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Investment Securities
 6 Months Ended
Jun. 30, 2022
Marketable Securities [Abstract]  
Investment Securities

7. Investment Securities

The following is a summary of available-for-sale securities:

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Loss

 

 

Fair Value

 

 

 

(In Thousands)

 

At June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-Sale Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of U.S. government corporations and agencies

 

$

174,154

 

 

$

—

 

 

$

(21,132

)

 

$

153,022

 

Mortgage-backed securities

 

 

209,527

 

 

 

14

 

 

 

(24,145

)

 

 

185,396

 

Collateralized mortgage obligations

 

 

315,850

 

 

 

—

 

 

 

(33,862

)

 

 

281,988

 

Asset-backed securities

 

 

212,019

 

 

 

620

 

 

 

(7,657

)

 

 

204,982

 

Corporate bonds

 

 

74,283

 

 

 

21

 

 

 

(3,392

)

 

 

70,912

 

Obligations of state and political subdivisions

 

 

287,132

 

 

 

360

 

 

 

(43,326

)

 

 

244,166

 

Total Available-for-Sale

 

$

1,272,965

 

 

$

1,015

 

 

$

(133,514

)

 

$

1,140,466

 

 

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Loss

 

 

Fair Value

 

 

 

(In Thousands)

 

At December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of U.S. government corporations and agencies

 

$

174,644

 

 

$

984

 

 

$

(918

)

 

$

174,710

 

Mortgage-backed securities

 

 

208,281

 

 

 

851

 

 

 

(2,381

)

 

 

206,751

 

Collateralized mortgage obligations

 

 

264,541

 

 

 

363

 

 

 

(4,736

)

 

 

260,168

 

Asset-backed securities

 

 

221,545

 

 

 

610

 

 

 

(1,619

)

 

 

220,536

 

Corporate bonds

 

 

70,008

 

 

 

1,160

 

 

 

(275

)

 

 

70,893

 

Obligations of state and political subdivisions

 

 

272,334

 

 

 

5,898

 

 

 

(5,030

)

 

 

273,202

 

Total Available-for-Sale

 

$

1,211,353

 

 

$

9,866

 

 

$

(14,959

)

 

$

1,206,260

 

The amortized cost and fair value of the investment securities portfolio at June 30, 2022, are shown below by contractual maturity. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. For purposes of the maturity table, mortgage-backed securities (“MBS”), CMOs and asset-backed securities (“ABS”), which are not due at a single maturity date, have not been allocated over the maturity groupings. These securities may mature earlier than their weighted-average contractual maturities because of principal prepayments.

 

 

 

Available-for-Sale

 

 

 

Amortized
Cost

 

 

Fair Value

 

 

 

(In Thousands)

 

Due in one year or less

 

$

3,100

 

 

$

3,117

 

Due after one year through five years

 

 

49,941

 

 

 

47,457

 

Due after five years through ten years

 

 

210,001

 

 

 

192,538

 

Due after ten years

 

 

272,527

 

 

 

224,988

 

MBS/CMO/ABS

 

 

737,396

 

 

 

672,366

 

 

 

$

1,272,965

 

 

$

1,140,466

 

 

Investment securities with a carrying amount of $580.9 million and $564.4 million at June 30, 2022 and December 31, 2021, respectively, were pledged as collateral on public deposits.

The following tables summarize Premier’s securities that were in an unrealized loss position at June 30, 2022, and December 31, 2021:

 

 

 

Duration of Unrealized Loss Position

 

 

 

 

 

 

 

 

 

Less than 12 Months

 

 

12 Months or Longer

 

 

Total

 

 

 

Fair Value

 

 

Gross
Unrealized
Loss

 

 

Fair Value

 

 

Gross
Unrealized
Loss

 

 

Fair Value

 

 

Unrealized
Loss

 

 

 

(In Thousands)

 

At June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of U.S. government corporations and agencies

 

$

145,333

 

 

$

(18,573

)

 

$

7,689

 

 

$

(2,559

)

 

$

153,022

 

 

$

(21,132

)

Mortgage-backed securities

 

 

125,194

 

 

 

(15,695

)

 

 

56,238

 

 

 

(8,450

)

 

 

181,432

 

 

 

(24,145

)

Collateralized mortgage obligations

 

 

245,728

 

 

 

(28,311

)

 

 

36,260

 

 

 

(5,551

)

 

 

281,988

 

 

 

(33,862

)

Asset-backed securities

 

 

160,734

 

 

 

(7,435

)

 

 

6,765

 

 

 

(222

)

 

 

167,499

 

 

 

(7,657

)

Corporate bonds

 

 

65,177

 

 

 

(3,346

)

 

 

1,213

 

 

 

(46

)

 

 

66,390

 

 

 

(3,392

)

Obligations of state and political subdivisions

 

 

137,603

 

 

 

(21,179

)

 

 

69,408

 

 

 

(22,147

)

 

 

207,011

 

 

 

(43,326

)

Total available-for-sale

 

$

879,769

 

 

$

(94,539

)

 

$

177,573

 

 

$

(38,975

)

 

$

1,057,342

 

 

$

(133,514

)

 

 

 

 

Duration of Unrealized Loss Position

 

 

 

 

 

 

 

 

 

Less than 12 Months

 

 

12 Months or Longer

 

 

Total

 

 

 

Fair Value

 

 

Gross
Unrealized
Loss

 

 

Fair Value

 

 

Gross
Unrealized
Loss

 

 

Fair Value

 

 

Unrealized
Loss

 

 

 

(In Thousands)

 

At December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of U.S. government corporations and agencies

 

$

73,810

 

 

$

(918

)

 

$

—

 

 

$

—

 

 

$

73,810

 

 

$

(918

)

Mortgage-backed securities-residential

 

 

167,379

 

 

 

(2,048

)

 

 

13,689

 

 

 

(333

)

 

 

181,068

 

 

 

(2,381

)

Collateralized mortgage obligations

 

 

222,134

 

 

 

(4,736

)

 

 

—

 

 

 

—

 

 

 

222,134

 

 

 

(4,736

)

Asset-backed securities

 

 

140,226

 

 

 

(1,589

)

 

 

2,705

 

 

 

(30

)

 

 

142,931

 

 

 

(1,619

)

Corporate bonds

 

 

24,173

 

 

 

(270

)

 

 

504

 

 

 

(5

)

 

 

24,677

 

 

 

(275

)

Obligations of state and political subdivisions

 

 

99,199

 

 

 

(3,355

)

 

 

34,548

 

 

 

(1,675

)

 

 

133,747

 

 

 

(5,030

)

Total available-for-sale

 

$

726,921

 

 

$

(12,916

)

 

$

51,446

 

 

$

(2,043

)

 

$

778,367

 

 

$

(14,959

)

 

The Company realized no gains from the sale of available-for-sale securities in the three and six months ended June 30, 2022. For the three and six months ended June 30, 2021, the Company had $1.5 million and $2.0 million in realized gains from the sale of investment securities.

 

Quarterly, the Company evaluates if any security has a fair value less than its amortized cost. Once these securities are identified, in order to determine whether a decline in fair value resulted from a credit loss or other factors, the Company performs further analysis as outlined below:

 

•
Review the extent to which the fair value is less than the amortized cost and observe the security’s lowest credit rating as reported by third-party credit ratings companies.

 

•
Any securities that are downgraded by a third party ratings company above would be subjected to additional analysis that may include, but is not limited to: changes in market interest rates, changes in securities credit ratings, security type, service area economic factors, financial performance of the issuer/or obligor of the underlying issue and third-party guarantee.
•
If the Company determines that a credit loss exists, the credit portion of the allowance will be measured using a DCF analysis using the effective interest rate as of the security’s purchase date. The amount of credit loss the Company records will be limited to the amount by which the amortized cost exceeds the fair value. As of June 30, 2022, management had determined that no credit loss exists.

 

At June 30, 2022, and December 31, 2021, the Company held preferred and common stock of various bank holding companies totaling $13.3 million and $14.1 million, respectively. During the three and six months ended June 30, 2022, $1.2 million and $1.8 million of unrealized losses were recorded within gain (loss) on equity securities on the Consolidated Condensed Statements of Income. During the three and six months ended June 30, 2021, $808,000 of unrealized losses and $802,000 of unrealized gains were recorded within gain (loss) on equity securities on the Consolidated Condensed Statements of Income.