Investment Securities

9 Months Ended

Sep. 30, 2018

Schedule of Investments [Abstract]

Investment Securities

NOTE 3

Investment Securities

Debt 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 September 30, 2018, and December 31, 2017, were as follows:

Securities Available For Sale:

September 30, 2018	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. government treasury securities	$	981,520	$	0	$	56,360	$	925,160
U.S. government agency securities		46,873,936		59,672		1,511,923		45,421,685
State and municipal securities		7,416,868		1,425		111,000		7,307,293
Residential mortgage-backed securities		4,972,506		20,655		71,094		4,922,067
Total debt securities AFS	$	60,244,830	$	81,752	$	1,750,377	$	58,576,205

December 31, 2017	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. government treasury securities	$	979,983	$	0	$	12,213	$	967,770
U.S. government agency securities		43,978,023		580,366		698,299		43,860,090
State and municipal securities		7,482,912		129,231		38,454		7,573,689
Residential mortgage-backed securities		1,812,905		51,651		2,844		1,861,712
Total debt securities AFS	$	54,253,823	$	761,248	$	751,810	$	54,263,261

Securities Held to Maturity:

September 30, 2018	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
State and municipal securities	$	34,423,325	$	173,948	$	208,179	$	34,389,094
Residential mortgage-backed securities		2,537,273		27,566		18,796		2,546,043
Total securities HTM	$	36,960,598	$	201,514	$	226,975	$	36,935,137

December 31, 2017	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
State and municipal securities	$	41,447,092	$	527,632	$	48,083	$	41,926,641
Residential mortgage-backed securities		3,143,749		77,542		132		3,221,159
Total securities HTM	$	44,590,841	$	605,174	$	48,215	$	45,147,800

The amortized cost and estimated fair value of debt securities at September 30, 2018, and December 31, 2017, 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.

September 30, 2018
Available for Sale:	Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	0	$	0
After one through five years		24,783,056		24,516,365
After five through ten years		29,782,725		28,443,405
After ten years		5,679,049		5,616,435
Total debt securities AFS	$	60,244,830	$	58,576,205
Held to Maturity:		Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	8,145,043	$	8,157,231
After one through five years		14,799,992		14,853,083
After five through ten years		11,471,319		11,414,767
After ten years		2,544,244		2,510,056
Total securities HTM	$	36,960,598	$	36,935,137

December 31, 2017
Available for Sale:	Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	0	$	0
After one through five years		15,437,594		15,556,274
After five through ten years		35,610,754		35,441,617
After ten years		3,205,475		3,265,370
Total debt securities AFS	$	54,253,823	$	54,263,261
Held to Maturity:		Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	9,812,609	$	9,821,948
After one through five years		19,467,142		19,680,375
After five through ten years		12,546,856		12,806,108
After ten years		2,764,234		2,839,369
Total securities HTM	$	44,590,841	$	45,147,800

 The following tables summarize the activity of security sales by intention and year for the three and nine months ended September 30, 2018, and 2017.

Securities Available For Sale:

	Three Months Ended				Nine Months Ended
	September 30, 2018		September 30, 2017		September 30, 2018		September 30, 2017
Proceeds of sales	$	0	$	3,065,000	$	0	$	5,741,211
Gross gains	$	0	$	19,795	$	0	$	186,610
Gross losses		0		0		0		0
Net gains on sales of  available for sale securities	$	0	$	19,795	$	0	$	186,610

There were no sales of held to maturity securities during the three and nine months ended September 30, 2018 and 2017.

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:

September 30, 2018	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 treasury securities	$	0	$	0	$	56,360	$	925,160
U.S. government agency securities		261,504		16,365,195		1,250,419		18,688,666
State and municipal securities		46,087		4,649,043		64,913		1,800,941
Residential mortgage-backed securities		65,650		4,229,470		5,444		137,343
Total debt securities available for sale	$	373,241	$	25,243,708	$	1,377,136	$	21,552,110
Securities Held to Maturity
Temporarily impaired debt securities:
State and municipal securities	$	157,970	$	17,691,528	$	50,209	$	1,456,042
Residential mortgage-backed securities		18,796		1,019,175		0		0
Total securities held to maturity	$	176,766	$	18,710,703	$	50,209	$	1,456,042

December 31, 2017	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 treasury securities	$	12,213	$	967,770	$	0	$	0
U.S. government agency securities		34,083		4,988,630		664,216		18,347,439
State and municipal securities		16,836		975,900		21,618		877,798
Residential mortgage-backed securities		0		0		2,844		188,081
Total debt securities available for sale	$	63,132	$	6,932,300	$	688,678	$	19,413,318
Securities Held to Maturity
Temporarily impaired debt securities:
State and municipal securities	$	15,954	$	5,521,443	$	32,129	$	1,281,797
Residential mortgage-backed securities		132		146,203		0		0
Total securities held to maturity	$	16,086	$	5,667,646	$	32,129	$	1,281,797

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 September 30, 2018, one-hundred and nine debt securities with unrealized losses have depreciated 2.9% 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.