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Investment Securities | 3 Months Ended
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Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment Securities Available-for-sale The following table summarizes Peoples' available-for-sale investment securities:
(Dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value
March 31, 2024 |  |  |  |
Obligations of: |  |  |  |
U.S. Treasury and government agencies | $ | 29,807 |  | $ | 113 |  | $ | (1,147) |  | $ | 28,773 |
U.S. government sponsored agencies | 210,871 |  | 597 |  | (11,008) |  | 200,460 |
States and political subdivisions | 237,207 |  | 92 |  | (28,549) |  | 208,750 |
Residential mortgage-backed securities | 717,657 |  | 1,366 |  | (97,332) |  | 621,691 |
Commercial mortgage-backed securities | 60,277 |  | 1 |  | (9,487) |  | 50,791 |
Bank-issued trust preferred securities | 6,500 |  | — |  | (499) |  | 6,001 |
Total available-for-sale securities | $ | 1,262,319 |  | $ | 2,169 |  | $ | (148,022) |  | $ | 1,116,466 |
December 31, 2023 |  |  |  |
Obligations of: |  |  |  |
U.S. Treasury and government agencies | $ | 30,999 |  | $ | 292 |  | $ | (995) |  | $ | 30,296 |
U.S. government sponsored agencies | 128,500 |  | 639 |  | (10,532) |  | 118,607 |
States and political subdivisions | 239,906 |  | 485 |  | (27,095) |  | 213,296 |
Residential mortgage-backed securities | 717,772 |  | 1,819 |  | (90,667) |  | 628,924 |
Commercial mortgage-backed securities | 60,611 |  | 5 |  | (9,382) |  | 51,234 |
Bank-issued trust preferred securities | 6,500 |  | — |  | (535) |  | 5,965 |
Total available-for-sale securities | $ | 1,184,288 |  | $ | 3,240 |  | $ | (139,206) |  | $ | 1,048,322 |
The gross gains and losses realized by Peoples from sales of available-for-sale securities for the periods ended March 31 were as follows:
|  |  | Three Months Ended
|  |  | March 31,
(Dollars in thousands) |  |  |  | 2024 | 2023
Gross gains realized |  |  |  | $ | — |  | $ | 78 |
Gross losses realized |  |  |  | 1 |  | 2,013 |
Net (loss) gain realized |  |  |  | $ | (1) |  | $ | (1,935) |
The cost of investment securities sold, and any resulting gain or loss, were based on the specific identification method and recognized as of the trade date. The following table presents a summary of available-for-sale investment securities that have been in a continuous unrealized loss position for the periods identified:
| 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
March 31, 2024 |  |  |  |  |  |  |  |  |  |
Obligations of: |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies | $ | 12,003 |  | $ | 173 |  | 23 |  |  | $ | 11,565 |  | $ | 974 |  | 5 |  |  | $ | 23,568 |  | $ | 1,147 |
U.S. government sponsored agencies | 63,921 |  | 114 |  | 10 |  |  | 77,014 |  | 10,894 |  | 15 |  |  | 140,935 |  | 11,008 |
States and political subdivisions | 26,352 |  | 439 |  | 66 |  |  | 171,591 |  | 28,110 |  | 144 |  |  | 197,943 |  | 28,549 |
Residential mortgage-backed securities | 70,006 |  | 1,833 |  | 75 |  |  | 517,070 |  | 95,499 |  | 239 |  |  | 587,076 |  | 97,332 |
Commercial mortgage-backed securities | 6,380 |  | 152 |  | 8 |  |  | 44,290 |  | 9,335 |  | 21 |  |  | 50,670 |  | 9,487 |
Bank-issued trust preferred securities | 1,988 |  | 12 |  | 1 |  |  | 4,013 |  | 487 |  | 3 |  |  | 6,001 |  | 499 |
Total | $ | 180,650 |  | $ | 2,723 |  | 183 |  |  | $ | 825,543 |  | $ | 145,299 |  | 427 |  |  | $ | 1,006,193 |  | $ | 148,022 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |
Obligations of: |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies | $ | 8,568 |  | $ | 83 |  | 22 |  |  | $ | 11,631 |  | $ | 912 |  | 5 |  |  | $ | 20,199 |  | $ | 995 |
U.S. government sponsored agencies | 14,439 |  | 35 |  | 4 |  |  | 74,211 |  | 10,497 |  | 15 |  |  | 88,650 |  | 10,532 |
States and political subdivisions | 18,268 |  | 136 |  | 32 |  |  | 167,346 |  | 26,959 |  | 138 |  |  | 185,614 |  | 27,095 |
Residential mortgage-backed securities | 58,671 |  | 1,150 |  | 66 |  |  | 529,895 |  | 89,517 |  | 238 |  |  | 588,566 |  | 90,667 |
Commercial mortgage-backed securities | 6,000 |  | 112 |  | 7 |  |  | 44,656 |  | 9,270 |  | 21 |  |  | 50,656 |  | 9,382 |
Bank-issued trust preferred securities | 1,984 |  | 16 |  | 1 |  |  | 3,981 |  | 519 |  | 3 |  |  | 5,965 |  | 535 |
Total | $ | 107,930 |  | $ | 1,532 |  | 132 |  |  | $ | 831,720 |  | $ | 137,674 |  | 420 |  |  | $ | 939,650 |  | $ | 139,206 |
Management evaluates available-for-sale investment securities for an allowance for credit losses on a quarterly basis. At March 31, 2024, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses. At March 31, 2024, 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 March 31, 2024 and December 31, 2023 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 $9.8 million at March 31, 2024 and $8.8 million at December 31, 2023. The unrealized loss with respect to the three bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at March 31, 2024 was attributable to the subordinated nature of the trust preferred securities. The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at March 31, 2024. 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. Treasury and government agencies | $ | 985 |  | $ | 15,661 |  | $ | 7,272 |  | $ | 5,889 |  | $ | 29,807 |
U.S. government sponsored agencies | — |  | 62,046 |  | 64,074 |  | 84,751 |  | 210,871 |
States and political subdivisions | 10,319 |  | 45,388 |  | 59,362 |  | 122,138 |  | 237,207 |
Residential mortgage-backed securities | 1 |  | 3,330 |  | 59,060 |  | 655,266 |  | 717,657 |
Commercial mortgage-backed securities | — |  | 12,392 |  | 27,108 |  | 20,777 |  | 60,277 |
Bank-issued trust preferred securities | 2,000 |  | 1,000 |  | 3,500 |  | — |  | 6,500 |
Total available-for-sale securities | $ | 13,305 |  | $ | 139,817 |  | $ | 220,376 |  | $ | 888,821 |  | $ | 1,262,319 |
Fair value |  |  |  |  |
Obligations of: |  |  |  |  |
U.S. Treasury and government agencies | $ | 978 |  | $ | 14,619 |  | $ | 7,303 |  | $ | 5,873 |  | $ | 28,773 |
U.S. government sponsored agencies | — |  | 57,082 |  | 60,078 |  | 83,300 |  | 200,460 |
States and political subdivisions | 10,264 |  | 42,516 |  | 50,785 |  | 105,185 |  | 208,750 |
Residential mortgage-backed securities | 1 |  | 3,208 |  | 53,811 |  | 564,671 |  | 621,691 |
Commercial mortgage-backed securities | — |  | 11,223 |  | 22,783 |  | 16,785 |  | 50,791 |
Bank-issued trust preferred securities | 1,988 |  | 942 |  | 3,071 |  | — |  | 6,001 |
Total available-for-sale securities | $ | 13,231 |  | $ | 129,590 |  | $ | 197,831 |  | $ | 775,814 |  | $ | 1,116,466 |
Total weighted-average yield | 3.59 | % | 2.31 | % | 2.77 | % | 2.73 | % | 2.70 | %
Held-to-maturity The following table summarizes Peoples’ held-to-maturity investment securities:
(Dollars in thousands) | Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value
March 31, 2024 |  |  |  |  |
Obligations of: |  |  |  |  |
U.S. government sponsored agencies | $ | 188,423 |  | $ | — |  | $ | 309 |  | $ | (9,087) |  | $ | 179,645 |
States and political subdivisions | 144,315 |  | (238) |  | 73 |  | (31,075) |  | 113,075 |
Residential mortgage-backed securities | 246,579 |  | — |  | 672 |  | (21,630) |  | 225,621 |
Commercial mortgage-backed securities | 100,427 |  | — |  | — |  | (16,656) |  | 83,771 |
Total held-to-maturity investment securities | $ | 679,744 |  | $ | (238) |  | $ | 1,054 |  | $ | (78,448) |  | $ | 602,112 |
December 31, 2023 |  |  |  |  |
Obligations of: |  |  |  |  |
U.S. government sponsored agencies | $ | 188,475 |  | $ | — |  | $ | 489 |  | $ | (8,139) |  | $ | 180,825 |
States and political subdivisions | 144,496 |  | (238) |  | 134 |  | (30,104) |  | 114,288 |
Residential mortgage-backed securities | 248,559 |  | — |  | 1,643 |  | (18,582) |  | 231,620 |
Commercial mortgage-backed securities | 102,365 |  | — |  | — |  | (17,076) |  | 85,289 |
Total held-to-maturity investment securities | $ | 683,895 |  | $ | (238) |  | $ | 2,266 |  | $ | (73,901) |  | $ | 612,022 |
There were no sales of held-to-maturity investment securities during either of the three months ended March 31, 2024 or 2023. Management evaluates held-to-maturity investment securities for an allowance for credit losses on a quarterly basis. Peoples has determined that the loss given default for U.S. government sponsored agencies investment securities is zero, due to the fact that it is unlikely the ultimate guarantor (the U.S. government) would not perform on its implicit guarantee in the event of default. The remaining securities are included in the calculation of the allowance for credit losses for held-to-maturity investment securities. Peoples reported $0.2 million of allowance for credit losses for held-to-maturity securities at both March 31, 2024, and December 31, 2023. The following table presents a summary of held-to-maturity investment securities that had been in a continuous unrealized loss position for the periods identified:
| 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
March 31, 2024 |  |  |  |  |  |  |  |  |  |
Obligations of: |  |  |  |  |  |  |  |  |  |
U.S. government sponsored agencies | $ | 35,986 |  | $ | 537 |  | 12 |  |  | 118,531 |  | 8,550 |  | 21 |  |  | $ | 154,517 |  | $ | 9,087 |
States and political subdivisions | — |  | — |  | — |  |  | 109,887 |  | 31,075 |  | 67 |  |  | 109,887 |  | 31,075 |
Residential mortgage-backed securities | 51,550 |  | 1,274 |  | 17 |  |  | 133,314 |  | 20,356 |  | 39 |  |  | 184,864 |  | 21,630 |
Commercial mortgage-backed securities | 8,575 |  | 1,297 |  | 5 |  |  | 73,196 |  | 15,359 |  | 30 |  |  | 81,771 |  | 16,656 |
Total | $ | 96,111 |  | $ | 3,108 |  | 34 |  |  | $ | 434,928 |  | $ | 75,340 |  | 157 |  |  | $ | 531,039 |  | $ | 78,448 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |
Obligations of: |  |  |  |  |  |  |  |  |  |
U.S. government sponsored agencies | $ | 64,487 |  | $ | 356 |  | 14 |  |  | $ | 86,071 |  | $ | 7,783 |  | 18 |  |  | $ | 150,558 |  | $ | 8,139 |
States and political subdivisions | — |  | — |  | — |  |  | 111,040 |  | 30,104 |  | 67 |  |  | 111,040 |  | 30,104 |
Residential mortgage-backed securities | 44,379 |  | 1,105 |  | 14 |  |  | 117,654 |  | 17,477 |  | 34 |  |  | 162,033 |  | 18,582 |
Commercial mortgage-backed securities | 13,919 |  | 1,845 |  | 6 |  |  | 71,370 |  | 15,231 |  | 31 |  |  | 85,289 |  | 17,076 |
Total | $ | 122,785 |  | $ | 3,306 |  | 34 |  |  | $ | 386,135 |  | $ | 70,595 |  | 150 |  |  | $ | 508,920 |  | $ | 73,901 |
The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity investment securities by contractual maturity at March 31, 2024. The weighted-average yields are based on the amortized cost and are computed on a fully taxable-equivalent basis using a blended federal and state corporate income tax rate of 23.2% at March 31, 2024. 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 | 10,500 |  | $ | 10,643 |  | $ | 67,056 |  | $ | 100,224 |  | $ | 188,423 |
States and political subdivisions | — |  | 6,422 |  | 11,419 |  | 126,474 |  | 144,315 |
Residential mortgage-backed securities | — |  | 451 |  | 4,241 |  | 241,887 |  | 246,579 |
Commercial mortgage-backed securities | 1,490 |  | 9,371 |  | 38,821 |  | 50,745 |  | 100,427 |
Total held-to-maturity investment securities | $ | 11,990 |  | $ | 26,887 |  | $ | 121,537 |  | $ | 519,330 |  | $ | 679,744 |
Fair value |  |  |  |  |
Obligations of: |  |  |  |  |
U.S. government sponsored agencies | 10,419 |  | $ | 10,144 |  | $ | 66,436 |  | $ | 92,646 |  | $ | 179,645 |
States and political subdivisions | — |  | 6,249 |  | 9,813 |  | 97,013 |  | 113,075 |
Residential mortgage-backed securities | — |  | 441 |  | 3,696 |  | 221,484 |  | 225,621 |
Commercial mortgage-backed securities | 1,478 |  | 8,719 |  | 32,914 |  | 40,660 |  | 83,771 |
Total held-to-maturity investment securities | $ | 11,897 |  | $ | 25,553 |  | $ | 112,859 |  | $ | 451,803 |  | $ | 602,112 |
Total weighted-average yield | 3.85 | % | 2.51 | % | 4.00 | % | 3.51 | % | 3.57 | %
Other Investment Securities Peoples' other investment securities on the Unaudited Consolidated Balance Sheets consist largely of shares of FHLB stock and of FRB stock. The following table summarizes the carrying value of Peoples' other investment securities:
(Dollars in thousands) | March 31, 2024 | December 31, 2023
FHLB stock | $ | 28,426 |  | $ | 29,949 |
FRB stock | 27,114 |  | 26,896 |
Nonqualified deferred compensation | 3,890 |  | 3,162 |
Equity investment securities | 2,640 |  | 2,545 |
Other investment securities | 869 |  | 869 |
Total other investment securities | $ | 62,939 |  | $ | 63,421 |
During the three months ended March 31, 2024, Peoples redeemed $8.0 million of FHLB stock in order to be in compliance with the requirements of the FHLB. Peoples purchased $6.5 million of additional FHLB stock during the three months ended March 31, 2024, as a result of the FHLB's capital requirements on FHLB advances. For the three months ended March 31, 2024 and 2023, Peoples recorded the change in the fair value of equity investment securities held during the period, in "Other non-interest income", resulting in an unrealized gains of $47,000 and $21,000, respectively. At March 31, 2024, 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 at March 31, 2024. Pledged Securities 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. The following table summarizes the carrying amount of Peoples' pledged securities:
|  | Carrying Amount
(Dollars in thousands) |  | March 31, 2024 |  | December 31, 2023
Securing public and trust department deposits, and repurchase agreements: |  |  |  |
Available-for-sale |  | $ | 809,988 |  |  | $ | 713,033 |
Held-to-maturity |  | 568,473 |  |  | 559,142 |
Securing additional borrowing capacity at the FHLB and the FRB: |  |  |  |
Available-for-sale |  | 98,146 |  |  | 85,899 |
Held-to-maturity |  | 50,046 |  |  | 39,607 |

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