Note 2 - Investment Securities

6 Months Ended

Jun. 30, 2014

Investment Holdings [Abstract]

Investment Holdings [Text Block]

NOTE 2 – INVESTMENT SECURITIES

The amortized cost and fair value of investment securities as of June 30, 2014 and December 31, 2013 are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
June 30, 2014
Securities held to maturity:
Municipal securities	$	165,737,372	$	1,492,583	$	(2,609,628	)	$	164,620,327
Other securities		1,050,000		-		-			1,050,000
	$	166,787,372	$	1,492,583	$	(2,609,628	)	$	165,670,327
Securities available for sale:
U.S. govt. sponsored agency securities	$	334,083,927	$	109,470	$	(8,572,941	)	$	325,620,456
Residential mortgage-backed and related securities		152,965,071		2,200,301		(1,270,158	)		153,895,214
Municipal securities		32,871,334		1,156,141		(170,004	)		33,857,471
Other securities		1,401,827		560,129		-			1,961,956
	$	521,322,159	$	4,026,041	$	(10,013,103	)	$	515,335,097
December 31, 2013:
Securities held to maturity:
Municipal securities	$	144,401,895	$	299,789	$	(7,111,579	)	$	137,590,105
Other securities		1,050,000		-		-			1,050,000
	$	145,451,895	$	299,789	$	(7,111,579	)	$	138,640,105
Securities available for sale:
U.S. govt. sponsored agency securities	$	376,574,132	$	41,696	$	(20,142,841	)	$	356,472,987
Residential mortgage-backed and related securities		160,110,199		1,153,409		(3,834,157	)		157,429,451
Municipal securities		35,813,866		923,315		(778,324	)		35,958,857
Other securities		1,372,365		524,798		-			1,897,163
	$	573,870,562	$	2,643,218	$	(24,755,322	)	$	551,758,458

The Company’s held to maturity municipal securities consist largely of private issues of municipal debt. The municipalities are located within the Midwest with a portion in or adjacent to the communities of QCBT and CRBT. The municipal debt investments are underwritten using specific guidelines with ongoing monitoring.

The Company’s residential mortgage-backed and related securities portfolio consists entirely of government sponsored or government guaranteed securities. The Company has not invested in commercial mortgage-backed securities or pooled trust preferred securities.

Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2014 and December 31, 2013, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
June 30, 2014:
Securities held to maturity:
Municipal securities	$	37,351,435	$	(982,726	)	$	47,726,709	$	(1,626,902	)	$	85,078,144	$	(2,609,628	)
Securities available for sale:
U.S. govt. sponsored agency securities	$	284,171,721	$	(8,502,103	)	$	13,725,024	$	(70,838	)	$	297,896,745	$	(8,572,941	)
Residential mortgage-backed and related securities		8,124,317		(95,270	)		55,800,561		(1,174,888	)		63,924,878		(1,270,158	)
Municipal securities		8,765,260		(131,548	)		2,184,122		(38,456	)		10,949,382		(170,004	)
	$	301,061,298	$	(8,728,921	)	$	71,709,707	$	(1,284,182	)	$	372,771,005	$	(10,013,103	)
December 31, 2013:
Securities held to maturity:
Municipal securities	$	101,983,602	$	(6,711,240	)	$	2,697,375	$	(400,339	)	$	104,680,977	$	(7,111,579	)
Securities available for sale:
U.S. govt. sponsored agency securities	$	333,194,820	$	(19,141,077	)	$	10,978,390	$	(1,001,764	)	$	344,173,210	$	(20,142,841	)
Residential mortgage-backed and related securities		94,723,092		(2,947,770	)		14,117,719		(886,387	)		108,840,811		(3,834,157	)
Municipal securities		13,890,692		(724,939	)		985,687		(53,385	)		14,876,379		(778,324	)
	$	441,808,604	$	(22,813,786	)	$	26,081,796	$	(1,941,536	)	$	467,890,400	$	(24,755,322	)

At June 30, 2014, the investment portfolio included 529 securities. Of this number, 259 securities had current unrealized losses with aggregate depreciation of less than 4% from the total amortized cost basis. Of these, 98 securities had an unrealized loss for twelve months or more. All of the debt securities in unrealized loss positions are considered acceptable credit risks. Based upon an evaluation of the available evidence, including the recent changes in market rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these debt securities are temporary. In addition, the Company does not intend to sell these securities and it is not more-likely-than-not that the Company will be required to sell these debt securities before their anticipated recovery. At June 30, 2014 and December 31, 2013, equity securities represented less than 1% of the total portfolio.

The Company did not recognize other-than-temporary impairment on any debt or equity securities for the three and six months ended June 30, 2014 and 2013.

All sales of securities for the three and six months ended June 30, 2014 and 2013, respectively, were from securities identified as available for sale. Information on proceeds received, as well as pre-tax gross gains from sales on those securities is as follows:

	Three Months Ended				Six Months Ended
	June 30, 2014		June 30, 2013		June 30, 2014		June 30, 2013
Proceeds from sales of securities	$	18,856,953	$	6,167,531	$	25,877,578	$	6,167,531
Pre-tax gross gains from sales of securities		571		16,460		21,196		16,460

The amortized cost and fair value of securities as of June 30, 2014 by contractual maturity are shown below. Expected maturities of residential mortgage-backed and related securities may differ from contractual maturities because the residential mortgages underlying the residential mortgage-backed and related securities may be called or prepaid without any penalties. Therefore, these securities are not included in the maturity categories in the following table. “Other securities” available for sale are excluded from the maturity categories as there is no fixed maturity date for those securities.

	Amortized Cost		Fair Value
Securities held to maturity:
Due in one year or less	$	2,927,386	$	2,929,942
Due after one year through five years		10,861,031		10,874,917
Due after five years		152,998,955		151,865,468
	$	166,787,372	$	165,670,327
Securities available for sale:
Due in one year or less	$	4,485,092	$	4,498,204
Due after one year through five years		48,898,104		48,717,600
Due after five years		313,572,065		306,262,123
	$	366,955,261	$	359,477,927
Residential mortgage-backed and related securities		152,965,071		153,895,214
Other securities		1,401,827		1,961,956
	$	521,322,159	$	515,335,097

Portions of the U.S. government sponsored agency securities and municipal securities contain call options, at the discretion of the issuer, to terminate the security at par and at predetermined dates prior to the stated maturity, summarized as follows:

	Amortized Cost		Fair Value
Securities held to maturity:
Municipal securities	$	102,919,232	$	102,260,651
Securities available for sale:
U.S. govt. sponsored agency securities		271,663,942		264,421,214
Municipal securities		20,829,274		21,268,094
	$	292,493,216	$	285,689,308