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Investment Securities - (Tables)
 9 Months Ended
Sep. 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:
 
September 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
$
80,166

$
81,308

$
1,357

$
(215
)

$
88,606

$
85,804

$
7

$
(2,809
)
SBA-backed securities
8,001

8,360

359

—

 
8,720

8,757

37

—

CMOs issued by FNMA
10,679

10,981

302

—

 
11,447

11,327

—

(120
)
CMOs issued by FHLMC
32,568

33,524

966

(10
)
 
33,583

33,021

8

(570
)
CMOs issued by GNMA
3,757

3,810

53

—

 
3,739

3,769

30

—

Obligations of state and
political subdivisions
7,042

7,135

93

—

 
11,111

11,216

128

(23
)
Total held-to-maturity
142,213

145,118

3,130

(225
)

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
62,654

64,290

1,683

(47
)

95,339

94,467

358

(1,230
)
SBA-backed securities
36,014

36,943

990

(61
)
 
50,722

50,781

465

(406
)
CMOs issued by FNMA
24,168

24,560

392

—


28,275

28,079

134

(330
)
CMOs issued by FHLMC
138,731

144,067

5,374

(38
)

145,979

144,836

454

(1,597
)
CMOs issued by GNMA
12,621

12,686

66

(1
)

11,294

11,021

1

(274
)
Debentures of government- sponsored agencies
23,069

23,822

753

—


52,956

53,018

185

(123
)
Privately issued CMOs
120

119

—

(1
)

295

297

2

—

Obligations of state and
political subdivisions
48,993

50,232

1,292

(53
)

79,046

77,960

134

(1,220
)
Corporate bonds
1,999

2,005

7

(1
)

2,004

2,005

15

(14
)
Total available-for-sale
348,369

358,724

10,557

(202
)

465,910

462,464

1,748

(5,194
)
Total investment securities
$
490,582

$
503,842

$
13,687

$
(427
)

$
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:
 
September 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
$
80,166

$
81,308

$
1,357

$
(215
)

$
88,606

$
85,804

$
7

$
(2,809
)
SBA-backed securities
8,001

8,360

359

—

 
8,720

8,757

37

—

CMOs issued by FNMA
10,679

10,981

302

—

 
11,447

11,327

—

(120
)
CMOs issued by FHLMC
32,568

33,524

966

(10
)
 
33,583

33,021

8

(570
)
CMOs issued by GNMA
3,757

3,810

53

—

 
3,739

3,769

30

—

Obligations of state and
political subdivisions
7,042

7,135

93

—

 
11,111

11,216

128

(23
)
Total held-to-maturity
142,213

145,118

3,130

(225
)

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
62,654

64,290

1,683

(47
)

95,339

94,467

358

(1,230
)
SBA-backed securities
36,014

36,943

990

(61
)
 
50,722

50,781

465

(406
)
CMOs issued by FNMA
24,168

24,560

392

—


28,275

28,079

134

(330
)
CMOs issued by FHLMC
138,731

144,067

5,374

(38
)

145,979

144,836

454

(1,597
)
CMOs issued by GNMA
12,621

12,686

66

(1
)

11,294

11,021

1

(274
)
Debentures of government- sponsored agencies
23,069

23,822

753

—


52,956

53,018

185

(123
)
Privately issued CMOs
120

119

—

(1
)

295

297

2

—

Obligations of state and
political subdivisions
48,993

50,232

1,292

(53
)

79,046

77,960

134

(1,220
)
Corporate bonds
1,999

2,005

7

(1
)

2,004

2,005

15

(14
)
Total available-for-sale
348,369

358,724

10,557

(202
)

465,910

462,464

1,748

(5,194
)
Total investment securities
$
490,582

$
503,842

$
13,687

$
(427
)

$
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 September 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.
 
September 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
$
5,327

$
5,335

 
$
5,475

$
5,478

 
$
6,194

$
6,182

 
$
9,863

$
9,795

After one but within five years
2,269

2,318

 
57,102

58,144

 
5,481

5,492

 
84,871

84,435

After five years through ten years
56,183

58,018

 
188,601

195,869

 
59,231

58,120

 
252,274

250,055

After ten years
78,434

79,447

 
97,191

99,233

 
86,300

84,100

 
118,902

118,179

Total
$
142,213

$
145,118

 
$
348,369

$
358,724

 
$
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
 
Nine months ended
(in thousands)
September 30, 2019
September 30, 2018
 
September 30, 2019
September 30, 2018
Available-for-sale:
 
 
 
 
 
Sales proceeds
$
—

$
11,966

 
$
66,081

$
16,972

Gross realized gains
—

—

 
214

27

Gross realized losses
—

(90
)
 
(159
)
(106
)
Schedule of Financial Instruments Owned and Pledged as Collateral

Pledged investment securities are shown in the following table.
(in thousands)
September 30, 2019
December 31, 2018
Pledged to the State of California:
 
 
Secure public deposits in compliance with the Local Agency Security Program
$
84,574

$
125,696

Collateral for trust deposits
745

734

Total investment securities pledged to the State of California
$
85,319

$
126,430

Collateral for Wealth Management and Trust Services checking account
$
625

$
2,000
Schedule of Unrealized Loss on Investments
There were 37 and 229 securities in unrealized loss positions at September 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:
September 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
$
9,063

$
(24
)
 
$
23,799

$
(191
)
 
$
32,862

$
(215
)
CMOs issued by FHLMC
—

—

 
1,866

(10
)
 
1,866

(10
)
Total held-to-maturity
9,063

(24
)
 
25,665

(201
)
 
34,728

(225
)
Available-for-sale:
 
 
 
 
 
 
 
 
MBS pass-through securities issued by FHLMC and FNMA
269

(1
)
 
7,628

(46
)
 
7,897

(47
)
SBA-backed securities
—

—

 
2,785

(61
)
 
2,785

(61
)
CMOs issued by FNMA
—

—

 
—

—

 
—

—

CMOs issued by FHLMC
7,735

(13
)
 
9,722

(25
)
 
17,457

(38
)
CMOs issued by GNMA
—

—

 
130

(1
)
 
130

(1
)
Privately issued CMOs
79

(1
)
 
—

—

 
79

(1
)
Obligations of state and political subdivisions
6,936

(49
)
 
966

(4
)
 
7,902

(53
)
Corporate bonds
—

—

 
504

(1
)
 
504

(1
)
Total available-for-sale
15,019

(64
)
 
21,735

(138
)
 
36,754

(202
)
Total temporarily impaired securities
$
24,082

$
(88
)
 
$
47,400

$
(339
)
 
$
71,482

$
(427
)
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
)