Investment Securities

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

The Company’s investment policy is designed primarily to provide and maintain liquidity, generate a favorable return on assets without incurring undue interest rate and credit risk, and complement the Bank’s lending activities.

There were no securities classified as trading or held to maturity at June 30, 2021 or December 31, 2020.

(a) Securities by Type and Maturity

The following tables present the amortized cost and fair value of investment securities available for sale at the dates indicated and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income:


	June 30, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
U.S. government and agency securities	$	104,688	$	477	$	(1,518)	$	103,647
Municipal securities	219,174		10,341		(588)		228,927

Residential CMO and MBS	256,875		3,465		(846)		259,494
Commercial CMO and MBS	413,304		9,973		(1,337)		421,940
Corporate obligations	7,004		17		(3)		7,018
Other asset-backed securities	27,956		551		(9)		28,498
Total	$	1,029,001	$	24,824	$	(4,301)	$	1,049,524


	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
U.S. government and agency securities	$	44,713	$	947	$	—	$	45,660
Municipal securities	197,634		12,561		(227)		209,968

Residential CMO and MBS	196,956		5,125		(209)		201,872
Commercial CMO and MBS	290,638		13,198		(90)		303,746
Corporate obligations	10,971		125		—		11,096
Other asset-backed securities	29,283		565		(27)		29,821
Total	$	770,195	$	32,521	$	(553)	$	802,163

The amortized cost and fair value of investment securities available for sale at June 30, 2021, by contractual maturity, are set forth below. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	33,741	$	33,967
Due after one year through five years	132,997		138,549
Due after five years through ten years	344,562		351,995
Due after ten years	517,701		525,013
Total	$	1,029,001	$	1,049,524

There were no holdings of investment securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity at June 30, 2021 and December 31, 2020.

(b) Unrealized Losses and ACL on Investment Securities Available for Sale

The following tables show the gross unrealized losses and fair value of the Company’s investment securities available for sale for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2021 and December 31, 2020:


	June 30, 2021
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. government and agency securities	$	50,213	$	(1,518)	$	—	$	—	$	50,213	$	(1,518)
Municipal securities	32,012		(484)		2,348		(104)		34,360		(588)

Residential CMO and MBS	42,784		(715)		22,901		(131)		65,685		(846)
Commercial CMO and MBS	84,771		(1,331)		2,595		(6)		87,366		(1,337)

Corporate obligations	4,990		(3)		—		—		4,990		(3)
Other asset-backed securities	—		—		1,262		(9)		1,262		(9)
Total	$	214,770	$	(4,051)	$	29,106	$	(250)	$	243,876	$	(4,301)


	December 31, 2020
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)

Municipal securities	$	10,264	$	(227)	$	—	$	—	$	10,264	$	(227)

Residential CMO and MBS	—		—		25,293		(209)		25,293		(209)
Commercial CMO and MBS	11,404		(29)		7,499		(61)		18,903		(90)


Other asset-backed securities	—		—		4,570		(27)		4,570		(27)
Total	$	21,668	$	(256)	$	37,362	$	(297)	$	59,030	$	(553)

The Company evaluated investment securities available for sale as of June 30, 2021 and December 31, 2020 and determined that any declines in fair value were attributable to changes in interest rates relative to where these investments fall within the yield curve and individual characteristics. Management monitors published credit ratings for adverse changes for all rated investment securities and none of these securities had a below investment grade credit rating as of both June 30, 2021 and December 31, 2020. In addition, the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of the amortized cost basis, which may be upon maturity. Therefore, no ACL on investment securities available for sale was recorded as of June 30, 2021 and December 31, 2020.

The following table presents the gross realized gains and losses on the sale of investment securities available for sale for the three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(In thousands)
Gross realized gains	$	—	$	414	$	29	$	1,442
Gross realized losses	—		(5)		—		(19)
Net realized gains	$	—	$	409	$	29	$	1,423

(d) Pledged Securities

The following table summarizes the amortized cost and fair value of investment securities available for sale that are pledged as collateral for the following obligations at June 30, 2021 and December 31, 2020:


	June 30, 2021				December 31, 2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Washington and Oregon state public deposits	$	124,649	$	128,591	$	119,652	$	124,228

Securities sold under agreement to repurchase	51,022		51,719		38,630		39,945
Other securities pledged	41,509		42,371		29,665		30,717
Total	$	217,180	$	222,681	$	187,947	$	194,890

(e) Accrued Interest Receivable

Accrued interest receivable excluded from amortized cost on investment securities available for sale totaled $4.2 million and $3.6 million at June 30, 2021 and December 31, 2020, respectively. No amounts of accrued interest receivable on investment securities available for sale were reversed against interest income on investment securities available for sale during the three and six months ended June 30, 2021 and June 30, 2020.