Investment Securities

9 Months Ended

Sep. 30, 2019

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, 2019, and December 31, 2018, were as follows:

Securities Available For Sale:

September 30, 2019	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. government treasury securities	$	3,969,317	$	69,723	$	0	$	4,039,040
U.S. government agency securities		39,676,381		1,147,249		10,816		40,812,814
State and municipal securities		4,364,312		180,397		508		4,544,201
Residential mortgage-backed securities		21,870,020		194,406		36,988		22,027,438
Total debt securities AFS	$	69,880,030	$	1,591,775	$	48,312	$	71,423,493

December 31, 2018	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. government treasury securities	$	982,044	$	0	$	27,474	$	954,570
U.S. government agency securities		45,823,595		264,567		881,157		45,207,005
State and municipal securities		7,394,278		30,579		46,922		7,377,935
Residential mortgage-backed securities		4,769,668		21,579		17,180		4,774,067
Total debt securities AFS	$	58,969,585	$	316,725	$	972,733	$	58,313,577

Securities Held to Maturity:

September 30, 2019	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
State and municipal securities	$	25,819,763	$	510,207	$	4,972	$	26,324,998
Residential mortgage-backed securities		5,347,008		178,244		0		5,525,252
Total securities HTM	$	31,166,771	$	688,451	$	4,972	$	31,850,250

December 31, 2018	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
State and municipal securities	$	30,582,785	$	208,480	$	67,434	$	30,723,831
Residential mortgage-backed securities		6,244,288		49,490		7,282		6,286,496
Total securities HTM	$	36,827,073	$	257,970	$	74,716	$	37,010,327

The amortized cost and estimated fair value of securities at September 30, 2019, and December 31, 2018, 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, 2019
Available for Sale:		Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	4,153,906	$	4,160,100
After one through five years		30,550,250		31,436,182
After five through ten years		13,166,732		13,650,251
After ten years		22,009,142		22,176,960
Total debt securities AFS	$	69,880,030	$	71,423,493
Held to Maturity:		Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	6,407,204	$	6,415,966
After one through five years		10,186,745		10,390,617
After five through ten years		9,794,246		10,066,110
After ten years		4,778,576		4,977,557
Total securities HTM	$	31,166,771	$	31,850,250

December 31, 2018
Available for Sale:		Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	2,147,059	$	2,124,645
After one through five years		29,691,474		29,674,236
After five through ten years		21,585,776		20,968,318
After ten years		5,545,276		5,546,378
Total debt securities AFS	$	58,969,585	$	58,313,577
Held to Maturity:		Amortized Cost		Estimated Fair Value
Amounts maturing in:
One year or less	$	6,483,464	$	6,497,910
After one through five years		12,885,021		12,961,209
After five through ten years		11,035,146		11,097,382
After ten years		6,423,442		6,453,826
Total securities HTM	$	36,827,073	$	37,010,327

The following tables summarize the activity of security sales by intention and year for the three and nine months ended September 30, 2019, and 2018.

Securities Available For Sale:

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2019		2018		2019		2018
Proceeds of sales	$	9,358,503	$	0	$	9,358,503	$	0
Gross gains	$	174,283	$	0	$	174,283	$	0
Gross losses		0		0		0		0
Net gains on sales of  available for sale securities	$	174,283	$	0	$	174,283	$	0

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, 2019	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	$	0	$	0
U.S. government agency securities		10,350		989,650		466		2,146,593
State and municipal securities		508		204,928		0		0
Residential mortgage-backed securities		35,716		8,179,689		1,272		108,200
Total debt securities available for sale	$	46,574	$	9,374,267	$	1,738	$	2,254,793
Securities Held to Maturity
Temporarily impaired debt securities:
State and municipal securities	$	4,972	$	470,837	$	0	$	0
Residential mortgage-backed securities		0		0		0		0
Total securities held to maturity	$	4,972	$	470,837	$	0	$	0

December 31, 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	$	27,474	$	954,570
U.S. government agency securities		33,077		6,073,337		848,080		20,015,052
State and municipal securities		3,209		306,792		43,713		1,813,173
Residential mortgage-backed securities		14,199		3,032,237		2,981		129,410
Total debt securities available for sale	$	50,485	$	9,412,366	$	922,248	$	22,912,205
Securities Held to Maturity
Temporarily impaired debt securities:
State and municipal securities	$	20,209	$	7,359,536	$	47,225	$	2,782,627
Residential mortgage-backed securities		5,671		879,487		1,611		89,464
Total securities held to maturity	$	25,880	$	8,239,023	$	48,836	$	2,872,091

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, 2019, nine 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.