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Securities | 12 Months Ended
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Dec. 31, 2011
Securities [Abstract] |
SECURITIES | NOTE 2 – SECURITIES The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 86,783,000 |  |  | $ | 1,872,000 |  |  | $ | (59,000 | ) |  | $ | 88,596,000 |
Mortgage-backed securities |  |  | 31,851,000 |  |  |  | 2,759,000 |  |  |  | 0 |  |  |  | 34,610,000 |
Michigan Strategic Fund bonds |  |  | 16,700,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 16,700,000 |
Municipal general obligation bonds |  |  | 26,212,000 |  |  |  | 1,097,000 |  |  |  | 0 |  |  |  | 27,309,000 |
Municipal revenue bonds |  |  | 4,300,000 |  |  |  | 123,000 |  |  |  | 0 |  |  |  | 4,423,000 |
Mutual funds |  |  | 1,312,000 |  |  |  | 42,000 |  |  |  | 0 |  |  |  | 1,354,000 |
|  | $ | 167,158,000 |  |  | $ | 5,893,000 |  |  | $ | (59,000 | ) |  | $ | 172,992,000 |
2010 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 121,633,000 |  |  | $ | 1,704,000 |  |  | $ | (1,775,000 | ) |  | $ | 121,562,000 |
Mortgage-backed securities |  |  | 44,340,000 |  |  |  | 2,601,000 |  |  |  | 0 |  |  |  | 46,941,000 |
Michigan Strategic Fund bonds |  |  | 18,175,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 18,175,000 |
Municipal general obligation bonds |  |  | 28,594,000 |  |  |  | 227,000 |  |  |  | (779,000 | ) |  |  | 28,042,000 |
Municipal revenue bonds |  |  | 4,841,000 |  |  |  | 46,000 |  |  |  | (44,000 | ) |  |  | 4,843,000 |
Mutual funds |  |  | 1,264,000 |  |  |  | 3,000 |  |  |  | 0 |  |  |  | 1,267,000 |
|  | $ | 218,847,000 |  |  | $ | 4,581,000 |  |  | $ | (2,598,000 | ) |  | $ | 220,830,000 |
Securities with unrealized losses at year-end 2011 and 2010, aggregated by investment category and length of time that individual securities have been in a continuous loss position, are as follows:
|  | Less than 12 Months |  |  | 12 Months or More |  |  | Total |
Description of Securities |  | Fair Value |  |  | Unrealized Loss |  |  | Fair Value |  |  | Unrealized Loss |  |  | Fair Value |  |  | Unrealized Loss |
2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 9,765,000 |  |  | $ | (33,000 | ) |  | $ | 9,526,000 |  |  | $ | (26,000 | ) |  | $ | 19,291,000 |  |  | $ | (59,000 | )
Mortgage-backed securities |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Michigan Strategic Fund bonds |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Municipal general obligation bonds |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Municipal revenue bonds |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Mutual funds |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 9,765,000 |  |  | $ | (33,000 | ) |  | $ | 9,526,000 |  |  | $ | (26,000 | ) |  | $ | 19,291,000 |  |  | $ | (59,000 | )
2010 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 56,588,000 |  |  | $ | (1,775,000 | ) |  | $ | 0 |  |  | $ | 0 |  |  | $ | 56,588,000 |  |  | $ | (1,775,000 | )
Mortgage-backed securities |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Michigan Strategic Fund bonds |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Municipal general obligation bonds |  |  | 7,847,000 |  |  |  | (299,000 | ) |  |  | 6,497,000 |  |  |  | (480,000 | ) |  |  | 14,344,000 |  |  |  | (779,000 | )
Municipal revenue bonds |  |  | 811,000 |  |  |  | (25,000 | ) |  |  | 805,000 |  |  |  | (19,000 | ) |  |  | 1,616,000 |  |  |  | (44,000 | )
Mutual funds |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 65,246,000 |  |  | $ | (2,099,000 | ) |  | $ | 7,302,000 |  |  | $ | (499,000 | ) |  | $ | 72,548,000 |  |  | $ | (2,598,000 | )
We evaluate securities for other-than-temporary impairment at least on a quarterly basis. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, our intent to sell the security, whether it is more likely than not that we will be required to sell the security before recovery and if we do not expect to recover the entire amortized cost basis of the security. In analyzing an issuer’s financial condition, we may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition. Six U.S. Government agency debt obligations were in a continuous loss position for 12 months or more at December 31, 2011. At December 31, 2011, 12 debt securities with a combined fair value totaling $19.3 million have unrealized losses with aggregate depreciation of $0.1 million, or 0.04% from the amortized cost basis of total securities. At December 31, 2011, 223 debt securities and a mutual fund with a combined fair value totaling $123.0 million have unrealized gains with aggregate appreciation of $5.9 million, or 3.5% from the amortized cost basis of total securities. After we considered whether the securities were issued by the federal government or its agencies and whether downgrades by bond rating agencies had occurred, we determined that unrealized losses were due to changing interest rate environments. As we do not intend to sell the securities, we believe it is more likely than not that we will not be required to sell the securities before recovery and we do expect to recover the entire amortized cost of the securities, no declines are deemed to be other-than-temporary. The amortized cost and fair values of debt securities at year-end 2011, by contractual maturity, are shown below. The contractual maturity is utilized below for U.S. Government agency debt obligations and municipal bonds. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately. The maturities of securities and their weighted average yields at December 31, 2011 are also shown in the following table. The yields for municipal securities are shown at their tax equivalent yield.
|  | Weighted Average Yield |  |  | Amortized Cost |  |  | Fair Value |
Due in one year or less |  |  | 7.78 | % |  | $ | 175,000 |  |  | $ | 177,000 |
Due from one to five years |  |  | 3.89 |  |  |  | 9,416,000 |  |  |  | 9,745,000 |
Due from five to ten years |  |  | 3.43 |  |  |  | 28,293,000 |  |  |  | 28,600,000 |
Due after ten years |  |  | 4.81 |  |  |  | 79,411,000 |  |  |  | 81,806,000 |
Mortgage-backed securities |  |  | 5.15 |  |  |  | 31,851,000 |  |  |  | 34,610,000 |
Michigan Strategic Fund bonds |  |  | 2.87 |  |  |  | 16,700,000 |  |  |  | 16,700,000 |
Mutual funds |  |  | 3.68 |  |  |  | 1,312,000 |  |  |  | 1,354,000 |
|  |  | 4.40 | % |  | $ | 167,158,000 |  |  | $ | 172,992,000 |
After analyzing our current and forecasted federal income tax position, we sold certain tax-exempt municipal bonds with an aggregate book value of $20.0 million in late March of 2010. Immediately subsequent to the sale, we reclassified the remaining tax-exempt municipal bonds with an amortized cost of $39.2 million from held to maturity to available for sale. The net unrealized gain at the date of transfer amounted to $0.4 million and was reported in other comprehensive income net of tax effect. During 2011 and 2009, there were no securities sold. At year-end 2011 and 2010, the amortized cost of securities issued by the State of Michigan and all its political subdivisions totaled $30.5 million and $33.4 million, with an estimated fair value of $31.7 million and $32.9 million, respectively. Total securities of any other specific issuer, other than the U.S. Government and its agencies, did not exceed 10% of shareholders’ equity. The carrying value of U.S. Government agency debt obligations and mortgage-backed securities that are pledged to secure repurchase agreements and letters of credit issued on behalf of our customers was $109.0 million and $166.9 million at December 31, 2011 and 2010, respectively. In addition, substantially all of our municipal bonds have been pledged to the Discount Window of the Federal Reserve Bank of Chicago. Investments in FHLB stock are restricted and may only be resold, or redeemed by, the issuer.

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- Definition Tabular disclosure of investments in certain debt and equity securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27405-111563 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6379141&loc=d3e15032-111544 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Equity Security -URI http://asc.fasb.org/extlink&oid=6511694 -Topic 320 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27161-111563 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Debt Security -URI http://asc.fasb.org/extlink&oid=6509901 -Topic 320 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 115 -Paragraph 3, 19, 20, 21, 22, 137 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27232-111563 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27357-111563 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27290-111563 + Details
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