10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 0-22955

BAY BANKS OF VIRGINIA, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

VIRGINIA	54-1838100
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)	(I.R.S. EMPLOYER IDENTIFICATION NO.)
100 SOUTH MAIN STREET, KILMARNOCK, VA	22482
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)	(ZIP CODE)

(804) 435-1171

(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  yes    ¨  no

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  yes    ¨  no

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  yes    x  no

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

2,610,856 shares of common stock on August 9, 2012

EXPLANATORY NOTE

Bay Banks of Virginia, Inc. (the “Company”) is filing this amendment to its Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed with the Securities and Exchange Commission on August 14, 2012, solely to furnish Exhibit 101 to the Form 10-Q which provides the Company’s consolidated financial statements and related notes formatted in Extensible Business Reporting Language (XBRL).

Except as described above, no other changes have been made to the original filing and this Form 10-Q/A does not amend, update or change the financial statements or any other items or disclosures in the original filing. Accordingly, this Form 10-Q/A speaks as of the date of original filing and does not reflect events that may have occurred subsequent to such date.

ITEM 6. EXHIBITS

31.1	Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011, (ii) Consolidated Statements of Income for the three and six months ended June 30, 2012 and 2011, (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011, (iv) Consolidated Statements of Changes in Shareholders’ Equity for the six months ended June 30, 2012 and 2011, (v) Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011, and (vi) Notes to Consolidated Financial Statements.**

* Previously filed.

** Pursuant to Rule 406T of Regulation S-T, the Interactive Data File attached as Exhibit 101 hereto is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under such sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Bay Banks of Virginia, Inc.
	(Registrant)
September 13, 2012	By:	/s/ Randal R. Greene
		Randal R. Greene
		President and Chief Executive Officer
		(Principal Executive Officer)
	By:	/s/ Deborah M. Evans
		Deborah M. Evans
		Treasurer and Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Earnings per share (Details Textual)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Earnings per share (Textual) [Abstract]
Shares not included in computing diluted earnings per share	122,056	206,388

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Fair Value Measurements (Details 1) (Recorded Balance [Member], USD $)	Jun. 30, 2012	Dec. 31, 2011
Summary of Company's assets measured at fair value on a nonrecurring basis
Impaired Loans, net of valuation allowance	$ 3,761,833	$ 4,310,746
Other real estate owned	2,729,966	2,279,935
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Summary of Company's assets measured at fair value on a nonrecurring basis
Impaired Loans, net of valuation allowance
Other real estate owned
Significant Other Observable Inputs (Level 2) [Member]
Summary of Company's assets measured at fair value on a nonrecurring basis
Impaired Loans, net of valuation allowance	1,618,409	2,057,314
Other real estate owned	2,729,966	2,279,935
Significant Unobservable Inputs (Level 3) [Member]
Summary of Company's assets measured at fair value on a nonrecurring basis
Impaired Loans, net of valuation allowance	2,143,424	2,253,432
Other real estate owned

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Long Term Debt (Details Textual) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Long Term Debt (Textual) [Abstract]
Advance on which FHLB holds an option to terminate	$ 10
Lendable Collateral Value One Through Four Family Residential Real Estate Loans	55.8
Immediate available credit	40.0
Total line of credit	64.7
Available line of credit	$ 38.8

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Allowance for Loan Losses (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	$ 3,188,541	$ 3,230,677
(Charge-offs)	(838,255)	(577,281)
Recoveries	347,987	40,145
Provision	642,685	495,000
Ending Balance	3,340,958	3,188,541
Individually evaluated for impairment	1,804,490	1,792,141
Collectively evaluated for impairment	1,536,468	1,396,401
Loan Receivables Ending Balance:
Individually evaluated for impairment	8,403,498	7,394,120
Collectively evaluated for impairment	233,087,081	229,295,702
Total loans	241,490,579	236,689,822
Construction, Land and Land Development [Member]
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	190,500	192,518
(Charge-offs)	(57,660)	(35,428)
Recoveries		175
Provision	41,031	33,235
Ending Balance	173,871	190,500
Individually evaluated for impairment	117,871	119,500
Collectively evaluated for impairment	56,000	71,000
Loan Receivables Ending Balance:
Individually evaluated for impairment	406,378	408,640
Collectively evaluated for impairment	28,175,959	27,233,640
Total loans	28,582,337	27,642,280
Farmland [Member]
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance		3,000
Provision	1,000	(3,000)
Ending Balance	1,000
Collectively evaluated for impairment	1,000
Loan Receivables Ending Balance:
Collectively evaluated for impairment	1,484,981	1,526,050
Total loans	1,484,981	1,526,050
Commercial Mortgages (Non-Owner Occupied) [Member]
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	88,000	108,000
(Charge-offs)	(283,569)	(52,117)
Recoveries	285,084
Provision	(515)	32,117
Ending Balance	89,000	88,000
Collectively evaluated for impairment	89,000	88,000
Loan Receivables Ending Balance:
Collectively evaluated for impairment	20,884,287	16,198,584
Total loans	20,884,287	16,198,584
Commercial Mortgages (Owner Occupied) [Member]
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	554,318	1,270,451
Provision	(179,522)	(716,133)
Ending Balance	374,796	554,318
Individually evaluated for impairment	140,796	244,318
Collectively evaluated for impairment	234,000	310,000
Loan Receivables Ending Balance:
Individually evaluated for impairment	1,603,830	1,447,278
Collectively evaluated for impairment	24,459,675	26,398,318
Total loans	26,063,505	27,845,596
Residential First Mortgage [Member]
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	1,161,551	206,171
(Charge-offs)	(203,544)	(232,904)
Recoveries		1,393
Provision	(179,522)	1,186,891
Ending Balance	374,796	1,161,551
Individually evaluated for impairment	843,341	726,552
Collectively evaluated for impairment	392,000	435,000
Loan Receivables Ending Balance:
Individually evaluated for impairment	4,025,871	3,187,147
Collectively evaluated for impairment	106,094,232	104,451,588
Total loans	110,120,103	107,638,735
Residential Junior Mortgage [Member]
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	719,121	460,648
(Charge-offs)	(32,674)	(29,162)
Provision	(76,007)	287,635
Ending Balance	610,440	719,121
Individually evaluated for impairment	431,440	465,121
Collectively evaluated for impairment	179,000	254,000
Loan Receivables Ending Balance:
Individually evaluated for impairment	1,760,201	1,790,858
Collectively evaluated for impairment	27,040,397	26,735,150
Total loans	28,800,598	28,526,008
Commercial and Industrial [Member]
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	281,650	69,869
(Charge-offs)	(185,427)	(16,553)
Recoveries	10,869
Provision	180,740	228,334
Ending Balance	287,832	281,650
Individually evaluated for impairment	176,832	236,650
Collectively evaluated for impairment	111,000	45,000
Loan Receivables Ending Balance:
Individually evaluated for impairment	513,008	560,197
Collectively evaluated for impairment	17,803,774	18,423,135
Total loans	18,316,782	18,983,332
Consumer Loans [Member]
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	185,000	210,662
(Charge-offs)	(75,381)	(211,117)
Recoveries	52,034	38,577
Provision	99,557	146,878
Ending Balance	261,210	185,000
Individually evaluated for impairment	94,210
Collectively evaluated for impairment	167,000	185,000
Loan Receivables Ending Balance:
Individually evaluated for impairment	94,210
Collectively evaluated for impairment	7,143,776	8,329,237
Total loans	7,237,986	8,329,237
Unallocated [Member]
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	8,401	709,358
Provision	299,067	(700,957)
Ending Balance	307,468	8,401
Collectively evaluated for impairment	$ 307,468	$ 8,401

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Long Term Debt (Tables)

6 Months Ended

Jun. 30, 2012

Long Term Debt [Abstract]

Advances of long term debt

Description	Balance		Acquired		Current Interest Rate			Maturity Date
Convertible	$	10,000,000		9/12/2006		4.23	%		9/12/2016
Fixed Rate Hybrid		5,000,000		5/20/2011		2.69	%		5/20/2014
	$	15,000,000

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Goodwill (Details Textual) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Goodwill (Textual) [Abstract]
Goodwill	$ 2,807,842	$ 2,807,842

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Allowance for Loan Losses (Details Textual) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2012 Relationships	Dec. 31, 2011 Relationships
Allowance for Loan Losses (Textual) [Abstract]
Troubled debt restructurings total	$ 3,800,000	$ 3,300,000
Troubled debt restructurings charged off	451,755
Allowance for Loan Losses (Additional Textual) [Abstract]
Period of Nonperforming Loans	90 days
Nonaccruing loans excluded from impaired loan	453,210	681,592
Nonaccruing loans accrued interest	4,056	32,560
Total number of TDR relationships	5	4
Number of TDR relationships charged off	1
Number of TDR relationships added	2
Troubled debt restructurings charge-offs applied to the ALL	188,122
Residential Mortgage [Member]
Allowance for Loan Losses (Textual) [Abstract]
Minimum balance in order to assign a risk rating grade	1,000,000
Consumer [Member]
Allowance for Loan Losses (Textual) [Abstract]
Minimum balance in order to assign a risk rating grade	250,000
First of five TDR relationships [Member]
Allowance for Loan Losses (Textual) [Abstract]
Number of loans	7
Troubled Debt Restructurings loan balances	1,800,000
Second, third and fourth of five TDR relationships [Member] | Residential First Mortgages [Member]
Allowance for Loan Losses (Textual) [Abstract]
Troubled Debt Restructurings loan balances	1,500,000
Troubled debt restructurings miscellaneous information	Three relationships each involved residential first mortgages for a total of $1.5 million inprincipal balances. Two of these three with balances of $804,064 as of June 30, 2012, were restructured during 2011.
Fourth of five TDR relationships [Member] | Residential First Mortgages [Member]
Allowance for Loan Losses (Textual) [Abstract]
Troubled Debt Restructurings loan balances	649,485
Fourth of five TDR relationships [Member] | Consumer [Member]
Allowance for Loan Losses (Textual) [Abstract]
Troubled Debt Restructurings loan balances	94,210
Fifth of five TDR relationships [Member] | Commercial Mortgages (Owner Occupied) [Member]
Allowance for Loan Losses (Textual) [Abstract]
Troubled Debt Restructurings loan balances	$ 479,115

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Fair Value Measurements (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value	$ 34,289,311	$ 41,799,121
U. S. Government agencies [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value	7,785,696	8,795,066
State and municipal obligations [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value	26,503,615	33,004,055
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U. S. Government agencies [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | State and municipal obligations [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value
Significant Other Observable Inputs (Level 2) [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value	34,289,311	41,799,121
Significant Other Observable Inputs (Level 2) [Member] | U. S. Government agencies [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value	7,785,696	8,795,066
Significant Other Observable Inputs (Level 2) [Member] | State and municipal obligations [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value	26,503,615	33,004,055
Significant Unobservable Inputs (Level 3) [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value
Significant Unobservable Inputs (Level 3) [Member] | U. S. Government agencies [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value
Significant Unobservable Inputs (Level 3) [Member] | State and municipal obligations [Member]
Balance of financial assets and liabilities measured at fair value on a recurring basis
Fair value

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General

6 Months Ended

Jun. 30, 2012

General [Abstract]

General

Note 1: General

Bay Banks of Virginia, Inc. (the “Company”) owns 100% of the Bank of Lancaster (the “Bank”), 100% of Bay Trust Company, Inc. (the “Trust Company”) and 100% of Steptoes Holdings, LLC (“Steptoes Holdings”). The consolidated financial statements include the accounts of the Bank, the Trust Company, Steptoes Holdings and Bay Banks of Virginia, Inc.

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and to the general practices within the banking industry. In management’s opinion, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the consolidated financial statements, have been included. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

Certain amounts in the consolidated financial statements have been reclassified to conform to current year presentations.

These consolidated financial statements should be read in conjunction with the financial statements and notes to financial statements included in the Company’s 2011 Annual Report to Shareholders.

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Employee Benefit Plans (Details) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Pension Benefits [Member]
Components of Net Periodic Benefit Cost
Service cost	$ 127,142	$ 137,474
Interest cost	89,149	103,988
Expected return on plan assets	(160,932)	(176,574)
Amortization of unrecognized prior service cost	(26,981)	(26,982)
Amortization of unrecognized net loss	35,720	21,210
Remaining amortization of unrecognized net loss due to settlements	112,313
Net gain due to curtailment	(191,177)
Amortization of transition obligation
Net periodic benefit cost	(14,766)	59,116
Post Retirement Benefits [Member]
Components of Net Periodic Benefit Cost
Service cost	13,001	11,141
Interest cost	14,978	15,886
Expected return on plan assets
Amortization of unrecognized prior service cost
Amortization of unrecognized net loss	1,457	84
Remaining amortization of unrecognized net loss due to settlements
Net gain due to curtailment
Amortization of transition obligation	1,471	1,456
Net periodic benefit cost	$ 30,907	$ 28,567

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Securities (Details 1) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Unrealized loss positions
Less than Twelve Months, Fair Value	$ 3,453,174	$ 1,130,931
Twelve Months or Longer, Fair Value	245,120
Fair Value, Total	3,698,294	1,130,931
Unrealized Loss, Less than 12 Months	36,682	14,915
Unrealized Loss, 12 Months or Longer	3,598
Unrealized Loss ,Total	40,280	14,915
U. S. Government agencies [Member]
Unrealized loss positions
Less than Twelve Months, Fair Value	1,064,773	311,122
Twelve Months or Longer, Fair Value	245,120
Fair Value, Total	1,309,893	311,122
Unrealized Loss, Less than 12 Months	11,440	4,656
Unrealized Loss, 12 Months or Longer	3,598
Unrealized Loss ,Total	15,038	4,656
State and municipal obligations [Member]
Unrealized loss positions
Less than Twelve Months, Fair Value	2,388,401	819,809
Fair Value, Total	2,388,401	819,809
Unrealized Loss, Less than 12 Months	25,242	10,259
Unrealized Loss ,Total	$ 25,242	$ 10,259

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Securities (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Aggregate amortized costs and fair values of the available-for-sale securities portfolio
Amortized cost	$ 33,423,589	$ 40,646,500
Gross unrealized gains	906,002	1,167,536
Gross unrealized (Losses)	(40,280)	(14,915)
Fair value	34,289,311	41,799,121
U. S. Government agencies [Member]
Aggregate amortized costs and fair values of the available-for-sale securities portfolio
Amortized cost	7,697,972	8,698,771
Gross unrealized gains	102,762	100,951
Gross unrealized (Losses)	(15,038)	(4,656)
Fair value	7,785,696	8,795,066
State and municipal obligations [Member]
Aggregate amortized costs and fair values of the available-for-sale securities portfolio
Amortized cost	25,725,617	31,947,729
Gross unrealized gains	803,240	1,066,585
Gross unrealized (Losses)	(25,242)	(10,259)
Fair value	$ 26,503,615	$ 33,004,055

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Employee Benefit Plans (Details Textual) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2012
Employee Benefit Plans (Textual) [Abstract]
Minimum age of full time employees	21
Conditional age-1 for availing plan	55
Conditional age-2 for availing plan	65
Conditional years of service -1 for availing plan	10
Conditional years of service-2 for availing plan	5
Pension Benefits [Member]
Employee Benefit Plans (Textual) [Abstract]
Company contribution to post-retirement benefit plan		$ 0
Post Retirement Benefits [Member]
Employee Benefit Plans (Textual) [Abstract]
Company contribution to post-retirement benefit plan	$ 7,655	$ 22,061

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Securities (Details Textual) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Securities (Textual) [Abstract]
Market value of securities	$ 10.2	$ 9.3
Company's investment in Federal Home Loan Bank Stock	$ 1.2	$ 1.6

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Loans (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Summary of balances of loans
Loans	$ 241,490,579	$ 236,689,822
Allowance for loan losses	(3,340,958)	(3,188,541)
Loans, net	238,149,621	233,501,281
Construction, Land and Land Development [Member]
Summary of balances of loans
Loans	28,582,337	27,642,280
Farmland [Member]
Summary of balances of loans
Loans	1,484,981	1,526,050
Commercial Mortgages (Non-Owner Occupied) [Member]
Summary of balances of loans
Loans	20,884,287	16,198,584
Commercial Mortgages (Owner Occupied) [Member]
Summary of balances of loans
Loans	26,063,505	27,845,596
Residential First Mortgage [Member]
Summary of balances of loans
Loans	110,120,103	107,638,735
Residential Junior Mortgage [Member]
Summary of balances of loans
Loans	28,800,598	28,526,008
Commercial and Industrial [Member]
Summary of balances of loans
Loans	18,316,782	18,983,332
Consumer Loans [Member]
Summary of balances of loans
Loans	$ 7,237,986	$ 8,329,237

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash Flows From Operating Activities
Net income	$ 202,677	$ 215,372
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	400,322	407,458
Net amortization and accretion of securities	126,999	38,178
Provision for loan losses	642,685	220,000
Stock-based compensation	2,925	7,948
(Gain) loss on securities available-for-sale	(502,816)	(123,583)
Increase in OREO valuation allowance	111,094	249,835
Loss on sale of other real estate	212,755	38,218
Loss (gain) on disposal of fixed assets	4,906	(4,082)
Decrease in accrued income and other assets	323,309	297,060
Increase (decrease) in other liabilities	78,210	(73,710)
Net cash provided by operating activities	1,603,066	1,272,694
Cash Flows From Investing Activities
Proceeds from maturities and principal paydowns of available-for-sale securities	1,610,448	4,769,373
Proceeds from sales and calls of available-for-sale securities	9,849,763	4,081,190
Purchases of available-for-sale securities	(3,861,484)	(5,480,327)
Sales of restricted securities	315,900	76,700
(Increase) in interest bearing deposits in other banks	(2,801,877)	(14,618,961)
Decrease (increase) in federal funds sold	1,906,080	(587,461)
Loan (originations) and principal collections, net	(6,695,008)	8,502,482
Proceeds from sale of other real estate	674,550	1,879,456
(Purchases) of premises and equipment	(59,947)	(97,970)
Net cash provided by (used in) investing activities	938,425	(1,475,518)
Cash Flows From Financing Activities
Increase in demand, savings, and other interest-bearing deposits	4,973,377	3,301,377
Net (decrease) increase in time deposits	(2,075,541)	2,902,003
Net increase (decrease) in securities sold under repurchase agreements	3,795,242	(106,247)
(Decrease) in FHLB advances		(5,000,000)
Net cash provided by financing activities	6,693,078	1,097,133
Net increase in cash and due from banks	9,234,569	894,309
Cash and due from banks at beginning of period	4,728,895	3,275,584
Cash and due from banks at end of period	13,963,464	4,169,893
Supplemental Schedule of Cash Flow Information
Interest paid	1,765,190	2,354,537
Income taxes paid		103,827
Unrealized gain (loss) on investment securities	(286,900)	385,616
Loans transferred to other real estate owned	$ 1,403,983	$ 1,220,132

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Loans (Details 1) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Recorded investment in past due and nonaccruing loans
30-59 days past due	$ 249,935	$ 257,980
60-89 days past due	219,790	652,350
90 days or more past due and still accruing	400,723	60,090
Nonaccruals	7,309,745	5,416,672
Total past due and nonaccruals	8,180,193	6,387,092
Current	233,310,386	230,302,730
Total loans	241,490,579	236,689,822
Construction, Land and Land Development [Member]
Recorded investment in past due and nonaccruing loans
60-89 days past due	122,479	93,287
90 days or more past due and still accruing	400,723
Nonaccruals	406,378	534,037
Total past due and nonaccruals	929,580	627,324
Current	27,652,757	27,014,956
Total loans	28,582,337	27,642,280
Farmland [Member]
Recorded investment in past due and nonaccruing loans
Current	1,484,982	1,526,050
Total loans	1,484,981	1,526,050
Commercial Mortgages (Non-Owner Occupied) [Member]
Recorded investment in past due and nonaccruing loans
Nonaccruals	318,418	384,168
Total past due and nonaccruals	318,418	384,168
Current	20,565,869	15,814,416
Total loans	20,884,287	16,198,584
Commercial Mortgages (Owner Occupied) [Member]
Recorded investment in past due and nonaccruing loans
Nonaccruals	915,795	256,749
Total past due and nonaccruals	915,795	256,749
Current	25,147,710	27,588,847
Total loans	26,063,505	27,845,596
Residential First Mortgage [Member]
Recorded investment in past due and nonaccruing loans
30-59 days past due	183,887	128,632
60-89 days past due	97,311	92,503
Nonaccruals	3,253,860	1,666,779
Total past due and nonaccruals	3,535,058	1,887,914
Current	106,585,044	105,750,821
Total loans	110,120,103	107,638,735
Residential Junior Mortgage [Member]
Recorded investment in past due and nonaccruing loans
30-59 days past due	60,123	29,712
Nonaccruals	1,886,099	1,741,286
Total past due and nonaccruals	1,946,222	1,770,998
Current	26,854,376	26,755,010
Total loans	28,800,598	28,526,008
Commercial and Industrial [Member]
Recorded investment in past due and nonaccruing loans
30-59 days past due	1,678	43,364
Nonaccruals	513,009	742,720
Total past due and nonaccruals	514,687	786,084
Current	17,802,095	18,197,248
Total loans	18,316,782	18,983,332
Consumer Loans [Member]
Recorded investment in past due and nonaccruing loans
30-59 days past due	4,247	56,272
60-89 days past due		466,560
90 days or more past due and still accruing		60,090
Nonaccruals	16,186	90,933
Total past due and nonaccruals	20,433	673,855
Current	7,217,553	7,655,382
Total loans	$ 7,237,986	$ 8,329,237

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Stock-Based Compensation (Details) (USD $)	6 Months Ended
	Jun. 30, 2012
Stock option plan activity
Options outstanding, January 1,shares	197,423
Granted, shares	0
Forfeited, shares	(47,645)
Exercised, shares	0
Expired, shares	(17,222)
Options outstanding, June 30, shares	132,556
Options exercisable, June 30	132,556
Options outstanding, January 1,Weighted Average Exercise Price	$ 10.00
Granted, Weighted Average Exercise Price	$ 0.00
Forfeited, Weighted Average Exercise Price	$ 9.17
Exercised, Weighted Average Exercise Price	$ 0.00
Expired, Weighted Average Exercise Price	$ 15.34
Options outstanding, June 30, Weighted Average Exercise Price	$ 9.60
Options exercisable, June 30, Weighted Average Exercise Price	$ 9.60
Options outstanding, January 1, Remaining Contractual Life	5 years 9 months 18 days
Options outstanding, June 30, Remaining Contractual Life	5 years 9 months 18 days
Options exercisable, June 30, Remaining Contractual Life	5 years 9 months 18 days
Options outstanding, June 30, Aggregate Intrinsic Value (1)	$ 9,963
Options exercisable, June 30, Aggregate Intrinsic Value (1)	$ 9,963

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Consolidated Balance Sheet (USD $)	Jun. 30, 2012	Dec. 31, 2011
ASSETS
Cash and due from banks	$ 13,963,464	$ 4,728,895
Interest-bearing deposits	13,170,952	10,369,075
Federal funds sold	230,295	2,136,375
Securities available for sale, at fair value	34,289,311	41,799,121
Restricted securities	1,675,300	1,991,200
Loans, net of allowance for loan losses of $3,340,958 and $3,188,541	238,149,621	233,501,281
Premises and equipment, net	11,954,993	12,300,274
Accrued interest receivable	1,190,789	1,161,191
Other real estate owned, net of valuation allowance	2,729,966	2,279,935
Goodwill	2,807,842	2,807,842
Other assets	1,739,553	2,136,907
Total assets	321,902,086	315,212,096
LIABILITIES
Noninterest-bearing deposits	46,056,610	43,803,349
Savings and interest-bearing demand deposits	107,990,005	105,269,889
Time deposits	114,369,326	116,444,867
Total deposits	268,415,941	265,518,105
Securities sold under repurchase agreements	9,072,400	5,277,158
Federal Home Loan Bank advances	15,000,000	15,000,000
Other liabilities	1,382,713	1,402,049
Commitments and contingencies
Total liabilities	293,871,054	287,197,312
SHAREHOLDERS' EQUITY
Common stock ($5 par value; authorized - 5,000,000 shares; outstanding - 2,610,856 shares)	13,054,280	13,054,280
Additional paid-in capital	4,974,456	4,971,531
Retained earnings	9,746,311	9,543,634
Accumulated other comprehensive income, net	255,985	445,339
Total shareholders' equity	28,031,032	28,014,784
Total liabilities and shareholders' equity	$ 321,902,086	$ 315,212,096

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Long Term Debt (Details) (USD $)	6 Months Ended
	Jun. 30, 2012
Advances of long term debt
Balance	$ 15,000,000
Convertible [Member]
Advances of long term debt
Balance	10,000,000
Acquired	Sep. 12, 2006
Current interest rate	4.23%
Maturity date	Sep. 12, 2016
Fixed Rate Hybrid [Member]
Advances of long term debt
Balance	$ 5,000,000
Acquired	May 20, 2011
Current interest rate	2.69%
Maturity date	May 20, 2014

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Consolidated Statement of Comprehensive Income (Unaudited) (Parenthetical) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated Statement Of Comprehensive Income [Abstract]
Unrealized holding gains (losses) arising during the period	$ 225,592	$ 147,539	$ 73,412	$ 173,128
Less reclassification adjustment for gains recognized in income	$ 167,945	$ 42,588	$ 170,957	$ 42,018

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Allowance for Loan Losses (Details 2) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Performing and Non Performing Loans
Loan receivables	$ 146,158,686	$ 144,493,980
Performing [Member]
Performing and Non Performing Loans
Loan receivables	141,002,541	140,934,892
Nonperforming [Member]
Performing and Non Performing Loans
Loan receivables	5,156,145	3,559,088
Residential First Mortgages [Member]
Performing and Non Performing Loans
Loan receivables	110,120,102	107,638,735
Residential First Mortgages [Member] | Performing [Member]
Performing and Non Performing Loans
Loan receivables	106,866,242	105,971,956
Residential First Mortgages [Member] | Nonperforming [Member]
Performing and Non Performing Loans
Loan receivables	3,253,860	1,666,779
Residential Junior Mortgages [Member]
Performing and Non Performing Loans
Loan receivables	28,800,598	28,526,008
Residential Junior Mortgages [Member] | Performing [Member]
Performing and Non Performing Loans
Loan receivables	26,914,499	26,784,722
Residential Junior Mortgages [Member] | Nonperforming [Member]
Performing and Non Performing Loans
Loan receivables	1,886,099	1,741,286
Consumer Loans [Member]
Performing and Non Performing Loans
Loan receivables	7,237,986	8,329,237
Consumer Loans [Member] | Performing [Member]
Performing and Non Performing Loans
Loan receivables	7,221,800	8,178,214
Consumer Loans [Member] | Nonperforming [Member]
Performing and Non Performing Loans
Loan receivables	$ 16,186	$ 151,023

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Earnings per share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Weighted average number of shares used in computing earnings per share

	Three Months Ended								Six Months Ended
	June 30, 2012				June 30, 2011				June 30, 2012				June 30, 2011
(Unaudited)	Average Shares		Per  Share Amount		Average Shares		Per  share Amount		Average Shares		Per  Share Amount		Average Shares		Per  Share Amount
Basic earnings per share		2,610,856	$	0.04		2,605,856	$	0.03		2,610,856	$	0.08		2,605,856	$	0.08
Effect of dilutive securities:
Stock options		3,021				—				1,960				—
Diluted earnings per share		2,613,877	$	0.04		2,605,856	$	0.03		2,612,816	$	0.08		2,605,856	$	0.08

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Allowance for Loan Losses (Details 3) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
With no related allowance:
Recorded Investment	$ 2,837,175	$ 1,291,233
Customers' Unpaid Principal Balance	283,175	1,291,233
Average Recorded Investment	2,108,637	1,000,665
Interest Income Recognized	60,367	73,929
Interest Income Collected	44,786	72,895
With an allowance recorded:
Recorded Investment	5,566,323	6,102,887
Customers' Unpaid Principal Balance	6,141,802	6,475,658
Related Allowance	1,804,490	1,792,141
Average Recorded Investment	5,438,998	4,309,779
Interest Income Recognized	47,829	183,480
Interest Income Collected	38,815	167,455
Total Impaired Loans:
Recorded Investment	8,403,498	7,394,120
Customers' Unpaid Principal Balance	8,978,977	7,766,891
Related Allowance	1,804,490	1,792,141
Average Recorded Investment	7,547,635	5,310,444
Interest Income Recognized	108,196	257,409
Interest Income Collected	83,601	240,350
Construction, Land and Land Development [Member]
With no related allowance:
Recorded Investment
Customers' Unpaid Principal Balance
Average Recorded Investment
Interest Income Recognized
Interest Income Collected
With an allowance recorded:
Recorded Investment	406,378	408,640
Customers' Unpaid Principal Balance	408,540	408,640
Related Allowance	117,871	119,500
Average Recorded Investment	407,510	355,822
Interest Income Recognized		3,865
Interest Income Collected		3,260
Total Impaired Loans:
Recorded Investment	406,378	408,640
Customers' Unpaid Principal Balance	408,540	408,640
Related Allowance	117,871	119,500
Average Recorded Investment	407,510	355,822
Interest Income Recognized		3,865
Interest Income Collected		3,260
Farmland [Member]
With no related allowance:
Recorded Investment
Customers' Unpaid Principal Balance
Average Recorded Investment
Interest Income Recognized
Interest Income Collected
With an allowance recorded:
Recorded Investment
Customers' Unpaid Principal Balance
Related Allowance
Average Recorded Investment
Interest Income Recognized
Interest Income Collected
Total Impaired Loans:
Recorded Investment
Customers' Unpaid Principal Balance
Related Allowance
Average Recorded Investment
Interest Income Recognized
Interest Income Collected
Residential First Mortgages [Member]
With no related allowance:
Recorded Investment	2,070,907	901,132
Customers' Unpaid Principal Balance	2,070,907	901,132
Average Recorded Investment	1,660,547	726,266
Interest Income Recognized	41,149	52,293
Interest Income Collected	24,912	52,378
With an allowance recorded:
Recorded Investment	1,954,964	2,286,015
Customers' Unpaid Principal Balance	2,125,388	2,303,167
Related Allowance	843,341	726,552
Average Recorded Investment	1,870,295	1,254,593
Interest Income Recognized	24,129	100,550
Interest Income Collected	23,564	95,208
Total Impaired Loans:
Recorded Investment	4,025,871	3,187,147
Customers' Unpaid Principal Balance	4,196,295	3,204,299
Related Allowance	843,341	726,552
Average Recorded Investment	3,530,842	1,980,859
Interest Income Recognized	65,278	152,843
Interest Income Collected	48,476	147,586
Residential Junior Mortgages [Member]
With no related allowance:
Recorded Investment	28,278	131,226
Customers' Unpaid Principal Balance	28,278	131,226
Average Recorded Investment	29,510	66,245
Interest Income Recognized		7,325
Interest Income Collected		6,208
With an allowance recorded:
Recorded Investment	1,731,923	1,659,632
Customers' Unpaid Principal Balance	2,054,084	1,961,728
Related Allowance	431,440	465,121
Average Recorded Investment	1,745,835	1,451,332
Interest Income Recognized	3,750	14,483
Interest Income Collected	1,875	9,846
Total Impaired Loans:
Recorded Investment	1,760,201	1,790,858
Customers' Unpaid Principal Balance	2,082,362	2,092,954
Related Allowance	431,440	465,121
Average Recorded Investment	1,775,345	1,517,577
Interest Income Recognized	3,750	21,808
Interest Income Collected	1,875	16,054
Commercial Mortgages (Non Owner Occupied) [Member]
With no related allowance:
Recorded Investment
Customers' Unpaid Principal Balance
Average Recorded Investment
Interest Income Recognized
Interest Income Collected
With an allowance recorded:
Recorded Investment
Customers' Unpaid Principal Balance
Related Allowance
Average Recorded Investment
Interest Income Recognized
Interest Income Collected
Total Impaired Loans:
Recorded Investment
Customers' Unpaid Principal Balance
Related Allowance
Average Recorded Investment
Interest Income Recognized
Interest Income Collected
Commercial Mortgages (Owner Occupied) [Member]
With no related allowance:
Recorded Investment	737,990	258,875
Customers' Unpaid Principal Balance	737,990	258,875
Average Recorded Investment	418,580	208,153
Interest Income Recognized	19,218	14,311
Interest Income Collected	19,874	14,309
With an allowance recorded:
Recorded Investment	865,840	1,188,403
Customers' Unpaid Principal Balance	865,840	1,191,301
Related Allowance	140,796	244,318
Average Recorded Investment	865,861	891,128
Interest Income Recognized	15,900	48,600
Interest Income Collected	9,010	44,593
Total Impaired Loans:
Recorded Investment	1,603,830	1,447,278
Customers' Unpaid Principal Balance	1,603,830	1,450,176
Related Allowance	140,796	244,318
Average Recorded Investment	1,284,441	1,099,281
Interest Income Recognized	35,118	62,911
Interest Income Collected	28,884	58,902
Commercial and Industrial Loans [Member]
With no related allowance:
Recorded Investment
Customers' Unpaid Principal Balance
Average Recorded Investment
Interest Income Recognized
Interest Income Collected
With an allowance recorded:
Recorded Investment	513,008	560,197
Customers' Unpaid Principal Balance	593,740	610,822
Related Allowance	176,832	236,650
Average Recorded Investment	486,690	356,905
Interest Income Recognized		15,982
Interest Income Collected	316	14,548
Total Impaired Loans:
Recorded Investment	513,008	560,197
Customers' Unpaid Principal Balance	593,740	610,822
Related Allowance	176,832	236,650
Average Recorded Investment	486,690	356,905
Interest Income Recognized		15,982
Interest Income Collected	316	14,548
Consumer [Member]
With no related allowance:
Recorded Investment
Customers' Unpaid Principal Balance
Average Recorded Investment
Interest Income Recognized
Interest Income Collected
With an allowance recorded:
Recorded Investment	94,210
Customers' Unpaid Principal Balance	94,210
Related Allowance	94,210
Average Recorded Investment	62,801
Interest Income Recognized	4,050
Interest Income Collected	4,050
Total Impaired Loans:
Recorded Investment	94,210
Customers' Unpaid Principal Balance	94,210
Related Allowance	94,210
Average Recorded Investment	62,807
Interest Income Recognized	4,050
Interest Income Collected	$ 4,050

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2012

Employee Benefit Plans [Abstract]

Components of Net Periodic Benefit Cost

	Pension Benefits						Post Retirement Benefits
Six months ended June 30,	2012			2011			2012		2011
Service cost	$	127,142		$	137,474		$	13,001	$	11,141
Interest cost		89,149			103,988			14,978		15,886
Expected return on plan assets		(160,932	)		(176,574	)		—		—
Amortization of unrecognized prior service cost		(26,981	)		(26,982	)		—		—
Amortization of unrecognized net loss		35,720			21,210			1,457		84
Remaining amortization of unrecognized net loss due to settlements		112,313			—			—		—
Net gain due to curtailment		(191,177	)		—			—		—
Amortization of transition obligation		—			—			1,471		1,456
Net periodic benefit cost	$	(14,766	)	$	59,116		$	30,907	$	28,567

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Consolidated Statements of Changes in Shareholders Equity (Unaudited) (USD $)	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period at Dec. 31, 2010	$ 27,342,310	$ 13,029,280	$ 4,965,460	$ 9,193,492	$ 154,078
Balance at beginning of period, Shares at Dec. 31, 2010	2,605,856
Net income	215,372			215,372
Other comprehensive income	254,506				254,506
Stock compensation expense	7,948		7,948
Balance at end of period at Jun. 30, 2011	27,820,136	13,029,280	4,973,408	9,408,864	408,584
Balance at end of period, Shares at Jun. 30, 2011	2,605,856
Balance at beginning of period at Dec. 31, 2011	28,014,784	13,054,280	4,971,531	9,543,634	445,339
Balance at beginning of period, Shares at Dec. 31, 2011	2,610,856
Net income	202,677			202,677
Other comprehensive income	(189,354)				(189,354)
Stock compensation expense	2,925		2,925
Balance at end of period at Jun. 30, 2012	$ 28,031,032	$ 13,054,280	$ 4,974,456	$ 9,746,311	$ 255,985
Balance at end of period, Shares at Jun. 30, 2012	2,610,856

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Consolidated Balance Sheet (Parenthetical) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Consolidated Balance Sheet [Abstract]
Loans, allowance for loan losses	$ 3,340,958	$ 3,188,541
Common stock, par value	$ 5	$ 5
Common stock, authorized shares	5,000,000	5,000,000
Common stock, outstanding shares	2,610,856	2,610,856

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Long Term Debt

6 Months Ended

Jun. 30, 2012

Long Term Debt [Abstract]

Long Term Debt

Note 9: Long Term Debt

On June 30, 2012, the Bank had FHLB debt consisting of two advances. The FHLB holds an option to terminate the $10 million advance on any quarterly payment date. The $10 million advance has an early conversion option which gives the FHLB the option to convert, in whole only, into a one-month LIBOR-based floating rate advance, effective on any quarterly payment date. If the FHLB elects to convert, the Bank may elect to terminate, in whole or in part, without a prepayment fee.

Advances on the FHLB lines are secured by a blanket lien on qualified 1 to 4 family residential real estate loans with a lendable collateral value of $55.8 million. Immediate available credit, as of June 30, 2012, was $40.0 million. With additional collateral, the total line of credit is worth $64.7 million, with $38.8 million available.

The two advances are shown in the following table.

Description	Balance		Acquired		Current Interest Rate			Maturity Date
Convertible	$	10,000,000		9/12/2006		4.23	%		9/12/2016
Fixed Rate Hybrid		5,000,000		5/20/2011		2.69	%		5/20/2014
	$	15,000,000

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 09, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	BAY BANKS OF VIRGINIA INC
Entity Central Index Key	0001034594
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,610,856

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Fair Value Measurements

6 Months Ended

Jun. 30, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 10: Fair Value Measurements

The Company uses fair value to record certain assets and liabilities and to determine fair value disclosures. Authoritative accounting guidance clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

Authoritative accounting guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy based on these two types of inputs are as follows:

Level 1 – Valuation is based on quoted prices in active markets for identical assets and liabilities.

Level 2 –	Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market.
Level 3 –	Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market.

The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements:

Securities available-for-sale: Securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that considers observable market data (Level 2).

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2012 and December 31, 2011:

			Fair Value Measurements at June 30, 2012 Using
Description	Balance as of June 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(unaudited)
U. S. Government agencies	$	7,785,696	$	—	$	7,785,696	$	—
State and municipal obligations		26,503,615		—		26,503,615		—
			Fair Value Measurements at December 31, 2011 Using
Description	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U. S. Government agencies	$	8,795,066	$	—	$	8,795,066	$	—
State and municipal obligations		33,004,055		—		33,004,055		—

Certain assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets.

The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the financial statements:

Impaired Loans: Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Fair value is measured based on the value of the collateral securing the loans. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the collateral is a house or building in the process of construction or if an appraisal of the real estate property is over two years old, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant, or the net book value on the applicable business’s financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Impaired loans allocated to the Allowance for Loan Losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Consolidated Statements of Income.

Other Real Estate Owned: Certain assets such as other real estate owned are measured at the lower of their carrying value or fair value less estimated costs to sell. At or near the time of foreclosure, the Bank obtains real estate appraisals on the properties acquired through foreclosure. The real estate is then valued at the lesser of the loan balance, including interest receivable, or the appraised value at the time of foreclosure less an estimate of costs to sell the property. Management believes that the fair value component in its valuation follows the provisions of Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 820 and that current real estate appraisals support a Level 2 valuation.

The following table summarizes the Company’s assets that were measured at fair value on a nonrecurring basis during the period.

			Fair value measurements at June 30, 2012 using
Description	Balance as of June 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(unaudited)
Impaired Loans, net of valuation allowance	$	3,761,833	$	—	$	1,618,409	$	2,143,424
Other real estate owned	$	2,729,966	$	—	$	2,729,966	$	—
			Fair value measurements at December 31, 2011 using
Description	Balance as of December 31,2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired Loans, net of valuation allowance	$	4,310,746	$	—	$	2,057,314	$	2,253,432
Other real estate owned	$	2,279,935	$	—	$	2,279,935	$	—

The estimated fair values of financial instruments are shown in the following table. The carrying amounts in the table are included in the balance sheet under the applicable captions.

			Fair Value Measurements at June 30, 2012 Using
June 30, 2012 (unaudited)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and due from banks	$	13,963,464	$	13,963,464	$	—	$	—
Interest-bearing deposits		13,170,952		—		13,170,952		—
Federal funds sold		230,295		—		230,295		—
Securities available-for-sale		34,289,311		—		34,289,311		—
Restricted securities		1,675,300		—		1,675,300		—
Loans, net		238,149,621		—		239,720,381		2,143,424
Accrued interest receivable		1,190,789		—		1,190,789		—
Liabilities:
Non-interest-bearing deposits	$	46,056,610	$	—	$	46,056,610	$	—
Savings and other interest-bearing deposits		107,990,005		—		107,990,005		—
Time deposits		114,369,326		—		117,465,510		—
Securities sold under repurchase agreements		9,072,400		—		9,072,400		—
FHLB advances		15,000,000		—		16,599,811		—
Accrued interest payable		159,473		—		159,473		—
			Fair Value Measurements at December 31, 2011 Using
December 31, 2011	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and due from banks	$	4,728,895	$	4,728,895	$	—	$	—
Interest-bearing deposits		10,369,075		—		10,369,075		—
Federal funds sold		2,136,375		—		2,136,375		—
Securities available-for-sale		41,799,121		—		41,799,121		—
Restricted securities		1,991,200		—		1,991,200		—
Loans, net		233,501,821		—		231,681,647		2,253,432
Accrued interest receivable		1,161,191		—		1,161,191		—
Liabilities:
Non-interest-bearing deposits	$	43,803,349	$	—	$	43,803,349	$	—
Savings and other interest-bearing deposits		105,269,889		—		105,269,889		—
Time deposits		116,444,867		—		118,668,679		—
Securities sold under repurchase agreements		5,277,158		—		5,277,158		—
FHLB advances		15,000,000		—		16,651,084		—
Accrued interest payable		168,628		—		168,628		—

The fair values shown do not necessarily represent the amounts which would be received on immediate settlement of the instruments. Authoritative accounting guidance excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

The carrying amounts of cash and due from banks, federal funds sold or purchased, accrued interest, non-interest-bearing deposits, savings, and securities sold under repurchase agreements, represent items which do not present significant market risks, are payable on demand, or are of such short duration that carrying value approximates market value.

Available-for-sale securities are carried at the fair values measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Therefore carrying value equals market value. The carrying value of restricted securities approximates fair value based on the redemption provisions.

The fair value of loans is estimated by discounting future cash flows using the interest rates at which similar loans would be made to borrowers.

Time deposits are presented at estimated fair value using interest rates offered for deposits of similar remaining maturities.

The fair value of the FHLB advances is estimated by discounting the future cash flows using the interest rate offered for similar advances.

The fair value of commitments to extend credit is estimated using the fees currently charged to enter similar agreements, taking into account the remaining terms of the agreements and the present credit worthiness of the counter parties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.

The fair value of standby letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counter parties at the reporting date.

At June 30, 2012 and December 31, 2011, the fair value of loan commitments and standby letters of credit was immaterial. Therefore, they are not included in the table above.

The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair value of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk.

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Consolidated Statement of Income (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
INTEREST INCOME
Loans, including fees	$ 3,264,259	$ 3,422,673	$ 6,489,039	$ 6,860,836
Securities:
Taxable	180,011	188,895	380,944	394,029
Tax-exempt	62,031	60,161	132,625	124,611
Federal funds sold	1,244	2,142	2,610	5,114
Interest -bearing deposit accounts	8,561	14,810	15,623	23,870
Total interest income	3,516,106	3,688,681	7,020,841	7,408,460
INTEREST EXPENSE
Deposits	716,967	833,092	1,466,121	1,653,773
Securities sold under repurchase agreements	5,146	4,011	8,067	7,409
FHLB advances	140,923	253,598	281,847	595,786
Total interest expense	863,036	1,090,701	1,756,035	2,256,968
Net interest income	2,653,070	2,597,980	5,264,806	5,151,492
Provision for loan losses	546,661	165,000	642,685	220,000
Net interest income after provision for loan losses	2,106,409	2,432,980	4,622,121	4,931,492
NON-INTEREST INCOME
Income from fiduciary activities	157,688	149,054	317,842	303,487
Service charges and fees on deposit accounts	192,826	158,029	359,689	324,285
VISA-related fees	212,654	193,420	372,123	356,378
Other service charges and fees	255,685	205,435	444,795	371,030
Secondary market lending fees	121,687	18,817	198,895	56,705
Gains on sale of securities available for sale	493,955	125,259	502,816	123,583
Other real estate (losses)	(255,796)	(170,277)	(323,849)	(288,053)
Net (losses) gain on other assets			(4,906)	4,082
Other income	30,076	16,061	58,400	19,179
Total non-interest income	1,208,775	695,798	1,925,805	1,270,676
NON-INTEREST EXPENSES
Salaries and employee benefits	1,384,469	1,548,310	2,946,638	3,080,486
Occupancy expense	546,034	479,328	1,050,365	944,442
Bank franchise tax	42,990	36,780	85,980	73,560
VISA expense	176,944	167,698	308,104	294,835
Telephone expense	33,737	45,283	75,061	88,336
FDIC assessments	103,851	104,856	207,702	251,954
Debit card expense	60,445	47,837	115,849	95,281
Foreclosure property expense	62,532	53,083	105,786	95,649
Other expense	795,302	553,240	1,424,977	1,050,308
Total non-interest expenses	3,206,304	3,036,415	6,320,462	5,974,851
Net income before income taxes	108,880	92,363	227,464	227,317
Income tax	11,830	5,727	24,787	11,945
Net Income	$ 97,050	$ 86,636	$ 202,677	$ 215,372
Basic Earnings Per Share
Average basic shares outstanding	2,610,856	2,605,856	2,610,856	2,605,856
Earnings per share, basic	$ 0.04	$ 0.03	$ 0.08	$ 0.08
Diluted Earnings Per Share
Average diluted shares outstanding	2,613,877	2,605,856	2,612,816	2,605,856
Earnings per share, diluted	$ 0.04	$ 0.03	$ 0.08	$ 0.08

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Allowance for Loan Losses

6 Months Ended

Jun. 30, 2012

Allowance for Loan Losses [Abstract]

Allowance for loan losses

Note 4: Allowance for Loan Losses

A disaggregation of and an analysis of the change in the allowance for loan losses by segment is shown below.

Allowance for Loan Losses by Portfolio Segment

For the six months ended June 30, 2012 (unaudited)

	Construction, Land and Land Development			Farmland		Commercial Mortgages (Non Owner Occupied)			Commercial Mortgages (Owner Occupied)			Residential First Mortgages			Residential Junior Mortgages			Commercial and Industrial			Consumer Loans			Unallocated		Total
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	$	190,500		$	—	$	88,000		$	554,318		$	1,161,551		$	719,121		$	281,650		$	185,000		$	8,401	$	3,188,541
(Charge-offs)		(57,660	)		—		(283,569	)		—			(203,544	)		(32,674	)		(185,427	)		(75,381	)				(838,255	)
Recoveries		—			—		285,084			—			—			—			10,869			52,034					347,987
Provision		41,031			1,000		(515	)		(179,522	)		277,334			(76,007	)		180,740			99,557			299,067		642,685
Ending Balance	$	173,871		$	1,000	$	89,000		$	374,796		$	1,235,341		$	610,440		$	287,832		$	261,210		$	307,468	$	3,340,958
Individually evaluated for impairment	$	117,871		$	—	$	—		$	140,796		$	843,341		$	431,440		$	176,832		$	94,210		$	—	$	1,804,490
Collectively evaluated for impairment	$	56,000		$	1,000	$	89,000		$	234,000		$	392,000		$	179,000		$	111,000		$	167,000		$	307,468	$	1,536,468
LOAN RECEIVABLES:
Ending Balance:
Individually evaluated for impairment	$	406,378		$	—	$	—		$	1,603,830		$	4,025,871		$	1,760,201		$	513,008		$	94,210				$	8,403,498
Collectively evaluated for impairment		28,175,959			1,484,981		20,884,287			24,459,675			106,094,232			27,040,397			17,803,774			7,143,776					233,087,081
Total Gross Loans	$	28,582,337		$	1,484,981	$	20,884,287		$	26,063,505		$	110,120,103		$	28,800,598		$	18,316,782		$	7,237,986				$	241,490,579

Provision is negative for the Commercial Mortgages (Owner occupied) and Residential Junior Mortgages segments due mainly to a reduction in the level of individual impaired allowance required for each of these segments.

Allowance for Loan Losses by Portfolio Segment

For the Year Ended December 31, 2011

	Construction, Land and Land Development			Farmland			Commercial Mortgages (Non Owner Occupied)			Commercial Mortgages (Owner Occupied)			Residential First Mortgages			Residential Junior Mortgages			Commercial and Industrial			Consumer Loans			Unallocated			Total
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	$	192,518		$	3,000		$	108,000		$	1,270,451		$	206,171		$	460,648		$	69,869		$	210,662		$	709,358		$	3,230,677
(Charge-offs)		(35,428	)		—			(52,117	)		—			(232,904	)		(29,162	)		(16,553	)		(211,117	)		—			(577,281	)
Recoveries		175			—			—			—			1,393			—			—			38,577			—			40,145
Provision		33,235			(3,000	)		32,117			(716,133	)		1,186,891			287,635			228,334			146,878			(700,957	)		495,000
Ending Balance	$	190,500		$	—		$	88,000		$	554,318		$	1,161,551		$	719,121		$	281,650		$	185,000		$	8,401		$	3,188,541
Individually evaluated for impairment	$	119,500		$	—		$	—		$	244,318		$	726,552		$	465,121		$	236,650		$	—		$	—		$	1,792,141
Collectively evaluated for impairment	$	71,000		$	—		$	88,000		$	310,000		$	435,000		$	254,000		$	45,000		$	185,000		$	8,401		$	1,396,401
LOAN RECEIVABLES:
Ending Balance:
Individually evaluated for impairment	$	408,640		$	—		$	—		$	1,447,278		$	3,187,147		$	1,790,858		$	560,197		$	—					$	7,394,120
Collectively evaluated for impairment		27,233,640			1,526,050			16,198,584			26,398,318			104,451,588			26,735,150			18,423,135			8,329,237						229,295,702
Total Gross Loans	$	27,642,280		$	1,526,050		$	16,198,584		$	27,845,596		$	107,638,735		$	28,526,008		$	18,983,332		$	8,329,237					$	236,689,822

Internal risk rating grades are assigned to commercial loans not secured by real estate, commercial mortgages, residential mortgages greater than $1 million, loans to real estate developers and contractors, and consumer loans greater than $250,000 with chronic delinquency, as shown in the following table. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. Risk grades are evaluated as new information becomes available for each borrowing relationship or at least quarterly.

As of June 30, 2012 (unaudited)

	Construction, Land and Land Development		Farmland		Commercial Mortgages (Non-Owner Occupied)		Commercial Mortgages (Owner Occupied)		Commercial and Industrial		Total
INTERNAL RISK RATING GRADES
Grade:
Pass	$	21,681,318	$	1,484,982	$	15,087,894	$	17,044,474	$	14,057,251	$	69,355,919
Watch		4,581,011		—		2,468,359		6,261,502		3,461,592		16,772,464
Special mention		—		—		2,574,371		—		—		2,574,371
Substandard		1,977,390		—		753,663		2,757,529		284,930		5,773,512
Doubtful		342,618		—		—		—		513,009		855,627
Total	$	28,582,337	$	1,484,982	$	20,884,287	$	26,063,505	$	18,316,782	$	95,331,893
As of December 31, 2011
	Construction, Land and Land Development		Farmland		Commercial Mortgages (Non-Owner Occupied)		Commercial Mortgages (Owner Occupied)		Commercial and Industrial		Total
INTERNAL RISK RATING GRADES
Grade:
Pass	$	20,365,500	$	1,526,050	$	11,209,765	$	17,875,112	$	13,790,715	$	64,767,142
Watch		2,807,742		—		1,847,911		7,079,654		3,952,068		15,687,375
Special mention		2,186,094		—		2,393,755		310,959		—		4,890,808
Substandard		1,940,326		—		681,403		2,323,122		457,698		5,402,549
Doubtful		342,618		—		65,750		256,749		782,851		1,447,968
Total	$	27,642,280	$	1,526,050	$	16,198,584	$	27,845,596	$	18,983,332	$	92,195,842

Loans not assigned internal risk rating grades are comprised of residential mortgages and smaller consumer loans. Payment activity of these loans is reviewed monthly by management. Loans are considered to be nonperforming when they are delinquent by 90 days or more or on nonaccrual, as shown in the table below.

As of June 30, 2012 (unaudited)

	Residential First Mortgages		Residential Junior Mortgages		Consumer Loans		Total
PAYMENT ACTIVITY STATUS
Performing	$	106,866,242	$	26,914,499	$	7,221,800	$	141,002,541
Nonperforming		3,253,860		1,886,099		16,186		5,156,145
Total	$	110,120,102	$	28,800,598	$	7,237,986	$	146,158,686
As of December 31, 2011
	Residential First Mortgages		Residential Junior Mortgages		Consumer Loans		Total
PAYMENT ACTIVITY STATUS
Performing	$	105,971,956	$	26,784,722	$	8,178,214	$	140,934,892
Nonperforming		1,666,779		1,741,286		151,023		3,559,088
Total	$	107,638,735	$	28,526,008	$	8,329,237	$	144,493,980

The following table shows the Company’s recorded investment and the customers’ unpaid principal balances for impaired loans, with the associated allowance amount, if applicable. Also shown are the average recorded investments in impaired loans and the related amount of interest recognized and collected during the time the loans were impaired.

IMPAIRED LOANS

As of June 30, 2012 (unaudited)

	Recorded Investment		Customers’ Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With no related allowance:
Construction, land & land development	$	—	$	—	$	—	$	—	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		2,070,907		2,070,907		—		1,660,547		41,149		24,912
Residential Junior Mortgages (1)		28,278		28,278		—		29,510		—		—
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		737,990		737,990		—		418,580		19,218		19,874
Commercial & industrial		—		—		—		—		—		—
Consumer (2)		—		—		—		—		—		—
	$	2,837,175	$	2,837,175	$	—	$	2,108,637	$	60,367	$	44,786
With an allowance recorded:
Construction, land & land development	$	406,378	$	408,540	$	117,871	$	407,510	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		1,954,964		2,125,388		843,341		1,870,295		24,129		23,564
Residential Junior Mortgages (1)		1,731,923		2,054,084		431,440		1,745,835		3,750		1,875
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		865,840		865,840		140,796		865,861		15,900		9,010
Commercial & industrial		513,008		593,740		176,832		486,690		—		316
Consumer (2)		94,210		94,210		94,210		62,807		4,050		4,050
	$	5,566,323	$	6,141,802	$	1,804,490	$	5,438,998	$	47,829	$	38,815
Total Impaired Loans:
Construction, land & land development	$	406,378	$	408,540	$	117,871	$	407,510	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		4,025,871		4,196,295		843,341		3,530,842		65,278		48,476
Residential Junior Mortgages (1)		1,760,201		2,082,362		431,440		1,775,345		3,750		1,875
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,603,830		1,603,830		140,796		1,284,441		35,118		28,884
Commercial & industrial		513,008		593,740		176,832		486,690		—		316
Consumer (2)		94,210		94,210		94,210		62,807		4,050		4,050
	$	8,403,498	$	8,978,977	$	1,804,490	$	7,547,635	$	108,196	$	83,601

(1) Junior mortgages include equity lines

(2) includes credit cards

IMPAIRED LOANS

As of December 31, 2011

	Recorded Investment		Customers’ Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With no related allowance:
Construction, land & land development	$	—	$	—	$	—	$	—	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		901,132		901,132		—		726,266		52,293		52,378
Residential Junior Mortgages		131,226		131,226		—		66,245		7,325		6,208
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		258,875		258,875		—		208,153		14,311		14,309
Commercial & industrial		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
	$	1,291,233	$	1,291,233	$	—	$	1,000,665	$	73,929	$	72,895
With an allowance recorded:
Construction, land & land development	$	408,640	$	408,640	$	119,500	$	355,822	$	3,865	$	3,260
Farmland		—		—		—		—		—		—
Residential First Mortgages		2,286,015		2,303,167		726,552		1,254,593		100,550		95,208
Residential Junior Mortgages		1,659,632		1,961,728		465,121		1,451,332		14,483		9,846
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,188,403		1,191,301		244,318		891,128		48,600		44,593
Commercial & industrial		560,197		610,822		236,650		356,905		15,982		14,548
Consumer		—		—		—		—		—		—
	$	6,102,887	$	6,475,658	$	1,792,141	$	4,309,779	$	183,480	$	167,455
Total Impaired Loans:
Construction, land & land development	$	408,640	$	408,640	$	119,500	$	355,822	$	3,865	$	3,260
Farmland		—		—		—		—		—		—
Residential First Mortgages		3,187,147		3,204,299		726,552		1,980,859		152,843		147,586
Residential Junior Mortgages		1,790,858		2,092,954		465,121		1,517,577		21,808		16,054
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,447,278		1,450,176		244,318		1,099,281		62,911		58,902
Commercial & industrial		560,197		610,822		236,650		356,905		15,982		14,548
Consumer		—		—		—		—		—		—
	$	7,394,120	$	7,766,891	$	1,792,141	$	5,310,444	$	257,409	$	240,350

At June 30, 2012, the Bank had five relationships that constitute troubled debt restructurings (“TDR”), totaling $3.8 million. One relationship involves seven loans totaling $1.8 million, which is included above in the commercial and industrial segment; the construction, land and land development segment; and the residential junior mortgages segment. These loans had defaulted and have been nonaccruing since October of 2010, and were modified during the second quarter of 2011 to provide cross-collateralization between loans and reduced payments. Three relationships each involved residential first mortgages for a total of $1.5 million in principal balances. Two of these three with balances of $804,064 as of June 30, 2012, were restructured during 2011. The third relationship was added in 2012, which involved a residential first mortgage totaling $649,485, and a consumer loan totaling $94,210. In the second quarter of 2012, a commercial owner occupied mortgage was added totaling $479,115. Of these five relationships, two are non-accruing related to bankruptcies, one is non-accruing due to default, and two are performing according to modified terms.

At December 31, 2011, the Bank had four relationships that constituted TDRs, totaling $3.3 million. One of these relationships, with a balance of $451,755, was dispensed via foreclosure in the second quarter of 2012, resulting in a charge-off of $188,122.

At June 30, 2012 and December 31, 2011, nonaccruing loans excluded from impaired loan disclosure totaled $453,210 and $681,592, respectively. If interest on these nonaccruing loans had been accrued, such income would have approximated $4,056 during the six months ended June 30, 2012 and $32,560 during the year ended December 31, 2011.

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Loans

6 Months Ended

Jun. 30, 2012

Loans [Abstract]

Loans

Note 3: Loans

The following is a summary of the balances of loans:

	June 30, 2012			December 31, 2011
	(unaudited)
Mortgage loans on real estate:
Construction, Land and Land Development	$	28,582,337		$	27,642,280
Farmland		1,484,981			1,526,050
Commercial Mortgages (Non-Owner Occupied)		20,884,287			16,198,584
Commercial Mortgages (Owner Occupied)		26,063,505			27,845,596
Residential First Mortgages		110,120,103			107,638,735
Residential Junior Mortgages		28,800,598			28,526,008
Commercial and Industrial loans		18,316,782			18,983,332
Consumer Loans		7,237,986			8,329,237
Total loans	$	241,490,579		$	236,689,822
Allowance for loan losses		(3,340,958	)		(3,188,541	)
Loans, net	$	238,149,621		$	233,501,281

The recorded investment in past due and nonaccruing loans is shown in the following table. A loan past due by more than 90 days is generally placed on nonaccrual unless it is both well secured and in the process of collection.

Loans Past Due and Nonaccruals June 30, 2012 (unaudited)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Still Accruing		Nonaccruals		Total Past Due and Nonaccruals		Current		Total Loans
Construction, Land and Land Development	$	—	$	122,479	$	400,723	$	406,378	$	929,580	$	27,652,757	$	28,582,337
Farmland		—		—		—		—		—		1,484,982		1,484,981
Commercial Mortgages (Non-Owner Occupied)		—		—		—		318,418		318,418		20,565,869		20,884,287
Commercial Mortgages (Owner Occupied)		—		—		—		915,795		915,795		25,147,710		26,063,505
Residential First Mortgages		183,887		97,311		—		3,253,860		3,535,058		106,585,044		110,120,103
Residential Junior Mortgages		60,123		—		—		1,886,099		1,946,222		26,854,376		28,800,598
Commercial and Industrial		1,678		—		—		513,009		514,687		17,802,095		18,316,782
Consumer Loans		4,247		—		—		16,186		20,433		7,217,553		7,237,986
Total	$	249,935	$	219,790	$	400,723	$	7,309,745	$	8,180,193	$	233,310,386	$	241,490,579
Loans Past Due and Nonaccruals December 31, 2011	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Still Accruing		Nonaccruals		Total Past Due and Nonaccruals		Current		Total Loans
Construction, Land and Land Development	$	—	$	93,287	$	—	$	534,037	$	627,324	$	27,014,956	$	27,642,280
Farmland		—		—		—		—		—		1,526,050		1,526,050
Commercial Mortgages (Non-Owner Occupied)		—		—		—		384,168		384,168		15,814,416		16,198,584
Commercial Mortgages (Owner Occupied)		—		—		—		256,749		256,749		27,588,847		27,845,596
Residential First Mortgages		128,632		92,503		—		1,666,779		1,887,914		105,750,821		107,638,735
Residential Junior Mortgages		29,712		—		—		1,741,286		1,770,998		26,755,010		28,526,008
Commercial and Industrial		43,364		—		—		742,720		786,084		18,197,248		18,983,332
Consumer Loans		56,272		466,560		60,090		90,933		673,855		7,655,382		8,329,237
Total	$	257,980	$	652,350	$	60,090	$	5,416,672	$	6,387,092	$	230,302,730	$	236,689,822

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation [Abstract]

Stock option plan activity

	Shares			Weighted  Average Exercise Price		Remaining Contractual Life (in years)		Aggregate Intrinsic Value (1)
Options outstanding, January 1		197,423		$	10.00		5.8
Granted		—			—
Forfeited		(47,645	)		9.17
Exercised		—			—
Expired		(17,222	)		15.34
Options outstanding, June 30		132,556			9.60		5.8	$	9,963
Options exercisable, June 30		132,556			9.60		5.8	$	9,963

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Securities (Tables)

6 Months Ended

Jun. 30, 2012

Securities [Abstract]

Aggregate amortized costs and fair values of the available-for-sale securities portfolio

Available-for-sale securities June 30, 2012 (unaudited)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. Government agencies	$	7,697,972	$	102,762	$	(15,038	)	$	7,785,696
State and municipal obligations		25,725,617		803,240		(25,242	)		26,503,615
	$	33,423,589	$	906,002	$	(40,280	)	$	34,289,311
Available-for-sale securities December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. Government agencies	$	8,698,771	$	100,951	$	(4,656	)	$	8,795,066
State and municipal obligations		31,947,729		1,066,585		(10,259	)		33,004,055
	$	40,646,500	$	1,167,536	$	(14,915	)	$	41,799,121

Unrealized loss positions

	Less than 12 months				12 months or more				Total
June 30, 2012 (unaudited)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government agencies	$	1,064,773	$	11,440	$	245,120	$	3,598	$	1,309,893	$	15,038
States and municipal obligations		2,388,401		25,242		—		—		2,388,401		25,242
Total temporarily impaired securities	$	3,453,174	$	36,682	$	245,120	$	3,598	$	3,698,294	$	40,280
	Less than 12 months				12 months or more				Total
December 31, 2011	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government agencies	$	311,122	$	4,656	$	—	$	—	$	311,122	$	4,656
States and municipal obligations		819,809		10,259		—		—		819,809		10,259
Total temporarily impaired securities	$	1,130,931	$	14,915	$	—	$	—	$	1,130,931	$	14,915

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Goodwill

6 Months Ended

Jun. 30, 2012

Goodwill [Abstract]

Goodwill

Note 7: Goodwill

The Company has goodwill recorded on the consolidated financial statements relating to the purchase of five branches during the years 1994 through 2000. The balance of the goodwill at June 30, 2012 and December 31, 2011, as reflected on the consolidated balance sheets was $2,807,842. Management determined that these purchases qualified as acquisitions of businesses and that the related unidentifiable intangibles were goodwill. Therefore, amortization was discontinued effective January 1, 2002. The goodwill balance was tested for impairment as of September 30, 2010, and no impairment was determined to exist. Based on Accounting Standards Update (“ASU”) 2011-08, which the Company chose to adopt early, a qualitative assessment performed as of September 30, 2011 indicated that no further impairment testing was necessary for 2011. Considerations of the qualitative assessment included macroeconomic conditions, industry and market environments, financial performance of the five branches, and changes in key personnel, customers or strategy, none of which cause management to believe that the goodwill is impaired.

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Earnings per share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Earnings per share

Note 5: Earnings per share

The following table shows the weighted average number of shares used in computing earnings per share and the effect on the weighted average number of shares of dilutive potential common stock.

	Three Months Ended								Six Months Ended
	June 30, 2012				June 30, 2011				June 30, 2012				June 30, 2011
(Unaudited)	Average Shares		Per  Share Amount		Average Shares		Per  share Amount		Average Shares		Per  Share Amount		Average Shares		Per  Share Amount
Basic earnings per share		2,610,856	$	0.04		2,605,856	$	0.03		2,610,856	$	0.08		2,605,856	$	0.08
Effect of dilutive securities:
Stock options		3,021				—				1,960				—
Diluted earnings per share		2,613,877	$	0.04		2,605,856	$	0.03		2,612,816	$	0.08		2,605,856	$	0.08

As of June 30, 2012 and 2011, options on 122,056 and 206,388 shares, respectively, were not included in computing diluted earnings per share, because their effects were anti-dilutive.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 6: Stock-Based Compensation

Incremental stock-based compensation expense recognized was $2,924 during the first six months of 2012 and $7,948 for the same period in 2011. There was no unrecognized compensation expense related to stock options as of June 30, 2012. As of October 6, 2011, 5000 shares of the Company’s common stock was granted to the new Chief Executive Officer. These shares vested immediately and $16,000 in stock compensation expense was posted on that date

Stock option compensation expense is the estimated fair value of options granted using the Black-Scholes Model amortized on a straight-line basis over the vesting period of the award. There were no options granted and no options exercised during the six month period ended June 30, 2012.

Stock option plan activity for the six months ended June 30, 2012, is summarized below:

	Shares			Weighted  Average Exercise Price		Remaining Contractual Life (in years)		Aggregate Intrinsic Value (1)
Options outstanding, January 1		197,423		$	10.00		5.8
Granted		—			—
Forfeited		(47,645	)		9.17
Exercised		—			—
Expired		(17,222	)		15.34
Options outstanding, June 30		132,556			9.60		5.8	$	9,963
Options exercisable, June 30		132,556			9.60		5.8	$	9,963

(1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had all option holders exercised their options on June 30, 2012. This amount changes based on changes in the market value of the Company’s common stock.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2012

Employee Benefit Plans [Abstract]

Employee Benefit Plans

Note 8: Employee Benefit Plans

The Company has a non-contributory, defined benefit pension plan for all full-time employees over 21 years of age. Under this cash balance plan, until December 31, 2012, the account balance for each participant will grow each year with annual pay credits based on age and years of service and monthly interest credits based on an amount established each year by the Company’s Board of Directors. Effective December 31, 2012, this plan will be frozen. Subsequently, annual pay credits will be discontinued, but each participant’s account balance will continue to grow based on monthly interest credits. The Company funds pension costs in accordance with the funding provisions of the Employee Retirement Income Security Act.

The Company sponsors a postretirement benefit plan covering current and future retirees who acquire age 55 and 10 years of service or age 65 and 5 years of service. The post-retirement benefit plan provides coverage toward a retiree’s eligible medical and life insurance benefits expenses.

Components of Net Periodic Benefit Cost

(Unaudited)

	Pension Benefits						Post Retirement Benefits
Six months ended June 30,	2012			2011			2012		2011
Service cost	$	127,142		$	137,474		$	13,001	$	11,141
Interest cost		89,149			103,988			14,978		15,886
Expected return on plan assets		(160,932	)		(176,574	)		—		—
Amortization of unrecognized prior service cost		(26,981	)		(26,982	)		—		—
Amortization of unrecognized net loss		35,720			21,210			1,457		84
Remaining amortization of unrecognized net loss due to settlements		112,313			—			—		—
Net gain due to curtailment		(191,177	)		—			—		—
Amortization of transition obligation		—			—			1,471		1,456
Net periodic benefit cost	$	(14,766	)	$	59,116		$	30,907	$	28,567

The Company expects to make no contribution to its pension plan and $22,061 to its post-retirement benefit plan in 2012. The Company has contributed $7,655 toward the post-retirement plan during the first six months of 2012.

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Allowance for Loan Losses (Details 1) (USD $)	Jun. 30, 2012	Dec. 31, 2011
INTERNAL RISK RATING GRADES
Loan Receivables	$ 95,331,893	$ 92,195,842
Pass [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	69,355,919	64,767,142
Watch [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	16,722,464	15,687,375
Special Mention [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	2,574,371	4,890,808
Substandard [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	5,773,512	5,402,549
Doubtful [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	855,627	1,447,968
Construction, Land and Land Development [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	28,582,337	27,642,280
Construction, Land and Land Development [Member] | Pass [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	21,681,318	20,365,500
Construction, Land and Land Development [Member] | Watch [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	4,581,011	2,807,742
Construction, Land and Land Development [Member] | Special Mention [Member]
INTERNAL RISK RATING GRADES
Loan Receivables		2,186,094
Construction, Land and Land Development [Member] | Substandard [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	1,977,390	1,940,326
Construction, Land and Land Development [Member] | Doubtful [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	342,618	342,618
Farmland [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	1,484,982	1,526,050
Farmland [Member] | Pass [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	1,484,982	1,526,050
Commercial Mortgages (Non-Owner Occupied) [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	20,884,287	16,198,584
Commercial Mortgages (Non-Owner Occupied) [Member] | Pass [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	15,087,894	11,209,765
Commercial Mortgages (Non-Owner Occupied) [Member] | Watch [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	2,468,359	1,847,911
Commercial Mortgages (Non-Owner Occupied) [Member] | Special Mention [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	2,574,371	2,393,755
Commercial Mortgages (Non-Owner Occupied) [Member] | Substandard [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	753,663	681,403
Commercial Mortgages (Non-Owner Occupied) [Member] | Doubtful [Member]
INTERNAL RISK RATING GRADES
Loan Receivables		65,750
Commercial Mortgages (Owner Occupied) [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	26,063,505	27,845,596
Commercial Mortgages (Owner Occupied) [Member] | Pass [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	17,044,474	17,875,112
Commercial Mortgages (Owner Occupied) [Member] | Watch [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	6,261,502	7,079,654
Commercial Mortgages (Owner Occupied) [Member] | Special Mention [Member]
INTERNAL RISK RATING GRADES
Loan Receivables		310,959
Commercial Mortgages (Owner Occupied) [Member] | Substandard [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	2,757,529	2,323,122
Commercial Mortgages (Owner Occupied) [Member] | Doubtful [Member]
INTERNAL RISK RATING GRADES
Loan Receivables		256,749
Commercial and Industrial [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	18,316,782	18,983,332
Commercial and Industrial [Member] | Pass [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	14,057,251	13,790,715
Commercial and Industrial [Member] | Watch [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	3,461,592	3,952,068
Commercial and Industrial [Member] | Substandard [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	284,930	457,698
Commercial and Industrial [Member] | Doubtful [Member]
INTERNAL RISK RATING GRADES
Loan Receivables	$ 513,009	$ 782,851

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Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2012

Allowance for Loan Losses [Abstract]

Allowance for Loan Losses by Portfolio Segment

	Construction, Land and Land Development			Farmland		Commercial Mortgages (Non Owner Occupied)			Commercial Mortgages (Owner Occupied)			Residential First Mortgages			Residential Junior Mortgages			Commercial and Industrial			Consumer Loans			Unallocated		Total
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	$	190,500		$	—	$	88,000		$	554,318		$	1,161,551		$	719,121		$	281,650		$	185,000		$	8,401	$	3,188,541
(Charge-offs)		(57,660	)		—		(283,569	)		—			(203,544	)		(32,674	)		(185,427	)		(75,381	)				(838,255	)
Recoveries		—			—		285,084			—			—			—			10,869			52,034					347,987
Provision		41,031			1,000		(515	)		(179,522	)		277,334			(76,007	)		180,740			99,557			299,067		642,685
Ending Balance	$	173,871		$	1,000	$	89,000		$	374,796		$	1,235,341		$	610,440		$	287,832		$	261,210		$	307,468	$	3,340,958
Individually evaluated for impairment	$	117,871		$	—	$	—		$	140,796		$	843,341		$	431,440		$	176,832		$	94,210		$	—	$	1,804,490
Collectively evaluated for impairment	$	56,000		$	1,000	$	89,000		$	234,000		$	392,000		$	179,000		$	111,000		$	167,000		$	307,468	$	1,536,468
LOAN RECEIVABLES:
Ending Balance:
Individually evaluated for impairment	$	406,378		$	—	$	—		$	1,603,830		$	4,025,871		$	1,760,201		$	513,008		$	94,210				$	8,403,498
Collectively evaluated for impairment		28,175,959			1,484,981		20,884,287			24,459,675			106,094,232			27,040,397			17,803,774			7,143,776					233,087,081
Total Gross Loans	$	28,582,337		$	1,484,981	$	20,884,287		$	26,063,505		$	110,120,103		$	28,800,598		$	18,316,782		$	7,237,986				$	241,490,579

	Construction, Land and Land Development			Farmland			Commercial Mortgages (Non Owner Occupied)			Commercial Mortgages (Owner Occupied)			Residential First Mortgages			Residential Junior Mortgages			Commercial and Industrial			Consumer Loans			Unallocated			Total
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	$	192,518		$	3,000		$	108,000		$	1,270,451		$	206,171		$	460,648		$	69,869		$	210,662		$	709,358		$	3,230,677
(Charge-offs)		(35,428	)		—			(52,117	)		—			(232,904	)		(29,162	)		(16,553	)		(211,117	)		—			(577,281	)
Recoveries		175			—			—			—			1,393			—			—			38,577			—			40,145
Provision		33,235			(3,000	)		32,117			(716,133	)		1,186,891			287,635			228,334			146,878			(700,957	)		495,000
Ending Balance	$	190,500		$	—		$	88,000		$	554,318		$	1,161,551		$	719,121		$	281,650		$	185,000		$	8,401		$	3,188,541
Individually evaluated for impairment	$	119,500		$	—		$	—		$	244,318		$	726,552		$	465,121		$	236,650		$	—		$	—		$	1,792,141
Collectively evaluated for impairment	$	71,000		$	—		$	88,000		$	310,000		$	435,000		$	254,000		$	45,000		$	185,000		$	8,401		$	1,396,401
LOAN RECEIVABLES:
Ending Balance:
Individually evaluated for impairment	$	408,640		$	—		$	—		$	1,447,278		$	3,187,147		$	1,790,858		$	560,197		$	—					$	7,394,120
Collectively evaluated for impairment		27,233,640			1,526,050			16,198,584			26,398,318			104,451,588			26,735,150			18,423,135			8,329,237						229,295,702
Total Gross Loans	$	27,642,280		$	1,526,050		$	16,198,584		$	27,845,596		$	107,638,735		$	28,526,008		$	18,983,332		$	8,329,237					$	236,689,822

Internal risk rating grades are assigned to commercial loans not secured

	Construction, Land and Land Development		Farmland		Commercial Mortgages (Non-Owner Occupied)		Commercial Mortgages (Owner Occupied)		Commercial and Industrial		Total
INTERNAL RISK RATING GRADES
Grade:
Pass	$	21,681,318	$	1,484,982	$	15,087,894	$	17,044,474	$	14,057,251	$	69,355,919
Watch		4,581,011		—		2,468,359		6,261,502		3,461,592		16,772,464
Special mention		—		—		2,574,371		—		—		2,574,371
Substandard		1,977,390		—		753,663		2,757,529		284,930		5,773,512
Doubtful		342,618		—		—		—		513,009		855,627
Total	$	28,582,337	$	1,484,982	$	20,884,287	$	26,063,505	$	18,316,782	$	95,331,893
As of December 31, 2011
	Construction, Land and Land Development		Farmland		Commercial Mortgages (Non-Owner Occupied)		Commercial Mortgages (Owner Occupied)		Commercial and Industrial		Total
INTERNAL RISK RATING GRADES
Grade:
Pass	$	20,365,500	$	1,526,050	$	11,209,765	$	17,875,112	$	13,790,715	$	64,767,142
Watch		2,807,742		—		1,847,911		7,079,654		3,952,068		15,687,375
Special mention		2,186,094		—		2,393,755		310,959		—		4,890,808
Substandard		1,940,326		—		681,403		2,323,122		457,698		5,402,549
Doubtful		342,618		—		65,750		256,749		782,851		1,447,968
Total	$	27,642,280	$	1,526,050	$	16,198,584	$	27,845,596	$	18,983,332	$	92,195,842

Performing and non performing loans

	Residential First Mortgages		Residential Junior Mortgages		Consumer Loans		Total
PAYMENT ACTIVITY STATUS
Performing	$	106,866,242	$	26,914,499	$	7,221,800	$	141,002,541
Nonperforming		3,253,860		1,886,099		16,186		5,156,145
Total	$	110,120,102	$	28,800,598	$	7,237,986	$	146,158,686
As of December 31, 2011
	Residential First Mortgages		Residential Junior Mortgages		Consumer Loans		Total
PAYMENT ACTIVITY STATUS
Performing	$	105,971,956	$	26,784,722	$	8,178,214	$	140,934,892
Nonperforming		1,666,779		1,741,286		151,023		3,559,088
Total	$	107,638,735	$	28,526,008	$	8,329,237	$	144,493,980

Company's recorded investment and the customers unpaid principal balances for impaired loans, with the associated allowance amount

	Recorded Investment		Customers’ Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With no related allowance:
Construction, land & land development	$	—	$	—	$	—	$	—	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		2,070,907		2,070,907		—		1,660,547		41,149		24,912
Residential Junior Mortgages (1)		28,278		28,278		—		29,510		—		—
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		737,990		737,990		—		418,580		19,218		19,874
Commercial & industrial		—		—		—		—		—		—
Consumer (2)		—		—		—		—		—		—
	$	2,837,175	$	2,837,175	$	—	$	2,108,637	$	60,367	$	44,786
With an allowance recorded:
Construction, land & land development	$	406,378	$	408,540	$	117,871	$	407,510	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		1,954,964		2,125,388		843,341		1,870,295		24,129		23,564
Residential Junior Mortgages (1)		1,731,923		2,054,084		431,440		1,745,835		3,750		1,875
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		865,840		865,840		140,796		865,861		15,900		9,010
Commercial & industrial		513,008		593,740		176,832		486,690		—		316
Consumer (2)		94,210		94,210		94,210		62,807		4,050		4,050
	$	5,566,323	$	6,141,802	$	1,804,490	$	5,438,998	$	47,829	$	38,815
Total Impaired Loans:
Construction, land & land development	$	406,378	$	408,540	$	117,871	$	407,510	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		4,025,871		4,196,295		843,341		3,530,842		65,278		48,476
Residential Junior Mortgages (1)		1,760,201		2,082,362		431,440		1,775,345		3,750		1,875
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,603,830		1,603,830		140,796		1,284,441		35,118		28,884
Commercial & industrial		513,008		593,740		176,832		486,690		—		316
Consumer (2)		94,210		94,210		94,210		62,807		4,050		4,050
	$	8,403,498	$	8,978,977	$	1,804,490	$	7,547,635	$	108,196	$	83,601

(1) Junior mortgages include equity lines

(2) includes credit cards

	Recorded Investment		Customers’ Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With no related allowance:
Construction, land & land development	$	—	$	—	$	—	$	—	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		901,132		901,132		—		726,266		52,293		52,378
Residential Junior Mortgages		131,226		131,226		—		66,245		7,325		6,208
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		258,875		258,875		—		208,153		14,311		14,309
Commercial & industrial		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
	$	1,291,233	$	1,291,233	$	—	$	1,000,665	$	73,929	$	72,895
With an allowance recorded:
Construction, land & land development	$	408,640	$	408,640	$	119,500	$	355,822	$	3,865	$	3,260
Farmland		—		—		—		—		—		—
Residential First Mortgages		2,286,015		2,303,167		726,552		1,254,593		100,550		95,208
Residential Junior Mortgages		1,659,632		1,961,728		465,121		1,451,332		14,483		9,846
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,188,403		1,191,301		244,318		891,128		48,600		44,593
Commercial & industrial		560,197		610,822		236,650		356,905		15,982		14,548
Consumer		—		—		—		—		—		—
	$	6,102,887	$	6,475,658	$	1,792,141	$	4,309,779	$	183,480	$	167,455
Total Impaired Loans:
Construction, land & land development	$	408,640	$	408,640	$	119,500	$	355,822	$	3,865	$	3,260
Farmland		—		—		—		—		—		—
Residential First Mortgages		3,187,147		3,204,299		726,552		1,980,859		152,843		147,586
Residential Junior Mortgages		1,790,858		2,092,954		465,121		1,517,577		21,808		16,054
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,447,278		1,450,176		244,318		1,099,281		62,911		58,902
Commercial & industrial		560,197		610,822		236,650		356,905		15,982		14,548
Consumer		—		—		—		—		—		—
	$	7,394,120	$	7,766,891	$	1,792,141	$	5,310,444	$	257,409	$	240,350

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value Measurements [Abstract]

Balance of financial assets and liabilities measured at fair value on a recurring basis

			Fair Value Measurements at June 30, 2012 Using
Description	Balance as of June 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(unaudited)
U. S. Government agencies	$	7,785,696	$	—	$	7,785,696	$	—
State and municipal obligations		26,503,615		—		26,503,615		—
			Fair Value Measurements at December 31, 2011 Using
Description	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U. S. Government agencies	$	8,795,066	$	—	$	8,795,066	$	—
State and municipal obligations		33,004,055		—		33,004,055		—

Summary of Company's assets measured at fair value on a nonrecurring basis

			Fair value measurements at June 30, 2012 using
Description	Balance as of June 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(unaudited)
Impaired Loans, net of valuation allowance	$	3,761,833	$	—	$	1,618,409	$	2,143,424
Other real estate owned	$	2,729,966	$	—	$	2,729,966	$	—
			Fair value measurements at December 31, 2011 using
Description	Balance as of December 31,2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired Loans, net of valuation allowance	$	4,310,746	$	—	$	2,057,314	$	2,253,432
Other real estate owned	$	2,279,935	$	—	$	2,279,935	$	—

Estimated fair values of financial instruments

			Fair Value Measurements at June 30, 2012 Using
June 30, 2012 (unaudited)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and due from banks	$	13,963,464	$	13,963,464	$	—	$	—
Interest-bearing deposits		13,170,952		—		13,170,952		—
Federal funds sold		230,295		—		230,295		—
Securities available-for-sale		34,289,311		—		34,289,311		—
Restricted securities		1,675,300		—		1,675,300		—
Loans, net		238,149,621		—		239,720,381		2,143,424
Accrued interest receivable		1,190,789		—		1,190,789		—
Liabilities:
Non-interest-bearing deposits	$	46,056,610	$	—	$	46,056,610	$	—
Savings and other interest-bearing deposits		107,990,005		—		107,990,005		—
Time deposits		114,369,326		—		117,465,510		—
Securities sold under repurchase agreements		9,072,400		—		9,072,400		—
FHLB advances		15,000,000		—		16,599,811		—
Accrued interest payable		159,473		—		159,473		—
			Fair Value Measurements at December 31, 2011 Using
December 31, 2011	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and due from banks	$	4,728,895	$	4,728,895	$	—	$	—
Interest-bearing deposits		10,369,075		—		10,369,075		—
Federal funds sold		2,136,375		—		2,136,375		—
Securities available-for-sale		41,799,121		—		41,799,121		—
Restricted securities		1,991,200		—		1,991,200		—
Loans, net		233,501,821		—		231,681,647		2,253,432
Accrued interest receivable		1,161,191		—		1,161,191		—
Liabilities:
Non-interest-bearing deposits	$	43,803,349	$	—	$	43,803,349	$	—
Savings and other interest-bearing deposits		105,269,889		—		105,269,889		—
Time deposits		116,444,867		—		118,668,679		—
Securities sold under repurchase agreements		5,277,158		—		5,277,158		—
FHLB advances		15,000,000		—		16,651,084		—
Accrued interest payable		168,628		—		168,628		—

XML

Fair Value Measurements (Details 2) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Assets
Securities available-for-sale	$ 34,289,311	$ 41,799,121
Carrying Value [Member]
Assets
Cash and due from banks	13,963,464	4,728,895
Interest-bearing deposits	13,170,952	10,369,075
Federal funds sold	230,295	2,136,375
Securities available-for-sale	34,289,311	41,799,121
Restricted securities	1,675,300	1,991,200
Loans, net	238,149,621	233,501,821
Accrued interest receivable	1,190,789	1,161,191
Liabilities
Non-interest-bearing deposits	46,056,610	43,803,349
Savings and other interest-bearing deposits	107,990,005	105,269,889
Time deposits	114,369,326	116,444,867
Securities sold under repurchase agreements	9,072,400	5,277,158
FHLB advances	15,000,000	15,000,000
Accrued interest payable	159,473	168,628
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets
Cash and due from banks	13,963,464	4,728,895
Interest-bearing deposits
Federal funds sold
Securities available-for-sale
Restricted securities
Loans, net
Accrued interest receivable
Liabilities
Non-interest-bearing deposits
Savings and other interest-bearing deposits
Time deposits
Securities sold under repurchase agreements
FHLB advances
Accrued interest payable
Significant Other Observable Inputs (Level 2) [Member]
Assets
Cash and due from banks
Interest-bearing deposits	13,170,952	10,369,075
Federal funds sold	230,295	2,136,375
Securities available-for-sale	34,289,311	41,799,121
Restricted securities	1,675,300	1,991,200
Loans, net	239,720,381	231,681,647
Accrued interest receivable	1,190,789	1,161,191
Liabilities
Non-interest-bearing deposits	46,056,610	43,803,349
Savings and other interest-bearing deposits	107,990,005	105,269,889
Time deposits	117,465,510	118,668,679
Securities sold under repurchase agreements	9,072,400	5,277,158
FHLB advances	16,599,811	16,651,084
Accrued interest payable	159,473	168,628
Significant Unobservable Inputs (Level 3) [Member]
Assets
Cash and due from banks
Interest-bearing deposits
Federal funds sold
Securities available-for-sale
Restricted securities
Loans, net	2,143,424	2,253,432
Accrued interest receivable
Liabilities
Non-interest-bearing deposits
Savings and other interest-bearing deposits
Time deposits
Securities sold under repurchase agreements
FHLB advances
Accrued interest payable

XML

Stock-Based Compensation (Details Textual) (USD $)	1 Months Ended	6 Months Ended
	Oct. 31, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock Based Compensation (Additional Textual) [Abstract]
Options granted		0
Stock-Based Compensation (Textual) [Abstract]
Incremental stock-based compensation expense recognized		$ 2,924	$ 7,948
Unrecognized compensation expense related to stock options		0
Exercised, shares		0
Stock compensation expense	$ 16,000
Chief Executive Officer [Member]
Stock Based Compensation (Additional Textual) [Abstract]
Options granted	5,000

XML

Consolidated Statement of Comprehensive Income (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated Statement Of Comprehensive Income [Abstract]
Net income	$ 97,050	$ 86,636	$ 202,677	$ 215,372
Unrealized gains (losses) on securities;
Unrealized holding gains (losses) arising during the period	(437,913)	286,399	142,505	336,071
Less reclassification adjustment for gains recognized in income	(326,010)	(82,671)	(331,859)	(81,565)
Other comprehensive income (loss)	(111,903)	203,728	(189,354)	254,506
Comprehensive income (loss)	$ (14,853)	$ 290,364	$ 13,323	$ 469,878

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Securities

6 Months Ended

Jun. 30, 2012

Securities [Abstract]

Securities

Note 2: Securities

The aggregate amortized costs and fair values of the available-for-sale securities portfolio are as follows:

Available-for-sale securities June 30, 2012 (unaudited)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. Government agencies	$	7,697,972	$	102,762	$	(15,038	)	$	7,785,696
State and municipal obligations		25,725,617		803,240		(25,242	)		26,503,615
	$	33,423,589	$	906,002	$	(40,280	)	$	34,289,311
Available-for-sale securities December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. Government agencies	$	8,698,771	$	100,951	$	(4,656	)	$	8,795,066
State and municipal obligations		31,947,729		1,066,585		(10,259	)		33,004,055
	$	40,646,500	$	1,167,536	$	(14,915	)	$	41,799,121

Securities with a market value of $10.2 million were pledged as collateral for repurchase agreements and for other purposes as required by law as of June 30, 2012. The market value of pledged securities at December 31, 2011 was $9.3 million.

Securities in an unrealized loss position at June 30, 2012 and December 31, 2011, by duration of the unrealized loss, are shown below. The unrealized loss positions were directly related to interest rate movements as there is minimal credit risk exposure in these investments. All securities are investment grade or better and all losses are considered temporary. Management does not intend to sell the securities and does not expect to be required to sell the securities. Furthermore, we do expect to recover the entire amortized cost basis. Bonds with unrealized loss positions at June 30, 2012 included five municipals and three federal agencies. Bonds with unrealized loss positions at December 31, 2011 included two municipals and one federal agency. The tables are shown below.

	Less than 12 months				12 months or more				Total
June 30, 2012 (unaudited)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government agencies	$	1,064,773	$	11,440	$	245,120	$	3,598	$	1,309,893	$	15,038
States and municipal obligations		2,388,401		25,242		—		—		2,388,401		25,242
Total temporarily impaired securities	$	3,453,174	$	36,682	$	245,120	$	3,598	$	3,698,294	$	40,280
	Less than 12 months				12 months or more				Total
December 31, 2011	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government agencies	$	311,122	$	4,656	$	—	$	—	$	311,122	$	4,656
States and municipal obligations		819,809		10,259		—		—		819,809		10,259
Total temporarily impaired securities	$	1,130,931	$	14,915	$	—	$	—	$	1,130,931	$	14,915

The Company’s investment in Federal Home Loan Bank of Atlanta (“FHLB”) stock totaled $1.2 million at June 30, 2012 and $1.6 million at December 31, 2011. FHLB stock is generally viewed as a long-term investment and as a restricted investment security, which is carried at cost, because there is no market for the stock, other than the FHLBs or its member institutions. Therefore, when evaluating FHLB stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. Despite the FHLB’s temporary suspension of repurchases of excess capital stock in 2010, the Company does not consider this investment to be other-than-temporarily impaired at June 30, 2012 and no impairment has been recognized. FHLB stock is shown in the restricted securities line item on the consolidated balance sheets and is not a part of the available-for-sale securities portfolio.

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General (Details Textual)	Jun. 30, 2012
Bank of Lancaster [Member]
General (Textual) [Abstract]
Percent of ownership	100.00%
Bay Trust Company [Member]
General (Textual) [Abstract]
Percent of ownership	100.00%
Steptoes Holdings [Member]
General (Textual) [Abstract]
Percent of ownership	100.00%

XML

Earnings per share (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Weighted average number of shares used in computing earnings per share
Average basic shares outstanding	2,610,856	2,605,856	2,610,856	2,605,856
Basic earnings per share	$ 0.04	$ 0.03	$ 0.08	$ 0.08
Effect of dilutive securities:
Stock options	3,021		1,960
Average diluted shares outstanding	2,613,877	2,605,856	2,612,816	2,605,856
Diluted earnings per share	$ 0.04	$ 0.03	$ 0.08	$ 0.08

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Loans (Tables)

6 Months Ended

Jun. 30, 2012

Loans [Abstract]

Summary of balances of loans

	June 30, 2012			December 31, 2011
	(unaudited)
Mortgage loans on real estate:
Construction, Land and Land Development	$	28,582,337		$	27,642,280
Farmland		1,484,981			1,526,050
Commercial Mortgages (Non-Owner Occupied)		20,884,287			16,198,584
Commercial Mortgages (Owner Occupied)		26,063,505			27,845,596
Residential First Mortgages		110,120,103			107,638,735
Residential Junior Mortgages		28,800,598			28,526,008
Commercial and Industrial loans		18,316,782			18,983,332
Consumer Loans		7,237,986			8,329,237
Total loans	$	241,490,579		$	236,689,822
Allowance for loan losses		(3,340,958	)		(3,188,541	)
Loans, net	$	238,149,621		$	233,501,281

Recorded investment in past due and nonaccruing loans

Loans Past Due and Nonaccruals June 30, 2012 (unaudited)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Still Accruing		Nonaccruals		Total Past Due and Nonaccruals		Current		Total Loans
Construction, Land and Land Development	$	—	$	122,479	$	400,723	$	406,378	$	929,580	$	27,652,757	$	28,582,337
Farmland		—		—		—		—		—		1,484,982		1,484,981
Commercial Mortgages (Non-Owner Occupied)		—		—		—		318,418		318,418		20,565,869		20,884,287
Commercial Mortgages (Owner Occupied)		—		—		—		915,795		915,795		25,147,710		26,063,505
Residential First Mortgages		183,887		97,311		—		3,253,860		3,535,058		106,585,044		110,120,103
Residential Junior Mortgages		60,123		—		—		1,886,099		1,946,222		26,854,376		28,800,598
Commercial and Industrial		1,678		—		—		513,009		514,687		17,802,095		18,316,782
Consumer Loans		4,247		—		—		16,186		20,433		7,217,553		7,237,986
Total	$	249,935	$	219,790	$	400,723	$	7,309,745	$	8,180,193	$	233,310,386	$	241,490,579
Loans Past Due and Nonaccruals December 31, 2011	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Still Accruing		Nonaccruals		Total Past Due and Nonaccruals		Current		Total Loans
Construction, Land and Land Development	$	—	$	93,287	$	—	$	534,037	$	627,324	$	27,014,956	$	27,642,280
Farmland		—		—		—		—		—		1,526,050		1,526,050
Commercial Mortgages (Non-Owner Occupied)		—		—		—		384,168		384,168		15,814,416		16,198,584
Commercial Mortgages (Owner Occupied)		—		—		—		256,749		256,749		27,588,847		27,845,596
Residential First Mortgages		128,632		92,503		—		1,666,779		1,887,914		105,750,821		107,638,735
Residential Junior Mortgages		29,712		—		—		1,741,286		1,770,998		26,755,010		28,526,008
Commercial and Industrial		43,364		—		—		742,720		786,084		18,197,248		18,983,332
Consumer Loans		56,272		466,560		60,090		90,933		673,855		7,655,382		8,329,237
Total	$	257,980	$	652,350	$	60,090	$	5,416,672	$	6,387,092	$	230,302,730	$	236,689,822