Note 5. Held to Maturity Securities

6 Months Ended

Jun. 30, 2012

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

5.    Held to Maturity Securities

Securities classified as held to maturity are those securities the Bank has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions.  These securities are carried at cost, adjusted for amortization of premium and accretion of discount, computed by the effective interest method over their contractual lives. Realized gains and losses are computed on a specific identification basis and declines in value determined to be other than temporary due to credit issues are included in gains (losses) on sale of securities.  In the event that a security is called, the Bank would expect to receive 100% of the principal.  Amortized costs and fair values of held to maturity securities as of June 30, 2012 and December 31, 2011 are summarized as follows:

	June 30, 2012
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Obligations of:
States and political subdivisions	$	60,146,013	$	1,938,157	$	(26,415	)	$	62,057,755
U.S. government-sponsored entities		107,000,000		341,300		-			107,341,300
Collateralized mortgage obligations		47,617,750		807,039		(40,460	)		48,384,329
Mortgage-backed securities		121,023,134		1,054,135		(25,387	)		122,051,882
Other		50,000		-		-			50,000
Totals	$	335,836,897	$	4,140,631	$	(92,262	)	$	339,885,266

	December 31, 2011
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Obligations of:
States and political subdivisions	$	63,145,630	$	1,897,676	$	(3,892	)	$	65,039,414
U.S. government-sponsored entities		261,601,680		810,407		(5,000	)		262,407,087
Collateralized mortgage obligations		17,069,071		25,702		(81,226	)		17,013,547
Mortgage-backed securities		18,699,681		52,067		(9,112	)		18,742,636
Other		50,000		-		-			50,000
Totals	$	360,566,062	$	2,785,852	$	(99,230	)	$	363,252,684

The amortized cost and fair value of held-to-maturity securities at June 30, 2012 by contractual maturity are shown below. Expected maturities differ from contractual maturities because borrowers or issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
Due in one year or less	$	54,374,594	$	54,602,091
Due after one year less than 5 years		170,073,142		172,241,921
Due after 5 years less than 10 years		101,389,161		102,999,254
Due in more than 10 years		10,000,000		10,042,000
Totals	$	335,836,897	$	339,885,266

Held to maturity securities with an amortized cost of $77.5 million and $114.5 million at June 30, 2012 and December 31, 2011, respectively, were pledged as collateral on public deposits and for other purposes as required or permitted by law.

 The following table summarizes the portion of the Bank’s held to maturity securities portfolio which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position at June 30, 2012 and December 31, 2011.

	June 30, 2012
	Continuous unrealized losses existing for less than 12 months				Continuous unrealized losses existing for 12 months or more				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of:
States and political subdivisions	$	2,007,671	$	26,415	$	-	$	-	$	2,007,671	$	26,415
Collateralized mortgage obligations		8,708,838		40,460		-		-		8,708,838		40,460
Mortgage-backed securities		24,062,781		25,387		-		-		24,062,781		25,387
Totals	$	34,779,290	$	92,262	$	-	$	-	$	34,779,290	$	92,262

	December 31, 2011
	Continuous unrealized losses existing for less than 12 months				Continuous unrealized losses existing for 12 months or more				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of:
States and political subdivisions	$	979,394	$	3,892	$	-	$	-	$	979,394	$	3,892
U.S. government-sponsored entities		9,995,000		5,000		-		-		9,995,000		5,000
Collateralized mortgage obligations		11,163,181		81,226		-		-		11,163,181		81,226
Mortgage-backed securities		5,403,167		9,112		-		-		5,403,167		9,112
Totals	$	27,540,742	$	99,230	$	-	$	-	$	27,540,742	$	99,230

Management does not believe any individual unrealized loss as of June 30, 2012 or December 31, 2011 represents other than temporary impairment.  At both June 30, 2012 and December 31, 2011, the Bank held no investment securities that had unrealized losses existing for greater than 12 months.   The Bank held fourteen securities at June 30, 2012 that had unrealized losses existing for less than 12 months.  Management believes the temporary impairment in fair value was caused by market fluctuations in interest rates and not by deterioration in credit quality of the underlying portfolio of securities. Since securities are held to maturity, management does not believe that the Bank will experience any losses on these investments.