Note 3 - Securities

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

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

Note 3: 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 March 31, 2021
Debt Securities:
U. S. government agencies	$	7,277,937	$	-	$	(293,249	)	$	6,984,688
Municipals		66,051,714		2,157,557		(743,209	)		67,466,062
Corporates		34,682,597		345,845		(394,092	)		34,634,350
Mortgage-backed securities - private label - commercial		6,406,588		76,714		(8,576	)		6,474,726
Mortgage-backed securities - private label - consumer		9,418,436		208,602		(95,228	)		9,531,810
Government sponsored asset-backed securities and SBA loan pools		53,763,840		1,054,204		(575,115	)		54,242,929
	$	177,601,112	$	3,842,922	$	(2,109,469	)	$	179,334,565

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2020
Debt Securities:
U. S. government agencies	$	6,282,000	$	6,519	$	(4,885	)	$	6,283,634
Municipals		58,754,912		3,241,133		(26,991	)		61,969,054
Corporates		30,510,893		261,740		(171,811	)		30,600,822
Mortgage-backed securities - private label - commercial		5,399,385		55,712		(10,650	)		5,444,447
Mortgage-backed securities - private label - consumer		9,249,375		228,469		(25,747	)		9,452,097
Government sponsored asset-backed securities and SBA loan pools		49,053,252		1,391,728		(74,165	)		50,370,815
	$	159,249,817	$	5,185,301	$	(314,249	)	$	164,120,869

Maturities of available-for-sale debt securities as of March 31, 2021:

	Amortized Cost		Approximate Fair Value
1-5 years	$	1,000,000	$	999,531
6-10 years		39,772,344		39,833,474
After 10 years		67,239,904		68,252,095
Mortgage-backed securities - private label - commercial not due on a single maturity date		6,406,588		6,474,726
Mortgage-backed securities - private label - consumer not due on a single maturity date		9,418,436		9,531,810
Government sponsored asset-backed securities and SBA loan pools not due on a single maturity date		53,763,840		54,242,929
	$	177,601,112	$	179,334,565

The book value of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $16,128,452 and $8,294,321 as of March 31, 2021 and December 31, 2020, respectively. The approximate fair value of pledged securities amounted to $16,624,795 and $8,749,409 as of March 31, 2021 and December 31, 2020, 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 $89,055 and $58,587 and gross losses of $16,842 and $30,688 for the three months ended March 31, 2021 and March 31, 2020, respectively, were realized from the sale of available-for-sale securities. The tax effect of these net gains and losses was $15,165 and $5,859 for the three months ended March 31, 2021 and March 31, 2020, 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 securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at March 31, 2021 and December 31, 2020, was $68,784,026 and $30,049,473 respectively, which is approximately 38% and 18% 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 March 31, 2021 and December 31, 2020.

As of March 31, 2021	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	$	6,984,688	$	(293,249	)	$	-	$	-		$	6,984,688	$	(293,249	)
Municipals		19,726,646		(665,287	)		940,820		(77,922	)		20,667,466		(743,209	)
Corporates		15,201,566		(390,164	)		1,002,423		(3,928	)		16,203,989		(394,092	)
Mortgage-backed securities - private label - commercial		1,007,242		(109	)		1,484,550		(8,467	)		2,491,792		(8,576	)
Mortgage-backed securities - private label - consumer		3,092,306		(95,228	)		-		-			3,092,306		(95,228	)
Government sponsored mortgage-backed securities and SBA loan pools		19,343,785		(575,115	)		-		-			19,343,785		(575,115	)
	$	65,356,233	$	(2,019,152	)	$	3,427,793	$	(90,317	)	$	68,784,026	$	(2,109,469	)

As of December 31, 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	$	1,495,116	$	(4,885	)	$	-	$	-	$	1,495,116	$	(4,885	)
Municipals		4,011,492		(26,991	)		-		-		4,011,492		(26,991	)
Corporates		14,869,853		(171,811	)		-		-		14,869,853		(171,811	)
Mortgage-backed securities - private label - commercial		1,481,805		(10,650	)		-		-		1,481,805		(10,650	)
Mortgage-backed securities - private label - consumer		2,391,511		(25,747	)		-		-		2,391,511		(25,747	)
Government sponsored mortgage-backed securities and SBA loan pools		5,799,696		(74,165	)		-		-		5,799,696		(74,165	)
	$	30,049,473	$	(314,249	)	$	-	$	-	$	30,049,473	$	(314,249	)