Securities

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

The book values and approximate fair values of investment securities at June 30, 2022 and December 31, 2021 are summarized as follows:


($ in thousands)	June 30, 2022					December 31, 2021
	Amortized Cost		Fair Value	Unrealized		Amortized Cost	Fair Value	Unrealized
				Gains	(Losses)			Gains	(Losses)
Securities available for sale:
U.S. Treasuries	$	174,236	172,195	—	(2,041)	—	—	—	—
Government-sponsored enterprise securities	71,954		60,917	—	(11,037)	71,951	69,179	—	(2,772)
Mortgage-backed securities	2,564,559		2,254,549	19	(310,029)	2,545,150	2,514,805	9,489	(39,834)
Corporate bonds	45,360		44,963	103	(500)	45,380	46,430	1,106	(56)
Total available for sale	$	2,856,109	2,532,624	122	(323,607)	2,662,481	2,630,414	10,595	(42,662)

Securities held to maturity:
Mortgage-backed securities	$	17,190	16,754	—	(436)	20,260	20,845	585	—
State and local governments	529,220		435,904	10	(93,326)	493,565	490,854	2,955	(5,666)
Total held to maturity	$	546,410	452,658	10	(93,762)	513,825	511,699	3,540	(5,666)

All of the Company’s mortgage-backed securities were issued by government-sponsored enterprises, except for private mortgage-backed securities with a fair value of $0.8 million and $0.9 million as of June 30, 2022 and December 31, 2021, respectively.

The following table presents information regarding securities with unrealized losses at June 30, 2022:


	Securities in an Unrealized Loss Position for Less than 12 Months			Securities in an Unrealized Loss Position for More than 12 Months		Total
($ in thousands)	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
U.S. Treasuries	$	172,195	2,041	—	—	172,195	2,041
Government-sponsored enterprise securities	18,850		3,109	42,067	7,928	60,917	11,037
Mortgage-backed securities	1,505,339		189,853	761,606	120,612	2,266,945	310,465
Corporate bonds	13,593		407	907	93	14,500	500
State and local governments	392,160		80,374	41,878	12,952	434,038	93,326
Total unrealized loss position	$	2,102,137	275,784	846,458	141,585	2,948,595	417,369

The following table presents information regarding securities with unrealized losses at December 31, 2021:


	Securities in an Unrealized Loss Position for Less than 12 Months			Securities in an Unrealized Loss Position for More than 12 Months		Total
($ in thousands)	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
Government-sponsored enterprise securities	$	21,436	522	47,743	2,250	69,179	2,772
Mortgage-backed securities	1,773,022		25,977	404,484	13,857	2,177,506	39,834
Corporate bonds	999		1	945	55	1,944	56
State and local governments	228,279		3,797	34,398	1,869	262,677	5,666
Total unrealized loss position	$	2,023,736	30,297	487,570	18,031	2,511,306	48,328

As of June 30, 2022, the Company's securities portfolio held 669 securities of which 616 securities were in an unrealized loss position. As of December 31, 2021, the Company's securities portfolio held 648 securities of which 371 securities were in an unrealized loss position. In the above tables, all of the securities that were in an unrealized loss position at June 30, 2022 and December 31, 2021 are bonds that the Company has determined are in a loss position due primarily to interest rate factors and not credit quality concerns. In arriving at this conclusion, the Company reviewed third-party credit ratings and considered the severity of the 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.

At June 30, 2022 and December 31, 2021, the Company determined that expected credit losses associated with held to maturity debt securities were insignificant.

The book values and approximate fair values of investment securities at June 30, 2022, 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
Due within one year	$	26,094	26,149	435	436
Due after one year but within five years	176,752		174,759	998	907
Due after five years but within ten years	87,704		76,260	28,037	24,715
Due after ten years	1,000		907	499,750	409,846
Mortgage-backed securities	2,564,559		2,254,549	17,190	16,754
Total securities	$	2,856,109	2,532,624	546,410	452,658

At June 30, 2022 and December 31, 2021 investment securities with carrying values of $812.7 million and $951.4 million, respectively, were pledged as collateral for public deposits.

At June 30, 2022 and December 31, 2021, there were no holdings of securities of any one issuer, other than U.S. Government and its agencies or government-sponsored enterprises, in an amount greater than 10% of shareholders equity.

Included in “Other assets” in the Consolidated Balance Sheets are investments in Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank of Richmond (“FRB”) stock totaling $30.2 million and $22.3 million at June 30, 2022 and December 31, 2021, respectively. These investments do not have readily determinable fair values. The FHLB stock had a cost and fair value of $5.3 million and $4.6 million at June 30, 2022 and December 31, 2021, 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 $24.9 million and $17.8 million at June 30, 2022 and December 31, 2021, 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 June 30, 2022 was approximately 1.61, which means the Company would have received approximately 19,843 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 their conversion to Class A shares, the Company will adjust the carrying value of the stock to its market value with a credit to earnings.