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Note 3 - Securities
 3 Months Ended
Mar. 31, 2020
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
NOTE
3.
SECURITIES
 
The following tables present the amortized costs, unrealized gains, unrealized losses and estimated fair values of our investment securities as of
March 31, 2020,
and
December 31, 2019.
 
   
As of March 31, 2020
  
   
 
 
 
  
Gross
    
Gross
    
 
 
 
   
Amortized
    
Unrealized
    
Unrealized
    
Estimated
  
(Amounts in thousands)
  
Costs
    
Gains
    
Losses
    
Fair Value
s
  
Available-for-sale securities:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U.S. government & agencies
   $
35,487
     $
575
     $
(19
 )   $
36,043
  
Obligations of state and political subdivisions
    
60,828
      
2,488
      
(53
 )    
63,263
  
Residential mortgage-backed securities and collateralized mortgage obligations
    
155,252
      
5,728
      
(541
 )    
160,439
  
Corporate securities
    
3,001
      
3
      
(21
 )    
2,983
  
Commercial mortgage-backed securities
    
16,891
      
543
      
(6
 )    
17,428
  
Other asset-backed securities
    
5,176
      
—
      
(255
 )    
4,921
  
Total
   $
276,635
     $
9,337
     $
(895
 )   $
285,077
  
 
   
As of December 31, 2019
  
   
 
 
 
  
Gross
    
Gross
    
 
 
 
   
Amortized
    
Unrealized
    
Unrealized
    
Estimated
  
(Amounts in thousands)
  
Costs
    
Gains
    
Losses
    
Fair Value
s
  
Available-for-sale securities:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U.S. government & agencies
   $
38,291
     $
469
     $
(27
 )   $
38,733
  
Obligations of state and political subdivisions
    
40,702
      
1,422
      
(26
 )    
42,098
  
Residential mortgage-backed securities and collateralized mortgage obligations
    
179,114
      
2,163
      
(442
 )    
180,835
  
Corporate securities
    
3,005
      
6
      
(45
 )    
2,966
  
Commercial mortgage-backed securities
    
19,126
      
221
      
(40
 )    
19,307
  
Other asset-backed securities
    
3,019
      
—
      
(8
 )    
3,011
  
Total
   $
283,257
     $
4,281
     $
(588
 )   $
286,950
  
 
 
The following table presents the expected maturities of investment securities at
March 31, 2020.
 
   
Available-For-Sale
  
(Amounts in thousands)
  
Amortized Costs
    
Fair Values
  
Amounts maturing in:
  
 
 
 
  
 
 
 
One year or less
   $
6,119
     $
6,127
  
One year through five years
    
113,504
      
117,594
  
Five years through ten years
    
88,844
      
91,394
  
After ten years
    
68,168
      
69,962
  
Total
   $
276,635
     $
285,077
  
 
 
The amortized costs and fair values of residential mortgage-backed securities, collateralized mortgage obligations and commercial mortgage securities are presented by their expected average life, rather than contractual maturity, because the underlying loans
may
be repaid without prepayment penalties.
 
At
March 31, 2020
and
December 31, 2019,
securities with a fair value of
$84.7
million and
$81.4
million, respectively, were pledged as collateral to secure public fund deposits, Federal Home Loan Bank of San Francisco borrowings and for other purposes as required by law.
 
The following table presents the cash proceeds from sales of investment securities and the associated gross realized gains and gross realized losses that have been included in earnings for the
three
months ended
March 31, 2020
and
2019.
 
   
Three Months Ended March 31,
  
(Amounts in thousands)
  
2020
    
2019
  
Proceeds from sales of investment securities
   $
29,339
     $
67,402
  
                 
Gross realized gains on sales of investment securities:
                
U.S. government & agencies
   $
—
     $
33
  
Obligations of state and political subdivisions
    
48
      
181
  
Residential mortgage-backed securities and collateralized mortgage obligations
    
84
      
47
  
Commercial mortgage-backed securities
    
36
      
—
  
Total gross realized gains on sales of investment securities
    
168
      
261
  
                 
Gross realized losses on sales of investment securities:
                
U.S. government & agencies
    
—
      
(4
 )
Obligations of state and political subdivisions
    
(4
 )    
(77
 )
Residential mortgage-backed securities and collateralized mortgage obligations
    
(80
 )    
(86
 )
Commercial mortgage-backed securities
    
—
      
(2
 )
Total gross realized losses on sales of investment securities
    
(84
 )    
(169
 )
Gain on sales of investment securities, net
   $
84
     $
92
  
 
Investment securities that were in an unrealized loss position as of
March 31, 2020
and
December 31, 2019
are presented in the following tables, based on the length of time individual securities have been in an unrealized loss position.
 
   
As of March 31, 2020
  
   
Less Than 12 Months
    
12 Months or More
    
Total
  
   
Fair
    
Unrealized
    
Fair
    
Unrealized
    
Fair
    
Unrealized
  
(Amounts in thousands)
  
Value
s
    
Losses
    
Value
s
    
Losses
    
Value
s
    
Losses
  
Available-for-sale securities:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U.S. government & agencies
   $
4,061
     $
(8
 )   $
1,758
     $
(11
 )   $
5,819
     $
(19
 )
Obligations of state and political subdivisions
    
3,125
      
(53
 )    
—
      
—
      
3,125
      
(53
 )
Residential mortgage-backed securities and collateralized mortgage obligations
    
17,165
      
(453
 )    
4,358
      
(88
 )    
21,523
      
(541
 )
Corporate securities
    
—
      
—
      
979
      
(21
 )    
979
      
(21
 )
Commercial mortgage-backed securities
    
—
      
—
      
4,432
      
(6
 )    
4,432
      
(6
 )
Other asset-backed securities
    
4,921
      
(255
 )    
—
      
—
      
4,921
      
(255
 )
Total temporarily impaired securities
   $
29,272
     $
(769
 )   $
11,527
     $
(126
 )   $
40,799
     $
(895
 )
 
 
   
As of December 31, 2019
  
   
Less Than 12 Months
    
12 Months or More
    
Total
  
   
Fair
    
Unrealized
    
Fair
    
Unrealized
    
Fair
    
Unrealized
  
(Amounts in thousands)
  
Value
s
    
Loss
es
    
Value
s
    
Loss
e
s
    
Value
s
    
Loss
es
  
Available-for-sale securities:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
U.S. government & agencies
   $
6,473
     $
(25
 )   $
380
     $
(2
 )   $
6,853
     $
(27
 )
Obligations of state and political subdivisions
    
2,249
      
(26
 )    
—
      
—
      
2,249
      
(26
 )
Residential mortgage-backed securities and collateralized mortgage obligations
    
31,817
      
(207
 )    
22,166
      
(235
 )    
53,983
      
(442
 )
Corporate securities
    
—
      
—
      
955
      
(45
 )    
955
      
(45
 )
Commercial mortgage-backed securities
    
1,464
      
(1
 )    
4,549
      
(39
 )    
6,013
      
(40
 )
Other asset-backed securities
    
3,011
      
(8
 )    
—
      
—
      
3,011
      
(8
 )
Total temporarily impaired securities
   $
45,014
     $
(267
 )   $
28,050
     $
(321
 )   $
73,064
     $
(588
 )
 
 
At
March 31, 2020
and
December 31, 2019,
the number of securities that were in an unrealized loss position was
46
and
63,
respectively. In the opinion of management, these securities are considered only temporarily impaired due to changes in market interest rates or widening of market spreads subsequent to the initial purchase of the securities, and
not
due to concerns regarding the underlying credit of the issuers or the underlying collateral. Our investment policy requires securities at the time of purchase to be rated
A3/A
- or higher by Moody’s, S&P and Fitch rating agencies. Management monitors the published credit ratings of our investment portfolio for material rating or outlook changes. For all private-label securities collateralized by mortgages, management also monitors the credit characteristics of the underlying mortgages to identify potential credit losses, if any, in the portfolio. Because the decline in fair value is
not
due to credit quality concerns, we have
no
plans to sell the securities before the recovery of their amortized cost, and the Bank has the ability to hold the securities to maturity these investments are
not
considered other-than-temporarily impaired.
 
The following table presents the characteristics of our securities that are in unrealized loss positions at
March 31, 2020
and
December 31, 2019.
 
   
Characteristics of securities in unrealized loss positions at
Available-for-sale securities:
  
March 31, 2020
and
December 31, 2019
U.S. government & agencies
  
Direct obligations of the U.S. Government or obligations guaranteed by U.S. Government agencies.
Obligations of state and political subdivisions
  
General obligation issuances or revenue securities secured by revenues from specific sources issued by municipalities and political subdivisions located within the U.S.
Residential mortgage-backed securities and collateralized mortgage obligations
  
Obligations of U.S. government sponsored entities or non-governmental entities collateralized by high quality mortgages on residential properties. Issuances by non-governmental entities usually include good credit enhancements. Of the residential mortgage-backed securities and collateralized mortgage obligations that we owned at
March 31, 2020
and
December 31, 2019,
83%
and
79%
were issued or guaranteed by U.S. government sponsored entities, respectively.
Corporate securities
  
Debt obligations generally issued or guaranteed by large U.S. corporate institutions.
Commercial mortgage-backed securities
  
Obligations of U.S. government sponsored entities or non-governmental entities collateralized by high quality mortgages on commercial properties. Issuances by non-governmental entities usually include good credit enhancements. Of the commercial mortgage-backed securities that we owned at
March 31, 2020
and
December 31, 2019,
100%
were issued or guaranteed by U.S. government sponsored entities.
Other asset-backed securities
  
Obligations secured by high quality loans with good credit enhancements issued by non-governmental issuers.