Mortgage-Backed Securities (Tables)

3 Months Ended

Mar. 31, 2014

Schedule of Agency Securities Portfolio Backed by U.S. Government Agency or U.S. Government Sponsored Entity

The Company’s investment portfolio consists of agency securities, which are backed by a U.S. Government agency or a U.S. Government sponsored enterprise.  The following table presents certain information about the Company’s agency securities at March 31, 2014.  

	Amortized Cost		Gross Unrealized Loss			Gross Unrealized Gain		Estimated Fair Value
Agency Securities
Fannie Mae Certificates
ARMs	$	9,553,321	$	(36,442	)	$	171,484	$	9,688,363
Fixed Rate		303,611		(345	)		817		304,083
Total Fannie Mae		9,856,932		(36,787	)		172,301		9,992,446
Freddie Mac Certificates
ARMs		6,964,182		(54,734	)		63,071		6,972,519
Fixed Rate		173,086		(196	)		101		172,991
Total Freddie Mac		7,137,268		(54,930	)		63,172		7,145,510
Total Agency Securities	$	16,994,200	$	(91,717	)	$	235,473	$	17,137,956

The following table presents certain information about the Company’s agency securities at December 31, 2013.  

	Amortized Cost		Gross Unrealized Loss			Gross Unrealized Gain		Estimated Fair Value
Agency Securities
Fannie Mae Certificates
ARMs	$	9,620,743	$	(44,871	)	$	167,848	$	9,743,720
Fixed Rate		806,312		(1,798	)		3,832		808,346
Total Fannie Mae		10,427,055		(46,669	)		171,680		10,552,066
Freddie Mac Certificates
ARMs		6,671,013		(70,752	)		57,808		6,658,069
Fixed Rate		338,738		(1,600	)		21		337,159
Total Freddie Mac		7,009,751		(72,352	)		57,829		6,995,228
Ginnie Mae Certificates
ARMs		—		—			—		—
Fixed Rate		96,236		(998	)		—		95,238
Total Ginnie Mae		96,236		(998	)		—		95,238
Total Agency Securities	$	17,533,042	$	(120,019	)	$	229,509	$	17,642,532

Components of Carrying Value of Available-For-Sale Agency Securities

The components of the carrying value of available-for-sale agency securities at March 31, 2014 and December 31, 2013 are presented below.  

	March 31, 2014			December 31, 2013
Principal balance	$	16,525,003		$	17,044,190
Unamortized premium		469,197			488,854
Unamortized discount		-			(2	)
Gross unrealized gains		235,473			229,509
Gross unrealized losses		(91,717	)		(120,019	)
Carrying value/estimated fair value	$	17,137,956		$	17,642,532

Schedule of Interest Income

The following table presents components of interest income on the Company’s agency securities portfolio for the three months ended March 31, 2014 and 2013.  

	Three Months Ended March 31
	2014			2013
Coupon interest on MBS	$	118,398		$	167,434
Net premium amortization		(22,091	)		(43,193	)
Interest income on MBS, net	$	96,307		$	124,241

Gross Gains and Losses from Securities Sales

Gross gains and losses from sales of securities for the three months ended March 31, 2014 and 2013 were as follows.  

	Three Months Ended March 31
	2014		2013
Gross gains on MBS	$	7,436	$	2,500
Gross losses on MBS		-		-
Net gain (loss) on MBS	$	7,436	$	2,500

Schedule of Agency Securities in Unrealized Loss Position

The Company monitors the performance and market value of its agency securities portfolio on an ongoing basis, and on a quarterly basis reviews its agency securities for impairment.  At March 31, 2014 and December 31, 2013, the Company had the following securities in a loss position presented below:

	Less than 12 months					Less than 12 months
	as of March 31, 2014					as of December 31, 2013
	Fair Market		Unrealized			Fair Market		Unrealized
	Value		Loss			Value		Loss
Fannie Mae Certificates
ARMs	$	3,133,610	$	(36,442	)	$	3,233,274	$	(44,871	)
Fixed Rate		171,707		(345	)		281,760		(1,798	)
Freddie Mac Certificates
ARMs		3,806,999		(54,734	)		4,046,473		(70,752	)
Fixed Rate		153,804		(196	)		316,835		(1,600	)
Ginnie Mae Certificates
ARMs		-		-			-		-
Fixed Rate		-		-			95,238		(998	)
Total temporarily impaired securities	$	7,266,120	$	(91,717	)	$	7,973,580	$	(120,019	)
Number of securities in an unrealized loss position				233					279