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Securities
 6 Months Ended
Jun. 30, 2016
Securities [Abstract]  
Securities

Note 6 – Securities

 

The book values and approximate fair values of investment securities at June 30, 2016 and December 31, 2015 are summarized as follows:

 

    June 30, 2016     December 31, 2015  
    Amortized     Fair     Unrealized     Amortized     Fair     Unrealized  
($ in thousands)   Cost     Value     Gains     (Losses)     Cost     Value     Gains     (Losses)  
                                                 
Securities available for sale:                                                                
  Government-sponsored enterprise securities   $ 16,000       15,992       2       (10 )     19,000       18,972       1       (29 )
  Mortgage-backed securities     168,103       169,256       1,437       (284 )     122,474       121,553       348       (1,269 )
  Corporate bonds     33,853       34,381       598       (70 )     25,216       24,946       —       (270 )
  Equity securities     83       133       58       (8 )     88       143       64       (9 )
Total available for sale   $ 218,039       219,762       2,095       (372 )     166,778       165,614       413       (1,577 )
                                                                 
Securities held to maturity:                                                                
  Mortgage-backed securities   $ 92,675       93,444       769       —       102,509       101,767       —       (742 )
  State and local governments     49,398       52,655       3,257       —       52,101       55,379       3,284       (6 )
Total held to maturity   $ 142,073       146,099       4,026       —       154,610       157,146       3,284       (748 )

 

All of the Company’s mortgage-backed securities were issued by government-sponsored corporations.

 

The following table presents information regarding securities with unrealized losses at June 30, 2016:

 

 ($ 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   $ 9,992       7       2,997       3       12,989       10  
  Mortgage-backed securities     5,917       22       20,242       262       26,159       284  
  Corporate bonds     —       —       930       70       930       70  
  Equity securities     —       —       17       8       17       8  
  State and local governments     —       —       —       —       —       —  
      Total temporarily impaired securities   $ 15,909       29       24,186       343       40,095       372  

 

The following table presents information regarding securities with unrealized losses at December 31, 2015:

 

 ($ 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   $ 5,993       7       2,978       22       8,971       29  
  Mortgage-backed securities     150,853       1,148       27,460       863       178,313       2,011  
  Corporate bonds     24,006       210       940       60       24,946       270  
  Equity securities     —       —       17       9       17       9  
  State and local governments     840       6       —       —       840       6  
      Total temporarily impaired securities   $ 181,692       1,371       31,395       954       213,087       2,325  

 

In the above tables, all of the non-equity securities that were in an unrealized loss position at June 30, 2016 and December 31, 2015 are bonds that the Company has determined are in a loss position due primarily to interest rate factors and not credit quality concerns. The Company has evaluated the collectability of each of these bonds and has concluded that there is 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 Company has also concluded that each of the equity securities in an unrealized loss position at June 30, 2016 and December 31, 2015 was in such a position due to temporary fluctuations in the market prices of the securities. The Company’s policy is to record an impairment charge for any of these equity securities that remains in an unrealized loss position for twelve consecutive months unless the amount is insignificant.

 

The book values and approximate fair values of investment securities at June 30, 2016, 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  
                         
Debt securities                                
Due within one year   $ —       —       1,307       1,330  
Due after one year but within five years     3,000       2,997       15,795       16,590  
Due after five years but within ten years     41,853       42,366       31,127       33,552  
Due after ten years     5,000       5,010       1,169       1,183  
Mortgage-backed securities     168,103       169,256       92,675       93,444  
Total debt securities     217,956       219,629       142,073       146,099  
                                 
Equity securities     83       133       —       —  
Total securities   $ 218,039       219,762       142,073       146,099  

 

At June 30, 2016 and December 31, 2015 investment securities with carrying values of $141,155,000 and $141,379,000, respectively, were pledged as collateral for public deposits.

 

In the first half of 2016, the Company received proceeds from sales of securities of $8,000 and recorded $3,000 in gains from the sales. The Company recorded no gains or losses on securities during the first half of 2015.

 

The aggregate carrying amount of cost-method investments was $16,881,000 and $15,453,000 at June 30, 2016 and 2015, respectively, which is recorded within the line item “other assets” on the Company’s Consolidated Balance Sheets. These investments are comprised of Federal Home Loan Bank (“FHLB”) stock and Federal Reserve Bank of Richmond (“FRB”) stock. The FHLB stock had a cost and fair value of $9,825,000 and $8,421,000 at June 30, 2016 and 2015, 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 $7,056,000 and $7,032,000 at June 30, 2016 and 2015, respectively. Periodically, both the FHLB and FRB recalculate the Company’s required level of holdings, and the Company either buys more stock or the redeems a portion of the stock at cost. The Company determined that neither stock was impaired at either period end.