SMARTFINANCIAL INC., 10-Q filed on 11/14/2013
Quarterly Report
Document And Entity Information
9 Months Ended
Sep. 30, 2013
Nov. 7, 2013
Document Information [Line Items]
 
 
Entity Registrant Name
CORNERSTONE BANCSHARES INC 
 
Entity Central Index Key
0001038773 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Smaller Reporting Company 
 
Trading Symbol
CSBQ 
 
Entity Common Stock, Shares Outstanding
 
6,547,074 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Sep. 30, 2013 
 
Document Fiscal Period Focus
Q3 
 
Document Fiscal Year Focus
2013 
 
Consolidated Balance Sheets (USD $)
Sep. 30, 2013
Dec. 31, 2012
ASSETS
 
 
Cash and due from banks
$ 2,148,352 
$ 3,222,139 
Interest-bearing deposits at other financial institutions
19,106,638 
56,173,099 
Total cash and cash equivalents
21,254,990 
59,395,238 
Securities available for sale
95,282,416 
76,096,646 
Securities held to maturity (fair value $37,589 and $46,212 at September 30, 2013 and December 31, 2012, respectively)
36,620 
45,086 
Federal Home Loan Bank stock, at cost
2,322,900 
2,322,900 
Loans, net of allowance for loan losses of $3,158,766 and $6,141,281 at September 30, 2013 and December 31, 2012, respectively
281,021,767 
270,850,465 
Bank premises and equipment, net
5,094,668 
5,399,340 
Accrued interest receivable
1,221,841 
1,213,778 
Foreclosed assets
14,923,933 
20,332,313 
Other assets
8,522,148 
7,790,634 
Total assets
429,681,283 
443,446,400 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
Noninterest-bearing demand deposits
54,452,293 
60,053,838 
Interest-bearing demand deposits
25,463,874 
30,178,624 
Savings deposits and money market accounts
90,665,979 
80,994,239 
Time deposits
170,174,142 
173,653,892 
Total deposits
340,756,288 
344,880,593 
Accrued interest payable
100,129 
120,558 
Federal funds purchased and securities sold under agreements to repurchase
20,508,655 
19,587,387 
Federal Home Loan Bank advances and other borrowings
26,740,000 
37,175,000 
Other liabilities
1,426,357 
794,026 
Total liabilities
389,531,429 
402,557,564 
Stockholders' equity:
 
 
Preferred stock - no par value; 2,000,000 shares authorized; 600,000 shares issued and outstanding in 2013 and 2012
14,875,081 
14,821,546 
Common stock - $1.00 par value; 20,000,000 shares authorized; 6,709,199 shares issued in 2013 and 2012; 6,547,074 and 6,500,396 shares outstanding in 2013 and 2012, respectively
6,547,074 
6,500,396 
Additional paid-in capital
21,517,620 
21,390,486 
Accumulated deficit
(3,110,707)
(3,274,986)
Accumulated other comprehensive income
320,786 
1,451,394 
Total stockholders' equity
40,149,854 
40,888,836 
Total liabilities and stockholders' equity
$ 429,681,283 
$ 443,446,400 
Consolidated Balance Sheets [Parenthetical] (USD $)
Sep. 30, 2013
Dec. 31, 2012
Securities held to maturity, fair value (in dollars)
$ 37,589 
$ 46,212 
Allowance for loan losses (in dollars)
$ 3,158,766 
$ 6,141,281 
Preferred stock, shares authorized
2,000,000 
2,000,000 
Preferred stock, shares issued
600,000 
600,000 
Preferred stock, shares outstanding
600,000 
600,000 
Common stock, par value (in dollars per share)
$ 1.00 
$ 1.00 
Common stock, shares authorized
20,000,000 
20,000,000 
Common stock, shares issued
6,709,199 
6,709,199 
Common stock, shares outstanding
6,547,074 
6,500,396 
Consolidated Statements of Income (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
INTEREST INCOME
 
 
 
 
Loans, including fees
$ 4,293,583 
$ 4,241,492 
$ 12,514,688 
$ 12,571,193 
Investment securities
457,299 
478,172 
1,379,322 
1,563,433 
Federal funds sold & other earning assets
9,510 
15,647 
45,515 
44,075 
Total interest income
4,760,392 
4,735,311 
13,939,525 
14,178,701 
INTEREST EXPENSE
 
 
 
 
Time deposits
445,397 
612,286 
1,365,993 
1,946,341 
Other deposits
117,327 
144,157 
386,791 
398,859 
Federal funds purchased and securities sold under agreements to repurchase
21,435 
21,889 
56,258 
77,193 
Federal Home Loan Bank advances and other borrowings
284,882 
394,066 
941,269 
1,281,010 
Total interest expense
869,041 
1,172,398 
2,750,311 
3,703,403 
Net interest income before provision for loan losses
3,891,351 
3,562,913 
11,189,214 
10,475,298 
Provision for loan losses
0 
100,000 
300,000 
100,000 
Net interest income after provision for loan losses
3,891,351 
3,462,913 
10,889,214 
10,375,298 
NONINTEREST INCOME
 
 
 
 
Customer service fees
218,304 
197,509 
608,087 
602,107 
Net gains from sale of securities
0 
0 
424,971 
0 
Net gains from sale of loans and other assets
39,164 
48,199 
240,746 
124,109 
Other noninterest income
12,500 
12,944 
48,968 
51,844 
Total noninterest income
269,968 
258,652 
1,322,772 
778,060 
NONINTEREST EXPENSE
 
 
 
 
Salaries and employee benefits
1,619,030 
1,566,359 
4,838,822 
4,727,049 
Net occupancy and equipment expense
333,850 
354,555 
1,011,335 
1,038,296 
Depository insurance
161,956 
236,927 
482,920 
682,830 
Foreclosed assets, net
381,847 
314,088 
1,308,995 
945,163 
Other operating expenses
967,888 
731,090 
2,500,107 
2,307,172 
Total noninterest expenses
3,464,571 
3,203,019 
10,142,179 
9,700,510 
Income before provision for income taxes
696,748 
518,546 
2,069,807 
1,452,848 
Provision for income taxes
268,200 
154,300 
793,100 
421,500 
Net income
428,548 
364,246 
1,276,707 
1,031,348 
Preferred stock dividend requirements
375,000 
308,893 
1,125,000 
854,780 
Accretion on preferred stock discount
17,845 
16,370 
53,535 
46,079 
Net income available to common shareholders
$ 35,703 
$ 38,983 
$ 98,172 
$ 130,489 
EARNINGS PER COMMON SHARE
 
 
 
 
Basic (in dollars per share)
$ 0.01 
$ 0.01 
$ 0.01 
$ 0.02 
Diluted (in dollars per share)
$ 0.01 
$ 0.01 
$ 0.01 
$ 0.02 
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share)
$ 0 
$ 0 
$ 0 
$ 0 
Consolidated Statements of Comprehensive Income (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Net income
$ 428,548 
$ 364,246 
$ 1,276,707 
$ 1,031,348 
Other comprehensive income, net of tax:
 
 
 
 
Unrealized holding (losses) gains arising during the period, net oftax benefit (expense)
(170,234)
110,781 
(867,126)
308,452 
Reclassification adjustment for gains included in net income, net of tax expense
 
 
(263,482)
0 
Total other comprehensive (loss) income
(170,234)
110,781 
(1,130,608)
308,452 
Comprehensive income
$ 258,314 
$ 475,027 
$ 146,099 
$ 1,339,800 
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Unrealized holding (losses) gains arising during the period, tax benefit (expense)
$ 104,336 
$ (67,898)
$ 531,464 
$ (189,051)
Reclassification adjustment for gains included in net income, tax expense
 
 
$ 161,489 
 
Consolidated Statement of Changes in Stockholders' Equity - Unaudited (USD $)
Total
Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
BALANCE at Dec. 31, 2012
$ 40,888,836 
$ 14,821,546 
$ 6,500,396 
$ 21,390,486 
$ (3,274,986)
$ 1,451,394 
Stock compensation expense
96,793 
0 
0 
96,793 
0 
0 
Issuance of common stock, 46,678 shares
77,019 
0 
46,678 
30,341 
0 
0 
Preferred stock dividends
(1,058,893)
0 
0 
0 
(1,058,893)
0 
Accretion on preferred stock
0 
53,535 
0 
0 
(53,535)
0 
Net income
1,276,707 
0 
0 
0 
1,276,707 
0 
Unrealized holding gains (losses) on securities available for sale, net of reclassification adjustment and taxes
(1,130,608)
0 
0 
0 
0 
(1,130,608)
BALANCE at Sep. 30, 2013
$ 40,149,854 
$ 14,875,081 
$ 6,547,074 
$ 21,517,620 
$ (3,110,707)
$ 320,786 
Consolidated Statement of Changes in Stockholders' Equity - Unaudited [Parenthetical]
9 Months Ended
Sep. 30, 2013
Stock Issued During Period Shares New Issues
46,678 
Consolidated Statements of Cash Flows (USD $)
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Net income
$ 1,276,707 
$ 1,031,348 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
295,836 
418,721 
Provision for loan losses
300,000 
100,000 
Stock compensation expense
96,793 
55,536 
Gains on sale of securities
(424,971)
0 
Net (gains) losses on sales of loans and other assets
(240,746)
(124,109)
Changes in other operating assets and liabilities:
 
 
Accrued interest receivable
(8,063)
(24,021)
Accrued interest payable
(20,429)
25,378 
Other assets and liabilities
1,509,377 
2,469,965 
Net cash provided by operating activities
2,784,504 
3,952,818 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
Securities available for sale
29,187,978 
30,392,105 
Securities held to maturity
8,354 
16,904 
Purchase of securities available for sale
(49,745,656)
(26,098,797)
Loan originations and principal collections, net
(11,836,658)
(15,547,286)
Purchase of bank premises and equipment
(17,734)
(101,036)
Proceeds from sale of other real estate and other assets
6,098,875 
2,769,712 
Net cash used in investing activities
(26,304,841)
(8,568,398)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
Net (decrease) / increase in deposits
(4,124,305)
14,921,054 
Net increase / (decrease)in federal funds purchased and securities sold under agreements to repurchase
921,268 
(10,010,775)
Net payments on Federal Home Loan Bank advances and other borrowings
(10,435,000)
(5,870,000)
Payment of dividends on preferred stock
(1,058,893)
(705,886)
Issuance of common stock
77,019 
0 
Issuance of preferred stock
0 
2,230,029 
Net cash (used in) provided by financing activities
(14,619,911)
564,422 
NET (DECREASE) IN CASH AND CASH EQUIVALENTS
(38,140,248)
(4,051,158)
CASH AND CASH EQUIVALENTS, beginning of period
59,395,238 
38,882,691 
CASH AND CASH EQUIVALENTS, end of period
21,254,990 
34,831,533 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 
 
Cash paid during the period for interest
2,770,740 
3,678,025 
Cash paid during the period for taxes
755,820 
943,327 
NONCASH INVESTING AND FINANCING ACTIVITIES
 
 
Acquisition of real estate through foreclosure
$ 1,604,806 
$ 7,399,290 
Presentation of Financial Information
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]
Note 1. Presentation of Financial Information
 
Nature of Business-Cornerstone is a bank holding company whose primary business is performed by its wholly-owned subsidiary, Cornerstone Community Bank (the “Bank”).  The Bank provides a full range of banking services to the Chattanooga, Tennessee market.  The Bank has also established a loan production office (“LPO”) in Dalton, Georgia to further enhance the Bank’s lending markets. 
 
Interim Financial Information (Unaudited)-The financial information in this report for September 30, 2013 and September 30, 2012 has not been audited. The information included herein should be read in conjunction with the annual consolidated financial statements and footnotes thereto included in the 2012 Annual Report to Shareholders which was furnished to each shareholder of Cornerstone in April of 2013. The consolidated financial statements presented herein conform to U.S. generally accepted accounting principles and to general industry practices.  In the opinion of Cornerstone’s management, the accompanying interim financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial condition, the results of operations, and cash flows for the interim period. Results for interim periods are not necessarily indicative of the results to be expected for a full year. 
 
Use of Estimates-The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for loan losses, foreclosed assets and deferred tax assets.
 
Consolidation-The accompanying consolidated financial statements include the accounts of Cornerstone and the Bank.   Substantially all intercompany transactions, profits and balances have been eliminated.
 
Reclassification-Certain amounts in the prior consolidated financial statements have been reclassified to conform to the current period presentation.  The reclassifications had no effect on net income, total assets or stockholders’ equity as previously reported.
 
Accounting Policies-During interim periods, Cornerstone follows the accounting policies set forth in its Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission.  Since December 31, 2012, there have been no significant changes in any accounting principles or practices, or in the method of applying any such principles or practices, except for the following:
 
 In February 2013, the Financial Accounting Standards Board (FASB) issued updated guidance related to disclosure of reclassification amounts out of other comprehensive income.  The standard requires that companies present either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification.  The new requirements took effect for public companies in fiscal years, and interim periods within those years, beginning after December 15, 2012.  The Company adopted this standard on January 1, 2013. The effect of adopting this standard increased our disclosure requirements surrounding reclassification items out of accumulated other comprehensive income.
 
Earnings per Common Share- Basic earnings per share (“EPS”) is computed by dividing income available to common shareholders (numerator) by the weighted average number of common shares outstanding during the period (denominator). Diluted EPS is computed by dividing income available to common shareholders (numerator) by the adjusted weighted average number of shares outstanding (denominator). The adjusted weighted average number of shares outstanding reflects the potential dilution occurring if securities or other contracts to issue common stock were exercised or converted into common stock resulting in the issuance of common stock that share in the earnings of the entity. 
 
The following is a summary of the basic and diluted earnings per share for the three and nine month periods ended September 30, 2013 and September 30, 2012.
 
 
 
Three Months Ended September 30,
 
 
 
2013
 
2012
 
Basic earnings per common share calculation:
 
 
 
 
 
 
 
Numerator: Net income available to common shareholders
 
$
35,703
 
$
38,983
 
Denominator: Weighted avg. common shares outstanding
 
 
6,547,074
 
 
6,500,396
 
Effect of dilutive stock options
 
 
145,508
 
 
3,758
 
Diluted shares
 
 
6,692,582
 
 
6,504,154
 
 
 
 
 
 
 
 
 
Basic earnings per common share
 
$
0.01
 
$
0.01
 
Diluted earnings per common share
 
$
0.01
 
$
0.01
 
 
 
 
Nine Months Ended September 30,
 
 
 
2013
 
2012
 
Basic earnings per common share calculation:
 
 
 
 
 
 
 
Numerator: Net income available to common shareholders
 
$
98,172
 
$
130,489
 
Denominator: Weighted avg. common shares outstanding
 
 
6,547,074
 
 
6,500,396
 
Effect of dilutive stock options
 
 
127,453
 
 
59,090
 
Diluted shares
 
 
6,674,527
 
 
6,559,486
 
 
 
 
 
 
 
 
 
Basic earnings per common share
 
$
0.01
 
$
0.02
 
Diluted earnings per common share
 
$
0.01
 
$
0.02
 
 
For the three and nine months ended September 30, 2013, potential common shares of 503,075 were not included in the calculation of diluted earnings per share because the assumed exercise of such shares would be anti-dilutive.
Stock Based Compensation
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Note 2. Stock Based Compensation
 
Accounting Policies- Cornerstone, as required by FASB, applies the fair value recognition provisions of ASC 718, Compensation –Stock Compensation.  As a result, for the nine month period ended September 30, 2013, the compensation cost charged to earnings related to the vested incentive stock options was approximately $97,000, which had no material impact on earnings per share.
 
Officer and Employee Plans-Cornerstone has two stock option plans under which officers and employees can be granted incentive stock options or non-qualified stock options to purchase a total of up to 1,420,000 shares of Cornerstone’s common stock.  The exercise price for incentive stock options must be not less than 100 percent of the fair market value of the common stock on the date of the grant.  The exercise price of the non-qualified stock options may be equal to or more or less than the fair market value of the common stock on the date of the grant.  The incentive stock options vest 30 percent on the second anniversary of the grant date, 60 percent on the third anniversary of the grant date and 100 percent on the fourth anniversary of the grant date, and the non-qualified stock options vest 50 percent on the first anniversary of the grant date and 100 percent on the second anniversary of the grant date.  The options expire ten years from the grant date.  At September 30, 2013, the total remaining compensation cost to be recognized on non-vested options is approximately $519,000.  A summary of the status of these stock option plans is presented in the following table:
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
Weighted
 
Contractual
 
 
 
 
 
 
 
 
Average
 
Remaining
 
Aggregate
 
 
 
 
 
Exercisable
 
Term
 
Intrinsic
 
 
 
Number
 
Price
 
(in years)
 
Value
 
Outstanding at December 31, 2012
 
670,300
 
$
3.86
 
6.2 Years
 
$
232,900
 
Granted
 
203,000
 
 
2.37
 
9.4 Years
 
 
 
 
Exercised
 
-
 
 
-
 
 
 
 
 
 
Forfeited
 
(57,475)
 
 
(3.51)
 
 
 
 
 
 
Outstanding at September 30, 2013
 
815,825
 
$
3.51
 
6.8 Years
 
$
207,030
 
Options exercisable at September 30, 2013
 
305,525
 
$
6.13
 
 
 
 
 
 
   
    Board of Directors Plan-Cornerstone has a stock option plan under which members of the Board of Directors, at the formation of the Bank, were granted options to purchase a total of up to 600,000 shares of the Bank's common stock.  On October 15, 1997, the Bank stock options were converted to Cornerstone stock options.  Only non-qualified stock options may be granted under the plan.  The exercise price of each option equals the market price of Cornerstone’s stock on the date of grant and the maximum term is ten years.  Vesting is 50 percent on the first anniversary of the grant date and 100 percent on the second anniversary of the grant date.  At September 30, 2013, the total remaining compensation cost to be recognized on non-vested options is approximately $97,000.  A summary of the status of this stock option plan is presented in the following table:             
 
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
Weighted
 
Contractual
 
 
 
 
 
 
 
 
Average
 
Remaining
 
Aggregate
 
 
 
 
 
Exercisable
 
Term
 
Intrinsic
 
 
 
Number
 
Price
 
(in years)
 
Value
 
Outstanding at December 31, 2012
 
145,250
 
$
3.30
 
7.2 Years
 
$
57,600
 
Granted
 
45,000
 
 
2.37
 
9.4 Years
 
 
 
 
Exercised
 
-
 
 
-
 
 
 
 
 
 
Forfeited
 
-
 
 
-
 
 
 
 
 
 
Outstanding at September 30, 2013
 
190,250
 
$
3.08
 
7.1 Years
 
$
52,200
 
Options exercisable at September 30, 2013
 
100,250
 
$
4.04
 
 
 
 
 
 
 
The weighted average grant date fair value of all stock options granted during the nine months ended September 30, 2013 was $1.17.  This was determined using the Black-Scholes option-pricing model with the following weighted-average assumptions:
 
Dividend yield
 
0.0
%
Expected life
 
7.0 Years
 
Expected volatility
 
47.60
%
Risk-free interest rate
 
1.23
%
Securities
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
Note 3. Securities
 
The amortized cost and fair value of securities available-for-sale and held-to-maturity at September 30, 2013 and December 31, 2012 are summarized as follows:
 
 
 
September 30, 2013
 
 
 
 
 
 
Gross
 
Gross
 
 
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
 
 
 
Cost
 
Gains
 
Losses
 
Value
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
 
$
3,479,680
 
$
48,665
 
$
-
 
$
3,528,345
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
 
 
17,065,923
 
 
683,599
 
 
(55,166)
 
 
17,694,356
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans guaranteed
     by GNMA or FNMA
 
 
7,797,244
 
 
106,280
 
 
-
 
 
7,903,524
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations
     issued or guaranteed by U.S.
     Government agencies or sponsored
     agencies
 
 
66,403,939
 
 
53,727
 
 
(301,475)
 
 
66,156,191
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
94,746,786
 
$
892,271
 
$
(356,641)
 
$
95,282,416
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans guaranteed
     by GNMA or FNMA
 
$
36,620
 
$
969
 
$
-
 
$
37,589
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
Gross
 
Gross
 
 
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
 
 
 
Cost
 
Gains
 
Losses
 
Value
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
 
$
3,961,956
 
$
56,195
 
$
-
 
$
4,018,151
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
 
 
21,531,727
 
 
2,101,590
 
 
-
 
 
23,633,317
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans guaranteed
    by GNMA or FNMA
 
 
9,092,205
 
 
132,038
 
 
(1,824)
 
 
9,222,419
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations
    issued or guaranteed by U.S.
    Government agencies or sponsored
    agencies
 
 
39,151,568
 
 
86,099
 
 
(14,908)
 
 
39,222,759
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
73,737,456
 
$
2,375,922
 
$
(16,732)
 
$
76,096,646
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans guaranteed
    by GNMA or FNMA
 
$
45,086
 
$
1,341
 
$
(8)
 
$
46,212
 
 
At September 30, 2013, securities with a fair value totaling approximately $73 million were pledged to secure public funds, securities sold under agreements to repurchase, as collateral for federal funds purchased from other financial institutions and serve as collateral for borrowings at the Federal Reserve Discount Window.
 
For the three months ended September 30, 2013, there were no available for sale securities sold.  For the nine months ended September 30, 2013, there were available for sale securities sold with proceeds totaling $5,328,170 which resulted in gross gains realized of $424,971.  There were no securities sales during 2012.
 
The amortized cost and estimated market value of securities at September 30, 2013, by contractual maturity, are shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
 
 
Securities Available for Sale
 
Securities Held to Maturity
 
 
 
Amortized
 
Fair
 
Amortized
 
Fair
 
 
 
Cost
 
Value
 
Cost
 
Value
 
Due in one year or less
 
$
-
 
$
-
 
$
-
 
$
-
 
Due from one year to five years
 
 
1,267,124
 
 
1,338,576
 
 
-
 
 
-
 
Due from five years to ten years
 
 
6,310,901
 
 
6,648,634
 
 
-
 
 
-
 
Due after ten years
 
 
12,967,578
 
 
13,235,491
 
 
-
 
 
-
 
 
 
$
20,545,603
 
$
21,222,701
 
$
-
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
 
74,201,183
 
 
74,059,715
 
 
36,620
 
 
37,589
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
94,746,786
 
$
95,282,416
 
$
36,620
 
$
37,589
 
 
The following tables present the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities available for sale have been in a continuous unrealized loss position, as of September 30, 2013 and as of December 31, 2012:
 
 
 
As of September 30, 2013
 
 
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
 
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
 
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
 
$
1,138,535
 
$
(40,736)
 
$
554,465
 
$
(14,430)
 
$
1,693,000
 
$
(55,166)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
Collateralized mortgage
    obligations issued or
    guaranteed by U.S.
    Government agencies
    or sponsored agencies
 
 
48,435,866
 
 
(278,248)
 
 
9,042,662
 
 
(23,227)
 
 
57,478,528
 
 
(301,475)
 
 
 
$
49,574,401
 
$
(318,984)
 
$
9,597,127
 
$
(37,657)
 
$
59,171,528
 
$
(356,641)
 
 
 
 
As of December 31, 2012
 
 
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
 
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
 
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans
    guaranteed by GNMA
    or FNMA
 
$
667,325
 
$
(1,824)
 
$
-
 
$
-
 
$
667,325
 
$
(1,824)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage
    obligations issued or
    guaranteed by U.S.
    Government agencies
    or sponsored agencies
 
 
22,514,641
 
 
(14,908)
 
 
-
 
 
-
 
 
22,514,641
 
 
(14,908)
 
 
 
$
23,181,966
 
$
(16,732)
 
$
-
 
$
-
 
$
23,181,966
 
$
(16,732)
 
 
Upon acquisition of a security, the Bank determines the appropriate impairment model that is applicable.  If the security is a beneficial interest in securitized financial assets, the Bank uses the beneficial interests in securitized financial assets impairment model.  If the security is not a beneficial interest in securitized financial assets, the Bank uses the debt and equity securities impairment model.  The Bank conducts periodic reviews to evaluate each security to determine whether an other-than-temporary impairment has occurred.  The Bank does not have any securities that have been classified as other-than-temporarily-impaired at September 30, 2013 or December 31, 2012.
 
At September 30, 2013 and December 31, 2012, the significant categories of temporarily impaired securities and management’s evaluation of those securities are as follows:
 
State and municipal securities:  At September 30, 2013, three investments in obligations of state and municipal securities had unrealized losses.  The Bank believes the unrealized losses on those investments were caused by the interest rate environment and does not relate to the underlying credit quality of the issuers.  Because the Bank has the intent and ability to hold those investments for a time necessary to recover their amortized cost bases, which may be until maturity, the Bank does not consider those investments to be other-than-temporarily impaired at September 30, 2013.
 
Mortgage-backed securities:  At September 30, 2013, eighteen investments in residential mortgage-backed securities had unrealized losses.  This impairment is believed to be caused by the current interest rate environment.  The contractual cash flows of those investments are guaranteed or issued by an agency of the U.S. Government.  Because the decline in market value is attributable to the current interest rate environment and not credit quality, and because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Bank does not deem those investments to be other-than-temporarily impaired at September 30, 2013.
Loans and Allowance for Loan Losses
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]
Note 4. Loans and Allowance for Loan Losses
 
At September 30, 2013 and December 31, 2012, loans are summarized as follows (in thousands):
 
 
 
September 30,
 
 
 
December 31,
 
 
 
 
 
2013
 
Percent
 
2012
 
Percent
 
Commercial real estate-mortgage:
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
 
$
66,143
 
23.28
%
$
58,425
 
21.09
%
All other
 
 
66,721
 
23.48
%
 
66,747
 
24.10
%
Consumer real estate-mortgage
 
 
69,911
 
24.60
%
 
71,195
 
25.70
%
Construction and land development
 
 
38,970
 
13.71
%
 
38,557
 
13.92
%
Commercial and industrial
 
 
39,782
 
14.00
%
 
40,140
 
14.49
%
Consumer and other
 
 
2,654
 
0.93
%
 
1,927
 
0.70
%
Total loans
 
 
284,181
 
100.00
%
 
276,991
 
100.00
%
Less: Allowance for loan losses
 
 
(3,159)
 
 
 
 
(6,141)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans, net
 
$
281,022
 
 
 
$
270,850
 
 
 
 
Cornerstone follows the loan impairment accounting guidance in ASC Topic 310.  A loan is considered impaired when, based on current information and events, it is probable that Cornerstone will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.  Impaired loans include nonperforming loans and loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties.  These concessions could include a reduction in interest rates, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collections.
 
The composition of loans by loan classification for impaired and performing loan status at September 30, 2013 and December 31, 2012, is summarized in the tables below (amounts in thousands):
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
September 30, 2013
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Performing loans
 
$
125,418
 
$
66,950
 
$
38,712
 
$
38,027
 
$
2,654
 
$
271,761
 
Impaired loans
 
 
7,446
 
 
2,961
 
 
258
 
 
1,755
 
 
-
 
 
12,420
 
Total
 
$
132,864
 
$
69,911
 
$
38,970
 
$
39,782
 
$
2,654
 
$
284,181
 
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
December 31, 2012
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Performing loans
 
$
115,959
 
$
69,329
 
$
37,607
 
$
36,980
 
$
1,927
 
$
261,802
 
Impaired loans
 
 
9,213
 
 
1,866
 
 
950
 
 
3,160
 
 
-
 
 
15,189
 
Total
 
$
125,172
 
$
71,195
 
$
38,557
 
$
40,140
 
$
1,927
 
$
276,991
 
 
The following tables show the allowance for loan losses allocation by loan classification for impaired and performing loans as of September 30, 2013 and December 31, 2012 (amounts in thousands):
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
September 30, 2013
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Allowance related to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performing loans
 
$
784
 
$
922
 
$
339
 
$
196
 
$
20
 
$
2,261
 
Impaired loans
 
 
682
 
 
134
 
 
-
 
 
82
 
 
-
 
 
898
 
Total
 
$
1,466
 
$
1,056
 
$
339
 
$
278
 
$
20
 
$
3,159
 
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
December 31, 2012
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Allowance related to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performing loans
 
$
319
 
$
952
 
$
781
 
$
29
 
$
14
 
$
2,095
 
Impaired loans
 
 
2,230
 
 
576
 
 
460
 
 
780
 
 
-
 
 
4,046
 
Total
 
$
2,549
 
$
1,528
 
$
1,241
 
$
809
 
$
14
 
$
6,141
 
 
The following tables detail the changes in the allowance for loan losses for the  nine month period ending September 30, 2013 and year ending December 31, 2012, by loan classification (amounts in thousands):
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
September 30, 2013
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Beginning balance
 
$
2,549
 
$
1,528
 
$
1,241
 
$
809
 
$
14
 
$
6,141
 
Charged-off loans
 
 
(1,874)
 
 
(688)
 
 
(1,185)
 
 
(694)
 
 
(19)
 
 
(4,460)
 
Recovery of charge-offs
 
 
61
 
 
224
 
 
810
 
 
80
 
 
3
 
 
1,178
 
Provision for
    (reallocation of) loan losses
 
 
730
 
 
(8)
 
 
(527)
 
 
83
 
 
22
 
 
300
 
Ending balance
 
$
1,466
 
$
1,056
 
$
339
 
$
278
 
$
20
 
$
3,159
 
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
December 31, 2012
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Beginning balance
 
$
3,557
 
$
2,518
 
$
827
 
$
482
 
$
16
 
$
7,400
 
Charged-off loans
 
 
(958)
 
 
(1,022)
 
 
(782)
 
 
(74)
 
 
(33)
 
 
(2,869)
 
Recovery of charge-offs
 
 
838
 
 
36
 
 
145
 
 
144
 
 
17
 
 
1,180
 
Provision for
    (reallocation of)loan losses
 
 
(888)
 
 
(4)
 
 
1,051
 
 
257
 
 
14
 
 
430
 
Ending balance
 
$
2,549
 
$
1,528
 
$
1,241
 
$
809
 
$
14
 
$
6,141
 
 
Credit quality indicators:
 
Federal regulations require the Bank to review and classify its assets on a regular basis.  To fulfill this requirement, the Bank systematically reviews its loan portfolio to ensure the Bank’s large loan relationships are being maintained within its loan policy guidelines, remains properly underwritten and is properly classified by loan grade.  This review process is performed by the Bank's management, loan review, internal auditors and state and federal regulators.
 
The Bank’s loan grading process is as follows:
 
The Bank’s loan grading process is as follows:
 
 
§
All loans are assigned a loan grade at the time of origination by the relationship manager.  Typically, a loan is assigned a loan grade of “pass” at origination.
 
 
 
 
§
Loan relationships greater than or equal to $500 thousand are reviewed by the Bank’s external loan review provider on an annual basis.
 
 
 
 
§
The Bank’s internal loan review department samples approximately 33 percent of all other loan relationships less than $500 thousand on an annual basis for review. 
 
 
 
 
§
If a loan is delinquent 60 days or more or a pattern of delinquency exists, the loan will be selected for review.
 
 
 
 
§
Generally, all loans on the Bank’s internal watchlist are reviewed annually by internal loan review or external loan review providers.
 
If a loan is classified as a problem asset, it will be assigned one of the following loan grades:  substandard, substandard-impaired, doubtful, and loss. “Substandard assets” must have one or more defined weaknesses and are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. “Doubtful assets” have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. An asset classified “loss” is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. The regulations also provide for a “special mention” category, described as assets which do not currently expose an institution to a sufficient degree of risk to warrant classification but do possess credit deficiencies or potential weaknesses deserving close attention. When the Bank classifies an asset as substandard or doubtful, a specific allowance for loan losses may be established.
 
The following tables outline the amount of each loan classification and the amount categorized into each risk rating as of September 30, 2013 and December 31, 2012 (amounts in thousands):
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
September 30, 2013
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Pass
 
$
120,812
 
$
58,536
 
$
38,027
 
$
33,456
 
$
2,654
 
$
253,485
 
Special mention
 
 
4,209
 
 
5,377
 
 
95
 
 
4,105
 
 
-
 
 
13,786
 
Substandard
 
 
397
 
 
3,037
 
 
590
 
 
466
 
 
-
 
 
4,490
 
Substandard-impaired
 
 
7,164
 
 
2,961
 
 
258
 
 
1,755
 
 
-
 
 
12,138
 
Doubtful-impaired
 
 
282
 
 
-
 
 
-
 
 
-
 
 
-
 
 
282
 
 
 
$
132,864
 
$
69,911
 
$
38,970
 
$
39,782
 
$
2,654
 
$
284,181
 
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
December 31, 2012
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Pass
 
$
111,313
 
$
57,959
 
$
36,802
 
$
36,482
 
$
1,904
 
$
244,460
 
Special mention
 
 
4,145
 
 
8,401
 
 
198
 
 
330
 
 
18
 
 
13,092
 
Substandard
 
 
501
 
 
2,969
 
 
607
 
 
168
 
 
5
 
 
4,250
 
Substandard-impaired
 
 
9,213
 
 
1,866
 
 
950
 
 
3,160
 
 
-
 
 
15,189
 
 
 
$
125,172
 
$
71,195
 
$
38,557
 
$
40,140
 
$
1,927
 
$
276,991
 
 
After the Bank’s independent loan review department completes the loan grade assignment, a loan impairment analysis is performed on loans graded substandard or worse.The following tables present summary information pertaining to impaired loans by loan classification as of September 30, 2013 and December 31, 2012 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
For the quarter ended
 
 
 
At September 30, 2013
 
September 30, 2013
 
 
 
 
 
 
Unpaid
 
 
 
 
Average
 
Interest
 
 
 
Recorded
 
Principal
 
Related
 
Recorded
 
Income
 
 
 
Investment
 
Balance
 
Allowance
 
Investment
 
Recognized
 
Impaired loans without a valuation allowance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate – mortgage
 
$
4,578
 
$
4,797
 
$
-
 
$
4,683
 
$
183
 
Consumer real estate – mortgage
 
 
2,066
 
 
2,066
 
 
-
 
 
1,854
 
 
73
 
Construction and land development
 
 
258
 
 
271
 
 
-
 
 
349
 
 
11
 
Commercial and industrial
 
 
1,353
 
 
1,396
 
 
-
 
 
1,875
 
 
31
 
Total
 
$
8,255
 
$
8,530
 
$
-
 
$
8,761
 
$
298
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impaired loans with a valuation allowance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate – mortgage
 
$
2,868
 
$
2,943
 
$
682
 
$
4,670
 
$
126
 
Consumer real estate – mortgage
 
 
895
 
 
895
 
 
134
 
 
1,110
 
 
49
 
Construction and land development
 
 
-
 
 
-
 
 
-
 
 
296
 
 
-
 
Commercial and industrial
 
 
402
 
 
402
 
 
82
 
 
740
 
 
38
 
Total
 
$
4,165
 
$
4,240
 
$
898
 
$
6,816
 
$
213
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total impaired loans
 
$
12,420
 
$
12,770
 
$
898
 
$
15,577
 
$
511
 
   
 
 
 
 
 
 
 
 
 
 
 
For the year ended
 
 
 
At December 31, 2012
 
December 31, 2012
 
 
 
 
 
 
Unpaid
 
 
 
 
Average
 
Interest
 
 
 
Recorded
 
Principal
 
Related
 
Recorded
 
Income
 
 
 
Investment
 
Balance
 
Allowance
 
Investment
 
Recognized
 
Impaired loans without a valuation allowance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate – mortgage
 
$
3,406
 
$
3,453
 
$
-
 
$
4,389
 
$
180
 
Consumer real estate – mortgage
 
 
513
 
 
540
 
 
-
 
 
1,538
 
 
52
 
Construction and land development
 
 
244
 
 
251
 
 
-
 
 
358
 
 
19
 
Commercial and industrial
 
 
2,111
 
 
2,155
 
 
-
 
 
2,277
 
 
55
 
Total
 
$
6,274
 
$
6,399
 
$
-
 
$
8,562
 
$
306
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impaired loans with a valuation allowance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate – mortgage
 
$
5,807
 
$
5,848
 
$
2,230
 
$
6,616
 
$
215
 
Consumer real estate – mortgage
 
 
1,353
 
 
1,353
 
 
576
 
 
2,606
 
 
61
 
Construction and land development
 
 
706
 
 
706
 
 
460
 
 
642
 
 
49
 
Commercial and industrial
 
 
1,049
 
 
1,049
 
 
780
 
 
700
 
 
132
 
Total
 
$
8,915
 
$
8,956
 
$
4,046
 
$
10,564
 
$
457
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total impaired loans
 
$
15,189
 
$
15,355
 
$
4,046
 
$
19,126
 
$
763
 
 
The following tables present an aged analysis of past due loans as of September 30, 2013 and December 31, 2012 (in thousands):
 
 
 
30-89 Days
 
Past Due 90
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Past Due and
 
Days or More
 
 
 
 
Total
 
Current
 
Total
 
September 30, 2013
 
Accruing
 
and Accruing
 
Nonaccrual
 
Past Due
 
Loans
 
Loans
 
Commercial real estate-mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
 
$
431
 
$
-
 
$
494
 
$
925
 
$
65,218
 
$
66,143
 
All other
 
 
-
 
 
-
 
 
924
 
 
924
 
 
65,797
 
 
66,721
 
Consumer real estate-mortgage
 
 
712
 
 
-
 
 
964
 
 
1,676
 
 
68,235
 
 
69,911
 
Construction and land development
 
 
48
 
 
-
 
 
22
 
 
70
 
 
38,900
 
 
38,970
 
Commercial and industrial
 
 
552
 
 
-
 
 
1,692
 
 
2,244
 
 
37,538
 
 
39,782
 
Consumer and other
 
 
2
 
 
-
 
 
-
 
 
2
 
 
2,652
 
 
2,654
 
Total
 
$
1,745
 
$
-
 
$
4,096
 
$
5,841
 
$
278,340
 
$
284,181
 
 
 
 
30-89 Days
 
Past Due 90
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Past Due and
 
Days or More
 
 
 
 
Total
 
Current
 
Total
 
December 31, 2012
 
Accruing
 
and Accruing
 
Nonaccrual
 
Past Due
 
Loans
 
Loans
 
Commercial real estate-mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
 
$
2,738
 
$
-
 
$
956
 
$
3,694
 
$
54,731
 
$
58,425
 
All other
 
 
636
 
 
-
 
 
1,913
 
 
2,549
 
 
64,198
 
 
66,747
 
Consumer real estate-mortgage
 
 
1,858
 
 
-
 
 
616
 
 
2,474
 
 
68,721
 
 
71,195
 
Construction and land development
 
 
100
 
 
-
 
 
53
 
 
153
 
 
38,404
 
 
38,557
 
Commercial and industrial
 
 
1,227
 
 
-
 
 
2,467
 
 
3,694
 
 
36,446
 
 
40,140
 
Consumer and other
 
 
35
 
 
-
 
 
-
 
 
35
 
 
1,892
 
 
1,927
 
Total
 
$
6,594
 
$
-
 
$
6,005
 
$
12,599
 
$
264,392
 
$
276,991
 
 
Impaired loans also include loans that the Bank has elected to formally restructure when, due to the weakening credit status of a borrower, the restructuring may facilitate a repayment plan that seeks to minimize the potential losses that the Bank may have to otherwise incur.  At September 30, 2013 and December 31, 2012, the Bank has loans of approximately $6,119,000 and $9,403,000, respectively, that were modified for troubled debt restructuring. Troubled commercial loans are restructured by specialists within our Special Asset department and all restructurings are approved by committees and credit officers separate and apart from the normal loan approval process.  These specialists are trained to reduce the Bank’s overall risk and exposure to loss in the event of a restructuring through obtaining either or all of the following:  improved documentation, additional guaranties, increase in curtailments, reduction in collateral terms, additional collateral or other similar strategies. 
 
The following tables present a summary of loans that were modified as troubled debt restructurings during the nine month periods ending September 30, 2013 and 2012 (amounts in thousands):
 
 
 
 
 
Pre-Modification
 
Post-Modification
 
 
 
 
 
Outstanding
 
Outstanding
 
 
 
 
 
Recorded
 
Recorded
 
September 30, 2013
 
Number of Contracts
 
Investment
 
Investment
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate-mortgage
 
2
 
$
2,073
 
$
2,073
 
Consumer real estate-mortgage
 
1
 
 
66
 
 
66
 
Construction and land development
 
3
 
 
898
 
 
898
 
Commercial and industrial
 
3
 
 
2,389
 
 
2,389
 
 
 
 
 
 
Pre-Modification
 
Post-Modification
 
 
 
 
 
Outstanding
 
Outstanding
 
 
 
 
 
Recorded
 
Recorded
 
September 30, 2012
 
Number of Contracts
 
Investment
 
Investment
 
Commercial real estate-mortgage
 
2
 
$
4,233
 
$
4,233
 
Consumer real estate-mortgage
 
1
 
 
65
 
 
65
 
Construction and land development
 
3
 
 
1,178
 
 
1,178
 
Commercial and industrial
 
4
 
 
2,408
 
 
2,408
 
 
There were no loans that were modified as troubled debt restructurings during the past twelve months and for which there was a subsequent payment default.
Commitments and Contingent Liabilities
Commitments and Contingencies Disclosure [Text Block]
Note 5. Commitments and Contingent Liabilities
 
Off Balance Sheet Arrangements - In the normal course of business, the Bank has entered into off-balance sheet financial instruments which include commitments to extend credit (i.e., including unfunded lines of credit) and standby letters of credit. Commitments to extend credit are usually the result of lines of credit granted to existing borrowers under agreements that the total outstanding indebtedness will not exceed a specific amount during the term of the indebtedness. Typical borrowers are commercial concerns that use lines of credit to supplement their treasury management functions; thus their total outstanding indebtedness may fluctuate during any time period based on the seasonality of their business and the resultant timing of their cash flows. Other typical lines of credit are related to home equity loans granted to consumers. Commitments to extend credit generally have fixed expiration dates or other termination clauses and may require payment of a fee.
 
Standby letters of credit are generally issued on behalf of an applicant (our customer) to a specifically named beneficiary and are the result of a particular business arrangement that exists between the applicant and the beneficiary. Standby letters of credit have fixed expiration dates and are usually for terms of two years or less unless terminated beforehand due to criteria specified in the standby letter of credit. A typical arrangement involves the applicant routinely being indebted to the beneficiary for such items as inventory purchases, insurance, utilities, lease guarantees or other third party
commercial transactions. The standby letter of credit would permit the beneficiary to obtain payment from the  Bank under certain prescribed circumstances. Subsequently, the Bank would seek reimbursement from the applicant pursuant to the terms of the standby letter of credit.
     
The Bank follows the same credit policies and underwriting practices when making these commitments as it does for on-balance sheet instruments. Each customer’s creditworthiness is evaluated on a case-by-case basis, and the amount of collateral obtained, if any, is based on management’s credit evaluation of the customer. Collateral held varies but may include cash, real estate and improvements, marketable securities, accounts receivable, inventory, equipment and personal property.
 
The contractual amounts of these commitments are not reflected in the consolidated financial statements and would only be reflected if drawn upon. Since many of the commitments are expected to expire without being drawn upon, the contractual amounts do not necessarily represent future cash requirements. However, should the commitments be drawn upon and should customers default on their resulting obligation to, the Bank’s maximum exposure to credit loss, without consideration of collateral, is represented by the contractual amount of those instruments.
 
A summary of the Bank’s total contractual amount for all off-balance sheet commitments at September 30, 2013 is as follows:
 
Commitments to extend credit
 
$
34.1 million
 
Standby letters of credit
 
$
392.2 thousand
 
 
Various legal claims also arise from time to time in the normal course of business. In the opinion of management, the resolution of claims outstanding at September 30, 2013 will not have a material effect on Cornerstone’s consolidated financial statements. 
Fair Value Disclosures
Fair Value Disclosures [Text Block]
Note 6. Fair Value Disclosures
 
Fair Value Measurements:
 
Cornerstone uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.  In accordance with the “Fair Value Measurements and Disclosure” ASC Topic 820, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Fair value is best determined based upon quoted market prices.  In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.  Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.  Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. 
 
ASC Topic 820 provides a consistent definition of fair value, which focuses on exit price in an orderly transaction between market participants at the measurement date under current market conditions.  If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate.  In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment.  The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.
 
ASC Topic 820 also establishes a three-tier fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value, as follows:
 
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that Cornerstone has the ability to access.
 
Level 2 - Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active and other inputs that are observable or can be corroborated by observable market data.
 
Level 3 - Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
 
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
 
The following methods and assumptions were used by Cornerstone in estimating fair value disclosures for financial instruments.  There have been no changes in the methodologies used at September 30, 2013 and December 31, 2012.
 
Cash and cash equivalents:
 
The carrying amounts of cash and cash equivalents approximate fair values based on the short-term nature of the assets.
Cash and cash equivalents are classified as Level 1 of the fair value hierarchy.
 
Securities:
 
Fair values are estimated using pricing models and discounted cash flows that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, and credit spreads.  Securities classified as available for sale are reported at fair value utilizing Level 2 inputs.
 
The carrying value of Federal Home Loan Bank stock approximates fair value based on the redemption provisions of the Federal Home Loan Bank. Federal Home Loan Bank stock is classified as Level 3 of the fair value hierarchy.
 
Loans:
 
For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.  Fair values for fixed-rate loans are estimated using discounted cash flow analysis, using market interest rates for comparable loans. Generally, Level 3 inputs are utilized for this estimate.  Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired.  Once a loan is identified as individually impaired, management measures impairment in accordance with ASC Topic 310, Accounting by Creditors for Impairment of a Loan.  The fair value of impaired loans is estimated using several methods including collateral value, liquidation value and discounted cash flows. 
 
Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.  At September 30, 2013 and December 31, 2012, substantially all of the total impaired loans were evaluated based on the fair value of collateral.  In accordance with ASC Topic 820, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy.  When the fair value of the collateral is based on an observable market price or a current appraised value, Cornerstone records the impaired loan as nonrecurring Level 2.  When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, Cornerstone records the impaired loan as nonrecurring Level 3.
 
Cash surrender value of life insurance:
 
The carrying amounts of cash surrender value of life insurance approximate their fair value.  The carrying amount is based on information received from the insurance carriers indicating the financial performance of the policies and the amount Cornerstone would receive should the policies be surrendered.  Cornerstone reflects these assets within Level 2 of the valuation hierarchy.
 
Foreclosed assets:
 
Foreclosed assets, consisting of properties obtained through foreclosure or in satisfaction of loans, are initially recorded at fair value, determined on the basis of current appraisals, comparable sales, and other estimates of value obtained principally from independent sources, adjusted for estimated selling costs.  At the time of foreclosure, any excess of the loan balance over the fair value of the real estate held as collateral is treated as a charge against the allowance for loan losses.  Gains or losses on sale and any subsequent adjustment to the fair value are recorded as a component of foreclosed real estate expense.  Foreclosed assets are included in Level 2 of the valuation hierarchy.
 
Deposits:
 
The fair value of deposits with no stated maturity, such as noninterest-bearing and interest-bearing demand deposits, savings deposits, and money market accounts, is equal to the amount payable on demand at the reporting date.  The carrying amounts of variable-rate, fixed-term certificates of deposit approximate their fair values at the reporting date.  Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates on comparable instruments to a schedule of aggregated expected monthly maturities on time deposits. Generally, Level 3 inputs are utilized in this estimate.
 
Fed funds purchased and securities sold under agreements to repurchase:
 
The carrying amount of these liabilities approximates their estimated fair value. These liabilities are included in Level 3 of the fair value hierarchy.
 
Federal Home Loan Bank advances and other borrowings:
 
The carrying amounts of FHLB advances and other borrowings approximate their fair value. These liabilities are included in Level 3 of the fair value hierarchy.
 
Accrued interest: 
 
The carrying amounts of accrued interest approximate fair value. Accrued interest is included in Level 3 of the fair value hierarchy.
 
Commitments to extend credit, letters of credit and lines of credit:
 
The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties.  For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.
 
Assets and liabilities recorded at fair value on a recurring basis are as follows.
 
 
 
 
 
 
Quoted Prices in
 
Significant
 
Significant
 
 
 
 
 
 
Active Markets
 
Other
 
Other
 
 
 
Balance as of
 
for Identical
 
Observable
 
Unobservable
 
 
 
September 30,
 
Assets
 
Inputs
 
Inputs
 
 
 
2013
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
 
$
3,528,345
 
$
-
 
$
3,528,345
 
$
-
 
State and municipal securities
 
 
17,694,356
 
 
-
 
 
17,694,356
 
 
-
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans
    guaranteed by GNMA or FNMA
 
 
7,903,524
 
 
-
 
 
7,903,524
 
 
-
 
Collateralized mortgage
obligations issued or
guaranteed by U.S.
 Government agencies or
    sponsored agencies
 
 
66,156,191
 
 
-
 
 
66,156,191
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total securities
available for sale
 
$
95,282,416
 
$
-
 
$
95,282,416
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash surrender value of life insurance
 
$
1,224,437
 
$
-
 
$
1,224,437
 
$
-
 
 
 
 
 
 
 
 
Quoted Prices in
 
Significant
 
Significant
 
 
 
 
 
 
Active Markets
 
Other
 
Other
 
 
 
Balance as of
 
for Identical
 
Observable
 
Unobservable
 
 
 
December 31,
 
Assets
 
Inputs
 
Inputs
 
 
 
2012
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
 
$
4,018,151
 
$
-
 
$
4,018,151
 
$
-
 
State and municipal securities
 
 
23,633,317
 
 
-
 
 
23,633,317
 
 
-
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans
    guaranteed by GNMA or FNMA
 
 
9,222,419
 
 
-
 
 
9,222,419
 
 
-
 
Collateralized mortgage
obligations issued or
guaranteed by U.S.
    Government agencies or
    sponsored agencies
 
 
39,222,759
 
 
-
 
 
39,222,759
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total securities
available for sale
 
$
76,096,646
 
$
-
 
$
76,096,646
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash surrender value of life insurance
 
$
1,199,725
 
$
-
 
$
1,199,725
 
$
-
 
 
Cornerstone has no assets or liabilities whose fair values are measured on a recurring basis using Level 3 inputs.
Additionally, there were no transactions between Level 1 and Level 2 in the fair value hierarchy.
 
Certain assets and liabilities are measured at fair value on a nonrecurring basis, which means the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).  The tables below present information about assets and liabilities on the balance sheet at September 30, 2013 and December 31, 2012 for which a nonrecurring change in fair value was recorded (amounts in thousands).
 
 
 
 
 
 
Quoted Prices in
 
Significant
 
Significant
 
 
 
 
 
 
Active Markets
 
Other
 
Other
 
 
 
Balance as of
 
for Identical
 
Observable
 
Unobservable
 
 
 
September 30,
 
Assets
 
Inputs
 
Inputs
 
 
 
2013
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Impaired loans
 
$
3,267
 
$
-
 
$
3,267
 
$
-
 
Foreclosed assets (OREO & Repossessions)
 
 
14,924
 
 
-
 
 
14,924
 
 
-
 
 
 
 
 
 
 
Quoted Prices in
 
Significant
 
Significant
 
 
 
 
 
 
Active Markets
 
Other
 
Other
 
 
 
Balance as of
 
for Identical
 
Observable
 
Unobservable
 
 
 
December 31,
 
Assets
 
Inputs
 
Inputs
 
 
 
2012
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Impaired loans
 
$
4,869
 
$
-
 
$
4,869
 
$
-
 
Foreclosed assets (OREO & Repossessions)
 
 
20,332
 
 
-
 
 
20,332
 
 
-
 
 
Loans include impaired loans held for investment for which an allowance for loan losses has been calculated based upon the fair value of the loans at September 30, 2013 and December 31, 2012.
   
The carrying amount and estimated fair value of Cornerstone's financial instruments at September 30, 2013 and December  31, 2012 are as follows (in thousands):
 
 
 
September 30, 2013
 
December 31, 2012
 
 
 
Carrying
 
Estimated
 
Carrying
 
Estimated
 
 
 
Amount
 
Fair Value
 
Amount
 
Fair Value
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
21,255
 
$
21,255
 
$
59,395
 
$
59,395
 
Securities
 
 
95,319
 
 
95,320
 
 
76,142
 
 
76,143
 
Federal Home Loan Bank stock
 
 
2,323
 
 
2,323
 
 
2,323
 
 
2,323
 
Loans, net
 
 
281,022
 
 
281,403
 
 
270,850
 
 
271,128
 
Cash surrender value of life insurance
 
 
1,224
 
 
1,224
 
 
1,200
 
 
1,200
 
Accrued interest receivable
 
 
1,222
 
 
1,222
 
 
1,214
 
 
1,214
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
 
54,452
 
 
54,452
 
 
60,054
 
 
60,054
 
Interest-bearing demand deposits
 
 
25,464
 
 
25,464
 
 
30,179
 
 
30,179
 
Savings deposits and money market accounts
 
 
90,666
 
 
90,666
 
 
80,994
 
 
80,994
 
Time deposits
 
 
170,174
 
 
171,541
 
 
173,654
 
 
175,177
 
Federal funds purchased and securities
    sold under agreements to repurchase
 
 
20,509
 
 
20,509
 
 
19,587
 
 
19,587
 
Federal Home Loan Bank advances
    and other borrowings
 
 
26,740
 
 
26,740
 
 
37,175
 
 
37,175
 
Accrued interest payable
 
 
100
 
 
100
 
 
121
 
 
121
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized financial instruments
    (net of contract amount):
 
 
 
 
 
 
 
 
 
 
 
 
 
Commitments to extend credit
 
 
-
 
 
-
 
 
-
 
 
-
 
Letters of credit
 
 
-
 
 
-
 
 
-
 
 
-
 
Lines of credit
 
 
-
 
 
-
 
 
-
 
 
-
 
Presentation of Financial Information (Policies)
Use of Estimates, Policy [Policy Text Block] 
Use of Estimates-The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for loan losses, foreclosed assets and deferred tax assets.
Consolidation, Policy [Policy Text Block] 
Consolidation-The accompanying consolidated financial statements include the accounts of Cornerstone and the Bank.   Substantially all intercompany transactions, profits and balances have been eliminated.
Reclassification, Policy [Policy Text Block] 
Reclassification-Certain amounts in the prior consolidated financial statements have been reclassified to conform to the current period presentation.  The reclassifications had no effect on net income, total assets or stockholders’ equity as previously reported.
New Accounting Pronouncements, Policy [Policy Text Block] 
Accounting Policies-During interim periods, Cornerstone follows the accounting policies set forth in its Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission.  Since December 31, 2012, there have been no significant changes in any accounting principles or practices, or in the method of applying any such principles or practices, except for the following:
 
 In February 2013, the Financial Accounting Standards Board (FASB) issued updated guidance related to disclosure of reclassification amounts out of other comprehensive income.  The standard requires that companies present either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification.  The new requirements took effect for public companies in fiscal years, and interim periods within those years, beginning after December 15, 2012.  The Company adopted this standard on January 1, 2013. The effect of adopting this standard increased our disclosure requirements surrounding reclassification items out of accumulated other comprehensive income.
Earnings Per Share, Policy [Policy Text Block] 
Earnings per Common Share- Basic earnings per share (“EPS”) is computed by dividing income available to common shareholders (numerator) by the weighted average number of common shares outstanding during the period (denominator). Diluted EPS is computed by dividing income available to common shareholders (numerator) by the adjusted weighted average number of shares outstanding (denominator). The adjusted weighted average number of shares outstanding reflects the potential dilution occurring if securities or other contracts to issue common stock were exercised or converted into common stock resulting in the issuance of common stock that share in the earnings of the entity. 
 
The following is a summary of the basic and diluted earnings per share for the three and nine month periods ended September 30, 2013 and September 30, 2012.
 
 
 
Three Months Ended September 30,
 
 
 
2013
 
2012
 
Basic earnings per common share calculation:
 
 
 
 
 
 
 
Numerator: Net income available to common shareholders
 
$
35,703
 
$
38,983
 
Denominator: Weighted avg. common shares outstanding
 
 
6,547,074
 
 
6,500,396
 
Effect of dilutive stock options
 
 
145,508
 
 
3,758
 
Diluted shares
 
 
6,692,582
 
 
6,504,154
 
 
 
 
 
 
 
 
 
Basic earnings per common share
 
$
0.01
 
$
0.01
 
Diluted earnings per common share
 
$
0.01
 
$
0.01
 
 
 
 
Nine Months Ended September 30,
 
 
 
2013
 
2012
 
Basic earnings per common share calculation:
 
 
 
 
 
 
 
Numerator: Net income available to common shareholders
 
$
98,172
 
$
130,489
 
Denominator: Weighted avg. common shares outstanding
 
 
6,547,074
 
 
6,500,396
 
Effect of dilutive stock options
 
 
127,453
 
 
59,090
 
Diluted shares
 
 
6,674,527
 
 
6,559,486
 
 
 
 
 
 
 
 
 
Basic earnings per common share
 
$
0.01
 
$
0.02
 
Diluted earnings per common share
 
$
0.01
 
$
0.02
 
 
For the three and nine months ended September 30, 2013, potential common shares of 503,075 were not included in the calculation of diluted earnings per share because the assumed exercise of such shares would be anti-dilutive.
Presentation of Financial Information (Tables)
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
The following is a summary of the basic and diluted earnings per share for the three and nine month periods ended September 30, 2013 and September 30, 2012.
 
 
 
Three Months Ended September 30,
 
 
 
2013
 
2012
 
Basic earnings per common share calculation:
 
 
 
 
 
 
 
Numerator: Net income available to common shareholders
 
$
35,703
 
$
38,983
 
Denominator: Weighted avg. common shares outstanding
 
 
6,547,074
 
 
6,500,396
 
Effect of dilutive stock options
 
 
145,508
 
 
3,758
 
Diluted shares
 
 
6,692,582
 
 
6,504,154
 
 
 
 
 
 
 
 
 
Basic earnings per common share
 
$
0.01
 
$
0.01
 
Diluted earnings per common share
 
$
0.01
 
$
0.01
 
 
 
 
Nine Months Ended September 30,
 
 
 
2013
 
2012
 
Basic earnings per common share calculation:
 
 
 
 
 
 
 
Numerator: Net income available to common shareholders
 
$
98,172
 
$
130,489
 
Denominator: Weighted avg. common shares outstanding
 
 
6,547,074
 
 
6,500,396
 
Effect of dilutive stock options
 
 
127,453
 
 
59,090
 
Diluted shares
 
 
6,674,527
 
 
6,559,486
 
 
 
 
 
 
 
 
 
Basic earnings per common share
 
$
0.01
 
$
0.02
 
Diluted earnings per common share
 
$
0.01
 
$
0.02
 
Stock Based Compensation (Tables)
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] 
This was determined using the Black-Scholes option-pricing model with the following weighted-average assumptions:
 
Dividend yield
 
0.0
%
Expected life
 
7.0 Years
 
Expected volatility
 
47.60
%
Risk-free interest rate
 
1.23
%
Schedule of Share-based Compensation, Stock Options and Stock Appreciation Rights Award Activity [Table Text Block] 
A summary of the status of these stock option plans is presented in the following table:
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
Weighted
 
Contractual
 
 
 
 
 
 
 
 
Average
 
Remaining
 
Aggregate
 
 
 
 
 
Exercisable
 
Term
 
Intrinsic
 
 
 
Number
 
Price
 
(in years)
 
Value
 
Outstanding at December 31, 2012
 
670,300
 
$
3.86
 
6.2 Years
 
$
232,900
 
Granted
 
203,000
 
 
2.37
 
9.4 Years
 
 
 
 
Exercised
 
-
 
 
-
 
 
 
 
 
 
Forfeited
 
(57,475)
 
 
(3.51)
 
 
 
 
 
 
Outstanding at September 30, 2013
 
815,825
 
$
3.51
 
6.8 Years
 
$
207,030
 
Options exercisable at September 30, 2013
 
305,525
 
$
6.13
 
 
 
 
 
 
Schedule of Share-based Compensation, Stock Options and Stock Appreciation Rights Award Activity [Table Text Block] 
A summary of the status of this stock option plan is presented in the following table:             
 
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
Weighted
 
Contractual
 
 
 
 
 
 
 
 
Average
 
Remaining
 
Aggregate
 
 
 
 
 
Exercisable
 
Term
 
Intrinsic
 
 
 
Number
 
Price
 
(in years)
 
Value
 
Outstanding at December 31, 2012
 
145,250
 
$
3.30
 
7.2 Years
 
$
57,600
 
Granted
 
45,000
 
 
2.37
 
9.4 Years
 
 
 
 
Exercised
 
-
 
 
-
 
 
 
 
 
 
Forfeited
 
-
 
 
-
 
 
 
 
 
 
Outstanding at September 30, 2013
 
190,250
 
$
3.08
 
7.1 Years
 
$
52,200
 
Options exercisable at September 30, 2013
 
100,250
 
$
4.04
 
 
 
 
 
 
Securities (Tables)
Schedule Of Available For Sale Securities and Held To Maturity Reconciliation [Table Text Block] 
The amortized cost and fair value of securities available-for-sale and held-to-maturity at September 30, 2013 and December 31, 2012 are summarized as follows:
 
 
 
September 30, 2013
 
 
 
 
 
 
Gross
 
Gross
 
 
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
 
 
 
Cost
 
Gains
 
Losses
 
Value
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
 
$
3,479,680
 
$
48,665
 
$
-
 
$
3,528,345
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
 
 
17,065,923
 
 
683,599
 
 
(55,166)
 
 
17,694,356
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans guaranteed
     by GNMA or FNMA
 
 
7,797,244
 
 
106,280
 
 
-
 
 
7,903,524
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations
     issued or guaranteed by U.S.
     Government agencies or sponsored
     agencies
 
 
66,403,939
 
 
53,727
 
 
(301,475)
 
 
66,156,191
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
94,746,786
 
$
892,271
 
$
(356,641)
 
$
95,282,416
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans guaranteed
     by GNMA or FNMA
 
$
36,620
 
$
969
 
$
-
 
$
37,589
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
Gross
 
Gross
 
 
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
 
 
 
Cost
 
Gains
 
Losses
 
Value
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
 
$
3,961,956
 
$
56,195
 
$
-
 
$
4,018,151
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
 
 
21,531,727
 
 
2,101,590
 
 
-
 
 
23,633,317
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans guaranteed
    by GNMA or FNMA
 
 
9,092,205
 
 
132,038
 
 
(1,824)
 
 
9,222,419
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage obligations
    issued or guaranteed by U.S.
    Government agencies or sponsored
    agencies
 
 
39,151,568
 
 
86,099
 
 
(14,908)
 
 
39,222,759
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
73,737,456
 
$
2,375,922
 
$
(16,732)
 
$
76,096,646
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans guaranteed
    by GNMA or FNMA
 
$
45,086
 
$
1,341
 
$
(8)
 
$
46,212
 
Investments Classified by Contractual Maturity Date [Table Text Block] 
The amortized cost and estimated market value of securities at September 30, 2013, by contractual maturity, are shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
 
 
Securities Available for Sale
 
Securities Held to Maturity
 
 
 
Amortized
 
Fair
 
Amortized
 
Fair
 
 
 
Cost
 
Value
 
Cost
 
Value
 
Due in one year or less
 
$
-
 
$
-
 
$
-
 
$
-
 
Due from one year to five years
 
 
1,267,124
 
 
1,338,576
 
 
-
 
 
-
 
Due from five years to ten years
 
 
6,310,901
 
 
6,648,634
 
 
-
 
 
-
 
Due after ten years
 
 
12,967,578
 
 
13,235,491
 
 
-
 
 
-
 
 
 
$
20,545,603
 
$
21,222,701
 
$
-
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
 
74,201,183
 
 
74,059,715
 
 
36,620
 
 
37,589
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
94,746,786
 
$
95,282,416
 
$
36,620
 
$
37,589
 
Schedule of Unrealized Loss on Investments [Table Text Block] 
The following tables present the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities available for sale have been in a continuous unrealized loss position, as of September 30, 2013 and as of December 31, 2012:
 
 
 
As of September 30, 2013
 
 
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
 
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
 
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
 
$
1,138,535
 
$
(40,736)
 
$
554,465
 
$
(14,430)
 
$
1,693,000
 
$
(55,166)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
Collateralized mortgage
    obligations issued or
    guaranteed by U.S.
    Government agencies
    or sponsored agencies
 
 
48,435,866
 
 
(278,248)
 
 
9,042,662
 
 
(23,227)
 
 
57,478,528
 
 
(301,475)
 
 
 
$
49,574,401
 
$
(318,984)
 
$
9,597,127
 
$
(37,657)
 
$
59,171,528
 
$
(356,641)
 
 
 
 
As of December 31, 2012
 
 
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
 
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
 
Gross
 
 
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
 
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans
    guaranteed by GNMA
    or FNMA
 
$
667,325
 
$
(1,824)
 
$
-
 
$
-
 
$
667,325
 
$
(1,824)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized mortgage
    obligations issued or
    guaranteed by U.S.
    Government agencies
    or sponsored agencies
 
 
22,514,641
 
 
(14,908)
 
 
-
 
 
-
 
 
22,514,641
 
 
(14,908)
 
 
 
$
23,181,966
 
$
(16,732)
 
$
-
 
$
-
 
$
23,181,966
 
$
(16,732)
 
Loans and Allowance for Loan Losses (Tables)
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] 
At September 30, 2013 and December 31, 2012, loans are summarized as follows (in thousands):
 
 
 
September 30,
 
 
 
December 31,
 
 
 
 
 
2013
 
Percent
 
2012
 
Percent
 
Commercial real estate-mortgage:
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
 
$
66,143
 
23.28
%
$
58,425
 
21.09
%
All other
 
 
66,721
 
23.48
%
 
66,747
 
24.10
%
Consumer real estate-mortgage
 
 
69,911
 
24.60
%
 
71,195
 
25.70
%
Construction and land development
 
 
38,970
 
13.71
%
 
38,557
 
13.92
%
Commercial and industrial
 
 
39,782
 
14.00
%
 
40,140
 
14.49
%
Consumer and other
 
 
2,654
 
0.93
%
 
1,927
 
0.70
%
Total loans
 
 
284,181
 
100.00
%
 
276,991
 
100.00
%
Less: Allowance for loan losses
 
 
(3,159)
 
 
 
 
(6,141)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans, net
 
$
281,022
 
 
 
$
270,850
Schedule Of Impaired and Performing Loans Receivable [Table Text Block] 
The composition of loans by loan classification for impaired and performing loan status at September 30, 2013 and December 31, 2012, is summarized in the tables below (amounts in thousands):
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
September 30, 2013
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Performing loans
 
$
125,418
 
$
66,950
 
$
38,712
 
$
38,027
 
$
2,654
 
$
271,761
 
Impaired loans
 
 
7,446
 
 
2,961
 
 
258
 
 
1,755
 
 
-
 
 
12,420
 
Total
 
$
132,864
 
$
69,911
 
$
38,970
 
$
39,782
 
$
2,654
 
$
284,181
 
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
December 31, 2012
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Performing loans
 
$
115,959
 
$
69,329
 
$
37,607
 
$
36,980
 
$
1,927
 
$
261,802
 
Impaired loans
 
 
9,213
 
 
1,866
 
 
950
 
 
3,160
 
 
-
 
 
15,189
 
Total
 
$
125,172
 
$
71,195
 
$
38,557
 
$
40,140
 
$
1,927
 
$
276,991
Schedule Of Allowance For Loan Losses For Impaired and Performing Loans Receivable [Table Text Block] 
The following tables show the allowance for loan losses allocation by loan classification for impaired and performing loans as of September 30, 2013 and December 31, 2012 (amounts in thousands):
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
September 30, 2013
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Allowance related to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performing loans
 
$
784
 
$
922
 
$
339
 
$
196
 
$
20
 
$
2,261
 
Impaired loans
 
 
682
 
 
134
 
 
-
 
 
82
 
 
-
 
 
898
 
Total
 
$
1,466
 
$
1,056
 
$
339
 
$
278
 
$
20
 
$
3,159
 
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
December 31, 2012
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Allowance related to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performing loans
 
$
319
 
$
952
 
$
781
 
$
29
 
$
14
 
$
2,095
 
Impaired loans
 
 
2,230
 
 
576
 
 
460
 
 
780
 
 
-
 
 
4,046
 
Total
 
$
2,549
 
$
1,528
 
$
1,241
 
$
809
 
$
14
 
$
6,141
Schedule Of Financing Receivable Allowance For Credit Losses [Table Text Block] 
The following tables detail the changes in the allowance for loan losses for the  nine month period ending September 30, 2013 and year ending December 31, 2012, by loan classification (amounts in thousands):
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
September 30, 2013
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Beginning balance
 
$
2,549
 
$
1,528
 
$
1,241
 
$
809
 
$
14
 
$
6,141
 
Charged-off loans
 
 
(1,874)
 
 
(688)
 
 
(1,185)
 
 
(694)
 
 
(19)
 
 
(4,460)
 
Recovery of charge-offs
 
 
61
 
 
224
 
 
810
 
 
80
 
 
3
 
 
1,178
 
Provision for
    (reallocation of) loan losses
 
 
730
 
 
(8)
 
 
(527)
 
 
83
 
 
22
 
 
300
 
Ending balance
 
$
1,466
 
$
1,056
 
$
339
 
$
278
 
$
20
 
$
3,159
 
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
December 31, 2012
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Beginning balance
 
$
3,557
 
$
2,518
 
$
827
 
$
482
 
$
16
 
$
7,400
 
Charged-off loans
 
 
(958)
 
 
(1,022)
 
 
(782)
 
 
(74)
 
 
(33)
 
 
(2,869)
 
Recovery of charge-offs
 
 
838
 
 
36
 
 
145
 
 
144
 
 
17
 
 
1,180
 
Provision for
    (reallocation of)loan losses
 
 
(888)
 
 
(4)
 
 
1,051
 
 
257
 
 
14
 
 
430
 
Ending balance
 
$
2,549
 
$
1,528
 
$
1,241
 
$
809
 
$
14
 
$
6,141
Financing Receivable Credit Quality Indicators [Table Text Block] 
The following tables outline the amount of each loan classification and the amount categorized into each risk rating as of September 30, 2013 and December 31, 2012 (amounts in thousands):
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
September 30, 2013
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Pass
 
$
120,812
 
$
58,536
 
$
38,027
 
$
33,456
 
$
2,654
 
$
253,485
 
Special mention
 
 
4,209
 
 
5,377
 
 
95
 
 
4,105
 
 
-
 
 
13,786
 
Substandard
 
 
397
 
 
3,037
 
 
590
 
 
466
 
 
-
 
 
4,490
 
Substandard-impaired
 
 
7,164
 
 
2,961
 
 
258
 
 
1,755
 
 
-
 
 
12,138
 
Doubtful-impaired
 
 
282
 
 
-
 
 
-
 
 
-
 
 
-
 
 
282
 
 
 
$
132,864
 
$
69,911
 
$
38,970
 
$
39,782
 
$
2,654
 
$
284,181
 
 
 
 
Commercial
 
Consumer
 
Construction
 
Commercial
 
 
 
 
 
 
 
 
 
Real Estate-
 
Real Estate-
 
and Land
 
and
 
Consumer
 
 
 
 
December 31, 2012
 
Mortgage
 
Mortgage
 
Development
 
Industrial
 
and Other
 
Total
 
Pass
 
$
111,313
 
$
57,959
 
$
36,802
 
$
36,482
 
$
1,904
 
$
244,460
 
Special mention
 
 
4,145
 
 
8,401
 
 
198
 
 
330
 
 
18
 
 
13,092
 
Substandard
 
 
501
 
 
2,969
 
 
607
 
 
168
 
 
5
 
 
4,250
 
Substandard-impaired
 
 
9,213
 
 
1,866
 
 
950
 
 
3,160
 
 
-
 
 
15,189
 
 
 
$
125,172
 
$
71,195
 
$
38,557
 
$
40,140
 
$
1,927
 
$
276,991
Impaired Financing Receivables [Table Text Block] 
The following tables present summary information pertaining to impaired loans by loan classification as of September 30, 2013 and December 31, 2012 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
For the quarter ended
 
 
 
At September 30, 2013
 
September 30, 2013
 
 
 
 
 
 
Unpaid
 
 
 
 
Average
 
Interest
 
 
 
Recorded
 
Principal
 
Related
 
Recorded
 
Income
 
 
 
Investment
 
Balance
 
Allowance
 
Investment
 
Recognized
 
Impaired loans without a valuation allowance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate – mortgage
 
$
4,578
 
$
4,797
 
$
-
 
$
4,683
 
$
183
 
Consumer real estate – mortgage
 
 
2,066
 
 
2,066
 
 
-
 
 
1,854
 
 
73
 
Construction and land development
 
 
258
 
 
271
 
 
-
 
 
349
 
 
11
 
Commercial and industrial
 
 
1,353
 
 
1,396
 
 
-
 
 
1,875
 
 
31
 
Total
 
$
7,825
 
$
8,530
 
$
-
 
$
8,761
 
$
298
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impaired loans with a valuation allowance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate – mortgage
 
$
2,868
 
$
2,943
 
$
682
 
$
4,670
 
$
126
 
Consumer real estate – mortgage
 
 
895
 
 
895
 
 
134
 
 
1,110
 
 
49
 
Construction and land development
 
 
-
 
 
-
 
 
-
 
 
296
 
 
-
 
Commercial and industrial
 
 
402
 
 
402
 
 
82
 
 
740
 
 
38
 
Total
 
$
4,165
 
$
4,240
 
$
898
 
$
6,816
 
$
213
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total impaired loans
 
$
12,420
 
$
12,770
 
$
898
 
$
15,577
 
$
511
 
   
 
 
 
 
 
 
 
 
 
 
 
For the year ended
 
 
 
At December 31, 2012
 
December 31, 2012
 
 
 
 
 
 
Unpaid
 
 
 
 
Average
 
Interest
 
 
 
Recorded
 
Principal
 
Related
 
Recorded
 
Income
 
 
 
Investment
 
Balance
 
Allowance
 
Investment
 
Recognized
 
Impaired loans without a valuation allowance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate – mortgage
 
$
3,406
 
$
3,453
 
$
-
 
$
4,389
 
$
180
 
Consumer real estate – mortgage
 
 
513
 
 
540
 
 
-
 
 
1,538
 
 
52
 
Construction and land development
 
 
244
 
 
251
 
 
-
 
 
358
 
 
19
 
Commercial and industrial
 
 
2,111
 
 
2,155
 
 
-
 
 
2,277
 
 
55
 
Total
 
$
6,274
 
$
6,399
 
$
-
 
$
8,562
 
$
306
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impaired loans with a valuation allowance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate – mortgage
 
$
5,807
 
$
5,848
 
$
2,230
 
$
6,616
 
$
215
 
Consumer real estate – mortgage
 
 
1,353
 
 
1,353
 
 
576
 
 
2,606
 
 
61
 
Construction and land development
 
 
706
 
 
706
 
 
460
 
 
642
 
 
49
 
Commercial and industrial
 
 
1,049
 
 
1,049
 
 
780
 
 
700
 
 
132
 
Total
 
$
8,915
 
$
8,956
 
$
4,046
 
$
10,564
 
$
457
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total impaired loans
 
$
15,189
 
$
15,355
 
$
4,046
 
$
19,126
 
$
763
 
Past Due Financing Receivables [Table Text Block] 
The following tables present an aged analysis of past due loans as of September 30, 2013 and December 31, 2012 (in thousands):
 
 
 
30-89 Days
 
Past Due 90
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Past Due and
 
Days or More
 
 
 
 
Total
 
Current
 
Total
 
September 30, 2013
 
Accruing
 
and Accruing
 
Nonaccrual
 
Past Due
 
Loans
 
Loans
 
Commercial real estate-mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
 
$
431
 
$
-
 
$
494
 
$
925
 
$
65,218
 
$
66,143
 
All other
 
 
-
 
 
-
 
 
924
 
 
924
 
 
65,797
 
 
66,721
 
Consumer real estate-mortgage
 
 
712
 
 
-
 
 
964
 
 
1,676
 
 
68,235
 
 
69,911
 
Construction and land development
 
 
48
 
 
-
 
 
22
 
 
70
 
 
38,900
 
 
38,970
 
Commercial and industrial
 
 
552
 
 
-
 
 
1,692
 
 
2,244
 
 
37,538
 
 
39,782
 
Consumer and other
 
 
2
 
 
-
 
 
-
 
 
2
 
 
2,652
 
 
2,654
 
Total
 
$
1,745
 
$
-
 
$
4,096
 
$
5,841
 
$
278,340
 
$
284,181
 
 
 
 
30-89 Days
 
Past Due 90
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Past Due and
 
Days or More
 
 
 
 
Total
 
Current
 
Total
 
December 31, 2012
 
Accruing
 
and Accruing
 
Nonaccrual
 
Past Due
 
Loans
 
Loans
 
Commercial real estate-mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
 
$
2,738
 
$
-
 
$
956
 
$
3,694
 
$
54,731
 
$
58,425
 
All other
 
 
636
 
 
-
 
 
1,913
 
 
2,549
 
 
64,198
 
 
66,747
 
Consumer real estate-mortgage
 
 
1,858
 
 
-
 
 
616
 
 
2,474
 
 
68,721
 
 
71,195
 
Construction and land development
 
 
100
 
 
-
 
 
53
 
 
153
 
 
38,404
 
 
38,557
 
Commercial and industrial
 
 
1,227
 
 
-
 
 
2,467
 
 
3,694
 
 
36,446
 
 
40,140
 
Consumer and other
 
 
35
 
 
-
 
 
-
 
 
35
 
 
1,892
 
 
1,927
 
Total
 
$
6,594
 
$
-
 
$
6,005
 
$
12,599
 
$
264,392
 
$
276,991
Troubled Debt Restructurings on Financing Receivables [Table Text Block] 
The following tables present a summary of loans that were modified as troubled debt restructurings during the nine month periods ending September 30, 2013 and 2012 (amounts in thousands):
 
 
 
 
 
Pre-Modification
 
Post-Modification
 
 
 
 
 
Outstanding
 
Outstanding
 
 
 
 
 
Recorded
 
Recorded
 
September 30, 2013
 
Number of Contracts
 
Investment
 
Investment
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate-mortgage
 
2
 
$
2,073
 
$
2,073
 
Consumer real estate-mortgage
 
1
 
 
66
 
 
66
 
Construction and land development
 
3
 
 
898
 
 
898
 
Commercial and industrial
 
3
 
 
2,389
 
 
2,389
 
 
 
 
 
 
Pre-Modification
 
Post-Modification
 
 
 
 
 
Outstanding
 
Outstanding
 
 
 
 
 
Recorded
 
Recorded
 
September 30, 2012
 
Number of Contracts
 
Investment
 
Investment
 
Commercial real estate-mortgage
 
2
 
$
4,233
 
$
4,233
 
Consumer real estate-mortgage
 
1
 
 
65
 
 
65
 
Construction and land development
 
3
 
 
1,178
 
 
1,178
 
Commercial and industrial
 
4
 
 
2,408
 
 
2,408
Commitments and Contingent Liabilities (Tables)
Schedule of Fair Value, Off-balance Sheet Risks [Table Text Block]
A summary of the Bank’s total contractual amount for all off-balance sheet commitments at September 30, 2013 is as follows:
 
Commitments to extend credit
 
$
34.1 million
 
Standby letters of credit
 
$
392.2 thousand
 
Fair Value Disclosures (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] 
Assets and liabilities recorded at fair value on a recurring basis are as follows.
 
 
 
 
 
 
Quoted Prices in
 
Significant
 
Significant
 
 
 
 
 
 
Active Markets
 
Other
 
Other
 
 
 
Balance as of
 
for Identical
 
Observable
 
Unobservable
 
 
 
September 30,
 
Assets
 
Inputs
 
Inputs
 
 
 
2013
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
 
$
3,528,345
 
$
-
 
$
3,528,345
 
$
-
 
State and municipal securities
 
 
17,694,356
 
 
-
 
 
17,694,356
 
 
-
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans
    guaranteed by GNMA or FNMA
 
 
7,903,524
 
 
-
 
 
7,903,524
 
 
-
 
Collateralized mortgage obligations
    issued or guaranteed by U.S.
    Government agencies or
    sponsored agencies
 
 
66,156,191
 
 
-
 
 
66,156,191
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total securities available for sale
 
$
95,282,416
 
$
-
 
$
95,282,416
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash surrender value of life insurance
 
$
1,224,437
 
$
-
 
$
1,224,437
 
$
-
 
 
 
 
 
 
 
 
Quoted Prices in
 
Significant
 
Significant
 
 
 
 
 
 
Active Markets
 
Other
 
Other
 
 
 
Balance as of
 
for Identical
 
Observable
 
Unobservable
 
 
 
December 31,
 
Assets
 
Inputs
 
Inputs
 
 
 
2012
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
 
$
4,018,151
 
$
-
 
$
4,018,151
 
$
-
 
State and municipal securities
 
 
23,633,317
 
 
-
 
 
23,633,317
 
 
-
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans
    guaranteed by GNMA or FNMA
 
 
9,222,419
 
 
-
 
 
9,222,419
 
 
-
 
Collateralized mortgage obligations
    issued or guaranteed by U.S.
    Government agencies or
    sponsored agencies
 
 
39,222,759
 
 
-
 
 
39,222,759
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total securities available for sale
 
$
76,096,646
 
$
-
 
$
76,096,646
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash surrender value of life insurance
 
$
1,199,725
 
$
-
 
$
1,199,725
 
$
-
 
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Table Text Block] 
The tables below present information about assets and liabilities on the balance sheet at September 30, 2013 and December 31, 2012 for which a nonrecurring change in fair value was recorded (amounts in thousands).
 
 
 
 
 
 
Quoted Prices in
 
Significant
 
Significant
 
 
 
 
 
 
Active Markets
 
Other
 
Other
 
 
 
Balance as of
 
for Identical
 
Observable
 
Unobservable
 
 
 
September 30,
 
Assets
 
Inputs
 
Inputs
 
 
 
2013
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Impaired loans
 
$
3,267
 
$
-
 
$
3,267
 
$
-
 
Foreclosed assets (OREO & Repossessions)
 
 
14,924
 
 
-
 
 
14,924
 
 
-
 
 
 
 
 
 
 
Quoted Prices in
 
Significant
 
Significant
 
 
 
 
 
 
Active Markets
 
Other
 
Other
 
 
 
Balance as of
 
for Identical
 
Observable
 
Unobservable
 
 
 
December 31,
 
Assets
 
Inputs
 
Inputs
 
 
 
2012
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Impaired loans
 
$
4,869
 
$
-
 
$
4,869
 
$
-
 
Foreclosed assets (OREO & Repossessions)
 
 
20,332
 
 
-
 
 
20,332
 
 
-
 
Fair Value, by Balance Sheet Grouping [Table Text Block] 
The carrying amount and estimated fair value of Cornerstone's financial instruments at September 30, 2013 and December  31, 2012 are as follows (in thousands):
 
 
 
September 30, 2013
 
December 31, 2012
 
 
 
Carrying
 
Estimated
 
Carrying
 
Estimated
 
 
 
Amount
 
Fair Value
 
Amount
 
Fair Value
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
21,255
 
$
21,255
 
$
59,395
 
$
59,395
 
Securities
 
 
95,319
 
 
95,320
 
 
76,142
 
 
76,143
 
Federal Home Loan Bank stock
 
 
2,323
 
 
2,323
 
 
2,323
 
 
2,323
 
Loans, net
 
 
281,022
 
 
281,403
 
 
270,850
 
 
271,128
 
Cash surrender value of life insurance
 
 
1,224
 
 
1,224
 
 
1,200
 
 
1,200
 
Accrued interest receivable
 
 
1,222
 
 
1,222
 
 
1,214
 
 
1,214
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
 
54,452
 
 
54,452
 
 
60,054
 
 
60,054
 
Interest-bearing demand deposits
 
 
25,464
 
 
25,464
 
 
30,179
 
 
30,179
 
Savings deposits and money market accounts
 
 
90,666
 
 
90,666
 
 
80,994
 
 
80,994
 
Time deposits
 
 
170,174
 
 
171,541
 
 
173,654
 
 
175,177
 
Federal funds purchased and securities
    sold under agreements to repurchase
 
 
20,509
 
 
20,509
 
 
19,587
 
 
19,587
 
Federal Home Loan Bank advances
    and other borrowings
 
 
26,740
 
 
26,740
 
 
37,175
 
 
37,175
 
Accrued interest payable
 
 
100
 
 
100
 
 
121
 
 
121
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized financial instruments
    (net of contract amount):
 
 
 
 
 
 
 
 
 
 
 
 
 
Commitments to extend credit
 
 
-
 
 
-
 
 
-
 
 
-
 
Letters of credit
 
 
-
 
 
-
 
 
-
 
 
-
 
Lines of credit
 
 
-
 
 
-
 
 
-
 
 
-
 
Presentation of Financial Information (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Basic earnings per common share calculation:
 
 
 
 
Numerator: Net income available to common shareholders
$ 35,703 
$ 38,983 
$ 98,172 
$ 130,489 
Denominator: Weighted avg. common shares outstanding (in shares)
6,547,074 
6,500,396 
6,547,074 
6,500,396 
Effect of dilutive stock options (in shares)
145,508 
3,758 
127,453 
59,090 
Diluted shares (in shares)
6,692,582 
6,504,154 
6,674,527 
6,559,486 
Basic earnings per common share (in dollars per share)
$ 0.01 
$ 0.01 
$ 0.01 
$ 0.02 
Diluted earnings per common share (in dollars per share)
$ 0.01 
$ 0.01 
$ 0.01 
$ 0.02 
Presentation of Financial Information (Details Textual)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
503,075 
503,075 
Stock Based Compensation (Details) (Officer and Employee Plans [Member], USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Officer and Employee Plans [Member]
 
 
Number, Outstanding (in shares)
670,300 
 
Number, Granted (in shares)
203,000 
 
Number, Exercised (in shares)
0 
 
Number, Forfeited (in shares)
(57,475)
 
Number, Outstanding (in shares)
815,825 
670,300 
Number, Options exercisable (in shares)
305,525 
 
Weighted Average Exercisable Price, Outstanding (in dollars per share)
$ 3.86 
 
Weighted Average Exercisable Price, Granted (in dollars per share)
$ 2.37 
 
Weighted Average Exercisable Price, Exercised (in dollars per share)
$ 0 
 
Weighted Average Exercisable Price, Forfeited (in dollars per share)
$ (3.51)
 
Weighted Average Exercisable Price Outstanding (in dollars per share)
$ 3.51 
$ 3.86 
Weighted Average Exercisable Price Options exercisable (in dollars per share)
$ 6.13 
 
Weighted-Average Contractual Remaining Term, Outstanding (in years)
6 years 9 months 18 days 
6 years 2 months 12 days 
Weighted-Average Contractual Remaining Term, Granted (in years)
9 years 4 months 24 days 
 
Aggregate Intrinsic Value, Outstanding
$ 232,900 
 
Aggregate Intrinsic Value, Outstanding
$ 207,030 
$ 232,900 
Stock Based Compensation (Details 1) (Board Of Directors Plan [Member], USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Board Of Directors Plan [Member]
 
 
Number, Outstanding (in shares)
145,250 
 
Number, Granted (in shares)
45,000 
 
Number, Exercised (in shares)
0 
 
Number, Forfeited (in shares)
0 
 
Number, Outstanding (in shares)
190,250 
145,250 
Number, Options exercisable (in shares)
100,250 
 
Weighted Average Exercisable Price, Outstanding (in dollars per share)
$ 3.30 
 
Weighted Average Exercisable Price, Granted (in dollars per share)
$ 2.37 
 
Weighted Average Exercisable Price, Exercised (in dollars per share)
$ 0 
 
Weighted Average Exercisable Price, Forfeited (in dollars per share)
$ 0 
 
Weighted Average Exercisable Price Outstanding (in dollars per share)
$ 3.08 
$ 3.30 
Weighted Average Exercisable Price Options exercisable (in dollars per share)
$ 4.04 
 
Weighted-Average Contractual Remaining Term, Outstanding (in years)
7 years 1 month 6 days 
7 years 2 months 12 days 
Weighted-Average Contractual Remaining Term, Granted (in years)
9 years 4 months 24 days 
 
Aggregate Intrinsic Value, Outstanding
$ 57,600 
 
Aggregate Intrinsic Value, Outstanding
$ 52,200 
$ 57,600 
Stock Based Compensation (Details 2) (Board Of Directors Plan [Member])
9 Months Ended
Sep. 30, 2013
Board Of Directors Plan [Member]
 
Dividend yield
0.00% 
Expected life
7 years 
Expected volatility
47.60% 
Risk-free interest rate
1.23% 
Stock Based Compensation (Details Textual) (USD $)
9 Months Ended
Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value
$ 1.17 
Stock or Unit Option Plan Expense
$ 97,000 
Sharebased Compensation Arrangement by Share-based Payment Award, Options, Grants Date Maximum Term
10 years 
Officer and Employee Plans [Member]
 
Shares Held in Employee Stock Option Plan, Allocated
1,420,000 
Incentive Stock Option Description
The exercise price for incentive stock options must be not less than 100 percent of the fair market value of the common stock on the date of the grant. 
Percentage Of Incentive Stock Options Vest On Second Anniversary Of Grant Date
30.00% 
Percentage Of Incentive Stock Options Vest On Third Anniversary Of Grant Date
60.00% 
Percentage Of Incentive Stock Options Vest On Fourth Anniversary Of Grant Date
100.00% 
Percentage Of Nonqualified Stock Options Vest On First Anniversary Of Grant Date
50.00% 
Percentage Of Nonqualified Stock Options Vest On Second Anniversary Of Grant Date
100.00% 
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized
519,000 
Board Of Directors Plan [Member]
 
Shares Held in Employee Stock Option Plan, Allocated
600,000 
Percentage Of Nonqualified Stock Options Vest On First Anniversary Of Grant Date
50.00% 
Percentage Of Nonqualified Stock Options Vest On Second Anniversary Of Grant Date
100.00% 
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized
$ 97,000 
Securities (Details) (USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Debt securities available for sale:
 
 
Debt securities available for sale, Amortized Cost
$ 94,746,786 
$ 73,737,456 
Debt securities available for sale, Gross Unrealized Gains
892,271 
2,375,922 
Debt securities available for sale, Gross Unrealized Loss
(356,641)
(16,732)
Debt securities available for sale, Fair Value
95,282,416 
76,096,646 
Debt securities held to maturity, Fair Value
37,589 
46,212 
US Government Agencies Debt Securities [Member]
 
 
Debt securities available for sale:
 
 
Debt securities available for sale, Amortized Cost
3,479,680 
3,961,956 
Debt securities available for sale, Gross Unrealized Gains
48,665 
56,195 
Debt securities available for sale, Gross Unrealized Loss
0 
0 
Debt securities available for sale, Fair Value
3,528,345 
4,018,151 
US States and Political Subdivisions Debt Securities [Member]
 
 
Debt securities available for sale:
 
 
Debt securities available for sale, Amortized Cost
17,065,923 
21,531,727 
Debt securities available for sale, Gross Unrealized Gains
683,599 
2,101,590 
Debt securities available for sale, Gross Unrealized Loss
(55,166)
0 
Debt securities available for sale, Fair Value
17,694,356 
23,633,317 
Residential Mortgage Backed Securities [Member]
 
 
Debt securities available for sale:
 
 
Debt securities available for sale, Amortized Cost
7,797,244 
9,092,205 
Debt securities available for sale, Gross Unrealized Gains
106,280 
132,038 
Debt securities available for sale, Gross Unrealized Loss
0 
(1,824)
Debt securities available for sale, Fair Value
7,903,524 
9,222,419 
Debt securities held to maturity, Amortized Cost
36,620 
45,086 
Debt securities held to maturity, Unrecognized Gain
969 
1,341 
Debt securities held to maturity, Unrecognized Loss
0 
(8)
Debt securities held to maturity, Fair Value
37,589 
46,212 
Collateralized Debt Obligations [Member]
 
 
Debt securities available for sale:
 
 
Debt securities available for sale, Amortized Cost
66,403,939 
39,151,568 
Debt securities available for sale, Gross Unrealized Gains
53,727 
86,099 
Debt securities available for sale, Gross Unrealized Loss
(301,475)
(14,908)
Debt securities available for sale, Fair Value
$ 66,156,191 
$ 39,222,759 
Securities (Details 1) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Securities Available-for-Sale, Due in one year or less, Amortized Cost
$ 0 
 
Securities Available-for-Sale, Due from one year to five years, Amortized Cost
1,267,124 
 
Securities Available-for-Sale, Due from five years to ten years, Amortized Cost
6,310,901 
 
Securities Available-for-Sale, Due after ten years, Amortized Cost
12,967,578 
 
Securities Available-for-Sale, Debt securities, Amortized Cost
20,545,603 
 
Securities Available-for-Sale, Mortgage-backed securities, Amortized Cost
74,201,183 
 
Securities Available-for-Sale, Amortized Cost
94,746,786 
 
Securities Available-for-Sale, Due in one year or less, Fair Value
0 
 
Securities Available-for-Sale, Due from one year to five years, Fair Value
1,338,576 
 
Securities Available-for-Sale, Due from five years to ten years, Fair Value
6,648,634 
 
Securities Available-for-Sale, Due after ten years, Fair Value
13,235,491 
 
Securities Available-for-Sale, Debt securities, Fair Value
21,222,701 
 
Securities Available-for-Sale, Mortgage-backed securities, Fair Value
74,059,715 
 
Securities Available-for-Sale, Fair Value
95,282,416 
76,096,646 
Securities Held to Maturity, Due in one year or less, Amortized Cost
0 
 
Securities Held to Maturity, Due from one year to five years, Amortized Cost
0 
 
Securities Held to Maturity, Due from five years to ten years, Amortized Cost
0 
 
Securities Held to Maturity, Due after ten years, Amortized Cost
0 
 
Securities Held to Maturity, Debt securities, Amortized Cost
0 
 
Securities Held to Maturity, Mortgage-backed securities, Amortized Cost
36,620 
 
Securities Held to Maturity, Amortized Cost
36,620 
45,086 
Securities Held to Maturity, Due in one year or less, Fair Value
0 
 
Securities Held to Maturity, Due from one year to five years, Fair Value
0 
 
Securities Held to Maturity, Due from five years to ten years, Fair Value
0 
 
Securities Held to Maturity, Due after ten years, Fair Value
0 
 
Securities Held to Maturity, Debt securities, Fair Value
0 
 
Securities Held to Maturity, Mortgage-backed securities, Fair Value
37,589 
 
Securities Held to Maturity, Fair Value
$ 37,589 
$ 46,212 
Securities (Details 2) (USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Less than 12 Months, Fair Value
$ 49,574,401 
$ 23,181,966 
Less than 12 Months, Gross Unrealized Losses
(318,984)
(16,732)
12 Months or Greater, Fair Value
9,597,127 
0 
12 Months or Greater, Gross Unrealized Losses
(37,657)
0 
Total, Fair Value
59,171,528 
23,181,966 
Total, Gross Unrealized Losses
(356,641)
(16,732)
US States and Political Subdivisions Debt Securities [Member]
 
 
Less than 12 Months, Fair Value
1,138,535 
 
Less than 12 Months, Gross Unrealized Losses
(40,736)
 
12 Months or Greater, Fair Value
554,465 
 
12 Months or Greater, Gross Unrealized Losses
(14,430)
 
Total, Fair Value
1,693,000 
 
Total, Gross Unrealized Losses
(55,166)
 
Residential Mortgage Backed Securities [Member]
 
 
Less than 12 Months, Fair Value
 
667,325 
Less than 12 Months, Gross Unrealized Losses
 
(1,824)
12 Months or Greater, Fair Value
 
0 
12 Months or Greater, Gross Unrealized Losses
 
0 
Total, Fair Value
 
667,325 
Total, Gross Unrealized Losses
 
(1,824)
Collateralized Debt Obligations [Member]
 
 
Less than 12 Months, Fair Value
48,435,866 
22,514,641 
Less than 12 Months, Gross Unrealized Losses
(278,248)
(14,908)
12 Months or Greater, Fair Value
9,042,662 
0 
12 Months or Greater, Gross Unrealized Losses
(23,227)
0 
Total, Fair Value
57,478,528 
22,514,641 
Total, Gross Unrealized Losses
$ (301,475)
$ (14,908)
Securities (Details Textual) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Total Fair Value Of Federal Funds Pledged
$ 73,000,000 
 
$ 73,000,000 
 
Securities available for sale
 
 
5,328,170 
 
Net gains from sale of securities
$ 0 
$ 0 
$ 424,971 
$ 0 
Loans and Allowance for Loan Losses (Details) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Dec. 31, 2011
Total Loans
$ 284,181,000 
$ 276,991,000 
 
Less: Allowance for loan losses
(3,158,766)
(6,141,281)
(7,400,000)
Loans, net
281,021,767 
270,850,465 
 
Total Loans Percentage
100.00% 
100.00% 
 
Commercial Real Estate Owner Occupied [Member]
 
 
 
Total Loans
66,143,000 
58,425,000 
 
Total Loans Percentage
23.28% 
21.09% 
 
Commercial Real Estate All Other [Member]
 
 
 
Total Loans
66,721,000 
66,747,000 
 
Total Loans Percentage
23.48% 
24.10% 
 
Consumer Real Estate Mortgage [Member]
 
 
 
Total Loans
69,911,000 
71,195,000 
 
Less: Allowance for loan losses
(1,056,000)
(1,528,000)
(2,518,000)
Total Loans Percentage
24.60% 
25.70% 
 
Construction and Land Development [Member]
 
 
 
Total Loans
38,970,000 
38,557,000 
 
Less: Allowance for loan losses
(339,000)
(1,241,000)
(827,000)
Total Loans Percentage
13.71% 
13.92% 
 
Commercial and Industrial Loans [Member]
 
 
 
Total Loans
39,782,000 
40,140,000 
 
Less: Allowance for loan losses
(278,000)
(809,000)
(482,000)
Total Loans Percentage
14.00% 
14.49% 
 
Consumer and Other Loans [Member]
 
 
 
Total Loans
2,654,000 
1,927,000 
 
Less: Allowance for loan losses
$ (20,000)
$ (14,000)
$ (16,000)
Total Loans Percentage
0.93% 
0.70% 
 
Loans and Allowance for Loan Losses (Details 1) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Total
$ 284,181 
$ 276,991 
Commercial Real Estate Mortgage [Member]
 
 
Total
132,864 
125,172 
Consumer Real Estate Mortgage [Member]
 
 
Total
69,911 
71,195 
Construction and Land Development [Member]
 
 
Total
38,970 
38,557 
Commercial and Industrial Loans [Member]
 
 
Total
39,782 
40,140 
Consumer and Other Loans [Member]
 
 
Total
2,654 
1,927 
Performing Loans [Member]
 
 
Total
271,761 
261,802 
Performing Loans [Member] |
Commercial Real Estate Mortgage [Member]
 
 
Total
125,418 
115,959 
Performing Loans [Member] |
Consumer Real Estate Mortgage [Member]
 
 
Total
66,950 
69,329 
Performing Loans [Member] |
Construction and Land Development [Member]
 
 
Total
38,712 
37,607 
Performing Loans [Member] |
Commercial and Industrial Loans [Member]
 
 
Total
38,027 
36,980 
Performing Loans [Member] |
Consumer and Other Loans [Member]
 
 
Total
2,654 
1,927 
Impaired Loans [Member]
 
 
Total
12,420 
15,189 
Impaired Loans [Member] |
Commercial Real Estate Mortgage [Member]
 
 
Total
7,446 
9,213 
Impaired Loans [Member] |
Consumer Real Estate Mortgage [Member]
 
 
Total
2,961 
1,866 
Impaired Loans [Member] |
Construction and Land Development [Member]
 
 
Total
258 
950 
Impaired Loans [Member] |
Commercial and Industrial Loans [Member]
 
 
Total
1,755 
3,160 
Impaired Loans [Member] |
Consumer and Other Loans [Member]
 
 
Total
$ 0 
$ 0 
Loans and Allowance for Loan Losses (Details 2) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Dec. 31, 2011
Total
$ 3,158,766 
$ 6,141,281 
$ 7,400,000 
Commercial Real Estate Mortgage [Member]
 
 
 
Total
1,466,000 
2,549,000 
3,557,000 
Consumer Real Estate Mortgage [Member]
 
 
 
Total
1,056,000 
1,528,000 
2,518,000 
Construction and Land Development [Member]
 
 
 
Total
339,000 
1,241,000 
827,000 
Commercial and Industrial Loans [Member]
 
 
 
Total
278,000 
809,000 
482,000 
Consumer and Other Loans [Member]
 
 
 
Total
20,000 
14,000 
16,000 
Performing Loans [Member]
 
 
 
Total
2,261,000 
2,095,000 
 
Performing Loans [Member] |
Commercial Real Estate Mortgage [Member]
 
 
 
Total
784,000 
319,000 
 
Performing Loans [Member] |
Consumer Real Estate Mortgage [Member]
 
 
 
Total
922,000 
952,000 
 
Performing Loans [Member] |
Construction and Land Development [Member]
 
 
 
Total
339,000 
781,000 
 
Performing Loans [Member] |
Commercial and Industrial Loans [Member]
 
 
 
Total
196,000 
29,000 
 
Performing Loans [Member] |
Consumer and Other Loans [Member]
 
 
 
Total
20,000 
14,000 
 
Impaired Loans [Member]
 
 
 
Total
898,000 
4,046,000 
 
Impaired Loans [Member] |
Commercial Real Estate Mortgage [Member]
 
 
 
Total
682,000 
2,230,000 
 
Impaired Loans [Member] |
Consumer Real Estate Mortgage [Member]
 
 
 
Total
134,000 
576,000 
 
Impaired Loans [Member] |
Construction and Land Development [Member]
 
 
 
Total
0 
460,000 
 
Impaired Loans [Member] |
Commercial and Industrial Loans [Member]
 
 
 
Total
82,000 
780,000 
 
Impaired Loans [Member] |
Consumer and Other Loans [Member]
 
 
 
Total
$ 0 
$ 0 
 
Loans and Allowance for Loan Losses (Details 3) (USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Dec. 31, 2012
Beginning balance
$ 6,141,281 
$ 7,400,000 
$ 7,400,000 
Charged-off loans
(4,460,000)
 
(2,869,000)
Recovery of charge-offs
1,178,000 
 
1,180,000 
Provision for (reallocation of) loan losses
300,000 
100,000 
430,000 
Ending balance
3,158,766 
 
6,141,281 
Commercial Real Estate Mortgage [Member]
 
 
 
Beginning balance
2,549,000 
3,557,000 
3,557,000 
Charged-off loans
(1,874,000)
 
(958,000)
Recovery of charge-offs
61,000 
 
838,000 
Provision for (reallocation of) loan losses
730,000 
 
(888,000)
Ending balance
1,466,000 
 
2,549,000 
Consumer Real Estate Mortgage [Member]
 
 
 
Beginning balance
1,528,000 
2,518,000 
2,518,000 
Charged-off loans
(688,000)
 
(1,022,000)
Recovery of charge-offs
224,000 
 
36,000 
Provision for (reallocation of) loan losses
(8,000)
 
(4,000)
Ending balance
1,056,000 
 
1,528,000 
Construction and Land Development [Member]
 
 
 
Beginning balance
1,241,000 
827,000 
827,000 
Charged-off loans
(1,185,000)
 
(782,000)
Recovery of charge-offs
810,000 
 
145,000 
Provision for (reallocation of) loan losses
(527,000)
 
1,051,000 
Ending balance
339,000 
 
1,241,000 
Commercial and Industrial Loans [Member]
 
 
 
Beginning balance
809,000 
482,000 
482,000 
Charged-off loans
(694,000)
 
(74,000)
Recovery of charge-offs
80,000 
 
144,000 
Provision for (reallocation of) loan losses
83,000 
 
257,000 
Ending balance
278,000 
 
809,000 
Consumer and Other Loans [Member]
 
 
 
Beginning balance
14,000 
16,000 
16,000 
Charged-off loans
(19,000)
 
(33,000)
Recovery of charge-offs
3,000 
 
17,000 
Provision for (reallocation of) loan losses
22,000 
 
14,000 
Ending balance
$ 20,000 
 
$ 14,000 
Loans and Allowance for Loan Losses (Details 4) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Loans and Leases Receivable, Gross, Carrying Amount
$ 284,181 
$ 276,991 
Commercial Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
132,864 
125,172 
Consumer Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
69,911 
71,195 
Construction and Land Development [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
38,970 
38,557 
Commercial and Industrial Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
39,782 
40,140 
Consumer and Other Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
2,654 
1,927 
Pass [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
253,485 
244,460 
Pass [Member] |
Commercial Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
120,812 
111,313 
Pass [Member] |
Consumer Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
58,536 
57,959 
Pass [Member] |
Construction and Land Development [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
38,027 
36,802 
Pass [Member] |
Commercial and Industrial Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
33,456 
36,482 
Pass [Member] |
Consumer and Other Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
2,654 
1,904 
Special Mention [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
13,786 
13,092 
Special Mention [Member] |
Commercial Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
4,209 
4,145 
Special Mention [Member] |
Consumer Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
5,377 
8,401 
Special Mention [Member] |
Construction and Land Development [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
95 
198 
Special Mention [Member] |
Commercial and Industrial Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
4,105 
330 
Special Mention [Member] |
Consumer and Other Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
0 
18 
Substandard [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
4,490 
4,250 
Substandard [Member] |
Commercial Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
397 
501 
Substandard [Member] |
Consumer Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
3,037 
2,969 
Substandard [Member] |
Construction and Land Development [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
590 
607 
Substandard [Member] |
Commercial and Industrial Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
466 
168 
Substandard [Member] |
Consumer and Other Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
0 
5 
Substandard Impaired [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
12,138 
15,189 
Substandard Impaired [Member] |
Commercial Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
7,164 
9,213 
Substandard Impaired [Member] |
Consumer Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
2,961 
1,866 
Substandard Impaired [Member] |
Construction and Land Development [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
258 
950 
Substandard Impaired [Member] |
Commercial and Industrial Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
1,755 
3,160 
Substandard Impaired [Member] |
Consumer and Other Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
0 
0 
Doubtful [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
282 
 
Doubtful [Member] |
Commercial Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
282 
 
Doubtful [Member] |
Consumer Real Estate Mortgage [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
0 
 
Doubtful [Member] |
Construction and Land Development [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
0 
 
Doubtful [Member] |
Commercial and Industrial Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
0 
 
Doubtful [Member] |
Consumer and Other Loans [Member]
 
 
Loans and Leases Receivable, Gross, Carrying Amount
$ 0 
 
Loans and Allowance for Loan Losses (Details 5) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Impaired loans without a valuation allowance, Recorded Investment
$ 8,255 
$ 6,274 
Impaired loans without a valuation allowance, Unpaid Principal Balance
8,530 
6,399 
Impaired loans without a valuation allowance, Related Allowance
0 
0 
Impaired loans without a valuation allowance, Average Recorded Investment
8,761 
8,562 
Impaired loans without a valuation allowance, Interest Income Recognized
298 
306 
Impaired loans with a valuation allowance, Recorded Investment
4,165 
8,915 
Impaired loans with a valuation allowance, Unpaid Principal Balance
4,240 
8,956 
Impaired loans with a valuation allowance, Related Allowance
898 
4,046 
Impaired loans with a valuation allowance, Average Recorded Investment
6,816 
10,564 
Impaired loans with a valuation allowance, Interest Income Recognized
213 
457 
Total impaired loans, Recorded Investment
12,420 
15,189 
Total impaired loans, Unpaid Principal Balance
12,770 
15,355 
Total impaired loans, Related Allowance
898 
4,046 
Total impaired loans, Average Recorded Investment
15,577 
19,126 
Total impaired loans, Interest Income Recognized
511 
763 
Commercial Real Estate Mortgage [Member]
 
 
Impaired loans without a valuation allowance, Recorded Investment
4,578 
3,406 
Impaired loans without a valuation allowance, Unpaid Principal Balance
4,797 
3,453 
Impaired loans without a valuation allowance, Related Allowance
0 
0 
Impaired loans without a valuation allowance, Average Recorded Investment
4,683 
4,389 
Impaired loans without a valuation allowance, Interest Income Recognized
183 
180 
Impaired loans with a valuation allowance, Recorded Investment
2,868 
5,807 
Impaired loans with a valuation allowance, Unpaid Principal Balance
2,943 
5,848 
Impaired loans with a valuation allowance, Related Allowance
682 
2,230 
Impaired loans with a valuation allowance, Average Recorded Investment
4,670 
6,616 
Impaired loans with a valuation allowance, Interest Income Recognized
126 
215 
Consumer Real Estate Mortgage [Member]
 
 
Impaired loans without a valuation allowance, Recorded Investment
2,066 
513 
Impaired loans without a valuation allowance, Unpaid Principal Balance
2,066 
540 
Impaired loans without a valuation allowance, Related Allowance
0 
0 
Impaired loans without a valuation allowance, Average Recorded Investment
1,854 
1,538 
Impaired loans without a valuation allowance, Interest Income Recognized
73 
52 
Impaired loans with a valuation allowance, Recorded Investment
895 
1,353 
Impaired loans with a valuation allowance, Unpaid Principal Balance
895 
1,353 
Impaired loans with a valuation allowance, Related Allowance
134 
576 
Impaired loans with a valuation allowance, Average Recorded Investment
1,110 
2,606 
Impaired loans with a valuation allowance, Interest Income Recognized
49 
61 
Construction and Land Development [Member]
 
 
Impaired loans without a valuation allowance, Recorded Investment
258 
244 
Impaired loans without a valuation allowance, Unpaid Principal Balance
271 
251 
Impaired loans without a valuation allowance, Related Allowance
0 
0 
Impaired loans without a valuation allowance, Average Recorded Investment
349 
358 
Impaired loans without a valuation allowance, Interest Income Recognized
11 
19 
Impaired loans with a valuation allowance, Recorded Investment
0 
706 
Impaired loans with a valuation allowance, Unpaid Principal Balance
0 
706 
Impaired loans with a valuation allowance, Related Allowance
0 
460 
Impaired loans with a valuation allowance, Average Recorded Investment
296 
642 
Impaired loans with a valuation allowance, Interest Income Recognized
0 
49 
Commercial and Industrial Loans [Member]
 
 
Impaired loans without a valuation allowance, Recorded Investment
1,353 
2,111 
Impaired loans without a valuation allowance, Unpaid Principal Balance
1,396 
2,155 
Impaired loans without a valuation allowance, Related Allowance
0 
0 
Impaired loans without a valuation allowance, Average Recorded Investment
1,875 
2,277 
Impaired loans without a valuation allowance, Interest Income Recognized
31 
55 
Impaired loans with a valuation allowance, Recorded Investment
402 
1,049 
Impaired loans with a valuation allowance, Unpaid Principal Balance
402 
1,049 
Impaired loans with a valuation allowance, Related Allowance
82 
780 
Impaired loans with a valuation allowance, Average Recorded Investment
740 
700 
Impaired loans with a valuation allowance, Interest Income Recognized
$ 38 
$ 132 
Loans and Allowance for Loan Losses (Details 6) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
30-89 Days Past Due and Accruing
$ 1,745 
$ 6,594 
Past Due 90 Days or More and Accruing
0 
0 
Nonaccrual
4,096 
6,005 
Total Past Due
5,841 
12,599 
Current Loans
278,340 
264,392 
Total Loans
284,181 
276,991 
Commercial Real Estate Owner Occupied [Member]
 
 
30-89 Days Past Due and Accruing
431 
2,738 
Past Due 90 Days or More and Accruing
0 
0 
Nonaccrual
494 
956 
Total Past Due
925 
3,694 
Current Loans
65,218 
54,731 
Total Loans
66,143 
58,425 
Commercial Real Estate All Other [Member]
 
 
30-89 Days Past Due and Accruing
0 
636 
Past Due 90 Days or More and Accruing
0 
0 
Nonaccrual
924 
1,913 
Total Past Due
924 
2,549 
Current Loans
65,797 
64,198 
Total Loans
66,721 
66,747 
Consumer Real Estate Mortgage [Member]
 
 
30-89 Days Past Due and Accruing
712 
1,858 
Past Due 90 Days or More and Accruing
0 
0 
Nonaccrual
964 
616 
Total Past Due
1,676 
2,474 
Current Loans
68,235 
68,721 
Total Loans
69,911 
71,195 
Construction and Land Development [Member]
 
 
30-89 Days Past Due and Accruing
48 
100 
Past Due 90 Days or More and Accruing
0 
0 
Nonaccrual
22 
53 
Total Past Due
70 
153 
Current Loans
38,900 
38,404 
Total Loans
38,970 
38,557 
Commercial and Industrial Loans [Member]
 
 
30-89 Days Past Due and Accruing
552 
1,227 
Past Due 90 Days or More and Accruing
0 
0 
Nonaccrual
1,692 
2,467 
Total Past Due
2,244 
3,694 
Current Loans
37,538 
36,446 
Total Loans
39,782 
40,140 
Consumer and Other Loans [Member]
 
 
30-89 Days Past Due and Accruing
2 
35 
Past Due 90 Days or More and Accruing
0 
0 
Nonaccrual
0 
0 
Total Past Due
2 
35 
Current Loans
2,652 
1,892 
Total Loans
$ 2,654 
$ 1,927 
Loans and Allowance for Loan Losses (Details 7) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Contract
Sep. 30, 2012
Contract
Commercial Real Estate Mortgage [Member]
 
 
Number of Contracts
2 
2 
Pre-Modification Outstanding Recorded Investment
$ 2,073 
$ 4,233 
Post-Modification Outstanding Recorded Investment
2,073 
4,233 
Consumer Real Estate Mortgage [Member]
 
 
Number of Contracts
1 
1 
Pre-Modification Outstanding Recorded Investment
66 
65 
Post-Modification Outstanding Recorded Investment
66 
65 
Construction and Land Development [Member]
 
 
Number of Contracts
3 
3 
Pre-Modification Outstanding Recorded Investment
898 
1,178 
Post-Modification Outstanding Recorded Investment
898 
1,178 
Commercial and Industrial Loans [Member]
 
 
Number of Contracts
3 
4 
Pre-Modification Outstanding Recorded Investment
2,389 
2,408 
Post-Modification Outstanding Recorded Investment
$ 2,389 
$ 2,408 
Loans and Allowance for Loan Losses (Details Textual) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Description Of Bank's Loan Grading Process
The Bank’s loan grading process is as follows: All loans are assigned a loan grade at the time of origination by the relationship manager. Typically, a loan is assigned a loan grade of “pass” at origination. Loan relationships greater than or equal to $500 thousand are reviewed by the Bank’s external loan review provider on an annual basis. The Bank’s internal loan review department samples approximately 33 percent of all other loan relationships less than $500 thousand on an annual basis for review. If a loan is delinquent 60 days or more or a pattern of delinquency exists, the loan will be selected for review. Generally, all loans on the Bank’s internal watchlist are reviewed annually by internal loan review or external loan review providers. 
 
Financing Receivable, Modifications, Recorded Investment
$ 6,119,000 
$ 9,403,000 
Commitments and Contingent Liabilities (Details) (USD $)
Sep. 30, 2013
Commitments to Extend Credit [Member]
 
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability
$ 34,100,000 
Standby Letters of Credit [Member]
 
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability
$ 392,200 
Fair Value Disclosures (Details) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Total securities available for sale
$ 95,282,416 
$ 76,096,646 
Cash surrender value of life insurance
1,224,437 
1,199,725 
Fair Value, Inputs, Level 1 [Member]
 
 
Total securities available for sale
0 
0 
Cash surrender value of life insurance
0 
0 
Fair Value, Inputs, Level 2 [Member]
 
 
Total securities available for sale
95,282,416 
76,096,646 
Cash surrender value of life insurance
1,224,437 
1,199,725 
Fair Value, Inputs, Level 3 [Member]
 
 
Total securities available for sale
0 
0 
Cash surrender value of life insurance
0 
0 
US Government Agencies Debt Securities [Member]
 
 
Total securities available for sale
3,528,345 
4,018,151 
US Government Agencies Debt Securities [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Total securities available for sale
0 
0 
US Government Agencies Debt Securities [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Total securities available for sale
3,528,345 
4,018,151 
US Government Agencies Debt Securities [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Total securities available for sale
0 
0 
US States and Political Subdivisions Debt Securities [Member]
 
 
Total securities available for sale
17,694,356 
23,633,317 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Total securities available for sale
0 
0 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Total securities available for sale
17,694,356 
23,633,317 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Total securities available for sale
0 
0 
Residential Mortgage Backed Securities [Member]
 
 
Total securities available for sale
7,903,524 
9,222,419 
Residential Mortgage Backed Securities [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Total securities available for sale
0 
0 
Residential Mortgage Backed Securities [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Total securities available for sale
7,903,524 
9,222,419 
Residential Mortgage Backed Securities [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Total securities available for sale
0 
0 
Collateralized Debt Obligations [Member]
 
 
Total securities available for sale
66,156,191 
39,222,759 
Collateralized Debt Obligations [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Total securities available for sale
0 
0 
Collateralized Debt Obligations [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Total securities available for sale
66,156,191 
39,222,759 
Collateralized Debt Obligations [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Total securities available for sale
$ 0 
$ 0 
Fair Value Disclosures (Details 1) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Impaired loans
$ 3,267 
$ 4,869 
Foreclosed assets (OREO & Repossessions)
14,924 
20,332 
Fair Value, Inputs, Level 1 [Member]
 
 
Impaired loans
0 
0 
Foreclosed assets (OREO & Repossessions)
0 
0 
Fair Value, Inputs, Level 2 [Member]
 
 
Impaired loans
3,267 
4,869 
Foreclosed assets (OREO & Repossessions)
14,924 
20,332 
Fair Value, Inputs, Level 3 [Member]
 
 
Impaired loans
0 
0 
Foreclosed assets (OREO & Repossessions)
$ 0 
$ 0 
Fair Value Disclosures (Details 2) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2012
Dec. 31, 2011
Assets:
 
 
 
 
Cash and cash equivalents, Carrying Amount
$ 21,254,990 
$ 59,395,238 
$ 34,831,533 
$ 38,882,691 
Securities, Carrying Amount
95,319,000 
76,142,000 
 
 
Federal Home Loan Bank stock, Carrying Amount
2,322,900 
2,322,900 
 
 
Loans, net, Carrying Amount
281,021,767 
270,850,465 
 
 
Cash surrender value of life insurance, Carrying Amount
1,224,000 
1,200,000 
 
 
Accrued interest receivable, Carrying Amount
1,221,841 
1,213,778 
 
 
Cash and cash equivalents, Estimated Fair Value
21,255,000 
59,395,000 
 
 
Securities, Estimated Fair Value
95,320,000 
76,143,000 
 
 
Federal Home Loan Bank stock, Estimated Fair Value
2,323,000 
2,323,000 
 
 
Loans, net, Estimated Fair Value
281,403,000 
271,128,000 
 
 
Cash surrender value of life insurance, Estimated Fair Value
1,224,437 
1,199,725 
 
 
Accrued interest receivable, Estimated Fair Value
1,222,000 
1,214,000 
 
 
Liabilities:
 
 
 
 
Noninterest-bearing demand deposits, Carrying Amount
54,452,293 
60,053,838 
 
 
Interest-bearing demand deposits, Carrying Amount
25,463,874 
30,178,624 
 
 
Savings deposits and money market accounts, Carrying Amount
90,665,979 
80,994,239 
 
 
Time deposits, Carrying Amount
170,174,142 
173,653,892 
 
 
Federal funds purchased and securities sold under agreements to repurchase, Carrying Amount
20,508,655 
19,587,387 
 
 
Federal Home Loan Bank advances and other borrowings, Carrying Amount
26,740,000 
37,175,000 
 
 
Accrued interest payable, Carrying Amount
100,129 
120,558 
 
 
Noninterest-bearing demand deposits, Estimated Fair Value
54,452,000 
60,054,000 
 
 
Interest-bearing demand deposits, Estimated Fair Value
25,464,000 
30,179,000 
 
 
Savings deposits and money market accounts, Estimated Fair Value
90,666,000 
80,994,000 
 
 
Time deposits, Estimated Fair Value
171,541,000 
175,177,000 
 
 
Federal funds purchased and securities sold under agreements to repurchase, Estimated Fair Value
20,509,000 
19,587,000 
 
 
Federal Home Loan Bank advances and other borrowings, Estimated Fair Value
26,740,000 
37,175,000 
 
 
Accrued interest payable, Estimated Fair Value
100,000 
121,000 
 
 
Unrecognized financial instruments (net of contract amount):
 
 
 
 
Commitments to extend credit, Carrying Amount
0 
0 
 
 
Letters of credit, Carrying Amount
0 
0 
 
 
Lines of credit, Carrying Amount
0 
0 
 
 
Commitments to extend credit, Estimated Fair Value
0 
0 
 
 
Letters of credit, Estimated Fair Value
0 
0 
 
 
Lines of credit, Estimated Fair Value
$ 0 
$ 0