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Investment Securities (Tables)
 6 Months Ended
Jun. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Portfolio
Our investment securities portfolio consists of obligations of state and political subdivisions, corporate bonds, U.S. government agency securities, including residential and commercial mortgage-backed securities (“MBS”) and collateralized mortgage obligations (“CMOs”) issued or guaranteed by Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), Small Business Administration ("SBA"), or Government National Mortgage Association ("GNMA"), debentures issued by government-sponsored agencies such as FNMA, Federal Farm Credit Bureau, FHLB and FHLMC, and privately issued CMOs, as reflected in the following table.
 
June 30, 2018
 
December 31, 2017
 
Amortized
Fair
Gross Unrealized
 
Amortized
Fair
Gross Unrealized
(in thousands)
Cost
Value
Gains
(Losses)
 
Cost
Value
Gains
(Losses)
Held-to-maturity:
 
 
 
 
 
 
 
 
 
Securities of U.S. government agencies:
 
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
$
94,203

$
90,824

$
—

$
(3,379
)

$
100,376

$
100,096

$
234

$
(514
)
SBA-backed securities
8,882

8,743

—

(139
)
 
—

—

—

—

  CMOs issued by FNMA
11,881

11,766

—

(115
)
 
—

—

—

—

     CMOs issued by FHLMC
34,668

33,591

—

(1,077
)
 
31,010

30,938

2

(74
)
CMOs issued by GNMA
3,730

3,713

—

(17
)
 
—

—

—

—

Obligations of state and
political subdivisions
17,288

17,490

235

(33
)
 
19,646

19,998

383

(31
)
Total held-to-maturity
170,652

166,127

235

(4,760
)

151,032

151,032

619

(619
)
Available-for-sale:
 
 
 
 
 
 
 
 
 
Securities of U.S. government agencies:
 
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
90,082

87,590

17

(2,509
)

65,559

65,262

126

(423
)
SBA-backed securities
24,620

23,954

—

(666
)
 
25,979

25,982

58

(55
)
CMOs issued by FNMA
21,026

20,571

7

(462
)

35,340

35,125

33

(248
)
CMOs issued by FHLMC
123,359

120,411

1

(2,949
)

70,514

69,889

3

(628
)
CMOs issued by GNMA
12,641

12,222

2

(421
)

17,953

17,785

26

(194
)
Debentures of government- sponsored agencies
32,395

32,139

—

(256
)

12,940

12,938

3

(5
)
Privately issued CMOs
431

435

4

—


1,432

1,431

1

(2
)
Obligations of state and
political subdivisions
89,699

87,788

77

(1,988
)

98,027

97,491

298

(834
)
  Corporate bonds
3,015

3,027

24

(12
)

6,541

6,564

26

(3
)
Total available-for-sale
397,268

388,137

132

(9,263
)

334,285

332,467

574

(2,392
)
Total investment securities
$
567,920

$
554,264

$
367

$
(14,023
)

$
485,317

$
483,499

$
1,193

$
(3,011
)
Sales of investment securities and gross gains and losses
Sales of investment securities and gross gains and losses are shown in the following table.
 
Three months ended
 
Six months ended
(in thousands)
June 30, 2018
 
June 30, 2017
 
June 30, 2018
 
June 30, 2017
Available-for-sale:
 
 
 
 
 
 
 
Sales proceeds
$
5,006

 
$
1,321

 
$
5,006

 
$
1,321

Gross realized gains
27

 
13

 
27

 
13

Gross realized losses
(16
)
 
(3
)
 
(16
)
 
(3
)
Our investment securities portfolio consists of obligations of state and political subdivisions, corporate bonds, U.S. government agency securities, including residential and commercial mortgage-backed securities (“MBS”) and collateralized mortgage obligations (“CMOs”) issued or guaranteed by Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), Small Business Administration ("SBA"), or Government National Mortgage Association ("GNMA"), debentures issued by government-sponsored agencies such as FNMA, Federal Farm Credit Bureau, FHLB and FHLMC, and privately issued CMOs, as reflected in the following table.
 
June 30, 2018
 
December 31, 2017
 
Amortized
Fair
Gross Unrealized
 
Amortized
Fair
Gross Unrealized
(in thousands)
Cost
Value
Gains
(Losses)
 
Cost
Value
Gains
(Losses)
Held-to-maturity:
 
 
 
 
 
 
 
 
 
Securities of U.S. government agencies:
 
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
$
94,203

$
90,824

$
—

$
(3,379
)

$
100,376

$
100,096

$
234

$
(514
)
SBA-backed securities
8,882

8,743

—

(139
)
 
—

—

—

—

  CMOs issued by FNMA
11,881

11,766

—

(115
)
 
—

—

—

—

     CMOs issued by FHLMC
34,668

33,591

—

(1,077
)
 
31,010

30,938

2

(74
)
CMOs issued by GNMA
3,730

3,713

—

(17
)
 
—

—

—

—

Obligations of state and
political subdivisions
17,288

17,490

235

(33
)
 
19,646

19,998

383

(31
)
Total held-to-maturity
170,652

166,127

235

(4,760
)

151,032

151,032

619

(619
)
Available-for-sale:
 
 
 
 
 
 
 
 
 
Securities of U.S. government agencies:
 
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
90,082

87,590

17

(2,509
)

65,559

65,262

126

(423
)
SBA-backed securities
24,620

23,954

—

(666
)
 
25,979

25,982

58

(55
)
CMOs issued by FNMA
21,026

20,571

7

(462
)

35,340

35,125

33

(248
)
CMOs issued by FHLMC
123,359

120,411

1

(2,949
)

70,514

69,889

3

(628
)
CMOs issued by GNMA
12,641

12,222

2

(421
)

17,953

17,785

26

(194
)
Debentures of government- sponsored agencies
32,395

32,139

—

(256
)

12,940

12,938

3

(5
)
Privately issued CMOs
431

435

4

—


1,432

1,431

1

(2
)
Obligations of state and
political subdivisions
89,699

87,788

77

(1,988
)

98,027

97,491

298

(834
)
  Corporate bonds
3,015

3,027

24

(12
)

6,541

6,564

26

(3
)
Total available-for-sale
397,268

388,137

132

(9,263
)

334,285

332,467

574

(2,392
)
Total investment securities
$
567,920

$
554,264

$
367

$
(14,023
)

$
485,317

$
483,499

$
1,193

$
(3,011
)
Investments Classified by Contractual Maturity Date
The amortized cost and fair value of investment debt securities by contractual maturity at June 30, 2018 and December 31, 2017 are shown in the following table. Expected maturities may differ from contractual maturities if the issuers of the securities have the right to call or prepay obligations with or without call or prepayment penalties.
 
June 30, 2018
 
December 31, 2017
 
Held-to-Maturity
 
Available-for-Sale
 
Held-to-Maturity
 
Available-for-Sale
(in thousands)
Amortized Cost
Fair Value
 
Amortized Cost
Fair Value
 
Amortized Cost
Fair Value
 
Amortized Cost
Fair Value
Within one year
$
2,859

$
2,882

 
$
8,272

$
8,263

 
$
2,151

$
2,172

 
$
10,268

$
10,272

After one but within five years
13,063

13,147

 
79,662

78,514

 
15,577

15,791

 
71,576

71,237

After five years through ten years
63,321

61,350

 
216,584

210,650

 
54,641

54,554

 
129,723

128,954

After ten years
91,409

88,748

 
92,750

90,710

 
78,663

78,515

 
122,718

122,004

Total
$
170,652

$
166,127

 
$
397,268

$
388,137

 
$
151,032

$
151,032

 
$
334,285

$
332,467
Schedule of Financial Instruments Owned and Pledged as Collateral
Pledged investment securities are shown in the following table.
(in thousands)
June 30, 2018
December 31, 2017
Pledged to the State of California:
 
 
   Secure public deposits in compliance with the Local Agency Security Program
$
103,097

$
107,829

   Collateral for trust deposits
749

761

      Total investment securities pledged to the State of California
$
103,846

$
108,590

Collateral for Wealth Management and Trust Services checking account
$
2,014

$
2,026
Schedule of Unrealized Loss on Investments
There were 266 and 198 investment securities in unrealized loss positions at June 30, 2018 and December 31, 2017, respectively. Those securities are summarized and classified according to the duration of the loss period in the following tables:
June 30, 2018
< 12 continuous months
 
≥ 12 continuous months
 
Total securities
 in a loss position
(in thousands)
Fair value
Unrealized loss
 
Fair value
Unrealized loss
 
Fair value
Unrealized loss
Held-to-maturity:
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
$
22,100

$
(830
)
 
$
68,724

$
(2,549
)
 
$
90,824

$
(3,379
)
SBA-backed securities

8,742

(139
)
 
—

—

 
$
8,742

$
(139
)
CMOs issued by FNMA
11,766

(115
)
 
—

—

 
11,766

(115
)
CMOs issued by FHLMC
19,798

(564
)
 
13,793

(513
)
 
33,591

(1,077
)
CMOs issued by GNMA
—

—

 
3,713

(17
)
 
3,713

(17
)
Obligations of state and political subdivisions
3,816

(33
)
 
—

—

 
3,816

(33
)
Total held-to-maturity
66,222

(1,681
)
 
86,230

(3,079
)
 
152,452

(4,760
)
Available-for-sale:
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
68,906

(1,843
)
 
17,713

(666
)
 
86,619

(2,509
)
SBA-backed securities

23,954

(666
)
 
—

—

 
23,954

(666
)
CMOs issued by FNMA
15,687

(321
)
 
4,642

(141
)
 
20,329

(462
)
CMOs issued by FHLMC
115,370

(2,949
)
 
—

—

 
115,370

(2,949
)
CMOs issued by GNMA
11,297

(419
)
 
603

(2
)
 
11,900

(421
)
Debentures of government- sponsored agencies
32,139

(256
)
 
—

—

 
32,139

(256
)
Privately issued CMOs
—

—

 
—

—

 
—

—

Obligations of state and political subdivisions
57,217

(835
)
 
18,832

(1,153
)
 
76,049

(1,988
)
Corporate bonds
1,522

(12
)
 
—

—

 
1,522

(12
)
Total available-for-sale
326,092

(7,301
)
 
41,790

(1,962
)
 
367,882

(9,263
)
Total temporarily impaired securities
$
392,314

$
(8,982
)
 
$
128,020

$
(5,041
)
 
$
520,334

$
(14,023
)
December 31, 2017
< 12 continuous months
 
≥ 12 continuous months
 
Total securities
 in a loss position
(in thousands)
Fair value
Unrealized loss
 
Fair value
Unrealized loss
 
Fair value
Unrealized loss
Held-to-maturity:
 
 
 
 
 
 
 
 
Obligations of state and political subdivisions
$
3,648

$
(31
)
 
$
—

$
—

 
$
3,648

$
(31
)
MBS pass-through securities issued by FHLMC and FNMA
16,337

(143
)
 
46,845

(371
)
 
63,182

(514
)
CMOs issued by FHLMC
11,066

(31
)
 
13,824

(43
)
 
24,890

(74
)
Total held-to-maturity
31,051

(205
)
 
60,669

(414
)
 
91,720

(619
)
Available-for-sale:




 




 




MBS pass-through securities issued by FHLMC and FNMA
32,189

(121
)
 
15,325

(302
)
 
47,514

(423
)
SBA-backed securities
11,028

(53
)
 
165

(2
)
 
11,193

(55
)
CMOs issued by FNMA
26,401

(171
)
 
5,440

(77
)
 
31,841

(248
)
CMOs issued by FHLMC
69,276

(628
)
 
—

—

 
69,276

(628
)
CMOs issued by GNMA
14,230

(194
)
 
—

—

 
14,230

(194
)
Debentures of government- sponsored agencies
2,984

(5
)
 
—

—

 
2,984

(5
)
   Privately issued CMO's
1,310

(2
)
 
—

—

 
1,310

(2
)
Obligations of state and political subdivisions
52,197

(288
)
 
19,548

(546
)
 
71,745

(834
)
Corporate bonds
3,060

(3
)
 
—

—

 
3,060

(3
)
Total available-for-sale
212,675

(1,465
)
 
40,478

(927
)
 
253,153

(2,392
)
Total temporarily impaired securities
$
243,726

$
(1,670
)
 
$
101,147

$
(1,341
)
 
$
344,873

$
(3,011
)