Note 4. Investments, at Cost
The Bank carries the following investments at cost because they are not readily marketable and there is no established market price for the investments. These investments are normally redeemed by the issuer at par value and may carry call or put options under certain circumstances. Investments carried at cost at December 31, 2013 and 2012, consist of:
| December 31, 2013 |
December 31, 2012 |
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Federal Home Loan Bank of Cincinnati common stock |
$ | 2,898,800 | $ | 2,898,800 | ||||
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Tenth Street Fund III, L.P. investment |
750,000 | 495,000 | ||||||
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| $ | 3,648,800 | $ | 3,393,800 | |||||
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The Bank, as a member of the Federal Home Loan Bank (“FHLB”) of Cincinnati, is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. Management reviews for impairment based on the ultimate recoverability of the cost basis in the FHLB stock.
While the Federal Home Loan Banks have been negatively impacted by current economic conditions, the Federal Home Loan Bank of Cincinnati has reported profits for 2013 and 2012, remains in compliance with regulatory capital and liquidity requirements, continues to pay dividends on the stock and make redemptions at the par value. With consideration given to these factors, management concluded that the stock was not impaired at December 31, 2013 or 2012.
Tenth Street Capital Fund III, L.P. is a limited partnership investment in which the Bank holds an ownership interest of less than 3 percent and does not exercise significant influence over the Fund. As such, this investment is accounted for under the cost method of accounting.