Our investment securities portfolio consists of U.S. Treasury securities, obligations of state and political subdivisions, U.S. federal government agencies, such as the Government National Mortgage Association ("GNMA") and Small Business Administration ("SBA"), and U.S. government-sponsored enterprises ("GSEs"), such as the Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), Federal


Held-to-maturity:	Amortized Cost 1		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized				Fair Value
(in thousands)							Gains		(Losses)
December 31, 2024
Securities of U.S. government-sponsored enterprises:
CMBS issued by FHLMC, FNMA and GNMA	$	242,559	$	—	$	242,559	$	—	$	(34,449)	$	208,110
CMOs issued by FHLMC, FNMA and GNMA	209,748		—		209,748		—		(18,492)		191,256
MBS pass-through securities issued by FHLMC, FNMA and GNMA	192,388		—		192,388		—		(30,942)		161,446
SBA-backed securities	1,513		—		1,513		—		(61)		1,452

Debentures of government-sponsored agencies	141,431		—		141,431		—		(22,694)		118,737
Obligations of state and political subdivisions	61,560		—		61,560		—		(8,341)		53,219
Corporate bonds	30,000		—		30,000		—		(685)		29,315
Total held-to-maturity	$	879,199	$	—	$	879,199	$	—	$	(115,664)	$	763,535
December 31, 2023

Securities of U.S. government-sponsored enterprises:
CMBS issued by FHLMC, FNMA and GNMA	$	247,441	$	—	$	247,441	$	—	$	(35,071)	$	212,370
CMOs issued by FHLMC, FNMA and GNMA	228,761		—		228,761		28		(16,882)		211,907
MBS pass-through securities issued by FHLMC, FNMA and GNMA	208,983		—		208,983		—		(27,326)		181,657
SBA-backed securities	1,853		—		1,853		—		(90)		1,763
Debentures of government-sponsored agencies	146,126		—		146,126		—		(21,994)		124,132
Obligations of state and political subdivisions	62,034		—		62,034		47		(7,884)		54,197
Corporate bonds	30,000		—		30,000		—		(1,196)		28,804
Total held-to-maturity	$	925,198	$	—	$	925,198	$	75	$	(110,443)	$	814,830
1 Amortized cost and fair values exclude accrued interest receivable of $3.4 million and $3.6 million at December 31, 2024 and 2023, 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 collectively 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 and corporate bonds, 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, 2024
Securities of U.S. government-sponsored enterprises:
CMBS issued by FHLMC, FNMA and GNMA	$	222,862	$	154	$	(4,977)	$	—	$	218,039
CMOs issued by FHLMC, FNMA and GNMA	42,432		28		(6,321)		—		36,139
MBS pass-through securities issued by FHLMC, FNMA and GNMA	30,498		2		(4,840)		—		25,660
SBA-backed securities	331		—		(23)		—		308
Debentures of government- sponsored agencies	8,971		—		(1,761)		—		7,210
U.S. Treasury securities	12,020		—		(1,205)		—		10,815

Obligations of state and political subdivisions	96,178		—		(12,464)		—		83,714
Corporate bonds	6,000		—		(351)		—		5,649

Total available-for-sale	$	419,292	$	184	$	(31,942)	$	—	$	387,534
December 31, 2023
Securities of U.S. government-sponsored enterprises:
CMBS issued by FHLMC, FNMA and GNMA	$	160,968	$	—	$	(13,279)	$	—	$	147,689
CMOs issued by FHLMC, FNMA and GNMA	153,689		—		(17,420)		—		136,269
MBS pass-through securities issued by FHLMC, FNMA and GNMA	77,680		2		(9,168)		—		68,514
SBA-backed securities	21,126		—		(1,655)		—		19,471
Debentures of government- sponsored agencies	73,899		—		(7,037)		—		66,862

U.S. Treasury securities	11,923		—		(1,300)		—		10,623
Obligations of state and political subdivisions	102,202		1		(10,321)		—		91,882
Corporate bonds	11,992		—		(1,274)		—		10,718

Total available-for-sale	$	613,479	$	3	$	(61,454)	$	—	$	552,028
1 Amortized cost and fair value exclude accrued interest receivable of $1.7 million and $2.3 million at December 31, 2024 and 2023, respectively, which is included in interest receivable and other assets in the consolidated statements of condition.

As part of our ongoing review of our investment securities portfolio, we reassessed the classification of certain securities issued by government-sponsored agencies. In March 2022, we transferred $357.5 million of these securities 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 $14.8 million that remained and the related accumulated other comprehensive loss are accreted to interest income over the remaining lives of the securities. Because these entries offset each other, there is no impact on net income.


	December 31, 2024								December 31, 2023
	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	$	36,476	$	36,380	$	99,431	$	99,258	$	—	$	—	$	101	$	100
After one but within five years	118,590		110,857		106,986		103,058		87,887		84,541		226,669		208,444
After five years through ten years	229,040		191,328		75,429		67,940		304,976		261,654		95,552		85,447
After ten years	495,093		424,970		137,446		117,278		532,335		468,635		291,157		258,037
Total	$	879,199	$	763,535	$	419,292	$	387,534	$	925,198	$	814,830	$	613,479	$	552,028


(in thousands)	December 31, 2024		December 31, 2023
Pledged to the State of California:
Secure public deposits in compliance with the Local Agency Security Program	$	288,385	$	287,436
Collateral for trust deposits	1,284		666
Collateral for Wealth Management and Trust Services checking account	895		562
Total investment securities pledged to the State of California	290,564		288,664
Bankruptcy trustee deposits pledged with Federal Reserve Bank	651		1,151
Pledged to FHLB Securities-Backed Credit Program	284,148		383,484
Pledged to the Federal Reserve Discount Window	365,759		—
Pledged to the Federal Reserve "BTFP"	—		265,660
Total pledged investment securities	$	941,122	$	938,959


December 31, 2024	< 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:
CMBS issued by FHLMC, FNMA and GNMA	$	—	$	—	$	208,110	$	(34,449)	$	208,110	$	(34,449)
CMOs issued by FHLMC, FNMA and GNMA	18,451		(1,623)		172,805		(16,869)		191,256		(18,492)
MBS pass-through securities issued by FHLMC, FNMA and GNMA	3,487		(150)		157,959		(30,792)		161,446		(30,942)
SBA-backed securities	—		—		1,452		(61)		1,452		(61)
Debentures of government-sponsored agencies	—		—		118,737		(22,694)		118,737		(22,694)
Obligations of state and political subdivisions	5,558		(44)		47,661		(8,297)		53,219		(8,341)
Corporate bonds	—		—		29,315		(685)		29,315		(685)
Total held-to-maturity	$	27,496	$	(1,817)	$	736,039	$	(113,847)	$	763,535	$	(115,664)
Available-for-sale:
CMBS issued by FHLMC, FNMA and GNMA	$	129,402	$	(343)	$	58,065	$	(4,634)	$	187,467	$	(4,977)
CMOs issued by FHLMC, FNMA and GNMA	—		—		33,749		(6,321)		33,749		(6,321)
MBS pass-through securities issued by FHLMC, FNMA and GNMA	7		—		25,495		(4,840)		25,502		(4,840)
SBA-backed securities	—		—		309		(23)		309		(23)
Debentures of government-sponsored agencies	—		—		7,210		(1,761)		7,210		(1,761)
U.S. Treasury securities	—		—		10,815		(1,205)		10,815		(1,205)
Obligations of state and political subdivisions	—		—		83,714		(12,464)		83,714		(12,464)
Corporate bonds	—		—		5,649		(351)		5,649		(351)


Total available-for-sale	$	129,409	$	(343)	$	225,006	$	(31,599)	$	354,415	$	(31,942)
Total securities at a loss position	$	156,905	$	(2,160)	$	961,045	$	(145,446)	$	1,117,950	$	(147,606)


December 31, 2023	< 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:
CMBS issued by FHLMC, FNMA and GNMA	$	10,988	$	(244)	$	201,383	$	(34,826)	$	212,371	$	(35,070)
CMOs issued by FHLMC, FNMA and GNMA	51,136		(432)		156,515		(16,451)		207,651		(16,883)
MBS pass-through securities issued by FHLMC, FNMA and GNMA	—		—		181,656		(27,326)		181,656		(27,326)
SBA-backed securities	—		—		1,763		(90)		1,763		(90)
Debentures of government-sponsored agencies	—		—		124,132		(21,994)		124,132		(21,994)
Obligations of state and political subdivisions	—		—		44,437		(7,884)		44,437		(7,884)
Corporate bonds	—		—		28,804		(1,196)		28,804		(1,196)
Total held-to-maturity	$	62,124	$	(676)	$	738,690	$	(109,767)	$	800,814	$	(110,443)
Available-for-sale:
CMBS issued by FHLMC, FNMA and GNMA	$	1,235	$	(7)	$	146,454	$	(13,272)	$	147,689	$	(13,279)
CMOs issued by FHLMC, FNMA and GNMA	—		—		136,269		(17,420)		136,269		(17,420)
MBS pass-through securities issued by FHLMC, FNMA and GNMA	—		—		68,237		(9,168)		68,237		(9,168)
SBA-backed securities	—		—		19,471		(1,655)		19,471		(1,655)
Debentures of government- sponsored agencies	—		—		66,862		(7,037)		66,862		(7,037)
U.S. Treasury securities	—		—		10,623		(1,300)		10,623		(1,300)
Obligations of state and political subdivisions	666		(1)		90,655		(10,320)		91,321		(10,321)
Corporate bonds	—		—		10,718		(1,274)		10,718		(1,274)
Asset-backed securities	—		—		—		—		—		—
Total available-for-sale	$	1,901	$	(8)	$	549,289	$	(61,446)	$	551,190	$	(61,454)
Total	$	64,025	$	(684)	$	1,287,979	$	(171,213)	$	1,352,004	$	(171,897)

Securities issued by government-sponsored agencies, such as FNMA and FHLMC, usually have implicit credit support from 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 while FNMA and FHLMC remain under conservatorship. 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.

No allowances for credit losses have been recognized on available-for-sale securities in an unrealized loss position, as management does not believe any of the securities are impaired due credit risk factors at either December 31, 2024 or 2023. In addition, for any available-for-sale securities in an unrealized loss position at December 31, 2024 and 2023, the Bank assessed whether it intended to sell the securities, or if it was more likely than not that it would be required to sell the securities before recovery of its amortized cost basis, which would require a write-down to fair value through net income. Because the Bank did not intend to sell those securities that were in an unrealized loss position, and it was not more-likely-than-not that the Bank would be required to sell the securities before recovery of their amortized cost bases, the Bank determined that no write-down was necessary as of the reporting date.

On July 7, 2023, the Bank entered into various interest rate swap agreements with notional values totaling $101.8 million to hedge balance sheet interest rate sensitivity and protect selected securities in its available-for-sale portfolio against changes in fair value related to changes in the benchmark interest rate. On November 4, 2024, the Bank terminated these contracts resulting in an adjustment to book value that will be amortized over the life of the hedged securities. For additional details, refer to Note 14, Derivative Financial Instruments and Hedging Activities.

As a member of the FHLB, we are required to maintain a minimum investment in FHLB capital stock as 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 $16.7 million of FHLB stock included in other assets on the consolidated statements of condition at both December 31, 2024 and 2023. The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and 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, 2024 or 2023. On February 20, 2025, FHLB announced a cash dividend for the fourth quarter of 2024 at an annualized dividend rate of 8.75% to be distributed in mid-March 2025. 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 as of December 31, 2022. These shares had a carrying value of zero because they lacked a readily determinable fair value due to the restriction 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, and uncertainty about the conversion rate to Class A shares. On July 13, 2023, the Bank sold the entirety of its remaining investment in Visa Inc. Class B restricted common stock for a $2.8 million gain.

We invest in low-income housing tax credit funds as a limited partner, which totaled $1.6 million and $2.0 million recorded in other assets as of December 31, 2024 and 2023, respectively. In 2024, we recognized $525 thousand of low income housing tax credits and other tax benefits, offset by $438 thousand of amortization expense for low-income housing tax credit investments, as a component of income tax expense. As of December 31, 2024, our unfunded commitments for these low-income housing tax credit funds totaled $338 thousand. We did not recognize any impairment losses on these low-income housing tax credit investments during 2024 or 2023, as the value of the future tax benefits exceeds the carrying value of the investments.