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Note 2 - Securities | 9 Months Ended
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Sep. 30, 2025
Notes to Financial Statements |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | 2. SECURITIES The amortized cost and fair value of available for sale securities and the related pre-tax gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) are as follows:
|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Fair |
(Dollars in thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
September 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 632,999 |  |  | $ | 3,356 |  |  | $ | (29,573 | ) |  | $ | 606,782 |
Mortgage-backed securities |  |  | 28,527 |  |  |  | 12 |  |  |  | (4,866 | ) |  |  | 23,673 |
Municipal general obligation bonds |  |  | 196,099 |  |  |  | 1,366 |  |  |  | (4,890 | ) |  |  | 192,575 |
Municipal revenue bonds |  |  | 33,103 |  |  |  | 183 |  |  |  | (1,678 | ) |  |  | 31,608 |
Other investments |  |  | 500 |  |  |  | 0 |  |  |  | 0 |  |  |  | 500 |
|  | $ | 891,228 |  |  | $ | 4,917 |  |  | $ | (41,007 | ) |  | $ | 855,138 |
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 542,676 |  |  | $ | 131 |  |  | $ | (47,226 | ) |  | $ | 495,581 |
Mortgage-backed securities |  |  | 31,696 |  |  |  | 4 |  |  |  | (6,332 | ) |  |  | 25,368 |
Municipal general obligation bonds |  |  | 187,484 |  |  |  | 513 |  |  |  | (7,827 | ) |  |  | 180,170 |
Municipal revenue bonds |  |  | 31,066 |  |  |  | 89 |  |  |  | (2,422 | ) |  |  | 28,733 |
Other investments |  |  | 500 |  |  |  | 0 |  |  |  | 0 |  |  |  | 500 |
|  | $ | 793,422 |  |  | $ | 737 |  |  | $ | (63,807 | ) |  | $ | 730,352 |
Securities with unrealized losses at September 30, 2025, 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 |
(Dollars in thousands) |  | Value |  |  | Loss |  |  | Value |  |  | Loss |  |  | Value |  |  | Loss |
September 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 23,431 |  |  | $ | 98 |  |  | $ | 347,556 |  |  | $ | 29,475 |  |  | $ | 370,987 |  |  | $ | 29,573 |
Mortgage-backed securities |  |  | 22 |  |  |  | 0 |  |  |  | 23,138 |  |  |  | 4,866 |  |  |  | 23,160 |  |  |  | 4,866 |
Municipal general obligation bonds |  |  | 32,869 |  |  |  | 565 |  |  |  | 87,987 |  |  |  | 4,325 |  |  |  | 120,856 |  |  |  | 4,890 |
Municipal revenue bonds |  |  | 2,343 |  |  |  | 18 |  |  |  | 20,035 |  |  |  | 1,660 |  |  |  | 22,378 |  |  |  | 1,678 |
Other investments |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 58,665 |  |  | $ | 681 |  |  | $ | 478,716 |  |  | $ | 40,326 |  |  | $ | 537,381 |  |  | $ | 41,007 |
Securities with unrealized losses at December 31, 2024, 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 |
(Dollars in thousands) |  | Value |  |  | Loss |  |  | Value |  |  | Loss |  |  | Value |  |  | Loss |
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agency debt obligations |  | $ | 113,942 |  |  | $ | 2,379 |  |  | $ | 361,171 |  |  | $ | 44,847 |  |  | $ | 475,113 |  |  | $ | 47,226 |
Mortgage-backed securities |  |  | 194 |  |  |  | 1 |  |  |  | 24,865 |  |  |  | 6,331 |  |  |  | 25,059 |  |  |  | 6,332 |
Municipal general obligation bonds |  |  | 63,387 |  |  |  | 1,117 |  |  |  | 92,153 |  |  |  | 6,710 |  |  |  | 155,540 |  |  |  | 7,827 |
Municipal revenue bonds |  |  | 2,840 |  |  |  | 28 |  |  |  | 21,865 |  |  |  | 2,394 |  |  |  | 24,705 |  |  |  | 2,422 |
Other investments |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 180,363 |  |  | $ | 3,525 |  |  | $ | 500,054 |  |  | $ | 60,282 |  |  | $ | 680,417 |  |  | $ | 63,807 |
We evaluate securities in an unrealized loss position at least quarterly. Consideration is given to the financial condition of the issuer and 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 September 30, 2025, 643 debt securities with estimated fair values totaling $537 million had unrealized losses aggregating $41.0 million. At December 31, 2024, 843 debt securities with estimated fair values totaling $680 million had unrealized losses aggregating $63.8 million. At September 30, 2025, unrealized losses aggregating $34.4 million were attributable to bonds issued or guaranteed by agencies of the U.S. Federal Government, while unrealized losses totaling $6.6 million were associated with bonds issued by state-based municipalities. For available for sale debt securities in an unrealized loss position, we first assess whether we intend to sell, or if it is more likely than not that we will be required to sell the security before recovery of the amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the debt security’s amortized cost basis is written down to fair value through income with the establishment of an allowance. For debt securities available for sale that do not meet the aforementioned criteria, we evaluate whether any decline in fair value is due to credit loss factors. In making this assessment, we consider any changes to the rating of the security by a rating agency and adverse conditions specifically related to the issuer of the security, among other factors. The amortized cost and fair value of debt securities at September 30, 2025, 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.
|  | Amortized |  |  | Fair |
(Dollars in thousands) |  | Cost |  |  | Value |
Due in 2025 |  | $ | 16,400 |  |  | $ | 16,336 |
Due in 2026 through 2030 |  |  | 499,573 |  |  |  | 482,797 |
Due in 2031 through 2035 |  |  | 289,744 |  |  |  | 275,318 |
Due in 2036 and beyond |  |  | 56,484 |  |  |  | 56,514 |
Mortgage-backed securities |  |  | 28,527 |  |  |  | 23,673 |
Other investments |  |  | 500 |  |  |  | 500 |
Total available for sale securities |  | $ | 891,228 |  |  | $ | 855,138 |
No securities were sold during the first nine months of 2025 or the full-year 2024. Securities issued by the State of Michigan and all its political subdivisions had combined amortized costs of $229 million and $219 million as of September 30, 2025, and December 31, 2024, respectively, with estimated market values of $224 million and $209 million at the respective dates. We had no securities issued by all other states and their political subdivisions as of September 30, 2025, and December 31, 2024. 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 obligation securities that are pledged to secure repurchase agreements was $251 million and $122 million at September 30, 2025, and December 31, 2024, respectively. The carrying value of U.S. Government agency debt obligation securities that are pledged to secure specific customer deposits was $12.5 million and $11.7 million at September 30, 2025, and December 31, 2024, respectively.

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