Note 3: Securities

The amortized cost and approximate fair values of securities classified as available-for-sale are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of September 30, 2011
Equity Securities	$	102,212	$	-	$	(49,503	)	$	52,709
Debt Securities:
U. S. government agencies		18,307,070		167,778		(7,995	)		18,466,853
Municipals		1,772,038		86,182		-			1,858,220
Government sponsored mortgage-backed securities		58,789,011		3,354,407		(7,361	)		62,136,057
	$	78,970,331	$	3,608,367	$	(64,859	)	$	82,513,839

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2010
Equity Securities	$	102,212	$	7,089	$	(31,381	)	$	77,920
Debt Securities:
U. S. government agencies		27,409,482		222,014		(128,414	)		27,503,082
Government sponsored mortgage-backed securities		66,407,555		2,865,745		(9,649	)		69,263,651
	$	93,919,249	$	3,094,848	$	(169,444	)	$	96,844,653

Maturities of available-for-sale debt securities as of September 30, 2011:

	Amortized Cost		Approximate Fair Value
1-5 years	$	17,307,070	$	17,466,698
6-10 years		1,000,000		1,000,155
Over 10 years		1,772,038		1,858,220
Government sponsored mortgage-backed securities not due on a single maturity date		58,789,011		62,136,057
	$	78,868,119	$	82,461,130

The amortized cost and approximate fair values of securities classified as held to maturity are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Approximate Fair Value
As of September 30, 2011
Debt Securities:
Government sponsored mortgage-backed securities	$	227,224	$	17,684	$	-	$	244,908
	$	227,224	$	17,684	$	-	$	244,908

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Approximate Fair Value
As of December 31, 2010
Debt Securities:
Government sponsored mortgage-backed securities	$	260,956	$	20,828	$	-	$	281,784
	$	260,956	$	20,828	$	-	$	281,784

Maturities of held-to-maturity securities as of September 30, 2011:

	Amortized Cost		Approximate Fair Value
Government sponsored mortgage-backed securities not due on a single maturity date	$	227,224	$	244,908
	$	227,224	$	244,908

The book value of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $71,297,476 and $60,631,261 as of September 30, 2011 and December 31, 2010, respectively. The approximate fair value of pledged securities amounted to $74,853,125 and $62,981,616 as of September 30, 2011 and December 31, 2010, respectively.

Realized gains and losses are recorded as net securities gains (losses). Gains and losses on sales of securities are determined on the specific identification method. Gross gains of $198,146 and $215,359 for the nine months ended September 30, 2011 and 2010, respectively, were realized from the sale of available-for-sale securities. The tax effect of these net gains was $73,314 and $79,683 for the nine months ended September 30, 2011 and 2010, respectively.

The Company evaluates all securities quarterly to determine if any unrealized losses are deemed to be other than temporary. Certain investment securities are valued at less than their historical cost. These declines are primarily the result of the rate for these investments yielding less than current market rates, or declines in stock prices of equity securities. Based on evaluation of available evidence, management believes the declines in fair value for these securities are temporary. It is management's intent to hold the debt securities to maturity or until recovery of the unrealized loss. Should the impairment of any of these debt securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified, to the extent the loss is related to credit issues, and to other comprehensive income to the extent the decline on debt securities is related to other factors and the Company does not intend to sell the security prior to recovery of the unrealized loss.

Certain other investments in debt and equity securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at September 30, 2011 and December 31, 2010, was $5,951,456 and $5,386,231, respectively, which is approximately 7% and 6%, respectively, of the Company's investment portfolio. These declines primarily resulted from changes in market interest rates and failure of certain investments to meet projected earnings targets.

The following table shows gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2011 and December 31, 2010.

	September 30, 2011

	Less than 12 Months					12 Months or More					Total

Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses

Equity Securities	$	23,358	$	(7,319	)	$	29,350	$	(42,184	)	$	52,708	$	(49,503	)
U. S. government agencies		992,005		(7,995	)		-		-			992,005		(7,995	)
Government sponsored mortgage-backed securities		4,906,743		(7,361	)		-		-			4,906,743		(7,361	)
	$	5,922,106	$	(22,675	)	$	29,350	$	(42,184	)	$	5,951,456	$	(64,859	)

	December 31, 2010

	Less than 12 Months					12 Months or More					Total

Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses

Equity Securities	$	-	$	-		$	40,153	$	(31,381	)	$	40,153	$	(31,381	)
U. S. government agencies		4,374,049		(128,414	)		-		-			4,374,049		(128,414	)
Government sponsored mortgage-backed securities		972,029		(9,649	)		-		-			972,029		(9,649	)
	$	5,346,078	$	(138,063	)	$	40,153	$	(31,381	)	$	5,386,231	$	(169,444	)