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Securities
 12 Months Ended
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Securities

Note 2 – Securities 

 

The fair value of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) at December 31 were as follows:

 

    2016  
          Gross     Gross        
(Dollars in thousands)   Amortized     Unrealized     Unrealized     Fair  
    Cost     Gains     Losses     Value  
U.S. Government and federal agency   $ 59,864     $ 34     $ (846 )   $ 59,052  
U.S. Treasury notes and bonds     4,111       —       (39 )     4,072  
State and municipal     89,169       748       (944 )     88,973  
Mortgage-backed     7,925       19       (155 )     7,789  
Corporate     7,069       12       (40 )     7,041  
Foreign debt     4,514       —       (114 )     4,400  
Equity securities     2,617       266       —       2,883  
Asset-backed securities     182       —       (4 )     178  
     Total   $ 175,451     $ 1,079     $ (2,142 )   $ 174,388  

 

    2015  
          Gross     Gross        
(Dollars in thousands)   Amortized     Unrealized     Unrealized     Fair  
    Cost     Gains     Losses     Value  
U.S. Government and federal agency   $ 57,406     $ 30     $ (229 )   $ 57,207  
U.S. Treasury notes and bonds     6,133       —       (33 )     6,100  
State and municipal     76,005       1,858       (109 )     77,754  
Mortgage-backed     6,989       26       (45 )     6,970  
Corporate     8,418       8       (39 )     8,387  
Foreign debt     1,000       —       (5 )     995  
Equity securities     2,279       174       —       2,453  
Asset-backed securities     274       —       (4 )     270  
     Total   $ 158,504     $ 2,096     $ (464 )   $ 160,136  

  

Information regarding sales of securities available for sale for the year ended December 31 follows:

 

(Dollars in thousands) 

    2016     2015     2014  
Proceeds from sales of securities   $ 15,317     $ 25,876     $ 24,766  
Gross realized gains     312       261       341  
Gross realized losses     0       0       30  

 

Contractual maturities of securities available for sale at December 31, 2016 were as follows:

 

(Dollars in thousands)   Amortized     Fair  
    Cost     Value  
Due within one year   $ 34,174     $ 33,879  
Due after one year through five years     89,413       89,204  
Due after five years through ten years     37,153       36,514  
Due after ten years     4,168       4,119  
     Total debt securities     164,908       163,716  
Mortgage-backed securities     7,925       7,789  
Equity securities     2,883       2,883  
      Total   $ 175,716     $ 174,388  

  

Various securities were pledged as collateral for securities sold under agreements to repurchase, advances from the Federal Home Loan Bank, and participation in a program that provided Community Reinvestment Act credits. The carrying amount of securities pledged as collateral at December 31 was as follows:

 

(Dollars in thousands)

 

  2016   2015 
Securities pledged for securities sold under agreements to repurchase  $13,186   $7,011 
Securities pledged for advances from the Federal Home Loan Bank   —    24,199 
Security pledged for Community Reinvestment Act credits   250    276 
     Total  $13,436   $31,486 

 

The fair value of securities pledged to secure repurchase agreements may decline, and the Company may be required to provide additional collateral. The Company manages this risk by pledging securities with fair values in excess of the repurchase liability.

 

Securities with unrealized losses at year-end 2016 and 2015, aggregated by investment category and length of time the individual securities have been in an unrealized loss position, were as follows:

 

    2016  
    Less than 12 months     More than 12 months     Total  
(Dollars in thousands)   Fair     Unrealized     Fair     Unrealized     Fair     Unrealized  
    Value     Losses     Value     Losses     Value     Losses  
U.S. Government and federal agency   $ 46,283     $ (846 )   $ —     $ —     $ 46,283     $ (846 )
U.S. Treasury notes and bonds     4,072       (39 )     —       —       4,072       (39 )
State and municipal     47,832       (944 )     —       —       47,832       (944 )
Mortgage-backed     5,980       (150 )     251       (5 )     6,231       (155 )
Corporate     2,838       (40 )     —       —       2,838       (40 )
Foreign debt     4,400       (114 )     —       —       4,400       (114 )
Asset-backed securities     —       —       178       (4 )     178       (4 )
     Total temporarily impaired   $ 111,405     $ (2,133 )   $ 429     $ (9 )   $ 111,834     $ (2,142 )

 

    2015  
    Less than 12 months     More than 12 months     Total  
(Dollars in thousands)   Fair     Unrealized     Fair     Unrealized     Fair     Unrealized  
    Value     Losses     Value     Losses     Value     Losses  
U.S. Government and federal agency   $ 38,567     $ (216 )   $ 986     $ (13 )   $ 39,553     $ (229 )
U.S. Treasury notes and bonds     6,101       (33 )     —       —       6,101       (33 )
State and municipal     10,382       (69 )     2,906       (40 )     13,288       (109 )
Mortgage-backed     4,459       (41 )     382       (4 )     4,841       (45 )
Corporate     4,284       (33 )     896       (6 )     5,180       (39 )
Foreign debt     995       (5 )     —       —       995       (5 )
Asset-backed securities     —       —       270       (4 )     270       (4 )
     Total temporarily impaired   $ 64,788     $ (397 )   $ 5,440     $ (67 )   $ 70,228     $ (464 )

 

ChoiceOne evaluates all securities on a quarterly basis to determine whether unrealized losses are temporary or other than temporary. 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, and the intent and ability of ChoiceOne to retain its investment in the issue for a period of time sufficient to allow for any anticipated recovery in fair value of amortized cost basis. Management believed that unrealized losses as of December 31, 2016 were temporary in nature and were caused primarily by changes in interest rates, increased credit spreads, and reduced market liquidity and were not caused by the credit status of the issuer. No other than temporary impairments were recorded in 2016 or 2015.

 

At December 31, 2016, there were 196 securities with an unrealized loss, compared to 82 securities with an unrealized loss as of December 31, 2015. The increase in the number of securities in an unrealized loss position was caused by higher interest rates at the end of 2016 compared to the end of 2015.