Note

– Securities –

The amortized cost and fair values of securities available for sale as of

December 31, 2018

and

2017

are summarized as follows:

	December 31, 2018
	(Dollars in thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Government Agencies	$	17,529	$	54	$	144	$	17,439
Corporate Securities		13,052		76		436		12,692
Mortgage-Backed Securities		168,854		328		3,564		165,618
Municipal Securities		114,472		250		955		113,767
Other Securities		-		-		-		-

Total Securities Available for Sale	$	313,907	$	708	$	5,099	$	309,516

	December 31, 2017
	(Dollars in thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Government Agencies	$	9,008	$	13	$	68	$	8,953
Corporate Securities		13,074		59		92		13,041
Mortgage-Backed Securities		81,763		2		1,824		79,941
Municipal Securities		76,553		353		427		76,479
Other Securities		831		-		97		734

Total Securities Available for Sale	$	181,229	$	427	$	2,508	$	179,148

The following table is a summary of securities with gross unrealized losses and fair values at

December 31, 2018

and

2017,

aggregated by investment category and length of time in a continued unrealized loss position. Due to the nature of these investments and current prevailing market prices, these unrealized losses are considered a temporary impairment of the securities.

	December 31, 2018
	Less Than 12 Months				12 Months or Greater				Total
	(Dollars in thousands)
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Government Agencies	$	4,399	$	28	$	4,610	$	116	$	9,009	$	144
Corporate Securities		6,274		260		2,324		176		8,598		436
Mortgage-Backed Securities		67,770		1,264		61,271		2,300		129,041		3,564
Municipal Securities		40,473		484		29,782		471		70,255		955
Other Securities		-		-		-		-		-		-

Total Securities Available for Sale	$	118,916	$	2,036	$	97,987	$	3,063	$	216,903	$	5,099

	December 31, 2017
	Less Than 12 Months				12 Months or Greater				Total
	(Dollars in thousands)
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Government Agencies	$	4,136	$	56	$	2,004	$	12	$	6,140	$	68
Corporate Securities		4,448		69		2,007		23		6,455		92
Mortgage-Backed Securities		8,320		71		71,182		1,753		79,502		1,824
Municipal Securities		25,798		168		11,927		259		37,725		427
Other Securities		-		-		734		97		734		97

Total Securities Available for Sale	$	42,702	$	364	$	87,854	$	2,144	$	130,556	$	2,508

Management evaluates securities for other than temporary impairment when economic and market conditions warrant such evaluations. Consideration is given to the extent and length of time the fair value has been below cost, the reasons for the decline in value, and the Company’s intent to sell a security or whether it is more likely than

not

that the Company will be required to sell the security before the recovery of its amortized cost. The Company developed a process to identify securities that could potentially have a credit impairment that is other than temporary. This process involves evaluating each security for impairment by monitoring credit performance, collateral type, collateral geography, loan-to-value ratios, credit scores, loss severity levels, pricing levels, downgrades by rating agencies, cash flow projections and other factors as indicators of potential credit issues. When the Company determines that a security is deemed to be other than temporarily impaired, an impairment loss is recognized.

The amortized cost and fair values of securities available for sale as of

December 31, 2018

by contractual maturity are shown below. Actual maturities

may

differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities

may

be called or repaid without any penalties.

	Amortized		Fair
	Cost		Value
	(Dollars in thousands)
Less Than One Year	$	15,293	$	15,295
One to Five Years		74,679		74,213
Over Five to Ten Years		137,471		134,880
Over Ten Years		86,464		85,128

Total Securities Available for Sale	$	313,907	$	309,516

Securities available for sale with a fair value of

$172.2

million and

$103.2

million, respectively, were pledged as collateral on public deposits and for other purposes as required or permitted by law as of

December 31, 2018

and

2017.

There were

$7,000,

$31,000

and

$260,000

realized gross gains from sales or redemptions of securities for the years ended

December 31, 2018,

2017

and

2016,

respectively. There were

$28,000

realized gross losses from sales or redemptions of securities for the year ended

December 31, 2016,

and

realized gross losses from sales or redemptions of securities for the years ended

December 31, 2018

and

2017,

respectively.

The Bank has invested in the Federal Home Loan Bank of Dallas which is included in other equity securities and reflected at cost in these financial statements. The cost of these securities was

$3.6

million and

$4.0

million, respectively, at

December 31, 2018

and

2017.

The Federal Home Loan Bank stock is pledged to secure advances from the Federal Home Loan Bank of Dallas at both

December 31, 2018

and

2017.

The Bank also has investments of

$202,000

and

$100,000

in The Independent Bankers Bank,

$1.5

million and

$1.8

million in McLarty Capital Partners SBIC, L.P.,

$1.6

million and

$1.6

million in McLarty Capital Partners SBIC II, L.P.,

$1.1

million and

$654,000

in Bluehenge Capital Secured Debt SBIC, L.P.,

$13,000

and

$13,000

in New Louisiana Angel Fund

LLC,

$621,000

and

$226,000

in Bankers Insurance, LLC, and

$655,000

and

$252,000

in First National Bankers Bank at

December 31, 2018

and

2017,

respectively. These investments are carried at cost due to the lack of a quoted market price and a ready market for these types of investments.