Investment Securities

The amortized cost and estimated fair value of securities were as follows:



	March 31, 2016
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Available-for-sale:
Municipal bonds	$	123,484	$	2,426	$	(28	)	$	125,882
Collateralized mortgage obligation	23,805		70		(9		)	23,866
Mortgage-backed securities	119,939		499		(475		)	119,963
Total available-for-sale	267,228		2,995		(512		)	269,711
Held-to-maturity:
Mortgage-backed securities	8,361		22		—			8,383
Other	1,229		—		—			1,229
Total held-to-maturity	9,590		22		—			9,612
Total securities	$	276,818	$	3,017	$	(512	)	$	279,323



	December 31, 2015
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Available-for-sale:
Municipal bonds	$	128,546	$	1,796	$	(97	)	$	130,245
Collateralized mortgage obligation	24,722		4		(183		)	24,543
Mortgage-backed securities	126,443		153		(1,111		)	125,485
Total available-for-sale	279,711		1,953		(1,391		)	$	280,273
Held-to-maturity:
Mortgage-backed securities	8,400		—		(70		)	8,330
Other	1,242		—		—			1,242
Total held-to-maturity	9,642		—		(70		)	9,572
Total securities	$	289,353	$	1,953	$	(1,461	)	$	289,845



	March 31, 2015
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Available-for-sale:
Municipal bonds	$	103,997	$	1,718	$	(192	)	105,523
Collateralized mortgage obligation	11,204		84		—			11,288
Mortgage-backed securities	163,077		1,013		(440		)	163,650
Total available-for-sale	$	278,278	$	2,815	$	(632	)	$	280,461

At March 31, 2016, mortgage-backed securities (“MBS”) with an estimated par value of $61.6 million and a fair value of $63.8 million were pledged as collateral for the Bank’s three reverse repurchase agreements which totaled $28.5 million and homeowner’s association (“HOA”) reverse repurchase agreements which totaled $16.5 million.

The Company reviews individual securities classified as available-for-sale to determine whether a decline in fair value below the amortized cost basis is other-than-temporary. If it is probable that the Company will be unable to collect all amounts due according to contractual terms of the debt security not impaired at acquisition, an OTTI shall be considered to have occurred. If an OTTI occurs, the cost basis of the security will be written down to its fair value as the new cost basis and the write down accounted for as a realized loss. The Company realized OTTI losses of $207,000 for the three months ended March 31, 2016. The Company did not realize any OTTI losses for the three months ended December 31, 2015 and March 31, 2015.

During the three months ended March 31, 2016, December 31, 2015 and March 31, 2015, the Company recognized gross gains on sales of available-for-sale securities in the amount of $762,000, $1,000 and $117,000, respectively. During the three months ended March 31, 2016, December 31, 2015 and March 31, 2015, the Company recognized gross losses on sales of available-for-sale securities in the amount of $9,000, $5,000 and $1,000, respectively. The Company had net proceeds from the sale of available-for-sale securities of $185 million, $677,000 and $7.2 million during the three months ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively.

The table below shows the number, fair value and gross unrealized holding losses of the Company’s investment securities by investment category and length of time that the securities have been in a continuous loss position.



	March 31, 2016
	Less than 12 months						12 months or Longer						Total
	Number	Fair Value		Gross Unrealized Holding Losses			Number	Fair Value		Gross Unrealized Holding Losses			Number	Fair Value		Gross Unrealized Holding Losses
	(dollars in thousands)
Available-for-sale:
Municipal bonds	12	$	6,251	$	(28	)	—	$	—	$	—		12	$	6,251	$	(28	)
Collateralized mortgage obligation	2	9,318		(9		)	—	—		—			2	9,318		(9		)
Mortgage-backed securities	10	23,289		(140		)	7	22,444		(335		)	17	45,733		(475		)
Total securities available-for-sale	24	$	38,858	$	(177	)	7	$	22,444	$	(335	)	31	$	61,302	$	(512	)



	December 31, 2015
	Less than 12 months						12 months or Longer						Total
	Number	Fair Value		Gross Unrealized Holding Losses			Number	Fair Value		Gross Unrealized Holding Losses			Number	Fair Value		Gross Unrealized Holding Losses
	(dollars in thousands)
Available-for-sale:
Municipal bonds	32	$	15,516	$	(61	)	6	$	3,349	$	(36	)	38	$	18,865	$	(97	)
Collateralized mortgage obligation	5	22,771		(183		)	—	—		—			5	22,771		(183		)
Mortgage-backed securities	34	83,488		(679		)	3	12,935		(432		)	37	96,423		(1,111		)
Total securities available-for-sale	71	121,775		(923		)	9	16,284		(468		)	80	138,059		(1,391		)
Held-to-maturity:
Mortgage-backed securities	1	8,330		(70		)	—	—		—			1	8,330		(70		)
Total securities held-to-maturity	1	8,330		(70		)	—	—		—			1	8,330		(70		)
Total securities	72	$	130,105	$	(993	)	9	$	16,284	$	(468	)	81	$	146,389	$	(1,461	)



	March 31, 2015
	Less than 12 months						12 months or Longer						Total
	Number	Fair Value		Gross Unrealized Holding Losses			Number	Fair Value		Gross Unrealized Holding Losses			Number	Fair Value		Gross Unrealized Holding Losses
	(dollars in thousands)
Available-for-sale:
Municipal bonds	48	$	20,818	$	(179	)	3	$	1,073	$	(13	)	51	$	21,891	$	(192	)
Collateralized mortgage obligation	1	4,622		—			—	—		—			1	4,622		—
Mortgage-backed securities	9	17,235		(66		)	3	15,111		(374		)	12	32,346		(440		)
Total securities available-for-sale	58	$	42,675	$	(245	)	6	$	16,184	$	(387	)	64	$	58,859	$	(632	)

The amortized cost and estimated fair value of investment securities available for sale at March 31, 2016, by contractual maturity are shown in the table below.



	One Year or Less				More than One Year to Five Years				More than Five Years to Ten Years				More than Ten Years				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(dollars in thousands)
Available-for-sale:
Municipal bonds	$	1,422	$	1,423	$	27,576	$	27,886	$	43,199	$	44,398	$	51,287	$	52,175	$	123,484	$	125,882
Collateralized mortgage obligation	—		—		—		—		—		—		23,805		23,866		23,805		23,866
Mortgage-backed securities	—		—		—		—		29,014		29,196		90,925		90,767		119,939		119,963
Total securities available-for-sale	1,422		1,423		27,576		27,886		72,213		73,594		166,017		166,808		267,228		269,711
Held-to-maturity:
Mortgage-backed securities	—		—		—		—		—		—		8,361		8,383		8,361		8,383
Other	—		—		—		—		—		—		1,229		1,229		1,229		1,229
Total securities held-to-maturity	—		—		—		—		—		—		9,590		9,612		9,590		9,612
Total securities	$	1,422	$	1,423	$	27,576	$	27,886	$	72,213	$	73,594	$	175,607	$	176,420	$	276,818	$	279,323

Unrealized gains and losses on investment securities available for sale are recognized in stockholders’ equity as accumulated other comprehensive income or loss. At March 31, 2016, the Company had accumulated other comprehensive income of $2.5 million, or $1.5 million net of tax, compared to accumulated other comprehensive income of $562,000, or $332,000 net of tax, at December 31, 2015.

FHLB, FRB and other stock

At March 31, 2016, the Company had $14.4 million in Federal Home Loan Bank (“FHLB”) stock, $7.9 million in Federal Reserve Bank of San Francisco (“FRB”) stock, and $3.6 million in other stock, all carried at cost. During the three months ended March 31, 2016 and December 31, 2015, FHLB did not repurchase any of the Company’s excess FHLB stock through their stock repurchase program. During the three months ended March 31, 2015, FHLB had repurchased $5.9 million of the Company’s excess FHLB stock through their stock repurchase program. The Company evaluates its investments in FHLB and other stock for impairment periodically, including their capital adequacy and overall financial condition. No impairment losses have been recorded through March 31, 2016.