Fair Value and Interest Rate Risk (Tables)

9 Months Ended

Sep. 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 September 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
	(Level 1)		(Level 2)		(Level 3)		September 30, 2013
September 30, 2013
U.S. Government agency mortgage- backed securities	$	—	$	22,588,537	$	—	$	22,588,537
U.S. Government agency bonds		—		7,186,905		—		7,186,905
Corporate bonds		—		8,521,419		—		8,521,419

Securities available for sale	$	—	$	38,296,861	$	—	$	38,296,861


	Quoted Prices in		Significant		Significant
	Active Markets		Observable		Unobservable		Balance
	for Identical Assets		Inputs		Inputs		as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2012
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 September 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
	(Level 1)		(Level 2)		(Level 3)		Balance
September 30, 2013
Impaired Loans ⁽¹⁾	$	—	$	—	$	10,797,658	$	10,797,658

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 September 30, 2013 and December 31, 2012 (in thousands):


		September 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	$	1,552	$	1,552	$	2,736	$	2,736
Interest-bearing deposits due from banks	Level 1		21,785		21,785		67,567		67,567
Short-term investments	Level 1		—		—		711		711
Other investments	Level 2		3,500		3,500		3,500		3,500
Federal Reserve Bank stock	Level 1		1,518		1,518		1,730		1,730
Federal Home Loan Bank stock	Level 1		4,143		4,143		4,344		4,344
Loans receivable, net	Level 3		429,856		436,270		458,794		464,551
Accrued interest receivable	Level 1		1,551		1,551		1,894		1,894
Financial Liabilities:
Demand deposits	Level 1	$	58,110	$	58,110	$	65,176	$	65,176
Savings deposits	Level 1		82,392		82,392		77,761		77,761
Money market deposits	Level 1		31,474		31,474		42,401		42,401
NOW accounts	Level 1		28,562		28,562		30,191		30,191
Time deposits	Level 2		240,585		241,653		281,753		284,974
FHLB Borrowings	Level 2		42,000		41,996		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		1,312		1,312		1,241		1,241