
	September 30, 2020
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value
	(Dollars in thousands)
Investment securities available-for-sale:
U.S. Treasury	$	30,161	$	2,578	$	—	$	32,739
Agency	577,627		26,109		(691)		603,045
Corporate	397,670		2,035		(2,169)		397,536
Municipal bonds	1,305,389		23,581		(15,062)		1,313,908
Collateralized mortgage obligations	357,615		1,130		(465)		358,280
Mortgage-backed securities	868,298		27,121		(196)		895,223
Total investment securities available-for-sale	3,536,760		82,554		(18,583)		3,600,731
Investment securities held-to-maturity:
Mortgage-backed securities	26,357		1,419		—		27,776
Other	1,623		—		—		1,623
Total investment securities held-to-maturity	27,980		1,419		—		29,399
Total investment securities	$	3,564,740	$	83,973	$	(18,583)	$	3,630,130


	December 31, 2019
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value
	(Dollars in thousands)
Investment securities available-for-sale:
U.S. Treasury	$	60,457	$	3,137	$	(39)	$	63,555
Agency	240,348		7,686		(1,676)		246,358
Corporate	149,150		2,217		(14)		151,353
Municipal bonds	384,032		13,450		(184)		397,298
Collateralized mortgage obligations	9,869		123		(8)		9,984
Mortgage-backed securities	494,404		7,603		(2,171)		499,836
Total investment securities available-for-sale	1,338,260		34,216		(4,092)		1,368,384
Investment securities held-to-maturity:
Mortgage-backed securities	36,114		922		—		37,036
Other	1,724		—		—		1,724
Total investment securities held-to-maturity	37,838		922		—		38,760
Total investment securities	$	1,376,098	$	35,138	$	(4,092)	$	1,407,144

Unrealized gains and losses on investment securities available-for-sale are recognized in stockholders’ equity as accumulated other comprehensive income or loss. At September 30, 2020, the Company had accumulated other comprehensive income of $64.0 million, or $45.7 million net of tax, compared to an accumulated other comprehensive income of $30.1 million, or $21.5 million net of tax, at December 31, 2019.

The Company reviews individual securities classified as available-for-sale to determine whether a decline in fair value below the amortized cost basis is deemed credit related or due to other factors such as changes in interest rates and general market conditions. The Company recognizes credit losses in current period earnings, through a change to provision for credit losses, when declines in the fair value of individual available-for-sale securities are below their amortized cost, and the decline in fair value is deemed to be credit related. Declines in fair value below amortized cost not deemed credit related are recorded net of tax in accumulated other comprehensive income. In the event the Company is required to sell or has the intent to sell an available-for-sale security that has experienced a decline in fair value below its amortized cost, the Company writes the amortized cost of the security down to fair value in the current period.

During the second quarter of 2020, the Company acquired $829.9 million of available-for-sale securities in connection with the acquisition of Opus. Such securities were evaluated and it was determined that there were no investment securities classified as purchase credit deteriorated upon acquisition and, as a result, no allowance for credit losses was recorded.

As of September 30, 2020, the Company has not recorded credit losses on certain available-for-sale securities that were in an unrealized loss position due to the high quality of the investments, with investment grade ratings, and many of them are issued by U.S. government agencies. Additionally, the Company continues to receive contractual principal and interest payments in a timely manner. The Company performed a qualitative assessment of these investments as of September 30, 2020, and does not believe the declines in fair value are credit related. There were no provision for credit losses recognized for investment securities during the nine months ended September 30, 2020. There were no other than temporary impairment losses recognized for investment securities during the nine months ended September 30, 2019.

At September 30, 2020, there were no available-for-sale or held-to-maturity securities in nonaccrual status. All securities in the portfolio were current with their contractual principal and interest payments. At September 30, 2020 and December 31, 2019, there were no securities purchased with deterioration in credit quality since their origination. At September 30, 2020, there were no collateral dependent available-for-sale or held-to-maturity securities.


	September 30, 2020
	Less than 12 Months					12 Months or Longer					Total
	Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses
	(Dollars in thousands)
Investment securities available-for-sale:
U.S. Treasury	—	$	—	$	—	—	$	—	$	—	—	$	—	$	—
Agency	3	57,720		(370)		9	11,179		(321)		12	68,899		(691)
Corporate	17	145,419		(2,169)		—	—		—		17	145,419		(2,169)
Municipal bonds	141	776,203		(15,062)		—	—		—		141	776,203		(15,062)
Collateralized mortgage obligations	11	129,496		(463)		1	476		(2)		12	129,972		(465)
Mortgage-backed securities.	8	98,253		(196)		—	—		—		8	98,253		(196)
Total investment securities available-for-sale	180	$	1,207,091	$	(18,260)	10	$	11,655	$	(323)	190	$	1,218,746	$	(18,583)


	December 31, 2019
	Less than 12 Months					12 Months or Longer					Total
	Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses		Number	Fair Value		Gross Unrealized Losses
	(Dollars in thousands)
Investment securities available-for-sale:
U.S. Treasury	1	$	10,194	$	(39)	—	$	—	$	—	1	$	10,194	$	(39)
Agency	13	102,874		(1,340)		9	13,514		(336)		22	116,388		(1,676)
Corporate	1	1,017		(14)		—	—		—		1	1,017		(14)
Municipal bonds	12	30,541		(184)		—	—		—		12	30,541		(184)
Collateralized mortgage obligations	—	—		—		1	603		(8)		1	603		(8)
Mortgage-backed securities	18	130,014		(1,681)		11	26,886		(490)		29	156,900		(2,171)
Total investment securities available-for-sale	45	$	274,640	$	(3,258)	21	$	41,003	$	(834)	66	$	315,643	$	(4,092)


	Due in One Year or Less				Due after One Year through Five Years				Due after Five Years through Ten Years				Due after 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	$	—	$	—	$	30,161	$	32,739	$	—	$	—	$	—	$	—	$	30,161	$	32,739
Agency	1,000		1,006		266,255		272,144		234,070		247,806		76,302		82,089		577,627		603,045
Corporate	159,949		160,420		26,391		26,363		156,824		156,934		54,506		53,819		397,670		397,536
Municipal bonds	9,921		10,263		1,458		1,586		36,895		39,849		1,257,115		1,262,210		1,305,389		1,313,908
Collateralized mortgage obligations	—		—		3,620		3,622		135,863		136,445		218,132		218,213		357,615		358,280
Mortgage-backed securities	—		—		2,190		2,335		197,517		212,743		668,591		680,145		868,298		895,223
Total investment securities available-for-sale	170,870		171,689		330,075		338,789		761,169		793,777		2,274,646		2,296,476		3,536,760		3,600,731
Investment securities held-to-maturity:
Mortgage-backed securities	—		—		—		—		—		—		26,357		27,776		26,357		27,776
Other	—		—		—		—		—		—		1,623		1,623		1,623		1,623
Total investment securities held-to-maturity	—		—		—		—		—		—		27,980		29,399		27,980		29,399
Total investment securities	$	170,870	$	171,689	$	330,075	$	338,789	$	761,169	$	793,777	$	2,302,626	$	2,325,875	$	3,564,740	$	3,630,130

During the three months ended September 30, 2020, June 30, 2020, and September 30, 2019, the Company recognized gross gains on sales of available-for-sale securities in the amount of $1.2 million, $1.3 million, and $5.1 million, respectively. During the three months ended September 30, 2020, June 30, 2020, and September 30, 2019, the Company recognized gross losses on sales of available-for-sale securities in the amount of $12,000, $1.3 million, and $811,000, respectively. The Company had net proceeds from the sales of available-for-sale securities of $212.5 million, $191.1 million, and $191.3 million during the three months ended September 30, 2020, June 30, 2020, and September 30, 2019, respectively. The net proceeds from the sales of available-for-sale securities during the three months ended June 30, 2020 included $6.5 million of receivables for security sales which settled during the three months ended September 30, 2020.

During the nine months ended September 30, 2020 and 2019, the Company recognized gross gains on sales of available-for-sale securities in the amount of $10.4 million and $6.5 million, respectively. During the nine months ended September 30, 2020 and 2019, the Company recognized gross losses on the sales of available-for sale securities in the amount of $1.5 million and $1.6 million, respectively. The Company had net proceeds from the sales of available-for-sale securities of $558.9 million and $418.5 million during the nine months ended September 30, 2020 and 2019, respectively.

At September 30, 2020, the Company had $17.3 million in FHLB stock, $51.7 million in Federal Reserve Bank of San Francisco (“FRB”) stock and $25.7 million in other stock, all carried at cost. During the three months ended June 30, 2020 and September 30, 2019, the FHLB repurchased $17.3 million and $5.4 million, respectively, of the Company’s excess FHLB stock through its stock repurchase program. During the three months ended September 30, 2020, the FHLB did not repurchase any of the Company’s excess FHLB stock through its stock repurchase program.

The Company accounts for credit losses on debt securities in accordance with ASC 326, which requires the Company to record an ACL on held-to-maturity investment securities at the time of purchase or acquisition. The ACL for held-to-maturity investment securities represents the Company’s current estimate of expected credit losses that may be incurred over the life of the investment. An ACL on available-for-sale investment securities is recorded when the fair value of the investment is below its amortized cost and the decline in fair value has been deemed to be credit related through the Company’s qualitative assessment. Non-credit related declines in fair value of available-for-sale investment securities are not recorded through an ACL, but rather recorded as an adjustment to accumulated other comprehensive income, net of tax. The Company determines credit losses on both available-for-sale investment securities through the use of a discounted cash flow approach using the security’s effective interest rate. The ACL is measured as the amount by which an investment security’s amortized cost exceeds the net present value of expected future cash flows. However, the amount of credit losses for available-for-sale investment securities is limited to the amount of a security’s unrealized loss. The ACL is established through a charge to provision for credit losses in current period earnings.

The Company did not record an ACL for available-for-sale or held-to-maturity investment securities during the nine months ended September 30, 2020. For available-for-sale securities where estimated fair value was below amortized cost, such declines were deemed non-credit related and recorded as an adjustment to accumulated other comprehensive income, net of tax. Non-credit related decline in fair value of available-for-sale investment securities can be attributed to changes in interest rates and other market related factors. The Company did not record an ACL for held-to maturity securities during the nine months ended September 30, 2020, because the likelihood of non-repayment is remote.


	Vintage
	2020		2019		2018		2017		2016		Prior		Total
	(Dollars in thousands)
Investment securities available-for-sale:
U.S. Treasury
Aaa - Aa3	$	—	$	—	$	22,006	$	10,733	$	—	$	—	$	32,739


Agency
Aaa - Aa3	284,262		44,884		159,319		9,869		21,246		83,465		603,045


Corporate debt

A1 - A3	59,797		19,922		—		—		119,221		9,256		208,196
Baa1 - Baa3	80,417		41,866		5,074		18,029		8,801		35,153		189,340
Municipal bonds
Aaa - Aa3	904,523		284,555		32,497		50,942		15,238		25,296		1,313,051
A1 - A3	—		—		—		—		—		857		857

Collateralized mortgage obligations
Aaa - Aa3	119,689		86,130		14,500		3,975		114,460		19,526		358,280


Mortgage-backed securities
Aaa - Aa3	305,534		182,206		43,802		187,996		85,510		90,175		895,223


Total investment securities available-for-sale	1,754,222		659,563		277,198		281,544		364,476		263,728		3,600,731
Investment securities held-to-maturity:
Mortgage-backed securities
Aaa - Aa3	—		—		7,291		6,908		4,613		7,545		26,357


Other


Baa1 - Baa3	—		—		628		—		—		995		1,623
Total investment securities held-to-maturity	—		—		7,919		6,908		4,613		8,540		27,980
Total investment securities	$	1,754,222	$	659,563	$	285,117	$	288,452	$	369,089	$	272,268	$	3,628,711