SECURITIES

The amortized cost and fair value of available for sale securities and the related pre-tax gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30, 2019
U.S. Government agency debt obligations	$	195,926,000	$	3,151,000	$	(958,000	)	$	198,119,000
Mortgage-backed securities		42,563,000		524,000		(116,000	)		42,971,000
Municipal general obligation bonds		97,806,000		2,753,000		(22,000	)		100,537,000
Municipal revenue bonds		3,346,000		61,000		(1,000	)		3,406,000
Other investments		500,000		0		0			500,000

	$	340,141,000	$	6,489,000	$	(1,097,000	)	$	345,533,000

December 31, 201 8
U.S. Government agency debt obligations	$	196,109,000	$	310,000	$	(9,342,000	)	$	187,077,000
Mortgage-backed securities		44,263,000		187,000		(792,000	)		43,658,000
Municipal general obligation bonds		103,235,000		427,000		(1,165,000	)		102,497,000
Municipal revenue bonds		3,688,000		4,000		(58,000	)		3,634,000
Other investments		500,000		0		0			500,000

	$	347,795,000	$	928,000	$	(11,357,000	)	$	337,366,000

Securities with unrealized losses at

September 30, 2019

and

December 31, 2018,

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
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
September 30, 2019
U.S. Government agency debt obligations	$	15,630,000	$	370,000	$	53,935,000	$	588,000	$	69,565,000	$	958,000
Mortgage-backed securities		0		0		17,049,000		116,000		17,049,000		116,000
Municipal general obligation bonds		1,848,000		4,000		2,758,000		18,000		4,606,000		22,000
Municipal revenue bonds		0		0		554,000		1,000		554,000		1,000
Other investments		0		0		0		0		0		0

	$	17,478,000	$	374,000	$	74,296,000	$	723,000	$	91,774,000	$	1,097,000

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
December 31, 2018
U.S. Government agency debt obligations	$	31,220,000	$	1,136,000	$	136,445,000	$	8,206,000	$	167,665,000	$	9,342,000
Mortgage-backed securities		11,460,000		136,000		23,762,000		656,000		35,222,000		792,000
Municipal general obligation bonds		28,923,000		299,000		43,961,000		866,000		72,884,000		1,165,000
Municipal revenue bonds		1,188,000		11,000		1,372,000		47,000		2,560,000		58,000
Other investments		0		0		0		0		0		0

	$	72,791,000	$	1,582,000	$	205,540,000	$	9,775,000	$	278,331,000	$	11,357,000

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 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.

September 30, 2019,

debt securities with fair values totaling

$91.8

million have unrealized losses aggregating

$1.1

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 the 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 value of debt securities at

September 30, 2019,

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 2019		1.92%	$	3,487,000	$	3,488,000
Due in 2020 through 2024		2.31		67,321,000		67,802,000
Due in 2025 through 2029		2.70		113,584,000		115,696,000
Due in 2030 and beyond		3.11		112,686,000		115,076,000
Mortgage-backed securities		2.87		42,563,000		42,971,000
Other investments		4.50		500,000		500,000

Total available for sale securities		2.78%	$	340,141,000	$	345,533,000

Securities issued by the State of Michigan and all its political subdivisions had a combined amortized cost of

$94.3

million and

$98.2

million at

September 30, 2019

and

December 31, 2018,

respectively, with estimated market values of

$97.0

million and

$97.4

million, respectively. Securities issued by all other states and their political subdivisions had a combined amortized cost of

$6.9

million and

$8.7

million at

September 30, 2019

and

December 31, 2018,

respectively, with estimated market values of

$6.9

million and

$8.7

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 that are pledged to secure repurchase agreements was

$104

million at

September 30, 2019

and

December 31, 2018.

Investments in Federal Home Loan Bank stock are restricted and

may

only be resold or redeemed by the issuer.