SECURITIES AVAILABLE FOR SALE

9 Months Ended

Sep. 30, 2014

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, 2014
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
U.S. government agency obligations	$	29,786,402	$	19,271	$	(675,571	)	$	29,130,102
State and municipal securities		46,086,351		1,021,241		(351,145	)		46,756,447
Other securities(1)		248,501		-		-			248,501
Mortgage-backed: residential		33,418,517		161,406		(413,647	)		33,166,276
	$	109,539,771	$	1,201,918	$	(1,440,363	)	$	109,301,326
	December 31, 2013
U.S. government agency obligations	$	41,982,901	$	34,010	$	(1,101,316	)	$	40,915,595
U.S. treasury securities		5,000,000		-		-			5,000,000
State and municipal securities		39,827,427		439,363		(1,521,921	)		38,744,869
Other securities(1)		248,501		-		-			248,501
Mortgage-backed: residential		33,404,645		234,517		(771,145	)		32,868,017
	$	120,463,474	$	707,890	$	(3,394,382	)	$	117,776,982

⁽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, 2014 and December 31, 2013, are summarized as follows:

	September 30, 2014
	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	$	4,474,694	$	(30,506	)	$	15,390,885	$	(645,065	)	$	19,865,579	$	(675,571	)
State and municipal securities		1,071,984		(7,374	)		13,410,895		(343,771	)		14,482,879		(351,145	)
Mortgage-backed: residential		7,743,589		(46,736	)		17,863,388		(366,911	)		25,606,977		(413,647	)
	$	13,290,267	$	(84,616	)	$	46,665,168	$	(1,355,747	)	$	59,955,435	$	(1,440,363	)

	December 31, 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	$	32,313,881	$	(962,837	)	$	1,364,739	$	(138,479	)	$	33,678,620	$	(1,101,316	)
State and municipal securities		20,013,766		(1,112,126	)		3,322,850		(409,795	)		23,336,616		(1,521,921	)
Mortgage-backed: residential		16,485,580		(531,722	)		5,443,669		(239,423	)		21,929,249		(771,145	)
	$	68,813,227	$	(2,606,685	)	$	10,131,258	$	(787,697	)	$	78,944,485	$	(3,394,382	)

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, 2014, the Company had 73 securities in an unrealized loss position which included: 13 agency securities, 35 state and municipal securities, and 25 mortgage-backed securities. This is a decrease from 97 securities at December 31, 2013. The unrealized losses resulted from changes in market interest rates and liquidity, as opposed to 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, 2014.

The amortized cost and fair value at September 30, 2014, 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	$	7,220,236	$	7,247,004
Due after one year through five years		15,535,028		15,505,849
Due after five years through ten years		36,520,104		36,336,355
Due after ten years		16,842,385		17,042,341
Other securities - non-maturing		3,501		3,501
Mortgage-backed: residential		33,418,517		33,166,276
	$	109,539,771	$	109,301,326

Securities with a carrying amount of approximately $71,641,000 and $88,180,000 were pledged to secure deposits as required or permitted by law at September 30, 2014 and December 31, 2013, respectively.

At September 30, 2014, 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 $2,759,787 from the sale of securities during the three and nine months ended September 30, 2014, resulting in gross realized gains of $90,838 and gross realized losses of $2,749. There were no sales of securities during the three months ended September 30, 2013. The Company received proceeds of $9,025,930 from the sale of securities during the nine months ending September 30, 2013 resulting in gross realized gains of $373,489 and gross realized losses of $14,351.