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Investment Securities - (Tables) | 9 Months Ended
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Sep. 30, 2020
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. federal government agencies such as Government National Mortgage Association ("GNMA") and Small Business Administration ("SBA"), U.S. government-sponsored enterprises ("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, as reflected in the following table:
| September 30, 2020 |  | December 31, 2019
| 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 | $ | 69,797 |  | $ | 73,884 |  | $ | 4,087 |  | $ | — |  |  | $ | 80,451 |  | $ | 81,325 |  | $ | 1,018 |  | $ | (144) |
SBA-backed securities | 6,549 | 6,979 | 430 |  | — |  |  | 7,999 |  | 8,264 |  | 265 |  | — |
CMOs issued by FNMA | 8,440 | 8,834 | 394 |  | — |  |  | 10,210 |  | 10,492 |  | 282 |  | — |
CMOs issued by FHLMC | 29,657 | 31,331 | 1,674 |  | — |  |  | 31,477 |  | 32,157 |  | 685 |  | (5) |
CMOs issued by GNMA | 1,230 | 1,235 | 5 |  | — |  |  | 3,763 |  | 3,816 |  | 53 |  | — |
Obligations of state and political subdivisions | 1,677 | 1,720 | 43 |  | — |  |  | 3,513 |  | 3,588 |  | 75 |  | — |
Total held-to-maturity | 117,350 | 123,983 | 6,633 | — |  |  | 137,413 |  | 139,642 |  | 2,378 |  | (149) |
Available-for-sale: |  |  |  |  |  |  |  |  |
Securities of U.S. government-sponsored enterprises: |  |  |  |  |  |  |  |  |
MBS pass-through securities issued by FHLMC and FNMA | 56,679 | 59,482 | 2,803 | — |  |  | 98,502 |  | 100,071 |  | 1,617 |  | (48) |
SBA-backed securities | 31,057 | 32,844 | 1,844 |  | (57) |  |  | 35,674 |  | 36,286 |  | 688 |  | (76) |
CMOs issued by FNMA | 18,285 | 18,961 | 676 | — |  |  | 22,702 |  | 23,092 |  | 390 |  | — |
CMOs issued by FHLMC | 144,600 | 153,255 | 8,656 | (1) |  |  | 139,398 |  | 143,226 |  | 3,892 |  | (64) |
CMOs issued by GNMA | 9,064 | 9,491 | 427 |  | — |  |  | 11,719 |  | 11,755 |  | 42 |  | (6) |
Debentures of government- sponsored agencies | 45,239 | 45,688 | 449 |  | — |  |  | 48,389 |  | 49,046 |  | 727 |  | (70) |
Obligations of state and political subdivisions | 89,513 | 93,743 | 4,230 | — |  |  | 66,042 |  | 67,282 |  | 1,386 |  | (146) |
Corporate bonds | — | — | — | — |  |  | 1,497 |  | 1,502 |  | 6 |  | (1) |
Total available-for-sale | 394,437 | 413,464 | 19,085 | (58) |  |  | 423,923 |  | 432,260 |  | 8,748 |  | (411) |
Total investment securities | $ | 511,787 |  | $ | 537,447 |  | $ | 25,718 |  | $ | (58) |  |  | $ | 561,336 |  | $ | 571,902 |  | $ | 11,126 |  | $ | (560) |
Summary of available-for-sale investments | Our investment securities portfolio consists of obligations of state and political subdivisions, U.S. federal government agencies such as Government National Mortgage Association ("GNMA") and Small Business Administration ("SBA"), U.S. government-sponsored enterprises ("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, as reflected in the following table:
| September 30, 2020 |  | December 31, 2019
| 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 | $ | 69,797 |  | $ | 73,884 |  | $ | 4,087 |  | $ | — |  |  | $ | 80,451 |  | $ | 81,325 |  | $ | 1,018 |  | $ | (144) |
SBA-backed securities | 6,549 | 6,979 | 430 |  | — |  |  | 7,999 |  | 8,264 |  | 265 |  | — |
CMOs issued by FNMA | 8,440 | 8,834 | 394 |  | — |  |  | 10,210 |  | 10,492 |  | 282 |  | — |
CMOs issued by FHLMC | 29,657 | 31,331 | 1,674 |  | — |  |  | 31,477 |  | 32,157 |  | 685 |  | (5) |
CMOs issued by GNMA | 1,230 | 1,235 | 5 |  | — |  |  | 3,763 |  | 3,816 |  | 53 |  | — |
Obligations of state and political subdivisions | 1,677 | 1,720 | 43 |  | — |  |  | 3,513 |  | 3,588 |  | 75 |  | — |
Total held-to-maturity | 117,350 | 123,983 | 6,633 | — |  |  | 137,413 |  | 139,642 |  | 2,378 |  | (149) |
Available-for-sale: |  |  |  |  |  |  |  |  |
Securities of U.S. government-sponsored enterprises: |  |  |  |  |  |  |  |  |
MBS pass-through securities issued by FHLMC and FNMA | 56,679 | 59,482 | 2,803 | — |  |  | 98,502 |  | 100,071 |  | 1,617 |  | (48) |
SBA-backed securities | 31,057 | 32,844 | 1,844 |  | (57) |  |  | 35,674 |  | 36,286 |  | 688 |  | (76) |
CMOs issued by FNMA | 18,285 | 18,961 | 676 | — |  |  | 22,702 |  | 23,092 |  | 390 |  | — |
CMOs issued by FHLMC | 144,600 | 153,255 | 8,656 | (1) |  |  | 139,398 |  | 143,226 |  | 3,892 |  | (64) |
CMOs issued by GNMA | 9,064 | 9,491 | 427 |  | — |  |  | 11,719 |  | 11,755 |  | 42 |  | (6) |
Debentures of government- sponsored agencies | 45,239 | 45,688 | 449 |  | — |  |  | 48,389 |  | 49,046 |  | 727 |  | (70) |
Obligations of state and political subdivisions | 89,513 | 93,743 | 4,230 | — |  |  | 66,042 |  | 67,282 |  | 1,386 |  | (146) |
Corporate bonds | — | — | — | — |  |  | 1,497 |  | 1,502 |  | 6 |  | (1) |
Total available-for-sale | 394,437 | 413,464 | 19,085 | (58) |  |  | 423,923 |  | 432,260 |  | 8,748 |  | (411) |
Total investment securities | $ | 511,787 |  | $ | 537,447 |  | $ | 25,718 |  | $ | (58) |  |  | $ | 561,336 |  | $ | 571,902 |  | $ | 11,126 |  | $ | (560) |
Investments classified by contractual maturity date | The amortized cost a nd fair value of investment debt securities by contractual maturity at September 30, 2020 and December 31, 2019 are shown 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, 2020 |  | December 31, 2019
| 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 | $ | 247 |  | $ | 252 |  |  | $ | 14,235 |  | $ | 14,452 |  |  | $ | 1,807 |  | $ | 1,811 |  |  | $ | 6,699 |  | $ | 6,706 |
After one but within five years | 8,974 |  | 9,539 |  |  | 60,958 |  | 64,559 |  |  | 2,256 |  | 2,296 |  |  | 48,706 |  | 49,619 |
After five years through ten years | 52,373 |  | 56,139 |  |  | 164,815 |  | 174,439 |  |  | 56,221 |  | 57,544 |  |  | 208,806 |  | 214,277 |
After ten years | 55,756 |  | 58,053 |  |  | 154,429 |  | 160,014 |  |  | 77,129 |  | 77,991 |  |  | 159,712 |  | 161,658 |
Total | $ | 117,350 |  | $ | 123,983 |  |  | $ | 394,437 |  | $ | 413,464 |  |  | $ | 137,413 |  | $ | 139,642 |  |  | $ | 423,923 |  | $ | 432,260 |
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, 2020 | September 30, 2019 |  | September 30, 2020 | September 30, 2019
Available-for-sale: |  |  |  |  |
Sales proceeds | $ | — |  | $ | — |  |  | $ | 33,756 |  | $ | 66,081 |
Gross realized gains | — |  | — |  |  | 916 |  | 214 |
Gross realized losses | — |  | — |  |  | (1) |  | (159) |
Schedule of financial instruments owned and pledged as collateral | Pledged investment securities are shown in the following table:
(in thousands) | September 30, 2020 | December 31, 2019
Pledged to the State of California: |  |
Secure public deposits in compliance with the Local Agency Security Program | $ | 102,396 |  | $ | 126,598 |
Collateral for trust deposits | 752 |  | 742 |
Total investment securities pledged to the State of California | 103,148 |  | 127,340 |
Collateral for Wealth Management and Trust Services checking account | 629 |  | 622 |
Total pledged investment securities | $ | 103,777 |  | $ | 127,962 |
Schedule of unrealized loss on investments | There were 8 and 40 securities in unrealized loss positions at September 30, 2020 and December 31, 2019, respectively. Those securities are summarized and classified according to the duration of the loss period in the tables below:
September 30, 2020 | < 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
Available-for-sale: |  |  |  |  |  |  |  |
SBA-backed securities | $ | — |  | $ | — |  |  | $ | 1,900 |  | $ | (57) |  |  | $ | 1,900 |  | $ | (57) |
CMOs issued by FHLMC | 2,014 |  | (1) |  |  | — |  | — |  |  | 2,014 |  | (1) |
Total available-for-sale | 2,014 |  | (1) |  |  | 1,900 |  | (57) |  |  | 3,914 |  | (58) |
Total temporarily impaired securities | $ | 2,014 |  | $ | (1) |  |  | $ | 1,900 |  | $ | (57) |  |  | $ | 3,914 |  | $ | (58) |
December 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 | $ | 14,203 |  | $ | (60) |  |  | $ | 6,073 |  | $ | (84) |  |  | $ | 20,276 |  | $ | (144) |
CMOs issued by FHLMC | — |  | — |  |  | 1,725 |  | (5) |  |  | 1,725 |  | (5) |
Total held-to-maturity | 14,203 |  | (60) |  |  | 7,798 |  | (89) |  |  | 22,001 |  | (149) |
Available-for-sale: |  |  |  |  |  |  |  |
MBS pass-through securities issued by FHLMC and FNMA | 4,367 |  | (34) |  |  | 4,464 |  | (14) |  |  | 8,831 |  | (48) |
SBA-backed securities | 9,227 |  | (14) |  |  | 2,448 |  | (62) |  |  | 11,675 |  | (76) |
CMOs issued by FHLMC | 14,918 |  | (58) |  |  | 2,981 |  | (6) |  |  | 17,899 |  | (64) |
CMOs issued by GNMA | 7,139 |  | (6) |  |  | — |  | — |  |  | 7,139 |  | (6) |
Debentures of government- sponsored agencies | 25,228 |  | (70) |  |  | — |  | — |  |  | 25,228 |  | (70) |
Obligations of state and political subdivisions | 20,579 |  | (145) |  |  | 659 |  | (1) |  |  | 21,238 |  | (146) |
Corporate Bonds | 500 |  | (1) |  |  | — |  | — |  |  | 500 |  | (1) |
Total available-for-sale | 81,958 |  | (328) |  |  | 10,552 |  | (83) |  |  | 92,510 |  | (411) |
Total temporarily impaired securities | $ | 96,161 |  | $ | (388) |  |  | $ | 18,350 |  | $ | (172) |  |  | $ | 114,511 |  | $ | (560) |

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