Page 23 - Annual Report 2017

TEXAS GULF BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Statements
December 31, 2016 and 2015

NOTE B CASH AND CASH EQUIVALENTS

Cash and cash equivalents of the Company are maintained with major financial institutions in
the United States. Accounts with these financial institutions may exceed the amount of
insurance provided on such deposits; however, these deposits typically may be redeemed
upon demand and therefore, bear minimal risk. In monitoring this credit risk, the Company
periodically evaluates the stability of the financial institutions with which it has deposits. The
Company has interest bearing cash deposits in correspondent financial institutions in excess
of the amount insured by the FDIC in the approximate amount of $4,635,000 and $19,000 at
December 31, 2016 and 2015, respectively.

The Bank, as a member of the Federal Reserve System, is required to maintain reserves for
the purpose of facilitating the implementation of monetary policy. These reserves
are maintained in the form of balances held at the Federal Reserve Bank or by vault cash.
The Bank had reserve requirements of $292,000 and $338,000 at December 31, 2016 and
2015, respectively. Accordingly, cash and due from bank balances were restricted to that
extent.

SECURITIES AVAILABLE FOR SALE

Securities have been classified according to management's intent. The amortized cost
and estimated fair values of debt securities are summarized as follows:

NOTE C Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
2016
U.S. Government Agency:
Debt Securities $ 29,317,626 $ 82,522 $ (300,537) $ 29,099,611
Mortgage-backed Securities 18,821,466 273,188 (173,840) 18,920,814
Collateralized Mortgage
Obligations 4,666,116 - (74,703) 4,591,413
State and Political Subdivisions 106,894,418 589,739 (1,749,340) 105,734,817

$ 159,699,626 $ 945,449 $ (2,298,420) $ 158,346,655
2015
U.S. Government Agency:
Debt Securities $ 36,727,650 $ 98,514 $ (255,622) $ 36,570,542
Mortgage-backed Securities 16,882,792 390,062 (30,491) 17,242,363
Collateralized Mortgage
Obligations 5,787,777 2,459 (131,669) 5,658,567
State and Political Subdivisions 111,820,451 1,741,759 (181,513) 113,380,697

$ 171,218,670 $ 2,232,794 $ (599,295) $ 172,852,169

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