NOTE 2: Securities

Available-for-sale debt securities are recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

For debt securities with fair value below amortized cost, when the Company does not intend to sell a debt security, and it is more likely than not the Company will not have to sell the security before recovery of its cost basis, the Company recognizes the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income.

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


			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
Available-for-Sale Debt Securities:

September 30, 2020 (unaudited):
Mortgage-backed securities of government sponsored entities	$	5,499,982	$	42,684	$	(2,928)	$	5,539,738

December 31, 2019:
Mortgage-backed securities of government sponsored entities	$	6,740,450	$	7,335	$	(14,572)	$	6,733,213

The Company had no sales of investment securities during the three month and nine month periods ended September 30, 2020 and 2019. The Company had not pledged any of its investment securities as of September 30, 2020 or December 31, 2019.

The amortized cost and fair value of available-for-sale securities at September 30, 2020 and December 31, 2019, by contractual maturity is not disclosed for mortgage-backed securities, as expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

Certain investments in debt securities have fair values at an amount less than their historical cost. The total fair value of these investments at September 30, 2020 and December 31, 2019 was $197,178 and $5,814,388, respectively, which was approximately 3.6% and 86.4%, respectively, of the Company’s investment portfolio at those respective dates.

The following tables show the 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 class and length of time that the individual securities have been in continuous unrealized loss position at September 30, 2020 and December 31, 2019:


	Less than 12 Months				12 Months or More				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
September 30, 2020:
Mortgage-backed securities of government sponsored entities	$	51,529	$	(518)	$	145,649	$	(2,410)	$	197,178	$	(2,928)

December 31, 2019:
Mortgage-backed securities of government sponsored entities	$	5,582,540	$	(14,154)	$	231,848	$	(418)	$	5,814,388	$	(14,572)