0001475348-21-000035.txt : 20210806 0001475348-21-000035.hdr.sgml : 20210806 20210806135708 ACCESSION NUMBER: 0001475348-21-000035 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 95 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210806 DATE AS OF CHANGE: 20210806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Luther Burbank Corp CENTRAL INDEX KEY: 0001475348 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 680270948 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38317 FILM NUMBER: 211152287 BUSINESS ADDRESS: STREET 1: 520 THIRD STREET, 4TH FLOOR CITY: SANTA ROSA STATE: CA ZIP: 95401 BUSINESS PHONE: 844-446-8201 MAIL ADDRESS: STREET 1: 520 THIRD STREET, 4TH FLOOR CITY: SANTA ROSA STATE: CA ZIP: 95401 10-Q 1 lbc-20210630.htm 10-Q lbc-20210630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-38317
Luther Burbank Corporation
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation or organization)
68-0270948
(I.R.S. employer identification number)
   
520 Third St, Fourth Floor, Santa Rosa, California
 (Address of principal executive offices)
 
95401
(Zip Code)
 

Registrant's telephone number, including area code: (844) 446-8201
Securities Registered Pursuant to Section 12(b) of the Act
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common stock, no par valueLBCThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
Non-accelerated filer
o
Smaller Reporting Company
Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes No x

As of July 30, 2021, there were 51,723,447 shares of the registrant’s common stock, no par value, outstanding.



Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II - OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.
1

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
 
This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” and other similar expressions in this Quarterly Report on Form 10-Q. With respect to any such forward-looking statements, Luther Burbank Corporation (the "Company") claims the protection of the safe harbor provided for in the Private Securities Litigation Reform Act of 1995, as amended. The Company cautions investors that any forward-looking statements presented in this Quarterly Report on Form 10-Q, or those that the Company may make orally or in writing from time to time, are based on the beliefs of, assumptions made by, and information available to, management at the time such statements are first made. Actual outcomes will be affected by known and unknown risks, trends, uncertainties and factors that are beyond the Company’s control or ability to predict.  Although the Company believes that management’s beliefs and assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. As a result, the Company’s actual future results can be expected to differ from management’s expectations, and those differences may be material and adverse to the Company’s business, results of operations and financial condition. Accordingly, investors should use caution in placing any reliance on forward-looking statements to anticipate future results or trends.

Given the ongoing and dynamic nature of the coronavirus disease 2019 ("COVID-19") pandemic, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects remain uncertain. Deterioration in general business and economic conditions resulting from the continuing pandemic, including increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. Some of the other risks and uncertainties that may cause the Company’s actual results, performance or achievements to differ materially from those expressed include, but are not limited to, the following: the impact of changes in interest rates; political instability; changes in the monetary policies of the U.S. Government; a decline in economic conditions; deterioration in the value of West Coast real estate, both residential and commercial; an increase in the level of non-performing assets and charge-offs; further increased competition among financial institutions; the Company’s ability to continue to attract deposits and quality loan customers; further government regulation, including regulations regarding capital requirements, and the implementation and costs associated with the same; internal and external fraud and cyber-security threats including the loss of bank or customer funds, loss of system functionality or the theft or loss of data; management’s ability to successfully manage the Company’s operations; and the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. For further discussion of these and other factors, see “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q and the Company’s 2020 Annual Report on Form 10-K.

Any forward-looking statements in this Quarterly Report on Form 10-Q and all subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. The Company does not undertake any obligation to release publicly any revisions to forward-looking statements to reflect events or circumstances after the date such forward-looking statements are made, and hereby specifically disclaims any intention to do so, unless required by law.


2

PART I.

Item 1. Financial Statements
LUTHER BURBANK CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollar amounts in thousands)
June 30,
2021 (unaudited)
December 31,
2020
ASSETS
Cash, cash equivalents and restricted cash$70,296 $178,861 
Available for sale debt securities, at fair value653,260 593,734 
Held to maturity debt securities, at amortized cost (fair value of $4,527 and $7,870 at June 30, 2021 and December 31, 2020, respectively)
4,324 7,467 
Equity securities, at fair value11,859 12,037 
Loans receivable, net of allowance for loan losses of $41,335 and $46,214 at June 30, 2021 and December 31, 2020, respectively
6,402,305 6,003,602 
Accrued interest receivable18,909 18,795 
Federal Home Loan Bank ("FHLB") stock, at cost29,135 25,122 
Premises and equipment, net17,039 18,226 
Goodwill3,297 3,297 
Prepaid expenses and other assets46,654 44,963 
Total assets$7,257,078 $6,906,104 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $5,401,972 $5,264,329 
FHLB advances1,005,147 806,747 
Junior subordinated deferrable interest debentures61,857 61,857 
Senior debt
$95,000 face amount, 6.5% interest rate, due September 30, 2024 (less debt issuance costs of $399 and $461 at June 30, 2021 and December 31, 2020, respectively)
94,601 94,539 
Accrued interest payable527 1,388 
Other liabilities and accrued expenses54,275 63,553 
Total liabilities6,618,379 6,292,413 
Commitments and contingencies (Note 15)
Stockholders' equity:
Preferred stock, no par value; 5,000,000 shares authorized; none issued and outstanding at June 30, 2021 and December 31, 2020, respectively
  
Common stock, no par value; 100,000,000 shares authorized; 51,861,704 and 52,220,266 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively
407,860 414,120 
Retained earnings226,446 192,834 
Accumulated other comprehensive income, net of taxes4,393 6,737 
Total stockholders' equity638,699 613,691 
Total liabilities and stockholders' equity$7,257,078 $6,906,104 
See accompanying notes to unaudited consolidated financial statements

3

LUTHER BURBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollar amounts in thousands, except per share data)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Interest and fee income:
Loans$54,191 $58,190 $108,249 $118,895 
Investment securities2,091 2,316 4,074 5,619 
Cash, cash equivalents and restricted cash34 55 84 372 
Total interest and fee income56,316 60,561 112,407 124,886 
Interest expense:
Deposits9,749 19,821 21,355 44,402 
FHLB advances3,839 5,685 7,772 11,243 
Junior subordinated deferrable interest debentures255 332 514 825 
Senior debt1,574 1,575 3,148 3,153 
Total interest expense15,417 27,413 32,789 59,623 
Net interest income before provision for loan losses40,899 33,148 79,618 65,263 
(Reversal of) provision for loan losses(2,500)5,250 (5,000)10,550 
Net interest income after provision for loan losses43,399 27,898 84,618 54,713 
Noninterest income:
FHLB dividends371 374 738 909 
Other income139 297 81 560 
Total noninterest income510 671 819 1,469 
Noninterest expense:
Compensation and related benefits8,641 10,300 19,021 21,505 
Deposit insurance premium467 471 939 947 
Professional and regulatory fees614 454 1,098 885 
Occupancy1,257 1,101 2,472 2,241 
Depreciation and amortization678 687 1,333 1,356 
Data processing873 1,038 1,846 2,005 
Marketing235 330 527 1,205 
Other expenses1,115 967 2,048 2,063 
Total noninterest expense13,880 15,348 29,284 32,207 
Income before provision for income taxes30,029 13,221 56,153 23,975 
Provision for income taxes8,813 3,903 16,526 7,081 
Net income$21,216 $9,318 $39,627 $16,894 
Basic earnings per common share$0.41 $0.18 $0.76 $0.31 
Diluted earnings per common share$0.41 $0.18 $0.76 $0.31 
Dividends per common share$0.06 $0.06 $0.12 $0.12 

See accompanying notes to unaudited consolidated financial statements

4

LUTHER BURBANK CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(Dollar amounts in thousands)

Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net income$21,216 $9,318 $39,627 $16,894 
Other comprehensive income (loss):
Unrealized gain (loss) on available for sale debt securities:
Unrealized holding gain (loss) arising during the period512 6,172 (3,303)7,223 
Tax effect(150)(1,796)959 (2,101)
Total other comprehensive income (loss), net of tax362 4,376 (2,344)5,122 
Comprehensive income$21,578 $13,694 $37,283 $22,016 

See accompanying notes to unaudited consolidated financial statements

5

LUTHER BURBANK CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
(Dollar amounts in thousands, except per share data)

Accumulated Other Comprehensive Income (Net of Taxes)Total Stockholders' Equity
Common StockRetained EarningsAvailable for Sale Securities
SharesAmount
Balance, March 31, 202054,286,465 $431,578 $169,572 $2,190 $603,340 
Net income— — 9,318 — 9,318 
Other comprehensive income— — — 4,376 4,376 
Shares withheld to pay taxes on stock based compensation(2,740)(28)— — (28)
Restricted stock forfeitures(11,416)(17)2 — (15)
Stock based compensation expense— 899 — — 899 
Shares repurchased(1,889,414)(18,168)— — (18,168)
Cash dividends ($0.06 per share)
— — (3,040)— (3,040)
Balance, June 30, 202052,382,895 $414,264 $175,852 $6,566 $596,682 
Balance, March 31, 202152,231,912 $411,702 $208,236 $4,031 $623,969 
Net income— — 21,216 — 21,216 
Other comprehensive income— — — 362 362 
Restricted stock award grants6,395 — — — — 
Stock based compensation expense— 651 — — 651 
Shares repurchased(376,603)(4,493)— — (4,493)
Cash dividends ($0.06 per share)
— — (3,006)— (3,006)
Balance, June 30, 202151,861,704 $407,860 $226,446 $4,393 $638,699 

See accompanying notes to unaudited consolidated financial statements

6

Accumulated Other Comprehensive Income (Loss) (Net of Taxes)Total Stockholders' Equity
Common StockRetained EarningsAvailable for Sale Securities
SharesAmount
Balance, December 31, 201955,999,754 $447,784 $165,236 $1,444 $614,464 
Net income— — 16,894 — 16,894 
Other comprehensive income— — — 5,122 5,122 
Restricted stock award grants250,118 — — — — 
Settled restricted stock units70,220 — — — — 
Shares withheld to pay taxes on stock based compensation(56,564)(591)— — (591)
Restricted stock forfeitures(28,824)(25)8 — (17)
Stock based compensation expense— 1,810 — — 1,810 
Shares repurchased(3,851,809)(34,714)— — (34,714)
Cash dividends ($0.12 per share)
— — (6,286)— (6,286)
Balance, June 30, 202052,382,895 $414,264 $175,852 $6,566 $596,682 
Balance, December 31, 202052,220,266 $414,120 $192,834 $6,737 $613,691 
Net income— — 39,627 — 39,627 
Other comprehensive loss— — — (2,344)(2,344)
Restricted stock award grants289,473 — — — — 
Settled restricted stock units68,873 — — — — 
Shares withheld to pay taxes on stock based compensation(85,825)(901)— — (901)
Restricted stock forfeitures(52,798)(67)13— (54)
Stock based compensation expense— 1,301 — — 1,301 
Shares repurchased(578,285)(6,593)— — (6,593)
Cash dividends ($0.12 per share)
— — (6,028)— (6,028)
Balance, June 30, 202151,861,704 $407,860 $226,446 $4,393 $638,699 


See accompanying notes to unaudited consolidated financial statements

7

LUTHER BURBANK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollar amounts in thousands)
Six Months Ended June 30,
20212020
Cash flows from operating activities:
Net income$39,627 $16,894 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization1,333 1,356 
(Reversal of) provision for loan losses(5,000)10,550 
Amortization of deferred loan costs, net9,831 7,693 
Amortization of premiums on investment securities, net1,225 1,465 
Stock based compensation expense, net of forfeitures1,234 1,785 
Change in fair value of mortgage servicing rights407 629 
Change in fair value of equity securities178 (288)
Other items, net100 6 
Effect of changes in:
Accrued interest receivable(114)426 
Accrued interest payable(861)(1,648)
Prepaid expenses and other assets2,539 (658)
Other liabilities and accrued expenses(5,928)(2,363)
Net cash provided by operating activities44,571 35,847 
Cash flows from investing activities:
Proceeds from maturities, paydowns and calls of available for sale debt securities71,218 155,188 
Proceeds from maturities and paydowns of held to maturity debt securities3,070 728 
Purchases of available for sale debt securities(135,200)(159,639)
Net increase in loans receivable(123,673)(22,625)
Purchase of loans(286,917)(20,507)
(Purchase) redemption of FHLB stock, net(4,013)730 
Purchase of premises and equipment(155)(1,114)
Net cash used in investing activities(475,670)(47,239)
Cash flows from financing activities:
Net increase in deposits137,643 148,802 
Proceeds from long-term FHLB advances150,000 136,500 
Repayment of long-term FHLB advances(180,000)(151,955)
Net change in short-term FHLB advances228,400 (1,500)
Shares withheld for taxes on vested restricted stock(901)(591)
Shares repurchased(6,593)(34,714)
Cash paid for dividends(6,015)(6,278)
Net cash provided by financing activities322,534 90,264 
(Decrease) increase in cash, cash equivalents and restricted cash(108,565)78,872 
Cash, cash equivalents and restricted cash, beginning of period178,861 91,325 
Cash, cash equivalents and restricted cash, end of period$70,296 $170,197 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest$33,650 $61,271 
Income taxes$18,883 $438 

See accompanying notes to unaudited consolidated financial statements

8

LUTHER BURBANK CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.NATURE OF OPERATIONS

Organization

Luther Burbank Corporation (the ‘‘Company’’), a California corporation headquartered in Santa Rosa, is the bank holding company for its wholly-owned subsidiary, Luther Burbank Savings (the "Bank"), and its wholly-owned subsidiary, Burbank Investor Services. The Company also owns Burbank Financial Inc., a real estate investment company, and all the common interests in Luther Burbank Statutory Trusts I and II, entities created to issue trust preferred securities.

The Bank conducts its business from its headquarters in Gardena, California. It has ten full service branches in California located in Sonoma, Marin, Santa Clara, and Los Angeles Counties and one full service branch in Washington located in King County. Additionally, there are six loan production offices located throughout California, as well as a loan production office in Clackamas County, Oregon.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all footnotes as would be necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in stockholders’ equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, these interim unaudited consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments and accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in stockholders’ equity and cash flows for the interim periods presented. These unaudited consolidated financial statements have been prepared on a basis consistent with, and should be read in conjunction with, the audited consolidated financial statements as of and for the year ended December 31, 2020, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”), under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated.
 
The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the year ending December 31, 2021.

The Company’s accounting and reporting policies conform to GAAP and to general practices within the banking industry.

Use of Estimates

Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions affect the amounts reported in the unaudited consolidated financial statements and the disclosures provided, and actual results could differ.
Reclassifications
Certain prior balances in the unaudited consolidated financial statements have been reclassified to conform to current year presentation. These reclassifications had no effect on prior year net income or stockholders’ equity.
9

Earnings Per Share ("EPS")

Basic earnings per common share represents the amount of earnings for the period available to each share of common stock outstanding during the reporting period. Basic EPS is computed based upon net income divided by the weighted average number of common shares outstanding during the period. In determining the weighted average number of shares outstanding, vested restricted stock units are included. Diluted EPS represents the amount of earnings for the period available to each share of common stock outstanding including common stock that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during each reporting period. Diluted EPS is computed based upon net income divided by the weighted average number of common shares outstanding during each period, adjusted for the effect of dilutive potential common shares, such as restricted stock awards and units, calculated using the treasury stock method.
(Dollars in thousands, except share amounts)Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net income$21,216 $9,318 $39,627 $16,894 
Weighted average basic common shares outstanding51,726,331 52,465,458 51,854,531 54,038,642 
Add: Dilutive effects of assumed vesting of restricted stock134,802 85,548 125,155 99,410 
Weighted average diluted common shares outstanding51,861,133 52,551,006 51,979,686 54,138,052 
Income per common share:
Basic EPS$0.41 $0.18 $0.76 $0.31 
Diluted EPS$0.41 $0.18 $0.76 $0.31 
Anti-dilutive shares not included in calculation of diluted earnings per share 13,734 2,706 18,980 
2.     INVESTMENT SECURITIES
Available for Sale
The following table summarizes the amortized cost and the estimated fair value of available for sale debt securities as of the dates indicated:
(Dollars in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
At June 30, 2021:
Government and Government Sponsored Entities:
Residential mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs")$166,439 $2,102 $(700)$167,841 
Commercial MBS and CMOs438,112 5,457 (957)442,612 
Agency bonds12,754 217  12,971 
Other asset backed securities ("ABS")29,764 72  29,836 
Total available for sale debt securities$647,069 $7,848 $(1,657)$653,260 
At December 31, 2020:
Government and Government Sponsored Entities:
Residential MBS and CMOs$213,279 $3,459 $(14)$216,724 
Commercial MBS and CMOs355,963 6,337 (312)361,988 
Agency bonds14,998 69 (45)15,022 
Total available for sale debt securities$584,240 $9,865 $(371)$593,734 
10

Net unrealized gains on available for sale investment securities are recorded as accumulated other comprehensive income within stockholders’ equity and totaled $4.4 million and $6.7 million, net of $1.8 million and $2.8 million in tax liabilities, at June 30, 2021 and December 31, 2020, respectively. There were no sales or transfers of available for sale investment securities and no realized gains or losses on these securities during the three or six months ended June 30, 2021 or 2020.

The following tables summarize the gross unrealized losses and fair value of available for sale debt securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
June 30, 2021
Less than 12 Months12 Months or MoreTotal
(Dollars in thousands)Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
Government and Government Sponsored Entities:
Residential MBS and CMOs$51,171 $(697)$372 $(3)$51,543 $(700)
Commercial MBS and CMOs135,681 (948)5,848 (9)141,529 (957)
Total available for sale debt securities$186,852 $(1,645)$6,220 $(12)$193,072 $(1,657)
At June 30, 2021, the Company held 86 residential MBS and CMOs of which nine were in a loss position and five had been in a loss position for twelve months or more. The Company held 53 commercial MBS and CMOs of which 14 were in a loss position and one had been in a loss position for twelve months or more.
December 31, 2020
Less than 12 Months12 Months or MoreTotal
(Dollars in thousands)Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
Government and Government Sponsored Entities:
Residential MBS and CMOs$14,193 $(12)$4,248 $(2)$18,441 $(14)
Commercial MBS and CMOs33,986 (37)37,194 (275)71,180 (312)
Agency bonds3,331 (8)8,667 (37)11,998 (45)
Total available for sale debt securities$51,510 $(57)$50,109 $(314)$101,619 $(371)
At December 31, 2020, the Company held 86 residential MBS and CMOs of which 11 were in a loss position and six had been in a loss position for twelve months or more. The Company held 46 commercial MBS and CMOs of which ten were in a loss position and six had been in a loss position for twelve months or more. The Company held three agency bonds of which two were in a loss position and one had been in a loss position for twelve months or more.
The unrealized losses on the Company’s investments were caused by interest rate changes. In addition, the contractual cash flows of these investments are guaranteed by the U.S. government or agencies sponsored by the U.S. government. Accordingly, it is expected that the securities will not be settled at a price less than amortized cost. Because the decline in market value is attributable to changes in interest rates but not credit quality, and because the Company has the ability and intent to hold those investments until a recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2021 or December 31, 2020.
As of June 30, 2021 and December 31, 2020, there were no holdings of securities of any one issuer in an amount greater than 10% of stockholders' equity, other than the U.S. government and its agencies.
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Held to Maturity
The following table summarizes the amortized cost and estimated fair value of held to maturity investment securities as of the dates indicated:
(Dollars in thousands)Amortized CostGross Unrecognized GainsGross Unrecognized LossesEstimated Fair Value
As of June 30, 2021:
Government Sponsored Entities:
Residential MBS$4,252 $203 $ $4,455 
Other investments72   72 
Total held to maturity investment securities$4,324 $203 $ $4,527 
As of December 31, 2020:
Government Sponsored Entities:
Residential MBS$7,391 $403 $ $7,794 
Other investments76   76 
Total held to maturity investment securities$7,467 $403 $ $7,870 
The following table summarizes the scheduled maturities of available for sale and held to maturity investment securities as of June 30, 2021:
June 30, 2021
(Dollars in thousands)Amortized CostFair Value
Available for sale debt securities
Five to ten years$9,754 $9,905 
Beyond ten years3,000 3,066 
MBS, CMOs and other ABS634,315 640,289 
Total available for sale debt securities$647,069 $653,260 
Held to maturity investments securities
Beyond ten years$72 $72 
MBS4,252 4,455 
Total held to maturity debt securities$4,324 $4,527 
The amortized cost and fair value of debt securities are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. As such, mortgage backed securities, collateralized mortgage obligations and other asset backed securities are not included in the maturity categories above and instead are shown separately. No securities were pledged as of June 30, 2021 or December 31, 2020.

Equity Securities

Equity securities consist of investments in a qualified community reinvestment fund. At June 30, 2021 and December 31, 2020, the fair value of equity securities totaled $11.9 million and $12.0 million, respectively. Changes in fair value are recognized in other noninterest income. During the three and six months ended June 30, 2021, the fair value of these investments increased $33 thousand and decreased $178 thousand, respectively, compared to an increase in fair value of $100 thousand and $288 thousand, respectively, during the three and six months ended June 30, 2020. There were no sales of equity securities during the three or six months ended June 30, 2021 or 2020.
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3.     LOANS
Loans consist of the following:
(Dollars in thousands)June 30,
2021
December 31,
2020
Permanent mortgages on:
Multifamily residential$4,281,698 $4,100,831 
Single family residential1,945,099 1,723,953 
Commercial real estate196,347 202,871 
Construction and land loans20,496 22,061 
Non-Mortgage (‘‘NM’’) loans 100 
Total6,443,640 6,049,816 
Allowance for loan losses(41,335)(46,214)
Loans held for investment, net$6,402,305 $6,003,602 

Certain loans have been pledged to secure borrowing arrangements (see Note 7).
During the six months ended June 30, 2021, the Company purchased a pool of performing, fixed rate single family residential loans. The pool had an aggregate principal balance of $287.8 million and contained loans with a weighted average interest rate and maturity of 2.31% and 26.4 years, respectively.
13

The following table summarizes activity in and the allocation of the allowance for loan losses by portfolio segment:
(Dollars in thousands)Multifamily ResidentialSingle Family ResidentialCommercial Real EstateLand, Construction and NMTotal
Three months ended June 30, 2021
Allowance for loan losses:
Beginning balance allocated to portfolio segments$30,838 $9,816 $2,871 $241 $43,766 
(Reversal of) provision for loan losses(724)(1,546)(166)(