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, 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

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2016
Debt Securities:
Municipals	$	39,357,506	$	65,673	$	(1,085,654	)	$	38,337,525
Corporates		7,003,986		54,050		(4,514	)		7,053,522
Government sponsored mortgage-backed securities and SBA loan pools		48,115,793		19,432		(1,127,037	)		47,008,188
	$	94,477,285	$	139,155	$	(2,217,205	)	$	92,399,235

Maturities of available-for-sale debt securities as of

December 31,

201

	Amortized Cost		Approximate Fair Value
1-5 years	$	563,318	$	571,615
5-10 years		9,238,773		9,278,788
After ten years		27,106,116		27,113,055
Government sponsored mortgage-backed securities and SBA loan pools not due on a single maturity date		45,414,845		44,515,215
	$	82,323,052	$	81,478,673

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, 2017
Debt Securities:
Government sponsored mortgage-backed securities	$	16,457	$	327	$	(55	)	$	16,729

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Approximate Fair Value
As of December 31, 2016
Debt Securities:
Government sponsored mortgage-backed securities	$	27,528	$	625	$	-	$	28,153

Maturities of held-to-maturity securities as of

December 31,

201

		Amortized Cost				Approximate Fair Value
Government sponsored mortgage-backed securities not due on a single maturity date		$	16,457			$	16,729

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

$35,355,969

and

$47,617,900

as of

December 31, 2017

and

2016,

respectively.

Gross gains

$165,237,

$261,875

and

$205,909

and gross losses of

$118,908,

$69,338

and

$18,819

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

December 31, 2017,

2016

and

2015,

respectively. The tax effect of these net gains was

$17,142,

$71,239

and

$69,223

2017,

2016

and

2015,

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, 2017,

2016

and

2015.

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, 2017

and

2016,

was

$62,107,660

and

$79,361,229,

respectively, which is approximately

76%

and

86%

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,

201

and

2016.

	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	)

	December 31, 2016
	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	$	33,084,816	$	(1,082,021	)	$	179,402	$	(3,633	)	$	33,264,218	$	(1,085,654	)
Corporates		1,996,172		(3,828	)		881,100		(686	)		2,877,272		(4,514	)
Government sponsored mortgage-backed securities and SBA loan pools		39,570,463		(1,022,511	)		3,649,276		(104,526	)		43,219,739		(1,127,037	)
	$	74,651,451	$	(2,108,360	)	$	4,709,778	$	(108,845	)	$	79,361,229	$	(2,217,205	)