Company: COFS
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0000950170-25-036839
Chunk: 94

Company: CHOICEONE FINANCIAL SERVICES INC
Filing Date: 2025-03-11
Form: 10-K
Item: Item 8
Chunk 94
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 and near-term prospects of the issuer, and the intent and ability of ChoiceOne to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value of amortized cost basis. ChoiceOne believes that unrealized losses on securities were temporary in nature and were caused primarily by changes in interest rates, increased credit spreads, and reduced market liquidity and were not caused by the credit status of the issuer.  No ACL was recorded in the year ended December 31, 2024 and December 31, 2023 on AFS securities.The majority of unrealized losses at December 31, 2024, are related to U.S. Treasury notes and bonds, state and municipal bonds and mortgage backed securities.  The U.S. Treasury notes are guaranteed by the U.S. government and 100% of the notes are rated AA or better. State and municipal bonds are backed by the taxing authority of the bond issuer or the revenues from the bond. On December 31, 2024, 85% of state and municipal bonds held are rated AA or better, 10% are A rated and 4% are not rated.  Of the mortgage-backed securities held on December 31, 2024, 42% were issued by US government sponsored entities and agencies, and rated AA, 44% are AAA rated private issue and collateralized mortgage obligation, and 14% are unrated privately issued mortgage-backed securities with structured credit enhancement and collateralized mortgage obligation. Unrealized losses have not been recognized into income because the issuers’ bonds are of high credit quality, and management does not intend to sell prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity. Following is information regarding unrealized gains and losses on equity securities for the years ending December 31:

        2024

        2023

        2022

        Net gains and losses recognized during the period

        $
        195

        $
        (317
        )
         
        $
        (955
        )

        Less: Net gains and losses recognized during the period on securities sold

        —

        (71
        )

        -

        Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date

        $
        195

        $