Investment Securities

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Investment securities at September 30, 2024 and at December 31, 2023, were as follows:


Debt securities AFS (In thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
September 30, 2024:
Obligations of U.S. Government sponsored entities	$	250	$	—	$	2	$	248
Obligations of states and political subdivisions	219,248		484		13,362		206,370
U.S. Government sponsored entities' asset-backed securities	608,962		74		48,187		560,849
Collateralized loan obligations	343,370		434		75		343,729
Corporate debt securities	20,732		4		2,057		18,679
Total	$	1,192,562	$	996	$	63,683	$	1,129,875


Debt securities AFS (In thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
December 31, 2023:
Obligations of states and political subdivisions	$	251,531	$	1,173	$	11,520	$	241,184
U.S. Government sponsored entities' asset-backed securities	703,645		23		68,193		635,475
Collateralized loan obligations	443,112		31		4,857		438,286
Corporate debt securities	20,482		—		2,585		17,897
Total	$	1,418,770	$	1,227	$	87,155	$	1,332,842

Investment securities in an unrealized loss position at September 30, 2024, 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	$	248	$	2	$	—	$	—	$	248	$	2
Obligations of states and political subdivisions	23,999		312		144,936		13,050		168,935		13,362
U.S. Government sponsored entities' asset-backed securities	—		—		553,361		48,187		553,361		48,187
Collateralized loan obligations	66,578		22		73,616		53		140,194		75
Corporate debt securities	944		16		15,609		2,041		16,553		2,057
Total	$	91,769	$	352	$	787,522	$	63,331	$	879,291	$	63,683

Investment securities in an unrealized loss position at December 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 states and political subdivisions	$	46,685	$	420	$	103,993	$	11,100	$	150,678	$	11,520
U.S. Government sponsored entities' asset-backed securities	—		—		634,261		68,193		634,261		68,193
Collateralized loan obligations	—		—		404,019		4,857		404,019		4,857
Corporate debt securities	9,530		702		8,367		1,883		17,897		2,585
Total	$	56,215	$	1,122	$	1,150,640	$	86,033	$	1,206,855	$	87,155

At September 30, 2024, Park’s debt securities portfolio consisted of $1.1 billion of securities, $879.3 million of which were in an unrealized loss position with aggregate unrealized losses of $63.7 million. Of the $879.3 million of securities in an unrealized loss position, $787.5 million were in an unrealized loss position for 12 months or longer. Of the $63.7 million in unrealized losses, $48.2 million were related to Park's "Obligations of U.S. Government sponsored entities" and "U.S. Government sponsored entities' asset-backed securities" portfolios. For non-agency debt securities, Park verified that the current credit ratings remain above investment grade. On a quarterly basis, management 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 that changes in value are largely the result of changes in the yield curve, 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 interest rates change.

There was no ACL recorded for debt securities AFS at either September 30, 2024 or December 31, 2023. Additionally, for the three months and the nine months ended September 30, 2024 and 2023, there were no credit-related investment impairment losses recognized.

The amortized cost and estimated fair value of investments in debt securities AFS at September 30, 2024, 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.Government sponsored entities
Due within one year	$	250	$	248	2.88	%
Total	$	250	$	248	2.88	%

Obligations of state and political subdivisions:
Due within one year	$	250	$	250	6.06	%
Due one through five years	1,494		1,494		3.15	%
Due five through ten years	94,696		91,936		3.18	%
Due over ten years	122,808		112,690		3.19	%
Total	$	219,248	$	206,370	3.19	%

U.S. Government sponsored entities' asset-backed securities	$	608,962	$	560,849	1.86	%

Collateralized loan obligations	$	343,370	$	343,729	7.00	%

Corporate debt securities
Due within one year	$	961	$	945	9.67	%
Due five through ten years	19,771		17,734		4.10	%
Total	$	20,732	$	18,679	4.36	%

(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.

During the nine-month period ended September 30, 2024, Park sold certain AFS debt securities with a book value of $31.2 million at a gross loss of $398,000. There were no sales of debt securities AFS during the three month period ended September 30, 2024. There were no sales of debt securities AFS during the three month or nine-month periods ended September 30, 2023.

Investment securities having a fair value of $724.7 million and $602.0 million at September 30, 2024 and December 31, 2023, respectively, were pledged to collateralize government and public fund deposits, to secure repurchase agreements and as collateral for FHLB advance borrowings.