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Note 2 - Investment Securities | 3 Months Ended
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Mar. 31, 2018
Notes to Financial Statements |
Investment Holdings [Text Block] | NOTE 2 – INVESTMENT SECURITIES The amortized cost and fair value of investment securities as of March 31, 2018 and December 31, 2017 are summarized as follows:
|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Fair |
|  | Cost |  |  | Gains |  |  | (Losses) |  |  | Value |
March 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities HTM: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | 377,534,337 |  |  | $ | 2,244,218 |  |  | $ | (5,024,697 | ) |  | $ | 374,753,858 |
Other securities |  |  | 1,050,000 |  |  |  | - |  |  |  | (11,175 | ) |  |  | 1,038,825 |
|  | $ | 378,584,337 |  |  | $ | 2,244,218 |  |  | $ | (5,035,872 | ) |  | $ | 375,792,683 |
Securities AFS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. govt. sponsored agency securities |  | $ | 37,591,155 |  |  | $ | 21,236 |  |  | $ | (744,881 | ) |  | $ | 36,867,510 |
Residential mortgage-backed and related securities |  |  | 162,453,605 |  |  |  | 60,222 |  |  |  | (5,224,784 | ) |  |  | 157,289,043 |
Municipal securities |  |  | 61,862,665 |  |  |  | 238,583 |  |  |  | (899,444 | ) |  |  | 61,201,804 |
Other securities |  |  | 4,254,716 |  |  |  | 31,867 |  |  |  | - |  |  |  | 4,286,583 |
|  | $ | 266,162,141 |  |  | $ | 351,908 |  |  | $ | (6,869,109 | ) |  | $ | 259,644,940 |
December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities HTM: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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 AFS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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 |
The Company’s HTM municipal securities consist largely of private issues of municipal debt. The large majority of the municipalities are located 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 private 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 March 31, 2018 and December 31, 2017, 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 |
March 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities HTM: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | 69,404,232 |  |  | $ | (2,881,032 | ) |  | $ | 59,545,239 |  |  | $ | (2,143,665 | ) |  | $ | 128,949,471 |  |  | $ | (5,024,697 | )
Other securities |  |  | 1,038,825 |  |  |  | (11,175 | ) |  |  | - |  |  |  | - |  |  |  | 1,038,825 |  |  |  | (11,175 | )
|  | $ | 70,443,057 |  |  | $ | (2,892,207 | ) |  | $ | 59,545,239 |  |  | $ | (2,143,665 | ) |  | $ | 129,988,296 |  |  | $ | (5,035,872 | )
Securities AFS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. govt. sponsored agency securities |  | $ | 29,643,497 |  |  | $ | (589,515 | ) |  | $ | 3,634,609 |  |  | $ | (155,365 | ) |  | $ | 33,278,106 |  |  | $ | (744,880 | )
Residential mortgage-backed and related securities |  |  | 94,102,512 |  |  |  | (2,858,578 | ) |  |  | 55,394,159 |  |  |  | (2,366,206 | ) |  |  | 149,496,671 |  |  |  | (5,224,784 | )
Municipal securities |  |  | 36,845,821 |  |  |  | (659,492 | ) |  |  | 8,217,318 |  |  |  | (239,952 | ) |  |  | 45,063,139 |  |  |  | (899,444 | )
|  | $ | 160,591,830 |  |  | $ | (4,107,585 | ) |  | $ | 67,246,086 |  |  | $ | (2,761,523 | ) |  | $ | 227,837,916 |  |  | $ | (6,869,108 | )
December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities HTM: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal securities |  | $ | 23,750,826 |  |  | $ | (354,460 | ) |  | $ | 72,611,780 |  |  | $ | (2,133,659 | ) |  | $ | 96,362,606 |  |  | $ | (2,488,119 | )
Securities AFS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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 | )
At March 31, 2018, the investment portfolio included 604 securities. Of this number, 290 securities were in an unrealized loss position. The aggregate losses of these securities totaled approximately 1.8% of the total amortized cost of the portfolio. Of these 290 securities, 105 securities had an unrealized loss for twelve 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 it is not more-likely-than- not that the Company will be required to sell these debt securities before their anticipated recovery. The Company did not recognize OTTI on any investment securities for the three months ended March 31, 2018 and 2017. There were no sales of securities for the three months ended March 31, 2018 and 2017. The amortized cost and fair value of securities as of March 31, 2018 by contractual maturity are shown below. Expected maturities of residential mortgage-backed and related securities may differ from contractual maturities because the residential mortgages underlying the residential mortgage-backed and related securities may be prepaid without any penalties. Therefore, these securities are not included in the maturity categories in the following table.
|  | Amortized Cost |  |  | Fair Value |
Securities HTM: |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 3,344,356 |  |  | $ | 3,345,990 |
Due after one year through five years |  |  | 25,163,524 |  |  |  | 25,191,668 |
Due after five years |  |  | 350,076,457 |  |  |  | 347,255,025 |
|  | $ | 378,584,337 |  |  | $ | 375,792,683 |
Securities AFS: |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 3,368,633 |  |  | $ | 3,381,748 |
Due after one year through five years |  |  | 23,949,100 |  |  |  | 23,738,028 |
Due after five years |  |  | 76,390,803 |  |  |  | 75,236,121 |
|  |  | 103,708,536 |  |  |  | 102,355,897 |
Residential mortgage-backed and related securities |  |  | 162,453,605 |  |  |  | 157,289,043 |
|  | $ | 266,162,141 |  |  | $ | 259,644,940 |
Portions of the U.S. government sponsored agency securities and municipal securities contain call options, at the discretion of the issuer, to terminate the security at par and at predetermined dates prior to the stated maturity. These callable securities are summarized as follows:
|  | Amortized Cost |  |  | Fair Value |
Securities HTM: |  |  |  |  |  |  |  |
Municipal securities |  | $ | 209,306,946 |  |  | $ | 207,262,788 |
Securities AFS: |  |  |  |  |  |  |  |
U.S. govt. sponsored agency securities |  |  | 5,048,812 |  |  |  | 4,947,644 |
Municipal securities |  |  | 54,016,828 |  |  |  | 53,258,850 |
|  | $ | 59,065,640 |  |  | $ | 58,206,494 |
As of March 31, 2018, the Company’s municipal securities portfolios were comprised of general obligation bonds issued by 128 issuers with fair values totaling $101.3 million and revenue bonds issued by 148 issuers, primarily consisting of states, counties, towns, villages and school districts with fair values totaling $334.6 million. The Company held investments in general obligation bonds in 26 states, including six states in which the aggregate fair value exceeded $5.0 million. The Company held investments in revenue bonds in 16 states, including seven states in which the aggregate fair value exceeded $5.0 million. 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 six states in which the aggregate fair value exceeded $5.0 million. The Company held investments in revenue bonds in 16 states, including seven 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:
March 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. State: |  | Number of Issuers |  |  | Amortized Cost |  |  | Fair Value |  |  | Average Exposure Per Issuer (Fair Value) |
North Dakota |  |  | 7 |  |  | $ | 21,627,097 |  |  | $ | 20,756,566 |  |  | $ | 2,965,224 |
Illinois |  |  | 20 |  |  |  | 18,532,776 |  |  |  | 18,513,766 |  |  |  | 925,688 |
Iowa |  |  | 16 |  |  |  | 13,878,991 |  |  |  | 13,830,003 |  |  |  | 864,375 |
Texas |  |  | 17 |  |  |  | 10,763,333 |  |  |  | 10,554,430 |  |  |  | 620,849 |
Missouri |  |  | 17 |  |  |  | 8,314,872 |  |  |  | 8,323,476 |  |  |  | 489,616 |
Ohio |  |  | 8 |  |  |  | 7,378,887 |  |  |  | 7,296,859 |  |  |  | 912,107 |
Other |  |  | 43 |  |  |  | 22,261,263 |  |  |  | 22,068,390 |  |  |  | 513,218 |
Total general obligation bonds |  |  | 128 |  |  | $ | 102,757,219 |  |  | $ | 101,343,490 |  |  | $ | 791,746 |
December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. State: |  | Number of Issuers |  |  | Amortized Cost |  |  | Fair Value |  |  | Average Exposure Per Issuer (Fair Value) |
North Dakota |  |  | 7 |  |  | $ | 21,626,574 |  |  | $ | 21,724,197 |  |  | $ | 3,103,457 |
Illinois |  |  | 20 |  |  |  | 19,328,700 |  |  |  | 19,514,024 |  |  |  | 975,701 |
Iowa |  |  | 16 |  |  |  | 13,881,689 |  |  |  | 13,969,512 |  |  |  | 873,095 |
Texas |  |  | 17 |  |  |  | 11,253,775 |  |  |  | 11,308,848 |  |  |  | 665,226 |
Missouri |  |  | 17 |  |  |  | 9,243,355 |  |  |  | 9,308,287 |  |  |  | 547,546 |
Ohio |  |  | 9 |  |  |  | 8,002,705 |  |  |  | 7,938,028 |  |  |  | 882,003 |
Other |  |  | 45 |  |  |  | 24,000,278 |  |  |  | 24,215,119 |  |  |  | 538,114 |
Total general obligation bonds |  |  | 131 |  |  | $ | 107,337,076 |  |  | $ | 107,978,015 |  |  | $ | 824,260 |
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:
March 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. State: |  | Number of Issuers |  |  | Amortized Cost |  |  | Fair Value |  |  | Average Exposure Per Issuer (Fair Value) |
Missouri |  |  | 58 |  |  | $ | 108,311,804 |  |  | $ | 108,445,780 |  |  | $ | 1,869,755 |
Iowa |  |  | 29 |  |  |  | 68,370,374 |  |  |  | 68,236,038 |  |  |  | 2,352,967 |
Ohio |  |  | 10 |  |  |  | 55,757,914 |  |  |  | 55,699,375 |  |  |  | 5,569,938 |
Indiana |  |  | 26 |  |  |  | 49,258,364 |  |  |  | 48,833,113 |  |  |  | 1,878,197 |
Illinois |  |  | 2 |  |  |  | 17,205,951 |  |  |  | 17,373,994 |  |  |  | 8,686,997 |
Kansas |  |  | 6 |  |  |  | 12,651,338 |  |  |  | 12,172,961 |  |  |  | 2,028,827 |
North Dakota |  |  | 5 |  |  |  | 11,220,278 |  |  |  | 10,644,441 |  |  |  | 2,128,888 |
Other |  |  | 12 |  |  |  | 13,863,760 |  |  |  | 13,206,470 |  |  |  | 1,100,539 |
Total revenue bonds |  |  | 148 |  |  | $ | 336,639,783 |  |  | $ | 334,612,172 |  |  | $ | 2,260,893 |
December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. State: |  | Number of Issuers |  |  | Amortized Cost |  |  | Fair Value |  |  | Average Exposure Per Issuer (Fair Value) |
Missouri |  |  | 56 |  |  | $ | 106,259,015 |  |  | $ | 106,232,837 |  |  | $ | 1,897,015 |
Iowa |  |  | 29 |  |  |  | 68,724,899 |  |  |  | 69,079,470 |  |  |  | 2,382,051 |
Ohio |  |  | 10 |  |  |  | 55,766,091 |  |  |  | 55,820,203 |  |  |  | 5,582,020 |
Indiana |  |  | 26 |  |  |  | 51,171,818 |  |  |  | 50,861,336 |  |  |  | 1,956,205 |
Illinois |  |  | 2 |  |  |  | 17,211,441 |  |  |  | 17,408,544 |  |  |  | 8,704,272 |
Kansas |  |  | 6 |  |  |  | 12,873,329 |  |  |  | 12,877,087 |  |  |  | 2,146,181 |
North Dakota |  |  | 5 |  |  |  | 11,451,560 |  |  |  | 11,351,676 |  |  |  | 2,270,335 |
Other |  |  | 11 |  |  |  | 13,805,340 |  |  |  | 13,716,132 |  |  |  | 1,246,921 |
Total revenue bonds |  |  | 145 |  |  | $ | 337,263,493 |  |  | $ | 337,347,285 |  |  | $ | 2,326,533 |
Both general obligation and revenue bonds are diversified across many issuers. As of March 31, 2018 and December 31, 2017, 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 loan risk rating of 2, indicating very high quality. Additionally, many of these bonds are funding essential municipal services such as water, sewer, education, and 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 March 31, 2018, all were well within policy limitations approved by the board of directors. Policy limits are calculated as a percentage of each charter’s total risk-based capital. As of March 31, 2018, the Company’s standard monitoring of its municipal securities portfolio had not uncovered any facts or circumstances resulting in significantly different credit 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://fasb.org/us-gaap/role/ref/legacyRef -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 2: http://fasb.org/us-gaap/role/ref/legacyRef -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 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -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://fasb.org/us-gaap/role/ref/legacyRef -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 + Details
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