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Securities
 12 Months Ended
Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]  
Securities

Note 2 – Securities

 

The fair value of equity securities and the related gross unrealized gains and losses recognized in noninterest income at December 31 were as follows: 

 

   2018 
       Gross   Gross     
(Dollars in thousands)  Amortized   Unrealized   Unrealized   Fair 
   Cost   Gains   Losses   Value 
Equity securities  $2,502    459    (114)   2,847 

 

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:

 

   2018 
       Gross   Gross     
(Dollars in thousands)  Amortized   Unrealized   Unrealized   Fair 
   Cost   Gains   Losses   Value 
U.S. Government and federal agency  $34,079   $1   $(551)  $33,529 
U.S. Treasury notes and bonds   1,992    —    (45)   1,947 
State and municipal   104,317    544    (933)   103,928 
Mortgage-backed   21,654    126    (205)   21,575 
Corporate   5,147    1    (46)   5,102 
Trust preferred securities   500    —    —    500 
Asset-backed securities   21    —    —    21 
Total  $167,710   $672   $(1,780)  $166,602 

 

   2017 
       Gross   Gross     
(Dollars in thousands)  Amortized   Unrealized   Unrealized   Fair 
   Cost   Gains   Losses   Value 
U.S. Government and federal agency  $35,518   $—   $(392)  $35,126 
U.S. Treasury notes and bonds   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   2,583    309    —    2,892 
Trust preferred securities   500    —    —    500 
Asset-backed securities   95    —    (1)   94 
Total  $155,423   $1,229   $(1,061)  $155,591 

 

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

 

(Dollars in thousands)            
   2018   2017   2016 
Proceeds from sales of securities  $2,725   $57,628   $15,317 
Gross realized gains   42    184    312 
Gross realized losses   8    464    — 

 

Contractual maturities of equity securities and securities available for sale at December 31, 2018 were as follows: 

 

(Dollars in thousands)  Amortized   Fair 
   Cost   Value 
Due within one year  $30,224   $30,390 
Due after one year through five years   69,299    68,809 
Due after five years through ten years   44,108    43,895 
Due after ten years   2,425    1,933 
Total debt securities   146,056    145,027 
Mortgage-backed securities   21,654    21,575 
Equity securities   2,502    2,847 
Total  $170,212   $169,449 

 

Various securities were pledged as collateral for securities sold under agreements to repurchase 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)  2018   2017 
Securities pledged for securities sold under agreements to repurchase  $—   $9,902 
Security pledged for Community Reinvestment Act credits   257    262 
Total  $257   $10,164 

 

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 2018 and 2017, aggregated by investment category and length of time the individual securities have been in an unrealized loss position, were as follows:

 

   2018 
   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  $—   $—   $31,499   $(551)  $31,499   $(551)
U.S. Treasury notes and bonds   —    —    1,947    (45)   1,947    (45)
State and municipal   9,726    (36)   56,763    (897)   66,489    (933)
Mortgage-backed   5,384    (28)   7,443    (177)   12,827    (205)
Corporate   —    —    4,604    (46)   4,604    (46)
Equity securities   886    (114)   —    —    886    (114)
Total temporarily impaired  $15,996   $(178)  $102,256   $(1,716)  $118,252   $(1,894)

 

   2017 
   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  $20,297   $(190)  $9,798   $(202)  $30,095   $(392)
U.S. Treasury notes and bonds   1,960    (31)   —    —    1,960    (31)
State and municipal   38,887    (319)   6,889    (152)   45,776    (471)
Mortgage-backed   8,481    (104)   838    (27)   9,319    (131)
Corporate   2,471    (17)   687    (18)   3,158    (35)
Asset-backed securities   —    —    94    (1)   94    (1)
Total temporarily impaired  $72,096   $(661)  $18,306   $(400)  $90,402   $(1,061)

 

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, 2018 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 2018 or 2017. 

 

Following is information regarding unrealized gains and losses on equity securities for the year ending December 31, 2018: 

     
   2018 
New gains and losses recognized during the period  $71 
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  $62 

 

No presentation is necessary for years prior to 2018 due to implementation of ASU 2016-01 effective January 1, 2018.

 

At December 31, 2018, there were 210 securities with an unrealized loss, compared to 154 securities with an unrealized loss as of December 31, 2017.