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Note 2 - Securities

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 2 – SECURITIES

During the three months ended March 31, 2022, ChoiceOne reassessed and transferred, at fair value $428.4 million of securities classified as available for sale to the held to maturity classification. The net unrealized pre-tax loss of $3.4 million as of the transfer date remained in accumulated other comprehensive income to be amortized over the remaining life of the securities, offsetting the related amortization of discount or premium on the transferred securities. No gains or losses were recognized at the time of the transfer. The remaining net unamortized unrealized loss on transferred securities included in accumulated other comprehensive income was $2.6 million after tax as of March 31, 2022.

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

		March 31, 2022
						Gross				Gross
(Dollars in thousands)		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
Equity securities		$	8,100			$	545			$	(363	)		$	8,282

		December 31, 2021
						Gross				Gross
(Dollars in thousands)		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
Equity securities		$	7,953			$	665			$	(126	)		$	8,492

The following tables present the amortized cost and fair value of investment securities at the dates indicated and the corresponding amounts of gross unrealized gains and losses, including the corresponding amounts of gross unrealized gains and losses on investment securities available for sale recognized in accumulated other comprehensive income:

		March 31, 2022
						Gross				Gross
(Dollars in thousands)		Amortized				Unrealized				Unrealized				Fair
Available for Sale:		Cost				Gains				Losses				Value
U.S. Government and federal agency		$	-			$	-			$	-			$	-
U.S. Treasury notes and bonds			93,154				8				(6,671	)			86,491
State and municipal			334,907				443				(22,962	)			312,388
Mortgage-backed			240,062				19				(13,412	)			226,669
Corporate			1,255				4				(4	)			1,255
Asset-backed securities			14,465				-				(220	)			14,245
Total		$	683,843			$	474			$	(43,269	)		$	641,048

Held to Maturity:
U.S. Government and federal agency		$	2,962			$	-			$	(195	)		$	2,767
U.S. Treasury notes and bonds			-				-				-				-
State and municipal			204,201				2				(17,668	)			186,535
Mortgage-backed			204,165				30				(13,533	)			190,662
Corporate			17,161				-				(606	)			16,555
Asset-backed securities			1,429				-				(37	)			1,392
Total		$	429,918			$	32			$	(32,039	)		$	397,911

		December 31, 2021
						Gross				Gross
(Dollars in thousands)		Amortized				Unrealized				Unrealized				Fair
Available for Sale:		Cost				Gains				Losses				Value
U.S. Government and federal agency		$	2,001			$	7			$	-			$	2,008
U.S. Treasury notes and bonds			93,267				23				(1,311	)			91,979
State and municipal			528,252				10,704				(4,109	)			534,847
Mortgage-backed			441,383				781				(9,049	)			433,115
Corporate			20,856				19				(233	)			20,642
Asset-backed securities			16,387				-				(93	)			16,294
Total		$	1,102,146			$	11,534			$	(14,795	)		$	1,098,885

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 months ended March 31, 2022 or in the same period in2021. ChoiceOne believes 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 March 31, 2022, the fair value of securities available for sale and the amortized cost of securities held to maturity as of March 31, 2022. Callable securities in the money are presumed called and matured at the callable date.

		Available for Sale Securities maturing within:
																		Fair Value
		Less than				1 Year -				5 Years -				More than				at March 31,
(Dollars in thousands)		1 Year				5 Years				10 Years				10 Years				2022

U.S. Government and federal agency		$	-			$	-			$	-			$	-			$	-
U.S. Treasury notes and bonds			2,007				-				84,484				-				86,491
State and municipal			17,913				34,667				185,902				73,906				312,388
Corporate			501				508				246				-				1,255
Asset-backed securities			-				10,305				3,940				-				14,245
Total debt securities			20,421				45,480				274,572				73,906				414,379

Mortgage-backed securities			13,689				84,660				119,303				9,017				226,669
Equity securities			-				1,000				-				7,282				8,282
Total Available for Sale		$	34,110			$	131,140			$	393,875			$	90,205			$	649,330

		Held to Maturity Securities maturing within:
																		Amortized Cost
		Less than				1 Year -				5 Years -				More than				at March 31,
(Dollars in thousands)		1 Year				5 Years				10 Years				10 Years				2022

U.S. Government and federal agency		$	-			$	-			$	2,962			$	-			$	2,962
U.S. Treasury notes and bonds			-				-				-				-				-
State and municipal			2,755				4,608				97,764				99,074				204,201
Corporate			-				250				15,911				1,000				17,161
Asset-backed securities			-				1,429				-				-				1,429
Total debt securities			2,755				6,287				116,637				100,074				225,753

Mortgage-backed securities			3,511				44,972				155,682				-				204,165
Equity securities			-				-				-				-				-
Total Held to Maturity		$	6,266			$	51,259			$	272,319			$	100,074			$	429,918

Following is information regarding unrealized gains and losses on equity securities for the three months ended March 31, 2022 and 2021:

		Three Months Ended
		March 31,
		2022				2021

Net gains and (losses) recognized during the period		$	(356	)		$	608
Less: Net gains and (losses) recognized during the period on securities sold			—				—

Unrealized gains and (losses) recognized during the reporting period on securities still held at the reporting date		$	(356	)		$	608