Note 2 - Securities

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

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

2.    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 (loss) are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost		Gains		Losses			Value
March 31, 2024
U.S. Government agency debt obligations	$	438,662	$	0	$	(52,953	)	$	385,709
Mortgage-backed securities		34,059		10		(6,287	)		27,782
Municipal general obligation bonds		172,279		1,244		(6,891	)		166,632
Municipal revenue bonds		30,708		151		(2,329	)		28,530
Other investments		500		0		0			500
	$	676,208	$	1,405	$	(68,460	)	$	609,153
December 31, 2023
U.S. Government agency debt obligations	$	442,496	$	0	$	(52,000	)	$	390,496
Mortgage-backed securities		35,168		20		(5,715	)		29,473
Municipal general obligation bonds		172,126		1,924		(6,190	)		167,860
Municipal revenue bonds		30,708		262		(2,207	)		28,763
Other investments		500		0		0			500
	$	680,998	$	2,206	$	(66,112	)	$	617,092

Securities with unrealized losses at March 31, 2024 and  December 31, 2023, 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		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss
March 31, 2024
U.S. Government agency debt obligations	$	0	$	0	$	385,709	$	52,953	$	385,709	$	52,953
Mortgage-backed securities		201		3		27,089		6,284		27,290		6,287
Municipal general obligation bonds		20,393		189		100,489		6,702		120,882		6,891
Municipal revenue bonds		1,141		10		21,061		2,319		22,202		2,329
Other investments		0		0		0		0		0		0
	$	21,735	$	202	$	534,348	$	68,258	$	556,083	$	68,460

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss
December 31, 2023
U.S. Government agency debt obligations	$	0	$	0	$	390,496	$	52,000	$	390,496	$	52,000
Mortgage-backed securities		114		0		28,749		5,715		28,863		5,715
Municipal general obligation bonds		1,109		6		106,171		6,184		107,280		6,190
Municipal revenue bonds		1,506		8		20,602		2,199		22,108		2,207
Other investments		0		0		0		0		0		0
	$	2,729	$	14	$	546,018	$	66,098	$	548,747	$	66,112

We evaluate securities in an unrealized loss position at least quarterly. Consideration is given to the financial condition 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.

At March 31, 2024, 679 debt securities with estimated fair values totaling $556 million had unrealized losses aggregating $68.5 million. At December 31, 2023, 641 debt securities with estimated fair values totaling $549 million had unrealized losses aggregating $66.1 million. At March 31, 2024, unrealized losses aggregating $59.2 million were attributable to bonds issued or guaranteed by agencies of the U.S. Federal Government, while unrealized losses totaling $9.2 million were associated with bonds issued by state-based municipalities. For available for sale debt securities in an unrealized loss position, we first assess whether we intend to sell, or if it is more likely than not that we will be required to sell the security before recovery of the amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the debt security’s amortized cost basis is written down to fair value through income with the establishment of an allowance. For debt securities available for sale that do not meet the aforementioned criteria, we evaluate whether any decline in fair value is due to credit loss factors. In making this assessment, we consider any changes to the rating of the security by a rating agency and adverse conditions specifically related to the issuer of the security, among other factors.

The amortized cost and fair value of debt securities at March 31, 2024, 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.

	Amortized		Fair
(Dollars in thousands)	Cost		Value
Due in 2024	$	53,520	$	52,568
Due in 2025 through 2029		329,740		301,553
Due in 2030 through 2034		227,431		196,189
Due in 2035 and beyond		30,958		30,561
Mortgage-backed securities		34,059		27,782
Other investments		500		500
Total available for sale securities	$	676,208	$	609,153

No securities were sold during the first three months of 2024 or the full-year 2023.

Securities issued by the State of Michigan and all its political subdivisions had a combined amortized cost of $203 million as of both  March 31, 2024 and  December 31, 2023, with estimated market values of $195 million and $197 million at the respective dates. We had no securities issued by all other states and their political subdivisions as of March 31, 2024, and December 31, 2023. 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 obligation securities that are pledged to secure repurchase agreements was $229 million and $230 million at March 31, 2024, and December 31, 2023, respectively.