Securities

9 Months Ended

Sep. 30, 2011

Securities [Abstract]

Securities

Note 2. Securities

The amortized cost and estimated fair value of securities classified as available for sale and held to maturity at September 30, 2011 and December 31, 2010 are as follows:

	September 30, 2011
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Securities Available for Sale:
Securities of U.S. Government agencies and corporations	$	23,601,120	$	313,317	$	—		$	23,914,437
Mortgage-backed and related securities (1)		7,438,570		436,996		(132	)		7,875,434
State and municipal securities		4,995,519		236,718		—			5,232,237
	$	36,035,209	$	987,031	$	(132	)	$	37,022,108
Securities Held to Maturity:
Mortgage-backed and related securities (1)	$	—	$	—	$	—		$	—

	December 31, 2010
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Securities Available for Sale:
Securities of U.S. Government agencies and corporations	$	29,389,077	$	206,789	$	(257,160	)	$	29,338,706
Mortgage-backed and related securities (1)		6,269,479		402,284		(624	)		6,671,139
State and municipal securities		5,674,233		443		(146,935	)		5,527,741
	$	41,332,789	$	609,516	$	(404,719	)	$	41,537,586
Securities Held to Maturity:
Mortgage-backed and related securities (1)	$	25	$	1	$	—		$	26

(1) Collateralized by residential mortgages and guaranteed by U.S. Government sponsored entities.

The amortized cost and estimated market value of securities at September 30, 2011 and December 31, 2010, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay the securities with or without call or prepayment penalties.

	September 30, 2011
	Securities Available for Sale				Securities Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Due in one year or less	$	6,108,857	$	6,219,489	$	—	$	—
Due after one year through five years		17,953,510		18,164,995		—		—
Due five years to ten years		1,492,709		1,557,199		—		—
Due after ten years		3,041,563		3,204,991		—		—
Mortgage-backed securities		7,438,570		7,875,434		—		—
Total	$	36,035,209	$	37,022,108	$	—	$	—

	December 31, 2010
	Securities Available for Sale				Securities Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Due in one year or less	$	7,376,700	$	7,356,405	$	—	$	—
Due after one year through five years		20,774,132		20,715,338		—		—
Due five years to ten years		3,217,241		3,179,863		—		—
Due after ten years		3,695,237		3,614,841		—		—
Mortgage-backed securities		6,269,479		6,671,139		25		26
Total	$	41,332,789	$	41,537,586	$	25	$	26

The Company recognized $1,633 in realized gains for the nine-month period ended September 30, 2011 and realized no gains or losses for the year ended December 31, 2010.

The Company has pledged securities with carrying values of approximately $13,146,000 and $18,177,000 (which approximates fair values) to secure deposits of public and private funds as of September 30, 2011 and December 31, 2010, respectively.

Securities with gross unrealized losses at September 30, 2011 and December 31, 2010, aggregated by investment category and length of time that individual securities have been in a continuous loss position, are as follows:

	September 30, 2011
	Less than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(dollars in thousands)
Securities Available for Sale:
Mortgage-backed and related securities	$	21	$	—	$	18	$	—	$	39	$	—
	$	21	$	—	$	18	$	—	$	39	$	—

	December 31, 2010
	Less than 12 Months					12 Months or Greater					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	(dollars in thousands)
Securities Available for Sale:
Securities of U.S. Government agencies and corporations	$	12,803	$	(257	)	$	—	$	—		$	12,803	$	(257	)
Mortgage-backed and related securities		46		(1	)		53		—			99		(1	)
State and municipal securities		4,896		(102	)		332		(45	)		5,228		(147	)
	$	17,745	$	(360	)	$	385	$	(45	)	$	18,130	$	(405	)

Management performs periodic reviews for impairment in accordance with ASC Topic 320, Investment — Debt and Equity Securities.

At September 30, 2011, the two securities with unrealized losses had depreciated 0.33 percent from the Company’s amortized cost basis. At December 31, 2010, the 19 securities with unrealized losses had depreciated 2.19 percent from the Company’s amortized cost basis. Most of these securities are guaranteed by either U.S. government corporations or agencies or had investment grade ratings upon purchase. Further, the issuers of these securities have not established any cause for default. The unrealized losses associated with these investment securities are primarily attributable to changes in interest rates and not to the credit quality of the issuers. These securities will continue to be monitored as a part of the Company’s ongoing impairment analysis, but are expected to perform even if the rating agencies reduce the credit rating of the bond insurers. Management evaluates the financial performance of each issuer on a quarterly basis to determine if it is probable that the issuers can make all contractual principal and interest payments.

ASC Topic 320 requires an entity to assess whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. Management does not intend to sell these securities and it is not more likely than not that management will be required to sell the securities before the recovery of its amortized cost basis. In making this determination, management has considered the Company’s cash flow and liquidity requirements, capital requirements, economic factors, and contractual and regulatory obligations for indication that these securities will be required to be sold before a forecasted recovery occurs. Therefore, in management’s opinion, all securities that have been in a continuous unrealized loss position for the past 12 months or longer as of September 30, 2011 were not other-than-temporarily impaired as of September 30, 2011, and therefore, no impairment charges were warranted as of September 30, 2011.