NOTE

– SECURITIES

The amortized cost and fair value of available for sal

e securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
201 7
U.S. Government agency debt obligations	$	175,953,000	$	99,000	$	(6,352,000	)	$	169,700,000
M ortgage-backed securities		38,967,000		335,000		(510,000	)		38,792,000
M unicipal general obligation bonds		121,040,000		891,000		(638,000	)		121,293,000
Municipal revenue bonds		3,978,000		30,000		(30,000	)		3,978,000
O ther investments		2,010,000		0		(29,000	)		1,981,000
	$	341,948,000	$	1,355,000	$	(7,559,000	)	$	335,744,000
201 6
U.S. Government agency debt obligations	$	159,271,000	$	106,000	$	(7,337,000	)	$	152,040,000
M ortgage-backed securities		47,329,000		486,000		(423,000	)		47,392,000
M unicipal general obligation bonds		120,284,000		312,000		(1,549,000	)		119,047,000
M unicipal revenue bonds		7,699,000		23,000		(91,000	)		7,631,000
O ther investments		1,979,000		0		(29,000	)		1,950,000
	$	336,562,000	$	927,000	$	(9,429,000	)	$	328,060,000

Securities with

unrealized losses at year-end

2017

and

2016,

aggregated by investment category and length of time that individual securities have been in a continuous loss position, are as follows:

	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
201 7
U.S. Government agency debt obligations	$	35,677,000	$	434,000	$	115,374,000	$	5,918,000	$	151,051,000	$	6,352,000
Mortgage-backed securities		10,179,000		156,000		21,084,000		354,000		31,263,000		510,000
Municipal general obligation bonds		12,807,000		114,000		54,703,000		524,000		67,510,000		638,000
Municipal revenue bonds		0		0		1,187,000		30,000		1,187,000		30,000
Other investments		1,510,000		29,000		0		0		1,510,000		29,000
	$	60,173,000	$	733,000	$	192,348,000	$	6,826,000	$	252,521,000	$	7,559,000
201 6
U.S. Government agency debt obligations	$	110,160,000	$	7,172,000	$	5,073,000	$	165,000	$	115,233,000	$	7,337,000
Mortgage-backed securities		3,670,000		4,000		37,072,000		419,000		40,742,000		423,000
Municipal general obligation bonds		65,895,000		1,360,000		27,734,000		189,000		93,629,000		1,549,000
Municipal revenue bonds		1,921,000		90,000		206,000		1,000		2,127,000		91,000
Other investments		1,479,000		29,000		0		0		1,479,000		29,000
	$	183,125,000	$	8,655,000	$	70,085,000	$	774,000	$	253,210,000	$	9,429,000

We evaluate securities

for other-than-temporary impairment at least on a quarterly basis. 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 we have to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. For those debt securities whose fair value is less than their amortized cost basis, we also consider our intent to sell the security, whether it is more likely than

not

that we will be required to sell the security before recovery and if we do

not

expect to recover the entire amortized cost basis of the security. In analyzing an issuer’s financial condition, we

may

consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition.

December 31,

201

325

debt securities and

one

mutual fund with fair values totaling

$253

million had unrealized losses aggregating

$7.6

million. After we considered whether the securities were issued by the federal government or its agencies and whether downgrades by bond rating agencies had occurred, we determined that unrealized losses were due to changing interest rate environments. As we do

not

intend to sell our debt securities before recovery of their cost basis and we believe it is more likely than

not

that we will

not

be required to sell our debt securities before recovery of the cost basis,

unrealized losses are deemed to be other-than-temporary.

The amortized cost and fair values of debt securities at

December 31,

201

by maturity, are shown in the following table. The contractual maturity is utilized for U.S. Government agency debt obligations and municipal bonds. Expected maturities

may

differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties. Securities

not

due at a single maturity date, primarily mortgage-backed securities, are shown separately. Weighted average yields are also reflected, with yields for municipal securities shown at their tax equivalent yield.

	Weighted Average Yield		Amortized Cost		Fair Value
Due in one year or less		1.74%	$	29,667,000	$	29,675,000
Due from one to five years		2.12		65,093,000		64,938,000
Due from five to ten years		2.52		100,128,000		97,943,000
Due after ten years		2.90		106,083,000		102,415,000
Mortgage-backed securities		2.17		38,967,000		38,792,000
Other investments		2.71		2,010,000		1,981,000
		2.46%	$	341,948,000	$	335,744,000

Mortgage-backed securities totaling

$5.0

million were sold in

2017,

resulting in a nominal net gain.

mortgage-backed securities were sold in

2016

2015.

Municipal general obligation bonds totaling

$2.6

million,

$0.3

million and

$1.5

million were sold during

2017,

2016

and

2015,

respectively, resulting in a nominal net gain/loss.

Securities issued by the State of Michigan and all its political subdivisions had a co

mbined amortized cost of

$112

million and

$109

million at

December 31, 2017

and

December 31, 2016,

respectively, with estimated market values of

$112

million and

$107

million at the respective dates. Securities issued by all other states and their political subdivisions had a combined amortized cost of

$12.9

million and

$19.5

million at

December 31, 2017

and

December 31, 2016,

with estimated market values of

$13.0

million and

$19.5

million, respectively. Total securities of any other specific issuer, other than the U.S. Government and its agencies and the State of Michigan and all its political subdivisions, did

not

exceed

10%

of shareholders’ equity.

The carrying value of U.S. Government agency debt obligations and mortgage-backed securities that are pledged to secure repurchase agre

ements was

$119

million and

$132

million at

December 31, 2017

and

2016,

respectively. Investments in FHLBI stock are restricted and

may

only be resold to, or redeemed by, the issuer.