Investment Securities

Securities Available for Sale

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



	March 31, 2015									December 31, 2014
	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	$	22,578	$	2,835	$	—		$	25,413	$	23,344	$	2,595	$	(3	)	$	25,936
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	905,895		15,759		(6,402		)	915,252		947,635		13,076		(9,830		)	950,881
Mortgage-Backed Securities – Commercial	65		1		—			66		72		2		—			74
Other Government-Sponsored Enterprises	260,849		180		(330		)	260,699		269,181		4		(1,308		)	267,877
Obligations of States and Political Subdivisions	27,060		494		(5		)	27,549		27,058		362		(43		)	27,377
Corporate Securities	6,680		572		—			7,252		6,682		573		—			7,255
Pooled Trust Preferred Collateralized Debt Obligations	41,868		503		(11,237		)	31,134		41,926		309		(13,236		)	28,999
Total Debt Securities	1,264,995		20,344		(17,974		)	1,267,365		1,315,898		16,921		(24,420		)	1,308,399
Equities	1,920		—		—			1,920		1,420		—		—			1,420
Total Securities Available for Sale	$	1,266,915	$	20,344	$	(17,974	)	$	1,269,285	$	1,317,318	$	16,921	$	(24,420	)	$	1,309,819

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 March 31, 2015, by contractual maturity, are shown below.



	Amortized Cost		Estimated Fair Value
	(dollars in thousands)
Due within 1 year	$	6,800	$	6,798
Due after 1 but within 5 years	254,050		253,901
Due after 5 but within 10 years	24,420		24,869
Due after 10 years	51,187		41,066
	336,457		326,634
Mortgage-Backed Securities (a)	928,538		940,731
Total Debt Securities	$	1,264,995	$	1,267,365


(a)	Mortgage Backed Securities include an amortized cost of $22.6 million and a fair value of $25.4 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $906.0 million and a fair value of $915.3 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 three months ended March 31:



	2015		2014
	(dollars in thousands)
Proceeds from sales	$	—	$	—
Gross gains (losses) realized:
Sales Transactions:
Gross gains	$	—	$	—
Gross losses	—		—
	—		—
Maturities and impairment
Gross gains	105		—
Gross losses	—		—
Other-than-temporary impairment	—		—
	105		—
Net gains and impairment	$	105	$	—

Securities available for sale with an estimated fair value of $554.4 million and $563.2 million were pledged as of March 31, 2015 and December 31, 2014, respectively, to secure public deposits and for other purposes required or permitted by law.

Securities Held to Maturity

Below is an analysis of the amortized cost and fair values of debt securities held to maturity at March 31, 2015. There were no held to maturity securities at December 31, 2014.



	March 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(dollars in thousands)
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	$	26,315	$	—	$	(98	)	$	26,217
Obligations of States and Political Subdivisions	3,938		19		—			3,957
Total Securities Held to Maturity	$	30,253	$	19	$	(98	)	$	30,174

The amortized cost and estimated fair value of debt securities held to maturity at March 31, 2015, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or prepayment penalties.



	Amortized Cost		Estimated Fair Value
	(dollars in thousands)
Due within 1 year	$	—	$	—
Due after 1 but within 5 years	—		—
Due after 5 but within 10 years	—		—
Due after 10 years	3,938		3,957
	3,938		3,957
Mortgage-Backed Securities (a)	26,315		26,217
Total Debt Securities	$	30,253	$	30,174


(a)	Mortgage Backed Securities include an amortized cost of $26.3 million and a fair value of $26.2 million for Obligations of U.S. Government-sponsored enterprises issued by Fannie Mae and Freddie Mac.

Securities held to maturity with an amortized cost of $3.3 million were pledged as of March 31, 2015 to secure public deposits and for other purposes required or permitted by law.