Securities

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

The book values and approximate fair values of investment securities at December 31, 2019 and 2018 are summarized as follows:



	2019						2018
	Amortized Cost		Fair Value	Unrealized			Amortized Cost	Fair Value	Unrealized
($ in thousands)	Amortized Cost		Fair Value	Gains	(Losses)		Amortized Cost	Fair Value	Gains	(Losses)
Securities available for sale:
Government-sponsored enterprise securities	$	20,000	20,009	17	(8	)	82,995	82,662	63	(396	)
Mortgage-backed securities	758,491		767,285	9,463	(669	)	396,995	385,551	39	(11,483	)
Corporate bonds	33,711		34,651	1,025	(85	)	33,751	33,138	76	(689	)
Total available for sale	812,202		821,945	10,505	(762	)	513,741	501,351	178	(12,568	)

Securities held to maturity:
Mortgage-backed securities	41,423		41,542	125	(6	)	52,048	50,241	—	(1,807	)
State and local governments	26,509		26,791	285	(3	)	49,189	49,665	525	(49	)
Total held to maturity	$	67,932	68,333	410	(9	)	101,237	99,906	525	(1,856	)

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 $1.1 million and $1.0 million as of December 31, 2019 and 2018, respectively.

The following table presents information regarding securities with unrealized losses at December 31, 2019:



($ 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	$	4,992	8	—	—	4,992	8
Mortgage-backed securities	77,274		293	50,851	382	128,125	675
Corporate bonds	—		—	915	85	915	85
State and local governments	—		—	934	3	934	3
Total temporarily impaired securities	$	82,266	301	52,700	470	134,966	771

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

In the above tables, all of the securities that were in an unrealized loss position at December 31, 2019 and 2018 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.

As of December 31, 2019, the Company's security portfolio held 54 securities that were in an unrealized loss position. The majority of unrealized losses are related to the Company's mortgage-backed securities.

The book values and approximate fair values of investment securities at December 31, 2019, 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
($ in thousands)	Amortized Cost		Fair Value	Amortized Cost		Fair Value
Debt securities
Due within one year	$	—	—	$	1,165	1,167
Due after one year but within five years	43,711		44,616	17,909		18,123
Due after five years but within ten years	5,000		4,992	6,923		6,984
Due after ten years	5,000		5,052	512		517
Mortgage-backed securities	758,491		767,285	41,423		41,542
Total securities	$	812,202	821,945	$	67,932	68,333

At December 31, 2019 and 2018, investment securities with carrying values of $260,826,000 and $234,382,000, respectively, were pledged as collateral for public deposits.

In 2019, the Company received proceeds from sales of securities of $39,797,000 and recorded $97,000 in gains from the sales. In 2017, the Company received proceeds from sales of securities of $140,621,000 and recorded $(235,000) in losses from the sales. The Company sold no securities in 2018.

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 $33,380,000 and $37,468,000 at December 31, 2019 and 2018, respectively. The FHLB stock had a cost and fair value of $15,789,000 and $20,036,000 at December 31, 2019 and 2018, 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 $17,591,000 and $17,432,000 at December 31, 2019 and 2018, 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, which the Company is not a party to. 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, 2019 was approximately 1.62, which means the Company would receive approximately 20,051 Class A shares if the stock had converted on that date. This Class B stock does not have a readily determinable fair value and is carried at 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.