Note 2 - Securities

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

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

NOTE 2: 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, 2021
Debt Securities:
U. S. government agencies	$	7,778,256	$	-	$	(217,457	)		7,560,799
Municipals		45,982,657		837,946		(377,567	)		46,443,036
Corporates		37,019,519		634,758		(350,362	)		37,303,915
Mortgage-backed securities - private label - commercial		7,384,249		14,375		(30,202	)		7,368,422
Mortgage-backed securities - private label - consumer		9,057,185		42,493		(46,086	)		9,053,592
Government sponsored mortgage-backed securities and SBA loan pools		43,663,346		512,517		(503,129	)		43,672,734
	$	150,885,212	$	2,042,089	$	(1,524,803	)	$	151,402,498

	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 mortgage-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 December 31, 2021:

	Amortized Cost		Approximate Fair Value
1-5 years	$	1,500,000	$	1,497,325
5-10 years		37,399,244		37,449,981
After ten years		51,881,188		52,360,444
Mortgage-backed securities - private label - commercial not due on a single maturity date		7,384,249		7,368,422
Mortgage-backed securities - private label - consumer ot due on a single maturity date		9,057,185		9,053,592
Government sponsored mortgage-backed securities and SBA loan pools not due on a single maturity date		43,663,346		43,672,734
	$	150,885,212	$	151,402,498

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $20,211,961 and $8,749,409 as of December 31, 2021 and 2020, respectively.

Gross gains of $2,799,165, $552,366 and $244,777 and gross losses of $58,824, $91,337 and $155,213 resulting from sale of available-for-sale securities were realized for the years ended December 31, 2021, 2020 and 2019, respectively. The tax effect of these net gains (losses) was $575,472, $96,816 and $18,809 in 2021, 2020 and 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 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.

No securities were written down for other-than-temporary impairment during the years ended December 31, 2021, 2020 and 2019.

Certain investments in debt 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, 2021 and 2020, was $67,234,562 and $30,049,473, respectively, which is approximately 44% and 18% of the Company’s investment portfolio. These declines primarily resulted from changes in market interest rates.

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, 2021 and 2020.

	December 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	$	4,396,329	$	(99,928	)	$	3,164,470	$	(117,529	)	$	7,560,799	$	(217,457	)
Municipals		12,246,522		(322,939	)		1,538,128		(54,628	)		13,784,650		(377,567	)
Corporates		10,662,195		(181,647	)		5,124,238		(168,715	)		15,786,433		(350,362	)
Mortgage-backed securities - private label - commercial		2,976,069		(27,347	)		1,492,125		(2,855	)		4,468,194		(30,202	)
Mortgage-backed securities - private label - consumer		1,874,865		(46,086	)		-		-			1,874,865		(46,086	)
Government sponsored mortgage-backed securities and SBA loan pools		20,031,633		(322,842	)		3,727,988		(180,287	)		23,759,621		(503,129	)
	$	52,187,613	$	(1,000,789	)	$	15,046,949	$	(524,014	)	$	67,234,562	$	(1,524,803	)

	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	)