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Note 2 - Investments
 9 Months Ended
Sep. 30, 2016
Notes to Financial Statements  
Investment [Text Block]
Note 2. Investments
 
The amortized cost and fair value of available for sale and held to maturity investments as of September 30, 2016 and December
 
31, 2015 is as follows:
 
 
 
September 30, 2016
 
 
 
Cost or
 
 
Gross
 
 
Gross
 
 
 
 
 
 
 
Amortized
 
 
Unrealized
 
 
Unrealized
 
 
 
 
 
 
 
Cost
 
 
Gains
 
 
Losses
 
 
Fair Value
 
 
 
(unaudited)
 
Available for sale:
                                
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
US Treasury securities
 
$
313,778
 
 
$
7,075
 
 
$
-
 
 
$
320,853
 
Corporate bonds
 
 
3,829,016
 
 
 
146,421
 
 
 
(8,111
)
 
 
3,967,326
 
Municipal bonds
 
 
2,687,059
 
 
 
192,521
 
 
 
(647
)
 
 
2,878,933
 
Mortgage backed and asset backed securities
 
 
3,519,191
 
 
 
119,852
 
 
 
(2,914
)
 
 
3,636,129
 
Total fixed maturities
 
 
10,349,044
 
 
 
465,869
 
 
 
(11,672
)
 
 
10,803,241
 
Equities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equities
 
 
4,338,345
 
 
 
314,844
 
 
 
(86,124
)
 
 
4,567,065
 
Other equity investments
 
 
247,754
 
 
 
32,050
 
 
 
(894
)
 
 
278,910
 
Total equities
 
 
4,586,099
 
 
 
346,894
 
 
 
(87,018
)
 
 
4,845,975
 
Total available for sale
 
$
14,935,143
 
 
$
812,763
 
 
$
(98,690
)
 
$
15,649,216
 
 
 
   
December 31, 2015
  
   
Cost or
    
Gross
    
Gross
          
   
Amortized
    
Unrealized
    
Unrealized
          
   
Cost
    
Gains
    
Losses
    
Fair Value
  
Available for sale:
                                
Fixed maturities:
                                
US Treasury securities
   $ 461,132     $ -     $ (34,816 )   $ 426,316  
Corporate bonds
     3,039,539       15,715       (143,701 )     2,911,553  
Municipal bonds
     1,726,098       28,634       (10,595 )     1,744,137  
Mortgage backed and asset backed securities
     3,083,390       19,554       (53,831 )     3,049,113  
Total fixed maturities
     8,310,159       63,903       (242,943 )     8,131,119  
Equities:
                                
Equities
     3,387,927       219,883       (177,756 )     3,430,054  
Other equity investments
     137,778       36,436       -       174,214  
Total equities
     3,525,705       256,319       (177,756 )     3,604,268  
Total available for sale
   $ 11,835,864     $ 320,222     $ (420,699 )   $ 11,735,387  
 
The amortized cost and fair value of debt securities as of September 30, 2016, by contractual maturity, are shown below. Equity securities do not have stated maturity dates and therefore are not included in the following maturity summary. Actual maturities may 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
  
 
  
(unaudited)
  
Amounts maturing in:                
One year or less
   $ 49,879     $ 49,925  
After one year through five years
     1,820,706       1,839,613  
After five years through ten years
     1,603,698       1,665,396  
More than 10 years
     3,355,570       3,612,178  
Mortgage backed and asset backed securities
     3,519,191       3,636,129  
Total fixed maturities
   $ 10,349,044     $ 10,803,241  
 
 
 
 
US Alliance Corporation
Notes to Consolidated Financial Statements (unaudited) 
 
Proceeds from the sale of securities, maturities, and asset paydowns for the first nine months of 2016 and 2015 were $764,173
and $418,459, respectively. Realized gains and losses related to the sale of securities are summarized as follows:
 
 
 
Nine Months Ended September 30,
 
   
(unaudited)
  
 
 
2016
 
  
2015
  
Gross gains
 
$
42,719
 
   $ 7,793  
Gross losses
 
 
(2,066
)
    (8,642 )
Net security (losses) gains
 
$
40,653
 
   $ (849 )
 
Proceeds from the sale of securities, maturities, and asset paydowns for the three months ended September 30, 2016 and 2015 were $204,422
and $192,032, respectively. Realized gains and losses related to the sale of securities for the three months ended September 30, 2016 and 2015 are summarized as follows:
 
 
 
Three Months Ended September 30,
 
   
(unaudited)
  
 
 
2016
 
  
2015
  
Gross gains
 
$
29,889
 
   $ 7,691  
Gross losses
 
 
-
 
     (8,642 )
Net security (losses) gains
 
$
29,889
 
   $ (951 )
 
Gross unrealized losses by duration are summarized as follows:
 
   
(unaudited)
  
 
 
Less than 12 months
 
 
Greater than 12 months
 
 
Total
 
 
 
Fair
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
 
Value
 
 
Loss
 
 
Value
 
 
Loss
 
 
Value
 
 
Loss
 
September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
 
$
860,155
 
 
$
(3,071
)
 
$
193,590
 
 
$
(5,040
)
 
$
1,053,745
 
 
$
(8,111
)
Municipal bonds
 
 
99,353
 
 
 
(647
)
 
 
-
 
 
 
-
 
 
 
99,353
 
 
 
(647
)
Mortgage backed and asset backed securities
 
 
23,436
 
 
 
(17
)
 
 
128,089
 
 
 
(2,897
)
 
 
151,525
 
 
 
(2,914
)
Total fixed maturities
 
 
982,944
 
 
 
(3,735
)
 
 
321,679
 
 
 
(7,937
)
 
 
1,304,623
 
 
 
(11,672
)
Equities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equities
 
 
536,449
 
 
 
(14,499
)
 
 
1,135,166
 
 
 
(71,625
)
 
 
1,671,615
 
 
 
(86,124
)
Other equity investments
 
 
56,665
 
 
 
(894
)
 
 
-
 
 
 
-
 
 
 
56,665
 
 
 
(894
)
Total equities
 
 
593,114
 
 
 
(15,393
)
 
 
1,135,166
 
 
 
(71,625
)
 
 
1,728,280
 
 
 
(87,018
)
Total available for sale
 
$
1,576,058
 
 
$
(19,128
)
 
$
1,456,845
 
 
$
(79,562
)
 
$
3,032,903
 
 
$
(98,690
)
 
 
   
Less than 12 months
    
Greater than 12 months
    
Total
  
   
Fair
    
Unrealized
    
Fair
    
Unrealized
    
Fair
    
Unrealized
  
   
Value
    
Loss
    
Value
    
Loss
    
Value
    
Loss
  
December 31, 2015
                                                
Available for sale:
                                                
Fixed maturities:
                                                
US Treasury securities
   $ 197,719     $ (1,351 )   $ 228,597     $ (33,465 )   $ 426,316     $ (34,816 )
Corporate bonds
     2,141,253       (143,701 )     -       -       2,141,253       (143,701 )
Municipal bonds
     675,885       (10,595 )     -       -       675,885       (10,595 )
Mortgage backed and asset backed securities
     1,943,017       (39,189 )     438,173       (14,642 )     2,381,190       (53,831 )
Total fixed maturities
     4,957,874       (194,836 )     666,770       (48,107 )     5,624,644       (242,943 )
Equities:
                                                
Equities
     1,036,877       (75,352 )     820,370       (102,404 )     1,857,247       (177,756 )
Total equities
     1,036,877       (75,352 )     820,370       (102,404 )     1,857,247       (177,756 )
Total available for sale
   $ 5,994,751     $ (270,188 )   $ 1,487,140     $ (150,511 )   $ 7,481,891     $ (420,699 )
 
Unrealized losses occur from market price declines that may be due to a number of factors, including economic downturns, changes in interest rates, competitive forces within an industry, issuer specific events, operational difficulties, lawsuits, and market pricing anomalies caused by factors such as temporary lack of liquidity.
 
 
 
US Alliance Corporation
Notes to Consolidated Financial Statements (unaudited)
 
 
 
The total number of securities in the investment portfolio in an unrealized loss position as of September 30, 2016 was 24, which represented an unrealized loss of $98,690 of the aggregate carrying value of those securities. The 24 securities breakdown as follows: 10 bonds, 3 mortgage and asset backed securities, 6 common stocks, 2 high yield corporate bond fund, 2 preferred stock index fund, and 1 senior loan fund. The total number of securities in the investment portfolio in an unrealized loss position as of December 31, 2015 was 70, which represented an unrealized loss of $420,699 of the aggregate carrying value of those securities. The 70 securities breakdown as follows: 36 bonds, 25 mortgage and asset backed securities, 5 common stocks, 2 high yield corporate bond fund, 1 preferred stock index fund, and 1 senior loan fund. The Company determined that no securities were considered to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. The unrealized gains on the remainder of the available for sale portfolio as of September 30, 2016 and December 31, 2015 were $812,763 and $320,222, respectively.