SECURITIES AVAILABLE FOR SALE

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

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

2. SECURITIES AVAILABLE FOR SALE

The following tables represent the securities held in the Company’s portfolio at March 31, 2014 and at December 31, 2013:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2014	Cost		Gains		Losses		Value
US Treasury	$	2,521,823	$	15,990	$	0	$	2,537,813
US Government and federal agency		14,781,703		82,058		(44,277)		14,819,484
Municipals		1,561,714		19,608		0		1,581,322
Mortgage-backed and collateralized mortgage obligations– residential		11,701,347		129,016		(208,044)		11,622,319
	$	30,566,587	$	246,672	$	(252,321)	$	30,560,938

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2013	Cost		Gains		Losses		Value
US Treasury	$	2,525,481	$	16,551	$	0	$	2,542,032
US Government and federal agency		15,823,511		90,497		(46,602)		15,867,406
Municipals		1,563,394		27,747		0		1,591,141
Mortgage-backed and collateralized mortgage obligations– residential		11,354,185		132,797		(257,315)		11,229,667
	$	31,266,571	$	267,592	$	(303,917)	$	31,230,246

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 March 31, 2014:

	Amortized		Fair
	Cost		Value
Due in one year or less	$	3,017,309	$	3,039,954
Due from one to five years		15,496,681		15,538,963
Due from five to ten years		351,250		359,702
Due in more than ten years		0		0
Mortgage-backed and collateralized mortgage obligations – residential		11,701,347		11,622,319
	$	30,566,587	$	30,560,938

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 March 31, 2014 and December 31, 2013:

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
March 31, 2014	Value		Losses		Value		Losses		Value		Losses
US Government and federal agency	$	3,953,535	$	(40,323)	$	513,505	$	(3,954)	$	4,467,040	$	(44,277)
Mortgage-backed and collateralized mortgage obligations - residential		6,318,370		(160,714)		1,427,978		(47,330)		7,746,348		(208,044)
	$	10,271,905	$	(201,037)	$	1,941,483	$	(51,284)	$	12,213,388	$	(252,321)

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2013	Value		Losses		Value		Losses		Value		Losses
US Government and federal agency	$	2,439,145	$	(38,342)	$	1,031,280	$	(8,260)	$	3,470,425	$	(46,602)
Mortgage-backed and collateralized mortgage obligations - residential		5,604,925		(191,440)		1,473,265		(65,875)		7,078,190		(257,315)
	$	8,044,070	$	(229,782)	$	2,504,545	$	(74,135)	$	10,548,615	$	(303,917)

There was one security sold in the first three months of 2014. Proceeds from the sale were $661,182 with a realized gain of $7,409. No securities were sold in the three months ended March 31, 2013.

Other-Than-Temporary-Impairment

Management evaluates securities for other than temporary impairment (“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 March 31, 2014, 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 March 31, 2014, nineteen debt securities had unrealized losses with aggregate depreciation of 2.02% from the amortized cost basis. Five of the nineteen securities are issued by government agencies and fourteen are issued by a government-sponsored entity. It is more likely than not that these debt securities will be retained given the fact that they are pledged to various public funds. The reported decline in value is not material and is deemed to be market driven. Because the decline in fair value is 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 likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at March 31, 2014.