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Securities

6 Months Ended

Jun. 30, 2017

Securities [Abstract]

Securities

Note 7 – Securities

The book values and approximate fair values of investment securities at June 30, 2017 and December 31, 2016 are summarized as follows:

		June 30, 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		$	16,498				16,498				7				(7	)			17,497				17,490				—				(7	)
Mortgage-backed securities			156,934				156,601				647				(980	)			151,001				148,065				155				(3,091	)
Corporate bonds			33,812				34,397				650				(65	)			33,833				33,600				91				(324	)
Equity securities			—				—				—				—				83				174				96				(5	)
Total available for sale		$	207,244				207,496				1,304				(1,052	)			202,414				199,329				342				(3,427	)

Securities held to maturity:
Mortgage-backed securities		$	72,257				72,005				10				(262	)			80,585				79,283				—				(1,302	)
State and local governments			55,609				57,692				2,090				(7	)			49,128				50,912				1,815				(31	)
Total held to maturity		$	127,866				129,697				2,100				(269	)			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 June 30, 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		$	7,991				7				—				—				7,991				7
Mortgage-backed securities			131,117				865				16,909				377				148,026				1,242
Corporate bonds			—				—				935				65				935				65
State and local governments			817				7				—				—				817				7
Total temporarily impaired securities		$	139,925				879				17,844				442				157,769				1,321

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 June 30, 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 has 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 June 30, 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		$	—				—				1,873				1,888
Due after one year but within five years			16,498				16,498				23,718				24,580
Due after five years but within ten years			28,812				29,287				24,251				25,405
Due after ten years			5,000				5,110				5,767				5,819
Mortgage-backed securities			156,934				156,601				72,257				72,005
Total securities		$	207,244				207,496				127,866				129,697

At June 30, 2017 and December 31, 2016 investment securities with carrying values of $183,529,000 and $147,009,000, 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. 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.

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 $26,353,000 and $19,826,000 at June 30, 2017 and December 31, 2016, respectively. The FHLB stock had a cost and fair value of $16,702,000 and $12,588,000 at June 30, 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 June 30, 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.