Note 4 - Securities

6 Months Ended

Jun. 30, 2020

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 June 30, 2020
Debt Securities:
U. S. government agencies	$	8,532,000	$	17,924	$	(6,603	)	$	8,543,321
Municipals		49,127,773		2,241,588		(90,355	)		51,279,006
Corporates		27,055,325		374,680		(159,072	)		27,270,933
Mortgage-backed securities - private label		10,838,275		123,752		(165,184	)		10,796,843
Government sponsored asset-backed securities and SBA loan pools		47,869,033		1,357,901		(94,163	)		49,132,771
	$	143,422,406	$	4,115,845	$	(515,377	)	$	147,022,874

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2019
Debt Securities:
U. S. government agencies	$	2,499,755	$	-	$	(11,962	)	$	2,487,793
Municipals		35,625,038		675,382		(125,693	)		36,174,727
Corporates		15,395,190		154,942		(14,945	)		15,535,187
Mortgage-backed securities - private label		13,788,728		52,035		(29,392	)		13,811,371
Government sponsored mortgage-backed securities and SBA loan pools		49,844,049		585,641		(193,454	)		50,236,236
	$	117,152,760	$	1,468,000	$	(375,446	)	$	118,245,314

Maturities of available-for-sale debt securities as of June 30, 2020:

	Amortized Cost		Approximate Fair Value
1-5 years	$	150,000	$	150,324
6-10 years		36,006,625		36,533,558
After 10 years		48,558,473		50,409,378
Mortgage-backed securities - private label not due on a single maturity date		10,838,275		10,796,843
Government sponsored asset-backed securities and SBA loan pools not due on a single maturity date		47,869,033		49,132,771
	$	143,422,406	$	147,022,874

The book value of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $3,155,750 and $5,261,664 as of June 30, 2020 and December 31, 2019, respectively. The approximate fair value of pledged securities amounted to $3,275,770 and $5,358,929 as of June 30, 2020 and December 31, 2019, 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 $221,937 and $172,327 and gross losses of $58,745 and $124,064 for the six months ended June 30, 2020 and June 30, 2019, respectively, were realized from the sale of available-for-sale securities. The tax effect of these net gains and losses was $34,270 and $10,135 for the six months ended June 30, 2020 and June 30, 2019, 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 other investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at June 30, 2020 and December 31, 2019, was $31,639,412 and $42,570,363, respectively, which is approximately 22% and 36% 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 June 30, 2020 and December 31, 2019.

As of June 30, 2020
	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	$	4,743,398	$	(6,603	)	$	-	$	-		4,743,398	$	(6,603	)
Municipals		4,870,205		(90,355	)		-		-
Corporates		10,351,648		(159,072	)		-		-		10,351,648		(159,072	)
Mortgage-backed securities - private label		5,234,232		(165,184	)		-		-		5,234,232		(165,184	)
Government sponsored asset-backed securities and SBA loan pools		6,439,929		(94,163	)		-		-		6,439,929		(94,163	)
	$	31,639,412	$	(515,377	)	$	-	$	-	$	31,639,412	$	(515,377	)

As of December 31, 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	$	2,487,795	$	(11,962	)	$	-	$	-			2,487,795	$	(11,962	)
Municipals		7,083,208		(125,693	)		-		-			7,083,208		(125,693	)
Corporates		2,452,005		(14,945	)		-		-			2,452,005		(14,945	)
Mortgage-backed securities - private label		9,416,669		(29,392	)		-		-			9,416,669		(29,392	)
Government sponsored asset-backed securities and SBA loan pools		18,112,148		(125,906	)		3,018,538		(67,548	)		21,130,686		(193,454	)
	$	39,551,825	$	(307,898	)	$	3,018,538	$	(67,548	)	$	42,570,363	$	(375,446	)