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Securities
3 Months Ended
Mar. 31, 2016
Securities [Abstract]  
Securities

Note 6 – Securities

 

The book values and approximate fair values of investment securities at March 31, 2016 and December 31, 2015 are summarized as follows:

 

    March 31, 2016     December 31, 2015  
    Amortized     Fair     Unrealized     Amortized     Fair     Unrealized  
($ in thousands)   Cost     Value     Gains     (Losses)     Cost     Value     Gains     (Losses)  

 

                                                               

Securities available for sale:

                               

  Government-sponsored enterprise securities

  $ 38,638   38,636   4   (6 )   19,000   18,972   1   (29 )

  Mortgage-backed securities

  174,905   174,579   666   (992 )   122,474   121,553   348   (1,269 )

  Corporate bonds

  33,863   33,798   126   (191 )   25,216   24,946  

  (270 )

  Equity securities

  83   127   53   (9 )   88   143   64   (9 )

Total available for sale

  $ 247,489   247,140   849   (1,198 )   166,778   165,614   413   (1,577 )
               

Securities held to maturity:

               

  Mortgage-backed securities

  $ 98,102   98,030   87   (159 )   102,509   101,767  

  (742 )

  State and local governments

  50,383   53,654   3,273   (2 )   52,101   55,379   3,284   (6 )

Total held to maturity

  $ 148,485   151,684   3,360   (161 )   154,610   157,146   3,284   (748 )

 

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 March 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

  $  

  2,994   6   2,994   6

Mortgage-backed securities

  117,206   602   25,136   549   142,342   1,151

  Corporate bonds

  13,926   131   940   60   14,866   191

  Equity securities

 

 

  17   9   17   9

  State and local governments

  841   2  

 

  841   2

      Total temporarily impaired securities

  $ 131,973   735   29,087   624   161,060   1,359

 

The following table presents information regarding securities with unrealized losses at December 31, 2015:

 

($ 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

  $ 5,993   7   2,978   22   8,971   29

Mortgage-backed securities

  150,853   1,148   27,460   863   178,313   2,011

  Corporate bonds

  24,006   210   940   60   24,946   270

  Equity securities

 

 

  17   9   17   9

  State and local governments

  840   6  

 

  840   6

      Total temporarily impaired securities

  $ 181,692   1,371   31,395   954   213,087   2,325

 

In the above tables, all of the non-equity securities that were in an unrealized loss position at March 31, 2016 and December 31, 2015 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 March 31, 2016 and December 31, 2015 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 March 31, 2016, 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

  $  

  1,308   1,340

Due after one year but within five years

  10,639   10,635   12,630   13,253

Due after five years but within ten years

  56,862   56,919   35,268   37,882

Due after ten years

  5,000   4,880   1,177   1,179

Mortgage-backed securities

  174,905   174,579   98,102   98,030

Total debt securities

  247,406   247,013   148,485   151,684
       

Equity securities

  83   127  

 

Total securities

  $ 247,489   247,140   148,485   151,684

 

At March 31, 2016 and December 31, 2015 investment securities with carrying values of $158,504,000 and $141,379,000, respectively, were pledged as collateral for public deposits. 

 

In the first quarter of 2016, the Company received proceeds from sales of securities of $8,000 and recorded $3,000 in gains from the sales. The Company recorded no gains or losses on securities during the three month period ended March 31, 2015.

 

The aggregate carrying amount of cost-method investments was $16,031,000 and $5,871,000 at March 31, 2016 and 2015, respectively, which is recorded within the line item “other assets” on the Company's Consolidated Balance Sheets.  These investments are comprised of Federal Home Loan Bank (“FHLB”) stock and Federal Reserve Bank of Richmond (“FRB”) stock.  The FHLB stock had a cost and fair value of $8,975,000 and $5,871,000 at March 31, 2016 and 2015, 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 $7,056,000 at March 31, 2016.  The Company was required to purchase this stock when it became a member of the Federal Reserve System in the second quarter of 2015.  Periodically, both the FHLB and FRB recalculate the Company's required level of holdings, and the Company either buys more stock or the redeems a portion of the stock at cost.  The Company determined that neither stock was impaired at either period end.