Investment Securities

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investment securities at March 31, 2023 and at December 31, 2022, were as follows:


Debt securities AFS (In thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
March 31, 2023:
Obligations of U.S. Government sponsored entities	$	39,000	$	—	$	1,656	$	37,344
Obligations of states and political subdivisions	422,398		3,941		14,333		412,006
U.S. Government sponsored entities' asset-backed securities	805,466		—		75,205		730,261
Collateralized loan obligations	535,436		—		16,008		519,428
Corporate debt securities	17,650		—		2,249		15,401
Total	$	1,819,950	$	3,941	$	109,451	$	1,714,440


Debt securities AFS (In thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
December 31, 2022:
Obligations of U.S. Government sponsored entities	$	39,000	$	—	$	1,787	$	37,213
Obligations of states and political subdivisions	423,285		1,620		18,194		406,711
U.S. Government sponsored entities' asset-backed securities	839,399		—		82,638		756,761
Collateralized loan obligations	535,518		—		18,979		516,539
Corporate debt securities	17,650		—		1,178		16,472
Total	$	1,854,852	$	1,620	$	122,776	$	1,733,696

Investment securities in an unrealized loss position at March 31, 2023, 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. Government sponsored entities	$	13,411	$	590	$	23,933	$	1,066	$	37,344	$	1,656
Obligations of states and political subdivisions	52,910		1,102		85,762		13,231		138,672		14,333
U.S. Government sponsored entities' asset-backed securities	197,348		7,644		532,913		67,561		730,261		75,205
Collateralized loan obligations	35,179		492		484,249		15,516		519,428		16,008
Corporate debt securities	11,844		1,556		3,557		693		15,401		2,249
Total	$	310,692	$	11,384	$	1,130,414	$	98,067	$	1,441,106	$	109,451

Investment securities in an unrealized loss position at December 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. Government sponsored entities	$	37,213	$	1,787	$	—	$	—	$	37,213	$	1,787
Obligations of states and political subdivisions	270,905		18,194		—		—		270,905		18,194
U.S. Government sponsored entities' asset-backed securities	446,423		27,507		310,338		55,131		756,761		82,638
Collateralized loan obligations	415,491		15,446		101,048		3,533		516,539		18,979
Corporate debt securities	7,388		862		1,684		316		9,072		1,178
Total	$	1,177,420	$	63,796	$	413,070	$	58,980	$	1,590,490	$	122,776

At March 31, 2023, Park’s debt securities portfolio consisted of $1.7 billion of securities, $1.4 billion of which were in an unrealized loss position with unrealized losses of $109.5 million. Of the $1.4 billion of securities in an unrealized loss position, $1.1 billion were in an unrealized loss position for 12 months or longer. Of the $109.5 million in unrealized losses, an aggregate of $76.9 million were related to Park's "Obligations of U.S. Government sponsored entities" portfolio and 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. Management periodically reviews the credit profile of each non-agency debt security and assesses whether any impairment to the contractually obligated cash flow is likely to occur. Based on these reviews, management has concluded that the underlying creditworthiness for each security remains sufficient to maintain required payment obligations and, therefore, unrealized losses have not been recognized into net income. 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, 2023 or December 31, 2022. Additionally, for the three months ended March 31, 2023 and 2022, 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, 2023, 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	$	37,344	2.37	%

Obligations of state and political subdivisions:
Due one through five years	$	2,280	$	2,282	2.97	%
Due five through ten years	275,512		278,622		3.69	%
Due over ten years	144,606		131,102		3.12	%
Total (1)	$	422,398	$	412,006	3.49	%

U.S. Government sponsored entities' asset-backed securities	$	805,466	$	730,261	1.90	%

Collateralized loan obligations	$	535,436	$	519,428	6.51	%

Corporate debt securities
Due five through ten years	$	17,650	$	15,401	3.89	%

(1) The tax equivalent yield for certain obligations of state and political subdivisions includes the effect 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, 2023 or 2022.

Investment securities having a fair value of $778.7 million and $753.6 million at March 31, 2023 and December 31, 2022, respectively, were pledged to collateralize government and public fund deposits, to secure repurchase agreements sold and as collateral for FHLB advance borrowings.