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v3.22.1

Note 2 - Securities | 3 Months Ended
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Mar. 31, 2022
Notes to Financial Statements |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] |
2. | SECURITIES
The amortized cost and estimated fair value of available for sale securities and the related pre-tax gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows:
|  | Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
March 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 442,500,000 |  |  | $ | 74,000 |  |  | $ | (31,996,000 | ) |  | $ | 410,578,000 |
Mortgage-backed securities |  |  | 40,215,000 |  |  |  | 123,000 |  |  |  | (2,592,000 | ) |  |  | 37,746,000 |
Municipal general obligation bonds |  |  | 138,916,000 |  |  |  | 540,000 |  |  |  | (4,785,000 | ) |  |  | 134,671,000 |
Municipal revenue bonds |  |  | 23,900,000 |  |  |  | 39,000 |  |  |  | (1,773,000 | ) |  |  | 22,166,000 |
Other investments |  |  | 500,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 500,000 |
|  | $ | 646,031,000 |  |  | $ | 776,000 |  |  | $ | (41,146,000 | ) |  | $ | 605,661,000 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 398,874,000 |  |  | $ | 266,000 |  |  | $ | (8,769,000 | ) |  | $ | 390,371,000 |
Mortgage-backed securities |  |  | 41,906,000 |  |  |  | 549,000 |  |  |  | (652,000 | ) |  |  | 41,803,000 |
Municipal general obligation bonds |  |  | 133,894,000 |  |  |  | 4,092,000 |  |  |  | (392,000 | ) |  |  | 137,594,000 |
Municipal revenue bonds |  |  | 22,289,000 |  |  |  | 331,000 |  |  |  | (145,000 | ) |  |  | 22,475,000 |
Other investments |  |  | 500,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 500,000 |
|  | $ | 597,463,000 |  |  | $ | 5,238,000 |  |  | $ | (9,958,000 | ) |  | $ | 592,743,000 |
Securities with unrealized losses at March 31, 2022 and December 31, 2021, 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 |
|  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |  |  | Fair |  |  | Unrealized |
|  | Value |  |  | Loss |  |  | Value |  |  | Loss |  |  | Value |  |  | Loss |
March 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 190,990,000 |  |  | $ | 11,971,000 |  |  | $ | 215,783,000 |  |  | $ | 20,025,000 |  |  | $ | 406,773,000 |  |  | $ | 31,996,000 |
Mortgage-backed securities |  |  | 26,110,000 |  |  |  | 1,783,000 |  |  |  | 6,594,000 |  |  |  | 809,000 |  |  |  | 32,704,000 |  |  |  | 2,592,000 |
Municipal general obligation bonds |  |  | 63,139,000 |  |  |  | 3,399,000 |  |  |  | 12,600,000 |  |  |  | 1,386,000 |  |  |  | 75,739,000 |  |  |  | 4,785,000 |
Municipal revenue bonds |  |  | 13,671,000 |  |  |  | 999,000 |  |  |  | 5,842,000 |  |  |  | 774,000 |  |  |  | 19,513,000 |  |  |  | 1,773,000 |
|  | $ | 293,910,000 |  |  | $ | 18,152,000 |  |  | $ | 240,819,000 |  |  | $ | 22,994,000 |  |  | $ | 534,729,000 |  |  | $ | 41,146,000 |
|  | Less than 12 Months |  |  | 12 Months or More |  |  | Total |
|  | Fair Value |  |  | Unrealized Loss |  |  | Fair Value |  |  | Unrealized Loss |  |  | Fair Value |  |  | Unrealized Loss |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 274,287,000 |  |  | $ | 5,274,000 |  |  | $ | 110,053,000 |  |  | $ | 3,495,000 |  |  | $ | 384,340,000 |  |  | $ | 8,769,000 |
Mortgage-backed securities |  |  | 23,184,000 |  |  |  | 652,000 |  |  |  | 24,000 |  |  |  | 0 |  |  |  | 23,208,000 |  |  |  | 652,000 |
Municipal general obligation bonds |  |  | 40,748,000 |  |  |  | 392,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 40,748,000 |  |  |  | 392,000 |
Municipal revenue bonds |  |  | 12,843,000 |  |  |  | 137,000 |  |  |  | 414,000 |  |  |  | 8,000 |  |  |  | 13,257,000 |  |  |  | 145,000 |
|  | $ | 351,062,000 |  |  | $ | 6,455,000 |  |  | $ | 110,491,000 |  |  | $ | 3,503,000 |  |  | $ | 461,553,000 |  |  | $ | 9,958,000 |
We evaluate securities in an unrealized loss position at least quarterly. Consideration is given to the length of time and the extent to which the intent and ability we have to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. For those debt securities whose fair value is less than their amortized cost basis, we also consider 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. At March 31, 2022, 527 debt securities with estimated fair values totaling $535 million had unrealized losses aggregating $41.1 million. At December 31, 2021, 333 debt securities with estimated fair values totaling $462 million had unrealized losses aggregating $10.0 million. 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 the unrealized losses were due to changing interest rate environments. As we do not intend to sell our debt securities before recovery of their cost basis and we believe it is more likely than not that we will not be required to sell our debt securities before recovery of the cost basis, no unrealized losses are deemed to be other-than-temporary. The amortized cost and fair value of debt securities at March 31, 2022, by maturity, are shown in the following table. The contractual maturity is utilized 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. Weighted average yields are also reflected, with yields for municipal securities shown at their tax equivalent yield.
|  | Weighted |  |  |  |  |  |  |  |  |
|  | Average |  |  | Amortized |  |  | Fair |
|  | Yield (%) |  |  | Cost |  |  | Value |
Due in 2022 |  |  | 1.98 |  |  | $ | 10,171,000 |  |  | $ | 10,171,000 |
Due in 2023 through 2027 |  |  | 1.11 |  |  |  | 263,429,000 |  |  |  | 251,105,000 |
Due in 2028 through 2032 |  |  | 1.74 |  |  |  | 295,377,000 |  |  |  | 273,366,000 |
Due in 2033 and beyond |  |  | 2.13 |  |  |  | 36,339,000 |  |  |  | 32,773,000 |
Mortgage-backed securities |  |  | 1.95 |  |  |  | 40,215,000 |  |  |  | 37,746,000 |
Other investments |  |  | 3.75 |  |  |  | 500,000 |  |  |  | 500,000 |
Total available for sale securities |  |  | 1.52 |  |  | $ | 646,031,000 |  |  | $ | 605,661,000 |
Securities issued by the State of Michigan and all its political subdivisions had combined amortized costs of $161 million and $155 million at March 31, 2022 and December 31, 2021, respectively, with estimated market values of $155 million and $158 million, respectively. Securities issued by all other states and their political subdivisions had combined amortized costs of $1.6 million and $1.7 million and estimated market values of $1.6 million and $1.7 million at March 31, 2022 and December 31, 2021, respectively. Total securities of any other specific issuer, other than the U.S. Government and its agencies and the State of Michigan and all its political subdivisions, 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 was $204 million and $197 million at March 31, 2022 and December 31, 2021, respectively. Investments in Federal Home Loan Bank stock are restricted and may only be resold or redeemed by the issuer.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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