Investment Securities

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Investment securities at March 31, 2022 and December 31, 2021, were as follows:


Debt securities AFS (In thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
March 31, 2022:
Obligations of U.S. Treasury and other U.S. Government sponsored entities	$	39,000	$	—	$	438	$	38,562
Obligations of states and political subdivisions	374,101		6,572		9,032		371,641
U.S. Government sponsored entities' asset-backed securities	870,576		1,185		36,959		834,802
Collateralized loan obligations	500,029		—		5,112		494,917
Corporate debt securities	17,250		125		150		17,225
Total	$	1,800,956	$	7,882	$	51,691	$	1,757,147


Debt securities AFS (In thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
December 31, 2021:
Obligations of states and political subdivisions	$	366,933	$	22,682	$	24	$	389,591
U.S. Government sponsored entities' asset-backed securities	849,114		13,437		8,088		854,463
Collateralized loan obligations	500,066		3		1,395		498,674
Corporate debt securities	11,250		169		7		11,412
Total	$	1,727,363	$	36,291	$	9,514	$	1,754,140

Investment securities in an unrealized loss position at March 31, 2022, were as follows:


	Unrealized loss position for less than 12 months				Unrealized loss position for 12 months or longer				Total
(In thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Debt securities AFS:
Obligations of U.S. Treasury and other U.S. Government sponsored entities	$	24,562	$	438	$	—	$	—	$	24,562	$	438
Obligations of states and political subdivisions	91,029		9,032		—		—		91,029		9,032
U.S. Government sponsored entities' asset-backed securities	532,506		21,675		149,376		15,284		681,882		36,959
Collateralized loan obligations	494,917		5,112		—		—		494,917		5,112
Corporate debt securities	4,100		150		—		—		4,100		150
Total	$	1,147,114	$	36,407	$	149,376	$	15,284	$	1,296,490	$	51,691

Investment securities in an unrealized loss position at December 31, 2021, were as follows:


	Unrealized loss position for less than 12 months				Unrealized loss position for 12 months or longer				Total
(In thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Debt securities AFS:
Obligations of states and political subdivisions	$	1,834	$	24	$	—	$	—	$	1,834	$	24
U.S. Government sponsored entities' asset-backed securities	333,653		4,996		73,431		3,092		407,084		8,088
Collateralized loan obligations	429,671		1,395		—		—		429,671		1,395
Corporate debt securities	2,243		7		—		—		2,243		7
Total	$	767,401	$	6,422	$	73,431	$	3,092	$	840,832	$	9,514

At March 31, 2022, Park’s debt securities portfolio consisted of $1.8 billion of securities, $1.3 billion of which were in an unrealized loss position with unrealized losses of $51.7 million. Of the $1.3 billion of securities in an unrealized loss position, $149.4 million were in an unrealized loss position for 12 months or longer. The majority of the unrealized losses were related to Park’s U.S. Government sponsored entities' asset-backed securities portfolio. For non-agency debt securities, Park verified that the current credit ratings remain above investment grade. Unrealized losses have not been recognized into earnings as they represent negative adjustments to fair value relative to the rate of interest paid on the securities and not losses related to the creditworthiness of the respective issuers. Management does not intend to sell, and it is not more likely than not that management would be required to sell, the securities prior to their anticipated recovery in respect of the unrealized losses. Management believes the value will recover as the securities approach maturity or market rates change.

There was no allowance for credit losses recorded for debt securities AFS at either March 31, 2022 or December 31, 2021. Additionally, for the three months ended March 31, 2022 and 2021, there were no credit-related investment impairment losses recognized.

The amortized cost and estimated fair value of investments in debt securities AFS at March 31, 2022, are shown in the following table by contractual maturity, except for asset-backed securities and collateral loan obligations, which are shown as a

single total, due to the unpredictability of the timing of principal repayments. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.


(In thousands)	Amortized cost		Fair value		Tax equivalent yield (1)
Debt Securities AFS
Obligations of U.S. Treasury and other U.S. Government sponsored entities
Due one through five years	$	39,000	$	38,562	2.37	%

Obligations of state and political subdivisions:
Due five through ten years	$	245,269	$	250,847	3.68	%
Due over ten years	128,832		120,794		2.67	%
Total (1)	$	374,101	$	371,641	3.33	%

U.S. Government sponsored entities' asset-backed securities	$	870,576	$	834,802	1.75	%

Collateralized loan obligations	$	500,029	$	494,917	1.96	%

Corporate debt securities
Due five through ten years	$	17,250	$	17,225	3.79	%

(1) The tax equivalent yield for certain obligations of state and political subdivisions includes the effects of a taxable equivalent adjustment using a 21% federal corporate income tax rate.

There were no sales of debt securities AFS during the three-month periods ended March 31, 2022 or 2021.

Investment securities having an amortized cost of $690.4 million and $733.7 million at March 31, 2022 and December 31, 2021, respectively, were pledged to collateralize government and trust department deposits in accordance with federal and state requirements, to secure repurchase agreements sold and as collateral for FHLB advance borrowings.