INVESTMENTS

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

6.	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
March 31, 2014:
U.S. government and agencies	$	10,665,828	$	103,698	$	(304,689	)	$	10,464,837
Mortgage-backed securities (government-
sponsored enterprises - residential)		49,644,442		258,131		(892,958	)		49,009,615
Municipal bonds		49,730,707		1,202,823		(1,203,663	)		49,729,867
	$	110,040,977	$	1,564,652	$	(2,401,310	)	$	109,204,319

December 31, 2013:
U.S. government and agencies	$	10,710,675	$	114,936	$	(405,535	)	$	10,420,076
Mortgage-backed securities (government-
sponsored enterprises - residential)		49,486,337		219,222		(1,359,904	)		48,345,655
Municipal bonds		50,889,046		1,053,134		(1,723,314	)		50,218,866
	$	111,086,058	$	1,387,292	$	(3,488,753	)	$	108,984,597

The amortized cost and fair value of available-for-sale securities at March 31, 2014, 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	$	96,049	$	97,076
One to five years		8,426,041		8,726,223
Five to ten years		25,087,635		25,113,697
After ten years		26,786,810		26,257,708
		60,396,535		60,194,704
Mortgage-backed securities (government-
sponsored enterprises - residential)		49,644,442		49,009,615
	$	110,040,977	$	109,204,319

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $20,313,000 at March 31, 2014 and $20,420,000 at December 31, 2013.

The book value of securities sold under agreement to repurchase amounted to $8,776,000 at March 31, 2014 and $9,541,000 at December 31, 2013.

Gross gains of $120,000 and $584,000 and gross losses of $20,000 and $0 resulting from sales of available-for-sale securities were realized during the three months ended March 31, 2014 and 2013, 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 March 31, 2014 and December 31, 2013 were $63,831,000, and $71,198,000, respectively, which were approximately 58% and 65% 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 March 31, 2014 and December 31, 2013.

	Less Than Twelve Months					Twelve Months or More					Total
	Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
March 31, 2014	Losses			Value		Losses			Value		Losses			Value

Municipal bonds	$	(789,168	)	$	16,895,964	$	(414,495	)	$	5,513,523	$	(1,203,663	)	$	22,409,487
U.S. government agencies		(221,116	)		5,221,925		(83,573	)		1,136,555		(304,689	)		6,358,480
Mortgage-backed securities
(government sponsored
enterprises - residential)		(639,756	)		28,713,653		(253,202	)		6,349,139		(892,958	)		35,062,792

Total	$	(1,650,040	)	$	50,831,542	$	(751,270	)	$	12,999,217	$	(2,401,310	)	$	63,830,759

	Less Than Twelve Months					Twelve Months or More					Total
	Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
December 31, 2013	Losses			Value		Losses			Value		Losses			Value

Municipal bonds	$	(1,462,733	)	$	22,534,325	$	(260,581	)	$	2,759,523	$	(1,723,314	)	$	25,293,848
U.S. government agencies		(367,005	)		5,824,808		(38,530	)		470,324		(405,535	)		6,295,132
Mortgage-backed securities
(government sponsored
enterprises - residential)		(1,065,542	)		33,521,545		(294,362	)		6,087,526		(1,359,904	)		39,609,071

Total	$	(2,895,280	)	$	61,880,678	$	(593,473	)	$	9,317,373	$	(3,488,753	)	$	71,198,051

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 March 31, 2014 and December 31, 2013.