XML 29 R10.htm IDEA: XBRL DOCUMENT v2.4.0.6
Securities
 3 Months Ended
Mar. 31, 2012
Investments, Debt and Equity Securities [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 3. Securities

 

The amortized cost and fair value of securities available-for-sale and held-to-maturity at March 31, 2012 and December 31, 2011 are summarized as follows:

 

    March 31, 2012  
          Gross     Gross        
    Amortized     Unrealized     Unrealized     Fair  
Debt securities available-for-sale:   Cost     Gains     Losses     Value  
U.S. Government agencies   $ 4,110,466     $ 13,552     $ -     $ 4,124,018  
                                 
State and municipal securities     22,586,186       1,534,934       (38,139 )     24,082,981  
                                 
Mortgage-backed securities:                                
Residential mortgage guaranteed by GNMA     11,193,727       160,500       (3,020 )     11,351,207  
                                 
Collateralized mortgage obligations issued or guaranteed by U.S. Government agencies or sponsored agencies     48,597,186       96,095       (1,891 )     48,691,390  
                                 
    $ 86,487,565     $ 1,805,081     $ (43,050 )   $ 88,249,596  
                                 
Debt securities held to maturity:                                
Mortgage-backed securities:                                
Residential mortgage guaranteed by GNMA   $ 63,410     $ 1,660     $ -     $ 64,970  

 

    December 31, 2011  
          Gross     Gross        
    Amortized     Unrealized     Unrealized     Fair  
Debt securities available-for-sale:   Cost     Gains     Losses     Value  
U.S. Government agencies   $ 4,176,301     $ 13,978     $ -     $ 4,190,279  
                                 
State and municipal securities     22,902,892       1,584,284       (50,919 )     24,436,257  
                                 
Mortgage-backed securities:                                
Residential mortgage guaranteed by GNMA     11,723,499       150,767       (3,096 )     11,871,170  
                                 
Collateralized mortgage obligations issued or guaranteed by U.S. Government agencies or sponsored agencies     45,431,456       131,215       (2,940 )     45,559,731  
                                 
    $ 84,234,148     $ 1,880,244     $ (56,955 )   $ 86,057,437  
                                 
Debt securities held to maturity:                                
Mortgage-backed securities:                                
Residential mortgage guaranteed by GNMA   $ 68,643     $ 1,841     $ -     $ 70,484  

 

At March 31, 2012, securities with a fair value totaling approximately $ 80 million were pledged to secure public funds, securities sold under agreements to repurchase, the Federal Home Loan Bank (sometimes referred to herein as “FHLB”) as collateral for the Bank’s borrowings, as collateral for federal funds purchased from other financial institutions and serve as collateral for borrowings at the Federal Reserve Discount Window.

 

The amortized cost and estimated market value of securities at March 31, 2012, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

    Securities Available-for-Sale     Securities Held to Maturity  
    Amortized     Fair     Amortized     Fair  
    Cost     Value     Cost     Value  
Due in one year or less   $ 300,000     $ 300,249     $ -     $ -  
Due from one year to five years     874,058       972,828       -       -  
Due from five years to ten years     5,368,718       5,767,715       -       -  
Due after ten years     20,153,876       21,166,207       -       -  
    26,696,652     28,206,999       -       -  
                                 
Mortgage-backed securities     59,790,913       60,042,597       63,410       65,070  
                                 
    $ 86,487,565     $ 88,249,596     $ 63,410     $ 65,070  

  

The following tables present the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities available for sale have been in a continuous unrealized loss position, as of March 31, 2012 and as of December 31, 2011:

 

    As of March 31, 2012  
    Less than 12 Months     12 Months or Greater     Total  
          Gross           Gross           Gross  
    Fair     Unrealized     Fair     Unrealized     Fair     Unrealized  
    Value     Losses     Value     Losses     Value     Losses  
Debt securities available for sale:                                                
State and municipal securities   $ 1,203,220     $ (38,139 )   $ -     $ -     $ 1,203,220     $ (38,139 )
                                                 
Mortgage-backed securities:                                                
Residential mortgage guaranteed by GNMA     -       -       2,190,117       (3,020 )     2,190,117       (3,020 )
                                                 
Collateralized mortgage obligations issued or guaranteed by U.S. Government agencies or sponsored agencies     -       -       5,368,357       (1,891 )     5,368,357       (1,891 )
    $ 1,203,220     $ (31,139 )   $ 7,558,474     $ (4,911 )   $ 8,761,694     $ (43,050 )

 

    As of December 31, 2011  
    Less than 12 Months     12 Months or Greater     Total  
          Gross           Gross           Gross  
    Fair     Unrealized     Fair     Unrealized     Fair     Unrealized  
    Value     Losses     Value     Losses     Value     Losses  
Debt securities available for sale:                                                
State and municipal securities   $ 1,735,771     $ (50,919 )   $ -     $ -     $ 1,735,771     $ (50,919 )
                                                 
Mortgage-backed securities:                                                
Residential mortgage guaranteed by GNMA     -       -       3,133,826       (3,096 )     3,133,826       (3,096 )
                                                 
Collateralized mortgage obligations issued or guaranteed by U.S. Government agencies or sponsored agencies     -       -       6,954,999       (2,939 )     6,954,999       (2,940 )
    $ 1,735,771     $ (50,919 )   $ 10,088,825     $ (6,036 )   $ 11,824,596     $ (56,955 )

  

Upon acquisition of a security, the Bank determines the appropriate impairment model that is applicable.  If the security is a beneficial interest in securitized financial assets, the Bank uses the beneficial interests in securitized financial assets impairment model.  If the security is not a beneficial interest in securitized financial assets, the Bank uses the debt and equity securities impairment model.  The Bank conducts periodic reviews to evaluate each security to determine whether an other-than-temporary impairment has occurred.  The Bank does not have any securities that have been classified as other-than-temporarily-impaired at March 31, 2012 or December 31, 2011.

 

At March 31, 2012 and December 31, 2011, the significant categories of temporarily impaired securities, and management’s evaluation of those securities are as follows:

 

State and municipal securities: At March 31, 2012, two investments in obligations of state and municipal securities had unrealized losses. The Bank believes the unrealized losses on those investments were caused by the interest rate environment and does not relate to the underlying credit quality of the issuers. Because the Bank has the intent and ability to hold those investments for a time necessary to recover their amortized cost bases, which may be maturity, the Bank does not consider those investments to be other-than-temporarily impaired at March 31, 2012.

 

Mortgage-backed securities: At March 31, 2012, five investments in residential mortgage-backed securities had unrealized losses.  This impairment is believed to be caused by the current interest rate environment.  The contractual cash flows of those investments are guaranteed or issued by an agency of the U.S. Government.  Because the decline in market value is attributable to the current interest rate environment and not credit quality, and because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Bank does not deem those investments to be other-than-temporarily impaired at March 31, 2012.