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.


Held-to-maturity:	Amortized Cost 1		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized				Fair Value
(in thousands)							Gains		(Losses)
December 31, 2020
Securities of U.S. government-sponsored enterprises:
MBS pass-through securities issued by FHLMC and FNMA	$	65,579	$	—	$	65,579	$	3,924	$	—	$	69,503
CMOs issued by FHLMC	27,201		—		27,201		1,441		—		28,642
CMOs issued by FNMA	8,042		—		8,042		363		—		8,405
SBA-backed securities	6,547		—		6,547		400		—		6,947

Obligations of state and political subdivisions	1,667		—		1,667		21				1,688
Total held-to-maturity	$	109,036	$	—	$	109,036	$	6,149	$	—	$	115,185
December 31, 2019

Securities of U.S. government-sponsored enterprises:
MBS pass-through securities issued by FHLMC and FNMA	80,451		—		80,451		1,018		(144)		81,325
CMOs issued by FHLMC	31,477		—		31,477		685		(5)		32,157
CMOs issued by FNMA	10,210		—		10,210		282		—		10,492
CMOs issued by GNMA	3,763		—		3,763		53		—		3,816
SBA-backed securities	7,999		—		7,999		265		—		8,264
Obligations of state and political subdivisions	3,513		—		3,513		75		—		3,588
Total held-to-maturity	$	137,413	$	—	$	137,413	$	2,378	$	(149)	$	139,642
1 Amortized cost and fair values exclude accrued interest receivable of $366 thousand and $469 thousand at December 31, 2020 and 2019, respectively, which is included in interest receivable and other assets in the consolidated statements of condition.

Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to MBSs and CMOs issued or guaranteed by the GSEs, and SBA-backed securities, we expect to receive all the contractual principal and interest on these securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to securities issued by states and political subdivisions, management considers (i) issuer and/or guarantor credit ratings, (ii) historical probability of default and loss given default rates for given bond ratings and remaining maturity,(iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) internal credit review of the financial information, and (v) whether or not such securities have credit enhancements such as guarantees, contain a defeasance clause, or are pre-refunded by the issuers. Based on the comprehensive analysis, no credit losses are expected.


Available-for-sale:	Amortized Cost 1		Gross Unrealized				Allowance for Credit Losses		Fair Value
(in thousands)			Gains		(Losses)
December 31, 2020
Securities of U.S. government-sponsored enterprises:
MBS pass-through securities issued by FHLMC and FNMA	$	50,686	$	2,530	$	—	$	—	$	53,216
CMOs issued by FHLMC	143,267		7,925		(1)		—		151,191
CMOs issued by FNMA	16,450		580		—		—		17,030
CMOs issued by GNMA	6,863		351		—		—		7,214
SBA-backed securities	30,941		1,976		(55)		—		32,862
Debentures of government- sponsored agencies	19,944		266		(24)		—		20,186

Obligations of state and political subdivisions	104,887		5,765		—		—		110,652

Total available-for-sale	$	373,038	$	19,393	$	(80)	$	—	$	392,351
December 31, 2019
Securities of U.S. government-sponsored enterprises:
MBS pass-through securities issued by FHLMC and FNMA	$	98,502	$	1,617	$	(48)	$	—	$	100,071
CMOs issued by FHLMC	139,398		3,892		(64)		—		143,226
CMOs issued by FNMA	22,702		390		—		—		23,092
CMOs issued by GNMA	11,719		42		(6)		—		11,755
SBA-backed securities	35,674		688		(76)		—		36,286
Debentures of government- sponsored agencies	48,389		727		(70)		—		49,046

Obligations of state and political subdivisions	66,042		1,386		(146)		—		67,282
Corporate bonds	1,497		6		(1)		—		1,502
Total available-for-sale	$	423,923	$	8,748	$	(411)	$	—	$	432,260
1 Amortized cost and fair value exclude accrued interest receivable of $1.9 million and $1.8 million at December 31, 2020 and 2019, respectively, which is included in interest receivable and other assets in the consolidated statements of condition.

The amortized cost and fair value of investment debt securities by contractual maturity at December 31, 2020 and 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.


	December 31, 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	$	246	$	250	$	11,530	$	11,687	$	1,807	$	1,811	$	6,699	$	6,706
After one but within five years	7,550		7,961		59,028		62,397		2,256		2,296		48,706		49,619
After five years through ten years	52,113		55,872		144,908		154,089		56,221		57,544		208,806		214,277
After ten years	49,127		51,102		157,572		164,178		77,129		77,991		159,712		161,658
Total	$	109,036	$	115,185	$	373,038	$	392,351	$	137,413	$	139,642	$	423,923	$	432,260

As part of our ongoing review of our investment securities portfolio, we reassessed the classification of certain securities issued by government sponsored agencies. During 2018, we transferred $27.4 million, from available-for-sale to held-to-maturity at fair value. We intend and have the ability to hold these securities to maturity. The net unrealized pre-tax loss of $278 thousand, remained in accumulated other comprehensive income and is amortized over the remaining life of the securities along with amortization of any prior transfers. Amortization of the net unrealized pre-tax loss totaled $524 thousand, $445 thousand and $516 thousand in 2020, 2019 and 2018, respectively. There were no securities transferred from available-for-sale to held-to-maturity at fair value in 2020 or 2019.


(in thousands)	December 31, 2020		December 31, 2019
Pledged to the State of California:
Secure public deposits in compliance with the Local Agency Security Program	$	131,051	$	126,598
Collateral for trust deposits	751		742
Total investment securities pledged to the State of California	$	131,802	$	127,340
Collateral for Wealth Management and Trust Services ("WMTS") checking account	$	629	$	622
Total pledged investment securities	$	132,431	$	127,962


December 31, 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	$	—	$	—	$	1,790	$	(55)	$	1,790	$	(55)

CMOs issued by FHLMC	5,975		(1)		—		—		5,975		(1)

Debentures of government-sponsored agencies	3,943		(24)		—		—		3,943		(24)



Total	$	9,918	$	(25)	$	1,790	$	(55)	$	11,708	$	(80)


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	$	96,161	$	(388)	$	18,350	$	(172)	$	114,511	$	(560)

Securities issued by government-sponsored agencies, such as FNMA and FHLMC, usually have implicit credit support by the U.S. federal government. However, since 2008, FNMA and FHLMC have been under government conservatorship and, therefore, contractual cash flows for these investments carry explicit guarantees by the U.S. federal government. Securities issued by the SBA and GNMA have explicit credit guarantees by the U.S. federal government, which protects us from credit losses on the contractual cash flows of the securities.

At December 31, 2020, management determined that it did not intend to sell investment securities with unrealized losses, and it is not more than likely than not that we will have to sell any of the securities with unrealized losses before recovery of their amortized cost. Therefore, no allowance for credit losses has been recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to reasons of credit quality at December 31, 2020.

As a member of the FHLB, we are required to maintain a minimum investment in FHLB capital stock determined by the Board of Directors of the FHLB. The minimum investment requirements can increase in the event we increase our total asset size or borrowings with the FHLB. Shares cannot be purchased or sold except between the FHLB and its members at the $100 per share par value. We held $11.9 million and $11.7 million of FHLB stock included in other assets on the consolidated statements of condition at December 31, 2020 and 2019, respectively. The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and they do not have a readily determinable market value. Based on our analysis of FHLB’s financial condition and certain qualitative factors, we determined that the FHLB stock was not impaired at December 31, 2020 and 2019. On February 18, 2021, FHLB announced a cash dividend for the fourth quarter of 2020 at an annualized dividend rate of 5.00% to be distributed in mid-March 2021. Cash dividends paid on FHLB capital stock are recorded as non-interest income.

As a member bank of Visa U.S.A., we held 10,439 shares of Visa Inc. Class B common stock at both December 31, 2020 and 2019. These shares have a carrying value of zero and are restricted from resale to non-member banks of Visa U.S.A. until their conversion into Class A (voting) shares upon the termination of Visa Inc.'s Covered Litigation escrow account. Because of the restriction and the uncertainty on the conversion rate to Class A shares, these shares lack a readily determinable fair value. When converting this Class B common stock to Class A common stock based on the conversion rate of 1.6228, as of December 31, 2020 and 2019, and the closing stock price of Class A shares at those respective dates, the converted value of our shares of Class B common stock would have been $3.7 million and $3.2 million at December 31, 2020 and 2019, respectively. The conversion rate is subject to further adjustment upon the final settlement of the covered litigation against Visa Inc. and its member banks. As such, the fair value of these Class B shares can differ significantly from their converted values. In October 2018, we sold 6,500 shares of our holdings of Visa Inc. Class B common stock to a member bank of Visa U.S.A., resulting in a pre-tax gain, net of sales commission, of $956 thousand. For further information, refer to Note 12, Commitments and Contingencies.

We invest in low income housing tax credit funds as a limited partner, which totaled $3.5 million and $4.1 million recorded in other assets as of December 31, 2020 and 2019, respectively. In 2020, we recognized $654 thousand of low income housing tax credits and other tax benefits, net of $550 thousand of amortization expense of low income housing tax credit investment, as a component of income tax expense. As of December 31, 2020, our