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Securities
 9 Months Ended
Sep. 30, 2016
Securities [Abstract]  
Securities

Note 7 – Securities

 

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

 

   September 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  $3,000    2,999    —    (1)   19,000    18,972    1    (29)
  Mortgage-backed securities   160,267    161,443    1,441    (265)   122,474    121,553    348    (1,269)
  Corporate bonds   33,842    34,571    852    (123)   25,216    24,946    —    (270)
  Equity securities   83    143    67    (7)   88    143    64    (9)
Total available for sale  $197,192    199,156    2,360    (396)   166,778    165,614    413    (1,577)
                                         
Securities held to maturity:                                        
  Mortgage-backed securities  $86,463    87,249    786    —    102,509    101,767    —    (742)
  State and local governments   49,345    52,265    2,920    —    52,101    55,379    3,284    (6)
Total held to maturity  $135,808    139,514    3,706    —    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 September 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  $2,999    1    —    —    2,999    1 
  Mortgage-backed securities   11,695    49    17,069    216    28,764    265 
  Corporate bonds   2,500    58    935    65    3,435    123 
  Equity securities   —    —    10    7    10    7 
  State and local governments   —    —    —    —    —    — 
      Total temporarily impaired securities  $17,194    108    18,014    288    35,208    396 

 

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 September 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 September 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 September 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  $—    —    1,556    1,571 
Due after one year but within five years   3,000    2,999    16,913    17,703 
Due after five years but within ten years   28,842    29,556    29,711    31,818 
Due after ten years   5,000    5,015    1,165    1,173 
Mortgage-backed securities   160,267    161,443    86,463    87,249 
Total debt securities   197,109    199,013    135,808    139,514 
                     
Equity securities   83    143    —    — 
Total securities  $197,192    199,156    135,808    139,514 

 

At September 30, 2016 and December 31, 2015 investment securities with carrying values of $169,100,000 and $141,379,000, respectively, were pledged as collateral for public deposits.

 

For the nine months ended September 30, 2016, the Company received proceeds from sales of securities of $8,000 and recorded $3,000 in gains from the sales. The Company recorded insignificant losses on securities during the three and nine months ended September 30, 2015.

 

The aggregate carrying amount of cost-method investments was $18,156,000 and $15,468,000 at September 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 $11,100,000 and $8,421,000 at September 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 $7,047,000 at September 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.