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Investment Securities
6 Months Ended
Jun. 30, 2019
Investment Securities [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] Investment Securities
Securities Available for Sale
Below is an analysis of the amortized cost and estimated fair values of securities available for sale at:
 
June 30, 2019
 
December 31, 2018
 
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
$
8,373

 
$
580

 
$

 
$
8,953

 
$
9,011

 
$
479

 
$
(84
)
 
$
9,406

Mortgage-Backed Securities – Commercial
168,626

 
2,121

 
(202
)
 
170,545

 
169,633

 
214

 
(2,103
)
 
167,744

Obligations of U.S. Government-Sponsored Enterprises:
 
 
 
 
 
 

 
 
 
 
 
 
 

Mortgage-Backed Securities – Residential
625,242

 
4,248

 
(3,911
)
 
625,579

 
686,906

 
1,846

 
(15,391
)
 
673,361

Other Government-Sponsored Enterprises
10,000

 
3

 

 
10,003

 
10,000

 
12

 

 
10,012

Obligations of States and Political Subdivisions
26,663

 
226

 

 
26,889

 
27,592

 
126

 
(6
)
 
27,712

Corporate Securities
22,908

 
1,026

 

 
23,934

 
20,912

 
321

 
(221
)
 
21,012

Total Securities Available for Sale
$
861,812

 
$
8,204

 
$
(4,113
)
 
$
865,903

 
$
924,054

 
$
2,998

 
$
(17,805
)
 
$
909,247



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, 2019, by contractual maturity, are shown below.
 
Amortized
Cost
 
Estimated
Fair Value
 
(dollars in thousands)
Due within 1 year
$
630

 
$
631

Due after 1 but within 5 years
32,735

 
33,334

Due after 5 but within 10 years
26,206

 
26,861

Due after 10 years

 

 
59,571

 
60,826

Mortgage-Backed Securities (a)
802,241

 
805,077

Total Debt Securities
$
861,812

 
$
865,903

 
(a)
Mortgage-backed and collateralized mortgage securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds. Mortgage-Backed Securities include an amortized cost of $177.0 million and a fair value of $179.5 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $625.2 million and a fair value of $625.6 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 ended June 30:
 
2019
 
2018
 
(dollars in thousands)
Proceeds from sales
$

 
$
15,939

Gross gains (losses) realized:
 
 
 
Sales transactions:
 
 
 
Gross gains
$

 
$
4,719

Gross losses

 

 

 
4,719

Maturities
 
 
 
Gross gains
6

 
3,383

Gross losses

 

 
6

 
3,383

Net gains and impairment
$
6

 
$
8,102


Gross gains from maturities recognized in 2019 were the result of a municipal security call. Gross gains from sales transactions of $4.7 million recognized in 2018 were the result of the sale of the remaining pool trust preferred security portfolio. Gross gains from maturities of $3.4 million recognized in 2018 were the result of successful auction calls on PreSTL XIV and PreSTL IX, two of our pooled trust preferred securities.
Securities available for sale with an estimated fair value of $589.4 million and $636.3 million were pledged as of June 30, 2019 and December 31, 2018, 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:
 
June 30, 2019
 
December 31, 2018
 
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
$
3,578

 
$
37

 
$

 
$
3,615

 
$
3,635

 
$

 
$
(97
)
 
$
3,538

Mortgage-Backed Securities- Commercial
54,618

 

 
(523
)
 
54,095

 
55,221

 

 
(2,327
)
 
52,894

Obligations of U.S. Government-Sponsored Enterprises:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-Backed Securities – Residential
259,748

 
684

 
(1,012
)
 
259,420

 
279,109

 
212

 
(7,254
)
 
272,067

Mortgage-Backed Securities – Commercial
12,633

 
108

 

 
12,741

 
13,159

 

 
(258
)
 
12,901

Obligations of States and Political Subdivisions
42,276

 
589

 
(1
)
 
42,864

 
42,331

 
175

 
(313
)
 
42,193

Debt Securities Issued by Foreign Governments
600

 

 

 
600

 
400

 

 

 
400

Total Securities Held to Maturity
$
373,453

 
$
1,418

 
$
(1,536
)
 
$
373,335

 
$
393,855

 
$
387

 
$
(10,249
)
 
$
383,993


The amortized cost and estimated fair value of debt securities held to maturity at June 30, 2019, 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
$
515

 
$
515

Due after 1 but within 5 years
8,103

 
8,170

Due after 5 but within 10 years
34,258

 
34,779

Due after 10 years

 

 
42,876

 
43,464

Mortgage-Backed Securities (a)
330,577

 
329,871

Total Debt Securities
$
373,453

 
$
373,335

(a)
Mortgage-backed and collateralized mortgage securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds. Mortgage-Backed Securities include an amortized cost of $58.2 million and a fair value of $57.7 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $272.4 million and a fair value of $272.2 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 $333.6 million and $250.3 million were pledged as of June 30, 2019 and December 31, 2018, respectively, to secure public deposits and for other purposes required or permitted by law.