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Investment Securities (Tables)
 9 Months Ended
Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Summary of Held-to-Maturity Investments
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.
 
September 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
$
91,237

$
86,962

$
—

$
(4,275
)

$
100,376

$
100,096

$
234

$
(514
)
SBA-backed securities
8,723

8,489

—

(234
)
 
—

—

—

—

CMOs issued by FNMA
11,646

11,254

—

(392
)
 
—

—

—

—

CMOs issued by FHLMC
34,169

32,868

—

(1,301
)
 
31,010

30,938

2

(74
)
CMOs issued by GNMA
3,734

3,694

—

(40
)
 
—

—

—

—

Obligations of state and
political subdivisions
14,713

14,839

160

(34
)
 
19,646

19,998

383

(31
)
Total held-to-maturity
164,222

158,106

160

(6,276
)

151,032

151,032

619

(619
)
Available-for-sale:
 
 
 
 
 
 
 
 
 
Securities of U.S. government agencies:
 
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
93,096

90,484

20

(2,632
)

65,559

65,262

126

(423
)
SBA-backed securities
41,074

40,181

—

(893
)
 
25,979

25,982

58

(55
)
CMOs issued by FNMA
19,914

19,356

4

(562
)

35,340

35,125

33

(248
)
CMOs issued by FHLMC
128,848

124,930

1

(3,919
)

70,514

69,889

3

(628
)
CMOs issued by GNMA
11,938

11,450

—

(488
)

17,953

17,785

26

(194
)
Debentures of government- sponsored agencies
43,470

42,914

—

(556
)

12,940

12,938

3

(5
)
Privately issued CMOs
367

370

3

—


1,432

1,431

1

(2
)
Obligations of state and
political subdivisions
75,519

73,373

41

(2,187
)

98,027

97,491

298

(834
)
Corporate bonds
2,506

2,513

19

(12
)

6,541

6,564

26

(3
)
Total available-for-sale
416,732

405,571

88

(11,249
)

334,285

332,467

574

(2,392
)
Total investment securities
$
580,954

$
563,677

$
248

$
(17,525
)

$
485,317

$
483,499

$
1,193

$
(3,011
)
Summary of Available-for-Sale Investments
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.
 
September 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
$
91,237

$
86,962

$
—

$
(4,275
)

$
100,376

$
100,096

$
234

$
(514
)
SBA-backed securities
8,723

8,489

—

(234
)
 
—

—

—

—

CMOs issued by FNMA
11,646

11,254

—

(392
)
 
—

—

—

—

CMOs issued by FHLMC
34,169

32,868

—

(1,301
)
 
31,010

30,938

2

(74
)
CMOs issued by GNMA
3,734

3,694

—

(40
)
 
—

—

—

—

Obligations of state and
political subdivisions
14,713

14,839

160

(34
)
 
19,646

19,998

383

(31
)
Total held-to-maturity
164,222

158,106

160

(6,276
)

151,032

151,032

619

(619
)
Available-for-sale:
 
 
 
 
 
 
 
 
 
Securities of U.S. government agencies:
 
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
93,096

90,484

20

(2,632
)

65,559

65,262

126

(423
)
SBA-backed securities
41,074

40,181

—

(893
)
 
25,979

25,982

58

(55
)
CMOs issued by FNMA
19,914

19,356

4

(562
)

35,340

35,125

33

(248
)
CMOs issued by FHLMC
128,848

124,930

1

(3,919
)

70,514

69,889

3

(628
)
CMOs issued by GNMA
11,938

11,450

—

(488
)

17,953

17,785

26

(194
)
Debentures of government- sponsored agencies
43,470

42,914

—

(556
)

12,940

12,938

3

(5
)
Privately issued CMOs
367

370

3

—


1,432

1,431

1

(2
)
Obligations of state and
political subdivisions
75,519

73,373

41

(2,187
)

98,027

97,491

298

(834
)
Corporate bonds
2,506

2,513

19

(12
)

6,541

6,564

26

(3
)
Total available-for-sale
416,732

405,571

88

(11,249
)

334,285

332,467

574

(2,392
)
Total investment securities
$
580,954

$
563,677

$
248

$
(17,525
)

$
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 September 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.
 
September 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
$
2,677

$
2,697

 
$
10,111

$
10,031

 
$
2,151

$
2,172

 
$
10,268

$
10,272

After one but within five years
12,476

12,438

 
69,230

67,972

 
15,577

15,791

 
71,576

71,237

After five years through ten years
60,422

58,041

 
239,939

232,532

 
54,641

54,554

 
129,723

128,954

After ten years
88,647

84,930

 
97,452

95,036

 
78,663

78,515

 
122,718

122,004

Total
$
164,222

$
158,106

 
$
416,732

$
405,571

 
$
151,032

$
151,032

 
$
334,285

$
332,467
Sale 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
 
Nine months ended
(in thousands)
September 30, 2018
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
Available-for-sale:
 
 
 
 
 
 
 
Sales proceeds
$
11,966

 
$
—

 
$
16,972

 
$
1,321

Gross realized gains
—

 
—

 
27

 
13

Gross realized losses
(90
)
 
—

 
(106
)
 
(3
)
Schedule of Financial Instruments Owned and Pledged as Collateral
Pledged investment securities are shown in the following table.
(in thousands)
September 30, 2018
December 31, 2017
Pledged to the State of California:
 
 
Secure public deposits in compliance with the Local Agency Security Program
$
97,978

$
107,829

Collateral for trust deposits
740

761

Total investment securities pledged to the State of California
$
98,718

$
108,590

Collateral for Wealth Management and Trust Services checking account
$
2,005

$
2,026
Schedule of Unrealized Loss on Investments
There were 253 and 198 investment securities in unrealized loss positions at September 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:
September 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
$
6,602

$
(225
)
 
$
80,360

$
(4,050
)
 
$
86,962

$
(4,275
)
SBA-backed securities

8,489

(234
)
 
—

—

 
$
8,489

$
(234
)
CMOs issued by FNMA
11,254

(392
)
 
—

—

 
11,254

(392
)
CMOs issued by FHLMC
11,430

(400
)
 
21,438

(901
)
 
32,868

(1,301
)
CMOs issued by GNMA
—

—

 
3,694

(40
)
 
3,694

(40
)
Obligations of state and political subdivisions
3,792

(34
)
 
—

—

 
3,792

(34
)
Total held-to-maturity
41,567

(1,285
)
 
105,492

(4,991
)
 
147,059

(6,276
)
Available-for-sale:
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
52,821

(1,804
)
 
20,406

(828
)
 
73,227

(2,632
)
SBA-backed securities

23,162

(893
)
 
—

—

 
23,162

(893
)
CMOs issued by FNMA
13,230

(383
)
 
5,905

(179
)
 
19,135

(562
)
CMOs issued by FHLMC
87,017

(2,930
)
 
29,702

(989
)
 
116,719

(3,919
)
CMOs issued by GNMA
10,728

(485
)
 
485

(3
)
 
11,213

(488
)
Debentures of government- sponsored agencies
37,831

(556
)
 
—

—

 
37,831

(556
)
Obligations of state and political subdivisions
44,714

(785
)
 
21,543

(1,402
)
 
66,257

(2,187
)
Corporate bonds
1,010

(12
)
 
—

—

 
1,010

(12
)
Total available-for-sale
270,513

(7,848
)
 
78,041

(3,401
)
 
348,554

(11,249
)
Total temporarily impaired securities
$
312,080

$
(9,133
)
 
$
183,533

$
(8,392
)
 
$
495,613

$
(17,525
)
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
)