Note 3 - Investment Securities

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

3. Investment Securities

Investments in debt securities are summarized as follows:

	Amortized		Unrealized		Unrealized		Fair
March 31, 2022	cost		gains		losses		value
Available for sale
State and municipal	$	752,413	$	730	$	5,780	$	747,363
SBA pools		1,300,202		1,682		22,049		1,279,835
Corporate bonds		10,960,028		15,803		347,754		10,628,077
Mortgage-backed securities		143,548,768		27,105		10,514,713		133,061,160
	$	156,561,411	$	45,320	$	10,890,296	$	145,716,435
Held to maturity
State and municipal	$	21,343,559	$	156,037	$	584,827	$	20,914,769

	Amortized		Unrealized		Unrealized		Fair
December 31, 2021	cost		gains		losses		value
Available for sale
State and municipal	$	753,061	$	10,437	$	-	$	763,498
SBA pools		1,418,770		1,656		22,664		1,397,762
Corporate bonds		9,225,153		64,595		55,541		9,234,207
Mortgage-backed securities		139,765,445		336,084		2,259,080		137,842,449
	$	151,162,429	$	412,772	$	2,337,285	$	149,237,916
Held to maturity
State and municipal	$	21,851,975	$	1,020,877	$	67,251	$	22,805,601

Contractual maturities, shown below, will differ from actual maturities because borrowers and issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
March 31, 2022	cost		value		cost		value
Within one year	$	752,350	$	754,818	$	-	$	-
Over one to five years		3,628,616		3,560,563		800,729		800,815
Over five to ten years		7,331,475		7,060,059		1,782,321		1,797,278
Over ten years		-		-		18,760,509		18,316,676
		11,712,441		11,375,440		21,343,559		20,914,769
Mortgage-backed securities and
SBA pools, due in monthly installments		144,848,970		134,340,995		-		-
	$	156,561,411	$	145,716,435	$	21,343,559	$	20,914,769

Securities with a carrying value of $16,852,733 and $14,307,989 as of March 31, 2022 and December 31, 2021, respectively, were pledged as collateral for government deposits and securities sold under repurchase agreements.

During the three months ended March 31, 2022, there were no sales of securities. During the three months ended March 31, 2021, the Company received proceeds of $513,845 from the call at a premium of available for sale investment securities. The Company realized an $8,569 gain on the call of the securities.

The following table sets forth the Company’s gross unrealized losses on a continuous basis for investments in debt securities, by category and length of time, at March 31, 2022 and December 31, 2021.

March 31, 2022	Less than 12 months				12 months or more				Total
Description of investments	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
State and municipal	$	7,738,761	$	412,339	$	924,219	$	178,268	$	8,662,980	$	590,607
SBA pools		-		-		1,039,389		22,049		1,039,389		22,049
Corporate bonds		8,201,181		347,754		-		-		8,201,181		347,754
Mortgage-backed securities		103,977,709		8,212,229		19,134,680		2,302,484		123,112,389		10,514,713
Total	$	119,917,651	$	8,972,322	$	21,098,288	$	2,502,801	$	141,015,939	$	11,475,123

December 31, 2021	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
Description of investments	Fair value		losses		Fair value		losses		Fair value		losses
State and municipal	$	1,324,648	$	35,720	$	715,650	$	31,531	$	2,040,298	$	67,251
SBA pools		-		-		1,133,398		22,664		1,133,398		22,664
Corporate bonds		5,443,886		55,541		-		-		5,443,886		55,541
Mortgage-backed securities		117,840,965		2,034,858		4,781,586		224,222		122,622,551		2,259,080
Total	$	124,609,499	$	2,126,119	$	6,630,634	$	278,417	$	131,240,133	$	2,404,536

Management has the ability and intent to hold securities classified as held to maturity until they mature, at which time the Company should receive full value for the securities. As of March 31, 2022 and December 31, 2021, management did not have the intent to sell any of the held to maturity or available for sale securities with unrealized losses before a recovery of cost. The unrealized losses detailed in the table above were due to increases in market interest rates over the yields available at the time the underlying securities were purchased as well as other market conditions for each particular security based upon the structure and remaining principal balance. The fair values of the debt securities are expected to recover as the securities approach their maturity dates or repricing dates or if market yields for such investments decline. Based on the foregoing factors, as of March 31, 2022 and December 31, 2021, management believes that these unrealized losses are temporary and, accordingly, they have not been recognized in the Company’s consolidated statements of income. At March 31, 2022, 156 available for sale and 20 held to maturity investments had unrealized losses.

At March 31, 2022, none of the available for sale or held to maturity investments were impaired. In determining whether other-than-temporary impairment exists, management considers many factors, including (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) whether the Company intends to sell the security, whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, and whether the Company expects to recover the security’s entire amortized cost basis. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.