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Investment Securities - (Tables) | 9 Months Ended
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Sep. 30, 2021
Investments, Debt and Equity Securities [Abstract] |
Summary of Held-to-Maturity Investments | A summary of the amortized cost, fair value and allowance for credit losses related to securities held-to-maturity as of September 30, 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) |
September 30, 2021 |  |  |  |  |  |  |
Securities of U.S. government-sponsored enterprises: |  |  |  |  |  |  |
MBS pass-through securities issued by FHLMC and FNMA | $ | 70,085 |  | $ | — |  | $ | 70,085 |  | $ | 2,828 |  | $ | (38) |  | $ | 72,875 |  |
CMOs issued by FHLMC | 42,275 |  | — |  | 42,275 |  | 1,114 |  | (95) |  | 43,294 |  |
CMOs issued by FNMA | 5,598 |  | — |  | 5,598 |  | 163 |  | — |  | 5,761 |  |
SBA-backed securities | 4,841 |  | — |  | 4,841 |  | 290 |  | — |  | 5,131 |  |
Debentures of government-sponsored agencies | 51,470 |  | — |  | 51,470 |  | — |  | — |  | 51,470 |  |
Obligations of state and political subdivisions | 22,532 |  | — |  | 22,532 |  | 20 |  | (31) |  | 22,521 |  |
Total held-to-maturity | $ | 196,801 |  | $ | — |  | $ | 196,801 |  | $ | 4,415 |  | $ | (164) |  | $ | 201,052 |  |
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 $451 thousand and $366 thousand at September 30, 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 September 30, 2021.
| Obligations of state and political subdivisions |  |  |  |
(in thousands) | September 30, 2021 | December 31, 2020 |  |  |  |
AAA | $ | 7,455 |  | $ | — |  |  |  |  |
AA | 14,975 |  | 1,461 |  |  |  |  |
A | 102 |  | 206 |  |  |  |  |
Total | $ | 22,532 |  | $ | 1,667 |  |  |  |  |
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 September 30, 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)
September 30, 2021 |  |  |  |  |
Securities of U.S. government-sponsored enterprises: |  |  |  |  |
MBS pass-through securities issued by FHLMC, FNMA and GNMA | $ | 207,557 |  | $ | 1,925 |  | $ | (243) |  | $ | — |  | $ | 209,239 |
CMOs issued by FHLMC | 363,708 |  | 5,045 |  | (1,065) |  | — |  | 367,688 |
CMOs issued by FNMA | 55,178 |  | 244 |  | (211) |  | — |  | 55,211 |
CMOs issued by GNMA | 61,411 |  | 232 |  | (249) |  | — |  | 61,394 |
SBA-backed securities | 33,422 |  | 1,323 |  | (136) |  | — |  | 34,609 |
Debentures of government- sponsored agencies | 71,328 |  | 63 |  | (1,177) |  | — |  | 70,214 |
U.S. Treasury securities | 11,881 |  | — |  | (104) |  | — |  | 11,777 |
Obligations of state and political subdivisions | 131,865 |  | 5,519 |  | (169) |  | — |  | 137,215 |
Corporate bonds | 14,014 |  | — |  | (237) |  | — |  | 13,777 |
Asset-backed securities | 1,914 |  | — |  | (5) |  | — |  | 1,909 |
Total available-for-sale | $ | 952,278 |  | $ | 14,351 |  | $ | (3,596) |  | $ | — |  | $ | 963,033 |
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 $2.9 million and $1.9 million September 30, 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 September 30, 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.
| September 30, 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 | $ | 102 |  | $ | 104 |  |  | $ | 11,700 |  | $ | 11,818 |  |  | $ | 246 |  | $ | 250 |  |  | $ | 11,530 |  | $ | 11,687 |
After one but within five years | 23,536 |  | 24,725 |  |  | 75,784 |  | 77,755 |  |  | 7,550 |  | 7,961 |  |  | 59,028 |  | 62,397 |
After five years through ten years | 51,125 |  | 53,105 |  |  | 314,110 |  | 318,801 |  |  | 52,113 |  | 55,872 |  |  | 144,908 |  | 154,089 |
After ten years | 122,038 |  | 123,118 |  |  | 550,684 |  | 554,659 |  |  | 49,127 |  | 51,102 |  |  | 157,572 |  | 164,178 |
Total | $ | 196,801 |  | $ | 201,052 |  |  | $ | 952,278 |  | $ | 963,033 |  |  | $ | 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 |  | Nine months ended
(in thousands) | September 30, 2021 | September 30, 2020 |  | September 30, 2021 | September 30, 2020
Available-for-sale: |  |  |  |  |
Sales proceeds | $ | 4,099 |  | $ | — |  |  | $ | 4,099 |  | $ | 33,756 |
Gross realized gains | 1 |  | — |  |  | 1 |  | 916 |
Gross realized losses | — |  | — |  |  | — |  | (1) |
Schedule of Financial Instruments Owned and Pledged as Collateral | Pledged investment securities are shown in the following table:
(in thousands) | September 30, 2021 | December 31, 2020
Pledged to the State of California: |  |
Secure public deposits in compliance with the Local Agency Security Program | $ | 234,390 |  | $ | 131,051 |
Collateral for trust deposits | 738 |  | 751 |
Collateral for Wealth Management and Trust Services checking account | 622 |  | 629 |
Total investment securities pledged to the State of California | 235,750 |  | 132,431 |
Bankruptcy trustee deposits pledged with Federal Reserve Bank | 2,845 |  | — |
Total pledged investment securities | $ | 238,595 |  | $ | 132,431 |
Schedule of Unrealized Loss on Investments | There were 165 and 10 securities in unrealized loss positions at September 30, 2021 and December 31, 2020, respectively. Those securities are summarized and classified according to the duration of the loss period in the tables below:
September 30, 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: |  |  |  |  |  |  |  |
MBS pass-through securities issued by FHLMC and FNMA | $ | 17,074 |  | $ | (38) |  |  | $ | — |  | $ | — |  |  | $ | 17,074 |  | $ | (38) |
CMOs issued by FHLMC | 9,320 |  | (95) |  |  | — |  | — |  |  | 9,320 |  | (95) |
Obligations of state and political subdivisions | 10,194 |  | (31) |  |  | — |  | — |  |  | 10,194 |  | (31) |
Total held-to-maturity | 36,588 |  | (164) |  |  | — |  | — |  |  | 36,588 |  | (164) |
Available-for-sale: |  |  |  |  |  |  |  |
MBS pass-through securities issued by FHLMC, FNMA and GNMA | 63,171 |  | (243) |  |  | — |  | — |  |  | 63,171 |  | (243) |
CMOs issued by FHLMC | 142,557 |  | (1,065) |  |  | — |  | — |  |  | 142,557 |  | (1,065) |
CMOs issued by FNMA | 25,256 |  | (211) |  |  | — |  | — |  |  | 25,256 |  | (211) |
CMOs issued by GNMA | 25,879 |  | (249) |  |  | — |  | — |  |  | 25,879 |  | (249) |
SBA-backed securities | 8,115 |  | (93) |  |  | 1,307 |  | (43) |  |  | 9,422 |  | (136) |
Debentures of government- sponsored agencies | 50,344 |  | (1,021) |  |  | 3,812 |  | (156) |  |  | 54,156 |  | (1,177) |
U.S. Treasury securities | 11,777 |  | (104) |  |  | — |  | — |  |  | 11,777 |  | (104) |
Obligations of state and political subdivisions | 16,494 |  | (169) |  |  | — |  | — |  |  | 16,494 |  | (169) |
Corporate bonds | 13,778 |  | (237) |  |  | — |  | — |  |  | 13,778 |  | (237) |
Asset-backed securities | 1,909 |  | (5) |  |  | — |  | — |  |  | 1,909 |  | (5) |
Total available-for-sale | 359,280 |  | (3,397) |  |  | 5,119 |  | (199) |  |  | 364,399 |  | (3,596) |
Total securities at loss position | $ | 395,868 |  | $ | (3,561) |  |  | $ | 5,119 |  | $ | (199) |  |  | $ | 400,987 |  | $ | (3,760) |
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: |  |  |  |  |  |  |  |
CMOs issued by FHLMC | $ | 5,975 |  | $ | (1) |  |  | $ | — |  | $ | — |  |  | $ | 5,975 |  | $ | (1) |
SBA-backed securities | — |  | — |  |  | 1,790 |  | (55) |  |  | 1,790 |  | (55) |
Debentures of government- sponsored agencies | 3,943 |  | (24) |  |  | — |  | — |  |  | 3,943 |  | (24) |
Total securities at loss position | $ | 9,918 |  | $ | (25) |  |  | $ | 1,790 |  | $ | (55) |  |  | $ | 11,708 |  | $ | (80) |

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