
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2021
Obligations of:

U.S. government sponsored agencies	$	78,916	$	102	$	(537)	$	78,481
States and political subdivisions	252,706		3,220		(3,007)		252,919
Residential mortgage-backed securities	894,848		10,453		(6,842)		898,459
Commercial mortgage-backed securities	63,568		85		(1,101)		62,552
Bank-issued trust preferred securities	4,616		233		(170)		4,679

Total available-for-sale securities	$	1,294,654	$	14,093	$	(11,657)	$	1,297,090
December 31, 2020
Obligations of:

U.S. government sponsored agencies	$	4,960	$	403	$	—	$	5,363
States and political subdivisions	110,401		4,642		(124)		114,919
Residential mortgage-backed securities	609,865		15,377		(2,024)		623,218
Commercial mortgage-backed securities	4,622		161		—		4,783
Bank-issued trust preferred securities	4,696		192		(158)		4,730

Total available-for-sale securities	$	734,544	$	20,775	$	(2,306)	$	753,013


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2021		2020		2021		2020
Gross gains realized	$	150	$	2	$	786	$	386
Gross losses realized	(316)		—		(1,490)		(3)
Net (loss) gain realized	$	(166)	$	2	$	(704)	$	383


	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
September 30, 2021
Obligations of:

U.S. government sponsored agencies	$	49,570	$	537	$	7	$	—	$	—	$	—	$	49,570	$	537
States and political subdivisions	128,402		3,007		76		—		—		—		128,402		3,007
Residential mortgage-backed securities	466,518		6,079		72		36,160		763		16		502,678		6,842
Commercial mortgage-backed securities	48,974		1,101		17		—		—		—		48,974		1,101
Bank-issued trust preferred securities	—		—		—		1,830		170		2		1,830		170

Total	$	693,464	$	10,724	172		$	37,990	$	933	18		$	731,454	$	11,657
December 31, 2020
Obligations of:


States and political subdivisions	$	17,651	$	124	5		$	—	$	—	—		$	17,651	$	124
Residential mortgage-backed securities	156,659		1,795		45		9,892		229		13		166,551		2,024

Bank-issued trust preferred securities	494		6		1		1,848		152		2		2,342		158

Total	$	174,804	$	1,925	51		$	11,740	$	381	15		$	186,544	$	2,306

Management evaluates available-for-sale investment securities for an allowance for credit losses on a quarterly basis. At September 30, 2021, management concluded that no individual securities at an unrealized loss position required an allowance for credit losses. At September 30, 2021, 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 September 30, 2021 and December 31, 2020 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 $5.7 million at September 30, 2021 and $2.7 million at December 31, 2020.

At September 30, 2021, approximately 99% of the mortgage-backed securities with a market value that had been at an unrealized loss position for twelve months or more were issued by U.S. government sponsored agencies. The remaining 1%, or two positions, consisted of privately issued mortgage-backed securities with all of the underlying mortgages originated prior to 2004. Neither of the two positions had a fair value of less than 90% of its book value. Management analyzed the underlying credit quality of these mortgage-backed securities and concluded the unrealized losses were primarily attributable to the floating rate nature of these investments and the low remaining number of loans underlying these securities.

The unrealized losses with respect to the two bank-issued trust preferred securities that had been in an unrealized loss position for twelve months or more at September 30, 2021 were attributable to the subordinated nature of the debt.

The table below presents the amortized cost, fair value and total weighted-average yield of available-for-sale securities by contractual maturity at September 30, 2021. 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. government sponsored agencies	$	—		$	1,996		$	66,436		$	10,484		$	78,916
States and political subdivisions	7,314			28,647			67,074			149,671			252,706
Residential mortgage-backed securities	7			981			56,615			837,245			894,848
Commercial mortgage-backed securities	1,887			—			34,169			27,512			63,568
Bank-issued trust preferred securities	—			—			4,616			—			4,616

Total available-for-sale securities	$	9,208		$	31,624		$	228,910		$	1,024,912		$	1,294,654
Fair value
Obligations of:

U.S. government sponsored agencies	$	—		$	2,069		$	66,161		$	10,251		$	78,481
States and political subdivisions	7,375			29,538			68,100			147,906			252,919
Residential mortgage-backed securities	7			1,006			56,712			840,734			898,459
Commercial mortgage-backed securities	1,907			—			33,763			26,882			62,552
Bank-issued trust preferred securities	—			—			4,679			—			4,679

Total available-for-sale securities	$	9,289		$	32,613		$	229,415		$	1,025,773		$	1,297,090
Total weighted-average yield	2.07		%	2.56		%	1.19		%	1.58		%	1.54		%


(Dollars in thousands)	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2021
Obligations of:
U.S. government sponsored agencies	$	29,995	$	—	$	85	$	(933)	$	29,147
States and political subdivisions	124,417		(236)		675		(2,421)		122,435
Residential mortgage-backed securities	41,035		—		661		(195)		41,501
Commercial mortgage-backed securities	47,889		—		236		(1,208)		46,917
Total held-to-maturity securities	$	243,336	$	(236)	$	1,657	$	(4,757)	$	240,000
December 31, 2020
Obligations of:
States and political subdivisions	$	35,199	$	(60)	$	510	$	(165)	$	35,484
Residential mortgage-backed securities	25,890		—		852		—		26,742
Commercial mortgage-backed securities	5,429		—		427		—		5,856
Total held-to-maturity securities	$	66,518	$	(60)	$	1,789	$	(165)	$	68,082

Management evaluates held-to-maturity investment securities for an allowance for credit losses on a quarterly basis. The majority of Peoples' held-to-maturity investment securities are obligations of states and political subdivisions with the remaining securities issued by U.S. government sponsored agencies. Peoples analyzed these securities using cumulative default rate averages for investment grade municipal securities. Since December 31, 2020, Peoples has purchased securities and designated them as held-to maturity and, as a result, at September 30, 2021, Peoples recorded $236,000 of allowance for credit losses for held-to-maturity securities, compared to $60,000 at December 31, 2020.


	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
September 30, 2021
Obligations of:
U.S. government sponsored agencies	$	25,587	$	933	5	—		—		—	$	25,587	$	933
States and political subdivisions	89,532		2,421		37	—		—		—	89,532		2,421
Residential mortgage-backed securities	17,426		195		2	—		—		—	17,426		195
Commercial mortgage-backed securities	39,641		1,208		11	—		—		—	39,641		1,208
Total	$	172,186	$	4,757	55	$	—	$	—	—	$	172,186	$	4,757
December 31, 2020
Obligations of:
States and political subdivisions	$	18,662	$	165	5	$	—	$	—	—	$	18,662	$	165


Total	$	18,662	$	165	5	$	—	$	—	—	$	18,662	$	165

The table below presents the amortized cost, fair value and total weighted-average yield of held-to-maturity securities by contractual maturity at September 30, 2021. 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 22.3%. 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	$	—		$	—		$	—		$	29,995		$	29,995
States and political subdivisions	—			989			2,511			120,917			124,417
Residential mortgage-backed securities	—			1,939			—			39,096			41,035
Commercial mortgage-backed securities	355			—			8,655			38,879			47,889
Total held-to-maturity securities	$	355		$	2,928		$	11,166		$	228,887		$	243,336
Fair value
Obligations of:
U.S. government sponsored agencies	$	—		$	—		$	—		$	29,147		$	29,147
States and political subdivisions	—			1,132			2,794			118,509			122,435
Residential mortgage-backed securities	—			2,015			—			39,486			41,501
Commercial mortgage-backed securities	358			—			8,844			37,715			46,917
Total held-to-maturity securities	$	358		$	3,147		$	11,638		$	224,857		$	240,000
Total weighted-average yield	2.25		%	2.29		%	2.37		%	2.05		%	2.07		%


(Dollars in thousands)	September 30, 2021		December 31, 2020
FHLB stock	$	17,918	$	21,718
FRB stock	13,311		13,311
Nonqualified deferred compensation	2,083		1,867
Equity investment securities	390		299
Other investment securities	784		365
Total other investment securities	$	34,486	$	37,560

During the nine months ended September 30, 2021, Peoples redeemed $7.5 million of FHLB stock as requested by the FHLB. During the three months ended September 30, 2021, Peoples acquired $3.7 million in FHLB stock in the Merger with Premier.

During the three and nine months ended September 30, 2021, 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 gain of $18,000 and $91,000, respectively. During the three and nine months ended September 30, 2020, 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 gain of $1,000 and an unrealized loss of $15,000, respectively.

At September 30, 2021, 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.

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 as well as to derivative counterparties as collateral on unrealized interest rate swaps.


	Carrying Amount
(Dollars in thousands)	September 30, 2021		December 31, 2020

Securing public and trust department deposits, and repurchase agreements:
Available-for-sale	$	851,966	$	547,244
Held-to-maturity	143,467		28,287
Securing collateral for cash flow hedge swaps:
Available-for-sale	36,314		—
Securing additional borrowing capacity at the FHLB and the FRB:
Available-for-sale	7,036		2,175
Held-to-maturity	556		—