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SECURITIES

6 Months Ended

Jun. 30, 2018

Investments, Debt and Equity Securities [Abstract]

SECURITIES

NOTE 2 - SECURITIES

The fair value of equity securities at fair value and the related gross unrealized gains recognized in other noninterest income were as follows:

June 30, 2018

(Dollars in thousands)

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Loss

Fair
Value

Equity securities

$

3,002

$

336

$

—

$

3,338

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

		June 30, 2018
						Gross				Gross
(Dollars in thousands)		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
U.S. Government and federal agency		$	34,099			$	—			$	(971	)		$	33,128
U.S. Treasury			1,991				—				(72	)			1,919
State and municipal			104,958				378				(1,731	)			103,605
Mortgage-backed			18,310				11				(409	)			17,912
Corporate			5,146				—				(79	)			5,067
Asset-backed securities			56				—				—				56
Total		$	164,560			$	389			$	(3,262	)		$	161,687

		December 31, 2017
							Gross				Gross
			Amortized				Unrealized				Unrealized				Fair
			Cost				Gains				Losses				Value
U.S. Government and federal agency		$	35,518			$	—			$	(392	)		$	35,126
U.S. Treasury			1,991				—				(31	)			1,960
State and municipal			99,609				910				(471	)			100,048
Mortgage-backed			9,943				8				(131	)			9,820
Corporate			5,184				2				(35	)			5,151
Equity securities			3,083				309				—				3,392
Asset-backed securities			95				—				(1	)			94
Total		$	155,423			$	1,229			$	(1,061	)		$	155,591

ChoiceOne reviews its securities portfolio on a quarterly basis to determine whether unrealized losses are considered to be temporary or other-than-temporary. No other-than-temporary impairment charges were recorded in the three and six months ended June 30, 2018. ChoiceOne believed that unrealized losses on securities were temporary in nature and were due to changes in interest rates and reduced market liquidity and not as a result of credit quality issues.

Presented below is a schedule of maturities of securities as of June 30, 2018, the fair value of securities as of June 30, 2018 and December 31, 2017, and the weighted average yields of securities as of June 30, 2018:

		Securities maturing within:
																		Fair Value				Fair Value
		Less than				1 Year -				5 Years -				More than				at June 30,				at Dec. 31,
(Dollars in thousands)		1 Year				5 Years				10 Years				10 Years				2018				2017
U.S. Government and federal agency		$	16,460			$	9,888			$	6,780			$	—			$	33,128			$	35,126
U.S. Treasury notes and bonds			—				1,919				—				—				1,919				1,960
State and municipal			10,694				50,580				40,314				2,017				103,605				100,048
Corporate			1,992				2,587				488				—				5,067				5,151
Asset-backed securities			56				—				—				—				56				94
Total debt securities			29,202				64,974				47,582				2,017				143,775				142,379

Mortgage-backed securities			—				11,656				6,256				—				17,912				9,820
Equity securities (1)			—				—				1,000				2,338				3,338				3,392
Total		$	29,202			$	76,630			$	54,838			$	4,355			$	165,025			$	155,591

		Weighted average yields:
		Less than				1 Year -				5 Years -				More than
		1 Year				5 Years				10 Years				10 Years				Total
U.S. Government and federal agency			2.19	%			1.78	%			2.67	%			—	%			2.17	%
U.S. Treasury notes and bonds			—				1.85				—				—				1.85
State and municipal (2)			3.10				3.05				3.58				1.22				3.23
Corporate			—				2.48				3.21				—				1.58
Asset-backed securities			2.59				—				—				—				2.59
Mortgage-backed securities			—				2.92				3.01				—				2.95
Equity securities (1)			—				—				4.78				1.07				2.18

(1) Equity securities are preferred and common stock that may or may not have stated maturity.

(2) The yield is computed for tax-exempt securities on a fully tax-equivalent basis at an incremental rate of 21%.

Following is information regarding unrealized gains and losses on equity securities for the three- and six-month periods ending June 30, 2018:

			Three Months Ended June 30, 2018				Six Months Ended June 30, 2018
Net gains and losses recognized during the period		$	26			$	58
Less: Net gains and losses recognized during the period on securities sold			—				9

Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date		$	26			$	49