UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024 or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-38149

RBB BANCORP

(Exact name of registrant as specified in its charter)

California 27-2776416

(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

1055 Wilshire Blvd., Suite 1200,
Los Angeles, California	90017

(Address of principal executive offices) (Zip Code)

(213) 627-9888

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12 (b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, No Par Value	RBB	NASDAQ Global Select Market

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 12 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  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 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  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the 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	☐	Accelerated filer	☒
Non-accelerated filer	☐	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 Exchange Act).    Yes  ☐   No  ☒

Number of shares of common stock of the registrant:  18,440,274 outstanding as of May 3, 2024.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION (UNAUDITED)		3
ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	3
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	8
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	30
	CRITICAL ACCOUNTING POLICIES	31
	OVERVIEW	33
	ANALYSIS OF THE RESULTS OF OPERATIONS	34
	ANALYSIS OF FINANCIAL CONDITION	41
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	57
ITEM 4.	CONTROLS AND PROCEDURES	58
PART II - OTHER INFORMATION		60
ITEM 1.	LEGAL PROCEEDINGS	60
ITEM 1A.	RISK FACTORS	60
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	60
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	60
ITEM 4.	MINE SAFETY DISCLOSURES	60
ITEM 5.	OTHER INFORMATION	60
ITEM 6.	EXHIBITS	61
SIGNATURES		62

2

PART I - FINANCIAL INFORMATION 

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

RBB BANCORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 MARCH 31, 2024 AND DECEMBER 31, 2023

(In thousands, except share amounts)

	(Unaudited)
	March 31,			December 31,
	2024			2023
Assets
Cash and due from banks	$	269,243		$	431,373
Interest-earning deposits in other financial institutions		600			600
Securities:
Available for sale		335,194			318,961
Held to maturity (fair value of $5,047 and $5,097 at March 31, 2024 and December 31, 2023)		5,204			5,209
Mortgage loans held for sale		3,903			1,911
Loans held for investment		3,026,887			3,031,319
Unaccreted discount on acquired loans		(921	)		(970	)
Deferred loan costs, net		1,395			1,512
Total loans held for investment, net of deferred loan costs and unaccreted discounts on acquired loans		3,027,361			3,031,861
Allowance for loan losses		(41,688	)		(41,903	)
Total loans held for investment, net		2,985,673			2,989,958
Premises and equipment, net		25,363			25,684
Federal Home Loan Bank (FHLB) stock		15,000			15,000
Net deferred tax assets		16,554			15,765
Cash surrender value of bank owned life insurance (BOLI)		59,101			58,719
Goodwill		71,498			71,498
Servicing assets		7,794			8,110
Core deposit intangibles		2,594			2,795
Right-of-use assets- operating leases		31,231			29,803
Accrued interest and other assets		49,054			50,639
Total assets	$	3,878,006		$	4,026,025
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand	$	539,517		$	539,621
Savings, NOW and money market accounts		642,840			632,729
Time deposits $250,000 and under		1,083,898			1,190,821
Time deposits over $250,000		762,074			811,589
Total deposits		3,028,329			3,174,760
Reserve for unfunded commitments		671			640
FHLB advances		150,000			150,000
Long-term debt, net of issuance costs		119,243			119,147
Subordinated debentures, net		14,993			14,938
Lease liabilities - operating leases		32,690			31,191
Accrued interest and other liabilities		18,094			24,089
Total liabilities		3,364,020			3,514,765
Commitments and contingencies - Note 12
Shareholders' equity:
Preferred Stock - 100,000,000 shares authorized, no par value; none outstanding		—			—
Common Stock - 100,000,000 shares authorized, no par value; 18,578,132 shares issued and outstanding at March 31, 2024 and 18,609,179 shares issued and outstanding at December 31, 2023		271,645			271,925
Additional paid-in capital		3,348			3,623
Retained earnings		259,903			255,152
Non-controlling interest		72			72
Accumulated other comprehensive loss, net		(20,982	)		(19,512	)
Total shareholders’ equity		513,986			511,260
Total liabilities and shareholders’ equity	$	3,878,006		$	4,026,025

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

RBB BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME – (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2024, DECEMBER 31, 2023, AND MARCH 31, 2023

(In thousands, except per share amounts)

	Three Months Ended
	March 31, 2024		December 31, 2023			March 31, 2023
Interest and dividend income:
Interest and fees on loans	$	45,547	$	45,895		$	49,942
Interest on interest-earning deposits		5,040		4,650			791
Interest on investment securities		3,611		3,706			2,536
Dividend income on FHLB stock		331		312			265
Interest on federal funds sold and other		266		269			217
Total interest and dividend income		54,795		54,832			53,751
Interest expense:
Interest on savings deposits, NOW and money market accounts		4,478		4,026			2,296
Interest on time deposits		23,322		22,413			13,406
Interest on long-term debt and subordinated debentures		1,679		2,284			2,539
Interest on other borrowed funds		439		440			1,409
Total interest expense		29,918		29,163			19,650
Net interest income before provision/(reversal) for credit losses		24,877		25,669			34,101
Provision/(reversal) for credit losses		—		(431	)		2,014
Net interest income after provision/(reversal) for credit losses		24,877		26,100			32,087
Noninterest income:
Service charges and fees		992		972			1,023
Gain on sale of loans		312		116			29
Loan servicing fees, net of amortization		589		616			731
Increase in cash surrender value of life insurance		382		374			335
Gain/(loss) on other real estate owned		724		(57	)		—
Other income		373		5,373			244
Total noninterest income		3,372		7,394			2,362
Noninterest expense:
Salaries and employee benefits		9,927		8,860			9,864
Occupancy and equipment expenses		2,443		2,387			2,398
Data processing		1,420		1,357			1,299
Legal and professional		880		1,291			3,013
Office expenses		356		349			375
Marketing and business promotion		172		241			300
Insurance and regulatory assessments		982		1,122			504
Core deposit premium		201		215			237
Other expenses		588		571			921
Total noninterest expense		16,969		16,393			18,911
Net income before income taxes		11,280		17,101			15,538
Income tax expense		3,244		5,028			4,568
Net income	$	8,036	$	12,073		$	10,970
Net income per share
Basic	$	0.43	$	0.64		$	0.58
Diluted		0.43		0.64			0.58
Weighted-average common shares outstanding
Basic		18,601,277		18,887,501			18,985,846
Diluted		18,666,683		18,900,351			19,049,685

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

RBB BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2024, DECEMBER 31, 2023, AND MARCH 31, 2023

(In thousands)

	Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
Net income	$	8,036		$	12,073		$	10,970
Other comprehensive (loss)/income:
Unrealized (loss)/gain on securities available for sale		(2,085	)		8,987			2,577
Related income tax effect		615			(2,738	)		(790	)
Total other comprehensive (loss)/income		(1,470	)		6,249			1,787
Total comprehensive income	$	6,566		$	18,322		$	12,757

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

RBB BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY – (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(In thousands, except share amounts)

	Common Stock														Accumulated
	Shares			Amount			Additional Paid-in Capital			Retained Earnings			Non- Controlling Interest		Other Comprehensive (Loss)/income, net			Total
Balance at January 1, 2024		18,609,179		$	271,925		$	3,623		$	255,152		$	72	$	(19,512	)	$	511,260
Net income		—			—			—			8,036			—		—			8,036
Stock-based compensation, net		—			—			140			—			—		—			140
Restricted stock units vested		8,238			145			(209	)		—			—		—			(64	)
Cash dividends on common stock ($0.16 per share)		—			—			—			(2,976	)		—		—			(2,976	)
Stock options exercised		41,000			747			(206	)		—			—		—			541
Repurchase of common stock		(80,285	)		(1,172	)		—			(309	)		—		—			(1,481	)
Other comprehensive loss, net of taxes		—			—			—			—			—		(1,470	)		(1,470	)
Balance at March 31, 2024		18,578,132		$	271,645		$	3,348		$	259,903		$	72	$	(20,982	)	$	513,986
Balance at January 1, 2023		18,965,776		$	276,912		$	3,361		$	225,883		$	72	$	(21,665	)	$	484,563
Net income		—			—			—			10,970			—		—			10,970
Stock-based compensation, net		—			—			316			—			—		—			316
Restricted stock units vested		17,974			361			(361	)		—			—		—			—
Cash dividends on common stock ($0.16 per share)		—			—			—			(3,038	)		—		—			(3,038	)
Stock options exercised		9,153			205			(46	)		—			—		—			159
Other comprehensive income, net of taxes		—			—			—			—			—		1,787			1,787
Balance at March 31, 2023		18,992,903		$	277,478		$	3,270		$	233,815		$	72	$	(19,878	)	$	494,757

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

RBB BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS – (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(In thousands)

	Three Months Ended
	March 31,
	2024			2023
Operating activities
Net income	$	8,036		$	10,970
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization of premises and equipment		479			504
Net accretion of securities, loans, deposits, and other		(1,430	)		(629	)
Amortization of investment in affordable housing tax credits		301			282
Amortization of intangible assets		597			609
Amortization of right-of-use asset		1,251			1,280
Change in operating lease liabilities		(1,180	)		(1,209	)
Provision for credit losses		—			2,014
Stock-based compensation		140			316
Deferred tax benefit		(174	)		(293	)
Gain on sale of loans		(312	)		(29	)
Gain on sale and transfer of OREO		(724	)		—
Increase in cash surrender value of life insurance		(382	)		(335	)
Loans originated and purchased for sale, net		(7,252	)		(831	)
Proceeds from loans sold		9,077			991
Other items		(3,578	)		3,178
Net cash provided by operating activities		4,849			16,818
Investing activities
Securities available for sale:
Purchases		(113,293	)		(87,070	)
Maturities, repayments and calls		96,082			53,838
Purchase of other equity securities, net		(71	)		(222	)
Net increase of investment in qualified affordable housing projects		—			(24	)
Net increase in loans		(674	)		(6,124	)
Proceeds from sales of OREO		1,573			—
Purchases of premises and equipment		(149	)		(524	)
Net cash used in investing activities		(16,532	)		(40,126	)
Financing activities
Net increase (decrease) in demand deposits and savings accounts		10,007			(124,803	)
Net (decrease) increase in time deposits		(156,474	)		298,145
Proceeds from FHLB advances		—			80,000
Repayments of FHLB Advances		—			(80,000	)
Cash dividends paid		(2,976	)		(3,038	)
Restricted stock units vesting		(64	)		—
Common stock repurchased, net of repurchased costs		(1,481	)		—
Exercise of stock options		541			159
Net cash (used in) provided by financing activities		(150,447	)		170,463
Net (decrease) increase in cash and cash equivalents		(162,130	)		147,155
Cash and cash equivalents at beginning of period		431,373			83,548
Cash and cash equivalents at end of period	$	269,243		$	230,703
Supplemental disclosure of cash flow information
Cash paid during the period:
Interest paid	$	35,300		$	18,700
Taxes paid (refund)		—			(46	)
Non-cash investing and financing activities:
Transfer from loans to other real estate owned		1,920			—
Loans transfer to held for sale, net		3,505			132
Additions to servicing assets		80			10
Net change in unrealized holding gain on securities available for sale		(2,085	)		2,577
Recognition of operating lease right-of-use assets		(2,679	)		(5,764	)
Recognition of operating lease liabilities		2,679			5,764

The accompanying notes are an integral part of these unaudited consolidated financial statements.

7

RBB BANCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (UNAUDITED)

NOTE 1 - BUSINESS DESCRIPTION

RBB Bancorp (“RBB”) is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. RBB Bancorp’s principal business is to serve as the holding company for its wholly-owned banking subsidiaries, Royal Business Bank ("Bank") and RBB Asset Management Company (“RAM”). RAM was formed to hold and manage problem assets acquired in business combinations. When we refer to “we”, “us”, “our”, or the “Company”, we are referring to RBB Bancorp and its consolidated subsidiaries including the Bank and RAM, collectively. When we refer to the “parent company”, “Bancorp”, or the “holding company”, we are referring to RBB Bancorp, the parent company, on a stand-alone basis.

At March 31, 2024, we had total assets of $3.9 billion, total loans of $3.0 billion, total deposits of $3.0 billion and total shareholders' equity of $514.0 million. RBB’s common stock trades on the Nasdaq Global Select Market under the symbol “RBB”.

The Bank provides business-banking products and services predominantly to the Asian-American communities through full service branches located in Los Angeles County, Orange County and Ventura County in California, Las Vegas (Nevada), the New York City metropolitan areas, Chicago (Illinois), Edison (New Jersey) and Honolulu (Hawaii). The products and services include commercial and investor real estate loans, business loans and lines of credit, Small Business Administration (“SBA”) 7A and 504 loans, mortgage loans, trade finance and a full range of depository accounts, including specialized services such as remote deposit, E-banking, and mobile banking.

We operate as a minority depository institution, which is defined by the FDIC as a federally insured depository institution where 51% or more of the voting stock is owned by minority individuals or a majority of the board of directors is minority and the community that the institution serves is predominantly minority. A minority depository institution is eligible to receive from the FDIC and other federal regulatory agencies training, technical assistance and review, and assistance regarding the implementation of proposed new deposit taking and lending programs, as well as with respect to the adoption of applicable policies and procedures governing such programs. We intend to maintain our minority depository institution designation, as it is expected that at least 51% of our issued and outstanding shares of capital shall remain owned by minority individuals. The minority depository institution designation has been historically beneficial to us, as the FDIC has reviewed and assisted with the implementation of our deposit and lending programs, and we continue to use the program for technical assistance.

We operate full-service banking offices in Arcadia, Cerritos, Diamond Bar, Irvine, Los Angeles, Monterey Park, Oxnard, Rowland Heights, San Gabriel, Silver Lake, Torrance, and Westlake Village, California; Las Vegas, Nevada; Manhattan, Brooklyn, Flushing, and Elmhurst, New York; the Chinatown and Bridgeport neighborhoods of Chicago, Illinois; Edison, New Jersey; and Honolulu, Hawaii. Our primary source of revenue is providing loans to customers, who are predominantly small and middle-market businesses and individuals. 

We generate our revenue primarily from interest received on loans and, to a lesser extent, from interest received on investment securities. We also derive income from noninterest sources, such as fees received in connection with various lending and deposit services, loan servicing, gain on sales of loans and wealth management services. Our principal expenses include interest expense on deposits and borrowings, and operating expenses, such as salaries and employee benefits, occupancy and equipment, data processing, and income tax expense.

We completed six whole bank acquisitions and one branch acquisition from July 2011 through January 2022. All of our acquisitions have been accounted for using the acquisition method of accounting and, accordingly, the operating results of the acquired entities have been included in the consolidated financial statements from their respective acquisition dates. 

NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for Form 10-Q and conform to practices within the banking industry and include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results for the full year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2023, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (our “2023 Annual Report”).

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. It is reasonably possible that these estimates could change as actual results could differ from those estimates. The allowance for credit losses, realization of deferred tax assets, the valuation of goodwill and other intangible assets, other derivatives, and the fair value measurement of financial instruments are particularly subject to change and such change could have a material effect on the consolidated financial statements.

Summary of Significant Accounting Policies

The accompanying unaudited consolidated financial statements were compiled in accordance with the accounting policies set forth in "Note 2 – Basis of Presentation and Summary of Significant Accounting Policies" in our consolidated financial statements as of and for the year ended December 31, 2023, included in our 2023 Annual Report. The Financial Accounting Standards Board ("FASB") issues Accounting Standards Updates ("ASU" or “Update”) and Accounting Standards Codifications (“ASC”), which are the primary source of GAAP.

8

 

Recent Accounting Pronouncements

Recently adopted

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820)—Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This pronouncement clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires certain new disclosures for equity securities subject to contractual sale restrictions. We adopted ASU 2022-03 on  January 1, 2024 and the adoption did not have a material impact on our consolidated financial statements.

In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323). This Update permits reporting entities to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met. It requires that a liability to be recognized for delayed equity contributions that are unconditional and legally binding or for equity contributions that are contingent upon a future event when that contingent event becomes probable. The reporting entity needs to disclose the nature of its tax equity investments and the effect of its tax equity investments on its financial position and results of operations. ASU 2023-02 is effective for us in fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. We adopted ASU 2023-02 on  January 1, 2024 and the adoption did not have a material impact on our consolidated financial statements.

9

 

Recently issued not yet effective

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements. This pronouncement amends the FASB Accounting Standards Codification to reflect updates and simplifications to certain disclosure requirements referred to the FASB by the SEC in 2018, including disclosures for the statement of cash flows, earnings per share, commitments, debt and equity instruments, and certain industry information, among other things. Each amendment is effective when the related disclosure is effectively removed from Regulations S-X or S-K; early adoption is prohibited. All amendments should be applied prospectively. If the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K by June 30, 2027, the pending amendments will be removed and will not become effective for any entity.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. This Update enhances the transparency and decision usefulness of income tax disclosures. The amendments in this Update require the following: 1) consistent categories and greater disaggregation of information in the rate reconciliation, and 2) income taxes paid disaggregated by jurisdiction. The amendments in the ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. Adoption of ASU 2023-09 is not expected to have a material impact on our consolidated financial statements.

NOTE 3 - INVESTMENT SECURITIES

The following table summarizes the amortized cost and fair value of investment securities available for sale (“AFS”) and  held to maturity (“HTM”) and the corresponding amounts of gross unrealized gains and losses as of the dates indicated:

			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
March 31, 2024	Cost		Gains		Losses			Value
Available for sale
Government agency securities	$	7,586	$	—	$	(527	)	$	7,059
SBA agency securities		14,524		40		(250	)		14,314
Mortgage-backed securities: residential		39,567		—		(6,387	)		33,180
Collateralized mortgage obligations: residential		100,808		169		(12,878	)		88,099
Collateralized mortgage obligations: commercial		78,404		105		(2,872	)		75,637
Commercial paper		77,088		—		(22	)		77,066
Corporate debt securities		34,784		21		(4,175	)		30,630
Municipal securities		12,627		—		(3,418	)		9,209
Total available for sale	$	365,388	$	335	$	(30,529	)	$	335,194
Held to maturity
Municipal taxable securities	$	501	$	—	$	(1	)	$	500
Municipal securities		4,703		—		(156	)		4,547
Total held to maturity	$	5,204	$	—	$	(157	)	$	5,047

			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
December 31, 2023	Cost		Gains		Losses			Value
Available for sale
Government agency securities	$	8,705	$	—	$	(544	)	$	8,161
SBA agency securities		13,289		144		(216	)		13,217
Mortgage-backed securities: residential		40,507		—		(5,855	)		34,652
Collateralized mortgage obligations: residential		94,071		454		(12,198	)		82,327
Collateralized mortgage obligations: commercial		69,941		22		(2,664	)		67,299
Commercial paper		73,121		—		(16	)		73,105
Corporate debt securities		34,800		—		(4,109	)		30,691
Municipal securities		12,636		—		(3,127	)		9,509
Total available for sale	$	347,070	$	620	$	(28,729	)	$	318,961
Held to maturity
Municipal taxable securities	$	501	$	3	$	—		$	504
Municipal securities		4,708		—		(115	)		4,593
Total held to maturity	$	5,209	$	3	$	(115	)	$	5,097

We pledged investment securities with a fair value of $33.1 million and $95.3 million for certificates of deposit from the State of California, secured Federal funds arrangements, and other local agency deposits at March 31, 2024 and December 31, 2023.

There were no sales of investment securities during the three months ended March 31, 2024, December 31, 2023, and March 31, 2023.

Accrued interest receivable for investment securities at March 31, 2024 and December 31, 2023 totaled $1.1 million and $962,000.

10

 

The table below summarizes amortized cost and fair value of the investment securities portfolio, by expected maturity, as of the dates indicated. Mortgage-backed securities are classified in accordance with their estimated average life. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

(dollars in thousands)	Less than One Year				More than One Year to Five Years				More than Five Years to Ten Years				More than Ten Years				Total
March 31, 2024	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Government agency securities	$	—	$	—	$	7,586	$	7,059	$	—	$	—	$	—	$	—	$	7,586	$	7,059
SBA agency securities		—		—		2,241		2,024		12,283		12,290		—		—		14,524		14,314
Mortgage-backed securities: residential		—		—		10,505		9,428		19,435		16,327		9,627		7,425		39,567		33,180
Collateralized mortgage obligations: residential		17		16		36,137		35,226		64,654		52,857		—		—		100,808		88,099
Collateralized mortgage obligations: commercial		4,096		4,071		19,849		18,023		54,459		53,543		—		—		78,404		75,637
Commercial paper		77,088		77,066		—		—		—		—		—		—		77,088		77,066
Corporate debt securities		—		—		12,906		12,533		19,245		16,160		2,633		1,937		34,784		30,630
Municipal securities		—		—		—		—		—		—		12,627		9,209		12,627		9,209
Total available for sale	$	81,201	$	81,153	$	89,224	$	84,293	$	170,076	$	151,177	$	24,887	$	18,571	$	365,388	$	335,194
Municipal taxable securities	$	—	$	—