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Investment Securities | 9 Months Ended
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Sep. 30, 2021
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment Securities 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. During the three months ended September 30, 2021, the Company reassessed and transferred, at fair value, $244.8 million of U.S. government and agency securities from the available for sale classification to the held to maturity classification. The net unrealized after tax gain of $1.3 million remained in accumulated other comprehensive income to be amortized over the remaining life of the securities, offsetting the related amortization of discount or premium on the transferred securities. No gains or losses were recognized at the time of the transfer. There were no investment securities classified as trading at September 30, 2021 or December 31, 2020. There were no investment securities classified as held to maturity at December 31, 2020. (a) Investment Securities by Classification, Type and Maturity The following tables present the amortized cost and fair value of investment securities at the dates indicated and the corresponding amounts of gross unrealized gains and losses, including the corresponding amounts of gross unrealized gains and losses on investment securities available for sale recognized in accumulated other comprehensive income:
| September 30, 2021
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
| (In thousands)
Investment securities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 26,000 |  |  | $ | 146 |  |  | $ | (40) |  |  | $ | 26,106 |
Municipal securities | 219,737 |  |  | 9,385 |  |  | (956) |  |  | 228,166 |
Residential CMO and MBS | 240,018 |  |  | 3,065 |  |  | (390) |  |  | 242,693 |
Commercial CMO and MBS | 229,518 |  |  | 5,861 |  |  | (361) |  |  | 235,018 |
Corporate obligations | 2,009 |  |  | 14 |  |  | — |  |  | 2,023 |
Other asset-backed securities | 27,054 |  |  | 475 |  |  | (9) |  |  | 27,520 |
Total | $ | 744,336 |  |  | $ | 18,946 |  |  | $ | (1,756) |  |  | $ | 761,526 |
Investment securities held to maturity: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 82,577 |  |  | $ | 46 |  |  | $ | (563) |  |  | $ | 82,060 |
Residential CMO and MBS | 10,000 |  |  | — |  |  | — |  |  | 10,000 |
Commercial CMO and MBS | 218,497 |  |  | — |  |  | (3,227) |  |  | 215,270 |
Total | $ | 311,074 |  |  | $ | 46 |  |  | $ | (3,790) |  |  | $ | 307,330 |
| December 31, 2020
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  |  |  | Fair Value
| (In thousands)
Investment securities available for sale: |  |  |  |  |  |  |  |  |
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 at September 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.
| Securities Available for Sale |  | Securities Held to Maturity
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
| (In thousands)
Due in one year or less | $ | 36,745 |  |  | $ | 37,158 |  |  | $ | — |  |  | $ | — |
Due after one year through five years | 122,029 |  |  | 126,853 |  |  | — |  |  | — |
Due after five years through ten years | 174,729 |  |  | 179,546 |  |  | 205,748 |  |  | 203,119 |
Due after ten years | 410,833 |  |  | 417,969 |  |  | 105,326 |  |  | 104,211 |
Total | $ | 744,336 |  |  | $ | 761,526 |  |  | $ | 311,074 |  |  | $ | 307,330 |
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 September 30, 2021 and December 31, 2020. (b) Unrealized Losses 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 September 30, 2021 and December 31, 2020:
| September 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 | $ | 1,695 |  |  | $ | (40) |  |  | $ | — |  |  | $ | — |  |  | $ | 1,695 |  |  | $ | (40) |
Municipal securities | 42,397 |  |  | (675) |  |  | 6,427 |  |  | (281) |  |  | 48,824 |  |  | (956) |
Residential CMO and MBS | 74,409 |  |  | (267) |  |  | 21,480 |  |  | (123) |  |  | 95,889 |  |  | (390) |
Commercial CMO and MBS | 30,070 |  |  | (354) |  |  | 2,583 |  |  | (7) |  |  | 32,653 |  |  | (361) |
Other asset-backed securities | — |  |  | — |  |  | 1,209 |  |  | (9) |  |  | 1,209 |  |  | (9) |
Total | $ | 148,571 |  |  | $ | (1,336) |  |  | $ | 31,699 |  |  | $ | (420) |  |  | $ | 180,270 |  |  | $ | (1,756) |
| 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) |
(c) ACL on Investment Securities The Company evaluated investment securities available for sale as of September 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 September 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 September 30, 2021 and December 31, 2020. The Company also evaluated investment securities held to maturity for current expected credit losses. There were no investment securities held to maturity classified as nonaccrual or past due as of September 30, 2021 and all were issued by the U.S. government and its agencies and either explicitly or implicitly guaranteed by the U.S. government, highly rated by major credit rating agencies and have a long history of no credit losses. Accordingly, the Company did not measure expected credit losses on investment securities held to maturity since the historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Therefore, no ACL on investment securities held to maturity was recorded as of September 30, 2021. (d) Realized Gains and Losses The following table presents the gross realized gains and losses on the sale of investment securities available for sale for the three and nine months ended September 30, 2021 and 2020:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
| (In thousands)
Gross realized gains | $ | — |  |  | $ | 40 |  |  | $ | 29 |  |  | $ | 1,482 |
Gross realized losses | — |  |  | — |  |  | — |  |  | (19) |
Net realized gains | $ | — |  |  | $ | 40 |  |  | $ | 29 |  |  | $ | 1,463 |
(e) Pledged Securities The following table summarizes the amortized cost and fair value of investment securities that are pledged as collateral for the following obligations at September 30, 2021 and December 31, 2020:
| September 30, 2021 |  | December 31, 2020
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
| (In thousands)
Washington and Oregon state public deposits | $ | 127,486 |  |  | $ | 130,675 |  |  | $ | 119,652 |  |  | $ | 124,228 |
Securities sold under agreement to repurchase | 68,297 |  |  | 68,424 |  |  | 38,630 |  |  | 39,945 |
Other securities pledged | 57,728 |  |  | 57,307 |  |  | 29,665 |  |  | 30,717 |
Total | $ | 253,511 |  |  | $ | 256,406 |  |  | $ | 187,947 |  |  | $ | 194,890 |
(f) Accrued Interest Receivable Accrued interest receivable excluded from amortized cost on investment securities available for sale totaled $3.0 million and $3.6 million at September 30, 2021 and December 31, 2020, respectively. Accrued interest receivable excluded from amortized cost on investment securities held to maturity totaled $0.6 million at September 30, 2021. No amounts of accrued interest receivable on investment securities available for sale or held to maturity were reversed against interest income on investment securities during the three and nine months ended September 30, 2021 and September 30, 2020.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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