Subordinated Debentures

12 Months Ended

Dec. 31, 2013

Disclosure Subordinated Debentures [Abstract]

Subordinated Debentures

Subordinated Debentures

Subordinated Debentures outstanding at December 31 are as follows:

		2013			2012
	Due	Amount		Rate	Amount		Rate
		(dollars in thousands)
Owed to:
First Commonwealth Capital Trust I	2029	$	—		$	33,583	9.50	%
First Commonwealth Capital Trust II	2034	30,929		LIBOR + 2.85	30,929		LIBOR + 2.85
First Commonwealth Capital Trust III	2034	41,238		LIBOR + 2.85	41,238		LIBOR + 2.85
Total		$	72,167		$	105,750

First Commonwealth has established three trusts, First Commonwealth Capital Trust I, First Commonwealth Capital Trust II, and First Commonwealth Capital Trust III, of which 100% of the common equity is owned by First Commonwealth. The trusts were formed for the purpose of issuing company obligated mandatorily redeemable capital securities to third-party investors and investing the proceeds from the sale of the capital securities solely in junior subordinated debt securities (“subordinated debentures”) of First Commonwealth. The subordinated debentures held by each trust are the sole assets of the trust.

Interest on the debentures issued to First Commonwealth Capital Trust III is paid quarterly at a floating rate of LIBOR + 2.85% which is reset quarterly. Subject to regulatory approval, First Commonwealth may redeem the debentures, in whole or in part, at its option on any interest payment date at a redemption price equal to 100% of the principal amount of the debentures, plus accrued and unpaid interest to the date of the redemption. Deferred issuance costs of $630 thousand are being amortized on a straight-line basis over the term of the securities.

Interest on the debentures issued to First Commonwealth Capital Trust II is paid quarterly at a floating rate of LIBOR + 2.85%, which is reset quarterly. Subject to regulatory approval, First Commonwealth may redeem the debentures, in whole or in part, at its option at a redemption price equal to 100% of the principal amount of the debentures, plus accrued and unpaid interest to the date of the redemption. Deferred issuance costs of $471 thousand are being amortized on a straight-line basis over the term of the securities.

On January 29, 2013, the Company’s Board of Directors authorized the redemption of 100% of First Commonwealth Capital Trust I as of April 1, 2013, at a redemption price of 103.325% of the principal amount, plus accrued and unpaid interest. At the time of redemption, a $1.1 million redemption premium was paid and $0.5 million in unamortized deferred issuance costs were recognized. Interest on debentures issued to First Commonwealth Capital Trust I was paid semiannually at a fixed rate of 9.50% and deferred issuance costs of $996 thousand were being amortized on a straight line basis over the term of the securities.