XML 24 R14.htm IDEA: XBRL DOCUMENT

INVESTMENT SECURITIES

3 Months Ended

Jun. 30, 2024

INVESTMENT SECURITIES

INVESTMENT SECURITIES

5. INVESTMENT SECURITIES

The amortized cost and approximate fair value of investment securities consisted of the following at the dates indicated (in thousands):


					Gross			Gross			Estimated
		Amortized			Unrealized			Unrealized			Fair
		Cost			Gains			Losses			Value
June 30, 2024
Available for sale:
Municipal securities		$	41,651		$	1		$	(6,867)		$	34,785
Agency securities			44,874			—			(4,060)			40,814
Real estate mortgage investment conduits⁽¹⁾			30,677			—			(6,005)			24,672
Residential mortgage-backed securities ⁽¹⁾			12,840			6			(921)			11,925
Other mortgage-backed securities ⁽²⁾			28,878			5			(3,708)			25,175
Total available for sale		$	158,920		$	12		$	(21,561)		$	137,371

Held to maturity:
Municipal securities		$	10,314		$	—		$	(2,892)		$	7,422
Agency securities			54,169			—			(4,281)			49,888
Real estate mortgage investment conduits⁽¹⁾			30,922			—			(5,228)			25,694
Residential mortgage-backed securities ⁽¹⁾			109,955			—			(18,126)			91,829
Other mortgage-backed securities ⁽³⁾			20,457			—			(3,264)			17,193
Total held to maturity		$	225,817		$	—		$	(33,791)		$	192,026

					Gross			Gross
		Amortized			Unrealized			Unrealized			Estimated
		Cost			Gains			Losses			Fair Value
March 31, 2024
Available for sale:
Municipal securities		$	41,657		$	20		$	(6,541)		$	35,136
Agency securities			47,818			—			(4,241)			43,577
Real estate mortgage investment conduits ⁽¹⁾			31,424			—			(5,759)			25,665
Residential mortgage-backed securities ⁽¹⁾			13,519			3			(971)			12,551
Other mortgage-backed securities ⁽²⁾			29,998			3			(3,734)			26,267
Total available for sale		$	164,416		$	26		$	(21,246)		$	143,196

Held to maturity:
Municipal securities		$	10,321		$	—		$	(2,789)		$	7,532
Agency securities			54,123			—			(4,522)			49,601
Real estate mortgage investment conduits⁽¹⁾			31,752			—			(5,171)			26,581
Residential mortgage-backed securities ⁽¹⁾			112,834			—			(18,196)			94,638
Other mortgage-backed securities ⁽³⁾			20,480			—			(3,313)			17,167
Total held to maturity		$	229,510		$	—		$	(33,991)		$	195,519

(1)	Comprised of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Ginnie Mae (“GNMA”) issued securities.

(2)	Comprised of U.S. Small Business Administration (“SBA”) issued securities and commercial real estate (“CRE”) secured securities issued by FNMA and FHLMC.

(3)	Comprised of FHLMC and FNMA issued securities.

The contractual maturities of investment securities as of June 30, 2024 are as follows (in thousands):


		Available for Sale						Held to Maturity
					Estimated						Estimated
		Amortized			Fair			Amortized			Fair
		Cost			Value			Cost			Value
Due in one year or less		$	16,171		$	16,064		$	11,934		$	11,759
Due after one year through five years			42,525			37,760			39,461			36,333
Due after five years through ten years			33,861			29,154			20,167			16,752
Due after ten years			66,363			54,393			154,255			127,182
Total		$	158,920		$	137,371		$	225,817		$	192,026

Expected maturities of investment securities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties.

The gross unrealized losses and the fair value of securities available-for-sale and held to maturity aggregated by the length of time that individual securities have been in a continuous unrealized loss position were as follows at the dates indicated (in thousands):


		Less than 12 months						12 months or longer						Total
		Estimated						Estimated						Estimated
		Fair			Unrealized			Fair			Unrealized			Fair			Unrealized
June 30, 2024		Value			Losses			Value			Losses			Value			Losses

Available for sale:
Municipal securities		$	—		$	—		$	32,394		$	(6,867)		$	32,394		$	(6,867)
Agency securities			—			—			40,814			(4,060)			40,814			(4,060)
Real estate mortgage investment conduits ⁽¹⁾			—			—			24,672			(6,005)			24,672			(6,005)
Residential mortgage-backed securities ⁽¹⁾			—			—			11,101			(921)			11,101			(921)
Other mortgage-backed securities ⁽²⁾			—			—			24,326			(3,708)			24,326			(3,708)
Total available for sale		$	—		$	—		$	133,307		$	(21,561)		$	133,307		$	(21,561)

Held to maturity:
Municipal securities		$	—		$	—		$	7,422		$	(2,892)		$	7,422		$	(2,892)
Agency securities			—			—			49,888			(4,281)			49,888			(4,281)
Real estate mortgage investment conduits ⁽¹⁾			—			—			25,694			(5,228)			25,694			(5,228)
Residential mortgage-backed securities ⁽¹⁾			—			—			91,829			(18,126)			91,829			(18,126)
Other mortgage-backed securities ⁽³⁾			—			—			17,193			(3,264)			17,193			(3,264)
Total held to maturity		$	—		$	—		$	192,026		$	(33,791)		$	192,026		$	(33,791)

March 31, 2024

Available for sale:
Municipal securities		$	—		$	—		$	32,748		$	(6,541)		$	32,748		$	(6,541)
Agency securities			—			—			43,577			(4,241)			43,577			(4,241)
Real estate mortgage investment conduits ⁽¹⁾			—			—			25,665			(5,759)			25,665			(5,759)
Residential mortgage-backed securities ⁽¹⁾			—			—			12,073			(971)			12,073			(971)
Other mortgage-backed securities ⁽²⁾			534			(1)			25,403			(3,733)			25,937			(3,734)
Total available for sale		$	534		$	(1)		$	139,466		$	(21,245)		$	140,000		$	(21,246)

Held to maturity:
Municipal securities		$	—		$	—		$	7,532		$	(2,789)		$	7,532		$	(2,789)
Agency securities			—			—			49,601			(4,522)			49,601			(4,522)
Real estate mortgage investment conduits ⁽¹⁾			—			—			26,581			(5,171)			26,581			(5,171)
Residential mortgage-backed securities ⁽¹⁾			—			—			94,638			(18,196)			94,638			(18,196)
Other mortgage-backed securities ⁽³⁾			—			—			17,167			(3,313)			17,167			(3,313)
Total held to maturity		$	—		$	—		$	195,519		$	(33,991)		$	195,519		$	(33,991)

(1)	Comprised of FHLMC, FNMA and GNMA issued securities.

(2)	Comprised of SBA and CRE secured securities issued by FHLMC and FNMA.

(3)	Comprised of FHLMC and FNMA issued securities.

Allowance for Credit Losses (“ACL”) on Available-for-Sale Debt Securities – Each reporting period, the Company assesses each available for sale debt security that is in an unrealized loss position to determine whether the decline in fair value below the amortized cost basis results from a credit loss or other factors. The Company did not record an ACL on available for sale debt securities at June 30, 2024. As of June 30, 2024, the Company considered the unrealized losses across the classes of major security-type to be related to fluctuations in market conditions, primarily interest rates, and not reflective of a deterioration in credit value.

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If the Company intends to sell the security or it is more likely than not that the Company will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings. If the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security, the

Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, Management considers the extent to which fair value is less than amortized costs, any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. Projected cash flows are discounted by the current effective interest rate. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to accumulated other comprehensive income (loss) (“AOCI”).

ACL on Held to Maturity Debt Securities – The Company separately evaluates its held to maturity debt securities for any credit losses based on probability of default and loss given default utilizing historical industry data based on investment category. The probability of default and loss given default are incorporated into the present value of expected cash flows and compared against amortized cost. The Company did not record an ACL on held to maturity debt securities at June 30, 2024 as the impact was insignificant.

The Company had no sales and realized no gains or losses on sales of investment securities for the three months ended June 30, 2024 and 2023. Investment securities available for sale with an amortized cost of $2.5 million and $2.6 million and an estimated fair value of $2.3 million and $2.4 million at June 30, 2024 and March 31, 2024, respectively, were pledged as collateral for government public funds held by the Bank. Investment securities held to maturity with an amortized cost of $11.0 million and $11.2 million and a fair value of $9.1 million and $9.3 million at June 30, 2024 and March 31, 2024, respectively, were pledged as collateral for government public funds held by the Bank. Investment securities held to maturity with an amortized cost of $148.6 million and $151.2 million and a fair value of $123.6 million and $126.1 million at June 30, 2024 and March 31, 2024, respectively, were pledged as collateral to the Federal Reserve Bank of San Francisco (“FRB”) pursuant to borrowing agreements.