Investment Securities

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Note 2. Investment Securities

The amortized cost and estimated fair value of securities available-for-sale and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income at December 31, 2018 and 2017 were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized
2018	Cost		Gains		Losses		Fair Value

Securities available-for-sale
Obligations of U.S.
Government agencies	$	99,365,930	$	—	$	3,388,147	$	95,977,783
Mortgage-backed securities		259,742,501		4,921		12,373,269		247,374,153
State, County, Municipals		105,590,858		67,888		4,264,228		101,394,518
Total	$	464,699,289	$	72,809	$	20,025,644	$	444,746,454

			Gross		Gross
	Amortized		Unrealized		Unrealized
2017	Cost		Gains		Losses		Fair Value

Securities available-for-sale
Obligations of U.S.
Government agencies	$	180,647,580	$	—	$	4,199,022	$	176,448,558
Mortgage-backed securities		213,707,125		43,197		5,327,265		208,423,057
State, County, Municipals		118,786,297		849,364		2,535,126		117,100,535
Other investments		2,865,294		208,933		—		3,074,227
Total	$	516,006,296	$	1,101,494	$	12,061,413	$	505,046,377

During the 2

quarter of 2018, management reclassified Small Business Administration Pools (“SBAP”) that are backed by mortgages from the Obligation of U.S. Government agencies portfolio to the Mortgage backed securities portfolio. This resulted in a reclassification of $76,518,180 in securities and did not have an impact on shareholders’ equity or net income.

The following tables show the gross unrealized losses and fair value of the Company’s investments classified as AFS investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2018 and 2017.

A summary of unrealized loss information for AFS securities, categorized by security type follows (in thousands):

December 31, 2018	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Losses		Value		Losses		Value		Losses

Obligations of U.S.
Government agencies	$	—		—	$	95,977,783		3,388,147	$	95,977,783		3,388,147
Mortgage backed securities		12,257,636		179,281		234,928,705		12,193,988		247,186,341		12,373,269
State, County, Municipal		12,623,964		285,275		76,535,741		3,978,953		89,159,705		4,264,228
Total	$	24,881,600		464,556	$	407,442,229		19,561,088	$	432,323,829		20,025,644

December 31, 2017	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Losses		Value		Losses		Value		Losses

Obligations of U.S.
Government agencies	$	15,681,866		223,535	$	160,766,691		3,975,487	$	176,448,557		4,199,022
Mortgage backed securities		88,499,852		1,613,091		116,753,236		3,714,175		205,253,088		5,327,266
State, County, Municipal		7,117,600		59,041		66,973,174		2,476,084		74,090,774		2,535,125
Total	$	111,299,318		1,895,667	$	344,493,101		10,165,746	$	455,792,419		12,061,413

Investment Securities.

The Company’s unrealized losses on its Obligations of United States Government agencies, Mortgage backed securities and State, County and Municipal bonds are the result of an upward trend in interest rates, mainly in the mid-term sector. The Company does not intend to sell any of the securities in an unrealized loss position, and it is not more likely than not that the Company will be required to sell any such security prior to the recovery of its amortized cost basis, which may be at maturity. Furthermore, even though a number of these securities have been in a continuous unrealized loss position for a period greater than twelve months, the Company is collecting principal and interest from the respective issuers as scheduled. None of the unrealized losses disclosed in the previous table are related to credit deterioration. As such, the Company did not record any other-than-temporary impairment for the years ended December 31, 2018 or 2017.

Other Investments.

The Company, at December 31, 2017, owned an investment in a pooled trust preferred security. During 2018, the Company sold the pooled trust preferred security and no longer has any of these type of investments in its portfolio. The impact of the transaction is further detailed in Note 16.

The amortized cost and estimated fair value of securities at December 31, 2018, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized
	Cost		Fair Value
Securities AFS
Due in one year or less	$	1,875,288	$	1,877,665
Due after one year through five years		91,948,838		89,121,194
Due after five years through ten years		32,801,788		31,718,293
Due after ten years		78,330,873		74,655,149
Residential mortgage backed securities		187,776,954		179,235,806
Commercial mortgage backed securities		71,965,548		68,138,347
Total	$	464,699,289	$	444,746,454

Investment securities with fair values of $357,231,440 and $373,956,804 at December 31, 2018 and December 31, 2017, respectively, were pledged as collateral for public deposits and securities sold under agreement to repurchase.

Gross realized gains and losses are included in net gains on sales of securities. Total gross realized gains and gross realized losses from the sale of investment securities for each of the years ended December 31 were:

	2018		2017		2016
Gross realized gains	$	171,376	$	633,244	$	112,881
Gross realized losses		160,329		528,536		—
Net realized gains	$	11,047	$	104,708	$	112,881