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Note 3 - Investment Securities | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Investment Holdings [Text Block] | Note 3. Investment Securities The amortized cost and fair value of investment securities as of December 31, 2017 and 2016 are summarized as follows:
|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Fair |
|  | Cost |  |  | Gains |  |  | (Losses) |  |  | Value |
December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | 378,424,205 |  |  | $ | 2,763,718 |  |  | $ | (2,488,119 | ) |  | $ | 378,699,804 |
Other securities |  |  | 1,050,000 |  |  |  | - |  |  |  | - |  |  |  | 1,050,000 |
|  | $ | 379,474,205 |  |  | $ | 2,763,718 |  |  | $ | (2,488,119 | ) |  | $ | 379,749,804 |
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. govt. sponsored agency securities |  | $ | 38,409,157 |  |  | $ | 37,344 |  |  | $ | (349,967 | ) |  | $ | 38,096,534 |
Residential mortgage-backed and related securities |  |  | 165,459,470 |  |  |  | 155,363 |  |  |  | (2,313,529 | ) |  |  | 163,301,304 |
Municipal securities |  |  | 66,176,364 |  |  |  | 660,232 |  |  |  | (211,100 | ) |  |  | 66,625,496 |
Other securities |  |  | 4,014,004 |  |  |  | 896,384 |  |  |  | (25,815 | ) |  |  | 4,884,573 |
|  | $ | 274,058,995 |  |  | $ | 1,749,323 |  |  | $ | (2,900,411 | ) |  | $ | 272,907,907 |
December 31, 2016: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | 321,859,056 |  |  | $ | 2,200,577 |  |  | $ | (4,694,734 | ) |  | $ | 319,364,899 |
Other securities |  |  | 1,050,000 |  |  |  | - |  |  |  | - |  |  |  | 1,050,000 |
|  | $ | 322,909,056 |  |  | $ | 2,200,577 |  |  | $ | (4,694,734 | ) |  | $ | 320,414,899 |
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. govt. sponsored agency securities |  | $ | 46,281,306 |  |  | $ | 132,886 |  |  | $ | (330,585 | ) |  | $ | 46,083,607 |
Residential mortgage-backed and related securities |  |  | 150,465,222 |  |  |  | 174,993 |  |  |  | (2,938,088 | ) |  |  | 147,702,127 |
Municipal securities |  |  | 52,816,541 |  |  |  | 425,801 |  |  |  | (637,916 | ) |  |  | 52,604,426 |
Other securities |  |  | 4,046,332 |  |  |  | 703,978 |  |  |  | (27,331 | ) |  |  | 4,722,979 |
|  | $ | 253,609,401 |  |  | $ | 1,437,658 |  |  | $ | (3,933,920 | ) |  | $ | 251,113,139 |
The Company ’s HTM municipal securities consist largely of private issues of municipal debt. The municipalities are located primarily within the Midwest. The municipal debt investments are underwritten using specific guidelines with ongoing monitoring. The Company ’s residential mortgage-backed and related securities portfolio consists entirely of government sponsored or government guaranteed securities. The Company has not invested in commercial mortgage-backed securities or pooled trust preferred securities. Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of December 31, 2017 and 2016, are summarized as follows:
|  | Less than 12 Months |  |  | 12 Months or More |  |  | Total |
|  |  |  |  |  | Gross |  |  |  |  |  |  | Gross |  |  |  |  |  |  | Gross |
|  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
|  | Value |  |  | Losses |  |  | Value |  |  | Losses |  |  | Value |  |  | Losses |
December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | 23,750,826 |  |  | $ | (354,460 | ) |  | $ | 72,611,780 |  |  | $ | (2,133,659 | ) |  | $ | 96,362,606 |  |  | $ | (2,488,119 | )
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. govt. sponsored agency securities |  | $ | 28,576,258 |  |  | $ | (200,022 | ) |  | $ | 3,640,477 |  |  | $ | (149,945 | ) |  | $ | 32,216,735 |  |  | $ | (349,967 | )
Residential mortgage-backed and related securities |  |  | 88,927,779 |  |  |  | (871,855 | ) |  |  | 57,931,731 |  |  |  | (1,441,674 | ) |  |  | 146,859,510 |  |  |  | (2,313,529 | )
Municipal securities |  |  | 10,229,337 |  |  |  | (41,151 | ) |  |  | 9,997,433 |  |  |  | (169,949 | ) |  |  | 20,226,770 |  |  |  | (211,100 | )
Other securities |  |  | 923,535 |  |  |  | (25,815 | ) |  |  | - |  |  |  | - |  |  |  | 923,535 |  |  |  | (25,815 | )
|  | $ | 128,656,909 |  |  | $ | (1,138,843 | ) |  | $ | 71,569,641 |  |  | $ | (1,761,568 | ) |  | $ | 200,226,550 |  |  | $ | (2,900,411 | )
December 31, 2016: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities held to maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | 122,271,533 |  |  | $ | (4,076,647 | ) |  | $ | 13,010,803 |  |  | $ | (618,087 | ) |  | $ | 135,282,336 |  |  | $ | (4,694,734 | )
Securities available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. govt. sponsored agency securities |  | $ | 21,788,139 |  |  | $ | (257,640 | ) |  | $ | 5,499,012 |  |  | $ | (72,945 | ) |  | $ | 27,287,151 |  |  | $ | (330,585 | )
Residential mortgage-backed and related securities |  |  | 121,506,582 |  |  |  | (2,641,664 | ) |  |  | 7,437,615 |  |  |  | (296,424 | ) |  |  | 128,944,197 |  |  |  | (2,938,088 | )
Municipal securities |  |  | 34,152,822 |  |  |  | (618,462 | ) |  |  | 338,099 |  |  |  | (19,454 | ) |  |  | 34,490,921 |  |  |  | (637,916 | )
Other securities |  |  | 3,177,414 |  |  |  | (27,331 | ) |  |  | - |  |  |  | - |  |  |  | 3,177,414 |  |  |  | (27,331 | )
|  | $ | 180,624,957 |  |  | $ | (3,545,097 | ) |  | $ | 13,274,726 |  |  | $ | (388,823 | ) |  | $ | 193,899,683 |  |  | $ | (3,933,920 | )
At December 31, 2017, the investment portfolio included 613 securities. Of this number, 223 securities were in an unrealized loss position. The aggregate losses of these securities totaled approximately 0.8% of the total aggregate amortized cost. Of these 223 securities, 110 securities had an unrealized loss for 12 months or more. All of the debt securities in unrealized loss positions are considered acceptable credit risks. Based upon an evaluation of the available evidence, including the recent changes in market rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these debt securities are temporary. In addition, the Company lacks the intent to sell these securities and/or it is not more-likely-than- not that the Company will be required to sell these debt securities before their anticipated recovery. At December 31, 2017 and 2016, the Company’s equity securities represent less than 1% of the total portfolio. T he Company did not recognize OTTI on any debt or equity securities for the years ended December 31, 2017, 2016 or 2015. All sales of securities for the years ended December 31, 2017, 2016 and 2015, respectively, were from securities identified as AFS. Information on proceeds received, as well as the gains and losses from the sale of those securities are as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Proceeds from sales of securities |  | $ | 71,091,580 |  |  | $ | 134,188,737 |  |  | $ | 81,410,368 |
Gross gains from sales of securities |  |  | 67,351 |  |  |  | 4,845,009 |  |  |  | 1,045,444 |
Gross losses from sales of securities |  |  | (155,236 | ) |  |  | (252,611 | ) |  |  | (246,461 | )
In September 2016, the Company sold an equity security and recognized a pre-tax gross gain on the sale of $4,010,877. The equity security was acquired by the Company at no cost as part of a membership in the invested company in 2002. The amortized cost and fair value of securities as of December 31, 2017, by contractual maturity are shown below. Expected maturities of mortgage-backed and related securities may differ from contractual maturities because the mortgages underlying the securities may be called or prepaid without any penalties. Therefore, these securities are not included in the maturity categories in the following summary. “Other securities” available for sale are excluded from the maturity categories as there is no fixed maturity date for those securities.
|  | Amortized Cost |  |  | Fair Value |
Securities held to maturity: |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 2,912,158 |  |  | $ | 2,909,816 |
Due after one year through five years |  |  | 20,838,734 |  |  |  | 20,896,388 |
Due after five years |  |  | 355,723,313 |  |  |  | 355,943,600 |
|  | $ | 379,474,205 |  |  | $ | 379,749,804 |
Securities available for sale: |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 1,991,755 |  |  | $ | 1,996,584 |
Due after one year through five years |  |  | 26,984,843 |  |  |  | 26,986,584 |
Due after five years |  |  | 75,608,923 |  |  |  | 75,738,862 |
|  | $ | 104,585,521 |  |  | $ | 104,722,030 |
Residential mortgage-backed and related securities |  |  | 165,459,470 |  |  |  | 163,301,304 |
Other securities |  |  | 4,014,004 |  |  |  | 4,884,573 |
|  | $ | 274,058,995 |  |  | $ | 272,907,907 |
P ortions of the U.S. government sponsored agencies and municipal securities contain call options, at the discretion of the issuer, to terminate the security at predetermined dates prior to the stated maturity, summarized as follows:
|  | Amortized Cost |  |  | Fair Value |
Securities held to maturity: |  |  |  |  |  |  |  |
Municipal securities |  | $ | 208,103,672 |  |  | $ | 208,961,233 |
Securities available for sale: |  |  |  |  |  |  |  |
U.S. govt. sponsored agency securities |  |  | 5,048,756 |  |  |  | 4,988,073 |
Municipal securities |  |  | 57,554,280 |  |  |  | 57,817,498 |
|  | $ | 62,603,036 |  |  | $ | 62,805,571 |
As of December 31, 2017 and 2016, investment securities with a carrying value of $78,642,843 and $118,811,905, respectively, were pledged on FHLB advances, customer and wholesale repurchase agreements, and for other purposes as required or permitted by law. As of December 31, 2017, the Company’s municipal securities portfolios were comprised of general obligation bonds issued by 131 issuers with fair values totaling $108.0 million and revenue bonds issued by 145 issuers, primarily consisting of states, counties, towns, villages and school districts with fair values totaling $337.3 million. The Company held investments in general obligation bonds in 26 states, including 6 states in which the aggregate fair value exceeded $5.0 million. The Company held investments in revenue bonds in 16 states, including 7 states in which the aggregate fair value exceeded $5.0 million. As of December 31, 2016, the Company’s municipal securities portfolios were comprised of general obligation bonds issued by 116 issuers with fair values totaling $116.5 million and revenue bonds issued by 120 issuers, primarily consisting of states, counties, towns, villages and school districts with fair values totaling $255.5 million. The Company held investments in general obligation bonds in 21 states, including 5 states in which the aggregate fair value exceeded $5.0 million. The Company held investments in revenue bonds in 12 states, including 6 states in which the aggregate fair value exceeded $5.0 million. The amortized cost and fair values of the Company ’s portfolio of general obligation bonds are summarized in the following tables by the issuer’s state:
December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. State: |  | Number of Issuers |  |  | Amortized Cost |  |  | Fair Value |  |  | Average Exposure Per Issuer (Fair Value) |
Illinois |  |  | 20 |  |  | $ | 19,328,700 |  |  | $ | 19,514,024 |  |  | $ | 975,701 |
Iowa |  |  | 16 |  |  |  | 13,881,689 |  |  |  | 13,969,512 |  |  |  | 873,095 |
Missouri |  |  | 17 |  |  |  | 9,243,355 |  |  |  | 9,308,287 |  |  |  | 547,546 |
North Dakota |  |  | 7 |  |  |  | 21,626,574 |  |  |  | 21,724,197 |  |  |  | 3,103,457 |
Ohio |  |  | 9 |  |  |  | 8,002,705 |  |  |  | 7,938,028 |  |  |  | 882,003 |
Texas |  |  | 17 |  |  |  | 11,253,775 |  |  |  | 11,308,848 |  |  |  | 665,226 |
Other |  |  | 45 |  |  |  | 24,000,278 |  |  |  | 24,215,119 |  |  |  | 538,114 |
Total general obligation bonds |  |  | 131 |  |  | $ | 107,337,076 |  |  | $ | 107,978,015 |  |  | $ | 824,260 |
December 31, 2016: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. State: |  | Number of Issuers |  |  | Amortized Cost |  |  | Fair Value |  |  | Average Exposure Per Issuer (Fair Value) |
Illinois |  |  | 19 |  |  | $ | 29,214,559 |  |  | $ | 29,308,438 |  |  | $ | 1,542,549 |
Iowa |  |  | 27 |  |  |  | 32,258,612 |  |  |  | 32,231,936 |  |  |  | 1,193,775 |
Missouri |  |  | 14 |  |  |  | 8,291,192 |  |  |  | 8,323,245 |  |  |  | 594,518 |
North Dakota |  |  | 7 |  |  |  | 22,169,050 |  |  |  | 21,499,075 |  |  |  | 3,071,296 |
Ohio |  |  | 8 |  |  |  | 6,790,398 |  |  |  | 6,651,897 |  |  |  | 831,487 |
Other |  |  | 41 |  |  |  | 18,481,496 |  |  |  | 18,458,044 |  |  |  | 450,196 |
Total general obligation bonds |  |  | 116 |  |  | $ | 117,205,307 |  |  | $ | 116,472,635 |  |  | $ | 1,004,074 |
The amortized cost and fair values of the Company ’s portfolio of revenue bonds are summarized in the following tables by the issuer’s state:
December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. State: |  | Number of Issuers |  |  | Amortized Cost |  |  | Fair Value |  |  | Average Exposure Per Issuer (Fair Value) |
Illinois |  |  | 2 |  |  | $ | 17,211,441 |  |  | $ | 17,408,544 |  |  | $ | 8,704,272 |
Indiana |  |  | 26 |  |  |  | 51,171,818 |  |  |  | 50,861,336 |  |  |  | 1,956,205 |
Iowa |  |  | 29 |  |  |  | 68,724,899 |  |  |  | 69,079,470 |  |  |  | 2,382,051 |
Kansas |  |  | 6 |  |  |  | 12,873,329 |  |  |  | 12,877,087 |  |  |  | 2,146,181 |
Missouri |  |  | 56 |  |  |  | 106,259,015 |  |  |  | 106,232,837 |  |  |  | 1,897,015 |
North Dakota |  |  | 5 |  |  |  | 11,451,560 |  |  |  | 11,351,676 |  |  |  | 2,270,335 |
Ohio |  |  | 10 |  |  |  | 55,766,091 |  |  |  | 55,820,203 |  |  |  | 5,582,020 |
Other |  |  | 11 |  |  |  | 13,805,340 |  |  |  | 13,716,132 |  |  |  | 1,246,921 |
Total revenue bonds |  |  | 145 |  |  | $ | 337,263,493 |  |  | $ | 337,347,285 |  |  | $ | 2,326,533 |
December 31, 2016: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. State: |  | Number of Issuers |  |  | Amortized Cost |  |  | Fair Value |  |  | Average Exposure Per Issuer (Fair Value) |
Indiana |  |  | 22 |  |  | $ | 47,994,737 |  |  | $ | 47,582,138 |  |  | $ | 2,162,824 |
Iowa |  |  | 31 |  |  |  | 70,788,393 |  |  |  | 71,142,393 |  |  |  | 2,294,916 |
Kansas |  |  | 6 |  |  |  | 13,476,366 |  |  |  | 13,427,491 |  |  |  | 2,237,915 |
Missouri |  |  | 47 |  |  |  | 90,784,441 |  |  |  | 89,664,013 |  |  |  | 1,907,745 |
North Dakota |  |  | 4 |  |  |  | 8,089,067 |  |  |  | 7,796,381 |  |  |  | 1,949,095 |
Ohio |  |  | 3 |  |  |  | 13,650,000 |  |  |  | 13,405,222 |  |  |  | 4,468,407 |
Other |  |  | 7 |  |  |  | 12,687,286 |  |  |  | 12,479,052 |  |  |  | 1,782,722 |
Total revenue bonds |  |  | 120 |  |  | $ | 257,470,290 |  |  | $ | 255,496,690 |  |  | $ | 2,129,139 |
As of December 31, 2017 and 2016, the Company did not hold general obligation or revenue bonds of any single issuer, the aggregate book or market value of which exceeded 5% of the Company’s stockholders’ equity. Of the general obligation and revenue bonds in the Company’s portfolio, the majority are unrated bonds that represent small, private issuances. All unrated bonds were underwritten according to loan underwriting standards and have an average risk rating of 2, indicating very high quality. Additionally, many of these bonds are funding essential municipal services (water, sewer, education, medical facilities). The Company ’s municipal securities are owned by each of the four charters, whose investment policies set forth limits for various subcategories within the municipal securities portfolio. Each charter is monitored individually and as of December 31, 2017, all were well-within policy limitations approved by the board of directors. Policy limits are calculated as a percentage of total risk-based capital. As of December 31, 2017, the Company’s standard monitoring of its municipal securities portfolio had not uncovered any facts or circumstances resulting in significantly different credits ratings than those assigned by a nationally recognized statistical rating organization, or in the case of unrated bonds, the rating assigned using the credit underwriting standards.

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- Definition The entire disclosure for investment holdings. This includes the long positions of investments for the entity. It contains investments in affiliated and unaffiliated issuers. The investments include securities and non securities (i.e. commodities and futures contracts). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 4 -Subparagraph (SX 210.12-12C) -URI http://asc.fasb.org/extlink&oid=50485924&loc=d3e611225-123010 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14) -URI http://asc.fasb.org/extlink&oid=50485924&loc=d3e611322-123010 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 5 -Subparagraph (SX 210.12-13) -URI http://asc.fasb.org/extlink&oid=50485924&loc=d3e611282-123010 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-12) -URI http://asc.fasb.org/extlink&oid=50485924&loc=d3e611133-123010 + Details
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