825,327

Securities with a carrying amount of approximately $68,680,000 and $77,431,000 were pledged to secure deposits as required or permitted by law at September 30, 2013 and December 31, 2012, respectively.

At September 30, 2013, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.  The Company received proceeds of $9,025,930 from the sale of securities during the nine months ending September 30, 2013 which includes gross realized gains of $373,489 and gross realized losses of $14,351.  There were no sales of securities during the three months ended September 30, 2013.  The Company received proceeds of $4,307,679 from the sale of securities during three and nine months ended September 30, 2012, which includes gross realized gains of $167,978.