On June 30, 2013, the Company transferred all of its investment and mortgage-backed securities classified as held to maturity to available for sale. Based on changes in the current rate environment, management elected this change in an effort to more effectively manage the investment portfolio, including subsequently selling some securities that were formerly classified as held to maturity. The amortized cost of the securities that were transferred totaled $72.0 million and the net unrealized gain related to these securities totaled $1.4 million on the date of the transfer. As a result of the transfer and subsequent sales, the Company believes it has tainted its held to maturity classification and judgment will be required in the future in determining when circumstances have changed such that management can assert with a great degree of credibility that it has the intent and ability to hold debt securities to maturity. Based on this guidance, the Company does not expect to classify any securities as held to maturity within the near future.

8. Investment and Mortgage-Backed Securities, Held to Maturity, Continued

The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of investment and mortgage-backed securities held to maturity are as follows at December 31, 2012:



	December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
FHLB Securities	$	7,996,378	$	123,702	$	21,160	$	8,098,920
FFCB Securities	6,796,255		2,070		23,727		6,774,598
FNMA and FHLMC Bonds	4,019,931		29,029		4,560		4,044,400
SBA Bonds	5,865,767		315,841		6,139		6,175,469
Mortgage-Backed Securities	51,238,931		3,280,100		95,532		54,423,499
Equity Securities	155,000		—		—		155,000
	$	76,072,262	$	3,750,742	$	151,118	$	79,671,886

Included in the tables above and below in mortgage-backed securities are GNMA mortgage-backed securities, which are backed by the full faith and credit of the United States government. At December 31, 2012, the Bank held an amortized cost and fair value of $47.2 million and $50.4 million, respectively, in GNMA mortgage-backed securities included in mortgage-backed securities listed above. All mortgage-backed securities above are either GSEs or GNMA mortgage-backed securities. The Company has not invested in any private label mortgage-backed securities. At December 31, 2012, the amortized cost and fair value of investment and mortgage-backed securities held to maturity pledged as collateral for certain deposit accounts, FHLB advances and other borrowings were $12.2 million and $12.8 million, respectively at December 31, 2012.

The following tables show gross unrealized losses and fair value, aggregated by investment category, and length of time that individual available for sale securities have been in a continuous unrealized loss position for the periods indicated.



	December 31, 2012
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
FHLB Securities	$	1,978,840	$	21,160	$	—	$	—	$	1,978,840	$	21,160
FFCB Securities	5,772,528		23,727		—		—		5,772,528		23,727
FNMA And FHLMC Bonds	1,021,910		4,560		—		—		1,021,910		4,560
SBA Bonds	3,249,478		6,139		—		—		3,249,478		6,139
Mortgage-Backed Securities	7,659,461		95,532		—		—		7,659,461		95,532
	$	19,682,217	$	151,118	$	—	$	—	$	19,682,217	$	151,118

The Company’s held-to-maturity portfolio is recorded at amortized cost. The Company has the ability and intends to hold these securities to maturity. There were no sales of securities held to maturity during the six months ended June 30, 2013 and 2012.