NOTE

SECURITIES

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities classified as available-for-sale are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2018
Debt Securities:
Municipals	$	34,470,648	$	10,581	$	(710,709	)	$	33,770,520
Corporates		3,000,000		18,927		-			3,018,927
Government sponsored mortgage-backed securities and SBA loan pools		50,632,011		81,999		(1,237,260	)		49,476,750
	$	88,102,659	$	111,507	$	(1,947,969	)	$	86,266,197

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2017
Debt Securities:
Municipals	$	33,908,207	$	253,872	$	(263,621	)	$	33,898,458
Corporates		3,000,000		65,000		-			3,065,000
Government sponsored mortgage-backed securities and SBA loan pools		45,414,845		9,283		(908,913	)		44,515,215
	$	82,323,052	$	328,155	$	(1,172,534	)	$	81,478,673

Maturities of available-for-sale debt securities as of

December 31, 2018:

Maturities of Available for Sale
	Amortized Cost		Approximate Fair Value
1-5 years	$	428,963	$	430,802
5-10 years		11,905,343		11,738,780
After ten years		25,136,342		24,619,865
Government sponsored mortgage-backed securities and SBA loan pools not due on a single maturity date		50,632,011		49,476,750
	$	88,102,659	$	86,266,197

Maturities of held-to-maturity securities as of

December 31, 2018:

Maturities of Held to Maturity
	Amortized Cost		Approximate Fair Value
Government sponsored mortgage-backed securities not due on a single maturity date	$	11,794	$	11,850

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities classified as held to maturity are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2018
Debt Securities:
Government sponsored mortgage-backed securities	$	11,794	$	136	$	(80	)	$	11,850

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2017
Debt Securities:
Government sponsored mortgage-backed securities	$	16,457	$	327	$	(55	)	$	16,729

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, amounted to

$24,374,187

and

$35,355,969

as of

December 31, 2018

and

2017,

respectively.

Gross gains of

$48,931,

$165,237

and

$261,875

and gross losses of

$57,022,

$118,908

and

$69,338

resulting from sale of available-for-sale securities were realized for the years ended

December 31, 2018,

2017

and

2016,

respectively. The tax effect of these net gains (losses) was (

$2,063

$17,142

and

$71,239

2018,

2017

and

2016,

respectively.

The Company evaluates all securities quarterly to determine if any unrealized losses are deemed to be other than temporary. Certain investment securities are valued less than their historical cost. These declines are primarily the result of the rate for these investments yielding less than current market rates, or declines in stock prices of equity securities. Based on evaluation of available evidence, management believes the declines in fair value for these securities are temporary. It is management’s intent to hold the debt securities to maturity or until recovery of the unrealized loss. Should the impairment of any of these debt securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified, to the extent the loss is related to credit issues, and to other comprehensive income to the extent the decline on debt securities is related to other factors and the Company does

not

intend to sell the security prior to recovery of the unrealized loss.

securities were written down for other-than-temporary impairment during the years ended

December 31, 2018,

2017

and

2016.

Certain other investments in debt and equity securities are reported in the consolidated financial statements at an amount less than their historical cost. Total fair value of these investments at

December 31, 2018

and

2017,

was

$70,434,596

and

$62,107,660,

respectively, which is approximately

82%

and

76%

of the Company’s investment portfolio. These declines primarily resulted from changes in market interest rates and failure of certain investments to meet projected earnings targets.

The following table shows gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at

December 31, 2018

and

2017.

	December 31, 2018
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses

Municipals	$	6,324,750	$	(67,774	)	$	23,223,221	$	(642,935	)	$	29,547,971	$	(710,709	)
Government sponsored mortgage-backed securities and SBA loan pools		7,127,597		(112,282	)		33,759,028		(1,125,058	)		40,886,625		(1,237,340	)
	$	13,452,347	$	(180,056	)	$	56,982,249	$	(1,767,993	)	$	70,434,596	$	(1,948,049	)

	December 31, 2017
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses

Municipals	$	11,024,593	$	(103,747	)	$	8,802,796	$	(159,874	)	$	19,827,389	$	(263,621	)
Government sponsored mortgage-backed securities and SBA loan pools		20,088,694		(253,907	)		22,191,577		(655,006	)		42,280,271		(908,913	)
	$	31,113,287	$	(357,654	)	$	30,994,373	$	(814,880	)	$	62,107,660	$	(1,172,534	)