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Securities
 3 Months Ended
Mar. 31, 2017
Securities [Abstract]  
Securities

Note 7 – Securities

 

The book values and approximate fair values of investment securities at March 31, 2017 and December 31, 2016 are summarized as follows:

 

   March 31, 2017   December 31, 2016 
   Amortized   Fair   Unrealized   Amortized   Fair   Unrealized 
($ in thousands)  Cost   Value   Gains   (Losses)   Cost   Value   Gains   (Losses) 
                                 
Securities available for sale:                                        
  Government-sponsored enterprise securities  $19,498    19,426    8    (80)   17,497    17,490    —    (7)
  Mortgage-backed securities   162,660    160,786    220    (2,094)   151,001    148,065    155    (3,091)
  Corporate bonds   34,322    34,531    286    (77)   33,833    33,600    91    (324)
  Equity securities   —    —    —    —    83    174    96    (5)
Total available for sale  $216,480    214,743    514    (2,251)   202,414    199,329    342    (3,427)
                                         
Securities held to maturity:                                        
  Mortgage-backed securities  $76,201    75,264    —    (937)   80,585    79,283    —    (1,302)
  State and local governments   57,053    58,921    1,897    (29)   49,128    50,912    1,815    (31)
Total held to maturity  $133,254    134,185    1,897    (966)   129,713    130,195    1,815    (1,333)

 

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 March 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  $13,917    80    —    —    13,917    80 
  Mortgage-backed securities   167,034    2,513    17,862    518    184,896    3,031 
  Corporate bonds   8,021    17    940    60    8,961    77 
  Equity securities   —    —    —    —    —    — 
  State and local governments   7,057    29    —    —    7,057    29 
      Total temporarily impaired securities  $196,029    2,639    18,802    578    214,831    3,217 

 

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 

 

In the above tables, all of the non-equity securities that were in an unrealized loss position at March 31, 2017 and December 31, 2016 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 also concluded that each of the equity securities in an unrealized loss position at December 31, 2016 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 March 31, 2017, 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  $—    —    2,123    2,144 
Due after one year but within five years   19,498    19,426    21,815    22,527 
Due after five years but within ten years   29,322    29,411    27,398    28,600 
Due after ten years   5,000    5,120    5,717    5,650 
Mortgage-backed securities   162,660    160,786    76,201    75,264 
Total debt securities   216,480    214,743    133,254    134,185 
                     
Equity securities   —    —    —    — 
Total securities  $216,480    214,743    133,254    134,185 

 

At March 31, 2017 and December 31, 2016 investment securities with carrying values of $193,673,000 and $147,009,000, respectively, were pledged as collateral for public deposits.

 

In the first quarter of 2017, the Company received proceeds from sales of securities of $46,618,000 and recorded losses of $235,000 from the sales. In the first quarter of 2016, the Company received proceeds from sales of securities of $8,000 and recorded $3,000 in gains from the sales.

 

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 $23,694,000 and $19,826,000 at March 31, 2017 and December 31, 2016, respectively. The FHLB stock had a cost and fair value of $14,043,000 and $12,588,000 at March 31, 2017 and December 31, 2016, 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 $9,651,000 and $7,238,000 at March 31, 2017 and December 31, 2016, respectively. 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.