Investment Securities

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

Below is an analysis of the amortized cost and estimated fair values of securities available for sale at:

	June 30, 2014									December 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities – Residential	$	20,686	$	2,617	$	—		$	23,303	$	22,639	$	2,624	$	(59	)	$	25,204
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	1,001,669		15,257		(13,807		)	1,003,119		1,009,519		12,531		(27,163		)	994,887
Mortgage-Backed Securities – Commercial	88		2		—			90		104		1		—			105
Other Government-Sponsored Enterprises	269,175		15		(803		)	268,387		267,971		81		(1,927		)	266,125
Obligations of States and Political Subdivisions	15,738		156		(5		)	15,889		80		—		—			80
Corporate Securities	6,688		561		—			7,249		6,693		328		—			7,021
Pooled Trust Preferred Collateralized Debt Obligations	41,851		109		(13,806		)	28,154		42,040		—		(18,517		)	23,523
Total Debt Securities	1,355,895		18,717		(28,421		)	1,346,191		1,349,046		15,565		(47,666		)	1,316,945
Equities	1,420		—		—			1,420		1,420		—		—			1,420
Total Securities Available for Sale	$	1,357,315	$	18,717	$	(28,421	)	$	1,347,611	$	1,350,466	$	15,565	$	(47,666	)	$	1,318,365

Mortgage backed securities include mortgage backed obligations of U.S. Government agencies and obligations of U.S. Government-sponsored enterprises. These obligations have contractual maturities ranging from less than one year to approximately 30 years with lower anticipated lives to maturity due to prepayments. All mortgage backed securities contain a certain amount of risk related to the uncertainty of prepayments of the underlying mortgages. Interest rate changes have a direct impact upon prepayment speeds, therefore First Commonwealth uses computer simulation models to test the average life and yield volatility of all mortgage backed securities under various interest rate scenarios to monitor the potential impact on earnings and interest rate risk positions.

Expected maturities will differ from contractual maturities because issuers may have the right to call or repay obligations with or without call or prepayment penalties. Other fixed income securities within the portfolio also contain prepayment risk.

The amortized cost and estimated fair value of debt securities available for sale at June 30, 2014, by contractual maturity, are shown below.

	Amortized Cost		Estimated Fair Value
	(dollars in thousands)
Due within 1 year	$	2,600	$	2,601
Due after 1 but within 5 years	266,575		265,786
Due after 5 but within 10 years	8,402		8,506
Due after 10 years	55,875		42,786
	333,452		319,679
Mortgage-Backed Securities (a)	1,022,443		1,026,512
Total Debt Securities	$	1,355,895	$	1,346,191

(a) Mortgage Backed Securities include an amortized cost of $20.7 million and a fair value of $23.3 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $1,001.8 million and a fair value of $1,003.2 million for Obligations of U.S. Government-sponsored enterprises issued by Fannie Mae and Freddie Mac.

Proceeds from sales, gross gains (losses) realized on sales, maturities and other-than-temporary impairment charges related to securities available for sale were as follows for the six months endedJune 30:

	2014		2013
	(dollars in thousands)
Proceeds from sales	$	—	$	42
Gross gains (losses) realized:
Sales Transactions:
Gross gains	$	—	$	4
Gross losses	—		—
	—		4
Maturities and impairment
Gross gains	2		4
Gross losses	—		—
	2		4
Net gains and impairment	$	2	$	8

Securities available for sale with an estimated fair value of $511.9 million and $594.9 million were pledged as of June 30, 2014 and December 31, 2013, respectively, to secure public deposits and for other purposes required or permitted by law.