NOTE 4: SECURITIES

The following table provides a summary of the Company’s securities AFS portfolio as of:

	Amortized		Gross Unrealized					Estimated
(dollars in thousands)	Cost		Gains		Losses			Fair Value
September 30, 2016:
US Treasury securities	$	300	$	—	$	—		$	300
Agency mortgage-backed securities		489,233		9,749		(96	)		498,886
Beneficial interests in FHLMC securitization		44,505		121		(1,109	)		43,517
Total	$	534,038	$	9,870	$	(1,205	)	$	542,703

December 31, 2015:
US Treasury securities	$	300	$	—	$	—		$	300
FNMA and FHLB Agency notes		16,108		—		(95	)		16,013
Agency mortgage-backed securities		538,269		909		(3,030	)		536,148
Beneficial interests in FHLMC securitization		12,674		476		(476	)		12,674
Total	$	567,351	$	1,385	$	(3,601	)	$	565,135

The US Treasury securities are pledged as collateral to the State of California to meet regulatory requirements related to the Bank’s trust operations.

The tables below indicate, as of September 30, 2016 and December 31, 2015 the gross unrealized losses and fair values of our investments, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.

	Securities with Unrealized Loss at September 30, 2016
	Less than 12 months					12 months or more				Total
(dollars in thousands)	Fair Value			Unrealized Loss		Fair Value			Unrealized Loss	Fair Value		Unrealized Loss
Agency and FHLB Agency notes	$	46,649	$	(96	)	$	—	$	—	$	46,649	$	(96	)
Beneficial interests in FHLMC securitization		31,645		(1,109	)		—		—		31,645		(1,109	)
	$	78,294	$	(1,205	)	$	—	$	—	$	78,294	$	(1,205	)

	Securities with Unrealized Loss at December 31, 2015
	Less than 12 months					12 months or more				Total
(dollars in thousands)	Fair Value			Unrealized Loss		Fair Value			Unrealized Loss	Fair Value		Unrealized Loss
Agency notes	$	16,013	$	(95	)	$	—	$	—	$	16,013	$	(95	)
Agency mortgage backed securities		397,850		(3,030	)		—		—		397,850		(3,030	)
Beneficial interests in FHLMC securitization		12,674		(476	)		—		—		12,674		(476	)
	$	426,537	$	(3,601	)	$	—	$	—	$	426,537	$	(3,601	)

Unrealized losses in agency and FHLB agency notes, agency mortgage backed securities, and beneficial interests in FHLMC securitizations have not been recognized into income because the issuer bonds are of high credit quality, management does not intend to sell, it is not more likely than not that management would be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in discount rates and assumptions regarding future interest rates. The fair value is expected to recover as the bonds approach maturity.

The scheduled maturities of securities AFS and the related weighted average yields were as follows as of September 30, 2016:

(dollars in thousands)	Less than 1 Year			1 Through 5 years			5 Through 10 Years			After 10 Years			Total
Amortized Cost:
US Treasury securities	$	—		$	300		$	—		$	—		$	300
Weighted average yield		—	%		0.90	%		—	%		—	%		0.90	%

Estimated Fair Value:
US Treasury Securities	$	—		$	300		$	—		$	—		$	300

Agency mortgage backed securities and beneficial interests in FHLMC securitizations are excluded from the above table because such securities are not due at a single maturity date. The weighted average yield of the agency mortgage backed securities and beneficial interests in FHLMC securitizations as of September 30, 2016 was 2.59%.