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Investment Securities (Tables)
 3 Months Ended
Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]  
Summary of Held-to-Maturity Investments
Our investment securities portfolio consists of obligations of state and political subdivisions, U.S. corporations, U.S. federal government agencies such as Government National Mortgage Association ("GNMA") and Small Business Administration ("SBA"), U.S. government-sponsored enterprise securities ("GSEs"), such as Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), Federal Farm Credit Banks Funding Corporation and FHLB. We also invest in residential and commercial mortgage-backed securities (“MBS”/"CMBS") and collateralized mortgage obligations (“CMOs”) issued or guaranteed by the GSEs, and privately issued CMOs, as reflected in the following table:
 
March 31, 2019
 
December 31, 2018
 
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-sponsored enterprises:
 
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
$
86,117

$
84,588

$
44

$
(1,573
)

$
88,606

$
85,804

$
7

$
(2,809
)
SBA-backed securities
8,403

8,483

80

—

 
8,720

8,757

37

—

CMOs issued by FNMA
11,166

11,165

—

(1
)
 
11,447

11,327

—

(120
)
CMOs issued by FHLMC
33,375

33,148

65

(292
)
 
33,583

33,021

8

(570
)
CMOs issued by GNMA
3,746

3,733

—

(13
)
 
3,739

3,769

30

—

Obligations of state and
political subdivisions
10,038

10,137

111

(12
)
 
11,111

11,216

128

(23
)
Total held-to-maturity
152,845

151,254

300

(1,891
)

157,206

153,894

210

(3,522
)
Available-for-sale:
 
 
 
 
 
 
 
 
 
Securities of U.S. government-sponsored enterprises:
 
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
91,714

91,771

617

(560
)

95,339

94,467

358

(1,230
)
SBA-backed securities
48,441

48,798

582

(225
)
 
50,722

50,781

465

(406
)
CMOs issued by FNMA
27,192

27,037

127

(282
)

28,275

28,079

134

(330
)
CMOs issued by FHLMC
145,917

146,237

1,112

(792
)

145,979

144,836

454

(1,597
)
CMOs issued by GNMA
13,983

13,681

—

(302
)

11,294

11,021

1

(274
)
Debentures of government- sponsored agencies
37,984

38,245

344

(83
)

52,956

53,018

185

(123
)
Privately issued CMOs
251

252

1

—


295

297

2

—

Obligations of state and
political subdivisions
74,902

74,855

477

(524
)

79,046

77,960

134

(1,220
)
Corporate bonds
2,002

2,009

12

(5
)

2,004

2,005

15

(14
)
Total available-for-sale
442,386

442,885

3,272

(2,773
)

465,910

462,464

1,748

(5,194
)
Total investment securities
$
595,231

$
594,139

$
3,572

$
(4,664
)

$
623,116

$
616,358

$
1,958

$
(8,716
)
Summary of Available-for-Sale Investments
Our investment securities portfolio consists of obligations of state and political subdivisions, U.S. corporations, U.S. federal government agencies such as Government National Mortgage Association ("GNMA") and Small Business Administration ("SBA"), U.S. government-sponsored enterprise securities ("GSEs"), such as Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), Federal Farm Credit Banks Funding Corporation and FHLB. We also invest in residential and commercial mortgage-backed securities (“MBS”/"CMBS") and collateralized mortgage obligations (“CMOs”) issued or guaranteed by the GSEs, and privately issued CMOs, as reflected in the following table:
 
March 31, 2019
 
December 31, 2018
 
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-sponsored enterprises:
 
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
$
86,117

$
84,588

$
44

$
(1,573
)

$
88,606

$
85,804

$
7

$
(2,809
)
SBA-backed securities
8,403

8,483

80

—

 
8,720

8,757

37

—

CMOs issued by FNMA
11,166

11,165

—

(1
)
 
11,447

11,327

—

(120
)
CMOs issued by FHLMC
33,375

33,148

65

(292
)
 
33,583

33,021

8

(570
)
CMOs issued by GNMA
3,746

3,733

—

(13
)
 
3,739

3,769

30

—

Obligations of state and
political subdivisions
10,038

10,137

111

(12
)
 
11,111

11,216

128

(23
)
Total held-to-maturity
152,845

151,254

300

(1,891
)

157,206

153,894

210

(3,522
)
Available-for-sale:
 
 
 
 
 
 
 
 
 
Securities of U.S. government-sponsored enterprises:
 
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
91,714

91,771

617

(560
)

95,339

94,467

358

(1,230
)
SBA-backed securities
48,441

48,798

582

(225
)
 
50,722

50,781

465

(406
)
CMOs issued by FNMA
27,192

27,037

127

(282
)

28,275

28,079

134

(330
)
CMOs issued by FHLMC
145,917

146,237

1,112

(792
)

145,979

144,836

454

(1,597
)
CMOs issued by GNMA
13,983

13,681

—

(302
)

11,294

11,021

1

(274
)
Debentures of government- sponsored agencies
37,984

38,245

344

(83
)

52,956

53,018

185

(123
)
Privately issued CMOs
251

252

1

—


295

297

2

—

Obligations of state and
political subdivisions
74,902

74,855

477

(524
)

79,046

77,960

134

(1,220
)
Corporate bonds
2,002

2,009

12

(5
)

2,004

2,005

15

(14
)
Total available-for-sale
442,386

442,885

3,272

(2,773
)

465,910

462,464

1,748

(5,194
)
Total investment securities
$
595,231

$
594,139

$
3,572

$
(4,664
)

$
623,116

$
616,358

$
1,958

$
(8,716
)
Investments Classified by Contractual Maturity Date
The amortized cost and fair value of investment debt securities by contractual maturity at March 31, 2019 and December 31, 2018 are shown in the following table below. 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.
 
March 31, 2019
 
December 31, 2018
 
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
$
6,949

$
6,945

 
$
9,104

$
9,058

 
$
6,194

$
6,182

 
$
9,863

$
9,795

After one but within five years
3,649

3,664

 
71,592

71,425

 
5,481

5,492

 
84,871

84,435

After five years through ten years
58,337

58,048

 
243,869

244,875

 
59,231

58,120

 
252,274

250,055

After ten years
83,910

82,597

 
117,821

117,527

 
86,300

84,100

 
118,902

118,179

Total
$
152,845

$
151,254

 
$
442,386

$
442,885

 
$
157,206

$
153,894

 
$
465,910

$
462,464
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
(in thousands)
March 31, 2019
 
March 31, 2018
Available-for-sale:
 
 
 
Sales proceeds
$
4,229

 
$
—

Gross realized gains
3

 
—

Gross realized losses
(9
)
 
—
Schedule of Financial Instruments Owned and Pledged as Collateral
Pledged investment securities are shown in the following table.
(in thousands)
March 31, 2019
December 31, 2018
Pledged to the State of California:
 
 
Secure public deposits in compliance with the Local Agency Security Program
$
114,335

$
125,696

Collateral for trust deposits
729

734

Total investment securities pledged to the State of California
$
115,064

$
126,430

Collateral for Wealth Management and Trust Services checking account
$
1,995

$
2,000
Schedule of Unrealized Loss on Investments
There were 175 and 229 securities in unrealized loss positions at March 31, 2019 and December 31, 2018, respectively. Those securities are summarized and classified according to the duration of the loss period in the tables below:
March 31, 2019
< 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
$
2,663

$
(39
)
 
$
70,078

$
(1,534
)
 
$
72,741

$
(1,573
)
CMOs issued by FNMA
—

—

 
11,165

(1
)
 
11,165

(1
)
CMOs issued by FHLMC
—

—

 
19,113

(292
)
 
19,113

(292
)
CMOs issued by GNMA
3,733

(13
)
 
—

—

 
3,733

(13
)
Obligations of state and political subdivisions
—

—

 
3,554

(12
)
 
3,554

(12
)
Total held-to-maturity
6,396

(52
)
 
103,910

(1,839
)
 
110,306

(1,891
)
Available-for-sale:
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
—

—

 
51,734

(560
)
 
51,734

(560
)
SBA-backed securities
12,253

(123
)
 
14,799

(102
)
 
27,052

(225
)
CMOs issued by FNMA
—

—

 
17,786

(282
)
 
17,786

(282
)
CMOs issued by FHLMC
4,187

(3
)
 
72,861

(789
)
 
77,048

(792
)
CMOs issued by GNMA
3,529

(4
)
 
10,127

(298
)
 
13,656

(302
)
Debentures of government- sponsored agencies
—

—

 
11,385

(83
)
 
11,385

(83
)
Obligations of state and political subdivisions
1,044

(4
)
 
38,308

(520
)
 
39,352

(524
)
Corporate bonds
—

—

 
1,008

(5
)
 
1,008

(5
)
Total available-for-sale
21,013

(134
)
 
218,008

(2,639
)
 
239,021

(2,773
)
Total temporarily impaired securities
$
27,409

$
(186
)
 
$
321,918

$
(4,478
)
 
$
349,327

$
(4,664
)
December 31, 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
$
198

$
(9
)
 
$
83,990

$
(2,800
)
 
$
84,188

$
(2,809
)
CMOs issued by FNMA
—

—

 
11,327

(120
)
 
11,327

(120
)
CMOs issued by FHLMC
2,880

(3
)
 
28,171

(567
)
 
31,051

(570
)
Obligations of state and political subdivisions
—

—

 
3,565

(23
)
 
3,565

(23
)
Total held-to-maturity
3,078

(12
)
 
127,053

(3,510
)
 
130,131

(3,522
)
Available-for-sale:




 




 




MBS pass-through securities issued by FHLMC and FNMA
19,971

(128
)
 
50,077

(1,102
)
 
70,048

(1,230
)
SBA-backed securities
13,175

(122
)
 
20,123

(284
)
 
33,298

(406
)
CMOs issued by FNMA
2,345

(8
)
 
16,138

(322
)
 
18,483

(330
)
CMOs issued by FHLMC
24,094

(330
)
 
74,243

(1,267
)
 
98,337

(1,597
)
CMOs issued by GNMA
1,666

(7
)
 
9,112

(267
)
 
10,778

(274
)
Debentures of government- sponsored agencies
4,992

(8
)
 
11,349

(115
)
 
16,341

(123
)
Obligations of state and political subdivisions
15,290

(54
)
 
52,804

(1,166
)
 
68,094

(1,220
)
Corporate Bonds
—

—

 
1,004

(14
)
 
1,004

(14
)
Total available-for-sale
81,533

(657
)
 
234,850

(4,537
)
 
316,383

(5,194
)
Total temporarily impaired securities
$
84,611

$
(669
)
 
$
361,903

$
(8,047
)
 
$
446,514

$
(8,716
)