2. INVESTMENT SECURITIES

Investment securities available for sale are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

At December 31, 2012:
State, county, and municipal securities	$	36,977,202	$	2,886,607	$	—	$	39,863,809
Mortgage-backed securities		79,025,394		1,356,627		134,482		80,247,539
Corporate securities		9,745,591		135,093		126,508		9,754,176

Totals	$	125,748,187	$	4,378,327	$	260,990	$	129,865,524

At December 31, 2011:
State, county, and municipal securities	$	42,640,465	$	3,268,872	$	1,028	$	45,908,309
Mortgage-backed securities		67,940,959		1,405,456		116,957		69,229,458
Corporate securities		9,684,599		—		579,903		9,104,696

Totals	$	120,266,023	$	4,674,328	$	697,888	$	124,242,463

Investment securities held to maturity are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

At December 31, 2012:
State, county, and municipal securities	$	1,356,119	$	23,796	$	—	$	1,379,915

At December 31, 2011:
State, county, and municipal securities	$	3,292,492	$	83,898	$	—	$	3,376,390
Mortgage-backed securities		1,477		21		—		1,498

Totals	$	3,293,969	$	83,919	$	—	$	3,377,888

The amortized costs and fair values of investment securities at December 31, 2012, by contractual maturity, are shown below. Mortgage-backed securities are classified by their contractual maturity, however, expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with and without call or prepayment penalties.

	Held to Maturity				Available for Sale

	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	—	$	—
Due after one year through five years		1,356,119		1,379,915		11,984,224		12,120,343
Due after five years through ten years		—		—		25,545,639		27,134,326
Due after ten years		—		—		88,218,324		90,610,855

	$	1,356,119	$	1,379,915	$	125,748,187	$	129,865,524

Proceeds from the sale of securities were $7,967,000, $9,221,000, and $18,398,000 in 2012, 2011, and 2010, respectively. Gross realized gains on sales of securities were $681,327, $381,702, and $590,129 in 2012, 2011, and 2010, respectively. There were no gross realized losses on sales in 2012 and 2010. Gross realized losses on sales of securities were $180,281 in 2011.

Investment securities with carrying values of approximately $82,428,000 and $85,776,000 at December 31, 2012 and 2011, respectively, were pledged to secure public funds on deposit and for other purposes as required by law, FHLB advances and a $16.4 million line of credit at the Federal Reserve Bank discount window.

The following tables show investments' gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at December 31, 2012 and December 31, 2011. Except as explicitly identified below, all unrealized losses on investment securities are considered by management to be temporarily impaired given the credit ratings on these investment securities and the short duration of the unrealized loss.

At December 31, 2012:

Securities Available for Sale

	Securities in a loss position for less than twelve months					Securities in a loss position for twelve months or more					Total

	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
Mortgage-backed securities	$	17,834,180	$	(134,482	)	$	—	$	—		$	17,834,180	$	(134,482	)
Corporate securities		1,984,687		(15,313	)		3,888,804		(111,195	)		5,873,491		(126,508	)

Total	$	19,818,867	$	(149,795	)	$	3,888,804	$	(111,195	)	$	23,707,671	$	(260,990	)

There were no held to maturity securities in an unrealized loss position at December 31, 2012.

At December 31, 2011:

Securities Available for Sale

	Securities in a loss position for less than twelve months					Securities in a loss position for twelve months or more					Total

	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
Municipal securities	$	—	$	—		$	188,972	$	(1,028	)	$	188,972	$	(1,028	)
Mortgage-backed securities		16,456,324		(85,695	)		2,180,154		(31,262	)		18,636,478		(116,957	)
Corporate securities		5,226,732		(457,867	)		3,877,964		(122,036	)		9,104,696		(579,903	)

Total	$	21,683,056	$	(543,562	)	$	6,247,090	$	(154,326	)	$	27,930,146	$	(697,888	)

There were no held to maturity securities in an unrealized loss position at December 31, 2011.

Securities classified as available for sale are recorded at fair market value and held to maturity securities are recorded at amortized cost. At December 31, 2012 and 2011, the Company had two and five investment securities, respectively, that were in an unrealized loss position for more than 12 months. The Company reviews these securities for other-than-temporary impairment on a quarterly basis by monitoring their credit support and coverage, constant payment of the contractual principal and interest, loan to value and delinquencies ratios.

We use prices from third party pricing services and, to a lesser extent, indicative (non-binding) quotes from third party brokers, to measure fair value of our investment securities. Fair values of the investment securities portfolio could decline in the future if the underlying performance of the collateral for collateralized mortgage obligations or other securities deteriorates and the levels do not provide sufficient protection for contractual principal and interest. As a result, there is risk that an other-than-temporary impairment may occur in the future particularly in light of the current economic environment.

The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell those securities before recovery of its amortized cost. The Company believes, based on industry analyst reports and credit ratings, that it will continue to receive scheduled interest payments as well as the entire principal balance, and the deterioration in value is attributable to changes in market interest rates and is not in the credit quality of the issuer and therefore, these losses are not considered other-than-temporary.

The Company's investment portfolio consists principally of obligations of the United States, its agencies or its corporations and general obligation and revenue municipal securities. In the opinion of management, there is no concentration of credit risk in its investment portfolio. The Company places its deposits and correspondent accounts with and sells its federal funds to high quality institutions. Management believes credit risk associated with correspondent accounts is not significant.