Fair Value and Interest Rate Risk (Tables)

6 Months Ended

Jun. 30, 2013

Financial Assets Measured at Fair Value on Recurring Basis

The following table details the financial assets measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine fair value:


	Quoted Prices in		Significant		Significant
	Active Markets		Observable		Unobservable		Balance
	for Identical Assets		Inputs		Inputs		as of
June 30, 2013	(Level 1)		(Level 2)		(Level 3)		June 30, 2013
U.S. Government agency mortgage- backed securities	$	—	$	23,744,379	$	—	$	23,744,379
U.S. Government agency bonds		—		7,188,603		—		7,188,603
Corporate bonds		—		8,610,093		—		8,610,093

Securities available for sale	$	—	$	39,543,075	$	—	$	39,543,075


	Quoted Prices in		Significant		Significant
	Active Markets		Observable		Unobservable		Balance
	for Identical Assets		Inputs		Inputs		as of
December 31, 2012	(Level 1)		(Level 2)		(Level 3)		December 31, 2012
U.S. Government agency mortgage- backed securities	$	—	$	25,706,891	$	—	$	25,706,891
U.S. Government agency bonds				7,526,170		—		7,526,170
Corporate bonds		—		8,486,259		—		8,486,259

Securities available for sale	$	—	$	41,719,320	$	—	$	41,719,320

Financial Assets Measured at Fair Value on Non-Recurring Basis

The following tables reflect financial assets measured at fair value on a non-recurring basis as of June 30, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:


	Quoted Prices in		Significant		Significant
	Active Markets		Observable		Unobservable
	for Identical Assets		Inputs		Inputs
June 30, 2013	(Level 1)		(Level 2)		(Level 3)		Balance
Impaired Loans ⁽¹⁾	$	—	$	—	$	14,030,002	$	14,030,002

Other real estate owned ⁽²⁾	$	—	$	—	$	3,845,041	$	3,845,041

December 31, 2012
Impaired Loans ⁽¹⁾	$	—	$	—	$	8,424,786	$	8,424,786

Other real estate owned ⁽²⁾	$	—	$	—	$	4,873,844	$	4,873,844

⁽¹⁾	Represents carrying value for which adjustments are based on the appraised value of the collateral.

⁽²⁾	Represents carrying value for which adjustments are based on the appraised value of the property.

Carrying Amounts and Estimated Fair Values of Financial Instruments

The following is a summary of the carrying amounts and estimated fair values of the Company’s financial instruments not measured and not reported at fair value on the consolidated balance sheets at June 30, 2013 and December 31, 2012 (in thousands):


			June 30, 2013				December 31, 2012
	Fair Value		Carrying		Estimated		Carrying		Estimated
	Hierarchy		Amount		Fair Value		Amount		Fair Value
Financial Assets:
Cash and noninterest bearing balances due from banks		Level 1	$	3,866	$	3,866	$	2,736	$	2,736
Interest-bearing deposits due from banks		Level 1		20,509		20,509		67,567		67,567
Short-term investments		Level 1		711		711		711		711
Other investments		Level 2		3,500		3,500		3,500		3,500
Federal Reserve Bank stock		Level 1		1,634		1,634		1,730		1,730
Federal Home Loan Bank stock		Level 1		4,143		4,143		4,344		4,344
Loans receivable, net		Level 3		447,813		454,625		458,794		464,551
Accrued interest receivable		Level 1		1,711		1,711		1,894		1,894
Financial Liabilities:
Demand deposits		Level 1	$	63,869	$	63,869	$	65,176	$	65,176
Savings deposits		Level 1		94,601		94,601		77,761		77,761
Money market deposits		Level 1		36,494		36,494		42,401		42,401
NOW accounts		Level 1		33,706		33,706		30,191		30,191
Time deposits		Level 2		248,972		250,436		281,753		284,974
FHLB Borrowings		Level 2		35,000		35,691		50,000		52,448
Securities sold under repurchase agreements		Level 2		—		—		7,000		7,683
Subordinated debentures		Level 2		8,248		8,248		8,248		8,248
Accrued interest payable		Level 1		1,278		1,278		1,241		1,241