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, 2013 and 2012 are as follows:


			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
2013	Cost		Gains		Losses			Value
U. S. Government agency bonds	$	7,500,000	$	—	$	(420,650	)	$	7,079,350
U. S. Government agency mortgage-backed securities		22,387,986		—		(635,774	)		21,752,212
Corporate bonds		9,000,000		—		(130,206	)		8,869,794

	$	38,887,986	$	—	$	(1,186,630	)	$	37,701,356


			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

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, 2013 and 2012:


	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
2013	Value		Loss			Value		Loss			Value		Loss
U. S. Government agency bonds	$	7,079,350	$	(420,650	)	$	—	$	—		$	7,079,350	$	(420,650	)
U. S. Government agency mortgage-backed securities		8,870,860		(291,233	)		12,855,648		(344,541	)		21,726,508		(635,774	)
Corporate bonds		—		—			8,869,794		(130,206	)		8,869,794		(130,206	)

Totals	$	15,950,210	$	(711,883	)	$	21,725,442	$	(474,747	)	$	37,675,652	$	(1,186,630	)


	Less Than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
2012	Value		Loss			Value		Loss			Value		Loss
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	)

At December 31, 2013, eleven securities had unrealized losses with an aggregate depreciation of 3.2% from the amortized cost, compared to nine securities at December 31, 2012 with an aggregate depreciation of 1.9% 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 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 U.S. Government agency debt, 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, 2013.

At December 31, 2013 and 2012, available-for-sale securities with a carrying value of $5,758,916 and $6,913,797, respectively, were pledged to secure municipal deposits. At December 31, 2013, no securities were pledged to secure securities sold under agreements to repurchase. At December 31, 2012, available- for-sale securities with a carrying value of $9,088,000 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, 2013 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	$	8,869,794
U.S. Government bonds 5 to 10 years		7,500,000		7,079,350
Mortgage-backed securities		22,387,986		21,752,212

Total	$	38,887,986	$	37,701,356

During 2013 there were no sales of available-for-sale securities. 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.