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Available-for-Sale Securities
 12 Months Ended
Dec. 31, 2012
Available-for-Sale Securities [Abstract]  
Available-for-Sale Securities

Note 3. Available-for-Sale Securities

The amortized cost, gross unrealized gains, gross unrealized losses and approximate fair value of available-for-sale securities at December 31, 2012 and 2011 are as follows:

 

                                 
          Gross     Gross        
    Amortized     Unrealized     Unrealized     Fair  

2012

   Cost     Gains     Losses     Value  

U. S. Government agency bonds

   $ 7,500,000     $ 26,170     $ —       $ 7,526,170  

U. S. Government agency mortgage-backed securities

     25,837,100       —         (130,209 )      25,706,891  

Corporate bonds

     9,000,000       —         (513,741 )      8,486,259  
   

 

 

    

 

 

    

 

 

    

 

 

  
    $ 42,337,100     $ 26,170     $ (643,950 )    $ 41,719,320  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

                                 
          Gross     Gross        
    Amortized     Unrealized     Unrealized     Fair  

2011

   Cost     Gains     Losses     Value  

U. S. Government agency bonds

   $ 5,000,000     $ 37,085     $ —       $ 5,037,085  

U. S. Government agency mortgage-backed securities

     49,004,232       1,051,097       (5,900 )      50,049,429  

Corporate bonds

     12,249,064       25,338       (890,944 )      11,383,458  
   

 

 

    

 

 

    

 

 

    

 

 

  
    $ 66,253,296     $ 1,113,520     $ (896,844 )    $ 66,469,972  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

The following table presents the Company’s available for sale securities’ gross unrealized losses and fair value, aggregated by the length of time the individual securities have been in a continuous loss position, at December 31, 2012 and 2011:

 

                                                 
    Less Than 12 Months     12 Months or More     Total  
    Fair     Unrealized     Fair     Unrealized     Fair     Unrealized  
    Value     Loss     Value     Loss     Value     Loss  

2012

                                                

U. S. Government agency mortgage-backed securities

   $ 25,670,832     $ (130,209 )    $ —       $ —       $ 25,670,832     $ (130,209 ) 

Corporate bonds

     2,842,368       (157,632 )      5,643,891       (356,109 )      8,486,259       (513,741 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Totals

   $ 28,513,200     $ (287,841 )    $ 5,643,891     $ (356,109 )    $ 34,157,091     $ (643,950 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

2011

                        

U. S. Government agency mortgage-backed securities

   $ 4,941,662     $ (5,492 )    $ 68,309     $ (408 )    $ 5,009,971     $ (5,900 ) 

Corporate bonds

     8,358,120       (890,944 )      —         —         8,358,120       (890,944 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Totals

   $ 13,299,782     $ (896,436 )    $ 68,309     $ (408 )    $ 13,368,091     $ (896,844 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

At December 31, 2012, nine securities had unrealized losses with an aggregate depreciation of 1.9% from the amortized cost, compared to nine securities at December 31, 2011 with an aggregate depreciation of 6.3% from the amortized cost.

The Company performs a quarterly analysis of those securities that are in an unrealized loss position to determine if those losses qualify as other-than-temporary impairments. This analysis considers the following criteria in its determination: the ability of the issuer to meet its obligations, when the loss position is due to a deterioration in credit quality, management’s plans and ability to maintain its investment in the security, the length of time and the amount by which the security has been in a loss position, the interest rate environment, the general economic environment and prospects for projections for improvement or deterioration.

Management believes that none of the unrealized losses on available-for-sale securities noted above are other than temporary due to the fact that they relate to market interest rate changes on corporate debt and mortgage-backed securities issued by U.S. Government agencies. Management considers the issuers of the securities to be financially sound, the corporate bonds are investment grade and the Company expects to receive all contractual principal and interest related to these investments. Because the Company does not intend to sell the investments, and it is not more-likely-than-not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2012.

 

At December 31, 2012 and 2011, available-for-sale securities with a carrying value of $6,913,797 and $8,041,000, respectively, were pledged to secure municipal deposits. At December 31, 2012 and 2011, available-for-sale securities with a carrying value of $9,088,000 and $10,309,000, respectively, were pledged to secure securities sold under agreements to repurchase.

The amortized cost and fair value of available-for-sale debt securities at December 31, 2012 by contractual maturity are presented below. Actual maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the securities may be repaid without any penalties. Because mortgage-backed securities are not due at a single maturity date, they are not included in the maturity categories in the following maturity summary.

 

                 
    Amortized     Fair  
    Cost     Value  

Maturity:

                

Corporate bonds 5 to 10 years

   $ 9,000,000     $ 8,486,259  

U.S. Government bonds 5 to 10 years

     7,500,000       7,526,170  

Mortgage-backed securities

     25,837,100       25,706,891  
   

 

 

    

 

 

  

Total

   $ 42,337,100     $ 41,719,320  
   

 

 

    

 

 

  

During 2012, sales of available-for-sale securities resulted in the Company recognizing proceeds of $45,226,033, and gross gains and gross losses of $910,591 and $9,651 respectively. During 2011 there were ten sales of available-for-sale securities, which resulted in the Company recognizing gross proceeds from the sales of $26,349,070 and gross gains of $1,109,305. During 2010 there were no sales of available-for-sale securities.