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Investment Securities
 12 Months Ended
Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
Investment Securities
The Company’s investment policy is designed primarily to provide and maintain liquidity, generate a favorable return on assets without incurring undue interest rate and credit risk, and complement the Bank’s lending activities.
As a result of the adoption of FASB ASU 2016-01 on January 1, 2018, equity investments (except for investments accounted for under the equity method of accounting) are now measured at fair value, with changes in fair value recognized in earnings. These investments were previously measured at fair value, with changes in fair value recognized in accumulated other comprehensive income (loss). Accordingly, these securities are no longer classified as investment securities available for sale and their presentation is not comparable to the presentation as of December 31, 2017. See Note (1) Description of Business, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Pronouncements, as well as the Equity Securities section discussed below.
Available for sale investment securities
(a) Securities by Type and Maturity
The amortized cost, gross unrealized gains, gross unrealized losses and fair values of investment securities available for sale at the dates indicated were as follows:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
(In thousands)
December 31, 2018
 
 
 
 
 
 
 
U.S. Treasury and U.S. Government-sponsored agencies
$
101,595

 
$
155

 
$
(147
)
 
$
101,603

Municipal securities
158,461

 
1,209

 
(806
)
 
158,864

Mortgage-backed securities and collateralized mortgage obligations (1):
 
 
 
 
 
 

Residential
337,295

 
426

 
(6,119
)
 
331,602

Commercial
338,250

 
1,035

 
(5,524
)
 
333,761

Corporate obligations
25,662

 
36

 
(135
)
 
25,563

Other asset-backed securities
24,278

 
424

 
—

 
24,702

Total
$
985,541


$
3,285


$
(12,731
)

$
976,095

 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
U.S. Treasury and U.S. Government-sponsored agencies
$
13,460

 
$
6

 
$
(24
)
 
$
13,442

Municipal securities
247,358

 
3,720

 
(1,063
)
 
250,015

Mortgage-backed securities and collateralized mortgage obligations (1):
 
 
 
 
 
 

Residential
282,724

 
422

 
(2,935
)
 
280,211

Commercial
219,696

 
444

 
(3,061
)
 
217,079

Collateralized loan obligations
4,561

 
19

 
—

 
4,580

Corporate obligations
16,594

 
220

 
(44
)
 
16,770

Other securities (2)
27,781

 
652

 
—

 
28,433

Total
$
812,174


$
5,483


$
(7,127
)

$
810,530

(1) 
Issued and guaranteed by U.S. Government-sponsored agencies.
(2) 
Primarily asset-backed securities.
There were no securities classified as trading or held to maturity at December 31, 2018 or December 31, 2017.
The amortized cost and fair value of investment securities available for sale at December 31, 2018, by contractual maturity, are set forth below. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
 
Amortized Cost
 
Fair Value
 
(In thousands)
Due in one year or less
$
38,547

 
$
38,478

Due after one year through five years
193,191

 
192,556

Due after five years through ten years
272,408

 
268,779

Due after ten years
481,395

 
476,282

Total
$
985,541


$
976,095


(b) Unrealized Losses and Other-Than-Temporary Impairments
The following table shows the gross unrealized losses and fair value of the Company's investment securities available for sale that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that the individual securities have been in continuous unrealized loss positions as of December 31, 2018 and December 31, 2017:
 
Less than 12 Months
 
12 Months or Longer
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
(In thousands)
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and U.S. Government-sponsored agencies
$
46,992

 
$
(58
)
 
$
7,350

 
$
(89
)
 
$
54,342

 
$
(147
)
Municipal securities
31,157

 
(159
)
 
38,792

 
(647
)
 
69,949

 
(806
)
Mortgage-backed securities and collateralized mortgage obligations (1):
 
 
 
 
 
 
 
 

 

Residential
66,620

 
(247
)
 
193,726

 
(5,872
)
 
260,346

 
(6,119
)
Commercial
43,531

 
(272
)
 
190,585

 
(5,252
)
 
234,116

 
(5,524
)
Corporate obligations
13,736

 
(87
)
 
1,951

 
(48
)
 
15,687

 
(135
)
Total
$
202,036


$
(823
)

$
432,404


$
(11,908
)

$
634,440


$
(12,731
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and U.S. Government-sponsored agencies
$
11,436

 
$
(24
)
 
$
—

 
$
—

 
$
11,436

 
$
(24
)
Municipal securities
39,298

 
(384
)
 
26,509

 
(679
)
 
65,807

 
(1,063
)
Mortgage-backed securities and collateralized mortgage obligations (1):
 
 
 
 
 
 
 
 
 
 
 
Residential
175,847

 
(1,296
)
 
66,380

 
(1,639
)
 
242,227

 
(2,935
)
Commercial
75,121

 
(700
)
 
90,822

 
(2,361
)
 
165,943

 
(3,061
)
Corporate obligations
3,472

 
(44
)
 
—

 
—

 
3,472

 
(44
)
Total
$
305,174


$
(2,448
)

$
183,711


$
(4,679
)

$
488,885


$
(7,127
)
(1) Issued and guaranteed by U.S. Government-sponsored agencies.

The Company has evaluated these investment securities available for sale as of December 31, 2018 and December 31, 2017 and has determined that the decline in their value is not other-than-temporary. The unrealized losses are primarily due to increases in market interest rates. The fair value of these securities is expected to recover as the securities approach their maturity date. None of the underlying issuers of the municipal securities and corporate obligations had credit ratings that were below investment grade levels at December 31, 2018 or December 31, 2017. The Company has the ability and intent to hold the investments until recovery of the securities' amortized cost which may be the maturity date of the securities.
For the years ended December 31, 2018, 2017 and 2016 there were no other-than-temporary charges recorded to net income.

(c) Realized Gains and Losses
The following table presents the gross realized gains and losses on the sale of securities available for sale for the years ended December 31, 2018, 2017 and 2016:

 
Year ended December 31,
 
2018
 
2017
 
2016
 
(In thousands)
Gross realized gains
$
273

 
$
193

 
$
1,518

Gross realized losses
(136
)
 
(187
)
 
(203
)
Net realized gains
$
137

 
$
6

 
$
1,315



(d) Pledged Securities
The following table summarizes the amortized cost and fair value of investment securities available for sale that are pledged as collateral for the following obligations at December 31, 2018 and December 31, 2017:
 
December 31, 2018
 
December 31, 2017
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
(In thousands)
Washington and Oregon state to secure public deposits
$
199,026

 
$
196,786

 
$
206,377

 
$
206,425

Repurchase agreements
48,173

 
47,407

 
48,750

 
48,237

Other securities pledged
20,778

 
20,482

 
12,484

 
12,498

Total
$
267,977


$
264,675


$
267,611


$
267,160



(e) Equity Securities
The Company holds an equity security with a readily determinable fair value of $114,000 and $146,000 as of December 31, 2018 and December 31, 2017, respectively. As a result of the adoption of FASB ASU 2016-01, this security is no longer classified as an investment security available for sale and has been reclassified to prepaid expenses and other assets on the Company's Consolidated Statements of Financial Condition as of December 31, 2018. As such, its presentation is not comparable to the presentation as of December 31, 2017. The Company recorded the tax-effected unrealized gain on the equity security through an adjustment to accumulated other comprehensive income (loss), net and retained earnings in the Consolidated Statement of Stockholders' Equity during the year ended December 31, 2018.