7.	INVESTMENTS

The amortized cost and approximate fair value of securities, all of which are classified as available-for-sale, are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
September 30, 2011:
U.S. government and agencies	$	14,143,561	$	271,319	$	-		$	14,414,880
Mortgage-backed securities (government-sponsored enterprises - residential)		41,509,203		1,273,931		(8,421	)		42,774,713
Municipal bonds		41,055,956		2,730,954		(12,243	)		43,774,667
	$	96,708,720	$	4,276,204	$	(20,664	)	$	100,964,260

December 31, 2010:
U.S. government and agencies	$	12,530,787	$	112,102	$	(93,947	)	$	12,548,942
Mortgage-backed securities (government-sponsored enterprises - residential)		41,979,525		480,709		(465,384	)		41,994,850
Municipal bonds		40,584,897		407,015		(668,983	)		40,322,929
	$	95,095,209	$	999,826	$	(1,228,314	)	$	94,866,721

The amortized cost and fair value of available-for-sale securities at September 30, 2011, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
	Cost		Value
Within one year	$	90,307	$	90,363
One to five years		9,166,274		9,431,159
Five to ten years		25,508,562		26,862,408
After ten years		20,434,374		21,805,617
		55,199,517		58,189,547
Mortgage-backed securities (government-sponsored enterprises - residential)		41,509,203		42,774,713
	$	96,708,720	$	100,964,260

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $24,613,000 at September 30, 2011 and $26,629,000 at December 31, 2010.

The book value of securities sold under agreement to repurchase amounted to $5,179,000 at September 30, 2011 and $4,018,000 at December 31, 2010.

Gross gains of $138,000 and $424,000 and gross losses of $0 resulting from sales of available-for-sale securities were realized during the nine months ended September 30, 2011 and 2010, respectively.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at September 30, 2011 was $2,358,000, which is approximately 2% of the Company’s available-for-sale investment portfolio.

Management believes the declines in fair value for these securities are temporary. Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The following table shows the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous loss position, at September 30, 2011.

	Less Than Twelve Months					Twelve Months or More					Total
	Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value

Municipal bonds	$	(12,235	)	$	1,171,431	$	(8	)	$	50,174	$	(12,243	)	$	1,221,605
Mortgage-backed securities (government sponsored enterprises - residential)		(4,700	)		500,977		(3,721	)		635,671		(8,421	)		1,136,648

Total	$	(16,935	)	$	1,672,408	$	(3,729	)	$	685,845	$	(20,664	)	$	2,358,253

The unrealized losses on the Company’s investments in municipal bonds, U.S. government and agencies, and mortgage-backed securities were caused by interest rate increases. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2011.