Securities

12 Months Ended

Dec. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Securities

Note 3: Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale Securities
December 31, 2016:
U.S. Government and federal agencies	$	13,985,863	$	9,641	$	(661,964	)	$	13,333,540
Mortgage-backed securities (Government-sponsored enterprises - residential)		45,457,262		70,512		(1,114,597	)		44,413,177
Municipal bonds		42,500,579		558,776		(644,632	)		42,414,723
	$	101,943,704	$	638,929	$	(2,421,193	)	$	100,161,440
December 31, 2015:
U.S. Government and federal agencies	$	15,979,475	$	44,972	$	(85,750	)	$	15,938,697
Mortgage-backed securities (Government-sponsored enterprises - residential)		23,067,200		211,987		(100,792	)		23,178,395
Municipal bonds		47,229,171		1,306,328		(179,259	)		48,356,240
	$	86,275,846	$	1,563,287	$	(365,801	)	$	87,473,332

The amortized cost and fair value of available-for-sale securities at December 31, 2016, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-sale
	Amortized Cost		Fair  Value
Within one year	$	1,036,978	$	1,043,616
One to five years		9,201,183		9,315,610
Five to ten years		27,297,515		27,081,945
After ten years		18,950,766		18,307,092
		56,486,442		55,748,263
Mortgage-backed securities		45,457,262		44,413,177
Totals	$	101,943,704	$	100,161,440

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $42,463,127 at December 31, 2016 and $25,681,115 at December 31, 2015.

The carrying value of securities sold under agreement to repurchase amounted to $9,709,793 at December 31, 2016 and $7,591,475 at December 31, 2015.

Gross gains of $402,981 and $352,983 and gross losses of $(3,382) and $(32,398) resulting from sales of available-for-sale securities were realized for 2016 and 2015, respectively. The tax provision applicable to these net realized gains amounted to $135,864 and $108,999, respectively.

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, 2016 and 2015, was $71,583,259 and $30,676,768, which is approximately 71% and 35%, respectively, of the Company’s available-for-sale investment portfolio. The declines primarily resulted from recent changes in market interest rates.

Management believes the declines in fair value for these securities are temporary.

The following table shows the Company’s investments’ gross unrealized losses and fair value of the Company’s 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, 2016 and 2015:

	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
Available-for-sale Securities
U.S. Government agencies	$	12,333,924	$	(661,964	)	$	—	$	—		$	12,333,924	$	(661,964	)
Mortgage-backed securities (Government-sponsored enterprises - residential)		37,144,915		(1,114,597	)		—		—			37,144,915		(1,114,597	)
Municipal bonds		22,104,420		(644,632	)		—		—			22,104,420		(644,632	)
Total temporarily impaired securities	$	71,583,259	$	(2,421,193	)	$	—	$	—		$	71,583,259	$	(2,421,193	)
	December 31, 2015
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Available-for-sale Securities
U.S. Government agencies	$	8,591,014	$	(49,205	)	$	1,809,745	$	(36,545	)	$	10,400,759	$	(85,750	)
Mortgage-backed securities (Government-sponsored enterprises - residential)		5,843,754		(45,886	)		2,257,674		(54,906	)		8,101,428		(100,792	)
Municipal bonds		5,440,291		(48,383	)		6,734,290		(130,876	)		12,174,581		(179,259	)
Total temporarily impaired securities	$	19,875,059	$	(143,474	)	$	10,801,709	$	(222,327	)	$	30,676,768	$	(365,801	)

U.S. Government Agencies

The unrealized losses on the Company’s investments in direct obligations of U.S. government agencies were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2016.

Residential Mortgage-backed Securities

The unrealized losses on the Company’s investment in residential mortgage-backed securities were caused by changes in interest rates. The Company expects to recover the amortized cost basis over the term of the securities. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2016.

Municipal Bonds

The unrealized losses on the Company’s investments in securities of municipal bonds were caused by changes in interest rates. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2016.