
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2021
Obligations of:

U.S. government sponsored agencies	$	14,345	$	85	$	(195)	$	14,235
States and political subdivisions	221,354		4,212		(1,713)		223,853
Residential mortgage-backed securities	571,447		11,712		(4,007)		579,152
Commercial mortgage-backed securities	27,840		112		(321)		27,631
Bank-issued trust preferred securities	4,696		242		(172)		4,766

Total available-for-sale securities	$	839,682	$	16,363	$	(6,408)	$	849,637
December 31, 2020
Obligations of:

U.S. government sponsored agencies	$	4,960	$	403	$	—	$	5,363
States and political subdivisions	110,401		4,642		(124)		114,919
Residential mortgage-backed securities	609,865		15,377		(2,024)		623,218
Commercial mortgage-backed securities	4,622		161		—		4,783
Bank-issued trust preferred securities	4,696		192		(158)		4,730

Total available-for-sale securities	$	734,544	$	20,775	$	(2,306)	$	753,013

The gross unrealized losses related to residential mortgage-backed securities and obligations of states and political subdivisions at June 30, 2021 and at December 31, 2020, were attributed to changes in market interest rates and spreads since the securities were purchased.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in thousands)	2021		2020		2021		2020
Gross gains realized	$	297	$	65	$	636	$	384
Gross losses realized	(499)		(3)		(1,174)		(3)
Net (loss) gain realized	$	(202)	$	62	$	(538)	$	381


	Less than 12 Months						12 Months or More						Total
(Dollars in thousands)	Fair Value		Unrealized Loss		No. of Securities		Fair Value		Unrealized Loss		No. of Securities		Fair Value		Unrealized Loss
June 30, 2021
Obligations of:

U.S. government sponsored agencies	$	10,655	$	195	$	2	$	—	$	—	$	—	$	10,655	$	195
States and political subdivisions	73,895		1,713		28		—		—		—		73,895		1,713
Residential mortgage-backed securities	228,726		3,744		45		12,636		263		12		241,362		4,007
Commercial mortgage-backed securities	20,302		321		6		—		—		—		20,302		321
Bank-issued trust preferred securities	—		—		—		1,828		172		2		1,828		172

Total	$	333,578	$	5,973	81		$	14,464	$	435	14		$	348,042	$	6,408
December 31, 2020
Obligations of:


States and political subdivisions	$	17,651	$	124	5		$	—	$	—	—		$	17,651	$	124
Residential mortgage-backed securities	156,659		1,795		45		9,892		229		13		166,551		2,024

Bank-issued trust preferred securities	494		6		1		1,848		152		2		2,342		158

Total	$	174,804	$	1,925	51		$	11,740	$	381	15		$	186,544	$	2,306

Management evaluates available-for-sale investment securities for an allowance for credit losses on a quarterly basis. At June 30, 2021, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses. At June 30, 2021, Peoples did not have the intent to sell, nor was it more likely than not that Peoples would be required to sell, any of the securities with an unrealized loss prior to recovery. Further, the unrealized losses at both June 30, 2021 and December 31, 2020 were largely attributable to changes in market interest rates and spreads since the securities were purchased, and were not credit related losses. Accrued interest receivable is not included in investment securities balances, and is presented in the “Other assets” line of the Unaudited Consolidated Balance Sheets, with no recorded allowance for credit losses. Interest receivable on investment securities was $4.3 million at June 30, 2021 and $2.7 million at December 31, 2020.

At June 30, 2021, approximately 99% of the mortgage-backed securities with a market value that had been at an unrealized loss position for twelve months or more were issued by U.S. government sponsored agencies. The remaining 1%, or two positions, consisted of privately issued mortgage-backed securities with all of the underlying mortgages originated prior to 2004. Neither of the two positions had a fair value of less than 90% of its book value. Management analyzed the underlying credit quality of these mortgage-backed securities and concluded the unrealized losses were primarily attributable to the floating rate nature of these investments and the low remaining number of loans underlying these securities.

The unrealized losses with respect to the two bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at June 30, 2021 were primarily attributable to the subordinated nature of the debt.

The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at June 30, 2021. The weighted-average yields are based on the amortized cost. In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date.


(Dollars in thousands)	Within 1 Year			1 to 5 Years			5 to 10 Years			Over 10 Years			Total
Amortized cost
Obligations of:

U.S. government sponsored agencies	$	—		$	1,995		$	2,500		$	9,850		$	14,345
States and political subdivisions	7,714			26,841			53,403			133,396			221,354
Residential mortgage-backed securities	1			3,652			42,869			524,925			571,447
Commercial mortgage-backed securities	1,319			798			9,912			15,811			27,840
Bank-issued trust preferred securities	—			—			4,696			—			4,696

Total available-for-sale securities	$	9,034		$	33,286		$	113,380		$	683,982		$	839,682
Fair value
Obligations of:

U.S. government sponsored agencies	$	—		$	2,080		$	2,489		$	9,666		$	14,235
States and political subdivisions	7,774			27,879			54,874			133,326			223,853
Residential mortgage-backed securities	1			3,688			43,101			532,362			579,152
Commercial mortgage-backed securities	1,337			814			9,860			15,620			27,631
Bank-issued trust preferred securities	—			—			4,766			—			4,766

Total available-for-sale securities	$	9,112		$	34,461		$	115,090		$	690,974		$	849,637
Total weighted-average yield	2.20		%	2.42		%	1.91		%	1.81		%	1.85		%


(Dollars in thousands)	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2021
Obligations of:
U.S. government sponsored agencies	$	30,103	$	—	$	99	$	(757)	$	29,445
States and political subdivisions	102,425		(201)		1,079		(1,563)		101,740
Residential mortgage-backed securities	24,067		—		676		—		24,743
Commercial mortgage-backed securities	23,830		—		324		(195)		23,959
Total held-to-maturity securities	$	180,425	$	(201)	$	2,178	$	(2,515)	$	179,887
December 31, 2020
Obligations of:
States and political subdivisions	$	35,199	$	(60)	$	510	$	(165)	$	35,484
Residential mortgage-backed securities	25,890		—		852		—		26,742
Commercial mortgage-backed securities	5,429		—		427		—		5,856
Total held-to-maturity securities	$	66,518	$	(60)	$	1,789	$	(165)	$	68,082

Management evaluates held-to-maturity investment securities for an allowance for credit losses on a quarterly basis. The majority of Peoples' held-to-maturity investment securities are obligations of states and political subdivisions with the remaining securities issued by U.S. government sponsored agencies. Peoples analyzed these securities using cumulative default rate averages for investment grade municipal securities. Since December 31, 2020, Peoples purchased securities and designated them as held-to maturity and, as a result, at June 30, 2021, Peoples recorded $201,000 of allowance for credit losses for held-to-maturity securities, compared to $60,000 at December 31, 2020.


	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss		No. of Securities	Fair Value		Unrealized Loss
June 30, 2021
Obligations of:
U.S. government sponsored agencies	$	25,860	$	757	5	—		—		—	$	25,860	$	757
States and political subdivisions	47,469		1,563		14	—		—		—	47,469		1,563

Commercial mortgage-backed securities	11,534		195		2	—		—		—	11,534		195
Total	$	84,863	$	2,515	21	$	—	$	—	—	$	84,863	$	2,515
December 31, 2020
Obligations of:
States and political subdivisions	$	18,662	$	165	5	$	—	$	—	—	$	18,662	$	165


Total	$	18,662	$	165	5	$	—	$	—	—	$	18,662	$	165

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at June 30, 2021. The weighted-average yields are based on the amortized cost and are computed on a fully taxable-equivalent basis using a statutory federal corporate income tax rate of 21%. In some cases, the issuers may have the right to call or prepay obligations without call or prepayment penalties prior to the contractual maturity date.


(Dollars in thousands)	Within 1 Year			1 to 5 Years			5 to 10 Years			Over 10 Years			Total
Amortized cost
Obligations of:
U.S. government sponsored agencies	$	—		$	—		$	—		$	30,103		$	30,103
States and political subdivisions	—			989			2,511			98,925			102,425
Residential mortgage-backed securities	—			2,211			—			21,856			24,067
Commercial mortgage-backed securities	—			362			3,683			19,785			23,830
Total held-to-maturity securities	$	—		$	3,562		$	6,194		$	170,669		$	180,425
Fair value
Obligations of:
U.S. government sponsored agencies	$	—		$	—		$	—		$	29,445		$	29,445
States and political subdivisions	—			1,141			2,812			97,787			101,740
Residential mortgage-backed securities	—			2,302			—			22,441			24,743
Commercial mortgage-backed securities	—			366			3,951			19,642			23,959
Total held-to-maturity securities	$	—		$	3,809		$	6,763		$	169,315		$	179,887
Total weighted-average yield	—		%	0.23		%	3.08		%	2.13		%	2.12		%


(Dollars in thousands)	June 30, 2021		December 31, 2020
FHLB stock	$	16,523	$	21,718
FRB stock	13,311		13,311
Nonqualified deferred compensation	2,013		1,867
Equity investment securities	372		299
Other investment securities	365		365
Total other investment securities	$	32,584	$	37,560

During the three and six months ended June 30, 2021, Peoples recorded the change in the fair value of equity investment securities held during the period, in "Other non-interest income", resulting in unrealized gain of $42,000 and $73,000, respectively.

During the three and six months ended June 30, 2020, Peoples recorded the change in the fair value of equity investment securities held during the period, in "Other non-interest income", resulting in unrealized gain $16,000 and unrealized loss of $15,000, respectively.

At June 30, 2021, Peoples' investment in equity investment securities was comprised largely of common stocks issued by various unrelated bank holding companies. There were no equity investment securities of a single issuer that exceeded 10% of Peoples' stockholders' equity.

Peoples has pledged available-for-sale investment securities and held-to-maturity investment securities to secure public and trust department deposits, and repurchase agreements in accordance with federal and state requirements. Peoples has also pledged available-for-sale investment securities to secure additional borrowing capacity at the FHLB and the FRB as well as to derivative counterparties as collateral on unrealized interest rate and cash flow hedge swaps.


	Carrying Amount
(Dollars in thousands)	June 30, 2021		December 31, 2020

Securing public and trust department deposits, and repurchase agreements:
Available-for-sale	$	559,889	$	547,244
Held-to-maturity	118,803		28,287
Securing collateral for cash flow hedge swaps:
Available-for-sale	39,640		—
Securing additional borrowing capacity at the FHLB and the FRB:
Available-for-sale	2,300		2,175