Investment Securities

3 Months Ended

Mar. 31, 2016

Schedule of Investments [Abstract]

Investment Securities

NOTE 3

Investment Securities

Debt and equity securities have been classified in the consolidated balance sheets according to management’s intent. The amortized cost of securities as shown in the consolidated balance sheets and their estimated fair values at March 31, 2016, and December 31, 2015, were as follows:

Securities Available For Sale:

March 31, 2016	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. government agency securities	$	31,452,651	$	1,500,841	$	0	$	32,953,492
State and municipal securities		2,567,781		62,048		0		2,629,829
Residential mortgage-backed securities		3,053,360		137,127		0		3,190,487
Corporate notes		2,496,439		0		27,624		2,468,815
Total debt securities AFS		39,570,231		1,700,016		27,624		41,242,623
Equity securities		12,000		0		0		12,000
Total securities AFS	$	39,582,231	$	1,700,016	$	27,624	$	41,254,623

December 31, 2015	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. government agency securities	$	42,074,712	$	782,567	$	214,957	$	42,642,322
State and municipal securities		2,573,844		33,840		0		2,607,684
Residential mortgage-backed securities		3,601,949		140,934		1,438		3,741,445
Corporate notes		2,496,320		0		23,360		2,472,960
Total debt securities AFS		50,746,825		957,341		239,755		51,464,411
Equity securities		12,000		0		0		12,000
Total securities AFS	$	50,758,825	$	957,341	$	239,755	$	51,476,411

Securities Held to Maturity:

March 31, 2016	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
State and municipal securities	$	54,197,609	$	1,413,852	$	3,208	$	55,608,253
Residential mortgage-backed securities		5,175,691		222,404		0		5,398,095
Total securities HTM	$	59,373,300	$	1,636,256	$	3,208	$	61,006,348

December 31, 2015	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
State and municipal securities	$	54,775,093	$	1,124,007	$	41,153	$	55,857,947
Residential mortgage-backed securities		6,113,711		227,041		0		6,340,752
Total securities HTM	$	60,888,804	$	1,351,048	$	41,153	$	62,198,699

The amortized cost and estimated fair value of securities at March 31, 2016, and December 31, 2015, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

March 31, 2016
Available for Sale:	Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	0	$	0
After one through five years		14,269,466		14,570,727
After five through ten years		21,265,081		22,522,317
After ten years		4,035,684		4,149,579
Total debt securities AFS		39,570,231		41,242,623
Equity securities		12,000		12,000
Total securities AFS	$	39,582,231	$	41,254,623
Held to Maturity:		Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	4,924,637	$	4,933,645
After one through five years		26,376,148		26,807,727
After five through ten years		20,684,858		21,637,792
After ten years		7,387,657		7,627,184
Total securities HTM	$	59,373,300	$	61,006,348

December 31, 2015
Available for Sale:	Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	0	$	0
After one through five years		22,374,572		22,310,228
After five through ten years		22,553,504		23,222,962
After ten years		5,818,749		5,931,221
Total debt securities AFS		50,746,825		51,464,411
Equity securities		12,000		12,000
Total securities AFS	$	50,758,825	$	51,476,411
Held to Maturity:		Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	3,956,629	$	3,968,196
After one through five years		27,302,169		27,617,796
After five through ten years		21,412,080		22,253,863
After ten years		8,217,926		8,358,844
Total securities HTM	$	60,888,804	$	62,198,699

Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in continuous loss position, follows:

March 31, 2016	Less Than Twelve Months				Twelve Months or More
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
Securities Available for Sale
Temporarily impaired debt securities:
U.S. government agency securities	$	0	$	0	$	0	$	0
State and municipal securities		0		0		0		0
Residential mortgage-backed securities		0		0		0		0
Corporate notes		26,559		1,969,880		1,065		498,935
Total debt securities available for sale	$	26,559	$	1,969,880	$	1,065	$	498,935
Securities Held to Maturity
Temporarily impaired debt securities:
State and municipal securities	$	3,135	$	3,968,429	$	73	$	645,631
Residential mortgage-backed securities		0		0		0		0
Total securities held to maturity	$	3,135	$	3,968,429	$	73	$	645,631

December 31, 2015	Less Than Twelve Months				Twelve Months or More
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
Securities Available for Sale
Temporarily impaired debt securities:
U.S. government agency securities	$	73,907	$	11,885,323	$	141,050	$	5,858,950
State and municipal securities		0		0		0		0
Residential mortgage-backed securities		1,438		441,997		0		0
Corporate notes		22,360		1,973,960		1,000		499,000
Total debt securities available for sale	$	97,705	$	14,301,280	$	142,050	$	6,357,950
Securities Held to Maturity
Temporarily impaired debt securities:
State and municipal securities	$	26,435	$	7,250,634	$	14,718	$	994,476
Residential mortgage-backed securities		0		0		0		0
Total securities held to maturity	$	26,435	$	7,250,634	$	14,718	$	994,476

During the three months ended March 31, 2016, we sold mortgage-backed securities in the amount of $924,406 which resulted in a realized gain of $35,344 and U. S. government agency securities in the amount of $4,954,459 which resulted in a realized loss of $7,438 for a net realized gain of $27,906. Of the investment securities sold, $5,302,031 were available for sale and $576,834 were held to maturity. These transactions occurred in order to provide liquidity and remove small lots of mortgage-backed securities. The small lots of held to maturity mortgage-backed securities sold were paid down by over 85% of face value. No investment securities were sold in the first quarter of 2015.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Corporation to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At March 31, 2016, fifteen debt securities with unrealized losses have depreciated 0.4% from the Corporation’s amortized cost basis. These unrealized losses relate principally to current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government, its agencies, or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. Management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available-for-sale. Also, no declines in debt securities are deemed to be other-than-temporary.