Securities

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

The book values and approximate fair values of investment securities at September 30, 2020 and December 31, 2019 are summarized as follows:


($ in thousands)	September 30, 2020					December 31, 2019
	Amortized Cost		Fair Value	Unrealized		Amortized Cost	Fair Value	Unrealized
				Gains	(Losses)			Gains	(Losses)
Securities available for sale:
Government-sponsored enterprise securities	$	75,016	75,653	637	—	20,000	20,009	17	(8)
Mortgage-backed securities	1,024,735		1,047,922	24,194	(1,007)	758,491	767,285	9,463	(669)
Corporate bonds	43,680		45,131	1,743	(292)	33,711	34,651	1,025	(85)
Total available for sale	$	1,143,431	1,168,706	26,574	(1,299)	812,202	821,945	10,505	(762)

Securities held to maturity:
Mortgage-backed securities	$	33,222	34,161	939	—	41,423	41,542	125	(6)
State and local governments	76,978		77,953	975	—	26,509	26,791	285	(3)
Total held to maturity	$	110,200	112,114	1,914	—	67,932	68,333	410	(9)

All of the Company’s mortgage-backed securities were issued by government-sponsored corporations, except for private mortgage-backed securities with a fair value of $1.0 million and $1.1 million as of September 30, 2020 and December 31, 2019, respectively.

The following table presents information regarding securities with unrealized losses at September 30, 2020:


($ in thousands)	Securities in an Unrealized Loss Position for Less than 12 Months			Securities in an Unrealized Loss Position for More than 12 Months		Total
	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
Government-sponsored enterprise securities	$	—	—	—	—	—	—
Mortgage-backed securities	212,533		816	6,639	191	219,172	1,007
Corporate bonds	13,907		93	801	199	14,708	292
State and local governments	—		—	—	—	—	—
Total temporarily impaired securities	$	226,440	909	7,440	390	233,880	1,299

The following table presents information regarding securities with unrealized losses at December 31, 2019:


($ in thousands)	Securities in an Unrealized Loss Position for Less than 12 Months			Securities in an Unrealized Loss Position for More than 12 Months		Total
	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
Government-sponsored enterprise securities	$	4,992	8	—	—	4,992	8
Mortgage-backed securities	77,274		293	50,851	382	128,125	675
Corporate bonds	—		—	915	85	915	85
State and local governments	—		—	934	3	934	3
Total temporarily impaired securities	$	82,266	301	52,700	470	134,966	771

In the above tables, all of the securities that were in an unrealized loss position at September 30, 2020 and December 31, 2019 were bonds that the Company has determined are in a loss position due primarily to interest rate factors and not credit quality concerns. The Company evaluated the collectability of each of these bonds and concluded that there was no other-than-temporary impairment. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost.

As of September 30, 2020 and December 31, 2019, the Company's security portfolio held 31 securities and 54 securities, respectively, that were in an unrealized loss position.

The book values and approximate fair values of investment securities at September 30, 2020, by contractual maturity, are summarized in the table below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Securities Available for Sale			Securities Held to Maturity
($ in thousands)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Securities
Due within one year	$	—	—	1,496	1,509
Due after one year but within five years	28,680		30,423	3,957	4,075
Due after five years but within ten years	79,016		79,560	5,877	5,985
Due after ten years	11,000		10,801	65,648	66,384
Mortgage-backed securities	1,024,735		1,047,922	33,222	34,161
Total securities	$	1,143,431	1,168,706	110,200	112,114

At September 30, 2020 and December 31, 2019 investment securities with carrying values of $414,668,000 and $260,826,000, respectively, were pledged as collateral for public deposits.

In the first nine months of 2020, the Company received proceeds from sales of securities of $219,697,000 and recorded $8,024,000 in gains from the sales. The Company sold $39,797,000 securities in the first nine months of 2019, and recorded $97,000 in gains from the sales.

Included in “other assets” in the Consolidated Balance Sheets are cost-method investments in Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank of Richmond (“FRB”) stock totaling $23,527,000 and $33,380,000 at September 30, 2020 and December 31, 2019, respectively. The FHLB stock had a cost and fair value of $5,855,000 and $15,789,000 at September 30, 2020 and December 31, 2019, respectively, and serves as part of the collateral for the Company’s line of credit with the FHLB and is also a requirement for membership in the FHLB system. The FRB stock had a cost and fair value of $17,672,000 and $17,591,000 at September 30, 2020 and December 31, 2019, respectively, and is a requirement for FRB member bank qualification. Periodically, both the FHLB and FRB recalculate the Company’s required level of holdings, and the Company either buys more stock or redeems a portion of the stock at cost. The Company determined that neither stock was impaired at either period end.

The Company owns 12,356 Class B shares of Visa, Inc. (“Visa”) stock that were received upon Visa’s initial public offering. These shares are expected to convert into Class A Visa shares subsequent to the settlement of certain litigation against Visa, to which the Company is not a party. The Class B shares have transfer restrictions, and the conversion rate into Class A shares is periodically adjusted as Visa settles litigation. The conversion rate at September 30, 2020 was approximately 1.62, which means the Company would receive approximately 20,051 Class A shares if the stock had converted on that date. This Class B stock does not have a readily determinable fair value and is carried at zero. If a readily determinable fair value becomes available for the Class B shares, or upon the conversion to Class A shares, the Company will adjust the carrying value of the stock to its market value with a credit to earnings.