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20) Mortgage Servicing Rights

12 Months Ended

Dec. 31, 2012

The Company did not have MSRs before the year ended December 31, 2012. The following table presents the MSR activity for 2012.

	December 31, 2012
Amortized cost:
Balance before valuation allowance at beginning of year	$ -
MSRs received as proceeds from loan sales	2,797,470
Amortization	-
Application of valuation allowance to write down MSRs with other than temporary impairment	-
Balance before valuation allowance at year end	$ 2,797,470

Valuation allowance for impairment of MSRs:
Balance at beginning of year	$ -
Additions	-
Application of valuation allowance to write down MSRs with other than temporary impairment	-
Balance at year end	$ -

Mortgage servicing rights, net	$ 2,797,470

Estimated fair value of MSRs at year end	$ 2,797,470

Amortization for 2012 was immaterial, and has not been recorded. The following table summarizes the Company’s estimate of future amortization of its existing MSRs carried at amortized cost. This projection was developed using the assumptions made by management in its December 31, 2012 valuation of MSRs. The assumptions underlying the following estimate will change as market conditions and portfolio composition and behavior change, causing both actual and projected amortization levels to change over time. Therefore, the following estimates will change in a manner and amount not presently determinable by management.

		Estimated MSR Amortization
2013		$ 310,830
2014		310,830
2015		310,830
2016		310,830
2017		310,830
Thereafter		$ 1,243,320
Total		$ 2,797,470

The Company began to retain MSRs in the second quarter of 2012. Since the retained MSRs were relatively small, they were determined to be immaterial. However, the Company substantially increased its MSR retention in the fourth quarter and began to report these MSRs pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.