Investment Securities

6 Months Ended

Dec. 31, 2011

Investment Securities

Investment Securities

Note 6.  Investment Securities

The Company follows the authoritative guidance which clarifies the definition of fair value, establishes a framework for measuring fair value, and expands the disclosures on fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The authoritative guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs were established that may be used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.  The fair value of the Company’s equity securities classified as trading securities in the table below are derived solely from Level 1 inputs.

Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable. The Company’s Level 2 assets and liabilities primarily include debt securities with quoted prices that are traded less frequently than exchange-traded instruments, corporate bonds, U.S. government and agency securities and certain mortgage-backed and asset-backed securities whose values are determined using pricing models with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.  The fair value of the Company’s available-for-sale securities in the table below are derived solely from Level 2 inputs.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company does not have any Level 3 investment securities as of December 31, 2011 or June 30, 2011.

If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The amortized cost, gross unrealized gains and losses, and fair value of the Company’s investment securities are summarized as follows:

December 31, 2011
Available-for-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate Bonds	$	179,507	$	1,299	$	-	$	180,806
Trading
Equity securities	5,052,677		-		(18,852)		5,033,825
Total	$	5,232,184	$	1,299	$	(18,852)	$	5,214,631
June 30, 2011
Available-for-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate Bonds	$	179,507	$	3,028	-		$	182,535
Trading
Equity securities	7,067,677		131,819		-		7,199,496
Held-to -Maturity
Certificates of Deposit	12,000,048		-		-		12,000,048
Total	$	19,247,232	$	134,847	$	-	$	19,382,079

The Company uses the specific identification method to determine the cost of securities sold. For the three months ended December 31, 2011, the Company had gains on investments of $702,370, of which $26,496 was realized gains and $675,874 was unrealized gains. For the six months ended December 31, 2011, the Company had losses on investments of $297,035, of which $146,363 was realized losses and $150,672 was unrealized losses. For the three and six month periods ended December 31, 2010, the Company had realized gains of $2,124 and $14,765, respectively.

As of December 31, 2011 and June 30, 2011, the available-for-sale and held-to-maturity investment securities were due in one year or less.  As of December 31, 2011 and June 30, 2011, there were no securities held from a single issuer that represented more than 10% of shareholders’ equity.  As of December 31, 2011, there were no individual securities in a continuous unrealized loss position.