10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

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

For the quarterly period ended September 30, 2013 _______________________________________________

or

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

For the transition period from ____________________________ to ________________________

Commission File Number:  000-51166

Community Shores Bank Corporation

(Exact name of registration as specified in its charter)

Michigan	38-3423227
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1030 W. Norton Avenue, Muskegon, MI	49441
(Address of principal executive offices)	(Zip Code)

(231) 780-1800

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

¨ Yes x 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company x
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

¨ Yes x No

At November 1, 2013, 1,468,800 shares of common stock were outstanding.

EXPLANATORY NOTE

The purpose of this Amendment No. 1 on Form 10-Q/A is to amend the Quarterly Report on Form 10-Q of Community Shores Bank Corporation for the quarterly period ended September 30, 2013 (the “Form 10-Q”), as filed with the Securities and Exchange Commission (the “SEC”) on November 13, 2013, for the sole purpose of furnishing the Interactive Data Files as Exhibit 101 in accordance with Rule 405 of Regulation S-T. Exhibit 101 provides the financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).

No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q continue to speak as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the Form 10-Q.

 ITEM 6. EXHIBITS

EXHIBIT NO.	EXHIBIT DESCRIPTION
31.1	Rule 13a-14(a) Certification of the principal executive officer.
31.2	Rule 13a-14(a) Certification of the principal financial officer.
32.1	Section 1350 Chief Executive Officer Certification.
32.2	Section 1350 Chief Financial Officer Certification.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.DEF	XBRL Taxonomy Extension Definition
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

2

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.

	COMMUNITY SHORES BANK CORPORATION
May 15, 2015	By:	/s/ Heather D. Brolick
Date	Heather D. Brolick
	President and Chief Executive Officer
	(principal executive officer)
May 15, 2015	By:	/s/ Tracey A. Welsh
Date	Tracey A. Welsh
	Senior Vice President, Chief Financial Officer and Treasurer
	(principal financial and accounting officer)

3

EX-31.1

Exhibit 31.1

RULE 13a-14(a) CERTIFICATION

I, Heather D. Brolick, President and Chief Executive Officer of Community Shores Bank Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Community Shores Bank Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:      May 15, 2015	/s/ Heather D. Brolick
	Heather D. Brolick
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

RULE 13a-14(a) CERTIFICATION

I, Tracey A. Welsh, Senior Vice President, Chief Financial Officer and Treasurer of Community Shores Bank Corporation, certify that:

1. I have reviewed this report on Form 10-Q of Community Shores Bank Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:     May 15, 2015	/s/ Tracey A. Welsh
	Tracey A. Welsh
	Senior Vice President, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the quarterly report on Form 10-Q for the quarter ended September 30, 2013 (the "Form 10-Q") of Community Shores Bank Corporation (the "Issuer").

I, Heather D. Brolick, President and Chief Executive Officer of the Issuer, certify that to my knowledge:

(i) the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Dated: May 15, 2015
	/s/ Heather D. Brolick
	Heather D. Brolick
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the quarterly report on Form 10-Q for the quarter ended September 30, 2013 (the "Form 10-Q") of Community Shores Bank Corporation (the "Issuer").

I, Tracey A. Welsh, Senior Vice President, Chief Financial Officer and Treasurer of the Issuer, certify that to my knowledge:

(i) the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Dated: May 15, 2015
	/s/ Tracey A. Welsh
	Tracey A. Welsh
	Senior Vice President, Chief Financial Officer and Treasurer

XML

LOANS (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Loans and Leases Receivable Disclosure [Abstract]
Net deferred loan fees	$ (57,759)	$ (55,642)
Loans	128,547,253	125,830,250
Less: Allowance for loan losses	(2,870,036)	(3,382,977)
Net loans	125,677,217	122,447,273
Commercial Portfolio Segment [Member]
Loans and Leases Receivable Disclosure [Abstract]
Net deferred loan fees	43,596,519	39,915,144
Commercial Real Estate Portfolio Segment [Member]
Loans and Leases Receivable Disclosure [Abstract]
Loans	56,402,659	53,096,828
Commercial Real Estate Construction Financing Receivable [Member]
Loans and Leases Receivable Disclosure [Abstract]
Loans	2,094,988	3,464,366
Consumer Line of Credit [Member]
Loans and Leases Receivable Disclosure [Abstract]
Loans	8,291,775	9,105,387
Consumer Other Financing Receivable [Member]
Loans and Leases Receivable Disclosure [Abstract]
Loans	1,669,427	2,015,234
Consumer Credit Card Financing Receivable [Member]
Loans and Leases Receivable Disclosure [Abstract]
Loans	470,836	490,802
Residential Portfolio Segment [Member]
Loans and Leases Receivable Disclosure [Abstract]
Loans	$ 16,078,808	$ 17,798,131

XML

NOTES PAYABLE (Details Textual) (USD $)	3 Months Ended	1 Months Ended
	Mar. 31, 2013	Mar. 20, 2013	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Notes Payable			$ 1,280,000	$ 5,000,000
Debt Instrument, Interest Rate, Stated Percentage				6.00%
Interest Payable, Current				763,000
Gain (Loss) on Non-Recourse Debt	5,300,000
Stockholders' Equity Attributable to Parent	4,000,000		3,770,359	(1,239,096)	(1,149,542)	(1,420,382)
Senior Notes [Member]
Notes Payable		1,280,000
Repayments of Debt		500,000
Debt Instrument, Interest Rate, Stated Percentage		8.00%
Debt Instrument, Maturity Date		Mar. 31, 2015
Interest Payable, Current			$ 26,000

XML

PREMISES AND EQUIPMENT (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Land & land improvements	$ 4,700,464	$ 4,700,464
Buildings & building improvements	6,148,829	6,132,163
Furniture, fixtures and equipment	3,839,270	3,800,460
Property, Plant and Equipment, Gross	14,688,563	14,633,087
Less: accumulated depreciation	5,520,211	5,212,201
Property, Plant and Equipment, Net	$ 9,168,352	$ 9,420,886

XML

COMMITMENTS AND OFF-BALANCE SHEET RISK (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Unused lines of credit and letters of credit [Member]
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability	$ 25,064,561	$ 22,817,615
Commitments to make loans [Member]
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability	$ 453,935	$ 253,000

XML

ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS (Details Textual) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Allowance for Credit Losses, Change in Method of Calculating Impairment	$ 1,537,738		$ 1,699,851
Receivables, Change in Method of Calculating Impairment, Recorded Investment	8,361,469		10,441,218
Additional Allowance for Credit Losses Change in Method of Calculating Impairment	38,913	50,000
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	9,711	638,000
Financing Receivable, Credit Quality, Additional Information	All commercial and commercial real estate loans exceeding $500,000 are formally reviewed at least annually. Once a loan is graded a 5M or greater number, and is over $100,000, the loan grade will be reanalyzed once a quarter to assess the borrowers compliance with the Banks documented action plan
Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowance for Credit Losses, Change in Method of Calculating Impairment	$ 181,503		$ 184,364

XML

REGULATORY MATTERS (Tables)

9 Months Ended

Sep. 30, 2013

Regulatory Capital Requirements [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

Actual capital amounts and ratios for the Bank and required capital amounts and ratios for the Bank to be adequately capitalized and to be at the level mandated by the Consent Order at September 30, 2013 and December 31, 2012 were:

						Minimum Required					Minimum Required
						For Capital					Under
	Actual					Adequacy Purposes					Consent Order
	Amount		Ratio			Amount		Ratio			Amount		Ratio
September 30, 2013
Total Capital (Tier 1 and
Tier 2) to risk-weighted assets of the Bank	$	11,305,260		8.46	%	$	10,688,585		8.00	%	$	14,696,805		11.00	%
Tier 1 (Core) Capital to risk-weighted assets of the Bank		9,620,354		7.20			5,344,293		4.00			N/A		N/A
Tier 1 (Core) Capital to average assets of the Bank		9,620,354		5.06			7,602,012		4.00			16,154,276		8.50

						Minimum Required					Minimum Required
						For Capital					Under
	Actual					Adequacy Purposes					Consent Order
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2012
Total Capital (Tier 1 and Tier 2) to risk-weighted assets of the Bank	$	10,760,348		7.88	%	$	10,928,836		8.00	%	$	15,027,149	11.00	%
Tier 1 (Core) Capital to risk-weighted assets of the Bank		9,032,034		6.61			5,464,418		4.00			N/A	N/A
Tier 1 (Core) Capital to average assets of the Bank		9,032,034		4.53			7,976,194		4.00			16,949,413	8.50

XML

FAIR VALUE MEASUREMENTS (Details 1) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 114,334	$ 1,011,306
Foreclosed assets:	323,184	521,738
Consumer Other Financing Receivable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	52,612
Consumer Residential Portfolio Segment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	61,722
Commercial Portfolio Segment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		84,755
Commercial Real Estate Portfolio Segment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		786,282
Foreclosed assets:	267,390	141,596
Residential Portfolio Segment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		140,269
Foreclosed assets:	55,794
Commercial Real Estate Construction Financing Receivable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreclosed assets:		380,142
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	114,334	1,011,306
Foreclosed assets:	323,184	521,738
Fair Value, Inputs, Level 3 [Member] | Consumer Other Financing Receivable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	52,612
Fair Value, Inputs, Level 3 [Member] | Consumer Residential Portfolio Segment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	61,722
Fair Value, Inputs, Level 3 [Member] | Commercial Portfolio Segment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		84,755
Fair Value, Inputs, Level 3 [Member] | Commercial Real Estate Portfolio Segment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		786,282
Foreclosed assets:	267,390	141,596
Fair Value, Inputs, Level 3 [Member] | Residential Portfolio Segment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		140,269
Foreclosed assets:	55,794
Fair Value, Inputs, Level 3 [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreclosed assets:		$ 380,142

XML

LOANS (Tables)

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

Outstanding loan balances by portfolio segment and class were as follows:

	September 30, 2013		December 31, 2012
Commercial	$	43,596,519	$	39,915,144
Commercial Real Estate:
General		56,402,659		53,096,828
Construction		2,094,988		3,464,366
Consumer:
Lines of credit		8,291,775		9,105,387
Other		1,669,427		2,015,234
Credit card		470,836		490,802
Residential		16,078,808		17,798,131
Net deferred loan fees		(57,759)		(55,642)
		128,547,253		125,830,250
Less: Allowance for loan losses		(2,870,036)		(3,382,977)
Loans, net	$	125,677,217	$	122,447,273

XML

DEPOSITS (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Non-interest-bearing DDA	$ 31,700,054	$ 40,271,190
Interest-bearing DDA	25,738,324	22,865,704
Money market	21,524,818	18,602,302
Savings	8,157,419	9,018,387
Time, under $100,000	66,976,766	83,416,175
Time, over $100,000	9,471,078	10,002,735
Total Deposits	$ 163,568,459	$ 184,176,493

XML

ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS (Details 2) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
With an related allowance recorded, Related Allowance	$ 0		$ 0		$ 1,382,905
Nonperforming Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average Recorded Investment	9,345,988	12,974,508	9,688,033	13,572,067
Interest Income Recognized	75,675	90,782	237,917	245,097
Cash Basis Interest Recognized	71,218	79,574	230,040	197,276
Performing Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With an related allowance recorded, Recorded Investment	9,305,129		9,305,129		11,715,696
With an related allowance recorded, Unpaid Principal Balance	9,868,380		9,868,380		12,006,477
With an related allowance recorded, Related Allowance	1,574,433		1,574,433		1,810,376
Commercial Portfolio Segment [Member] | Nonperforming Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Average Recorded Investment	1,104,010	2,374,733	1,406,983	2,496,173
With no related allowance recorded, Interest Income Recognized	7,911	13,665	28,936	40,811
With no related allowance recorded, Cash Basis Interest Recognized	5,315	13,665	26,460	40,696
With an related allowance recorded, Average Recorded Investment	133,788	1,186,175	326,595	1,595,863
With an related allowance recorded, Interest Income Recognized	1,493	9,981	13,895	30,009
With an related allowance recorded, Cash Basis Interest Recognized	1,493	9,276	13,540	26,306
Commercial Portfolio Segment [Member] | Performing Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Recorded Investment	1,122,429		1,122,429		2,147,075
With no related allowance recorded, Unpaid Principal Balance	1,258,174		1,258,174		2,295,401
With an related allowance recorded, Recorded Investment	103,802		103,802		1,141,219
With an related allowance recorded, Unpaid Principal Balance	103,343		103,343		1,139,885
With an related allowance recorded, Related Allowance	31,938		31,938		104,727
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Average Recorded Investment	2,343,382	3,328,040	2,369,993	2,665,005
With no related allowance recorded, Interest Income Recognized	26,440	27,030	78,459	39,906
With no related allowance recorded, Cash Basis Interest Recognized	26,440	18,288	78,459	31,214
With an related allowance recorded, Average Recorded Investment	4,513,623	2,922,193	4,517,192	3,448,840
With an related allowance recorded, Interest Income Recognized	30,960	33,091	92,370	111,506
With an related allowance recorded, Cash Basis Interest Recognized	30,960	32,866	92,370	80,952
Commercial Real Estate Portfolio Segment [Member] | Performing Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Recorded Investment	2,472,673		2,472,673		2,662,984
With no related allowance recorded, Unpaid Principal Balance	2,504,385		2,504,385		2,739,027
With an related allowance recorded, Recorded Investment	4,438,690		4,438,690		4,659,866
With an related allowance recorded, Unpaid Principal Balance	4,438,407		4,438,407		4,675,981
With an related allowance recorded, Related Allowance	1,319,242		1,319,242		1,489,569
Commercial Real Estate Construction Financing Receivable [Member] | Nonperforming Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Average Recorded Investment	0	61,223	0	223,032
With no related allowance recorded, Interest Income Recognized	0	0	0	0
With no related allowance recorded, Cash Basis Interest Recognized	0	0	0	0
With an related allowance recorded, Average Recorded Investment	0	1,960,467	0	1,988,734
With an related allowance recorded, Interest Income Recognized	0	0	0	0
With an related allowance recorded, Cash Basis Interest Recognized	0	0	0	0
Commercial Real Estate Construction Financing Receivable [Member] | Performing Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Recorded Investment	0		0		0
With no related allowance recorded, Unpaid Principal Balance	0		0		0
With an related allowance recorded, Recorded Investment	0		0		0
With an related allowance recorded, Unpaid Principal Balance	0		0		0
With an related allowance recorded, Related Allowance	0		0		0
Consumer Line of Credit [Member] | Nonperforming Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Average Recorded Investment	7,159	41,072	60,136	47,143
With no related allowance recorded, Interest Income Recognized	0	1,966	0	8,752
With no related allowance recorded, Cash Basis Interest Recognized	0	995	0	4,814
With an related allowance recorded, Average Recorded Investment	286,416	162,470	183,031	187,926
With an related allowance recorded, Interest Income Recognized	2,953	1,054	6,696	2,777
With an related allowance recorded, Cash Basis Interest Recognized	2,296	871	5,141	2,594
Consumer Line of Credit [Member] | Performing Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Recorded Investment	9,800		9,800		55,659
With no related allowance recorded, Unpaid Principal Balance	157,584		157,584		55,524
With an related allowance recorded, Recorded Investment	197,628		197,628		135,111
With an related allowance recorded, Unpaid Principal Balance	196,715		196,715		134,976
With an related allowance recorded, Related Allowance	127,124		127,124		40,180
Consumer Other Financing Receivable [Member] | Nonperforming Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Average Recorded Investment	42,295	15,557	26,438	18,796
With no related allowance recorded, Interest Income Recognized	0	71	0	106
With no related allowance recorded, Cash Basis Interest Recognized	0	0	0	0
With an related allowance recorded, Average Recorded Investment	62,352	119,951	92,557	113,378
With an related allowance recorded, Interest Income Recognized	476	611	1,411	1,572
With an related allowance recorded, Cash Basis Interest Recognized	474	484	1,411	1,447
Consumer Other Financing Receivable [Member] | Performing Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Recorded Investment	58,369		58,369		26,221
With no related allowance recorded, Unpaid Principal Balance	73,870		73,870		26,221
With an related allowance recorded, Recorded Investment	40,229		40,229		104,829
With an related allowance recorded, Unpaid Principal Balance	40,071		40,071		104,664
With an related allowance recorded, Related Allowance	20,768		20,768		48,870
Consumer Credit Card Financing Receivable [Member] | Nonperforming Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Average Recorded Investment	0	0	0	0
With no related allowance recorded, Interest Income Recognized	0	0	0	0
With no related allowance recorded, Cash Basis Interest Recognized	0	0	0	0
With an related allowance recorded, Average Recorded Investment	0	3,248	299	1,317
With an related allowance recorded, Interest Income Recognized	0	0	0	0
With an related allowance recorded, Cash Basis Interest Recognized	0	0	0	0
Consumer Credit Card Financing Receivable [Member] | Performing Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Recorded Investment	0		0		0
With no related allowance recorded, Unpaid Principal Balance	0		0		0
With an related allowance recorded, Recorded Investment	0		0		0
With an related allowance recorded, Unpaid Principal Balance	0		0		0
With an related allowance recorded, Related Allowance	0		0		0
Residential Portfolio Segment [Member] | Nonperforming Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Average Recorded Investment	292,817	358,875	191,531	285,696
With no related allowance recorded, Interest Income Recognized	563	0	1,671	0
With no related allowance recorded, Cash Basis Interest Recognized	563	0	1,671	0
With an related allowance recorded, Average Recorded Investment	560,146	440,504	513,278	500,164
With an related allowance recorded, Interest Income Recognized	4,879	3,313	14,479	9,658
With an related allowance recorded, Cash Basis Interest Recognized	3,677	3,129	10,988	9,253
Residential Portfolio Segment [Member] | Performing Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Recorded Investment	461,646		461,646		208,178
With no related allowance recorded, Unpaid Principal Balance	687,718		687,718		240,491
With an related allowance recorded, Recorded Investment	399,863		399,863		574,554
With an related allowance recorded, Unpaid Principal Balance	408,113		408,113		594,307
With an related allowance recorded, Related Allowance	75,361		75,361		127,030
Sub Total [Member] | Nonperforming Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Average Recorded Investment	3,789,663	6,179,500	4,055,081	5,735,845
With no related allowance recorded, Interest Income Recognized	34,914	42,732	109,066	89,575
With no related allowance recorded, Cash Basis Interest Recognized	32,318	32,948	106,590	76,724
With an related allowance recorded, Average Recorded Investment	5,556,325	6,795,008	5,632,952	7,836,222
With an related allowance recorded, Interest Income Recognized	40,761	48,050	128,851	155,522
With an related allowance recorded, Cash Basis Interest Recognized	38,900	46,626	123,450	120,552
Sub Total [Member] | Performing Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
With no related allowance recorded, Recorded Investment	4,124,917		4,124,917		5,100,117
With no related allowance recorded, Unpaid Principal Balance	4,681,731		4,681,731		5,356,664
With an related allowance recorded, Recorded Investment	5,180,212		5,180,212		6,615,579
With an related allowance recorded, Unpaid Principal Balance	5,186,649		5,186,649		6,649,813
With an related allowance recorded, Related Allowance	$ 1,574,433		$ 1,574,433		$ 1,810,376

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SECURITIES AVAILABLE FOR SALE (Details 2) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	$ 9,702,680	$ 6,933,005
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(185,384)	(26,203)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	1,058,476	269,692
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(33,005)	(9,798)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	10,761,156	7,202,697
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	(218,389)	(36,001)
US Government and federal agency [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	3,999,792	3,050,187
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(43,990)	(4,623)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	3,999,792	3,050,187
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	(43,990)	(4,623)
Mortgage-backed and collateralized mortgage obligations - residential [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	5,702,888	3,882,818
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(141,394)	(21,580)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	1,058,476	269,692
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(33,005)	(9,798)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	6,761,364	4,152,510
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	$ (174,399)	$ (31,378)

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FEDERAL HOME LOAN BANK BORROWINGS (Details Textual) (USD $)	Sep. 30, 2013
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available	$ 2,839,659
Residential Portfolio Segment [Member]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	$ 3,549,574

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INCOME TAXES (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Tax [Line Items]
Income Tax Expense (Benefit)	$ 0	$ 0	$ 105,000	$ 0
Operating Loss Carryforwards	5,300,000		5,300,000
Deferred Tax Assets, Operating Loss Carryforwards	$ 6,000,000		$ 6,000,000

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FORECLOSED ASSETS (Details) (Foreclosed Assets [Member], USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Foreclosed Assets [Member]
Beginning of year	$ 2,806,781	$ 3,276,838
Additions	614,485	1,243,347
Reductions from sales	(593,498)	(1,249,206)
Direct write-downs	(141,531)	(277,448)
End of period	2,686,237	2,993,531
Expenses related to foreclosed assets include:
Operating expenses, net of rental income	$ 189,268	$ 199,278

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SECURITIES AVAILABLE FOR SALE

9 Months Ended

Sep. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

2. SECURITIES AVAILABLE FOR SALE

The following tables represent the securities held in the Company’s portfolio at September 30, 2013 and at December 31, 2012:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
September 30, 2013	Cost		Gains		Losses		Value
US Treasury	$	3,029,943	$	22,166	$	0	$	3,052,109
US Government and federal agency		16,867,009		119,983		(43,990)		16,943,002
Municipals		1,565,075		33,077		0		1,598,152
Mortgage-backed and collateralized mortgage obligations– residential		11,931,575		150,175		(174,399)		11,907,351
	$	33,393,602	$	325,401	$	(218,389)	$	33,500,614

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2012	Cost		Gains		Losses		Value
US Treasury	$	4,044,909	$	49,623	$	0	$	4,094,532
US Government and federal agency		20,013,843		250,523		(4,623)		20,259,743
Municipals		2,260,272		73,469		0		2,333,741
Mortgage-backed and collateralized
mortgage obligations– residential		14,539,668		264,090		(31,378)		14,772,380
	$	40,858,692	$	637,705	$	(36,001)	$	41,460,396

The amortized cost and fair value of the securities portfolio are shown by expected maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment fees. Below is the schedule of contractual maturities for securities held at September 30, 2013:

	Amortized		Fair
	Cost		Value
Due in one year or less	$	5,024,323	$	5,056,320
Due from one to five years		16,085,877		16,175,309
Due from five to ten years		351,827		361,634
Due in more than ten years		0		0
Mortgage-backed and collateralized mortgage obligations – residential		11,931,575		11,907,351
	$	33,393,602	$	33,500,614

Below is the table of securities with unrealized losses, aggregated by investment category and length of time such securities were in an unrealized loss position at September 30, 2013 and December 31, 2012:

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
September 30, 2013	Value		Losses		Value		Losses		Value		Losses
US Government and federal agency	$	3,999,792	$	(43,990)	$	0	$	0	$	3,999,792	$	(43,990)
Mortgage-backed and collateralized mortgage obligations - residential		5,702,888		(141,394)		1,058,476		(33,005)		6,761,364		(174,399)
	$	9,702,680	$	(185,384)	$	1,058,476	$	(33,005)	$	10,761,156	$	(218,389)

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2012	Value		Losses		Value		Losses		Value		Losses
US Government and federal agency	$	3,050,187	$	(4,623)	$	0	$	0	$	3,050,187	$	(4,623)
Mortgage-backed and collateralized mortgage obligations - residential		3,882,818		(21,580)		269,692		(9,798)		4,152,510		(31,378)
	$	6,933,005	$	(26,203)	$	269,692	$	(9,798)	$	7,202,697	$	(36,001)

 No securities were sold in the three or nine months ended September 30, 2013. One security was sold in the first quarter of 2012 and none in 2012’s second or third quarters. The sale decision was made by management because the security no longer complied with the Bank’s internal investment policy. Proceeds from the sale were $257,997 resulting in a realized gain of $2,856. In the first nine months of 2013, there were no transfers out of accumulated other comprehensive income for security sales.

 

Other-Than-Temporary-Impairment

Management evaluates securities for OTTI at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. In determining OTTI, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current-period credit loss, the OTTI will be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the OTTI will be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

At September 30, 2013, all of the mortgage-backed securities and collateralized mortgage obligations held by the Company were issued by U.S. government-sponsored entities and agencies, primarily Fannie Mae, Freddie Mac and Ginnie Mae, institutions which the government has affirmed its commitment to support. At September 30, 2013, 16 debt securities had unrealized losses with aggregate depreciation of 1.99% from the amortized cost basis; fourteen of the 16 securities had unrealized losses less than twelve months and two had unrealized losses longer than twelve months. Furthermore, five of the 16 securities are issued by government agencies and 11 are issued by a government-sponsored entity. It is likely that these debt securities will be retained given the fact that they are pledged to various public funds. The aggregate depreciation of 1.99% of amortized cost is not material however; there has been a marked decline in value since year-end 2012. The decrease was $495,000. Even so, the change appears to be market driven and attributable to changes in interest rates and not credit quality, and because the Company does not have the intent to sell these securities and it is not likely that it will be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2013.

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REGULATORY MATTERS (Details) (USD $)	Sep. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Dec. 31, 2010	Sep. 02, 2010
Total Capital (Tier 1 and Tier 2) to risk-weighted assets of the Bank
Actual Amount	$ 11,305,260		$ 10,760,348
Actual Ratio	8.46%	8.04%	7.88%	7.06%
Minimum Required For Capital Adequacy Purposes Amount	10,688,585		10,928,836
Minimum Required For Capital Adequacy Purposes Ratio	8.00%		8.00%
Minimum Required Under Consent Order Amount	14,696,805		15,027,149
Minimum Required Under Consent Order Ratio	11.00%		11.00%		11.00%
Tier 1 (Core) Capital to risk-weighted assets of the Bank
Actual Amount	9,620,354		9,032,034
Actual Ratio	7.20%		6.61%
Minimum Required For Capital Adequacy Purposes Amount	5,344,293		5,464,418
Minimum Required For Capital Adequacy Purposes Ratio	4.00%		4.00%
Tier 1 (Core) Capital to average assets of the Bank
Actual Amount	9,620,354		9,032,034
Actual Ratio	5.06%		4.53%
Minimum Required For Capital Adequacy Purposes Amount	7,602,012		7,976,194
Minimum Required For Capital Adequacy Purposes Ratio	4.00%		4.00%
Minimum Required Under Consent Order Amount	$ 16,154,276		$ 16,949,413
Minimum Required Under Consent Order Ratio	8.50%		8.50%		8.50%

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ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS (Details 3) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Accrued Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	$ 98,099	$ 131,315
60-89 Days Past Due	4,949	130,108
Greater Than 90 Days Past Due	0	0
Total Past Due Loans	103,048	261,423
Loans, Current	125,549,958	122,062,295
Total Recorded Investment	125,653,006	122,323,718
Accrued Loans [Member] | Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	0	1,956
60-89 Days Past Due	0	0
Greater Than 90 Days Past Due	0	0
Total Past Due Loans	0	1,956
Loans, Current	43,613,174	39,465,435
Total Recorded Investment	43,613,174	39,467,391
Accrued Loans [Member] | Commercial Real Estate Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	0	97,605
60-89 Days Past Due	0	0
Greater Than 90 Days Past Due	0	0
Total Past Due Loans	0	97,605
Loans, Current	53,811,236	50,193,607
Total Recorded Investment	53,811,236	50,291,212
Accrued Loans [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
Greater Than 90 Days Past Due	0	0
Total Past Due Loans	0	0
Loans, Current	2,101,163	3,479,043
Total Recorded Investment	2,101,163	3,479,043
Accrued Loans [Member] | Consumer Line of Credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	97,593	26,037
60-89 Days Past Due	0	44,866
Greater Than 90 Days Past Due	0	0
Total Past Due Loans	97,593	70,903
Loans, Current	8,154,142	8,963,308
Total Recorded Investment	8,251,735	9,034,211
Accrued Loans [Member] | Consumer Other Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	0	3,707
60-89 Days Past Due	4,949	0
Greater Than 90 Days Past Due	0	0
Total Past Due Loans	4,949	3,707
Loans, Current	1,662,599	2,015,334
Total Recorded Investment	1,667,548	2,019,041
Accrued Loans [Member] | Consumer Credit Card Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	506	2,010
60-89 Days Past Due	0	0
Greater Than 90 Days Past Due	0	0
Total Past Due Loans	506	2,010
Loans, Current	470,330	488,792
Total Recorded Investment	470,836	490,802
Accrued Loans [Member] | Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	0	0
60-89 Days Past Due	0	85,242
Greater Than 90 Days Past Due	0	0
Total Past Due Loans	0	85,242
Loans, Current	15,737,314	17,456,776
Total Recorded Investment	15,737,314	17,542,018
Non Accrued Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	214,341	17,372
60-89 Days Past Due	2,141	322,451
Greater Than 90 Days Past Due	370,372	929,083
Total Past Due Loans	586,854	1,268,906
Loans, Current	2,641,306	2,646,751
Total Recorded Investment	3,228,160	3,915,657
Non Accrued Loans [Member] | Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	0	8,958
60-89 Days Past Due	0	20,469
Greater Than 90 Days Past Due	40,316	320,592
Total Past Due Loans	40,316	350,019
Loans, Current	42,678	210,153
Total Recorded Investment	82,994	560,172
Non Accrued Loans [Member] | Commercial Real Estate Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	204,541	8,414
60-89 Days Past Due	0	280,399
Greater Than 90 Days Past Due	0	406,792
Total Past Due Loans	204,541	695,605
Loans, Current	2,475,006	2,248,488
Total Recorded Investment	2,679,547	2,944,093
Non Accrued Loans [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
Greater Than 90 Days Past Due	0	0
Total Past Due Loans	0	0
Loans, Current	0	0
Total Recorded Investment	0	0
Non Accrued Loans [Member] | Consumer Line of Credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	9,800	0
60-89 Days Past Due	0	21,583
Greater Than 90 Days Past Due	44,528	0
Total Past Due Loans	54,328	21,583
Loans, Current	16,811	79,628
Total Recorded Investment	71,139	101,211
Non Accrued Loans [Member] | Consumer Other Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	0	0
60-89 Days Past Due	2,141	0
Greater Than 90 Days Past Due	0	6,050
Total Past Due Loans	2,141	6,050
Loans, Current	7,329	0
Total Recorded Investment	9,470	6,050
Non Accrued Loans [Member] | Consumer Credit Card Financing Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
Greater Than 90 Days Past Due	0	0
Total Past Due Loans	0	0
Loans, Current	0	0
Total Recorded Investment	0	0
Non Accrued Loans [Member] | Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
Greater Than 90 Days Past Due	285,528	195,649
Total Past Due Loans	285,528	195,649
Loans, Current	99,482	108,482
Total Recorded Investment	$ 385,010	$ 304,131

XML

DEPOSITS (Tables)

9 Months Ended

Sep. 30, 2013

Banking and Thrift [Abstract]

Schedule Of Deposit Liabilities Disclosures [Table Text Block]

The components of the outstanding deposit balances at September 30, 2013 and December 31, 2012 were as follows:

	September 30,		December 31,
	2013		2012
Non-interest-bearing DDA	$	31,700,054	$	40,271,190
Interest-bearing DDA		25,738,324		22,865,704
Money market		21,524,818		18,602,302
Savings		8,157,419		9,018,387
Time, under $100,000		66,976,766		83,416,175
Time, over $100,000		9,471,078		10,002,735
Total Deposits	$	163,568,459	$	184,176,493

XML

PREMISES AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Period end premises and equipment were as follows:

	September 30,		December 31,
	2013		2012
Land & land improvements	$	4,700,464	$	4,700,464
Buildings & building improvements		6,148,829		6,132,163
Furniture, fixtures and equipment		3,839,270		3,800,460
		14,688,563		14,633,087
Less: accumulated depreciation		5,520,211		5,212,201
	$	9,168,352	$	9,420,886

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FAIR VALUE MEASUREMENTS (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Available for sale securities:
Fair Value Measurements	$ 33,500,614	$ 41,460,396
Fair Value, Inputs, Level 1 [Member]
Available for sale securities:
Fair Value Measurements	3,052,109	4,094,532
Fair Value, Inputs, Level 2 [Member]
Available for sale securities:
Fair Value Measurements	30,448,505	37,365,864
Fair Value, Inputs, Level 3 [Member]
Available for sale securities:
Fair Value Measurements	0	0
Mortgage-backed and collateralized mortgage obligations- residential [Member]
Available for sale securities:
Fair Value Measurements	11,907,351	14,772,380
Mortgage-backed and collateralized mortgage obligations- residential [Member] | Fair Value, Inputs, Level 1 [Member]
Available for sale securities:
Fair Value Measurements	0	0
Mortgage-backed and collateralized mortgage obligations- residential [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale securities:
Fair Value Measurements	11,907,351	14,772,380
Mortgage-backed and collateralized mortgage obligations- residential [Member] | Fair Value, Inputs, Level 3 [Member]
Available for sale securities:
Fair Value Measurements	0	0
Municipals [Member]
Available for sale securities:
Fair Value Measurements	1,598,152	2,333,741
Municipals [Member] | Fair Value, Inputs, Level 1 [Member]
Available for sale securities:
Fair Value Measurements	0	0
Municipals [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale securities:
Fair Value Measurements	1,598,152	2,333,741
Municipals [Member] | Fair Value, Inputs, Level 3 [Member]
Available for sale securities:
Fair Value Measurements	0	0
US Treasury [Member]
Available for sale securities:
Fair Value Measurements	3,052,109	4,094,532
US Treasury [Member] | Fair Value, Inputs, Level 1 [Member]
Available for sale securities:
Fair Value Measurements	3,052,109	4,094,532
US Treasury [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale securities:
Fair Value Measurements	0	0
US Treasury [Member] | Fair Value, Inputs, Level 3 [Member]
Available for sale securities:
Fair Value Measurements	0	0
US Government and federal agency [Member]
Available for sale securities:
Fair Value Measurements	16,943,002	20,259,743
US Government and federal agency [Member] | Fair Value, Inputs, Level 1 [Member]
Available for sale securities:
Fair Value Measurements	0	0
US Government and federal agency [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale securities:
Fair Value Measurements	16,943,002	20,259,743
US Government and federal agency [Member] | Fair Value, Inputs, Level 3 [Member]
Available for sale securities:
Fair Value Measurements	$ 0	$ 0

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ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS (Details 4) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Troubled Debt Restructurings:
Number of Loans	3	9
Pre-Modification Outstanding Recorded Investment	$ 281,029	$ 3,647,094
Post-Modification Outstanding Recorded Investment	271,318	3,008,971
Commercial Portfolio Segment [Member]
Troubled Debt Restructurings:
Number of Loans	1	1
Pre-Modification Outstanding Recorded Investment	143,136	11,880
Post-Modification Outstanding Recorded Investment	133,425	11,880
Commercial Real Estate Portfolio Segment [Member]
Troubled Debt Restructurings:
Number of Loans		5
Pre-Modification Outstanding Recorded Investment		3,446,269
Post-Modification Outstanding Recorded Investment		2,808,146
Consumer Line of Credit [Member]
Troubled Debt Restructurings:
Number of Loans	2	2
Pre-Modification Outstanding Recorded Investment	137,893	126,860
Post-Modification Outstanding Recorded Investment	137,893	126,860
Residential Portfolio Segment [Member]
Troubled Debt Restructurings:
Number of Loans		1
Pre-Modification Outstanding Recorded Investment		62,085
Post-Modification Outstanding Recorded Investment		$ 62,085

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SHORT-TERM BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Schedule of Repurchase Agreements [Table Text Block]

The September 30, 2013 and December 31, 2012 short-term borrowing information was as follows:

	Repurchase
	Agreements
Outstanding at September 30, 2013	$	8,972,374
Average interest rate at period end		0.56	%
Average balance during period		9,996,881
Average interest rate during period		0.59	%
Maximum month end balance during period		10,878,256
Outstanding at December 31, 2012	$	10,190,059
Average interest rate at year-end		0.59	%
Average balance during year		9,241,260
Average interest rate during year		0.75	%
Maximum month end balance during year		12,037,087

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COMMITMENTS AND OFF-BALANCE SHEET RISK (Tables)

9 Months Ended

Sep. 30, 2013

Commitments And Off Balance Sheet [Abstract]

Schedule of Fair Value, Off-balance Sheet Risks [Table Text Block]

A summary of the notional and contractual amounts of outstanding financing instruments with off-balance-sheet risk as of September 30, 2013 and December 31, 2012 follows:

	September 30, 2013		December 31, 2012
Unused lines of credit and letters of credit	$	25,064,561	$	22,817,615
Commitments to make loans		453,935		253,000

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BASIS OF PRESENTATION, LOAN POLICY AND RECENT DEVELOPMENTS

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

1. BASIS OF PRESENTATION, LOAN POLICY AND RECENT DEVELOPMENTS

BASIS OF PRESENTATION: The unaudited, consolidated financial statements as of and for the three and nine months ended September 30, 2013 include the consolidated results of operations of Community Shores Bank Corporation (“Company”) and its wholly-owned subsidiaries, Community Shores Financial Services (“CS Financial Services”), and Community Shores Bank (the “Bank”), and the Bank’s wholly-owned subsidiary, Community Shores Mortgage Company (the “Mortgage Company”) and the Mortgage Company’s wholly-owned subsidiary, Berryfield Development, LLC (“Berryfield”). Community Shores Capital Trust I (“the Trust”) is not consolidated and exists solely to issue capital securities. These consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and Article 8 of Regulation S-X and do not include all disclosures required by generally accepted accounting principles for a complete presentation of the Company’s financial condition and results of operations. In the opinion of management, the information reflects all adjustments (consisting only of normal recurring adjustments) which are necessary in order to make the financial statements not misleading and for a fair representation of the results of operations for such periods. The results for the three and nine month periods ended September 30, 2013 should not be considered as indicative of results for a full year. For further information, refer to the consolidated financial statements and footnotes included in the Company’s annual report on Form 10-K for the period ended December 31, 2012. Some items in the prior year financial statements may be reclassified to conform to the current presentation.

LOAN POLICY: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses. The loan portfolio consists of the following segments:

Commercial- Loans to businesses that are sole proprietorships, partnerships, limited liability companies and corporations. These loans are for commercial, industrial, or professional purposes. The risk characteristics of these loans vary based on the borrowers business and industry as repayment is typically dependent on cash flows generated from the underlying business.

Commercial Real Estate- Loans to individuals or businesses that are secured by improved and unimproved vacant land, farmland, commercial real property, multifamily residential properties, and all other conforming, nonresidential properties. Proceeds may be used for land acquisition, development or construction. These loans typically fall into two general categories: property that is owner occupied and income or investment property. Owner occupied commercial real estate loans typically involve the same risks as commercial and industrial loans however the underlying collateral is the real estate which is subject to changes in market value after the loan’s origination. Adverse economic events and changes in real estate market valuations generally describe the risks that accompany commercial real estate loans involving income or investment property. The ability of the borrower to repay tends to depend on the success of the underlying project or the ability of the borrower to sell or lease the property at certain anticipated values.

Consumer-Term loans or lines of credit for the purchase of consumer goods, vehicles or home improvement. The risk characteristics of the loans in this segment vary depending on the type of collateral but for the most part repayment is expected from an individual continuing to generate a cash flow that supports the calculated payment obligation. Secondary support could involve liquidation of collateral.

Residential- Loans to purchase or refinance single family residences. The risks associated with this segment are similar to the risks for consumer loans as far as individual payment obligations however the underlying collateral is the real estate. Real estate is subject to changes in market valuation and can be unstable for a variety of reasons.

For all loan segments, interest income is accrued on the unpaid principal using the interest method assigned to the loan product and includes amortization of net deferred loan fees and costs over the loan term. Interest income is not reported when full loan repayment is in doubt. A loan is moved to non-accrual status when it is past due over 90 days unless the loan is well-secured and in the process of collection. If a loan is not past due but deemed to be impaired it may also be moved to non-accrual status. These rules apply to loans in all segments. However certain classes of loans in the consumer segment may simply get charged-off as opposed to moving to non-accrual status.

All interest accrued but not received for a loan placed on non-accrual is reversed against interest income at the time the loan is assigned non-accrual status. Payments received on such loans are applied to principal when there is doubt about recovering the full principal outstanding. Loans are eligible to return to accrual status after six months of timely payment and future payments are reasonably assured.

The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased by the provision for loan losses and from recoveries of previously charged-off loans and decreased by charge-offs.

The allowance for loan loss analysis is performed monthly. Management’s methodology consists of specific and general components. The general component covers non-impaired loans and is based on historical loss experience adjusted for current economic factors.

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Bank over the most recent 12 quarters. The historical loss experience is recalculated at the end of each quarter. This actual loss experience is supplemented with current economic factors based on the risks present for each portfolio segment. These current economic factors are also revisited at the end of each quarter and include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; quality of loan review system; degree of oversight by the Board of Directors; national and local economic trends and conditions; industry conditions; competition and legal and regulatory requirements; and effects of changes in credit concentrations.

For the commercial and commercial real estate portfolio segments, the historical loss is tracked by original loan grade. The Bank utilizes a numeric grading system for commercial and commercial real estate loans. Grades are assigned to each commercial and commercial real estate loan by assessing information about the specific borrower’s situation and the estimated collateral values. The description of the loan grade criteria is included in Note 4. The most significant risks to the commercial and commercial real estate segments are the level of development and sales of real estate and the collateral values.  Locally and nationally, real estate development and sales activity is slowly picking up but has not yet returned to pre-recession levels. There are widespread pockets of value stabilization but in some cases real estate values can be erratic for properties such as golf courses and non-owner occupied office space. Even so, impaired loan charge-off activity directly related to falling collateral values has been less frequent. In 2012 and 2013, with charge-off activity lessening, the calculated historical loss factor assigned to general allocations was reduced.

Within the commercial and industrial and commercial real estate portfolios, there are classes of loans with like risk characteristics that are periodically segregated because management has determined that the historical losses or current factors are unique and ought to be considered separately from the entire segment.

For the consumer segment, historical loss experience is based on the actual loss history of the following four classes; general consumer loans, personal lines of credit, home equity lines of credit and credit cards. The level of delinquencies and charge-off experience directly impacts the general allocations to the consumer classes. Both delinquencies and charge-offs have gone down in the last year allowing a reduction of the general allocations in the allowance for loan losses.

The residential segment loss experience is not segregated by grades or classes. The level of delinquencies, charge-off experience, and direction of real estate values directly impacts the allocations to the residential real estate segment. Stabilizing real estate values have resulted in reduced specific allocations in the allowance for loan losses.

The specific component of the allowance for loan losses relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and are classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.

Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Any loan within a segment can be considered for individual impairment if it meets the above criteria. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.

Allocations of the allowance may be made for specific loans and groups, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. Loan balances are generally charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Statutorily, the Bank must charge-off any bad debt that reaches delinquency of 360 days. In the case of an impaired loan, management typically charges off any portion of the debt that is unsecured based on an internal analysis of future cash flows and or collateral.

Various regulatory agencies periodically review our allowance for loan losses. These agencies may require the Company to take additional provisions based on their judgments about information available to them at the time of their examination.

There was no material change in the allowance for loan loss methodology in the first three quarters of 2013.

RECENT DEVELOPMENTS: In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which is intended to improve the reporting of reclassifications out of accumulated other comprehensive income.  The ASU requires an entity to report, either on the face of the income statement or in the notes to the financial statements, the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in the income statement.  This ASU was adopted by the Company prospectively in the first quarter of 2013.

In 2012, the Company recorded consolidated net income for the first time since 2006. The trend of profitability continued in the first three quarters of 2013. A large portion of the earnings reported for 2013 is attributable to a $5.3 million gain on extinguishment of debt recorded late in the first quarter. Operating profits recorded in the second and third quarters have added to the Company’s consolidated earnings, which were $5.5 million through September 30, 2013. The return to core earning profitability stems mainly from stabilized credit quality and real estate valuations and the associated effect on the calculated reserve for loan losses. There has been no provision for loan losses made since the first quarter of 2012, and at September 30, 2013, there was approximately $46,000 of unallocated reserves stemming from decreases to the Bank’s 36-month historical loss calculation. The unallocated reserves are not specific to any particular portfolio segment.

In spite of the improved financial outcome for the last several quarters, the Company’s significant consolidated losses from 2007 through 2011 eroded capital and reduced regulatory capital ratios. As a result, the Bank was deemed undercapitalized according to regulatory capital standards beginning December 31, 2010. At that time, the Bank had a total risk-based capital ratio of 7.06%. Earnings recorded by the Bank along with a significant reduction in risk-weighted assets during 2012 improved the total risk-based capital ratio to 7.88% at December 31, 2012. At March 31, 2013, the Bank’s total risk-based capital ratio advanced to 8.04% as a result of the Bank’s first quarter earnings and a $25,000 capital contribution from the Company. At that time, the Bank was considered adequately capitalized according to regulatory capital standards. As a result of earnings recorded during 2013’s second and third quarters, the Bank’s total risk-based capital ratio rose to 8.46% at September 30, 2013.

From 2007 through 2011 when the Company recorded significant losses primarily as a result of deteriorating asset quality, the Bank endured additional regulatory scrutiny and entered into a Consent Order with the Federal Deposit Insurance Corporation (“FDIC”) and the State of Michigan’s Department of Insurance and Financial Services (“DIFS”) previously the Office of Financial and Insurance Regulation (“OFIR”), its primary regulators, on September 2, 2010. The Bank agreed to the terms of the Consent Order without admitting or denying any charge of unsafe or unsound banking practices relating to capital, asset quality, or earnings. The Consent Order imposes no fines or penalties on the Bank. The Consent Order will remain in effect and enforceable until it is modified, terminated, suspended, or set aside by the FDIC and DIFS.

Under the Consent Order, the Bank was required, within 90 days of September 2, 2010, to have and maintain its level of Tier 1 capital, as a percentage of its total assets, at a minimum of 8.5%, and its level of qualifying total capital, as a percentage of risk-weighted assets, at a minimum of 11%. The Bank was not able to meet these requirements within the required 90-day period and remained out of compliance with the Consent Order as of September 30, 2013.

The lack of financial soundness of the Bank and the Company’s inability to serve as a source of strength for the Bank resulted in the board of directors entering into a Written Agreement with the Federal Reserve Bank of Chicago (the “FRB”), the Company’s primary regulator. The Written Agreement became effective on December 16, 2010, when it was executed by the FRB. The Written Agreement provides that: (i) the Company must take appropriate steps to fully utilize its financial and managerial resources to serve as a source of strength to the Bank; (ii) the Company may not declare or pay any dividends or take dividends or any other payment representing a reduction in capital from the Bank or make any distributions of interest, principal or other sums on subordinated debentures or trust preferred securities without prior FRB approval; (iii) the Company may not incur, increase or guarantee any debt or purchase or redeem any shares of its stock without prior FRB approval; (iv) the Company must submit a written statement of its planned sources and uses of cash for debt service, operating expenses and other purposes to the FRB within 30 days of the Written Agreement; (v) the Company shall take all necessary actions to ensure that the Bank, the Company and all nonbank subsidiaries of both the Bank and the Company comply with sections 23A and 23B of the Federal Reserve Act and Regulation W of the Board of Governors (12 C.F.R. Part 223) in all transactions between affiliates; (vi) the Company may not appoint any new director or senior executive officer, or change the responsibilities of any senior executive officer so that the officer would assume a different senior executive officer position, without prior regulatory approval; and finally (vii) within 30 days after the end of each calendar quarter following the date of the Written Agreement, the board of directors shall submit to the FRB written progress reports detailing the form and manner of all actions taken to secure compliance with the provisions of the Written Agreement as well as current copies of the parent company only financial statements. The Company has not yet been able to meet the obligation detailed in part (i) above; as the Company currently has limited resources with which to assist the Bank in achieving the capital level required by the Consent Order. The Company’s main liquidity resource is its cash account balance which, as of September 30, 2013, was approximately $656,000.

On January 3, 2011, the Company was not able to repay its $5 million term loan owed to Fifth Third Bank (“Fifth Third”); nor was the Company able to make the preceding ten quarterly interest payments. The term loan was in default for 25 months. At December 31, 2012, the total amount owed Fifth Third was $5,763,000. On March 20, 2013, the Company, with approval from the FRB, borrowed $1,280,000 from 1030 Norton LLC, a Michigan limited liability company owned by nine individuals; three directors of the Company-Gary F. Bogner, Robert L. Chandonnet and Bruce J. Essex, one former director and five local businessmen, and settled its debt with Fifth Third for $500,000. Settling the Fifth Third debt resulted in a gain of approximately $5.3 million in the first quarter of 2013. As a result of this transaction, the Company was able to achieve positive shareholders’ equity of approximately $4 million at March 31, 2013.

In addition to the payment to Fifth Third, the proceeds of the new senior debt will be used for interest carry, general operations and potential capital support for the Bank. The note bears interest at 8% per annum until paid in full. Interest is payable quarterly in arrears. The note matures on March 31, 2015 and is secured by all of the issued and outstanding shares of the Bank as evidenced by a pledge agreement between the Company and 1030 Norton LLC dated March 20, 2013. The reduced amount of borrowings is expected to decrease interest expense by approximately $200,000 annually. Refer to Note 11 for further discussion.

On August 17, 2011, the Bank was issued a Supervisory Prompt Corrective Action Directive (the “Directive”) because of its undercapitalized capital category at December 31, 2010, its failure to submit a capital restoration plan that satisfies the requirements stipulated in the FDIC Rules and Regulations, and the continued deterioration of the Bank. The Directive stipulated that the Bank be restored to an “adequately capitalized” capital category within 60 days of the issuance of the Directive. During the 60 days, the board made efforts to secure funding and comply with the Directive but was not successful. Through several quarters of earnings and a $25,000 capital contribution from the Company, the Bank reached an adequately capitalized regulatory capital category at March 31, 2013—see Note 15 to the consolidated financial statements. Management formally communicated achievement of the capital level stipulated in the Directive to the FDIC through the submission of the quarterly Call Report and the required quarterly written communication to the regulatory agencies at the end of April. Recent feedback received by management indicated that formal public release of the Directive is anticipated to occur upon achievement of four consecutive quarters of adequate capitalization, which is expected to occur by way of submitting 2013’s fourth quarter Call Report to the FDIC on or about January 30, 2014, assuming that the capital ratios of the Bank remain stable for the remaining quarter of 2013.

Regardless of meeting the stipulations in the Directive, failure to comply with the provisions of the Consent Order or the Written Agreement may subject the Bank to further regulatory enforcement action.

As of December 31, 2012, the Company’s extended period of net losses, failure to repay its term loan at maturity (subsequently settled as noted above), timely compliance with the higher capital ratios of the Directive and the Consent Order, and the provisions of the Written Agreement raised substantial doubt about the Company’s ability to continue as a going concern and as a result of this doubt, our auditors added an explanatory paragraph to their opinion on the Company’s December 31, 2012 consolidated financial statements expressing such doubt. These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

Assets measured at fair value on a recurring basis are summarized below as of the periods ended September 30, 2013 and December 31, 2012:

			Fair Value Measurements Using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
September 30, 2013	Total		(Level 1)		(Level 2)		(Level 3)
Available for sale securities:
US Treasury	$	3,052,109	$	3,052,109	$	0	$	0
US Government and federal agency		16,943,002		0		16,943,002		0
Municipals		1,598,152		0		1,598,152		0
Mortgage-backed and collateralized mortgage obligations– residential		11,907,351		0		11,907,351		0
Total	$	33,500,614	$	3,052,109	$	30,448,505	$	0
December 31, 2012
Available for sale securities:
US Treasury	$	4,094,532	$	4,094,532	$	0	$	0
US Government and federal agency		20,259,743		0		20,259,743		0
Municipals		2,333,741		0		2,333,741		0
Mortgage-backed and collateralized mortgage obligations– residential		14,772,380		0		14,772,380		0
Total	$	41,460,396	$	4,094,532	$	37,365,864	$	0

Fair Value Measurements, Nonrecurring [Table Text Block]

Assets measured at fair value on a non-recurring basis are summarized below as of the periods ended September 30, 2013 and December 31, 2012. Impaired loans and foreclosed assets are included if the fair value of such assets was revised during the quarterly period then ended.

			Significant
			Unobservable Inputs
	Total		(Level 3)
September 30, 2013
Impaired loans:
Consumer:
Other	$	52,612	$	52,612
Residential		61,722		61,722
Total	$	114,334	$	114,334
Foreclosed assets:
Commercial Real Estate:
General	$	267,390	$	267,390
Residential		55,794		55,794
Total	$	323,184	$	323,184
December 31, 2012
Impaired loans:
Commercial	$	84,755	$	84,755
Commercial Real Estate:
General		786,282		786,282
Residential		140,269		140,269
Total	$	1,011,306	$	1,011,306
Foreclosed assets:
Commercial Real Estate:
General	$	141,596	$	141,596
Construction		380,142		380,142
Total	$	521,738	$	521,738

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The following table presents information as of December 31, 2012 about significant unobservable inputs related to the Bank’s individually material¹ Level 3 financial assets, by class, measured on a non-recurring basis:

			Valuation	Significant Unobservable	Range			Weighted
	Fair Value		Technique (s)	Inputs	of Inputs			Average
December 31, 2012
Impaired loans:				Adjustments for differences between
Commercial Real Estate:			Sales comparison approach	the comparable sales		0	%		0	%
General	$	698,475	Income approach	Capitalization rate		10.0	%		10.0	%
Total	$	698,475
Foreclosed assets:
Commercial Real Estate:				Adjustments for differences between
Construction	$	269,100	Sales comparison approach	the comparable sales		(45.0) - 0	%		(4.5)	%
Total	$	269,100

¹ For purposes of this disclosure, only material Level 3 assets are disclosed. These assets are included in the total non-recurring Level 3 financial assets reported in the preceding tables.

Fair Value, by Balance Sheet Grouping [Table Text Block]

The carrying amounts and estimated fair values of financial instruments not previously presented above are as follows:

			Fair Value Measurements
			at September 30, 2013 Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	10,140	$	10,140	$	0	$	0	$	10,140
Loans held for sale		0		0		0		0		0
Loans, net (including impaired)		125,677		0		0		125,272		125,272
FHLB stock		451		N/A		N/A		N/A		N/A
Accrued interest receivable		485		15		136		334		485
Financial liabilities
Deposits		163,568		80,770		76,847		0		157,617
Federal funds purchased and repurchase agreements		8,972		0		8,972		0		8,972
Subordinated debentures		4,500		0		0		1,125		1,125
Notes payable		1,280		0		0		1,280		1,280
Accrued interest payable		475		3		31		130		164

			Fair Value Measurements
			at December 31, 2012 Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	20,297	$	20,297	$	0	$	0	$	20,297
Loans held for sale		6,041		0		6,183		0		6,183
Loans, net (including impaired)		122,447		0		0		116,004		116,004
FHLB stock		451		N/A		N/A		N/A		N/A
Accrued interest receivable		592		12		163		417		592
Financial liabilities
Deposits		184,176		88,959		94,185		0		183,144
Federal funds purchased and repurchase agreements		10,190		0		10,190		0		10,190
Subordinated debentures		4,500		0		0		1,125		1,125
Notes payable		5,000		0		0		500		500
Accrued interest payable		1,156		4		64		81		149

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ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Allowance for loan losses:
Beginning balance	$ 3,287,274	$ 4,321,297	$ 3,382,977	$ 5,299,454
Charge-offs	(444,698)	(738,267)	(603,172)	(1,851,414)
Recoveries	27,460	20,377	90,231	80,332
Provision for loan losses	0	0	0	75,035
Ending balance	2,870,036	3,603,407	2,870,036	3,603,407
Commercial Portfolio Segment [Member]
Allowance for loan losses:
Beginning balance	439,993	1,356,903	582,198	1,309,632
Charge-offs	(25,794)	(656,201)	(66,047)	(869,270)
Recoveries	19,656	10,296	75,856	36,844
Provision for loan losses	(51,133)	(98,273)	(209,285)	135,519
Ending balance	382,722	612,725	382,722	612,725
Commercial Real Estate Portfolio Segment [Member]
Allowance for loan losses:
Beginning balance	1,920,587	2,251,981	2,266,302	3,386,433
Charge-offs	0	(2,299)	(25,025)	(859,504)
Recoveries	0	8,204	0	21,727
Provision for loan losses	(105,707)	(100,367)	(426,397)	(391,137)
Ending balance	1,814,880	2,157,519	1,814,880	2,157,519
Consumer Portfolio Segment [Member]
Allowance for loan losses:
Beginning balance	419,511	442,467	331,459	410,001
Charge-offs	(225,308)	(79,767)	(263,905)	(111,248)
Recoveries	7,804	1,877	14,375	21,761
Provision for loan losses	209,672	2,191	329,750	46,254
Ending balance	411,679	366,768	411,679	366,768
Residential Portfolio Segment [Member]
Allowance for loan losses:
Beginning balance	157,406	193,706	203,018	193,388
Charge-offs	(193,596)	0	(248,195)	(11,392)
Recoveries	0	0	0	0
Provision for loan losses	250,712	(39,529)	259,699	(27,819)
Ending balance	214,522	154,177	214,522	154,177
Unallocated Financing Receivables [Member]
Allowance for loan losses:
Beginning balance	349,777	76,240	0	0
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision for loan losses	(303,544)	235,978	46,233	312,218
Ending balance	$ 46,233	$ 312,218	$ 46,233	$ 312,218

XML

SUBORDINATED DEBENTURES (Details Textual) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Interest Expense, Subordinated Notes and Debentures	$ 414,429
Subordinated Debt [Member]
Number Of Subordinated Securities Issued	4,500
Subordinated Security Price Per Share	$ 1,000
Debt Instrument, Basis Spread on Variable Rate	2.05%
Debt Instrument, Description of Variable Rate Basis	3-month LIBOR
Subordinated Borrowing, Interest Rate	2.30%	2.36%
Debt Instrument, Maturity Date	Dec. 30, 2034

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2013	Dec. 31, 2012
ASSETS
Cash and due from financial institutions	$ 3,245,012	$ 2,979,189
Interest-bearing deposits in other financial institutions	6,895,413	17,317,926
Total cash and cash equivalents	10,140,425	20,297,115
Securities available for sale (at fair value)	33,500,614	41,460,396
Loans held for sale	0	6,040,869
Loans	128,547,253	125,830,250
Less: Allowance for loan losses	2,870,036	3,382,977
Net loans	125,677,217	122,447,273
Federal Home Loan Bank stock (at cost)	450,800	450,800
Premises and equipment, net	9,168,352	9,420,886
Accrued interest receivable	485,441	592,043
Foreclosed assets	2,686,237	2,806,781
Other assets	855,210	715,200
Total assets	182,964,296	204,231,363
Deposits
Non-interest-bearing	31,700,054	40,271,190
Interest-bearing	131,868,405	143,905,303
Total deposits	163,568,459	184,176,493
Federal funds purchased and repurchase agreements	8,972,374	10,190,059
Subordinated debentures	4,500,000	4,500,000
Notes payable	1,280,000	5,000,000
Accrued expenses and other liabilities	873,104	1,603,907
Total liabilities	179,193,937	205,470,459
Shareholders' equity
Preferred Stock, no par value: 1,000,000 shares authorized and none issued	0	0
Common Stock, no par value: 9,000,000 shares authorized; 1,468,800 issued and outstanding	13,296,691	13,296,691
Retained deficit	(9,312,447)	(14,816,593)
Accumulated other comprehensive (loss) income	(213,885)	280,806
Total shareholders' equity	3,770,359	(1,239,096)
Total liabilities and shareholders' equity	$ 182,964,296	$ 204,231,363

XML

ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS (Details 5) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	$ 128,881,166	$ 126,239,375
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	43,696,168	40,027,563
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	58,591,946	56,714,348
Commercial Real Estate Construction Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	2,101,163	3,479,043
Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	16,122,324	17,846,149
Consumer Line of Credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	8,322,874	9,135,422
Consumer Other Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	1,677,018	2,025,091
Consumer Credit Card Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	470,836	490,802
Credit Rating One [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	0	0
Credit Rating One [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	0	0
Credit Rating One [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	0	0
Credit Rating Two [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	261,437	298,200
Credit Rating Two [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	0	0
Credit Rating Two [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	0	0
Credit Rating Three [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	7,791,976	2,004,476
Credit Rating Three [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	4,697,215	4,141,391
Credit Rating Three [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	0	0
Credit Rating Four [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	13,313,325	14,017,221
Credit Rating Four [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	17,931,763	12,911,811
Credit Rating Four [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	467,651	384,848
Credit Rating Five [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	15,217,224	16,373,423
Credit Rating Five [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	21,066,423	22,177,734
Credit Rating Five [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	236,099	1,695,990
Credit Rating Five M [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	4,275,905	3,318,016
Credit Rating Five M [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	3,817,196	3,675,131
Credit Rating Five M [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	1,397,413	1,398,205
Credit Rating Six [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	1,705,945	2,180,119
Credit Rating Six [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	6,298,783	7,365,970
Credit Rating Six [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	0	0
Credit Rating Seven [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	1,072,584	1,369,803
Credit Rating Seven [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	519,913	287,682
Credit Rating Seven [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	0	0
Credit Rating Eight [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	57,772	466,305
Credit Rating Eight [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	2,159,490	2,675,586
Credit Rating Eight [Member] | Commercial Real Estate Construction Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	0	0
Performing Loans [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	15,260,815	17,063,417
Performing Loans [Member] | Consumer Line of Credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	8,115,446	8,944,652
Performing Loans [Member] | Consumer Other Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	1,578,420	1,894,041
Performing Loans [Member] | Consumer Credit Card Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	470,836	490,802
Impaired Loans [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	861,509	782,732
Impaired Loans [Member] | Consumer Line of Credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	207,428	190,770
Impaired Loans [Member] | Consumer Other Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	98,598	131,050
Impaired Loans [Member] | Consumer Credit Card Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivable, Net	$ 0	$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (USD $)	Total	Common Stock [Member]	Retained Deficit [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance at Dec. 31, 2011	$ (1,420,382)	$ 13,296,691	$ (15,084,431)	$ 367,358
Balance (in Shares) at Dec. 31, 2011		1,468,800
Net income	259,482		259,482
Other comprehensive income (loss)	11,358			11,358
Balance at Sep. 30, 2012	(1,149,542)	13,296,691	(14,824,949)	378,716
Balance (in Shares) at Sep. 30, 2012		1,468,800
Balance at Dec. 31, 2012	(1,239,096)	13,296,691	(14,816,593)	280,806
Balance (in Shares) at Dec. 31, 2012		1,468,800
Net income	5,504,146		5,504,146
Other comprehensive income (loss)	(494,691)			(494,691)
Balance at Sep. 30, 2013	$ 3,770,359	$ 13,296,691	$ (9,312,447)	$ (213,885)
Balance (in Shares) at Sep. 30, 2013		1,468,800

XML

FAIR VALUE MEASUREMENTS (Details 3) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Financial assets (Carrying Amount)
Cash and cash equivalents	$ 10,140,425	$ 20,297,115	$ 27,435,526	$ 8,919,568
Loans held for sale	0	6,041,000
Loans, net (including impaired)	125,677,217	122,447,273
FHLB stock	450,800	450,800
Accrued interest receivable	485,441	592,043
Financial liabilities (Carrying Amount)
Deposits	163,568,459	184,176,493
Federal funds purchased and repurchase agreements	8,972,374	10,190,059
Subordinated debentures	4,500,000	4,500,000
Notes payable	1,280,000	5,000,000
Accrued interest payable	475,000	1,156,000
Financial assets (Fair Value Amount)
Cash and cash equivalents	10,140,000	20,297,000
Loans held for sale	0	6,183,000
Loans, net (including impaired)	125,272,000	116,004,000
Accrued interest receivable	485,000	592,000
Financial liabilities (Fair Value Amount)
Deposits	157,617,000	183,144,000
Federal funds purchased and repurchase agreements	8,972,000	10,190,000
Subordinated debentures	1,125,000	1,125,000
Notes payable	1,280,000	500,000
Accrued interest payable	164,000	149,000
Fair Value, Inputs, Level 1 [Member]
Financial assets (Fair Value Amount)
Cash and cash equivalents	10,140,000	20,297,000
Loans held for sale	0	0
Loans, net (including impaired)	0	0
Accrued interest receivable	15,000	12,000
Financial liabilities (Fair Value Amount)
Deposits	80,770,000	88,959,000
Federal funds purchased and repurchase agreements	0	0
Subordinated debentures	0	0
Notes payable	0	0
Accrued interest payable	3,000	4,000
Fair Value, Inputs, Level 2 [Member]
Financial assets (Fair Value Amount)
Cash and cash equivalents	0	0
Loans held for sale	0	6,183,000
Loans, net (including impaired)	0	0
Accrued interest receivable	136,000	163,000
Financial liabilities (Fair Value Amount)
Deposits	76,847,000	94,185,000
Federal funds purchased and repurchase agreements	8,972,000	10,190,000
Subordinated debentures	0	0
Notes payable	0	0
Accrued interest payable	31,000	64,000
Fair Value, Inputs, Level 3 [Member]
Financial assets (Fair Value Amount)
Cash and cash equivalents	0	0
Loans held for sale	0	0
Loans, net (including impaired)	125,272,000	116,004,000
Accrued interest receivable	334,000	417,000
Financial liabilities (Fair Value Amount)
Deposits	0	0
Federal funds purchased and repurchase agreements	0	0
Subordinated debentures	1,125,000	1,125,000
Notes payable	1,280,000	500,000
Accrued interest payable	$ 130,000	$ 81,000

XML

SECURITIES AVAILABLE FOR SALE (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	$ 33,393,602	$ 40,858,692
Available-for-sale Securities, Gross Unrealized Gains	325,401	637,705
Available-for-sale Securities, Gross Unrealized Losses	(218,389)	(36,001)
Available-for-sale Securities	33,500,614	41,460,396
US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	3,029,943	4,044,909
Available-for-sale Securities, Gross Unrealized Gains	22,166	49,623
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available-for-sale Securities	3,052,109	4,094,532
US Government and federal agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	16,867,009	20,013,843
Available-for-sale Securities, Gross Unrealized Gains	119,983	250,523
Available-for-sale Securities, Gross Unrealized Losses	(43,990)	(4,623)
Available-for-sale Securities	16,943,002	20,259,743
Municipals [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	1,565,075	2,260,272
Available-for-sale Securities, Gross Unrealized Gains	33,077	73,469
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available-for-sale Securities	1,598,152	2,333,741
Collateralized Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	11,931,575	14,539,668
Available-for-sale Securities, Gross Unrealized Gains	150,175	264,090
Available-for-sale Securities, Gross Unrealized Losses	(174,399)	(31,378)
Available-for-sale Securities	$ 11,907,351	$ 14,772,380

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REGULATORY MATTERS

9 Months Ended

Sep. 30, 2013

Regulatory Capital Requirements [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

15. REGULATORY MATTERS

Banks are subject to regulatory capital requirements administered by the federal banking agencies. Since the Company is a one bank holding company with consolidated assets less than $500 million, regulatory minimum capital ratios are applied only to the Bank. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet various capital requirements can initiate regulatory action.

 

Prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If a bank is not well capitalized, regulatory approval is required to accept brokered deposits. Subject to limited exceptions, a bank may not make a capital distribution if, after making the distribution, it would be undercapitalized. If a bank is undercapitalized, it is subject to being closely monitored by its principal federal regulator, its asset growth and expansion are restricted, acquisitions, new activities, new branches, payment of dividends or management fees are prohibited and plans for capital restoration are required. In addition, further specific types of restrictions may be imposed on the Bank at the discretion of the federal regulator. The Bank was in the undercapitalized category at December 31, 2012. At March 31, 2013, through earnings and a $25,000 capital contribution from the Company, the Bank achieved a total risk-based capital ratio of 8.04%; four basis points above the required level to be in the adequately capitalized regulatory category. At September 30, 2013, the total risk-based capital ratio of the Bank had risen to 8.46% and the Bank continues to be adequately capitalized.

Actual capital amounts and ratios for the Bank and required capital amounts and ratios for the Bank to be adequately capitalized and to be at the level mandated by the Consent Order at September 30, 2013 and December 31, 2012 were:

						Minimum Required					Minimum Required
						For Capital					Under
	Actual					Adequacy Purposes					Consent Order
	Amount		Ratio			Amount		Ratio			Amount		Ratio
September 30, 2013
Total Capital (Tier 1 and
Tier 2) to risk-weighted assets of the Bank	$	11,305,260		8.46	%	$	10,688,585		8.00	%	$	14,696,805		11.00	%
Tier 1 (Core) Capital to risk-weighted assets of the Bank		9,620,354		7.20			5,344,293		4.00			N/A		N/A
Tier 1 (Core) Capital to average assets of the Bank		9,620,354		5.06			7,602,012		4.00			16,154,276		8.50

						Minimum Required					Minimum Required
						For Capital					Under
	Actual					Adequacy Purposes					Consent Order
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2012
Total Capital (Tier 1 and Tier 2) to risk-weighted assets of the Bank	$	10,760,348		7.88	%	$	10,928,836		8.00	%	$	15,027,149	11.00	%
Tier 1 (Core) Capital to risk-weighted assets of the Bank		9,032,034		6.61			5,464,418		4.00			N/A	N/A
Tier 1 (Core) Capital to average assets of the Bank		9,032,034		4.53			7,976,194		4.00			16,949,413	8.50

Federal Reserve guidelines limit the amount of allowance for loan losses that can be included in Tier 2 capital. In general only 1.25% of net risk-weighted assets are allowed to be included. At September 30, 2013, only $1,684,905 was counted as Tier 2 capital and $1,185,131 was disallowed. At December 31, 2012, $1,728,314 was counted as Tier 2 capital and $1,654,663 was disallowed.

 

The Bank’s Consent Order with the FDIC and the DIFS, its primary banking regulators, became effective on September 2, 2010. The Bank agreed to the terms of the Consent Order without admitting or denying any charge of unsafe or unsound banking practices relating to capital, asset quality, or earnings. The Consent Order imposes no fines or penalties on the Bank. The Consent Order will remain in effect and enforceable until it is modified, terminated, suspended, or set aside by the FDIC and DIFS.

The Consent Order required the Bank to implement a written profit plan, a written contingency funding plan, a written plan to reduce the Bank's reliance on brokered deposits, a comprehensive strategic plan; and to develop an analysis and assessment of the Bank's management needs. Under the Consent Order, the Bank is required to maintain higher capital levels than requested under prompt corrective action and the Bank may not declare or pay any dividend without the prior written consent of the regulators.

Prior to the issuance of the Consent Order, the Bank's Board of Directors and management had already commenced initiatives and strategies to address a number of the requirements of the Consent Order. The Bank continues to work in cooperation with its regulators. Our ability to fully comply with all of the requirements of the Consent Order, including maintaining specified capital levels, is not entirely within our control, and is not assured. Our ability to comply with the requirements of the Consent Order may be affected by many factors, including the availability of capital and other funds, the extent of repayment of loans by borrowers, declines in the value of collateral including real estate, the Bank's ability to realize on collateral and actions by bank regulators. Failure to comply with provisions of the Consent Order may result in further regulatory action that could have a material adverse effect on us and our shareholders, as well as the Bank.

There were several directives related to loans contained in the Consent Order. All action plans were submitted to the FDIC as required. As of September 11, 2013, action plan submission is no longer required; however management continues to update plans as needed and works diligently to mitigate and reduce associated credit risk.

Under the Consent Order, the Bank was required, within 90 days of September 2, 2010, to have and maintain its level of tier one capital, as a percentage of its total assets, at a minimum of 8.5%, and its level of qualifying total capital, as a percentage of risk-weighted assets, at a minimum of 11%. The Bank was not in compliance with this requirement at September 30, 2013 or either December 31, 2010, 2011 or 2012. Management continues to explore options to raise the capital required for full compliance. At September 30, 2013, a capital contribution of $6,534,000 would have been needed to meet the capital ratios specified in the Consent Order.

 

Under the Consent Order the Bank is restricted from declaring or paying dividends without prior written authorization of the FDIC. The Bank is in full compliance with this restriction.

As required by the Consent Order, the Bank adopted a detailed liquidity plan on November 17, 2010 which provided for intended liquidity sources to meet the Bank’s assessed liquidity needs over the time horizons of 6, 12 and 18 months. The liquidity plan was meant to address the stipulation in the Consent Order that prohibited the Bank from accepting brokered deposits. To meet this restriction, the Bank’s liquidity plan entailed replacing maturing brokered deposits with a combination of local deposits and internet based time deposits. Since the beginning of 2010, the Bank has successfully used this strategy. There were no brokered deposits outstanding at September 30, 2013. The Bank has been able to maintain sufficient liquidity for its required payments despite the restriction on issuing brokered deposits.

On August 17, 2011, the Bank was issued a Supervisory Prompt Corrective Action Directive (the “Directive”) because of its undercapitalized capital category at December 31, 2010, its failure to submit a capital restoration plan that satisfies the requirements stipulated in the FDIC Rules and Regulations, and the continued deterioration of the Bank. The Directive stipulated that the Bank be restored to an “adequately capitalized” capital category within 60 days of the issuance of the Directive. During the 60 days, the board made efforts to secure funding and comply with the Directive but was not successful. Through several quarters of earnings and a $25,000 capital contribution from the Company, the Bank reached an adequately capitalized regulatory capital category at March 31, 2013. Management formally communicated achievement of the capital level stipulated in the Directive to the FDIC through the submission of the quarterly Call Report and the required quarterly written communication, at the end of April. Recent feedback received by management indicated that formal public release of the Directive is anticipated to occur upon achievement of four consecutive quarters of adequate capitalization which is expected to occur by way of submitting 2013’s fourth quarter Call Report to the FDIC on or about January 30, 2014, assuming that the capital ratios of the Bank remain stable for the remaining quarter of 2013.

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SECURITIES AVAILABLE FOR SALE (Details 1) (USD $)	Sep. 30, 2013
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract]
Due in one year or less	$ 5,024,323
Due from one to five years	16,085,877
Due from five to ten years	351,827
Due in more than ten years	0
Mortgage-backed and collateralized mortgage obligations - residential	11,931,575
Available-for-sale Debt Securities, Amortized Cost Basis	33,393,602
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Due in one year or less	5,056,320
Due from one to five years	16,175,309
Due from five to ten years	361,634
Due in more than ten years	0
Mortgage-backed and collateralized mortgage obligations - residential	11,907,351
Available-for-sale Securities, Debt Securities	$ 33,500,614

XML

SECURITIES AVAILABLE FOR SALE (Tables)

9 Months Ended

Sep. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Available-for-sale Securities [Table Text Block]

The following tables represent the securities held in the Company’s portfolio at September 30, 2013 and at December 31, 2012:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
September 30, 2013	Cost		Gains		Losses		Value
US Treasury	$	3,029,943	$	22,166	$	0	$	3,052,109
US Government and federal agency		16,867,009		119,983		(43,990)		16,943,002
Municipals		1,565,075		33,077		0		1,598,152
Mortgage-backed and collateralized mortgage obligations– residential		11,931,575		150,175		(174,399)		11,907,351
	$	33,393,602	$	325,401	$	(218,389)	$	33,500,614

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2012	Cost		Gains		Losses		Value
US Treasury	$	4,044,909	$	49,623	$	0	$	4,094,532
US Government and federal agency		20,013,843		250,523		(4,623)		20,259,743
Municipals		2,260,272		73,469		0		2,333,741
Mortgage-backed and collateralized
mortgage obligations– residential		14,539,668		264,090		(31,378)		14,772,380
	$	40,858,692	$	637,705	$	(36,001)	$	41,460,396

Investments Classified by Contractual Maturity Date [Table Text Block]

Below is the schedule of contractual maturities for securities held at September 30, 2013:

	Amortized		Fair
	Cost		Value
Due in one year or less	$	5,024,323	$	5,056,320
Due from one to five years		16,085,877		16,175,309
Due from five to ten years		351,827		361,634
Due in more than ten years		0		0
Mortgage-backed and collateralized mortgage obligations – residential		11,931,575		11,907,351
	$	33,393,602	$	33,500,614

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Table Text Block]

Below is the table of securities with unrealized losses, aggregated by investment category and length of time such securities were in an unrealized loss position at September 30, 2013 and December 31, 2012:

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
September 30, 2013	Value		Losses		Value		Losses		Value		Losses
US Government and federal agency	$	3,999,792	$	(43,990)	$	0	$	0	$	3,999,792	$	(43,990)
Mortgage-backed and collateralized mortgage obligations - residential		5,702,888		(141,394)		1,058,476		(33,005)		6,761,364		(174,399)
	$	9,702,680	$	(185,384)	$	1,058,476	$	(33,005)	$	10,761,156	$	(218,389)

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2012	Value		Losses		Value		Losses		Value		Losses
US Government and federal agency	$	3,050,187	$	(4,623)	$	0	$	0	$	3,050,187	$	(4,623)
Mortgage-backed and collateralized mortgage obligations - residential		3,882,818		(21,580)		269,692		(9,798)		4,152,510		(31,378)
	$	6,933,005	$	(26,203)	$	269,692	$	(9,798)	$	7,202,697	$	(36,001)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities
Net income	$ 5,504,146	$ 259,482
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses	0	75,035
Depreciation and amortization	308,010	301,960
Net amortization of securities	287,298	229,564
Net realized gain on sale of securities	0	(2,856)
Net realized gain on sale of loans	(166,766)	(208,387)
Net realized (gain) loss on sale of foreclosed assets	(181,163)	40,058
Net realized gain on sale of premises and equipment	(1,000)	(208,389)
Net realized gain on the extinguishment of debt	(5,262,653)	0
Foreclosed asset impairment	141,531	277,448
Originations of loans for sale	(7,291,857)	(11,657,459)
Proceeds from loan sales	7,617,841	11,364,365
Net change in:
Accrued interest receivable and other assets	(33,408)	(363,947)
Accrued interest payable and other liabilities	31,850	272,295
Net cash from operating activities	953,829	379,169
Cash flows from investing activities
Sales	0	257,997
Maturities, prepayments and calls	7,177,793	8,331,960
Purchases	0	(12,441,742)
Loan originations and payments, net	2,051,555	21,481,939
Additions to premises and equipment, net	(55,476)	(156,328)
Proceeds from the sale of premises and equipment	1,000	998,524
Proceeds from the sale of foreclosed assets	760,328	1,137,080
Net cash from investing activities	9,935,200	19,609,430
Cash flows from financing activities
Net change in deposits	(20,608,034)	(2,251,104)
Net change in federal funds purchased and repurchase agreements	(1,217,685)	778,463
Other borrowing activity:
Repayment of note payable	(500,000)	0
Issuance of senior debt	1,280,000	0
Net cash used in financing activities	(21,045,719)	(1,472,641)
Net change in cash and cash equivalents	(10,156,690)	18,515,958
Beginning cash and cash equivalents	20,297,115	8,919,568
Ending cash and cash equivalents	10,140,425	27,435,526
Supplemental cash flow information:
Cash paid during the period for interest	864,706	1,156,813
Transfers from loans to foreclosed assets	614,485	1,243,347
Transfers from loans held for sale to portfolio	5,881,651	0
Foreclosed asset sales financed by the Company	$ 14,333	$ 72,068

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Preferred Stock, par value (in Dollars per share)	$ 0	$ 0
Preferred Stock, Shares Authorized	1,000,000	1,000,000
Preferred Stock, Shares Issued	0	0
Common Stock, par value (in Dollars per share)	$ 0	$ 0
Common Stock, Shares Authorized	9,000,000	9,000,000
Common Stock, Shares, Issued	1,468,800	1,468,800
Common Stock, Shares, Outstanding	1,468,800	1,468,800

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SUBORDINATED DEBENTURES

9 Months Ended

Sep. 30, 2013

Subordinated Borrowings [Abstract]

Subordinated Borrowings Disclosure [Text Block]

10. SUBORDINATED DEBENTURES

The Trust, as defined in Note 1, sold 4,500 Cumulative Preferred Securities (“trust preferred securities”) at $1,000 per security in a December 2004 offering. The proceeds from the sale of the trust preferred securities were used by the Trust to purchase an equivalent amount of subordinated debentures from the Company. The trust preferred securities and subordinated debentures carry a floating rate of 2.05% over the 3-month LIBOR and was 2.30% at September 30, 2013 and 2.36% at December 31, 2012. The stated maturity is December 30, 2034. The trust preferred securities are redeemable at par value on any interest payment date and are, in effect, guaranteed by the Company. Interest on the subordinated debentures is payable quarterly on March 30^th, June 30^th, September 30^th and December 30^th. The Company is not considered the primary beneficiary of the Trust (under the variable interest entity rules), therefore the Trust is not consolidated in the Company’s financial statements, but rather the subordinated debentures are shown as a liability, and the interest expense is recorded on the Company’s consolidated statement of income.

The terms of the subordinated debentures, the trust preferred securities and the agreements under which they were issued, give the Company the right, from time to time, to defer payment of interest for up to 20 consecutive quarters, unless certain specified events of default have occurred and are continuing. The deferral of interest payments on the subordinated debentures results in the deferral of distributions on the trust preferred securities. In May 2010, the Company exercised its option to defer regularly scheduled quarterly interest payments beginning with the quarterly interest payment that was scheduled to be paid on June 30, 2010. The Company’s deferral of interest does not constitute an event of default.

During the deferral period, interest will continue to accrue on the subordinated debentures. Also, the deferred interest will accrue interest. At the expiration of the deferral period, all accrued and unpaid interest will become immediately due and payable.

The indenture under which the subordinated debentures were issued prohibits certain actions by the Company during the deferral period. Among other things, during the deferral period and subject to certain exceptions, the Company is prohibited from declaring or paying any dividends or distributions on, or redeeming, purchasing, acquiring or making any liquidation payment with respect to, any shares of its capital stock. Although the Company has not determined the duration of the deferral period, as of December 16, 2010, under the FRB Written Agreement, the Company is prohibited from making any distributions of interest, principal or other sums on subordinated debentures or trust preferred securities without prior FRB approval. At September 30, 2013, the accrued interest payable on the subordinated debentures was $414,429.

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 01, 2013
Document Information [Line Items]
Entity Registrant Name	COMMUNITY SHORES BANK CORP
Entity Central Index Key	0001070523
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	CSHB
Entity Common Stock, Shares Outstanding		1,468,800
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2013

XML

NOTES PAYABLE

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

11. NOTES PAYABLE

On January 3, 2011, the Company’s $5,000,000 term loan with Fifth Third Bank (“Fifth Third”) matured. The Company did not have the resources to pay the amount due. The loan was in default at year-end 2012. In addition to the outstanding principal due, there was accrued interest of $763,000 at December 31, 2012. The outstanding principal had an interest rate of 6.00% per annum; 275 basis points above Fifth Third’s prime rate.

On March 20, 2013, the Company, with approval from the FRB, borrowed $1,280,000 from 1030 Norton LLC, a Michigan limited liability company owned by nine individuals; three directors of the Company-Gary F. Bogner, Robert L. Chandonnet and Bruce J. Essex, one former director and five local businessmen, and settled its debt in full with Fifth Third for $500,000. In addition to the payment to Fifth Third, the proceeds of the new senior debt will be used for interest carry, general operations and potential capital support for the Bank. The note bears interest at a fixed rate of 8.00% per annum until paid in full. Interest is payable quarterly, in arrears. The note matures on March 31, 2015. The note is secured by a pledge of all of the issued and outstanding shares of the Bank as evidenced by a pledge agreement between the Company and 1030 Norton LLC. The accrued interest at September 30, 2013 was approximately $26,000. The entire interest balance due was paid on October 1, 2013.

Settling the Fifth Third debt resulted in a gain of approximately $5.3 million in the first quarter of 2013. As a result of this transaction, the Company was able to achieve positive shareholders’ equity of approximately $4 million at March 31, 2013.

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Interest and dividend income
Loans, including fees	$ 1,701,576	$ 1,946,158	$ 5,292,942	$ 6,199,527
Securities	127,222	162,014	421,821	511,709
Federal funds sold and other income	8,283	15,841	26,596	39,456
Total interest income	1,837,081	2,124,013	5,741,359	6,750,692
Interest expense
Deposits	226,945	333,829	757,995	1,094,497
Repurchase agreements, federal funds purchased, and other debt	14,193	15,574	43,919	54,593
Federal Home Loan Bank advances and notes payable	55,947	108,093	143,985	322,937
Total interest expense	297,085	457,496	945,899	1,472,027
Net Interest Income	1,539,996	1,666,517	4,795,460	5,278,665
Provision for loan losses	0	0	0	75,035
Net Interest Income After Provision for Loan Losses	1,539,996	1,666,517	4,795,460	5,203,630
Non-interest income
Service charges on deposit accounts	152,341	166,975	463,644	505,783
Mortgage loan referral fees	0	0	0	14,441
Gain on sale of loans	39,602	105,455	166,766	208,387
Gain on sale of securities	0	0	0	2,856
Gain (loss) on sale of foreclosed assets	136,786	2,375	181,163	(40,058)
Gain on sale of premises and equipment	0	0	1,000	208,389
Gain on the extinguishment of debt	0	0	5,262,653	0
Other	162,479	144,153	479,204	395,606
Total non-interest income	491,208	418,958	6,554,430	1,295,404
Non-interest expense
Salaries and employee benefits	952,400	939,795	2,779,445	2,828,517
Occupancy	168,241	163,266	484,510	484,751
Furniture and equipment	96,796	101,243	294,995	305,228
Advertising	11,427	14,198	35,538	41,550
Data processing	156,105	142,929	456,844	425,390
Professional services	63,357	70,695	268,169	218,803
Foreclosed asset impairment	32,791	92,428	141,531	277,448
FDIC insurance	107,123	178,529	331,191	540,770
Other	318,616	380,445	948,521	1,117,095
Total non-interest expense	1,906,856	2,083,528	5,740,744	6,239,552
Income Before Federal Income Taxes	124,348	1,947	5,609,146	259,482
Federal income tax expense	0	0	105,000	0
Net Income	$ 124,348	$ 1,947	$ 5,504,146	$ 259,482
Weighted average shares outstanding (in Shares)	1,468,800	1,468,800	1,468,800	1,468,800
Diluted average shares outstanding (in Shares)	1,468,800	1,468,800	1,468,800	1,468,800
Basic earnings per share (in Dollars per share)	$ 0.08	$ 0	$ 3.75	$ 0.18
Diluted earnings per share (in Dollars per share)	$ 0.08	$ 0	$ 3.75	$ 0.18

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FORECLOSED ASSETS

9 Months Ended

Sep. 30, 2013

Repossessed Assets [Abstract]

Foreclosed Assets [Text Block]

5. FORECLOSED ASSETS

Foreclosed asset activity:

	September 30,		September 30,
	2013		2012
Beginning of year	$	2,806,781	$	3,276,838
Additions		614,485		1,243,347
Reductions from sales		(593,498)		(1,249,206)
Direct write-downs		(141,531)		(277,448)
End of period	$	2,686,237	$	2,993,531
Expenses related to foreclosed assets include:
Operating expenses, net of rental income	$	189,268	$	199,278

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ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Allowance for Credit Losses [Text Block]

4. ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS

The following tables present the activity in the allowance for loan losses for the three month periods ended September 30, 2013 and 2012 by portfolio segment:

Three Months Ended September 30, 2013	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	439,993	$	1,920,587	$	419,511	$	157,406	$	349,777	$	3,287,274
Charge-offs		(25,794)		0		(225,308)		(193,596)		0		(444,698)
Recoveries		19,656		0		7,804		0		0		27,460
Provision for loan losses		(51,133)		(105,707)		209,672		250,712		(303,544)		0
Ending balance	$	382,722	$	1,814,880	$	411,679	$	214,522	$	46,233	$	2,870,036

Three Months Ended September 30, 2012	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	1,356,903	$	2,251,981	$	442,467	$	193,706	$	76,240	$	4,321,297
Charge-offs		(656,201)		(2,299)		(79,767)		0		0		(738,267)
Recoveries		10,296		8,204		1,877		0		0		20,377
Provision for loan losses		(98,273)		(100,367)		2,191		(39,529)		235,978		0
Ending balance	$	612,725	$	2,157,519	$	366,768	$	154,177	$	312,218	$	3,603,407

The following tables present the activity in the allowance for loan losses for the nine month periods ended September 30, 2013 and 2012 by portfolio segment:

Nine Months Ended September 30, 2013	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	582,198	$	2,266,302	$	331,459	$	203,018	$	0	$	3,382,977
Charge-offs		(66,047)		(25,025)		(263,905)		(248,195)		0		(603,172)
Recoveries		75,856		0		14,375		0		0		90,231
Provision for loan losses		(209,285)		(426,397)		329,750		259,699		46,233		0
Ending balance	$	382,722	$	1,814,880	$	411,679	$	214,522	$	46,233	$	2,870,036

Nine Months Ended September 30, 2012	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	1,309,632	$	3,386,433	$	410,001	$	193,388	$	0	$	5,299,454
Charge-offs		(869,270)		(859,504)		(111,248)		(11,392)		0		(1,851,414)
Recoveries		36,844		21,727		21,761		0		0		80,332
Provision for loan losses		135,519		(391,137)		46,254		(27,819)		312,218		75,035
Ending balance	$	612,725	$	2,157,519	$	366,768	$	154,177	$	312,218	$	3,603,407

The remaining loan footnote tables on the following pages present loans at the recorded investment which includes unpaid principal, accrued interest receivable and net deferred, unearned fees. The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method as of September 30, 2013 and December 31, 2012:

September 30, 2013	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	31,938	$	1,319,242	$	147,892	$	75,361	$	0	$	1,574,433
Collectively evaluated for impairment		350,784		495,638		263,787		139,161		0		1,249,370
Unallocated		0		0		0		0		46,233		46,233
Total ending allowance balance	$	382,722	$	1,814,880	$	411,679	$	214,522	$	46,233	$	2,870,036
Loans:
Individually evaluated for impairment	$	1,226,231	$	6,911,363	$	306,026	$	861,509	$	0	$	9,305,129
Collectively evaluated for impairment		42,469,937		51,680,583		10,164,702		15,260,815		0		119,576,037
Total ending loans balance	$	43,696,168	$	58,591,946	$	10,470,728	$	16,122,324	$	0	$	128,881,166

December 31, 2012	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	104,727	$	1,489,569	$	89,050	$	127,030	$	0	$	1,810,376
Collectively evaluated for impairment		477,471		776,733		242,409		75,988		0		1,572,601
Unallocated		0		0		0		0		0		0
Total ending allowance balance	$	582,198	$	2,266,302	$	331,459	$	203,018	$	0	$	3,382,977
Loans:
Individually evaluated for impairment	$	3,288,294	$	7,322,850	$	321,820	$	782,732	$	0	$	11,715,696
Collectively evaluated for impairment		36,739,269		49,391,498		11,329,495		17,063,417		0		114,523,679
Total ending loans balance	$	40,027,563	$	56,714,348	$	11,651,315	$	17,846,149	$	0	$	126,239,375

The following tables present loans individually evaluated for impairment by class of loans as of September 30, 2013 and December 31, 2012. For purposes of this disclosure, the unpaid principal balance is not reduced for partial charge-offs.

	As of September 30, 2013						For the periods ended September 30, 2013
							Three Months		Three Months		Three Months		Nine Months		Nine Months		Nine Months
			Unpaid				Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Principal		Related		Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Balance		Allowance		Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	1,122,429	$	1,258,174	$	0	$	1,104,010	$	7,911	$	5,315	$	1,406,983	$	28,936	$	26,460
Commercial Real Estate:
General		2,472,673		2,504,385		0		2,343,382		26,440		26,440		2,369,993		78,459		78,459
Construction		0		0		0		0		0		0		0		0		0
Consumer:
Lines of credit		9,800		157,584		0		7,159		0		0		60,136		0		0
Other		58,369		73,870		0		42,295		0		0		26,438		0		0
Credit card		0		0		0		0		0		0		0		0		0
Residential		461,646		687,718		0		292,817		563		563		191,531		1,671		1,671
Subtotal	$	4,124,917	$	4,681,731	$	0	$	3,789,663	$	34,914	$	32,318	$	4,055,081	$	109,066	$	106,590
With an allowance recorded:
Commercial	$	103,802	$	103,343	$	31,938	$	133,788	$	1,493	$	1,493	$	326,595	$	13,895	$	13,540
Commercial Real Estate:
General		4,438,690		4,438,407		1,319,242		4,513,623		30,960		30,960		4,517,192		92,370		92,370
Construction		0		0		0		0		0		0		0		0		0
Consumer:
Lines of credit		197,628		196,715		127,124		286,416		2,953		2,296		183,031		6,696		5,141
Other		40,229		40,071		20,768		62,352		476		474		92,557		1,411		1,411
Credit card		0		0		0		0		0		0		299		0		0
Residential		399,863		408,113		75,361		560,146		4,879		3,677		513,278		14,479		10,988
Subtotal	$	5,180,212	$	5,186,649	$	1,574,433	$	5,556,325	$	40,761	$	38,900	$	5,632,952	$	128,851	$	123,450
Total	$	9,305,129	$	9,868,380	$	1,574,433	$	9,345,988	$	75,675	$	71,218	$	9,688,033	$	237,917	$	230,040

	As of December 31, 2012						For the periods ended September 30, 2012
							Three Months		Three Months		Three Months		Nine Months		Nine Months		Nine Months
			Unpaid				Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Principal		Related		Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Balance		Allowance		Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	2,147,075	$	2,295,401	$	0	$	2,374,733	$	13,665	$	13,665	$	2,496,173	$	40,811	$	40,696
Commercial Real Estate:
General		2,662,984		2,739,027		0		3,328,040		27,030		18,288		2,665,005		39,906		31,214
Construction		0		0		0		61,223		0		0		223,032		0		0
Consumer:
Lines of credit		55,659		55,524		0		41,072		1,966		995		47,143		8,752		4,814
Other		26,221		26,221		0		15,557		71		0		18,796		106		0
Credit card		0		0		0		0		0		0		0		0		0
Residential		208,178		240,491		0		358,875		0		0		285,696		0		0
Subtotal	$	5,100,117	$	5,356,664	$	0	$	6,179,500	$	42,732	$	32,948	$	5,735,845	$	89,575	$	76,724
With an allowance recorded:
Commercial	$	1,141,219	$	1,139,885	$	104,727	$	1,186,175	$	9,981	$	9,276	$	1,595,863	$	30,009	$	26,306
Commercial Real Estate:
General		4,659,866		4,675,981		1,489,569		2,922,193		33,091		32,866		3,448,840		111,506		80,952
Construction		0		0		0		1,960,467		0		0		1,988,734		0		0
Consumer:
Lines of credit		135,111		134,976		40,180		162,470		1,054		871		187,926		2,777		2,594
Other		104,829		104,664		48,870		119,951		611		484		113,378		1,572		1,447
Credit card		0		0		0		3,248		0		0		1,317		0		0
Residential		574,554		594,307		127,030		440,504		3,313		3,129		500,164		9,658		9,253
Subtotal	$	6,615,579	$	6,649,813	$	1,810,376	$	6,795,008	$	48,050	$	46,626	$	7,836,222	$	155,522	$	120,552
Total	$	11,715,696	$	12,006,477	$	1,810,376	$	12,974,508	$	90,782	$	79,574	$	13,572,067	$	245,097	$	197,276

Non-performing loans and impaired loans are defined differently. Some loans may be included in both categories, whereas other loans may only be included in one category. However, non-accrual loans and loans past due 90 days still on accrual are all individually classified impaired loans.

The following tables present the aging of the recorded investment in past due and non accrual loans by class of loans as of September 30, 2013:

					Greater Than 90		Total Accruing				Total Recorded
	30-59 Days Past		60-89 Days  Past		Days Past		Past Due		Current		Investment of
Accruing Loans	Due		Due		Due		Loans		Accruing Loans		Accruing Loans
Commercial	$	0	$	0	$	0	$	0	$	43,613,174	$	43,613,174
Commercial Real Estate:
General		0		0		0		0		53,811,236		53,811,236
Construction		0		0		0		0		2,101,163		2,101,163
Consumer:
Lines of credit		97,593		0		0		97,593		8,154,142		8,251,735
Other		0		4,949		0		4,949		1,662,599		1,667,548
Credit card		506		0		0		506		470,330		470,836
Residential		0		0		0		0		15,737,314		15,737,314
Total	$	98,099	$	4,949	$	0	$	103,048	$	125,549,958	$	125,653,006

					Greater Than 90		Total		Current		Total Non Accrual
	30-59 Days Past		60-89 Days Past		Days Past		Non Accrual		Non Accrual		Recorded
Non Accrual Loans	Due		Due		Due		Past Due Loans		Loans		Investment
Commercial	$	0	$	0	$	40,316	$	40,316	$	42,678	$	82,994
Commercial Real Estate:
General		204,541		0		0		204,541		2,475,006		2,679,547
Construction		0		0		0		0		0		0
Consumer:
Lines of credit		9,800		0		44,528		54,328		16,811		71,139
Other		0		2,141		0		2,141		7,329		9,470
Credit card		0		0		0		0		0		0
Residential		0		0		285,528		285,528		99,482		385,010
Total	$	214,341	$	2,141	$	370,372	$	586,854	$	2,641,306	$	3,228,160

The following tables present the aging of the recorded investment in past due and non accrual loans by class of loans as of December 31, 2012:

					Greater Than 90		Total Accruing				Total Recorded
	30-59 Days Past		60-89 Days Past		Days Past		Past Due		Current		Investment of
Accruing Loans	Due		Due		Due		Loans		Accruing Loans		Accruing Loans
Commercial	$	1,956	$	0	$	0	$	1,956	$	39,465,435	$	39,467,391
Commercial Real Estate:
General		97,605		0		0		97,605		50,193,607		50,291,212
Construction		0		0		0		0		3,479,043		3,479,043
Consumer:
Lines of credit		26,037		44,866		0		70,903		8,963,308		9,034,211
Other		3,707		0		0		3,707		2,015,334		2,019,041
Credit card		2,010		0		0		2,010		488,792		490,802
Residential		0		85,242		0		85,242		17,456,776		17,542,018
Total	$	131,315	$	130,108	$	0	$	261,423	$	122,062,295	$	122,323,718

					Greater Than 90		Total		Current		Total Non Accrual
	30-59 Days Past		60-89 Days Past		Days Past		Non Accrual		Non Accrual		Recorded
Non Accrual Loans	Due		Due		Due		Past Due Loans		Loans		Investment
Commercial	$	8,958	$	20,469	$	320,592	$	350,019	$	210,153	$	560,172
Commercial Real Estate:
General		8,414		280,399		406,792		695,605		2,248,488		2,944,093
Construction		0		0		0		0		0		0
Consumer:
Lines of credit		0		21,583		0		21,583		79,628		101,211
Other		0		0		6,050		6,050		0		6,050
Credit card		0		0		0		0		0		0
Residential		0		0		195,649		195,649		108,482		304,131
Total	$	17,372	$	322,451	$	929,083	$	1,268,906	$	2,646,751	$	3,915,657

Troubled Debt Restructurings:

The Company has allocated $1,537,738 of specific reserves on $8,361,469 of unpaid principal balance of loans to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2013 and $1,699,851 on $10,441,218 of unpaid principal balance of loans as of        December 31, 2012. At September 30, 2013, the Company had an additional $181,503 in performing loans outstanding to one of those customers. As of December 31, 2012, there was $184,364 committed to one customer.

 

During the three and nine month periods ending September 30, 2013 and 2012, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a stated rate of interest lower than the current market rate for new debt with similar risk; interest only payments on an amortizing note; a reduced payment amount which does not fully cover the interest; financing concessions; or a permanent reduction of the recorded investment in the loan.

In the nine month period ended September 30, 2013, one modification involved a stated interest rate below the current market rate for a period of 7 years, while another modification for 2.5 years involved interest-only payments on an amortizing note. One A-B note modification involved a permanent reduction of the recorded investment in the loan.

In the nine month period ended September 30, 2012, modifications involving a stated interest rate of the loan below the current market rate were for periods ranging from 11 months to 5 years. Modifications involving a reduced payment amount were for periods ranging from 5 months to 4 years. Two modifications involved a permanent reduction of the recorded investment in the loan.

In the three month period ended September 30, 2013, there were no loans modified as troubled debt restructurings and no charge-offs as part of a troubled debt restructuring.

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ended September 30, 2013:

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
Nine Months Ended September 30, 2013	Number of Loans	Investment		Investment
Troubled Debt Restructurings:
Commercial	1	$	143,136	$	133,425
Consumer:
Lines of credit	2		137,893		137,893
Total	3	$	281,029	$	271,318

In the nine month period ended September 30, 2013, there were $9,711 of charge-offs as part of a troubled debt restructuring arrangement and an additional $38,913 of specific reserves were established on these troubled debt restructurings.

In the three month period ended September 30, 2012, there were no loans modified as troubled debt restructurings and no charge-offs as part of a troubled debt restructuring.

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ending September 30, 2012:

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
Nine Months Ended September 30, 2012	Number of Loans	Investment		Investment
Troubled Debt Restructurings:
Commercial	1	$	11,880	$	11,880
Commercial Real Estate:
General	5		3,446,269		2,808,146
Consumer:
Lines of credit	2		126,860		126,860
Residential	1		62,085		62,085
Total	9	$	3,647,094	$	3,008,971

In the nine month period ended September 30, 2012, there were $638,000 of charge-offs as part of a troubled debt restructuring arrangement and an additional $50,000 of specific reserves were established on these troubled debt restructurings.

 

Generally, a modified loan is considered to be in payment default when the borrower is not performing according to the renegotiated terms.

For the three and nine month periods ended September 30, 2013 and 2012, there were no troubled debt restructurings that experienced a payment default within 12 months following the modification.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed utilizing the Company’s internal underwriting policy.

Credit Quality Indicators:

The Bank utilizes a numeric grading system for commercial and commercial real estate loans to indicate the strength of the credit. At origination, grades are assigned to each commercial and commercial real estate loan by assessing information about the specific borrower’s situation including cash flow analysis and the estimated collateral values. The loan grade is reassessed at each renewal or amendment but any credit may receive a review based on lender identification of changes in the situation or behavior of the borrower. All commercial and commercial real estate loans exceeding $500,000 are formally reviewed at least annually. Once a loan is graded a 5M or greater number, and is over $100,000, the loan grade will be reanalyzed once a quarter to assess the borrower’s compliance with the Bank’s documented action plan. In addition to these methods for assigning loan grades, changes may occur through the external loan review or regulatory exam process. The loan grades are as follows:

1. Exceptional. Loans with an exceptional credit rating.

2. Quality. Loans with excellent sources of repayment that conform, in all respects, to Bank policy and regulatory requirements. These are loans for which little repayment risk has been identified.

3. Above Average. Loans with above average sources of repayment and minimal identified credit or collateral exceptions and minimal repayment risk.

4. Average. Loans with average sources of repayment that materially conform to Bank policy and regulatory requirements. Repayment risk is considered average.

5. Acceptable. Loans with acceptable sources of repayment and risk.

5M. Monitor. Loans considered to be below average quality. The loans are often fundamentally sound but require more frequent management review because of an adverse financial event. Risk of non payment is elevated.

6. Special Mention. Loans that have potential weaknesses and deserve close attention. If uncorrected, further deterioration is likely. Risk of non payment is above average.

7. Substandard. Loans that are inadequately protected by the borrower’s capacity to pay or the collateral pledged. Risk of non payment is high.

8. Doubtful. Loans in this grade have identified weaknesses that make full repayment highly questionable and improbable.

When a loan is downgraded to a nine, it is considered a loss and is charged-off.

As of September 30, 2013 and December 31, 2012, and based on the most recent analysis performed, the recorded investment by risk category and class of loans is as follows:

					Commercial Real Estate				Commercial Real Estate
	Commercial				General				Construction
	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
	2013		2012		2013		2012		2013		2012
1	$	0	$	0	$	0	$	0	$	0	$	0
2		261,437		298,200		0		0		0		0
3		7,791,976		2,004,476		4,697,215		4,141,391		0		0
4		13,313,325		14,017,221		17,931,763		12,911,811		467,651		384,848
5		15,217,224		16,373,423		21,066,423		22,177,734		236,099		1,695,990
5M		4,275,905		3,318,016		3,817,196		3,675,131		1,397,413		1,398,205
6		1,705,945		2,180,119		6,298,783		7,365,970		0		0
7		1,072,584		1,369,803		519,913		287,682		0		0
8		57,772		466,305		2,159,490		2,675,586		0		0
Total	$	43,696,168	$	40,027,563	$	56,490,783	$	53,235,305	$	2,101,163	$	3,479,043

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented and by payment activity. The following tables present the recorded investment in residential and consumer loans based on payment activity as of September 30, 2013 and December 31, 2012:

	Residential
	September 30,		December 31,
	2013		2012
Performing	$	15,260,815	$	17,063,417
Impaired		861,509		782,732
Total	$	16,122,324	$	17,846,149

	Consumer – Lines of credit				Consumer – Other				Consumer – Credit card
	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
	2013		2012		2013		2012		2013		2012
Performing	$	8,115,446	$	8,944,652	$	1,578,420	$	1,894,041	$	470,836	$	490,802
Impaired		207,428		190,770		98,598		131,050		0		0
Total	$	8,322,874	$	9,135,422	$	1,677,018	$	2,025,091	$	470,836	$	490,802

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BASIS OF PRESENTATION, LOAN POLICY AND RECENT DEVELOPMENTS (Policies)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

BASIS OF PRESENTATION: The unaudited, consolidated financial statements as of and for the three and nine months ended September 30, 2013 include the consolidated results of operations of Community Shores Bank Corporation (“Company”) and its wholly-owned subsidiaries, Community Shores Financial Services (“CS Financial Services”), and Community Shores Bank (the “Bank”), and the Bank’s wholly-owned subsidiary, Community Shores Mortgage Company (the “Mortgage Company”) and the Mortgage Company’s wholly-owned subsidiary, Berryfield Development, LLC (“Berryfield”). Community Shores Capital Trust I (“the Trust”) is not consolidated and exists solely to issue capital securities. These consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and Article 8 of Regulation S-X and do not include all disclosures required by generally accepted accounting principles for a complete presentation of the Company’s financial condition and results of operations. In the opinion of management, the information reflects all adjustments (consisting only of normal recurring adjustments) which are necessary in order to make the financial statements not misleading and for a fair representation of the results of operations for such periods. The results for the three and nine month periods ended September 30, 2013 should not be considered as indicative of results for a full year. For further information, refer to the consolidated financial statements and footnotes included in the Company’s annual report on Form 10-K for the period ended December 31, 2012. Some items in the prior year financial statements may be reclassified to conform to the current presentation.

Finance, Loans and Leases Receivable, Policy [Policy Text Block]

LOAN POLICY: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses. The loan portfolio consists of the following segments:

Commercial- Loans to businesses that are sole proprietorships, partnerships, limited liability companies and corporations. These loans are for commercial, industrial, or professional purposes. The risk characteristics of these loans vary based on the borrowers business and industry as repayment is typically dependent on cash flows generated from the underlying business.

Commercial Real Estate- Loans to individuals or businesses that are secured by improved and unimproved vacant land, farmland, commercial real property, multifamily residential properties, and all other conforming, nonresidential properties. Proceeds may be used for land acquisition, development or construction. These loans typically fall into two general categories: property that is owner occupied and income or investment property. Owner occupied commercial real estate loans typically involve the same risks as commercial and industrial loans however the underlying collateral is the real estate which is subject to changes in market value after the loan’s origination. Adverse economic events and changes in real estate market valuations generally describe the risks that accompany commercial real estate loans involving income or investment property. The ability of the borrower to repay tends to depend on the success of the underlying project or the ability of the borrower to sell or lease the property at certain anticipated values.

Consumer-Term loans or lines of credit for the purchase of consumer goods, vehicles or home improvement. The risk characteristics of the loans in this segment vary depending on the type of collateral but for the most part repayment is expected from an individual continuing to generate a cash flow that supports the calculated payment obligation. Secondary support could involve liquidation of collateral.

Residential- Loans to purchase or refinance single family residences. The risks associated with this segment are similar to the risks for consumer loans as far as individual payment obligations however the underlying collateral is the real estate. Real estate is subject to changes in market valuation and can be unstable for a variety of reasons.

For all loan segments, interest income is accrued on the unpaid principal using the interest method assigned to the loan product and includes amortization of net deferred loan fees and costs over the loan term. Interest income is not reported when full loan repayment is in doubt. A loan is moved to non-accrual status when it is past due over 90 days unless the loan is well-secured and in the process of collection. If a loan is not past due but deemed to be impaired it may also be moved to non-accrual status. These rules apply to loans in all segments. However certain classes of loans in the consumer segment may simply get charged-off as opposed to moving to non-accrual status.

All interest accrued but not received for a loan placed on non-accrual is reversed against interest income at the time the loan is assigned non-accrual status. Payments received on such loans are applied to principal when there is doubt about recovering the full principal outstanding. Loans are eligible to return to accrual status after six months of timely payment and future payments are reasonably assured.

The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased by the provision for loan losses and from recoveries of previously charged-off loans and decreased by charge-offs.

The allowance for loan loss analysis is performed monthly. Management’s methodology consists of specific and general components. The general component covers non-impaired loans and is based on historical loss experience adjusted for current economic factors.

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Bank over the most recent 12 quarters. The historical loss experience is recalculated at the end of each quarter. This actual loss experience is supplemented with current economic factors based on the risks present for each portfolio segment. These current economic factors are also revisited at the end of each quarter and include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; quality of loan review system; degree of oversight by the Board of Directors; national and local economic trends and conditions; industry conditions; competition and legal and regulatory requirements; and effects of changes in credit concentrations.

For the commercial and commercial real estate portfolio segments, the historical loss is tracked by original loan grade. The Bank utilizes a numeric grading system for commercial and commercial real estate loans. Grades are assigned to each commercial and commercial real estate loan by assessing information about the specific borrower’s situation and the estimated collateral values. The description of the loan grade criteria is included in Note 4. The most significant risks to the commercial and commercial real estate segments are the level of development and sales of real estate and the collateral values.  Locally and nationally, real estate development and sales activity is slowly picking up but has not yet returned to pre-recession levels. There are widespread pockets of value stabilization but in some cases real estate values can be erratic for properties such as golf courses and non-owner occupied office space. Even so, impaired loan charge-off activity directly related to falling collateral values has been less frequent. In 2012 and 2013, with charge-off activity lessening, the calculated historical loss factor assigned to general allocations was reduced.

Within the commercial and industrial and commercial real estate portfolios, there are classes of loans with like risk characteristics that are periodically segregated because management has determined that the historical losses or current factors are unique and ought to be considered separately from the entire segment.

For the consumer segment, historical loss experience is based on the actual loss history of the following four classes; general consumer loans, personal lines of credit, home equity lines of credit and credit cards. The level of delinquencies and charge-off experience directly impacts the general allocations to the consumer classes. Both delinquencies and charge-offs have gone down in the last year allowing a reduction of the general allocations in the allowance for loan losses.

The residential segment loss experience is not segregated by grades or classes. The level of delinquencies, charge-off experience, and direction of real estate values directly impacts the allocations to the residential real estate segment. Stabilizing real estate values have resulted in reduced specific allocations in the allowance for loan losses.

The specific component of the allowance for loan losses relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and are classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.

Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Any loan within a segment can be considered for individual impairment if it meets the above criteria. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.

Allocations of the allowance may be made for specific loans and groups, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. Loan balances are generally charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Statutorily, the Bank must charge-off any bad debt that reaches delinquency of 360 days. In the case of an impaired loan, management typically charges off any portion of the debt that is unsecured based on an internal analysis of future cash flows and or collateral.

Various regulatory agencies periodically review our allowance for loan losses. These agencies may require the Company to take additional provisions based on their judgments about information available to them at the time of their examination.

There was no material change in the allowance for loan loss methodology in the first three quarters of 2013.

New Accounting Pronouncements, Policy [Policy Text Block]

RECENT DEVELOPMENTS: In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which is intended to improve the reporting of reclassifications out of accumulated other comprehensive income.  The ASU requires an entity to report, either on the face of the income statement or in the notes to the financial statements, the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in the income statement.  This ASU was adopted by the Company prospectively in the first quarter of 2013.

In 2012, the Company recorded consolidated net income for the first time since 2006. The trend of profitability continued in the first three quarters of 2013. A large portion of the earnings reported for 2013 is attributable to a $5.3 million gain on extinguishment of debt recorded late in the first quarter. Operating profits recorded in the second and third quarters have added to the Company’s consolidated earnings, which were $5.5 million through September 30, 2013. The return to core earning profitability stems mainly from stabilized credit quality and real estate valuations and the associated effect on the calculated reserve for loan losses. There has been no provision for loan losses made since the first quarter of 2012, and at September 30, 2013, there was approximately $46,000 of unallocated reserves stemming from decreases to the Bank’s 36-month historical loss calculation. The unallocated reserves are not specific to any particular portfolio segment.

In spite of the improved financial outcome for the last several quarters, the Company’s significant consolidated losses from 2007 through 2011 eroded capital and reduced regulatory capital ratios. As a result, the Bank was deemed undercapitalized according to regulatory capital standards beginning December 31, 2010. At that time, the Bank had a total risk-based capital ratio of 7.06%. Earnings recorded by the Bank along with a significant reduction in risk-weighted assets during 2012 improved the total risk-based capital ratio to 7.88% at December 31, 2012. At March 31, 2013, the Bank’s total risk-based capital ratio advanced to 8.04% as a result of the Bank’s first quarter earnings and a $25,000 capital contribution from the Company. At that time, the Bank was considered adequately capitalized according to regulatory capital standards. As a result of earnings recorded during 2013’s second and third quarters, the Bank’s total risk-based capital ratio rose to 8.46% at September 30, 2013.

From 2007 through 2011 when the Company recorded significant losses primarily as a result of deteriorating asset quality, the Bank endured additional regulatory scrutiny and entered into a Consent Order with the Federal Deposit Insurance Corporation (“FDIC”) and the State of Michigan’s Department of Insurance and Financial Services (“DIFS”) previously the Office of Financial and Insurance Regulation (“OFIR”), its primary regulators, on September 2, 2010. The Bank agreed to the terms of the Consent Order without admitting or denying any charge of unsafe or unsound banking practices relating to capital, asset quality, or earnings. The Consent Order imposes no fines or penalties on the Bank. The Consent Order will remain in effect and enforceable until it is modified, terminated, suspended, or set aside by the FDIC and DIFS.

Under the Consent Order, the Bank was required, within 90 days of September 2, 2010, to have and maintain its level of Tier 1 capital, as a percentage of its total assets, at a minimum of 8.5%, and its level of qualifying total capital, as a percentage of risk-weighted assets, at a minimum of 11%. The Bank was not able to meet these requirements within the required 90-day period and remained out of compliance with the Consent Order as of September 30, 2013.

The lack of financial soundness of the Bank and the Company’s inability to serve as a source of strength for the Bank resulted in the board of directors entering into a Written Agreement with the Federal Reserve Bank of Chicago (the “FRB”), the Company’s primary regulator. The Written Agreement became effective on December 16, 2010, when it was executed by the FRB. The Written Agreement provides that: (i) the Company must take appropriate steps to fully utilize its financial and managerial resources to serve as a source of strength to the Bank; (ii) the Company may not declare or pay any dividends or take dividends or any other payment representing a reduction in capital from the Bank or make any distributions of interest, principal or other sums on subordinated debentures or trust preferred securities without prior FRB approval; (iii) the Company may not incur, increase or guarantee any debt or purchase or redeem any shares of its stock without prior FRB approval; (iv) the Company must submit a written statement of its planned sources and uses of cash for debt service, operating expenses and other purposes to the FRB within 30 days of the Written Agreement; (v) the Company shall take all necessary actions to ensure that the Bank, the Company and all nonbank subsidiaries of both the Bank and the Company comply with sections 23A and 23B of the Federal Reserve Act and Regulation W of the Board of Governors (12 C.F.R. Part 223) in all transactions between affiliates; (vi) the Company may not appoint any new director or senior executive officer, or change the responsibilities of any senior executive officer so that the officer would assume a different senior executive officer position, without prior regulatory approval; and finally (vii) within 30 days after the end of each calendar quarter following the date of the Written Agreement, the board of directors shall submit to the FRB written progress reports detailing the form and manner of all actions taken to secure compliance with the provisions of the Written Agreement as well as current copies of the parent company only financial statements. The Company has not yet been able to meet the obligation detailed in part (i) above; as the Company currently has limited resources with which to assist the Bank in achieving the capital level required by the Consent Order. The Company’s main liquidity resource is its cash account balance which, as of September 30, 2013, was approximately $656,000.

On January 3, 2011, the Company was not able to repay its $5 million term loan owed to Fifth Third Bank (“Fifth Third”); nor was the Company able to make the preceding ten quarterly interest payments. The term loan was in default for 25 months. At December 31, 2012, the total amount owed Fifth Third was $5,763,000. On March 20, 2013, the Company, with approval from the FRB, borrowed $1,280,000 from 1030 Norton LLC, a Michigan limited liability company owned by nine individuals; three directors of the Company-Gary F. Bogner, Robert L. Chandonnet and Bruce J. Essex, one former director and five local businessmen, and settled its debt with Fifth Third for $500,000. Settling the Fifth Third debt resulted in a gain of approximately $5.3 million in the first quarter of 2013. As a result of this transaction, the Company was able to achieve positive shareholders’ equity of approximately $4 million at March 31, 2013.

In addition to the payment to Fifth Third, the proceeds of the new senior debt will be used for interest carry, general operations and potential capital support for the Bank. The note bears interest at 8% per annum until paid in full. Interest is payable quarterly in arrears. The note matures on March 31, 2015 and is secured by all of the issued and outstanding shares of the Bank as evidenced by a pledge agreement between the Company and 1030 Norton LLC dated March 20, 2013. The reduced amount of borrowings is expected to decrease interest expense by approximately $200,000 annually. Refer to Note 11 for further discussion.

On August 17, 2011, the Bank was issued a Supervisory Prompt Corrective Action Directive (the “Directive”) because of its undercapitalized capital category at December 31, 2010, its failure to submit a capital restoration plan that satisfies the requirements stipulated in the FDIC Rules and Regulations, and the continued deterioration of the Bank. The Directive stipulated that the Bank be restored to an “adequately capitalized” capital category within 60 days of the issuance of the Directive. During the 60 days, the board made efforts to secure funding and comply with the Directive but was not successful. Through several quarters of earnings and a $25,000 capital contribution from the Company, the Bank reached an adequately capitalized regulatory capital category at March 31, 2013—see Note 15 to the consolidated financial statements. Management formally communicated achievement of the capital level stipulated in the Directive to the FDIC through the submission of the quarterly Call Report and the required quarterly written communication to the regulatory agencies at the end of April. Recent feedback received by management indicated that formal public release of the Directive is anticipated to occur upon achievement of four consecutive quarters of adequate capitalization, which is expected to occur by way of submitting 2013’s fourth quarter Call Report to the FDIC on or about January 30, 2014, assuming that the capital ratios of the Bank remain stable for the remaining quarter of 2013.

Regardless of meeting the stipulations in the Directive, failure to comply with the provisions of the Consent Order or the Written Agreement may subject the Bank to further regulatory enforcement action.

As of December 31, 2012, the Company’s extended period of net losses, failure to repay its term loan at maturity (subsequently settled as noted above), timely compliance with the higher capital ratios of the Directive and the Consent Order, and the provisions of the Written Agreement raised substantial doubt about the Company’s ability to continue as a going concern and as a result of this doubt, our auditors added an explanatory paragraph to their opinion on the Company’s December 31, 2012 consolidated financial statements expressing such doubt. These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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COMMITMENTS AND OFF-BALANCE SHEET RISK

9 Months Ended

Sep. 30, 2013

Commitments And Off Balance Sheet [Abstract]

Commitments And Off Balance Sheet [Text Block]

12. COMMITMENTS AND OFF-BALANCE SHEET RISK

Some financial instruments are used to meet financing needs and to reduce exposure to interest rate changes. These financial instruments include commitments to extend credit and standby letters of credit. These involve, to varying degrees, credit and interest-rate risk in excess of the amount reported in the financial statements. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the commitment, and generally have fixed expiration dates. Standby letters of credit are conditional commitments to guarantee a customer’s performance to another party. Exposure to credit loss, if the customer does not perform, is represented by the contractual amount for commitments to extend credit and standby letters of credit. Collateral or other security is normally obtained for these financial instruments prior to their use and many of the commitments are expected to expire without being used.

A summary of the notional and contractual amounts of outstanding financing instruments with off-balance-sheet risk as of September 30, 2013 and December 31, 2012 follows:

	September 30, 2013		December 31, 2012
Unused lines of credit and letters of credit	$	25,064,561	$	22,817,615
Commitments to make loans		453,935		253,000

Commitments to make loans generally terminate one year or less from the date of commitment and may require a fee. Since many of the above commitments on lines of credit and letters of credit expire without being used, the above amounts related to those categories do not necessarily represent future cash disbursements.

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SHORT-TERM BORROWINGS

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block]

8. SHORT-TERM BORROWINGS

The Company’s short-term borrowings consist of repurchase agreements and less frequently borrowings from the FRB Discount Window. There have been no borrowings from the FRB Discount Window since January 2010. The September 30, 2013 and December 31, 2012 short-term borrowing information was as follows:

	Repurchase
	Agreements
Outstanding at September 30, 2013	$	8,972,374
Average interest rate at period end		0.56	%
Average balance during period		9,996,881
Average interest rate during period		0.59	%
Maximum month end balance during period		10,878,256
Outstanding at December 31, 2012	$	10,190,059
Average interest rate at year-end		0.59	%
Average balance during year		9,241,260
Average interest rate during year		0.75	%
Maximum month end balance during year		12,037,087

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FAIR VALUE MEASUREMENTS (Details Textual) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Impaired Financing Receivable, Recorded Investment	$ 114,334	$ 2,394,211
Impaired Financing Receivable, Related Allowance	0	1,382,905
Loans Additional Provisions	15,818	13,000
Foreclosed Assets Fair Value Disclosure	323,184	521,738
Foreclosed Assets Written Down	$ 40,240	$ 128,139

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PREMISES AND EQUIPMENT

9 Months Ended

Sep. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

6. PREMISES AND EQUIPMENT

Period end premises and equipment were as follows:

	September 30,		December 31,
	2013		2012
Land & land improvements	$	4,700,464	$	4,700,464
Buildings & building improvements		6,148,829		6,132,163
Furniture, fixtures and equipment		3,839,270		3,800,460
		14,688,563		14,633,087
Less: accumulated depreciation		5,520,211		5,212,201
	$	9,168,352	$	9,420,886

During the second quarter of 2012, the Company sold land with a carrying value of $790,135 resulting in a gain on sale of $208,389.

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DEPOSITS

9 Months Ended

Sep. 30, 2013

Banking and Thrift [Abstract]

Deposit Liabilities Disclosures [Text Block]

7. DEPOSITS

The components of the outstanding deposit balances at September 30, 2013 and December 31, 2012 were as follows:

	September 30,		December 31,
	2013		2012
Non-interest-bearing DDA	$	31,700,054	$	40,271,190
Interest-bearing DDA		25,738,324		22,865,704
Money market		21,524,818		18,602,302
Savings		8,157,419		9,018,387
Time, under $100,000		66,976,766		83,416,175
Time, over $100,000		9,471,078		10,002,735
Total Deposits	$	163,568,459	$	184,176,493

There were no brokered deposits at September 30, 2013 and December 31, 2012. Since the Bank was not categorized as “well capitalized” at September 30, 2013 and is under a Consent Order, a regulatory waiver is required to accept, renew or rollover brokered deposits. The Bank has not issued brokered deposits since January of 2010.

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FEDERAL HOME LOAN BANK BORROWINGS

9 Months Ended

Sep. 30, 2013

Federal Home Loan Banks [Abstract]

Federal Home Loan Bank, Advances [Text Block]

9. FEDERAL HOME LOAN BANK BORROWINGS

The Bank is a member of the Federal Home Loan Bank (“FHLB”) of Indianapolis. Based on its current FHLB stock holdings and collateral, the Bank has the capacity to borrow $2,839,659. Each borrowing requires a direct pledge of securities and or loans. To support potential borrowings with the FHLB, the Bank had residential loans with a fair market value of $3,549,574 pledged at September 30, 2013. The Bank had no outstanding borrowings with the FHLB at either September 30, 2013 or December 31, 2012.

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REGULATORY MATTERS (Details Textual) (USD $)	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Aug. 17, 2011	Sep. 02, 2010
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Percentage Of Net Risk Weighted Assets	1.25%
Disallowed Tier Two Risk Based Capital	$ 1,185,131	$ 1,654,663
Minimum Net Capital Required	6,534,000		25,000
Tier Two Risk Based Capital	$ 1,684,905	$ 1,728,314
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	8.50%	8.50%		8.50%
Capital Required to be Well Capitalized to Risk Weighted Assets	11.00%	11.00%		11.00%
Description of Regulatory Minimum Capital Assets	Since the Company is a one bank holding company with consolidated assets less than $500 million, regulatory minimum capital ratios are applied only to the Bank.

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BASIS OF PRESENTATION, LOAN POLICY AND RECENT DEVELOPMENTS (Details Textual) (USD $)	3 Months Ended			9 Months Ended		1 Months Ended
	Sep. 30, 2013	Mar. 31, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Mar. 20, 2013	Dec. 31, 2012	Dec. 31, 2010	Sep. 02, 2010	Jan. 03, 2011
Net Income (Loss) Attributable to Parent	$ 124,348		$ 1,947	$ 5,504,146	$ 259,482
Capital to Risk Weighted Assets	8.46%	8.04%		8.46%			7.88%	7.06%
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	8.50%			8.50%			8.50%		8.50%
Capital Required to be Well Capitalized to Risk Weighted Assets	11.00%			11.00%			11.00%		11.00%
Term Of Consent Order With Regulatory Entity				90 months
Cash	656,000			656,000
Capital Contribution Made		25,000
Gains (Losses) on Extinguishment of Debt	0		0	5,262,653	0
Loans and Leases Receivable, Allowance	2,870,036			2,870,036			3,382,977
Extinguishment of Debt, Gain (Loss), Net of Tax		5,300,000
Retained Earnings (Accumulated Deficit)	(9,312,447)	4,000,000		(9,312,447)			(14,816,593)
Debt Instrument, Interest Rate, Stated Percentage							6.00%
Unallocated Financing Receivables [Member]
Loans and Leases Receivable, Allowance	46,000			46,000
Fifth Third Bank [Member]
Long-term Debt, Gross										5,000,000
Debt Instrument, Debt Default, Amount							5,763,000
Repayments of Long-term Debt						500,000
1030 Norton LLC [Member]
Long-term Debt, Gross						1,280,000
Decrease In Interest Payments				$ 200,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%			8.00%
Debt Instrument, Maturity Date				Mar. 31, 2015

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SHORT-TERM BORROWINGS (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Outstanding	$ 8,972,374	$ 10,190,059
Average interest rate at period end	0.56%	0.59%
Average balance during period	9,996,881	9,241,260
Average interest rate during period	0.59%	0.75%
Maximum month end balance during period	$ 10,878,256	$ 12,037,087

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INCOME TAXES

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

14. INCOME TAXES

Accounting guidance related to income taxes requires that companies assess whether a valuation allowance should be established against their deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard.  In making such judgments, we consider both positive and negative evidence and analyze changes in near-term market conditions as well as other factors which may impact future operating results. Significant weight is given to evidence that can be objectively verified.  The previous losses dating back to 2007 significantly restricted our ability under the accounting rules to rely on projections of future taxable income to support the recovery of our deferred tax assets. Consequently, we determined it necessary to carry a valuation allowance against our entire net deferred tax asset.

Although the Company recognized a profit in 2012 and the first three quarters of 2013, there must be a consistent trend of profitability in order to support the realization of our deferred tax assets. The valuation allowance against our deferred tax assets may be reversed to income in future periods to the extent that the related deferred income tax assets are realized or the valuation allowance is otherwise no longer required.  We will continue to monitor our deferred tax assets quarterly for changes affecting their realizability.

As a result of the large gain on the extinguishment of debt, the Company recorded income tax expense from operations in the amount of $105,000. This amount represents projected taxable earnings subject to alternative minimum taxation which may fluctuate throughout the year with changes in operating results. Additionally, the gain on the extinguishment of debt may result in a reduction of net operating loss carry-forward tax attributes by an estimated $5.3 million.  Even so, the Company’s estimated net operating loss carry-forward remaining would be over $6 million.

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ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS (Tables)

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent [Table Text Block]

The following tables present the activity in the allowance for loan losses for the three month periods ended September 30, 2013 and 2012 by portfolio segment:

Three Months Ended September 30, 2013	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	439,993	$	1,920,587	$	419,511	$	157,406	$	349,777	$	3,287,274
Charge-offs		(25,794)		0		(225,308)		(193,596)		0		(444,698)
Recoveries		19,656		0		7,804		0		0		27,460
Provision for loan losses		(51,133)		(105,707)		209,672		250,712		(303,544)		0
Ending balance	$	382,722	$	1,814,880	$	411,679	$	214,522	$	46,233	$	2,870,036

Three Months Ended September 30, 2012	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	1,356,903	$	2,251,981	$	442,467	$	193,706	$	76,240	$	4,321,297
Charge-offs		(656,201)		(2,299)		(79,767)		0		0		(738,267)
Recoveries		10,296		8,204		1,877		0		0		20,377
Provision for loan losses		(98,273)		(100,367)		2,191		(39,529)		235,978		0
Ending balance	$	612,725	$	2,157,519	$	366,768	$	154,177	$	312,218	$	3,603,407

The following tables present the activity in the allowance for loan losses for the nine month periods ended September 30, 2013 and 2012 by portfolio segment:

Nine Months Ended September 30, 2013	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	582,198	$	2,266,302	$	331,459	$	203,018	$	0	$	3,382,977
Charge-offs		(66,047)		(25,025)		(263,905)		(248,195)		0		(603,172)
Recoveries		75,856		0		14,375		0		0		90,231
Provision for loan losses		(209,285)		(426,397)		329,750		259,699		46,233		0
Ending balance	$	382,722	$	1,814,880	$	411,679	$	214,522	$	46,233	$	2,870,036

Nine Months Ended September 30, 2012	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	1,309,632	$	3,386,433	$	410,001	$	193,388	$	0	$	5,299,454
Charge-offs		(869,270)		(859,504)		(111,248)		(11,392)		0		(1,851,414)
Recoveries		36,844		21,727		21,761		0		0		80,332
Provision for loan losses		135,519		(391,137)		46,254		(27,819)		312,218		75,035
Ending balance	$	612,725	$	2,157,519	$	366,768	$	154,177	$	312,218	$	3,603,407

Allowance for Credit Losses on Financing Receivables [Table Text Block]

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method as of September 30, 2013 and December 31, 2012:

September 30, 2013	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	31,938	$	1,319,242	$	147,892	$	75,361	$	0	$	1,574,433
Collectively evaluated for impairment		350,784		495,638		263,787		139,161		0		1,249,370
Unallocated		0		0		0		0		46,233		46,233
Total ending allowance balance	$	382,722	$	1,814,880	$	411,679	$	214,522	$	46,233	$	2,870,036
Loans:
Individually evaluated for impairment	$	1,226,231	$	6,911,363	$	306,026	$	861,509	$	0	$	9,305,129
Collectively evaluated for impairment		42,469,937		51,680,583		10,164,702		15,260,815		0		119,576,037
Total ending loans balance	$	43,696,168	$	58,591,946	$	10,470,728	$	16,122,324	$	0	$	128,881,166

December 31, 2012	Commercial		Commercial Real Estate		Consumer		Residential		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	104,727	$	1,489,569	$	89,050	$	127,030	$	0	$	1,810,376
Collectively evaluated for impairment		477,471		776,733		242,409		75,988		0		1,572,601
Unallocated		0		0		0		0		0		0
Total ending allowance balance	$	582,198	$	2,266,302	$	331,459	$	203,018	$	0	$	3,382,977
Loans:
Individually evaluated for impairment	$	3,288,294	$	7,322,850	$	321,820	$	782,732	$	0	$	11,715,696
Collectively evaluated for impairment		36,739,269		49,391,498		11,329,495		17,063,417		0		114,523,679
Total ending loans balance	$	40,027,563	$	56,714,348	$	11,651,315	$	17,846,149	$	0	$	126,239,375

Schedule Of Non Performing Past Due And Accrual Status Of Impaired Loans [Table Text Block]

The following tables present loans individually evaluated for impairment by class of loans as of September 30, 2013 and December 31, 2012. For purposes of this disclosure, the unpaid principal balance is not reduced for partial charge-offs.

	As of September 30, 2013						For the periods ended September 30, 2013
							Three Months		Three Months		Three Months		Nine Months		Nine Months		Nine Months
			Unpaid				Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Principal		Related		Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Balance		Allowance		Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	1,122,429	$	1,258,174	$	0	$	1,104,010	$	7,911	$	5,315	$	1,406,983	$	28,936	$	26,460
Commercial Real Estate:
General		2,472,673		2,504,385		0		2,343,382		26,440		26,440		2,369,993		78,459		78,459
Construction		0		0		0		0		0		0		0		0		0
Consumer:
Lines of credit		9,800		157,584		0		7,159		0		0		60,136		0		0
Other		58,369		73,870		0		42,295		0		0		26,438		0		0
Credit card		0		0		0		0		0		0		0		0		0
Residential		461,646		687,718		0		292,817		563		563		191,531		1,671		1,671
Subtotal	$	4,124,917	$	4,681,731	$	0	$	3,789,663	$	34,914	$	32,318	$	4,055,081	$	109,066	$	106,590
With an allowance recorded:
Commercial	$	103,802	$	103,343	$	31,938	$	133,788	$	1,493	$	1,493	$	326,595	$	13,895	$	13,540
Commercial Real Estate:
General		4,438,690		4,438,407		1,319,242		4,513,623		30,960		30,960		4,517,192		92,370		92,370
Construction		0		0		0		0		0		0		0		0		0
Consumer:
Lines of credit		197,628		196,715		127,124		286,416		2,953		2,296		183,031		6,696		5,141
Other		40,229		40,071		20,768		62,352		476		474		92,557		1,411		1,411
Credit card		0		0		0		0		0		0		299		0		0
Residential		399,863		408,113		75,361		560,146		4,879		3,677		513,278		14,479		10,988
Subtotal	$	5,180,212	$	5,186,649	$	1,574,433	$	5,556,325	$	40,761	$	38,900	$	5,632,952	$	128,851	$	123,450
Total	$	9,305,129	$	9,868,380	$	1,574,433	$	9,345,988	$	75,675	$	71,218	$	9,688,033	$	237,917	$	230,040

	As of December 31, 2012						For the periods ended September 30, 2012
							Three Months		Three Months		Three Months		Nine Months		Nine Months		Nine Months
			Unpaid				Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Principal		Related		Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Balance		Allowance		Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial	$	2,147,075	$	2,295,401	$	0	$	2,374,733	$	13,665	$	13,665	$	2,496,173	$	40,811	$	40,696
Commercial Real Estate:
General		2,662,984		2,739,027		0		3,328,040		27,030		18,288		2,665,005		39,906		31,214
Construction		0		0		0		61,223		0		0		223,032		0		0
Consumer:
Lines of credit		55,659		55,524		0		41,072		1,966		995		47,143		8,752		4,814
Other		26,221		26,221		0		15,557		71		0		18,796		106		0
Credit card		0		0		0		0		0		0		0		0		0
Residential		208,178		240,491		0		358,875		0		0		285,696		0		0
Subtotal	$	5,100,117	$	5,356,664	$	0	$	6,179,500	$	42,732	$	32,948	$	5,735,845	$	89,575	$	76,724
With an allowance recorded:
Commercial	$	1,141,219	$	1,139,885	$	104,727	$	1,186,175	$	9,981	$	9,276	$	1,595,863	$	30,009	$	26,306
Commercial Real Estate:
General		4,659,866		4,675,981		1,489,569		2,922,193		33,091		32,866		3,448,840		111,506		80,952
Construction		0		0		0		1,960,467		0		0		1,988,734		0		0
Consumer:
Lines of credit		135,111		134,976		40,180		162,470		1,054		871		187,926		2,777		2,594
Other		104,829		104,664		48,870		119,951		611		484		113,378		1,572		1,447
Credit card		0		0		0		3,248		0		0		1,317		0		0
Residential		574,554		594,307		127,030		440,504		3,313		3,129		500,164		9,658		9,253
Subtotal	$	6,615,579	$	6,649,813	$	1,810,376	$	6,795,008	$	48,050	$	46,626	$	7,836,222	$	155,522	$	120,552
Total	$	11,715,696	$	12,006,477	$	1,810,376	$	12,974,508	$	90,782	$	79,574	$	13,572,067	$	245,097	$	197,276

Past Due Financing Receivables [Table Text Block]

The following tables present the aging of the recorded investment in past due and non accrual loans by class of loans as of September 30, 2013:

					Greater Than 90		Total Accruing				Total Recorded
	30-59 Days Past		60-89 Days  Past		Days Past		Past Due		Current		Investment of
Accruing Loans	Due		Due		Due		Loans		Accruing Loans		Accruing Loans
Commercial	$	0	$	0	$	0	$	0	$	43,613,174	$	43,613,174
Commercial Real Estate:
General		0		0		0		0		53,811,236		53,811,236
Construction		0		0		0		0		2,101,163		2,101,163
Consumer:
Lines of credit		97,593		0		0		97,593		8,154,142		8,251,735
Other		0		4,949		0		4,949		1,662,599		1,667,548
Credit card		506		0		0		506		470,330		470,836
Residential		0		0		0		0		15,737,314		15,737,314
Total	$	98,099	$	4,949	$	0	$	103,048	$	125,549,958	$	125,653,006

					Greater Than 90		Total		Current		Total Non Accrual
	30-59 Days Past		60-89 Days Past		Days Past		Non Accrual		Non Accrual		Recorded
Non Accrual Loans	Due		Due		Due		Past Due Loans		Loans		Investment
Commercial	$	0	$	0	$	40,316	$	40,316	$	42,678	$	82,994
Commercial Real Estate:
General		204,541		0		0		204,541		2,475,006		2,679,547
Construction		0		0		0		0		0		0
Consumer:
Lines of credit		9,800		0		44,528		54,328		16,811		71,139
Other		0		2,141		0		2,141		7,329		9,470
Credit card		0		0		0		0		0		0
Residential		0		0		285,528		285,528		99,482		385,010
Total	$	214,341	$	2,141	$	370,372	$	586,854	$	2,641,306	$	3,228,160

The following tables present the aging of the recorded investment in past due and non accrual loans by class of loans as of December 31, 2012:

					Greater Than 90		Total Accruing				Total Recorded
	30-59 Days Past		60-89 Days Past		Days Past		Past Due		Current		Investment of
Accruing Loans	Due		Due		Due		Loans		Accruing Loans		Accruing Loans
Commercial	$	1,956	$	0	$	0	$	1,956	$	39,465,435	$	39,467,391
Commercial Real Estate:
General		97,605		0		0		97,605		50,193,607		50,291,212
Construction		0		0		0		0		3,479,043		3,479,043
Consumer:
Lines of credit		26,037		44,866		0		70,903		8,963,308		9,034,211
Other		3,707		0		0		3,707		2,015,334		2,019,041
Credit card		2,010		0		0		2,010		488,792		490,802
Residential		0		85,242		0		85,242		17,456,776		17,542,018
Total	$	131,315	$	130,108	$	0	$	261,423	$	122,062,295	$	122,323,718

					Greater Than 90		Total		Current		Total Non Accrual
	30-59 Days Past		60-89 Days Past		Days Past		Non Accrual		Non Accrual		Recorded
Non Accrual Loans	Due		Due		Due		Past Due Loans		Loans		Investment
Commercial	$	8,958	$	20,469	$	320,592	$	350,019	$	210,153	$	560,172
Commercial Real Estate:
General		8,414		280,399		406,792		695,605		2,248,488		2,944,093
Construction		0		0		0		0		0		0
Consumer:
Lines of credit		0		21,583		0		21,583		79,628		101,211
Other		0		0		6,050		6,050		0		6,050
Credit card		0		0		0		0		0		0
Residential		0		0		195,649		195,649		108,482		304,131
Total	$	17,372	$	322,451	$	929,083	$	1,268,906	$	2,646,751	$	3,915,657

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ended September 30, 2013:

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
Nine Months Ended September 30, 2013	Number of Loans	Investment		Investment
Troubled Debt Restructurings:
Commercial	1	$	143,136	$	133,425
Consumer:
Lines of credit	2		137,893		137,893
Total	3	$	281,029	$	271,318

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ending September 30, 2012:

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
Nine Months Ended September 30, 2012	Number of Loans	Investment		Investment
Troubled Debt Restructurings:
Commercial	1	$	11,880	$	11,880
Commercial Real Estate:
General	5		3,446,269		2,808,146
Consumer:
Lines of credit	2		126,860		126,860
Residential	1		62,085		62,085
Total	9	$	3,647,094	$	3,008,971

Financing Receivable Credit Quality Indicators [Table Text Block]

As of September 30, 2013 and December 31, 2012, and based on the most recent analysis performed, the recorded investment by risk category and class of loans is as follows:

					Commercial Real Estate				Commercial Real Estate
	Commercial				General				Construction
	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
	2013		2012		2013		2012		2013		2012
1	$	0	$	0	$	0	$	0	$	0	$	0
2		261,437		298,200		0		0		0		0
3		7,791,976		2,004,476		4,697,215		4,141,391		0		0
4		13,313,325		14,017,221		17,931,763		12,911,811		467,651		384,848
5		15,217,224		16,373,423		21,066,423		22,177,734		236,099		1,695,990
5M		4,275,905		3,318,016		3,817,196		3,675,131		1,397,413		1,398,205
6		1,705,945		2,180,119		6,298,783		7,365,970		0		0
7		1,072,584		1,369,803		519,913		287,682		0		0
8		57,772		466,305		2,159,490		2,675,586		0		0
Total	$	43,696,168	$	40,027,563	$	56,490,783	$	53,235,305	$	2,101,163	$	3,479,043

The following tables present the recorded investment in residential and consumer loans based on payment activity as of September 30, 2013 and December 31, 2012:

	Residential
	September 30,		December 31,
	2013		2012
Performing	$	15,260,815	$	17,063,417
Impaired		861,509		782,732
Total	$	16,122,324	$	17,846,149

	Consumer – Lines of credit				Consumer – Other				Consumer – Credit card
	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
	2013		2012		2013		2012		2013		2012
Performing	$	8,115,446	$	8,944,652	$	1,578,420	$	1,894,041	$	470,836	$	490,802
Impaired		207,428		190,770		98,598		131,050		0		0
Total	$	8,322,874	$	9,135,422	$	1,677,018	$	2,025,091	$	470,836	$	490,802

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PREMISES AND EQUIPMENT (Details Textual) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Jun. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Land Sales			$ 790,135
Gain (Loss) on Disposition of Property Plant Equipment	$ 0	$ 0	$ 208,389	$ 1,000	$ 208,389

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ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS (Details 1) (USD $)	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011
Allowance for loan losses:
Individually evaluated for impairment	$ 1,574,433		$ 1,810,376
Collectively evaluated for impairment	1,249,370		1,572,601
Unallocated	46,233		0
Total ending allowance balance	2,870,036	3,287,274	3,382,977	3,603,407	4,321,297	5,299,454
Loans:
Individually evaluated for impairment	9,305,129		11,715,696
Collectively evaluated for impairment	119,576,037		114,523,679
Total ending loans balance	128,881,166		126,239,375
Commercial Portfolio Segment [Member]
Allowance for loan losses:
Individually evaluated for impairment	31,938		104,727
Collectively evaluated for impairment	350,784		477,471
Unallocated	0		0
Total ending allowance balance	382,722	439,993	582,198	612,725	1,356,903	1,309,632
Loans:
Individually evaluated for impairment	1,226,231		3,288,294
Collectively evaluated for impairment	42,469,937		36,739,269
Total ending loans balance	43,696,168		40,027,563
Commercial Real Estate Portfolio Segment [Member]
Allowance for loan losses:
Individually evaluated for impairment	1,319,242		1,489,569
Collectively evaluated for impairment	495,638		776,733
Unallocated	0		0
Total ending allowance balance	1,814,880	1,920,587	2,266,302	2,157,519	2,251,981	3,386,433
Loans:
Individually evaluated for impairment	6,911,363		7,322,850
Collectively evaluated for impairment	51,680,583		49,391,498
Total ending loans balance	58,591,946		56,714,348
Consumer Portfolio Segment [Member]
Allowance for loan losses:
Individually evaluated for impairment	147,892		89,050
Collectively evaluated for impairment	263,787		242,409
Unallocated	0		0
Total ending allowance balance	411,679	419,511	331,459	366,768	442,467	410,001
Loans:
Individually evaluated for impairment	306,026		321,820
Collectively evaluated for impairment	10,164,702		11,329,495
Total ending loans balance	10,470,728		11,651,315
Residential Portfolio Segment [Member]
Allowance for loan losses:
Individually evaluated for impairment	75,361		127,030
Collectively evaluated for impairment	139,161		75,988
Unallocated	0		0
Total ending allowance balance	214,522	157,406	203,018	154,177	193,706	193,388
Loans:
Individually evaluated for impairment	861,509		782,732
Collectively evaluated for impairment	15,260,815		17,063,417
Total ending loans balance	16,122,324		17,846,149
Unallocated Financing Receivables [Member]
Allowance for loan losses:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	0		0
Unallocated	46,233		0
Total ending allowance balance	46,233	349,777	0	312,218	76,240	0
Loans:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	0		0
Total ending loans balance	$ 0		$ 0

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net income	$ 124,348	$ 1,947	$ 5,504,146	$ 259,482
Other comprehensive income (loss):
Unrealized holding gains and (losses) on available for sale securities	50,370	38,745	(494,691)	14,214
Less reclassification adjustments for gains later recognized in income	0	0	0	(2,856)
Net unrealized gain (loss)	50,370	38,745	(494,691)	11,358
Tax effect	0	0	0	0
Total other comprehensive income (loss)	50,370	38,745	(494,691)	11,358
Comprehensive income	$ 174,718	$ 40,692	$ 5,009,455	$ 270,840

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LOANS

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3. LOANS

Outstanding loan balances by portfolio segment and class were as follows:

	September 30, 2013		December 31, 2012
Commercial	$	43,596,519	$	39,915,144
Commercial Real Estate:
General		56,402,659		53,096,828
Construction		2,094,988		3,464,366
Consumer:
Lines of credit		8,291,775		9,105,387
Other		1,669,427		2,015,234
Credit card		470,836		490,802
Residential		16,078,808		17,798,131
Net deferred loan fees		(57,759)		(55,642)
		128,547,253		125,830,250
Less: Allowance for loan losses		(2,870,036)		(3,382,977)
Loans, net	$	125,677,217	$	122,447,273

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FAIR VALUE MEASUREMENTS (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2012
Impaired Loans Receivable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	698,475	[1]
Impaired Loans Receivable [Member] | Sales Comparison Approach [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Measurements, Valuation Techniques	Sales comparison approach	[1]
Fair Value Measurements Unobservable Inputs	Adjustments for differences between the comparable sales	[1]
Fair Value Inputs, Comparability Adjustments	0.00%	[1]
Impaired Loans Receivable [Member] | Sales Comparison Approach [Member] | Weighted Average [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Inputs, Comparability Adjustments	0.00%	[1]
Impaired Loans Receivable [Member] | Income Approach [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	698,475	[1]
Fair Value Measurements, Valuation Techniques	Income approach	[1]
Fair Value Measurements Unobservable Inputs	Capitalization rate	[1]
Fair Value Inputs, Comparability Adjustments	10.00%	[1]
Impaired Loans Receivable [Member] | Income Approach [Member] | Weighted Average [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Inputs, Comparability Adjustments	10.00%	[1]
Foreclosed Assets Held For Sale [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	269,100	[1]
Foreclosed Assets Held For Sale [Member] | Sales Comparison Approach [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	269,100	[1]
Fair Value Measurements, Valuation Techniques	Sales comparison approach	[1]
Fair Value Measurements Unobservable Inputs	Adjustments for differences between the comparable sales	[1]
Foreclosed Assets Held For Sale [Member] | Sales Comparison Approach [Member] | Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Inputs, Comparability Adjustments	0.00%	[1]
Foreclosed Assets Held For Sale [Member] | Sales Comparison Approach [Member] | Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Inputs, Comparability Adjustments	(45.00%)	[1]
Foreclosed Assets Held For Sale [Member] | Sales Comparison Approach [Member] | Weighted Average [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Inputs, Comparability Adjustments	(4.50%)	[1]

[1] For purposes of this disclosure, only material Level 3 assets are disclosed. These assets are included in the total non-recurring Level 3 financial assets reported in the preceding tables.

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FORECLOSED ASSETS (Tables)

9 Months Ended

Sep. 30, 2013

Repossessed Assets [Abstract]

Foreclosed Assets [Table Text Block]

Foreclosed asset activity:

	September 30,		September 30,
	2013		2012
Beginning of year	$	2,806,781	$	3,276,838
Additions		614,485		1,243,347
Reductions from sales		(593,498)		(1,249,206)
Direct write-downs		(141,531)		(277,448)
End of period	$	2,686,237	$	2,993,531
Expenses related to foreclosed assets include:
Operating expenses, net of rental income	$	189,268	$	199,278

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SECURITIES AVAILABLE FOR SALE (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Proceeds from Sale of Available-for-sale Securities			$ 0	$ 257,997
Gain (Loss) on Sale of Securities, Net	0	0	0	2,856
Other Than Temporary Impairment [Member]
Number Of Debt Securities Held			16
Percentage Of Aggregate Depreciation			1.99%
Available-for-sale Securities, Change in Net Unrealized Holding Gain (Loss), Net of Tax			$ 495,000
US Government-sponsored Enterprises Debt Securities [Member] | Other Than Temporary Impairment [Member]
Number Of Debt Securities Held			11
US Government Agencies Debt Securities [Member] | Other Than Temporary Impairment [Member]
Number Of Debt Securities Held			5

XML

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

13. FAIR VALUE MEASUREMENTS

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

Securities: The fair values of securities are obtained from a third party who utilizes quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing (Level 2 inputs), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities.

Impaired Loans: The method used to determine the valuation of impaired loans depends on the anticipated source of repayment. Collateral dependent impaired loans with specific allocations of the allowance for loan losses are measured using the fair value of the collateral which is generally based on recent real estate appraisals or internal evaluations. Management may add discounts to third party appraisals. The appraisals are generally obtained annually and are performed by qualified licensed appraisers approved by the Board of Directors. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. The comparable sales approach evaluates the sales price of similar properties in the same market area. This approach is inherently subjective due to the wide range of comparable sale dates. The income approach considers net operating income generated by the property and the investor’s required return. This approach utilizes various inputs including lease rates and cap rates which are subject to judgment. Such adjustments can be significant and result in a Level 3 classification of the inputs for determining fair value.

Non-real estate collateral may be valued using appraisals, independent valuation tools, net book value per the borrower’s financial statements, or aging reports.  To determine the fair value, these values are adjusted or discounted based on several factors, including but not limited to: the Bank’s historical losses within that particular asset category;  knowledge of the collateral, including age and condition; and  changes in market conditions from the time of the valuation,  resulting in a Level 3 fair value classification.  Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Foreclosed Assets: Commercial and residential real estate properties classified as foreclosed assets are measured at fair value, less costs to sell at the time of foreclosure, establishing a new cost basis. Subsequently, foreclosed assets continue to be measured at the lower of cost or fair value. Fair values are generally based on recent real estate appraisals or internal evaluations. Management may add discounts to third party appraisals. The appraisals are generally obtained annually and are performed by qualified licensed appraisers approved by the Board of Directors. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. The comparable sales approach evaluates the sales price of similar properties in the same market area. This approach is inherently subjective due to the wide range of comparable sale dates. The income approach considers net operating income generated by the property and the investor’s required return. This approach utilizes various inputs including lease rates and cap rates which are subject to judgment. Adjustments of the carrying amount utilizing this process result in a Level 3 classification.

Assets measured at fair value on a recurring basis are summarized below as of the periods ended September 30, 2013 and December 31, 2012:

			Fair Value Measurements Using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
September 30, 2013	Total		(Level 1)		(Level 2)		(Level 3)
Available for sale securities:
US Treasury	$	3,052,109	$	3,052,109	$	0	$	0
US Government and federal agency		16,943,002		0		16,943,002		0
Municipals		1,598,152		0		1,598,152		0
Mortgage-backed and collateralized mortgage obligations– residential		11,907,351		0		11,907,351		0
Total	$	33,500,614	$	3,052,109	$	30,448,505	$	0
December 31, 2012
Available for sale securities:
US Treasury	$	4,094,532	$	4,094,532	$	0	$	0
US Government and federal agency		20,259,743		0		20,259,743		0
Municipals		2,333,741		0		2,333,741		0
Mortgage-backed and collateralized mortgage obligations– residential		14,772,380		0		14,772,380		0
Total	$	41,460,396	$	4,094,532	$	37,365,864	$	0

There were no transfers between levels during the first nine months of 2013 or 2012.

Assets measured at fair value on a non-recurring basis are summarized below as of the periods ended September 30, 2013 and December 31, 2012. Impaired loans and foreclosed assets are included if the fair value of such assets was revised during the quarterly period then ended.

			Significant
			Unobservable Inputs
	Total		(Level 3)
September 30, 2013
Impaired loans:
Consumer:
Other	$	52,612	$	52,612
Residential		61,722		61,722
Total	$	114,334	$	114,334
Foreclosed assets:
Commercial Real Estate:
General	$	267,390	$	267,390
Residential		55,794		55,794
Total	$	323,184	$	323,184
December 31, 2012
Impaired loans:
Commercial	$	84,755	$	84,755
Commercial Real Estate:
General		786,282		786,282
Residential		140,269		140,269
Total	$	1,011,306	$	1,011,306
Foreclosed assets:
Commercial Real Estate:
General	$	141,596	$	141,596
Construction		380,142		380,142
Total	$	521,738	$	521,738

The following describes the impairment charges recognized during the period:

At September 30, 2013, impaired loans carried at fair value had a recorded investment of $114,334 with no valuation allowance, resulting in additional provision of $15,818. At December 31, 2012, impaired loans carried at fair value had a recorded investment of $2,394,211 and a valuation allowance of $1,382,905, resulting in additional provision of $13,000.

Foreclosed assets carried at fair value at September 30, 2013 were $323,184 compared to $521,738 at December 31, 2012. During 2013, four properties included in this total were written down by $40,240. During 2012, three properties included in this total were written down by $128,139.

As of September 30, 2013, there were no individually material Level 3 financial assets, by class, measured on a non-recurring basis.

The following table presents information as of December 31, 2012 about significant unobservable inputs related to the Bank’s individually material¹ Level 3 financial assets, by class, measured on a non-recurring basis:

			Valuation	Significant Unobservable	Range			Weighted
	Fair Value		Technique (s)	Inputs	of Inputs			Average
December 31, 2012
Impaired loans:				Adjustments for differences between
Commercial Real Estate:			Sales comparison approach	the comparable sales		0	%		0	%
General	$	698,475	Income approach	Capitalization rate		10.0	%		10.0	%
Total	$	698,475
Foreclosed assets:
Commercial Real Estate:				Adjustments for differences between
Construction	$	269,100	Sales comparison approach	the comparable sales		(45.0) - 0	%		(4.5)	%
Total	$	269,100

¹ For purposes of this disclosure, only material Level 3 assets are disclosed. These assets are included in the total non-recurring Level 3 financial assets reported in the preceding tables.

The carrying amounts and estimated fair values of financial instruments not previously presented above are as follows:

			Fair Value Measurements
			at September 30, 2013 Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	10,140	$	10,140	$	0	$	0	$	10,140
Loans held for sale		0		0		0		0		0
Loans, net (including impaired)		125,677		0		0		125,272		125,272
FHLB stock		451		N/A		N/A		N/A		N/A
Accrued interest receivable		485		15		136		334		485
Financial liabilities
Deposits		163,568		80,770		76,847		0		157,617
Federal funds purchased and repurchase agreements		8,972		0		8,972		0		8,972
Subordinated debentures		4,500		0		0		1,125		1,125
Notes payable		1,280		0		0		1,280		1,280
Accrued interest payable		475		3		31		130		164

			Fair Value Measurements
			at December 31, 2012 Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	20,297	$	20,297	$	0	$	0	$	20,297
Loans held for sale		6,041		0		6,183		0		6,183
Loans, net (including impaired)		122,447		0		0		116,004		116,004
FHLB stock		451		N/A		N/A		N/A		N/A
Accrued interest receivable		592		12		163		417		592
Financial liabilities
Deposits		184,176		88,959		94,185		0		183,144
Federal funds purchased and repurchase agreements		10,190		0		10,190		0		10,190
Subordinated debentures		4,500		0		0		1,125		1,125
Notes payable		5,000		0		0		500		500
Accrued interest payable		1,156		4		64		81		149

The methods and assumptions, not previously presented above, used to estimate fair values are described as follows:

(a) Cash and cash equivalents

The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

(b) FHLB stock

It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

(c) Loans

Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification.

(d) Deposits

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

(e) Federal funds purchased and repurchase agreements

The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

(f) Subordinated debentures and Notes payable

The fair values of the Company’s subordinated debentures and notes payable are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements and consideration of the Company’s liquidity, resulting in a Level 3 classification.

(g) Accrued interest receivable/payable

The carrying amounts of accrued interest approximate fair value resulting in a Level 1, 2 or 3 classification, depending on the associated asset or liability.

(h) Off-balance sheet instruments

Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is not material.