NOTE 3 – INVESTMENT SECURITIES

At December 31, 2015 and December 31, 2014, the amortized cost and estimated fair value of the Company’s investment securities portfolio are summarized as follows:


Available for Sale	Amortized		Gross Unrealized				Estimated
December 31, 2015	cost		Gains		Losses		Fair Value
U.S. government agency	$	3,714,681	$	95,958	$	—	$	3,810,639
U.S. treasury securities		5,907,341		—		(35,201)		5,872,140
Residential mortgage-backed securities		14,836,750		287,365		(100,890)		15,023,225
State and municipal		4,510,883		21,096		(425)		4,531,554
Corporate bonds		4,024,894		33,246		—		4,058,140
Total debt securities		32,994,549		437,665		(136,516)		33,295,698
Equity securities		78,752		—		(22,217)		56,535
Totals	$	33,073,301	$	437,665	$	(158,733)	$	33,352,233

Held-to-Maturity	Amortized		Gross Unrealized				Estimated
December 31, 2015	cost		Gains		Losses		Fair Value
U.S. government agency	$	334,257	$	5,891	$	—	$	340,148
Residential mortgage-backed securities		1,238,908		17,206		—		1,256,114
Total debt securities		1,573,165		23,097		—		1,596,262
Totals	$	1,573,165	$	23,097	$	—	$	1,596,262

Available for Sale	Amortized		Gross Unrealized				Estimated
December 31, 2014	cost		Gains		Losses		Fair Value
U.S. government agency	$	7,561,238	$	217,033	$	—	$	7,778,271
Residential mortgage-backed securities		20,679,345		399,198		(207,616)		20,870,927
State and municipal		4,639,988		17,779		(3,621)		4,654,146
Corporate bonds		2,041,718		—		(11,718)		2,030,000
Total debt securities		34,922,289		634,010		(222,955)		35,333,344
Equity securities		78,754		—		(62,209)		16,545
Totals	$	35,001,043	$	634,010	$	(285,164)	$	35,349,889

Held-to-Maturity	Amortized		Gross Unrealized				Estimated
December 31, 2014	cost		Gains		Losses		Fair Value
Residential mortgage-backed securities	$	1,315,718	$	9,079	$	—	$	1,324,797
Total debt securities		1,315,718		9,079		—		1,324,797
Totals	$	1,315,718	$	9,079	$	—	$	1,324,797

Unrealized losses segregated by length of impairment as of December 31, 2015 and December 31, 2014 were as follows:


	Less than 12 months				12 months or longer				Total
Available for Sale	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2015	Value		Losses		Value		Losses		Value		Losses
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—
U.S. treasury securities		5,872,140		(35,201)		—		—		5,872,140		(35,201)
Residential mortgage-backed securities		1,862,893		(26,479)		1,761,669		(74,411)		3,624,562		(100,890)
State and municipals		1,150,915		(425)		—		—		1,150,915		(425)
Corporate bonds		—		—		—		—		—		—
Total debt securities		8,885,947		(62,105)		1,761,669		(74,411)		10,647,616		(136,516)
Equity securities		—		—		44,435		(22,217)		44,435		(22,217)
Totals	$	8,885,947	$	(62,105)	$	1,806,104	$	(96,628)	$	10,692,051	$	(158,733)


	Less than 12 months				12 months or longer				Total
Available for Sale	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2014	Value		Losses		Value		Losses		Value		Losses
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—
U.S. treasury securities		—		—		—		—		—		—
Residential mortgage-backed securities		791		(3)		6,901,324		(207,613)		6,902,115		(207,616)
State and municipals		757,939		(3,621)		—		—		757,939		(3,621)
Corporate bonds		2,030,000		(11,718)		—		—		2,030,000		(11,718)
Total debt securities		2,788,730		(15,342)		6,901,324		(207,613)		9,690,054		(222,955)
Equity securities		—		—		16,545		(62,209)		16,545		(62,209)
Totals	$	2,788,730	$	(15,342)	$	6,917,869	$	(269,822)	$	9,706,599	$	(285,164)

At December 31, 2015, unrealized losses in the Company’s portfolio of debt securities of $136,516 in the aggregate were related to 15 securities and caused by increases in market interest rates, spread volatility, or other factors that management deems to be temporary. Since management believes that it is more likely than not that the Company will not be required to sell these securities prior to maturity or a full recovery of the amortized cost, the Company does not consider these securities to be other-than-temporarily impaired.

At December 31, 2015, unrealized losses in the Company’s portfolio of equity securities of $22,217 were related to one security and considered temporary. Since management believes that it is more likely than not the Company will not be required to sell these equity positions for a reasonable period of time sufficient for recovery of fair value, the Company does not consider these equity securities to be other-than-temporarily impaired.

At December 31, 2014, unrealized losses in the Company’s portfolio of debt securities of $222,955 in the aggregate were related to 11 securities and caused by increases in market interest rates, spread volatility, or other factors that management deems to be temporary. Since management believes that it is more likely than not that the Company will not be required to sell these securities prior to maturity or a full recovery of the amortized cost, the Company does not consider these securities to be other-than-temporarily impaired.

At December 31, 2014, unrealized losses in the Company’s portfolio of equity securities of $62,209 were related to one security and considered temporary. Since management believes that it is more likely than not the Company will not be required to sell these equity positions for a reasonable period of time sufficient for recovery of fair value, the Company does not consider these equity securities to be other-than-temporarily impaired.

The outstanding balance of no single issuer, except for U.S. Agency securities, exceeded 10% of stockholders’ equity at December 31, 2015 or 2014.

No investment securities held by the Company as of December 31, 2015 and December 31, 2014 were subject to a write-down due to credit related other-than-temporary impairment.

Contractual maturities of debt securities at December 31, 2015 and 2014 are shown below. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.


	2015				2014
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Available for sale
Within one year	$	836,706	$	837,413	$	237,687	$	240,942
Over one to five years		9,542,262		9,609,537		4,794,585		4,787,945
Over five to ten years		7,778,830		7,825,523		9,210,672		9,433,530
Over ten years		—		—		—		—
Residential mortgage-backed securities		14,836,750		15,023,225		20,679,345		20,870,927
Totals	$	32,994,549	$	33,295,698	$	34,922,289	$	35,333,344

	2015				2014
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Held to maturity
Over ten years	$	334,257	$	340,147	$	—	$	—
Residential mortgage-backed securities		1,238,908		1,256,115		1,315,718		1,324,797
Totals	$	1,573,165	$	1,596,262	$	1,315,718	$	1,324,797

The Company’s residential mortgage-backed securities portfolio is presented as a separate line within the maturity table, since borrowers have the right to prepay obligations without prepayment penalties.

During the year ended December 31, 2015, there were two sales of investment securities available for sale for a gain of $119,476. There were no sales of investment securities available for sale during the year ended December 31, 2014.

At December 31, 2015, securities with an amortized cost of $12,391,059 (fair value of $12,654,624) were pledged as collateral for potential borrowings from the Federal Home Loan Bank of Atlanta (the “FHLB”) and the Federal Reserve Bank of Richmond (the “Reserve Bank”). At December 31, 2014, securities with an amortized cost of $20,035,812 (fair value of $20,358,237) were pledged as collateral for potential borrowings from the FHLB and the Reserve Bank.