Note 3 - Investment Securities

9 Months Ended

Sep. 30, 2021

Notes

Note 3 - Investment Securities

Note 3 – Investment Securities

Debt securities available-for-sale are carried at estimated fair value. Debt securities designated as "Held to Maturity" are carried at amortized cost based on Management's intent and ability to hold such securities to maturity. The amortized cost and estimated fair values of these debt securities were as follows:

	As of September 30, 2021		As of December 31, 2020
	Amortized Cost	Estimated Fair Value	Amortized Cost	Estimated Fair Value
Available-for-Sale
Obligations of states and political subdivisions	$239,977,196	$250,337,387	$204,199,851	$220,663,305
Corporate securities	130,316	422,280	130,316	391,113
	$240,107,512	$250,759,667	$204,330,167	$221,054,418
Held to Maturity
Obligations of states and political subdivisions	$-	$-	$379,002	$380,850

Gross unrealized losses on investment securities totaled $2,609,888 and $1,022 at September 30, 2021 and December 31, 2020, respectively. The following table provides an analysis of investment securities in an unrealized loss position for which an allowance for credit losses is unnecessary as of September 30, 2021 and December 31, 2020:

	Less than 12 Months		12 Months or Longer		Total
September 30, 2021	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
Available for Sale:
Obligations of states and political subdivisions	$58,435,854	$(2,609,888)	$-	$-	$58,435,854	$(2,609,888)

	Less than 12 Months		12 Months or Longer		Total
December 31, 2020	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
Available for Sale:
Obligations of states and political subdivisions	$920,927	$(1,022)	$-	$-	$920,927	$(1,022)

The previous two tables represent 46 and 1 investments held by the Company at September 30, 2021 and December 31, 2020, respectively, the majority of which are rated “A” or higher by Moody’s and/or Standard & Poor’s. The unrealized losses on the Company’s investments listed in the above table were primarily the result of interest rate and market fluctuations. Based on the credit ratings of these investments, along with the consideration of whether the Company has the intent to sell or will be more likely than not required to sell the applicable investment before recovery of amortized cost basis, no allowance for credit losses was determined to be necessary as of September 30, 2021 or December 31, 2020.

The Company’s insurance subsidiaries internally designate certain investments as restricted to cover their policy reserves and loss reserves. Funds are held in separate trusts for the benefit of each insurance subsidiary at U.S. Bank National Association ("US Bank"). US Bank serves as trustee under trust agreements with the Company's property and casualty insurance company subsidiary (“Frandisco P&C”), as grantor, and the non-affiliated insurance companies (who underwrite the policies), as beneficiaries. At September 30, 2021, these trusts held $39.6 million in available-for-sale investment securities at market value. US Bank also serves as trustee under trust agreements with the Company's life insurance company subsidiary (“Frandisco Life”), as grantor, and the non-affiliated insurance companies (who underwrite the policies), as beneficiaries. At September 30, 2021, these trusts held $24.4 million in available-for-sale investment securities at market value. The amounts required to be held in each trust change as required reserves change. All earnings on assets in the trusts are remitted to the Company's insurance subsidiaries.