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Securities
 3 Months Ended
Mar. 31, 2014
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, 2014 and December 31, 2013 are summarized as follows:
 
 
March 31, 2014
 
 
 
 
 
 
 
 
Gross
 
 
 
Gross
 
 
 
 
 
 
 
 
Amortized
 
 
 
Unrealized
 
 
 
Unrealized
 
 
 
Fair
 
Debt securities available-for-sale:
 
 
Cost
 
 
 
Gains
 
 
 
Losses
 
 
 
Value
 
    U.S. Government agencies
 
$
3,141,775
 
 
$
28,754
 
 
$
-
 
 
$
3,170,529
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    State and municipal securities
 
 
14,086,653
 
 
 
549,076
 
 
 
(50,345
)
 
 
14,585,384
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Residential mortgage guaranteed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        by GNMA or FNMA
 
 
5,431,068
 
 
 
41,836
 
 
 
-
 
 
 
5,472,904
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations issued
or guaranteed by U.S. Government agencies or sponsored agencies
 
 
65,257,603
 
 
 
499,110
 
 
 
(184,178
)
 
 
65,572,535
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
87,917,099
 
 
$
1,118,776
 
 
$
(234,523
)
 
$
88,801,352
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Residential mortgage guaranteed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         by GNMA or FNMA
 
$
32,618
 
 
$
899
 
 
$
-
 
 
$
33,517
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
Gross
 
 
 
Gross
 
 
 
 
 
 
 
 
Amortized
 
 
 
Unrealized
 
 
 
Unrealized
 
 
 
Fair
 
Debt securities available-for-sale:
 
 
Cost
 
 
 
Gains
 
 
 
Losses
 
 
 
Value
 
    U.S. Government agencies
 
$
3,433,216
 
 
$
48,119
 
 
$
-
 
 
$
3,481,335
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    State and municipal securities
 
 
14,908,761
 
 
 
425,021
 
 
 
(84,544
)
 
 
15,249,238
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       Residential mortgage guaranteed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       by GNMA or FNMA
 
 
7,047,076
 
 
 
85,203
 
 
 
-
 
 
 
7,132,279
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations issued
or guaranteed by U.S. Government agencies
or sponsored agencies
 
 
66,408,975
 
 
 
205,025
 
 
 
(268,180
)
 
 
66,345,820
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
91,798,028
 
 
$
763,368
 
 
$
(352,724
)
 
$
92,208,672
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       Residential mortgage guaranteed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       by GNMA or FNMA
 
$
34,165
 
 
$
862
 
 
$
-
 
 
$
35,027
 
 
At March 31, 2014, securities with a fair value totaling approximately $ 74 million were pledged to secure public funds, securities sold under agreements to repurchase, as collateral for federal funds purchased from other financial institutions and serve as collateral for borrowings at the Federal Reserve Discount Window and Federal Home Loan Bank.
 
For the three months ended March 31, 2014, there were available-for-sale securities sold with proceeds totaling $2,415,068 which resulted in gross gains realized of $102,272. There were no securities sales for the three months ended March 31, 2013.
 
The amortized cost and estimated market value of securities at March 31, 2014, 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
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
Due from one year to five years
 
 
1,265,880
 
 
 
1,329,826
 
 
 
-
 
 
 
-
 
Due from five years to ten years
 
 
3,997,177
 
 
 
4,183,977
 
 
 
-
 
 
 
-
 
Due after ten years
 
 
11,965,371
 
 
 
12,242,110
 
 
 
-
 
 
 
-
 
 
 
 
17,228,428
 
 
 
17,755,913
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
 
70,688,671
 
 
 
71,045,439
 
 
 
32,618
 
 
 
33,517
 
 
 
$
87,917,099
 
 
$
88,801,352
 
 
$
32,618
 
 
$
33,517
 
 
 
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, 2014 and as of December 31, 2013:
 
 
 
As of March 31, 2014
 
 
 
Less than 12 Months
 
 
12 Months or Greater
 
 
Total
 
 
 
 
 
 
 
 
Gross
 
 
 
 
 
 
 
Gross
 
 
 
 
 
 
 
Gross
 
 
 
 
Fair
 
 
 
Unrealized
 
 
 
Fair
 
 
 
Unrealized
 
 
 
Fair
 
 
 
Unrealized
 
 
 
 
Value
 
 
 
Losses
 
 
 
Value
 
 
 
Losses
 
 
 
Value
 
 
 
Losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
 
$
2,298,591
 
 
$
(50,345
)
 
$
-
 
 
$
-
 
 
$
2,298,591
 
 
$
(50,345
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations issued or guaranteed by U.S. Government agencies or sponsored agencies
 
 
13,081,188
 
 
 
(66,243
)
 
 
13,834,593
 
 
 
(117,935
)
 
 
26,915,781
 
 
 
(184,178
)
 
 
$
15,379,779
 
 
$
(116,588
)
 
$
13,834,593
 
 
$
(117,935
)
 
$
29,214,372
 
 
$
(234,523
)
 
 
 
As of December 31, 2013
 
 
 
Less than 12 Months
 
 
12 Months or Greater
 
 
Total
 
 
 
 
 
 
 
 
Gross
 
 
 
 
 
 
 
Gross
 
 
 
 
 
 
 
Gross
 
 
 
 
Fair
 
 
 
Unrealized
 
 
 
Fair
 
 
 
Unrealized
 
 
 
Fair
 
 
 
Unrealized
 
 
 
 
Value
 
 
 
Losses
 
 
 
Value
 
 
 
Losses
 
 
 
Value
 
 
 
Losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  State and municipal securities
 
$
3,025,250
 
 
$
(84,544
)
 
$
-
 
 
$
-
 
 
$
3,025,250
 
 
$
(84,544
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations issued or guaranteed by U.S. Government agencies or sponsored agencies
 
 
27,782,942
 
 
 
(221,827
)
 
 
8,761,049
 
 
 
(46,353
)
 
 
36,543,991
 
 
 
(268,180
)
 
 
$
30,808,192
 
 
$
(306,371
)
 
$
8,761,049
 
 
$
(46,353
)
 
$
39,569,241
 
 
$
(352,724
)
 
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, 2014 or December 31, 2013.
 
At March 31, 2014 and December 31, 2013, the categories of temporarily impaired securities, and management’s evaluation of those securities are as follows:
 
 
 
State and municipal securities: At March 31, 2014, five 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 do 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 until maturity, the Bank does not consider those investments to be other-than-temporarily impaired at March 31, 2014.
 
Mortgage-backed securities: At March 31, 2014, nine 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, 2014.