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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, 2022
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 August 1, 2022, there were 51,074,871 shares of the registrant’s common stock, no par value, outstanding.


Table of Contents
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.
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Cautionary Statements Regarding Forward-Looking Information
This document contains 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, including our current views with respect to, among other things, future events and our results of operations, financial condition, financial performance, plans and/or strategies. These forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and may be identified by use of words such as "anticipate," "believe," “continue,” "could," "estimate," "expect," “impact,” "intend," "seek," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions. These forward-looking statements are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control and involve a number of risks and uncertainties. Accordingly, we caution you that any such forward-looking statement is not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors, including without limitation:
•the ongoing and dynamic nature of the COVID-19 pandemic and the impact of actions to mitigate any continuing effects from the COVID-19 pandemic;
•business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic markets, including the tight labor market, supply chain disruptions, or turbulence in domestic or foreign financial markets;
•economic, market, operational, liquidity, credit, inflation and interest rate risks associated with our business;
•the occurrence of significant natural or man-made disasters, including fires, earthquakes and terrorist acts, as well as public health issues and other adverse external events that could harm our business;
•climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs;
•our management of risks inherent in our real estate loan portfolio, and the risk of a prolonged downturn in the real estate market, which could impair the value of our collateral and our ability to sell collateral upon any foreclosure;
•our ability to achieve organic loan and deposit growth and the composition of such growth;
•the fiscal position of the U.S. and the soundness of other financial institutions;
•changes in consumer spending and savings habits;
•technological changes;
•the laws and regulations applicable to our business, and the impact of recent and future legislative and regulatory changes;
•changing bank regulatory conditions, policies or programs, whether arising as new legislation or regulatory initiatives, that could lead to restrictions on activities of banks generally, or our subsidiary bank in particular, more restrictive regulatory capital requirements, increased costs, including deposit insurance premiums, regulation or prohibition of certain income producing activities or changes in the secondary market for loans and other products;
•increased competition in the financial services industry;
•changes in the level of our nonperforming assets and charge-offs;
•our involvement from time to time in legal proceedings and examinations and remedial actions by regulators;
•the composition of our management team and our ability to attract and retain key personnel;
•material weaknesses in our internal control over financial reporting;
•systems failures or interruptions involving our information technology and telecommunications systems;
•potential exposure to fraud, negligence, computer theft and cyber-crime;
•failure to adequately manage the transition from LIBOR as a reference rate;
•the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission ("SEC"), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board ("FASB") or other accounting standards setters, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the Current Expected Credit Loss (“CECL”) model, which will change how we estimate credit losses and may increase the required level of our allowance for credit losses after adoption on January 1, 2023; and
•political instability or the effects of war or other conflicts, including, but not limited to, the current conflict between Russia and Ukraine.
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The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in our annual report on Form 10-K for the year ended December 31, 2021, including under the caption “Risk Factors” in Item 1A of Part I, subsequent Quarterly Reports on Form 10-Q and other reports we file with the SEC. You should not place undue reliance on any of these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
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PART I.

Item 1. Financial Statements
LUTHER BURBANK CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollar amounts in thousands)
June 30,
2022 (unaudited)		December 31,
2021
ASSETS
Cash and cash equivalents$86,548 $138,413 
Available for sale debt securities, at fair value661,432 647,317 
Held to maturity debt securities, at amortized cost (fair value of $3,067 and $4,018 at June 30, 2022 and December 31, 2021, respectively)
3,162 3,829 
Equity securities, at fair value10,772 11,693 
Loans receivable, net of allowance for loan losses of $35,535 and $35,535 at June 30, 2022 and December 31, 2021, respectively
6,602,294 6,261,885 
Accrued interest receivable19,297 17,761 
Federal Home Loan Bank ("FHLB") stock, at cost27,874 23,411 
Premises and equipment, net14,969 16,090 
Goodwill3,297 3,297 
Prepaid expenses and other assets100,871 56,261 
Total assets$7,530,516 $7,179,957 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $5,668,759 $5,538,243 
FHLB advances954,947 751,647 
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 $276 and $338 at June 30, 2022 and December 31, 2021, respectively)
94,724 94,662 
Accrued interest payable276 118 
Other liabilities and accrued expenses78,331 64,297 
Total liabilities6,858,894 6,510,824 
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred stock, no par value; 5,000,000 shares authorized; none issued and outstanding at June 30, 2022 and December 31, 2021, respectively
— — 
Common stock, no par value; 100,000,000 shares authorized; 51,063,498 and 51,682,398 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
397,620 406,904 
Retained earnings295,297 262,141 
Accumulated other comprehensive (loss) income, net of taxes(21,295)88 
Total stockholders' equity671,622 669,133 
Total liabilities and stockholders' equity$7,530,516 $7,179,957 
See accompanying notes to unaudited consolidated financial statements

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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,
2022202120222021
Interest and fee income:
Loans$56,912 $54,191 $110,545 $108,249 
Investment securities2,863 2,091 5,163 4,074 
Cash, cash equivalents and restricted cash198 34 265 84 
Total interest and fee income59,973 56,316 115,973 112,407 
Interest expense:
Deposits6,913 9,749 12,933 21,355 
FHLB advances3,628 3,839 6,725 7,772 
Junior subordinated deferrable interest debentures385 255 660 514 
Senior debt1,575 1,574 3,149 3,148 
Total interest expense12,501 15,417 23,467 32,789 
Net interest income before provision for loan losses47,472 40,899 92,506 79,618 
Provision for (reversal of) loan losses2,500 (2,500)— (5,000)
Net interest income after provision for loan losses44,972 43,399 92,506 84,618 
Noninterest income:
FHLB dividends342 371 696 738 
Other income20 139 (276)81 
Total noninterest income362 510 420 819 
Noninterest expense:
Compensation and related benefits7,070 8,641 17,289 19,021 
Deposit insurance premium479 467 960 939 
Professional and regulatory fees634 614 1,173 1,098 
Occupancy1,197 1,257 2,391 2,472 
Depreciation and amortization746 678 1,349 1,333 
Data processing1,007 873 1,995 1,846 
Marketing525 235 983 527 
Other expenses1,667 1,115 2,697 2,048 
Total noninterest expense13,325 13,880 28,837 29,284 
Income before provision for income taxes32,009 30,029 64,089 56,153 
Provision for income taxes9,442 8,813 18,582 16,526 
Net income$22,567 $21,216 $45,507 $39,627 
Basic earnings per common share$0.44 $0.41 $0.89 $0.76 
Diluted earnings per common share$0.44 $0.41 $0.89 $0.76 
Dividends per common share$0.12 $0.06 $0.24 $0.12 

See accompanying notes to unaudited consolidated financial statements

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

Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net income$22,567 $21,216 $45,507 $39,627 
Other comprehensive (loss) income:
Unrealized (loss) gain on available for sale debt securities:
Unrealized holding (loss) gain arising during the period(13,150)512 (30,115)(3,303)
Tax effect3,813 (150)8,732 959 
Total other comprehensive (loss) income, net of tax(9,337)362 (21,383)(2,344)
Comprehensive income$13,230 $21,578 $24,124 $37,283 

See accompanying notes to unaudited consolidated financial statements

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LUTHER BURBANK CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)
(Dollar amounts in thousands, except per share data)
Accumulated Other Comprehensive Income (Loss) (Net of Taxes)Total Stockholders' Equity
Common StockRetained EarningsAvailable for Sale Securities
SharesAmount
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 
Balance, March 31, 202251,403,914 $401,102 $278,856 $(11,958)$668,000 
Net income— — 22,567 — 22,567 
Other comprehensive loss— — — (9,337)(9,337)
Restricted stock forfeitures(33,739)(67)12— (55)
Stock based compensation expense— 683 — — 683 
Shares repurchased(306,677)(4,098)— — (4,098)
Cash dividends ($0.12 per share)
— — (6,138)— (6,138)
Balance, June 30, 202251,063,498 $397,620 $295,297 $(21,295)$671,622 

See accompanying notes to unaudited consolidated financial statements

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LUTHER BURBANK CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)
(Dollar amounts in thousands, except per share data)
Accumulated Other Comprehensive Income (Loss) (Net of Taxes)Total Stockholders' Equity
Common StockRetained EarningsAvailable for Sale Securities
SharesAmount
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 
Balance, December 31, 202151,682,398 $406,904 $262,141 $88 $669,133 
Net income— — 45,507 — 45,507 
Other comprehensive loss— — — (21,383)(21,383)
Restricted stock award grants206,675 — — — — 
Settled restricted stock units6,759 — — — — 
Shares withheld to pay taxes on stock based compensation(62,422)(875)— — (875)
Restricted stock forfeitures(37,839)(71)14— (57)
Stock based compensation expense— 1,396 — — 1,396 
Shares repurchased(732,073)(9,734)— — (9,734)
Cash dividends ($0.24 per share)
— — (12,365)— (12,365)
Balance, June 30, 202251,063,498 $397,620 $295,297 $(21,295)$671,622 


See accompanying notes to unaudited consolidated financial statements

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LUTHER BURBANK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollar amounts in thousands)
Six Months Ended June 30,
20222021
Cash flows from operating activities:
Net income$45,507 $39,627 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization1,349 1,333 
Provision for (reversal of) loan losses— (5,000)
Amortization of deferred loan costs, net8,815 9,831 
Amortization of premiums on investment securities, net528 1,225 
Stock based compensation expense, net of forfeitures1,325 1,234 
Change in fair value of mortgage servicing rights136 407 
Change in fair value of equity securities921 178 
Other items, net110 100 
Effect of changes in:
Accrued interest receivable(1,536)(114)
Accrued interest payable158 (861)
Prepaid expenses and other assets(5,798)2,539 
Other liabilities and accrued expenses(3,049)(5,928)
Net cash provided by operating activities48,466 44,571 
Cash flows from investing activities:
Proceeds from maturities, paydowns and calls of available for sale debt securities72,742 71,218 
Proceeds from maturities and paydowns of held to maturity debt securities659 3,070 
Purchases of available for sale debt securities(117,494)(135,200)
Net increase in loans receivable(362,403)(123,673)
Purchase of loans, including discounts/premiums— (286,917)
Purchase of FHLB stock, net(4,463)(4,013)
Purchase of premises and equipment(228)(155)
Net cash used in investing activities(411,187)(475,670)
Cash flows from financing activities:
Net increase in deposits130,516 137,643 
Proceeds from long-term FHLB advances150,000 150,000 
Repayment of long-term FHLB advances(100,000)(180,000)
Net change in short-term FHLB advances153,300 228,400 
Shares withheld for taxes on vested restricted stock(875)(901)
Shares repurchased(9,734)(6,593)
Cash paid for dividends(12,351)(6,015)
Net cash provided by financing activities310,856 322,534 
Decrease in cash, cash equivalents and restricted cash(51,865)(108,565)
Cash, cash equivalents and restricted cash, beginning of period138,413 178,861 
Cash, cash equivalents and restricted cash, end of period$86,548 $70,296 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest$23,309 $33,650 
Income taxes$15,369 $18,883 
Supplemental non-cash disclosures:
Lease liabilities arising from obtaining right-of-use assets$17,514 $— 

See accompanying notes to unaudited consolidated financial statements

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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 the Bank's wholly-owned subsidiary, Burbank Investor Services. The Company also owns Burbank Financial Inc., a real estate investment company that provides limited loan administrative support to the Bank, 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 several 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, 2021, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 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, 2022 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, 2022.

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.
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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,
2022202120222021
Net income$22,567 $21,216 $45,507 $39,627 
Weighted average basic common shares outstanding50,794,950 51,726,331 51,066,219 51,854,531 
Add: Dilutive effects of assumed vesting of restricted stock112,312 134,802 94,621 125,155 
Weighted average diluted common shares outstanding50,907,262 51,861,133 51,160,840 51,979,686 
Income per common share:
Basic EPS$0.44 $0.41 $0.89 $0.76 
Diluted EPS$0.44 $0.41 $0.89 $0.76 
Anti-dilutive shares not included in calculation of diluted earnings per share1,359 — 433 2,706 
Adoption of New Financial Accounting Standards
FASB ASU 2016-13
In June 2016, the Financial Accounting Standards Board ("FASB") issued guidance to replace the incurred loss model with an expected loss model, which is referred to as the current expected credit loss ("CECL") model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables, held to maturity debt securities, and reinsurance receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor. The transition will be applied as follows:
-    For debt securities with other than temporary impairment ("OTTI"), the guidance will be applied prospectively.
-    Existing purchased credit impaired ("PCI") assets will be grandfathered and classified as purchased credit deteriorated ("PCD") assets at the date of adoption. The assets will be grossed up for the allowance for expected credit losses for all PCD assets at the date of adoption and will continue to recognize the noncredit discount in interest income based on the yield of such assets as of the adoption date. Subsequent changes in expected credit losses will be recorded through the allowance.
-    For all other assets within the scope of CECL, a cumulative-effect adjustment will be recognized in retained earnings as of the beginning of the first reporting period in which the guidance is effective.

These amendments are effective for PBEs that are SEC filers for annual periods and interim periods within those annual periods beginning after December 15, 2019. As an emerging growth company, the Company expects to adopt this guidance on January 1, 2023. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective.
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Through June 30, 2022, CECL implementation activities have generally focused on capturing and validating loan data, segmenting the loan portfolio, evaluating credit loss methodologies and models, as well as evaluating model results and sensitivities. In determining an expected allowance under CECL, the Company has selected a credit loss model that utilizes an approach focused on a loan's probability of default and loss given default. As part of the process to test and refine our CECL model, the Company has completed quarterly model runs for analysis and backtesting purposes starting with the third quarter of 2018. This process has been on-going and will continue until our adoption date. Continuing implementation activities include the completion of a third party model validation, refining qualitative factor adjustments, finalizing policies and disclosures and evaluating, documenting and testing internal controls. We estimate that the adoption of the CECL standard would not currently result in a material change in our allowance for credit losses, which, if necessary, will be recorded as a cumulative-effect adjustment to retained earnings, net of tax as of January 1, 2023. The ultimate impact will depend on the portfolio and forecasts when the standard is adopted.
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, 2022:
Government and Government Sponsored Entities:
Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs")$416,134 $1,468 $(16,427)$401,175 
Residential MBS and CMOs222,336 129 (14,033)208,432 
Agency bonds25,576 225 — 25,801 
Other asset backed securities ("ABS")27,377 — (1,353)26,024 
Total available for sale debt securities$691,423 $1,822 $(31,813)$661,432 
At December 31, 2021:
Government and Government Sponsored Entities:
Commercial MBS and CMOs$407,111 $3,281 $(2,646)$407,746 
Residential MBS and CMOs200,775 1,225 (1,867)200,133 
Agency bonds10,587 244 — 10,831 
Other ABS28,720 37 (150)28,607 
Total available for sale debt securities$647,193 $4,787 $(4,663)$647,317 
Net unrealized gains (losses) on available for sale investment securities are recorded as accumulated other comprehensive income (loss) within stockholders’ equity and totaled $(21.3) million and $88 thousand, net of $8.7 million and $(36) thousand in tax assets (liabilities), at June 30, 2022 and December 31, 2021, 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, 2022 or 2021.

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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, 2022
Less than 12 Months12 Months or MoreTotal
(Dollars in thousands)Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
Government and Government Sponsored Entities:
Commercial MBS and CMOs$152,632 $(8,905)$71,739 $(7,522)$224,371 $(16,427)
Residential MBS and CMOs153,853 (9,659)26,193 (4,374)180,046 (14,033)
Other ABS26,024 (1,353)— — 26,024 (1,353)
Total available for sale debt securities$332,509 $(19,917)$97,932 $(11,896)$430,441 $(31,813)
At June 30, 2022, the Company held 89 residential MBS and CMOs of which 66 were in a loss position and six had been in a loss position for twelve months or more. The Company held 59 commercial MBS and CMOs of which 34 were in a loss position and ten had been in a loss position for twelve months or more. The Company held three other ABS of which three were in a loss position and none had been in a loss position for twelve months or more.
December 31, 2021
Less than 12 Months12 Months or MoreTotal
(Dollars in thousands)Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
Government and Government Sponsored Entities:
Commercial MBS and CMOs$157,031 $(2,632)$10,608 $(14)$167,639 $(2,646)
Residential MBS and CMOs118,803 (1,864)247 (3)119,050 (1,867)
Other ABS$15,253 $(150)$— $— $15,253 $(150)
Total available for sale debt securities$291,087 $(4,646)$10,855 $(17)$301,942 $(4,663)
At December 31, 2021, the Company held 88 residential MBS and CMOs of which 14 were in a loss position and four had been in a loss position for twelve months or more. The Company held 54 commercial MBS and CMOs of which 20 were in a loss position and two had been in a loss position for twelve months or more. The Company held three other ABS of which two were in a loss position and none 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, 2022 or December 31, 2021.
As of June 30, 2022 and December 31, 2021, 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, 2022:
Government Sponsored Entities:
Residential MBS$3,097 $— $(95)$3,002 
Other investments65 — — 65 
Total held to maturity investment securities$3,162 $— $(95)$3,067 
As of December 31, 2021:
Government Sponsored Entities:
Residential MBS$3,761 $189 $— $3,950 
Other investments68 — — 68 
Total held to maturity investment securities$3,829 $189 $— $4,018 
The following table summarizes the gross unrecognized losses and fair value of held to maturity investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrecognized loss position:
Less than 12 Months12 Months or MoreTotal
(Dollars in thousands)Fair ValueUnrecognized LossesFair ValueUnrecognized LossesFair ValueUnrecognized Losses
As of June 30, 2022:
Government Sponsored Entities: