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Securities
 12 Months Ended
Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
Note 4.
Securities
 
Securities have been classified in the balance sheet according to management’s intent as either securities held to maturity or securities available for sale. The amortized cost and approximate fair value of securities at December 31, 2014 and 2013, are as follows:
 
 
 
December 31, 2014
 
 
 
 
 
 
Gross
 
Gross
 
 
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
 
 
 
Cost
 
Gains
 
Losses
 
Value
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
 
$
560,183
 
$
2,840
 
$
-
 
$
563,023
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
 
 
7,028,388
 
 
302,697
 
 
-
 
 
7,331,085
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage guaranteed by GNMA or FNMA
 
 
16,852,496
 
 
44,954
 
 
(9,179)
 
 
16,888,271
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations issued or guaranteed by U.S. Government agencies or sponsored agencies
 
 
62,278,948
 
 
273,571
 
 
(141,989)
 
 
62,410,530
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
86,720,015
 
$
624,062
 
$
(151,168)
 
$
87,192,909
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage guaranteed by GNMA or FNMA
 
$
25,428
 
$
274
 
$
-
 
$
25,702
 
 
 
 
December 31, 2013
 
 
 
 
 
 
Gross
 
Gross
 
 
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
 
 
 
Cost
 
Gains
 
Losses
 
Value
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
 
$
3,433,216
 
$
48,119
 
$
-
 
$
3,481,335
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
 
 
14,908,761
 
 
425,021
 
 
(84,544)
 
 
15,249,238
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities: Residential mortgage guaranteed by GNMA or FNMA
 
 
7,047,076
 
 
85,203
 
 
-
 
 
7,132,279
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations issued or guaranteed by U.S. Government agencies or sponsored agencies
 
 
66,408,975
 
 
205,025
 
 
(268,180)
 
 
66,345,820
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
91,798,028
 
$
763,368
 
$
(352,724)
 
$
92,208,672
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage guaranteed by GNMA or FNMA
 
$
34,165
 
$
862
 
$
-
 
$
35,027
 
 
U.S. Government sponsored agencies include entities such as Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and Government National Mortgage Association.
 
At December 31, 2014 and 2013, securities with a carrying value of approximately $12,612,000 and $14,385,000, respectively, were pledged to secure public deposits and for other purposes required or permitted by law.
 
At December 31, 2014 and 2013, the carrying amount of securities pledged to secure repurchase agreements was approximately $24,207,000 and $25,521,000, respectively.
 
At December 31, 2014 and 2013, securities with a carrying value of approximately $18,705,000 and $20,140,000, respectively, were pledged to the Federal Home Loan Bank as collateral for the Bank’s borrowings.
 
At December 31, 2014 and 2013, the Bank had pledged securities with a carrying amount of approximately $13,037,000 and $11,978,000, respectively, to other financial institutions as collateral for federal funds purchased.
 
The amortized cost and fair value of securities at December 31, 2014, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
 
 
Securities Available for Sale
 
Securities Held to Maturity
 
 
 
Amortized
 
Fair
 
Amortized
 
Fair
 
 
 
Cost
 
Value
 
Cost
 
Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Due in one year or less
 
$
-
 
$
-
 
$
-
 
$
-
 
Due from one year to five years
 
 
898,930
 
 
934,341
 
 
-
 
 
-
 
Due from five years to ten years
 
 
2,831,489
 
 
2,931,593
 
 
-
 
 
-
 
Due after ten years
 
 
3,858,152
 
 
4,028,174
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,588,571
 
 
7,894,108
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
 
79,131,444
 
 
79,298,801
 
 
25,428
 
 
25,702
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
86,720,015
 
$
87,192,909
 
$
25,428
 
$
25,702
 
 
For the year ended December 31, 2014, there were available for sale securities sold with proceeds totaling $12,240,478 which resulted in gross gains realized of $700,390. For the year ended December 31, 2013, there were available for sale securities sold with proceeds totaling $8,171,961 which resulted in gross gains realized of $652,421. For the year ended December 31, 2012, there were no securities sold.
 
The following tables present gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities available for sale have been in a continuous unrealized loss position, at December 31, 2014 and 2013:
 
 
 
As of December 31, 2014
 
 
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
 
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
 
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage guaranteed by GNMA or FNMA
 
$
7,018,137
 
$
(9,179)
 
$
-
 
$
-
 
$
7,018,137
 
$
(9,179)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations issued or guaranteed by U.S. Government agencies or
 sponsored agencies
 
 
9,504,525
 
 
(52,831)
 
 
17,546,169
 
 
(89,158)
 
 
27,050,694
 
 
(141,989)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
16,522,662
 
$
(62,010)
 
$
17,546,169
 
$
(89,158)
 
$
34,068,831
 
$
(151,168)
 
 
 
 
As of December 31, 2013
 
 
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
 
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
 
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
 
$
3,025,250
 
$
(84,544)
 
$
-
 
$
-
 
$
3,025,250
 
$
(84,544)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations issued or guaranteed by U.S. Government agencies or
 sponsored agencies
 
 
27,782,942
 
 
(221,827)
 
 
8,761,049
 
 
(46,353)
 
 
36,543,991
 
 
(268,180)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
30,808,192
 
$
(306,371)
 
$
8,761,049
 
$
(46,353)
 
$
39,569,241
 
$
(352,724)
 
 
Upon acquisition of a security, Cornerstone determines the appropriate impairment model that is applicable. If the security is a beneficial interest in securitized financial assets, Cornerstone uses the beneficial interests in securitized financial assets impairment model. If the security is not a beneficial interest in securitized financial assets, Cornerstone uses the debt and equity securities impairment model. Cornerstone conducts periodic reviews to evaluate each security to determine whether an other-than-temporary impairment has occurred. Cornerstone does not have any securities that have been classified as other-than-temporarily impaired at December 31, 2014.
 
At December 31, 2014, the significant categories of temporarily impaired securities, and management’s evaluation of those securities are as follows:
 
Mortgage-backed securities: At December 31, 2014, twelve investments in residential mortgage-backed securities had unrealized losses. This impairment is believed to be caused by the current interest rate environment. The contractual cash flows of those investments are guaranteed or issued by an agency of the U.S. Government. Because the decline in market value is attributable to the current interest rate environment and not credit quality, and because Cornerstone does not intend to sell the investments and it is not more likely than not that Cornerstone will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, Cornerstone does not deem those investments to be other-than-temporarily impaired at December 31, 2014.