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Securities
 12 Months Ended
Dec. 31, 2016
Securities [Abstract]  
Securities

Note 3. Securities

 

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

 

   2016   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  $17,497    17,490    —    (7)   19,000    18,972    1    (29)
  Mortgage-backed securities   151,001    148,065    155    (3,091)   122,474    121,553    348    (1,269)
  Corporate bonds   33,833    33,600    91    (324)   25,216    24,946    —    (270)
  Equity securities   83    174    96    (5)   88    143    64    (9)
Total available for sale  $202,414    199,329    342    (3,427)   166,778    165,614    413    (1,577)
                                         
Securities held to maturity:                                        
  Mortgage-backed securities  $80,585    79,283    —    (1,302)   102,509    101,767    —    (742)
  State and local governments   49,128    50,912    1,815    (31)   52,101    55,379    3,284    (6)
Total held to maturity  $129,713    130,195    1,815    (1,333)   154,610    157,146    3,284    (748)

 

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

 

The following table presents information regarding securities with unrealized losses at December 31, 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  $7,990    7    —    —    7,990    7 
  Mortgage-backed securities   196,999    3,841    19,001    552    216,000    4,393 
  Corporate bonds   27,027    259    935    65    27,962    324 
  Equity securities   —    —    7    5    7    5 
  State and local governments   801    31    —    —    801    31 
      Total temporarily impaired securities  $232,817    4,138    19,943    622    252,760    4,760 

 

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 December 31, 2016 and 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 concluded that each of the equity securities in an unrealized loss position at December 31, 2016 and 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 December 31, 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  $—    —   $2,016    2,028 
Due after one year but within five years   17,497    17,490    16,256    16,767 
Due after five years but within ten years   28,833    28,682    29,690    30,981 
Due after ten years   5,000    4,918    1,166    1,136 
Mortgage-backed securities   151,001    148,065    80,585    79,283 
Total debt securities   202,331    199,155    129,713    130,195 
                     
Equity securities   83    174    —    — 
Total securities  $202,414    199,329   $129,713    130,195 

 

At December 31, 2016 and 2015, investment securities with carrying values of $147,009,000 and $141,379,000, respectively, were pledged as collateral for public deposits.

 

In 2016, the Company received proceeds from sales of securities of $8,000 and recorded $3,000 in gains from the sales. In 2015, the Company recorded $1,000 in securities losses associated with write-downs and did not sell any securities. In 2014, the Company initiated security sales totaling $47,473,000, which resulted in net gains of $786,000 in 2014.

 

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 $19,826,000 and $15,893,000 at December 31, 2016 and 2015, respectively. The FHLB stock had a cost and fair value of $12,588,000 and $8,846,000 at December 31, 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 $7,238,000 and $7,047,000 at December 31, 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.