Loan Servicing

12 Months Ended

Dec. 31, 2012

Transfers and Servicing [Abstract]

Loan Servicing

LOAN SERVICING

Mortgage loans serviced for others, consisting of loans sold to Fannie Mae and Freddie Mac, are not included in the accompanying balance sheets. Mortgage loan portfolios serviced for Fannie Mae and Freddie Mac were $330,818,219 and $244,629,625 at December 31, 2012 and 2011, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and foreclosure processing. Total servicing fees received were $713,881, $608,513 and $522,491 during 2012, 2011 and 2010, respectively, and were included in mortgage banking income (loss). At December 31, 2012 and 2011, mortgage servicing rights were $2,524,676 and $1,871,244 respectively and are included in other assets on the consolidated balance sheets. Servicing rights recorded on loans originated and sold by the Bank and the changes in the fair value were recorded in the consolidated statements of income (loss) under the caption, mortgage banking income. Amortization/market value adjustments related to mortgage servicing rights were $(447,403), $(559,394) and $(431,350) for the years ended 2012, 2011 and 2010, respectively and recorded as a reduction to the mortgage banking income.

	2012			2011
Mortgage servicing assets, beginning of year	$	1,871,244		$	2,144,139
Capitalized	1,100,835			286,499
Change in fair value	(447,403		)	(559,394		)
Mortgage servicing assets, end of year	$	2,524,676		$	1,871,244

Custodial escrow balances maintained in connection with the loan servicing were $318,649 and $215,504 at December 31, 2012 and 2011, respectively.