Note 4 - Securities

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note

4:

Securities

The amortized cost and approximate fair values of securities classified as available-for-sale were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of September 30, 2019
Debt Securities:
U. S. government agencies	$	1,499,752	$	-	$	(9,071	)	$	1,490,681
Municipals		30,172,564		805,092		(22,646	)		30,955,010
Corporates		13,487,865		164,686		(13,115	)		13,639,436
Mortgage-backed securities - private label		10,963,720		9,367		(184	)		10,972,903
Government sponsored mortgage-backed securities and SBA loan pools		48,704,459		734,188		(142,975	)		49,295,672
	$	104,828,360	$	1,713,333		(187,991	)		106,353,702

	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

Maturities of available-for-sale debt securities as of

September 30, 2019:

	Amortized Cost		Approximate Fair Value
1-5 years	$	386,057	$	391,105
6-10 years		15,321,979		15,495,164
After 10 years		29,452,145		30,198,857
Mortgage-backed securities - private label not due on a single maturity date		10,963,720		10,972,903
Government sponsored mortgage-backed securities and SBA loan pools not due on a single maturity date		48,704,459		49,295,673
	$	104,828,360	$	106,353,702

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

$5,572,723

and

$24,943,176

as of

September 30, 2019

and

December 31, 2018,

respectively. The approximate fair value of pledged securities amounted to

$5,673,630

and

$24,374,187

as of

September 30, 2019

and

December 31, 2018,

respectively.

Realized gains and losses are recorded as net securities gains. Gains and losses on sales of securities are determined on the specific identification method. Gross gains of

$214,125

and

$26,061

and gross losses of

$134,369

and

$34,151

for the

nine

months ended

September 30, 2019

and

September 30, 2018,

respectively, were realized from the sale of available-for-sale securities. The tax effect of these net gains and losses was

$16,749

and (

$2,063

) for the

nine

months ended

September 30, 2019

and

September 30, 2018,

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 at less than their historical cost. These declines are primarily the result of the rate for these investments yielding less than current market rates. 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.

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

September 30, 2019

and

December 31, 2018,

was

$20,627,201

and

$70,434,596,

respectively, which is approximately

19%

and

82%

of the Company’s investment portfolio.

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

September 30, 2019

and

December 31, 2018.

As of September 30, 2019
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U. S. government agencies	$	1,490,680	$	(9,071	)	$	-	$	-		$	1,490,680	$	(9,071	)
Municipals		1,124,104		(22,646	)		-		-			1,124,104		(22,646	)
Corporates		2,540,521		(13,115	)		-		-			2,540,521		(13,115	)
Mortgage-backed securities - private label		2,063,242		(184	)		-		-			2,063,242		(184	)
Government sponsored mortgage-backed securities and SBA loan pools		8,979,065		(46,080	)		4,429,589		(96,895	)		13,408,654		(142,975	)
	$	16,197,612	$	(91,096	)	$	4,429,589	$	(96,895	)	$	20,627,201	$	(187,991	)

As of 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		(1,124,978	)		40,886,625		(1,237,260	)
	$	13,452,347	$	(180,056	)	$	56,982,249	$	(1,767,913	)	$	70,434,596	$	(1,947,969	)