Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

The book values and approximate fair values of investment securities at September 30, 2021 and December 31, 2020 are summarized as follows:


($ in thousands)	September 30, 2021					December 31, 2020
	Amortized Cost		Fair Value	Unrealized		Amortized Cost	Fair Value	Unrealized
				Gains	(Losses)			Gains	(Losses)
Securities available for sale:
Government-sponsored enterprise securities	$	70,014	68,608	—	(1,406)	70,016	70,206	371	(181)
Mortgage-backed securities	2,187,209		2,191,530	18,604	(14,283)	1,318,998	1,337,706	20,832	(2,124)
Corporate bonds	43,640		44,937	1,426	(129)	43,670	45,220	1,760	(210)
Total available for sale	$	2,300,863	2,305,075	20,030	(15,818)	1,432,684	1,453,132	22,963	(2,515)

Securities held to maturity:
Mortgage-backed securities	$	22,028	22,886	858	—	29,959	30,900	941	—
State and local governments	345,865		347,067	2,774	(1,572)	137,592	139,834	2,407	(165)
Total held to maturity	$	367,893	369,953	3,632	(1,572)	167,551	170,734	3,348	(165)

All of the Company’s mortgage-backed securities were issued by government-sponsored enterprises, except for private mortgage-backed securities with a fair value of $0.9 million and $1.0 million as of September 30, 2021 and December 31, 2020, respectively.

The following table presents information regarding securities with unrealized losses at September 30, 2021:


($ 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	$	49,238	776	19,370	630	68,608	1,406
Mortgage-backed securities	1,010,196		12,219	124,643	2,064	1,134,839	14,283
Corporate bonds	—		—	4,871	129	4,871	129
State and local governments	125,063		1,347	9,518	225	134,581	1,572
Total unrealized loss position	$	1,184,497	14,342	158,402	3,048	1,342,899	17,390

The following table presents information regarding securities with unrealized losses at December 31, 2020:


($ 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	$	29,812	181	—	—	29,812	181
Mortgage-backed securities	497,992		1,957	6,168	167	504,160	2,124
Corporate bonds	3,956		45	835	165	4,791	210
State and local governments	23,310		165	—	—	23,310	165
Total unrealized loss position	$	555,070	2,348	7,003	332	562,073	2,680

As of September 30, 2021 and December 31, 2020, the Company's security portfolio held 171 securities and 69 securities that were in an unrealized loss position, respectively. In the above tables, all of the securities that were in an unrealized loss position at September 30, 2021 and December 31, 2020 are bonds that the Company has determined are in a loss position due primarily to interest rate factors and not credit quality concerns. In arriving at this conclusion, the Company reviewed third-party credit ratings and considered the amount of the 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.

No impairment charges were recognized for any securities during the nine months ended September 30, 2020. At adoption of CECL on January 1, 2021 and at September 30, 2021, the Company determined that expected credit losses associated with held to maturity debt securities were insignificant. See Note 2 for additional details on the adoption of CECL as it relates to the securities portfolio.

The book values and approximate fair values of investment securities at September 30, 2021, 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
Securities
Due within one year	$	1,001	1,031	1,271	1,282
Due after one year but within five years	27,639		28,801	536	550
Due after five years but within ten years	84,014		82,739	8,388	8,525
Due after ten years	1,000		974	335,670	336,710
Mortgage-backed securities	2,187,209		2,191,530	22,028	22,886
Total securities	$	2,300,863	2,305,075	367,893	369,953

At September 30, 2021 and December 31, 2020, investment securities with carrying values of $861,827,000 and $630,303,000, respectively, were pledged as collateral for public deposits.

Included in “other assets” in the Consolidated Balance Sheets are investments in Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank of Richmond (“FRB”) stock totaling $21,735,000 and $23,526,000 at September 30, 2021 and December 31, 2020, respectively. These investments do not have readily determinable fair values. The FHLB stock had a cost and fair value of $3,970,000 and $5,855,000 at September 30, 2021 and December 31, 2020, 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 $17,765,000 and $17,671,000 at September 30, 2021 and December 31, 2020, 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, to which the Company is not a party. 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 September 30, 2021 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.