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Investment Securities
 6 Months Ended
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
 
The amortized cost and estimated fair value of securities were as follows:
 
 
June 30, 2019
 
 
Amortized
 Cost
 
Unrealized
Gain
 
Unrealized
Loss
 
Estimated
Fair Value
 
 
(dollars in thousands)
Investment securities available-for-sale:
 
 

 
 
 
 
 
 
U.S. Treasury
 
$
59,745

 
$
3,807

 
$
—

 
$
63,552

Agency
 
189,832

 
9,706

 
(305
)
 
199,233

Corporate
 
122,755

 
1,447

 
(83
)
 
124,119

Municipal bonds
 
278,962

 
9,573

 
(129
)
 
288,406

Collateralized mortgage obligation: residential
 
19,197

 
93

 
(54
)
 
19,236

Mortgage-backed securities: residential
 
556,463

 
9,379

 
(2,009
)
 
563,833

Total investment securities available-for-sale
 
1,226,954

 
34,005

 
(2,580
)
 
1,258,379

Investment securities held-to-maturity:
 
 
 
 
 
 
 
 
Mortgage-backed securities: residential
 
41,225

 
790

 
(128
)
 
41,887

Other
 
1,772

 
—

 
—

 
1,772

Total investment securities held-to-maturity
 
42,997

 
790

 
(128
)
 
43,659

Total investment securities
 
$
1,269,951

 
$
34,795

 
$
(2,708
)
 
$
1,302,038


 
 
December 31, 2018
 
 
Amortized
Cost
 
Unrealized
Gain
 
Unrealized
Loss
 
Estimated
Fair Value
 
 
(dollars in thousands)
Investment securities available-for-sale:
 
 

 
 
 
 
 
 
U.S. Treasury
 
$
59,688

 
$
1,224

 
$
—

 
$
60,912

Agency
 
128,958

 
1,631

 
(519
)
 
130,070

Corporate
 
104,158

 
291

 
(906
)
 
103,543

Municipal bonds
 
238,914

 
1,941

 
(2,225
)
 
238,630

Collateralized mortgage obligation: residential
 
24,699

 
64

 
(425
)
 
24,338

Mortgage-backed securities: residential
 
554,751

 
1,112

 
(10,134
)
 
545,729

Total investment securities available-for-sale
 
1,111,168

 
6,263

 
(14,209
)
 
1,103,222

Investment securities held-to-maturity:
 
 
 
 
 
 
 
 
Mortgage-backed securities: residential
 
43,381

 
148

 
(686
)
 
42,843

Other
 
1,829

 
—

 
—

 
1,829

Total investment securities held-to-maturity
 
45,210

 
148

 
(686
)
 
44,672

Total investment securities
 
$
1,156,378

 
$
6,411

 
$
(14,895
)
 
$
1,147,894



Unrealized gains and losses on investment securities available-for-sale are recognized in stockholders’ equity as accumulated other comprehensive income or loss. At June 30, 2019, the Company had an accumulated other comprehensive income of $31.4 million, or $22.4 million net of tax, compared to an accumulated other comprehensive loss of $7.9 million, or $5.6 million net of tax, at December 31, 2018.

    
Beginning the first quarter of March 31, 2019, the Bank no longer had HOA reverse repurchase agreements and unpledged all the supporting mortgage-backed securities. At December 31, 2018, mortgage-backed securities with an estimated par value of $20.3 million and a fair value of $20.9 million were pledged as collateral for the Bank’s HOA reverse repurchase agreements, which totaled $75,000. The average balance of repurchase agreement facilities was $15.0 million during the year ended December 31, 2018.

At June 30, 2019 and December 31, 2018, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

The Company reviews individual securities classified as available-for-sale to determine whether a decline in fair value below the amortized cost basis is temporary because (i) those declines were due to interest rate changes and not to a deterioration in the creditworthiness of the issuers of those investment securities, and (ii) we have the ability to hold those securities until there is a recovery in their values or until their maturity.

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 other-than-temporary impairment (“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. There was no OTTI for the six months ended June 30, 2019 and June 30, 2018.

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.
 
June 30, 2019
 
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)
Investment securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency
—

 
$
—

 
$
—

 
11

 
$
17,200

 
$
(305
)
 
11

 
$
17,200

 
$
(305
)
Corporate
2

 
13,023

 
(71
)
 
1

 
1,524

 
(12
)
 
3

 
14,547

 
(83
)
Municipal bonds
2

 
6,441

 
(5
)
 
28

 
14,907

 
(124
)
 
30

 
21,348

 
(129
)
Collateralized mortgage obligation: residential
1

 
703

 
(5
)
 
6

 
12,348

 
(49
)
 
7

 
13,051

 
(54
)
Mortgage-backed securities: residential
—

 
—

 
—

 
67

 
161,293

 
(2,009
)
 
67

 
161,293

 
(2,009
)
Total investment securities available-for-sale
5

 
20,167

 
(81
)
 
113

 
207,272

 
(2,499
)
 
118

 
227,439

 
(2,580
)
Investment securities held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities: residential
—

 
—

 
—

 
3

 
15,466

 
(128
)
 
3

 
15,466

 
(128
)
Total investment securities held-to-maturity
—

 
—

 
—

 
3

 
15,466

 
(128
)
 
3

 
15,466

 
(128
)
Total investment securities
5

 
$
20,167

 
$
(81
)
 
116

 
$
222,738

 
$
(2,627
)
 
121

 
$
242,905

 
$
(2,708
)

 
December 31, 2018
 
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)
Investment securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency
15

 
$
26,229

 
$
(333
)
 
6

 
$
10,434

 
$
(186
)
 
21

 
$
36,663

 
$
(519
)
Corporate
9

 
47,805

 
(471
)
 
8

 
19,369

 
(435
)
 
17

 
67,174

 
(906
)
Municipal bonds
60

 
45,083

 
(369
)
 
102

 
69,693

 
(1,856
)
 
162

 
114,776

 
(2,225
)
Collateralized mortgage obligation: residential
1

 
814

 
(1
)
 
8

 
18,104

 
(424
)
 
9

 
18,918

 
(425
)
Mortgage-backed securities: residential
20

 
70,839

 
(435
)
 
120

 
324,864

 
(9,699
)
 
140

 
395,703

 
(10,134
)
Total investment securities available-for-sale
105

 
190,770

 
(1,609
)
 
244

 
442,464

 
(12,600
)
 
349

 
633,234

 
(14,209
)
Investment securities held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities: residential
3

 
11,256

 
(81
)
 
3

 
15,741

 
(605
)
 
6

 
26,997

 
(686
)
Total investment securities held-to-maturity
3

 
11,256

 
(81
)
 
3

 
15,741

 
(605
)
 
6

 
26,997

 
(686
)
Total investment securities
108

 
$
202,026

 
$
(1,690
)
 
247

 
$
458,205

 
$
(13,205
)
 
355

 
$
660,231

 
$
(14,895
)

The amortized cost and estimated fair value of investment securities at June 30, 2019, 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)
Investment securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury
$
496

 
$
498

 
$
9,922

 
$
10,405

 
$
49,327

 
$
52,649

 
$
—

 
$
—

 
$
59,745

 
$
63,552

Agency
—

 
—

 
32,093

 
33,694

 
116,685

 
122,906

 
41,054

 
42,633

 
189,832

 
199,233

Corporate
—

 
—

 
—

 
—

 
122,755

 
124,119

 
—

 
—

 
122,755

 
124,119

Municipal bonds
—

 
—

 
2,267

 
2,326

 
40,211

 
41,019

 
236,484

 
245,061

 
278,962

 
288,406

Collateralized mortgage obligation: residential
—

 
—

 
—

 
—

 
2,798

 
2,795

 
16,399

 
16,441

 
19,197

 
19,236

Mortgage-backed securities: residential
—

 
—

 
—

 
—

 
149,614

 
153,311

 
406,849

 
410,522

 
556,463

 
563,833

Total investment securities available-for-sale
496

 
498

 
44,282

 
46,425

 
481,390

 
496,799

 
700,786

 
714,657

 
1,226,954

 
1,258,379

Investment securities held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities: residential
—

 
—

 
918

 
962

 
—

 
—

 
40,307

 
40,925

 
41,225

 
41,887

Other
—

 
—

 
—

 
—

 
—

 
—

 
1,772

 
1,772

 
1,772

 
1,772

Total investment securities held-to-maturity
—

 
—

 
918

 
962

 
—

 
—

 
42,079

 
42,697

 
42,997

 
43,659

Total investment securities
$
496

 
$
498

 
$
45,200

 
$
47,387

 
$
481,390

 
$
496,799

 
$
742,865

 
$
757,354

 
$
1,269,951

 
$
1,302,038



    
During the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, the Company recognized gross gains on sales of available-for-sale securities in the amount of $406,000, $1.0 million and $330,000, respectively. During the three months ended June 30, 2019 and March 31, 2019, the Company recognized gross losses on sales of available-for-sale securities in the amount of $194,000 and $615,000, respectively. The Company did not recognize any gross losses on the sales of available-for sale securities during the three months ended June 30, 2018. The Company had net proceeds from the sales of available-for-sale securities of $57.2 million, $168.8 million and $16.2 million during the three months ended June 30, 2019, March 31, 2019 and June 30, 2018.
        
During the six months ended June 30, 2019 and 2018, the Company recognized gross gains on
sales of available-for-sale securities in the amount of $1.4 million and $336,000, respectively. During the six months
ended June 30, 2019, the Company recognized gross losses on the sales of available-for sale securities in the amount of $809,000. During the six months ended June 30, 2018, the Company did not recognize any gross losses on sales of available-for-sale securities. The Company had net proceeds from the sales of available-for-sale securities of $227.1 million and $16.2 million during the six months ended June 30, 2019 and 2018, respectively.

FHLB, FRB and other stock

At June 30, 2019, the Company had $17.3 million in Federal Home Loan Bank of San Francisco (“FHLB”) stock, $51.6 million in Federal Reserve Bank of San Francisco (“FRB”) stock, and $23.9 million in other stock, all carried at cost. During the three months ended June 30, 2019 and March 31, 2019, the FHLB repurchased $5.4 million and $12.9 million, respectively, of the Company’s excess FHLB stock through their stock repurchase program. During the three months ended June 30, 2018, the FHLB did not repurchase any of the Company’s excess FHLB stock through their stock repurchase program.

The Company evaluates its investments in FHLB, FRB and other stock for impairment periodically, including their capital adequacy and overall financial condition. No impairment loss has been recorded through June 30, 2019.