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Securities

12 Months Ended

Dec. 31, 2018

Securities [Abstract]

Securities

Note 3. Securities

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

		2018																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		$	82,995				82,662				63				(396	)			14,000				13,867				—				(133	)
Mortgage-backed securities			396,995				385,551				39				(11,483	)			297,690				295,213				246				(2,722	)
Corporate bonds			33,751				33,138				76				(689	)			33,792				34,190				512				(114	)
Total available for sale			513,741				501,351				178				(12,568	)			345,482				343,270				758				(2,969	)

Securities held to maturity:
Mortgage-backed securities			52,048				50,241				—				(1,807	)			63,829				63,092				—				(737	)
State and local governments			49,189				49,665				525				(49	)			54,674				55,906				1,280				(48	)
Total held to maturity		$	101,237				99,906				525				(1,856	)			118,503				118,998				1,280				(785	)

All of the Company’s mortgage-backed securities were issued by government-sponsored corporations, except for private mortgage-backed securities with a fair value of $1.0 million and $0.5 million as of December 31, 2018 and 2017, respectively.

The following table presents information regarding securities with unrealized losses at December 31, 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		$	4,921				78				13,682				318				18,603				396
Mortgage-backed securities			82,525				351				294,305				12,939				376,830				13,290
Corporate bonds			20,704				433				5,817				256				26,521				689
State and local governments			595				1				6,641				48				7,236				49
Total temporarily impaired securities		$	108,745				863				320,445				13,561				429,190				14,424

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 December 31, 2018 and 2017 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 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 December 31, 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

Debt securities
Due within one year		$	—				—			$	2,233				2,240
Due after one year but within five years			109,205				108,303				28,488				28,766
Due after five years but within ten years			2,541				2,559				16,743				16,932
Due after ten years			5,000				4,938				1,725				1,727
Mortgage-backed securities			396,995				385,551				52,048				50,241
Total securities		$	513,741				501,351			$	101,237				99,906

At December 31, 2018 and 2017, investment securities with carrying values of $234,382,000 and $176,813,000, respectively, were pledged as collateral for public deposits.

The Company sold no securities in 2018, while in 2017, the Company received proceeds from sales of securities of $140,621,000 and recorded $235,000 in losses from the sales. In 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”) and Federal Reserve Bank of Richmond (“FRB”) stock totaling $37,468,000 and $31,338,000 at December 31, 2018 and 2017, respectively. The FHLB stock had a cost and fair value of $20,036,000 and $19,647,000 at December 31, 2018 and 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 December 31, 2018 and 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.

The Company owns 12,356 Class B shares of Visa, Inc. (“Visa”) stock that were received upon Visa’s initial public offering. These shares are expected to convert into Class A Visa shares subsequent to the settlement of certain litigation against Visa. The Class B shares have transfer restrictions, and the conversion rate into Class A shares is periodically adjusted as Visa settles litigation. The conversion rate at December 31, 2018 was approximately 1.63, which means the Company would receive approximately 20,140 Class A shares if the stock had converted on that date. This stock does not have a readily determinable fair value and is therefore carried at its cost basis of zero. If a readily determinable fair value becomes available for the Class B shares, or upon the conversion to Class A shares, the Company will adjust the carrying value of the stock to its market value with a credit to earnings.