Note 4.

Investment Securities

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


Available-for-sale securities December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value

U.S. Government agencies	$	9,383,854	$	10,627	$	(86,412	)	$	9,308,069
State and municipal obligations		27,690,034		109,280		(1,242,426	)		26,556,888
Certificates of deposits		1,736,000		9,039		—			1,745,039
Auction rate security		912,000		—		—			912,000

	$	39,721,888	$	128,946	$	(1,328,838	)	$	38,521,996


Available-for-sale securities December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value

U.S. Government agencies	$	9,411,627	$	78,178	$	(25,990	)	$	9,463,815
State and municipal obligations		23,480,871		412,759		(44,102	)		23,849,528
Certificates of deposits		1,985,000		3,271		(1,094	)		1,987,177
Auction rate security		1,400,000		—		—			1,400,000

	$	36,277,498	$	494,208	$	(71,186	)	$	36,700,520

The cost of securities sold is based on actual net cost. Gross realized gains and gross realized losses, as well as proceeds on sales and calls of securities, were as follows:


	For the years ended December 31,
	2013			2012

Gross realized gains	$	285,286		$	959,588
Gross realized losses		(1,580	)		(1,828	)

Net realized gains	$	283,706		$	957,760

Aggregate proceeds	$	9,432,875		$	15,225,843

The aggregate amortized cost and market values of the investment securities portfolio by contractual maturity at December 31, 2013 are shown below:


	Amortized Cost		Fair Value
Due in one year or less	$	5,882,454	$	5,881,588
Due after one year through five years		15,851,356		15,785,063
Due after five through ten years		15,416,075		14,539,307
Due after ten years		2,572,003		2,316,038

	$	39,721,888	$	38,521,996

Securities with a market value of $12,891,507 and $8,123,132 at December 31, 2013 and 2012, respectively, were pledged as collateral for public deposits, repurchase agreements and for other purposes as required by law.

Securities in an unrealized loss position at December 31, 2013 and 2012, by duration of the unrealized loss, are shown below. With the exception of the auction rate security, the unrealized loss positions were directly related to interest rate movements as there is minimal credit risk exposure in these investments. All agency securities, states and municipal securities and certificates of deposit are investment grade or better and their losses are considered temporary. Management does not intend to sell the securities and does not expect to be required to sell the securities. All amortized cost bases are expected to be recovered. Bonds with unrealized loss positions at December 31, 2013 included 50 municipals, 14 U.S. treasuries and agencies and one federal agency. Bonds with unrealized loss positions at December 31, 2012 included three certificates of deposit, 10 municipal securities and two federal agency securities.


	Less than 12 months				12 months or more				Total
December 31, 2013	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government agencies	$	4,807,632	$	66,984	$	1,462,360	$	19,428	$	6,269,992	$	86,412
States and municipal obligations		14,255,426		1,120,034		2,305,821		122,392		16,561,247		1,242,426

Total temporarily impaired securities	$	19,063,058	$	1,187,018	$	3,768,181	$	141,820	$	22,831,239	$	1,328,838


	Less than 12 months				12 months or more				Total
December 31, 2012	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Government agencies	$	1,080,438	$	25,990	$	—	$	—	$	1,080,438	$	25,990
States and municipal obligations		2,863,106		37,731		1,037,825		6,371		3,900,931		44,102
Certificates of deposits		742,906		1,094		—		—		742,906		1,094

Total temporarily impaired securities	$	4,686,450	$	64,815	$	1,037,825	$	6,371	$	5,724,275	$	71,186

The following table summarizes cumulative credit-related other-than temporary impairment losses recognized on the one auction rate security held by the Company (no other-than-temporary-impairment was recognized for the year ended December 31, 2012):


	For the year ended
	December 31, 2013
Balance, beginning of the period	$	—
Impairment losses recognized during the period		288,000
Realized losses from sales		—

Balance, end of period	$	288,000

The Company holds one South Carolina Student Loan Corporation auction rate security with a face amount of $1.2 million. During the second quarter of 2013, the South Carolina Student Loan Corporation made a tender and exchange offer with regards to these auction rate securities with the provision that 50% of the security holders were required to accept the tender offer in order for it to be consummated. The tender offer was not accepted by the required 50% of security holders. As a result of the tender and exchange offer, the Company determined that the value of this auction rate security was other than temporarily impaired. The market value of the security was estimated based on Level 3 inputs (refer to Note 21). The Company recognized an other-than-temporary impairment charge of $288 thousand in income related to this security during 2013. In the first quarter of 2014, the Company sold this auction rate security for $912 thousand.

The Company’s investment in Federal Home Loan Bank of Atlanta (“FHLB”) stock totaled $1,079,800 and $1,146,600 at December 31, 2013 and 2012, respectively. The investment in FHLB stock is a required investment related to the Company’s membership with the FHLB. This investment is carried at cost since there is no ready market and redemptions have historically has been made at par. The Company does not consider this investment to be other-than-temporarily impaired at December 31, 2013 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.

The Company also had an investment in Federal Reserve Bank (“FRB”) stock which totaled $382 thousand and $262 thousand at December 31, 2013 and 2012, respectively. The investment in FRB stock is a required investment and is carried at cost since there is no ready market. The Company does not consider this investment to be other-than-temporarily impaired at December 31, 2013 and no impairment has been recognized. FRB stock is shown in the restricted securities line item on the consolidated balance sheets and is not part of the available-for-sale securities portfolio.