Securities

6 Months Ended

Jun. 30, 2018

Securities [Abstract]

Securities

Note 7 – Securities

The book values and approximate fair values of investment securities at June 30, 2018 and December 31, 2017 are summarized as follows:

	June 30, 2018									December 31, 2017
	Amortized		Fair		Unrealized					Amortized		Fair		Unrealized
($ in thousands)	Cost		Value		Gains		(Losses)			Cost		Value		Gains		(Losses)
Securities available for sale:
Government-sponsored enterprise securities	$	19,000		18,537		—		(463	)		14,000		13,867		—		(133	)
Mortgage-backed securities		292,809		282,287		48		(10,570	)		297,690		295,213		246		(2,722	)
Corporate bonds		33,772		33,244		64		(592	)		33,792		34,190		512		(114	)
Total available for sale	$	345,581		334,068		112		(11,625	)		345,482		343,270		758		(2,969	)
Securities held to maturity:
Mortgage-backed securities	$	57,807		55,832		—		(1,975	)		63,829		63,092		—		(737	)
State and local governments		50,458		51,236		836		(58	)		54,674		55,906		1,280		(48	)
Total held to maturity	$	108,265		107,068		836		(2,033	)		118,503		118,998		1,280		(785	)

All of the Company’s mortgage-backed securities, including commercial mortgage-backed obligations, were issued by government-sponsored corporations, except for two private mortgage-backed securities with a fair value of $1.1 million as of June 30, 2018.

The following table presents information regarding securities with unrealized losses at June 30, 2018:

($ 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	$	15,615		385		2,922		78		18,537		463
Mortgage-backed securities		224,713		8,050		110,958		4,495		335,671		12,545
Corporate bonds		25,697		530		938		62		26,635		592
State and local governments		9,360		58		—		—		9,360		58
Total temporarily impaired securities	$	275,385		9,023		114,818		4,635		390,203		13,658

The following table presents information regarding securities with unrealized losses at December 31, 2017:

($ 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	$	10,897		103		2,970		30		13,867		133
Mortgage-backed securities		192,702		1,582		125,060		1,877		317,762		3,459
Corporate bonds		2,500		49		935		65		3,435		114
State and local governments		7,928		48		—		—		7,928		48
Total temporarily impaired securities	$	214,027		1,782		128,965		1,972		342,992		3,754

In the above tables, all of the securities that were in an unrealized loss position at June 30, 2018 and December 31, 2017 were bonds that the Company has determined were 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.

The book values and approximate fair values of investment securities at June 30, 2018, 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
	Amortized		Fair		Amortized		Fair
($ in thousands)	Cost		Value		Cost		Value
Securities
Due within one year	$	—		—		3,248		3,276
Due after one year but within five years		40,227		39,324		28,348		28,815
Due after five years but within ten years		7,545		7,460		17,066		17,355
Due after ten years		5,000		4,997		1,796		1,790
Mortgage-backed securities		292,809		282,287		57,807		55,832
Total securities	$	345,581		334,068		108,265		107,068

At June 30, 2018 and December 31, 2017, investment securities with carrying values of $233,437,000 and $176,813,000, respectively, were pledged as collateral for public deposits.

In the first six months of 2017, the Company received proceeds from sales of securities of $45,601,000 and recorded losses of $235,000 from the sales. There were no securities sales in the first six months of 2018.

Included in “other assets” in the consolidated balance sheets are cost method investments in Federal Home Loan Bank (“FHLB”) stock and Federal Reserve Bank of Richmond (“FRB”) stock totaling $37,437,000 and $31,338,000 at June 30, 2018 and December 31, 2017, respectively. The FHLB stock had a cost and fair value of $20,036,000 and $19,647,000 at June 30, 2018 and December 31, 2017, 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 $17,401,000 and $11,691,000 at June 30, 2018 and December 31, 2017, 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.