Fair Values of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Quantitative Inputs and Assumptions Used in Level 3 Fair Value Measurements

In accordance with ASU 2011-4, the following table provides information related to quantitative inputs and assumptions used in Level 3 fair value measurements.

	Fair Value (dollars in thousands)			Valuation Technique	Unobservable Inputs	Range /  (weighted average)
Pooled Trust Preferred Securities	$	28,999		Discounted Cash Flow	Probability of default	0% - 100% (17.16%)
					Prepayment rates	0% - 73.88% (6.13%)
					Discount rates	5.25% - 14.00% (a)
Equities	1,420			Par Value	N/A	N/A
Impaired Loans	4,116		(b)	Gas Reserve study	Discount rate	10.00%
					Gas per MCF	$3.00 - $4.85 (c)
					Oil per BBL/d	$53.91 - $71.01 (c)
					NGL per gallon	$0.83 (c)
Other Real Estate Owned	153			Internal Valuation	N/A	N/A

(a) incorporates spread over the risk free rate related primarily to credit quality and illiquidity of securities.

(b) the remainder of impaired loans valued using Level 3 inputs are not included in this disclosure as the values of those loans are based on bankruptcy agreement documentation.

(c) unobservable inputs are defined as follows: MCF—million cubic feet; BBL/d—barrels per day; NGL—natural gas liquid.

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The tables below present the balances of assets and liabilities measured at fair value on a recurring basis at December 31:

	2014
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities—Residential	$	—	$	25,936	$	—	$	25,936
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities—Residential	—		950,881		—		950,881
Mortgage-Backed Securities—Commercial	—		74		—		74
Other Government-Sponsored Enterprises	—		267,877		—		267,877
Obligations of States and Political Subdivisions	—		27,377		—		27,377
Corporate Securities	—		7,255		—		7,255
Pooled Trust Preferred Collateralized Debt Obligations	—		—		28,999		28,999
Total Debt Securities	—		1,279,400		28,999		1,308,399
Equities	—		—		1,420		1,420
Total Securities Available for Sale	—		1,279,400		30,419		1,309,819
Other Investments	—		44,545		—		44,545
Loans Held for Sale	—		2,502		—		2,502
Other Assets (a)	—		11,186		—		11,186
Total Assets	$	—	$	1,337,633	$	30,419	$	1,368,052
Other Liabilities (a)	$	—	$	10,671	$	—	$	10,671
Total Liabilities	$	—	$	10,671	$	—	$	10,671

(a) Hedging and non-hedging interest rate derivatives

	2013
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities—Residential	$	—	$	25,204	$	—	$	25,204
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities—Residential	—		994,887		—		994,887
Mortgage-Backed Securities—Commercial	—		105		—		105
Other Government-Sponsored Enterprises	—		266,125		—		266,125
Obligations of States and Political Subdivisions	—		80		—		80
Corporate Securities	—		7,021		—		7,021
Pooled Trust Preferred Collateralized Debt Obligations	—		—		23,523		23,523
Total Debt Securities	—		1,293,422		23,523		1,316,945
Equities	—		—		1,420		1,420
Total Securities Available for Sale	—		1,293,422		24,943		1,318,365
Other Investments	—		35,444		—		35,444
Loans Held for Sale	—		—		—		—
Other Assets (a)	—		14,358		—		14,358
Total Assets	$	—	$	1,343,224	$	24,943	$	1,368,167
Other Liabilities (a)	$	—	$	14,318	$	—	$	14,318
Total Liabilities	$	—	$	14,318	$	—	$	14,318

(a) Non-hedging interest rate derivatives

Schedule of Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis are summarized as follows for the year ended December 31, 2014:

	Pooled Trust Preferred Collateralized Debt Obligations			Equities		Loans Held for Sale			Other Assets		Total
	(dollars in thousands)
Balance, beginning of year	$	23,523		$	1,420	$	—		$	—	$	24,943
Total gains or losses
Included in earnings	—			—		77			—		77
Included in other comprehensive income	7,162			—		—			—		7,162
Purchases, issuances, sales, and settlements
Purchases	—			—		—			—		—
Issuances	—			—		—			—		—
Sales	—			—		(3,112		)	—		(3,112		)
Settlements	(1,686		)	—		—			—		(1,686		)
Transfers from Level 3	—			—		—			—		—
Transfers into Level 3	—			—		3,035			—		3,035
Balance, end of year	$	28,999		$	1,420	$	—		$	—	$	30,419

There are no gains or losses included in earnings for the period that are attributable to the change in realized gains (losses) relating to assets held at December 31, 2014.

During the year ended December 31, 2014, there were no transfers between fair value Levels 1 and 2. However, $3.0 million of loans were transferred into Level 3 from Level 2 due to the loans being transferred to a held for sale status. The loans transferred and subsequently sold related to two nonperforming relationships for which this was determined to be an appropriate exit strategy. Completion of the loan sales resulted in a $0.1 million gain for the period.

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis are summarized as follows for the year ended December 31, 2013:

		Pooled Trust Preferred Collateralized Debt Obligations			Equities		Loans Held for Sale			Other Assets		Total
	(dollars in thousands)
Balance, beginning of year		$	23,373		$	1,420	$	—		$	—	$	24,793
Total gains or losses
Included in earnings		(1,395		)	—		625			—		(770		)
Included in other comprehensive income		12,338			—		—			—		12,338
Purchases, issuances, sales, and settlements
Purchases		—			—		—			—		—
Issuances		—			—		—			—		—
Sales		—			—		(20,760		)	—		(20,760		)
Settlements		(10,793		)	—		—			—		(10,793		)
Transfers from Level 3		—			—		—			—		—
Transfers into Level 3		—			—		20,135			—		20,135
Balance, end of year		$	23,523		$	1,420	$	—		$	—	$	24,943

Schedule of Assets Measured on Nonrecurring Basis

The tables below present the balances of assets measured at fair value on a nonrecurring basis at December 31 and total gains and losses realized on these assets during the year ended December 31:

	2014
	Level 1		Level 2		Level 3		Total		Total Gains (Losses)
	(dollars in thousands)
Impaired loans	$	—	$	34,864	$	10,926	$	45,790	$	(7,017	)
Other real estate owned	—		7,828		153		7,981		(1,319		)
Total Assets	$	—	$	42,692	$	11,079	$	53,771	$	(8,336	)

	2013
	Level 1		Level 2		Level 3		Total		Total Gains (Losses)
	(dollars in thousands)
Impaired loans	$	—	$	36,903	$	13,656	$	50,559	$	(13,681	)
Other real estate owned	—		12,752		172		12,924		(198		)
Total Assets	$	—	$	49,655	$	13,828	$	63,483	$	(13,879	)

Carrying Amounts and Fair Values of Financial Instruments

The following table presents carrying amounts and estimated fair values of First Commonwealth’s financial instruments at December 31:

	2014
			Fair Value Measurements Using:
	Carrying Amount		Total		Level 1		Level 2		Level 3
	(dollars in thousands)
Financial assets
Cash and due from banks	$	72,276	$	72,276	$	72,276	$	—	$	—
Interest-bearing deposits	2,262		2,262		2,262		—		—
Securities available for sale	1,309,819		1,309,819		—		1,279,400		30,419
Other investments	44,545		44,545		—		44,545		—
Loans held for sale	2,502		2,502		—		2,502		—
Loans	4,457,308		4,439,766		—		34,864		4,404,902
Financial liabilities
Deposits	4,315,511		4,319,997		—		4,319,997		—
Short-term borrowings	1,105,876		1,105,867		—		1,105,867		—
Long-term debt	89,459		90,319		—		90,319		—
Subordinated debt	72,167		62,815		—		—		62,815

	2013
			Fair Value Measurements Using:
	Carrying Amount		Total		Level 1		Level 2		Level 3
	(dollars in thousands)
Financial assets
Cash and due from banks	$	74,427	$	74,427	$	74,427	$	—	$	—
Interest-bearing deposits	3,012		3,012		3,012		—		—
Securities available for sale	1,318,365		1,318,365		—		1,293,422		24,943
Other investments	35,444		35,444		—		35,444		—
Loans	4,283,833		4,321,847		—		36,903		4,284,944
Financial liabilities
Deposits	4,603,863		4,531,685		—		4,531,685		—
Short-term borrowings	626,615		626,603		—		626,603		—
Long-term debt	144,385		145,477		—		145,477		—
Subordinated debt	72,167		51,706		—		—		51,706