Mortgage-Backed Securities (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2014.  

	Amortized Cost		Gross Unrealized Loss			Gross Unrealized Gain		Estimated Fair Value
Agency Securities
Fannie Mae Certificates
ARMs	$	9,458,568	$	(17,277	)	$	189,611	$	9,630,902
Fixed Rate		288,499		-			3,845		292,344
Total Fannie Mae		9,747,067		(17,277	)		193,456		9,923,246
Freddie Mac Certificates
ARMs		6,514,037		(26,376	)		72,439		6,560,100
Fixed Rate		166,168		-			1,706		167,874
Total Freddie Mac		6,680,205		(26,376	)		74,145		6,727,974
Total Agency Securities	$	16,427,272	$	(43,653	)	$	267,601	$	16,651,220

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 June 30, 2014 and December 31, 2013 are presented below.  

	June 30, 2014			December 31, 2013
Principal balance	$	15,976,590		$	17,044,190
Unamortized premium		450,682			488,854
Unamortized discount		-			(2	)
Gross unrealized gains		267,601			229,509
Gross unrealized losses		(43,653	)		(120,019	)
Carrying value/estimated fair value	$	16,651,220		$	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 and six months ended June 30, 2014 and 2013.  

	Three Months Ended June 30						Six Months Ended June 30
	2014			2013			2014			2013
Coupon interest	$	114,328		$	163,964		$	232,726		$	331,397
Net premium amortization		(24,870	)		(48,849	)		(46,961	)		(92,041	)
Interest income	$	89,458		$	115,115		$	185,765		$	239,356

Gross Gains and Losses from Securities Sales

Gross gains and losses from sales of agency securities for the three months and six months ended June 30, 2014 and 2013 were as follows.

	Three Months Ended June 30					Six Months Ended June 30
	2014			2013		2014			2013
Gross gains	$	6,076		$	8,802	$	13,512		$	11,302
Gross losses		(10,660	)		-		(10,660	)		-
Net gain (loss)	$	(4,584	)	$	8,802	$	2,852		$	11,302

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 June 30, 2014 and December 31, 2013, the Company had the following securities in a loss position presented below:

	As of June 30, 2014
	Less than 12 Months					Greater than 12 Months					Total
	Fair Market		Unrealized			Fair Market		Unrealized			Fair Market		Unrealized
	Value		Loss			Value		Loss			Value		Loss
Fannie Mae Certificates
ARMs	$	814,169	$	(3,757	)	$	1,364,894	$	(13,519	)	$	2,179,063	$	(17,276	)
Fixed Rate		-		-			-		-			-		-
Freddie Mac Certificates
ARMs		419,460		(2,315	)		1,952,376		(24,062	)		2,371,836		(26,377	)
Fixed Rate		-		-			-		-			-		-
Total temporarily impaired securities	$	1,233,629	$	(6,072	)	$	3,317,270	$	(37,581	)	$	4,550,899	$	(43,653	)
Number of securities in an unrealized loss position				41					114					155

	As of December 31, 2013
	Less than 12 Months					Greater than 12 Months				Total
	Fair Market		Unrealized			Fair Market		Unrealized		Fair Market		Unrealized
	Value		Loss			Value		Loss		Value		Loss
Fannie Mae Certificates
ARMs	$	3,233,274	$	(44,871	)	$	-	$	-	$	3,233,274	$	(44,871	)
Fixed Rate		281,760		(1,798	)		-		-		281,760		(1,798	)
Freddie Mac Certificates
ARMs		4,046,473		(70,752	)		-		-		4,046,473		(70,752	)
Fixed Rate		316,835		(1,600	)		-		-		316,835		(1,600	)
Ginnie Mae Certificates
ARMs		-		-			-		-		-		-
Fixed Rate		95,238		(998	)		-		-		95,238		(998	)
Total temporarily impaired securities	$	7,973,580	$	(120,019	)	$	-	$	-	$	7,973,580	$	(120,019	)
Number of securities in an unrealized loss position				279					-				279