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Investment Securities - (Tables)
 6 Months Ended
Jun. 30, 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:
 
June 30, 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
$
83,493

$
84,121

$
967

$
(339
)

$
88,606

$
85,804

$
7

$
(2,809
)
SBA-backed securities
8,401

8,779

378

—

 
8,720

8,757

37

—

CMOs issued by FNMA
10,972

11,250

278

—

 
11,447

11,327

—

(120
)
CMOs issued by FHLMC
33,095

33,880

805

(20
)
 
33,583

33,021

8

(570
)
CMOs issued by GNMA
3,750

3,810

60

—

 
3,739

3,769

30

—

Obligations of state and
political subdivisions
9,168

9,278

110

—

 
11,111

11,216

128

(23
)
Total held-to-maturity
148,879

151,118

2,598

(359
)

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
70,550

72,144

1,644

(50
)

95,339

94,467

358

(1,230
)
SBA-backed securities
38,363

39,805

1,498

(56
)
 
50,722

50,781

465

(406
)
CMOs issued by FNMA
25,832

26,175

352

(9
)

28,275

28,079

134

(330
)
CMOs issued by FHLMC
142,175

146,528

4,410

(57
)

145,979

144,836

454

(1,597
)
CMOs issued by GNMA
13,275

13,268

33

(40
)

11,294

11,021

1

(274
)
Debentures of government- sponsored agencies
28,035

28,784

749

—


52,956

53,018

185

(123
)
Privately issued CMOs
159

159

1

(1
)

295

297

2

—

Obligations of state and
political subdivisions
48,323

49,259

1,012

(76
)

79,046

77,960

134

(1,220
)
Corporate bonds
2,000

2,009

10

(1
)

2,004

2,005

15

(14
)
Total available-for-sale
368,712

378,131

9,709

(290
)

465,910

462,464

1,748

(5,194
)
Total investment securities
$
517,591

$
529,249

$
12,307

$
(649
)

$
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:
 
June 30, 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
$
83,493

$
84,121

$
967

$
(339
)

$
88,606

$
85,804

$
7

$
(2,809
)
SBA-backed securities
8,401

8,779

378

—

 
8,720

8,757

37

—

CMOs issued by FNMA
10,972

11,250

278

—

 
11,447

11,327

—

(120
)
CMOs issued by FHLMC
33,095

33,880

805

(20
)
 
33,583

33,021

8

(570
)
CMOs issued by GNMA
3,750

3,810

60

—

 
3,739

3,769

30

—

Obligations of state and
political subdivisions
9,168

9,278

110

—

 
11,111

11,216

128

(23
)
Total held-to-maturity
148,879

151,118

2,598

(359
)

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
70,550

72,144

1,644

(50
)

95,339

94,467

358

(1,230
)
SBA-backed securities
38,363

39,805

1,498

(56
)
 
50,722

50,781

465

(406
)
CMOs issued by FNMA
25,832

26,175

352

(9
)

28,275

28,079

134

(330
)
CMOs issued by FHLMC
142,175

146,528

4,410

(57
)

145,979

144,836

454

(1,597
)
CMOs issued by GNMA
13,275

13,268

33

(40
)

11,294

11,021

1

(274
)
Debentures of government- sponsored agencies
28,035

28,784

749

—


52,956

53,018

185

(123
)
Privately issued CMOs
159

159

1

(1
)

295

297

2

—

Obligations of state and
political subdivisions
48,323

49,259

1,012

(76
)

79,046

77,960

134

(1,220
)
Corporate bonds
2,000

2,009

10

(1
)

2,004

2,005

15

(14
)
Total available-for-sale
368,712

378,131

9,709

(290
)

465,910

462,464

1,748

(5,194
)
Total investment securities
$
517,591

$
529,249

$
12,307

$
(649
)

$
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 June 30, 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.
 
June 30, 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
$
6,088

$
6,095

 
$
9,763

$
9,753

 
$
6,194

$
6,182

 
$
9,863

$
9,795

After one but within five years
3,637

3,694

 
64,474

65,498

 
5,481

5,492

 
84,871

84,435

After five years through ten years
57,679

59,303

 
195,243

201,925

 
59,231

58,120

 
252,274

250,055

After ten years
81,475

82,026

 
99,232

100,955

 
86,300

84,100

 
118,902

118,179

Total
$
148,879

$
151,118

 
$
368,712

$
378,131

 
$
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
 
Six months ended
(in thousands)
June 30, 2019
June 30, 2018
 
June 30, 2019
June 30, 2018
Available-for-sale:
 
 
 
 
 
Sales proceeds
$
61,852

$
5,006

 
$
66,081

$
5,006

Gross realized gains
211

27

 
214

27

Gross realized losses
(150
)
(16
)
 
(159
)
(16
)
Schedule of Financial Instruments Owned and Pledged as Collateral
Pledged investment securities are shown in the following table.
(in thousands)
June 30, 2019
December 31, 2018
Pledged to the State of California:
 
 
Secure public deposits in compliance with the Local Agency Security Program
$
97,974

$
125,696

Collateral for trust deposits
723

734

Total investment securities pledged to the State of California
$
98,697

$
126,430

Collateral for Wealth Management and Trust Services checking account
$
1,990

$
2,000
Schedule of Unrealized Loss on Investments
There were 56 and 229 securities in unrealized loss positions at June 30, 2019 and December 31, 2018, respectively. Those securities are summarized and classified according to the duration of the loss period in the tables below:
June 30, 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
$
343

$
(3
)
 
$
34,714

$
(336
)
 
$
35,057

$
(339
)
CMOs issued by FHLMC
—

—

 
3,205

(20
)
 
3,205

(20
)
Total held-to-maturity
343

(3
)
 
37,919

(356
)
 
38,262

(359
)
Available-for-sale:
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
—

—

 
13,537

(50
)
 
13,537

(50
)
SBA-backed securities
—

—

 
3,113

(56
)
 
3,113

(56
)
CMOs issued by FNMA
—

—

 
3,877

(9
)
 
3,877

(9
)
CMOs issued by FHLMC
8,153

(2
)
 
17,767

(55
)
 
25,920

(57
)
CMOs issued by GNMA
56

(1
)
 
7,948

(39
)
 
8,004

(40
)
Debentures of government- sponsored agencies
—

—

 
—

—

 
—

—

Privately issued CMOs
81

(1
)
 
—

—

 
81

(1
)
Obligations of state and political subdivisions
—

—

 
9,395

(76
)
 
9,395

(76
)
Corporate bonds
—

—

 
1,008

(1
)
 
1,008

(1
)
Total available-for-sale
8,290

(4
)
 
56,645

(286
)
 
64,935

(290
)
Total temporarily impaired securities
$
8,633

$
(7
)
 
$
94,564

$
(642
)
 
$
103,197

$
(649
)
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
)