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Investment Securities - (Tables) | 3 Months Ended
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Mar. 31, 2021
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 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. A summary of the amortized cost, fair value and allowance for credit losses related to securities held-to-maturity as of March 31, 2021 and December 31, 2020 is presented below.
Held-to-maturity: | Amortized Cost 1 | Allowance for Credit Losses | Net Carrying Amount | Gross Unrealized | Fair Value |
(in thousands) | Gains | (Losses) |
March 31, 2021 |  |  |  |  |  |  |
Securities of U.S. government-sponsored enterprises: |  |  |  |  |  |  |
MBS pass-through securities issued by FHLMC and FNMA | $ | 78,227 |  | $ | — |  | $ | 78,227 |  | $ | 3,283 |  | $ | — |  | $ | 81,510 |  |
CMOs issued by FHLMC | 30,207 |  | — |  | 30,207 |  | 1,105 |  | (189) |  | 31,123 |  |
CMOs issued by FNMA | 7,305 |  | — |  | 7,305 |  | 347 |  | — |  | 7,652 |  |
SBA-backed securities | 5,699 |  | — |  | 5,699 |  | 227 |  | — |  | 5,926 |  |
Debentures of government-sponsored agencies | 29,950 |  | — |  | 29,950 |  | — |  | — |  | 29,950 |  |
Obligations of state and political subdivisions | 582 |  | — |  | 582 |  | 13 |  | — |  | 595 |  |
Total held-to-maturity | $ | 151,970 |  | $ | — |  | $ | 151,970 |  | $ | 4,975 |  | $ | (189) |  | $ | 156,756 |  |
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 |  |
1 Amortized cost and fair values exclude accrued interest receivable of $295 thousand and $366 thousand at March 31, 2021 and December 31, 2020, respectively, which is included in interest receivable and other assets in the consolidated statements of condition. |
Schedule of Bond Ratings for Held-to-Maturity Securities | The following table summarizes the amortized cost of our portfolio of held-to-maturity securities issued by states and political subdivisions by Moody's and/or Standard & Poor's bond ratings as of March 31, 2021.
(in thousands) | Obligations of state and political subdivisions |  |  |  |
AA | $ | 377 |  |  |  |  |
A | 205 |  |  |  |  |
Total | $ | 582 |  |  |  |  |
Summary of Available-for-Sale Investments | A summary of the amortized cost, fair value and allowance for credit losses related to securities available-for-sale as of March 31, 2021 and December 31, 2020 is presented below.
Available-for-sale: | Amortized Cost 1 | Gross Unrealized | Allowance for Credit Losses | Fair Value
(in thousands) | Gains | (Losses)
March 31, 2021 |  |  |  |  |
Securities of U.S. government-sponsored enterprises: |  |  |  |  |
MBS pass-through securities issued by FHLMC and FNMA | $ | 65,871 |  | $ | 2,199 |  | $ | (56) |  | $ | — |  | $ | 68,014 |
CMOs issued by FHLMC | 168,589 |  | 5,525 |  | (948) |  | — |  | 173,166 |
CMOs issued by FNMA | 21,663 |  | 537 |  | (31) |  | — |  | 22,169 |
CMOs issued by GNMA | 23,738 |  | 236 |  | — |  | — |  | 23,974 |
SBA-backed securities | 28,059 |  | 1,212 |  | (53) |  | — |  | 29,218 |
Debentures of government- sponsored agencies | 76,313 |  | 201 |  | (2,041) |  | — |  | 74,473 |
Obligations of state and political subdivisions | 118,118 |  | 3,842 |  | (195) |  | — |  | 121,765 |
Corporate bonds | 5,986 |  | — |  | (197) |  | — |  | 5,789 |
Total available-for-sale | $ | 508,337 |  | $ | 13,752 |  | $ | (3,521) |  | $ | — |  | $ | 518,568 |
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 |
1 Amortized cost and fair value exclude accrued interest receivable of $1.9 million at both March 31, 2021 and December 31, 2020, which is included in interest receivable and other assets in the consolidated statements of condition.
Investments Classified by Contractual Maturity Date | The amortized cost a nd fair value of investment debt securities by contractual maturity at March 31, 2021 and December 31, 2020 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.
| March 31, 2021 |  | December 31, 2020
| 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 |  | $ | 248 |  |  | $ | 15,013 |  | $ | 15,219 |  |  | $ | 246 |  | $ | 250 |  |  | $ | 11,530 |  | $ | 11,687 |
After one but within five years | 8,847 |  | 9,284 |  |  | 55,101 |  | 57,955 |  |  | 7,550 |  | 7,961 |  |  | 59,028 |  | 62,397 |
After five years through ten years | 62,415 |  | 65,241 |  |  | 193,424 |  | 198,301 |  |  | 52,113 |  | 55,872 |  |  | 144,908 |  | 154,089 |
After ten years | 80,462 |  | 81,983 |  |  | 244,799 |  | 247,093 |  |  | 49,127 |  | 51,102 |  |  | 157,572 |  | 164,178 |
Total | $ | 151,970 |  | $ | 156,756 |  |  | $ | 508,337 |  | $ | 518,568 |  |  | $ | 109,036 |  | $ | 115,185 |  |  | $ | 373,038 |  | $ | 392,351 |
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, 2021 | March 31, 2020 |  |  |
Available-for-sale: |  |  |  |  |
Sales proceeds | $ | — |  | $ | 27,442 |  |  |  |
Gross realized gains | — |  | 800 |  |  |  |
Schedule of Financial Instruments Owned and Pledged as Collateral | Pledged investment securities are shown in the following table:
(in thousands) | March 31, 2021 | December 31, 2020
Pledged to the State of California: |  |
Secure public deposits in compliance with the Local Agency Security Program | $ | 123,085 |  | $ | 131,051 |
Collateral for trust deposits | 735 |  | 751 |
Total investment securities pledged to the State of California | 123,820 |  | 131,802 |
Collateral for Wealth Management and Trust Services checking account | 614 |  | 629 |
Total pledged investment securities | $ | 124,434 |  | $ | 132,431 |
Schedule of Unrealized Loss on Investments | There were 29 and 10 securities in unrealized loss positions at March 31, 2021 and December 31, 2020, respectively. Those securities are summarized and classified according to the duration of the loss period in the tables below:
March 31, 2021 | < 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: |  |  |  |  |  |  |  |
CMOs issued by FHLMC | $ | 4,235 |  | $ | (189) |  |  | $ | — |  | $ | — |  |  | $ | 4,235 |  | $ | (189) |
Total held-to-maturity | 4,235 |  | (189) |  |  | — |  | — |  |  | 4,235 |  | (189) |
Available-for-sale: |  |  |  |  |  |  |  |
MBS pass-through securities issued by FHLMC and FNMA | 10,013 |  | (56) |  |  | — |  | — |  |  | 10,013 |  | (56) |
SBA-backed securities | — |  | — |  |  | 1,699 |  | (53) |  |  | 1,699 |  | (53) |
CMOs issued by FNMA | 7,304 |  | (31) |  |  | — |  | — |  |  | 7,304 |  | (31) |
CMOs issued by FHLMC | 32,658 |  | (948) |  |  | — |  | — |  |  | 32,658 |  | (948) |
Debentures of government- sponsored agencies | 53,289 |  | (2,041) |  |  | — |  | — |  |  | 53,289 |  | (2,041) |
Obligations of state and political subdivisions | 28,529 |  | (195) |  |  | — |  | — |  |  | 28,529 |  | (195) |
Corporate bonds | 5,789 |  | (197) |  |  | — |  | — |  |  | 5,789 |  | (197) |
Total available-for-sale | 137,582 |  | (3,468) |  |  | 1,699 |  | (53) |  |  | 139,281 |  | (3,521) |
Total temporarily impaired securities | $ | 141,817 |  | $ | (3,657) |  |  | $ | 1,699 |  | $ | (53) |  |  | $ | 143,516 |  | $ | (3,710) |
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 available-for-sale | 9,918 |  | (25) |  |  | 1,790 |  | (55) |  |  | 11,708 |  | (80) |
Total temporarily impaired securities | $ | 9,918 |  | $ | (25) |  |  | $ | 1,790 |  | $ | (55) |  |  | $ | 11,708 |  | $ | (80) |

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- Definition Tabular disclosure of financial instruments held by the entity for its own account for trading or investment purposes that are carried at fair value and pledged to counterparties as collateral for financing transactions. Description may include equity, fixed income, debt or other securities. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=66007379&loc=d3e113888-111728 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 30 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=109249958&loc=SL6224234-111729 + Details
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