NOTE 2.

SECURITIES

Debt and equity securities have been classified in the balance sheets according to management’s intent. The amortized costs of securities available for sale and their approximate fair values at June 30, 2016 and December 31, 2015 follow:

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value

June 30, 2016
Government-sponsored enterprises	$	4,000,000	$	2,825	$	-	$	4,002,825
Mortgage-backed securities		16,548		436		-		16,984
Corporate bonds		300,000		-		-		300,000
	$	4,316,548	$	3,261	$	-	$	4,319,809

December 31, 2015
Government-sponsored enterprises	$	4,498,227	$	3,130	$	10,117	$	4,491,240
Mortgage-backed securities		20,233		446		-		20,679
Corporate bonds		300,000		-		300		299,700
Equities and mutual funds		563,321		14,644		48,841		529,124
	$	5,381,781	$	18,220	$	59,258	$	5,340,743

At June 30, 2016 and December 31, 2015, substantially all government-sponsored enterprises securities were pledged as collateral on public deposits and for other purposes as required or permitted by law. The mortgage-backed securities were pledged to the Federal Home Loan Bank.

Maturities of mortgage-backed bonds are stated based on contractual maturities. Actual maturities of these bonds may vary as the underlying mortgages are prepaid. The investment in equities and mutual funds by nature have no maturity date and are classified as due in one year or less. The scheduled maturities of securities (all available for sale) at June 30, 2016, were as follows:

	Amortized Cost		Fair Value
Due in one year or less	$	500,000	$	500,015
Due after one year through five years		3,808,872		3,811,838
Due after five years through ten years		805		831
Due after ten years		6,871		7,125
	$	4,316,548	$	4,319,809

There were no unrealized investment losses at June 30, 2016. The following table shows investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2015. These unrealized losses on investment securities are a result of volatility in interest rates which relate to government-sponsored enterprises and corporate bonds issued by other banks and market volatility as it relates to equity and mutual fund investments at December 31, 2015.

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

December 31, 2015
Government-sponsored enterprises	$	2,488,110	$	10,117	$	-	$	-	$	2,488,110	$	10,117
Corporate bonds		-		-		299,700		300		299,700		300
Equities and mutual funds		63,865		22,785		41,140		26,056		105,005		48,841
	$	2,551,975	$	32,902	$	340,840	$	26,356	$	2,892,815	$	59,258

Management considers the nature of the investment, the underlying causes of the decline in the market value and the severity and duration of the decline in market value in determining if impairment is other than temporary. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Based upon this evaluation, there are no securities in the portfolio at June 30, 2016, with unrealized losses

The Company had realized losses of $33,127 from the sales of equity and mutual fund investment securities for the six month period ended June 30, 2016, and realized gains of $4,376 from the sales of equity and mutual fund investment securities for the six month periods ended June 30, 2015. Total proceeds from the sales amounted to $530,710 and $11,135 in 2016 and 2015, respectively.