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Securities

9 Months Ended

Sep. 30, 2018

Securities [Abstract]

Securities

Note 7 – Securities

The book values and approximate fair values of investment securities at September 30, 2018 and December 31, 2017 are summarized as follows:

		September 30, 2018																December 31, 2017
		Amortized				Fair				Unrealized								Amortized				Fair				Unrealized
($ in thousands)		Cost				Value				Gains				(Losses)				Cost				Value				Gains				(Losses)

Securities available for sale:
Government-sponsored enterprise securities		$	44,000				43,422				—				(578	)			14,000				13,867				—				(133	)
Mortgage-backed securities			287,746				276,474				42				(11,314	)			297,690				295,213				246				(2,722	)
Corporate bonds			33,761				33,172				1				(591	)			33,792				34,190				512				(114	)
Total available for sale		$	365,507				353,068				43				(12,483	)			345,482				343,270				758				(2,969	)

Securities held to maturity:
Mortgage-backed securities		$	54,512				52,560				—				(1,952	)			63,829				63,092				—				(737	)
State and local governments			50,307				50,800				584				(91	)			54,674				55,906				1,280				(48	)
Total held to maturity		$	104,819				103,360				584				(2,043	)			118,503				118,998				1,280				(785	)

All of the Company’s mortgage-backed securities, including commercial mortgage-backed obligations, were issued by government-sponsored corporations, except for two private mortgage-backed securities with a fair value of $1.0 million as of September 30, 2018.

The following table presents information regarding securities with unrealized losses at September 30, 2018:

($ 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		$	9,687				313				8,735				265				18,422				578
Mortgage-backed securities			211,002				8,222				115,439				5,044				326,441				13,266
Corporate bonds			31,235				521				930				70				32,165				591
State and local governments			10,357				91				—				—				10,357				91
Total temporarily impaired securities		$	262,281				9,147				125,104				5,379				387,385				14,526

The following table presents information regarding securities with unrealized losses at December 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		$	10,897				103				2,970				30				13,867				133
Mortgage-backed securities			192,702				1,582				125,060				1,877				317,762				3,459
Corporate bonds			2,500				49				935				65				3,435				114
State and local governments			7,928				48				—				—				7,928				48
Total temporarily impaired securities		$	214,027				1,782				128,965				1,972				342,992				3,754

In the above tables, all of the securities that were in an unrealized loss position at September 30, 2018 and December 31, 2017 were bonds that the Company has determined were in a loss position due primarily to interest rate factors and not credit quality concerns. The Company evaluated the collectability of each of these bonds and concluded that there was 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 book values and approximate fair values of investment securities at September 30, 2018, 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

Securities
Due within one year		$	—				—				3,240				3,254
Due after one year but within five years			70,218				69,160				28,532				28,838
Due after five years but within ten years			2,543				2,523				16,790				16,978
Due after ten years			5,000				4,911				1,745				1,730
Mortgage-backed securities			287,746				276,474				54,512				52,560
Total securities		$	365,507				353,068				104,819				103,360

At September 30, 2018 and December 31, 2017, investment securities with carrying values of $225,467,000 and $176,813,000, respectively, were pledged as collateral for public deposits.

In the first nine months of 2017, the Company received proceeds from sales of securities of $45,601,000 and recorded losses of $235,000 from the sales. There were no securities sales in the first nine months of 2018.

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 $37,468,000 and $31,338,000 at September 30, 2018 and December 31, 2017, respectively. The FHLB stock had a cost and fair value of $20,036,000 and $19,647,000 at September 30, 2018 and December 31, 2017, 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 $17,432,000 and $11,691,000 at September 30, 2018 and December 31, 2017, respectively, and is a requirement for FRB member bank qualification. 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.