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Note 2 - Securities

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

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

NOTE 2 – SECURITIES

On January 1, 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 after-tax loss of $2.7 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 $2.5 million after tax as of June 30, 2022.

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

		June 30, 2022
						Gross				Gross
(Dollars in thousands)		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
Equity securities		$	8,432			$	405			$	(549	)		$	8,288

		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:

		June 30, 2022
						Gross				Gross
(Dollars in thousands)		Amortized				Unrealized				Unrealized				Fair
Available for Sale:		Cost				Gains				Losses				Value
U.S. Treasury notes and bonds		$	93,040			$	-			$	(9,397	)		$	83,643
State and municipal			300,824				34				(44,197	)			256,661
Mortgage-backed			230,842				5				(19,719	)			211,128
Corporate			1,256				-				(18	)			1,238
Asset-backed securities			14,122				-				(650	)			13,472
Total		$	640,084			$	39			$	(73,981	)		$	566,142

Held to Maturity:
U.S. Government and federal agency		$	2,963			$	-			$	(283	)		$	2,680
State and municipal			203,267				-				(32,638	)			170,629
Mortgage-backed			202,595				-				(23,007	)			179,588
Corporate			19,593				-				(1,013	)			18,580
Asset-backed securities			1,257				-				(67	)			1,190
Total		$	429,675			$	-			$	(57,008	)		$	372,667

		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 and six months ended June 30, 2022 or in the same periods 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 June 30, 2022, and the fair value of securities available for sale and the amortized cost of securities held to maturity as of June 30, 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 June 30,
(Dollars in thousands)		1 Year				5 Years				10 Years				10 Years				2022

U.S. Treasury notes and bonds		$	2,000			$	-			$	81,643			$	-			$	83,643
State and municipal			16,426				8,873				75,501				155,861				256,661
Corporate			500				505				233				-				1,238
Asset-backed securities			-				9,741				3,731				-				13,472
Total debt securities			18,926				19,119				161,108				155,861				355,014

Mortgage-backed securities			18,793				101,454				90,244				637				211,128
Total Available for Sale		$	37,719			$	120,573			$	251,352			$	156,498			$	566,142

		Held to Maturity Securities maturing within:
																		Amortized Cost
		Less than				1 Year -				5 Years -				More than				at June 30,
(Dollars in thousands)		1 Year				5 Years				10 Years				10 Years				2022

U.S. Government and federal agency		$	-			$	-			$	2,963			$	-			$	2,963
State and municipal			2,724				5,112				89,248				106,183				203,267
Corporate			-				250				18,343				1,000				19,593
Asset-backed securities			-				1,257				-				-				1,257
Total debt securities			2,724				6,619				110,554				107,183				227,080

Mortgage-backed securities			6,525				45,672				150,398				-				202,595
Total Held to Maturity		$	9,249			$	52,291			$	260,952			$	107,183			$	429,675

Following is information regarding unrealized gains and losses on equity securities for the three and six months ended June 30, 2022 and 2021:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2022				2021				2022				2021

Net gains and (losses) recognized during the period		$	(327	)		$	(119	)		$	(683	)		$	489
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		$	(327	)		$	(119	)		$	(683	)		$	489