

	September 30, 2019						December 31, 2018
	Originated		Acquired		Total		Originated		Acquired		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,173,070	$	37,866	$	1,210,936	$	1,100,947	$	37,526	$	1,138,473
Real estate construction	413,562		6,719		420,281		353,008		5,970		358,978
Residential real estate	1,380,486		285,734		1,666,220		1,313,645		248,760		1,562,405
Commercial real estate	1,947,533		176,707		2,124,240		1,922,349		201,195		2,123,544
Loans to individuals	662,838		15,046		677,884		585,347		5,392		590,739
Total loans	$	5,577,489	$	522,072	$	6,099,561	$	5,275,296	$	498,843	$	5,774,139



Other Assets Especially Mentioned (OAEM)		Potential weaknesses that deserve management’s close attention. The potential weaknesses may result in deterioration of the repayment prospects or weaken the Company’s credit position at some future date. The credit risk may be relatively minor, yet constitute an undesirable risk in light of the circumstances surrounding the specific credit. No loss of principal or interest is expected.



Substandard		Well-defined weakness or a weakness that jeopardizes the repayment of the debt. A loan may be classified as substandard as a result of deterioration of the borrower’s financial condition and repayment capacity. Loans for which repayment plans have not been met or collateral equity margins do not protect the Company may also be classified as substandard.

The use of creditworthiness categories to grade loans permits management’s use of migration analysis to estimate a portion of credit risk. The Company’s internal creditworthiness grading system provides a measurement of credit risk based primarily on an evaluation of the borrower’s cash flow and collateral. Movement between these rating categories provides a predictive measure of credit losses and therefore assists in determining the appropriate level for the loan loss reserves. Category ratings are reviewed each quarter, at which time management analyzes the results, as well as other external statistics and factors related



	September 30, 2019
	Commercial, financial, agricultural and other		Real estate construction		Residential real estate		Commercial real estate		Loans to individuals		Total
	(dollars in thousands)
Originated loans
Pass	$	1,115,341	$	413,535	$	1,371,231	$	1,902,969	$	662,535	$	5,465,611
Non-Pass
OAEM	49,258		27		487		22,709		—		72,481
Substandard	8,471		—		8,768		21,855		303		39,397
Doubtful	—		—		—		—		—		—
Total Non-Pass	57,729		27		9,255		44,564		303		111,878
Total	$	1,173,070	$	413,562	$	1,380,486	$	1,947,533	$	662,838	$	5,577,489

Acquired loans
Pass	$	30,986	$	6,134	$	283,171	$	169,935	$	15,033	$	505,259
Non-Pass
OAEM	2,143		585		637		2,126		—		5,491
Substandard	4,737		—		1,926		4,646		13		11,322
Doubtful	—		—		—		—		—		—
Total Non-Pass	6,880		585		2,563		6,772		13		16,813
Total	$	37,866	$	6,719	$	285,734	$	176,707	$	15,046	$	522,072



	December 31, 2018
	Commercial, financial, agricultural and other		Real estate construction		Residential real estate		Commercial real estate		Loans to individuals		Total
	(dollars in thousands)
Originated loans
Pass	$	1,055,394	$	337,367	$	1,302,912	$	1,880,139	$	585,141	$	5,160,953
Non-Pass
OAEM	33,723		15,641		1,026		28,904		—		79,294
Substandard	11,830		—		9,707		13,306		206		35,049
Doubtful	—		—		—		—		—		—
Total Non-Pass	45,553		15,641		10,733		42,210		206		114,343
Total	$	1,100,947	$	353,008	$	1,313,645	$	1,922,349	$	585,347	$	5,275,296

Acquired loans
Pass	$	31,399	$	5,337	$	245,637	$	198,201	$	5,377	$	485,951
Non-Pass
OAEM	5,890		633		736		441		—		7,700
Substandard	237		—		2,387		2,553		15		5,192
Doubtful	—		—		—		—		—		—
Total Non-Pass	6,127		633		3,123		2,994		15		12,892
Total	$	37,526	$	5,970	$	248,760	$	201,195	$	5,392	$	498,843

The credit quality of our loan portfolio can potentially represent significant risk to our earnings, capital and liquidity. First Commonwealth devotes substantial resources to managing this risk primarily through our credit administration department that develops and administers policies and procedures for underwriting, maintaining, monitoring and collecting loans. Credit administration is independent of lending departments and oversight is provided by the Credit Committee of the First Commonwealth Board of Directors.

Criticized loans have been evaluated when determining the appropriateness of the allowance for credit losses, which we believe is adequate to absorb losses inherent to the portfolio as of September 30, 2019. However, changes in economic conditions, interest rates, borrower financial condition, delinquency trends or previously established fair values of collateral factors could significantly change those judgmental estimates.

The following tables delineate the aging analysis of the recorded investments in past due loans as of September 30, 2019 and December 31, 2018. Also included in these tables are loans that are 90 days or more past due and still accruing because they are well-secured and in the process of collection.



	September 30, 2019
	30 - 59 days past due		60 - 89 days past due		90 days or greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Originated loans
Commercial, financial, agricultural and other	$	165	$	345	$	26	$	4,808	$	5,344	$	1,167,726	$	1,173,070
Real estate construction	—		—		—		—		—		413,562		413,562
Residential real estate	4,756		1,438		935		6,465		13,594		1,366,892		1,380,486
Commercial real estate	671		406		103		7,590		8,770		1,938,763		1,947,533
Loans to individuals	3,090		775		845		302		5,012		657,826		662,838
Total	$	8,682	$	2,964	$	1,909	$	19,165	$	32,720	$	5,544,769	$	5,577,489

Acquired loans
Commercial, financial, agricultural and other	$	10	$	—	$	4	$	4,693	$	4,707	$	33,159	$	37,866
Real estate construction	—		—		—		—		—		6,719		6,719
Residential real estate	394		101		119		1,818		2,432		283,302		285,734
Commercial real estate	—		—		—		1,612		1,612		175,095		176,707
Loans to individuals	220		16		22		13		271		14,775		15,046
Total	$	624	$	117	$	145	$	8,136	$	9,022	$	513,050	$	522,072



	December 31, 2018
	30 - 59 days past due		60 - 89 days past due		90 days or greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Originated loans
Commercial, financial, agricultural and other	$	130	$	247	$	92	$	10,223	$	10,692	$	1,090,255	$	1,100,947
Real estate construction	212		—		—		—		212		352,796		353,008
Residential real estate	3,697		710		790		6,238		11,435		1,302,210		1,313,645
Commercial real estate	492		69		—		3,437		3,998		1,918,351		1,922,349
Loans to individuals	2,362		532		662		207		3,763		581,584		585,347
Total	$	6,893	$	1,558	$	1,544	$	20,105	$	30,100	$	5,245,196	$	5,275,296

Acquired loans
Commercial, financial, agricultural and other	$	1	$	—	$	—	$	204	$	205	$	37,321	$	37,526
Real estate construction	—		—		—		—		—		5,970		5,970
Residential real estate	226		24		27		1,904		2,181		246,579		248,760
Commercial real estate	—		—		—		1,042		1,042		200,153		201,195
Loans to individuals	46		12		11		15		84		5,308		5,392
Total	$	273	$	36	$	38	$	3,165	$	3,512	$	495,331	$	498,843

The previous tables summarize nonaccrual loans by loan segment. The Company generally places loans on nonaccrual status when the full and timely collection of interest or principal becomes uncertain, when part of the principal balance has been charged off and no restructuring has occurred, or the loans reach a certain number of days past due. Generally, loans 90 days or more past due are placed on nonaccrual status, except for consumer loans, which are placed on nonaccrual status at 150 days past due.

When a loan is placed on nonaccrual, the accrued unpaid interest receivable is reversed against interest income and all future payments received are applied as a reduction to the loan principal. Generally, the loan is returned to accrual status when (a) all delinquent interest and principal becomes current under the terms of the loan agreement or (b) the loan is both well-secured and in the process of collection and collectability is no longer in doubt.

Management considers loans to be impaired when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Determination of impairment is treated the same across all loan categories. When management identifies a loan as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole source for repayment of the loan is the operation or liquidation of collateral. When the loan is collateral dependent, the appraised value less estimated cost to sell is utilized. If management determines the value of the impaired loan is less than the recorded investment in the loan, impairment is recognized through an allowance estimate or a charge-off to the allowance. Troubled debt restructured loans on accrual status are also considered to be impaired loans.

Troubled debt restructured loans are those loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest as a result of the financial difficulties experienced by the borrower, who could not obtain comparable terms from alternate financing sources.

At September 30, 2019 and December 31, 2018, there were no impaired loans held for sale. During the nine months ended, September 30, 2019, gains of $0.4 million were recognized on the sale of an impaired commercial real estate loan. There were gains of $1.2 million recognized on the sale of an impaired commercial, financial, agricultural and other relationship during the nine months ended September 30, 2018.

The following tables include the recorded investment and unpaid principal balance for impaired loans with the associated allowance amount, if applicable, as of September 30, 2019 and December 31, 2018. Also presented are the average recorded investment in impaired loans and the related amount of interest recognized while the loan was considered impaired. Average balances are calculated using month-end balances of the loans for the period reported and are included in the table below based on their period-end allowance position.



	September 30, 2019						December 31, 2018
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(dollars in thousands)
Originated loans:
With no related allowance recorded:
Commercial, financial, agricultural and other	$	1,638	$	7,014			$	8,735	$	16,442
Real estate construction	—		—				—		—
Residential real estate	9,760		11,516				10,726		12,571
Commercial real estate	3,274		3,502				3,599		3,812
Loans to individuals	392		593				281		408
Subtotal	15,064		22,625				23,341		33,233
With an allowance recorded:
Commercial, financial, agricultural and other	4,644		6,386		$	1,054	3,042		3,181		$	797
Real estate construction	—		—		—		—		—		—
Residential real estate	920		976		4		486		495		107
Commercial real estate	6,408		6,543		469		1,866		1,878		596
Loans to individuals	—		—		—		—		—		—
Subtotal	11,972		13,905		1,527		5,394		5,554		1,500
Total	$	27,036	$	36,530	$	1,527	$	28,735	$	38,787	$	1,500



	September 30, 2019						December 31, 2018
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(dollars in thousands)
Acquired loans
With no related allowance recorded:
Commercial, financial, agricultural and other	$	4,693	$	4,717			$	73	$	73
Real estate construction	—		—				—		—
Residential real estate	1,971		2,413				2,031		2,604
Commercial real estate	1,459		2,843				1,042		2,052
Loans to individuals	13		15				15		17
Subtotal	8,136		9,988				3,161		4,746
With an allowance recorded:
Commercial, financial, agricultural and other	—		—		$	—	131		131		$	131
Real estate construction	—		—		—		—		—		—
Residential real estate	—		—		—		—		—		—
Commercial real estate	153		165		19		—		—		—
Loans to individuals	—		—		—		—		—		—
Subtotal	153		165		19		131		131		131
Total	$	8,289	$	10,153	$	19	$	3,292	$	4,877	$	131



	For the Nine Months Ended September 30,
	2019								2018
	Originated Loans				Acquired Loans				Originated Loans				Acquired Loans
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	2,129	$	10	$	2,255	$	—	$	17,838	$	576	$	261	$	10
Real estate construction	—		—		—		—		—		—		—		—
Residential real estate	10,751		280		1,966		6		10,639		191		1,779		3
Commercial real estate	3,854		129		636		18		7,632		146		1,558		—
Loans to individuals	356		11		14		—		322		6		16		—
Subtotal	17,090		430		4,871		24		36,431		919		3,614		13
With an allowance recorded:
Commercial, financial, agricultural and other	4,064		36		—		—		5,979		16		—		—
Real estate construction	—		—		—		—		—		—		—		—
Residential real estate	347		6		—		—		532		11		—
Commercial real estate	5,357		2		160		—		1,787		3		—		—
Loans to individuals	—		—		—		—		—		—		—		—
Subtotal	9,768		44		160		—		8,298		30		—		—
Total	$	26,858	$	474	$	5,031	$	24	$	44,729	$	949	$	3,614	$	13



	For the Three Months Ended September 30,
	2019								2018
	Originated Loans				Acquired Loans				Originated Loans				Acquired Loans
	Average recorded investment		Interest Income Recognized		Average recorded investment		Interest Income Recognized		Average recorded investment		Interest Income Recognized		Average recorded investment		Interest Income Recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	1,902	$	3	$	4,697	$	—	$	5,697	$	8	$	73	$	10
Real estate construction	—		—		—		—		—		—		—		—
Residential real estate	10,254		86		1,950		1		10,627		59		2,541		2
Commercial real estate	3,582		28		666		—		6,810		59		1,955		—
Loans to individuals	389		4		13		—		320		2		16		—
Subtotal	16,127		121		7,326		1		23,454		128		4,585		12
With an allowance recorded:
Commercial, financial, agricultural and other	4,677		8		—		—		10,298		4		—		—
Real estate construction	—		—		—		—		—		—		—		—
Residential real estate	740		1		—		—		565		2		—		—
Commercial real estate	6,443		1		155		—		4,342		1		—		—
Loans to individuals	—		—		—		—		—		—		—		—
Subtotal	11,860		10		155		—		15,205		7		—		—
Total	$	27,987	$	131	$	7,481	$	1	$	38,659	$	135	$	4,585	$	12

Unfunded commitments related to nonperforming loans were $0.2 million at September 30, 2019 and $1.6 million at December 31, 2018. After consideration of the requirements to draw and available collateral related to these commitments, a reserve of $12 thousand was established for these off balance sheet exposures at both September 30, 2019 and December 31, 2018.



	September 30, 2019		December 31, 2018
	(dollars in thousands)
Troubled debt restructured loans
Accrual status	$	8,024	$	8,757
Nonaccrual status	11,074		11,761
Total	$	19,098	$	20,518
Commitments
Letters of credit	$	60	$	60
Unused lines of credit	131		1,027
Total	$	191	$	1,087



	For the Nine Months Ended September 30, 2019
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	2	$	—	$	—	$	156	$	156	$	157	$	—
Residential real estate	14	17		149		842		1,008		933		1
Commercial real estate	3	—		—		6,119		6,119		5,740		397
Loans to individuals	7	—		—		98		98		87		—
Total	26	$	17	$	149	$	7,215	$	7,381	$	6,917	$	398



	For the Nine Months Ended September 30, 2018
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	3	$	74	$	—	$	8,250	$	8,324	$	7,393	$	2,811
Residential real estate	24	85		145		959		1,189		1,108		—
Commercial real estate	2	—		—		966		966		943		—
Loans to individuals	13	—		77		44		121		103		—
Total	42	$	159	$	222	$	10,219	$	10,600	$	9,547	$	2,811

The troubled debt restructurings included in the above tables are also included in the impaired loan tables provided earlier in this note. Loans defined as modified due to a change in rate may include loans that were modified for a change in rate as well as a re-amortization of the principal and an extension of the maturity. For both the nine months ended September 30, 2019 and 2018, $0.1 million and $0.2 million, respectively, of total rate modifications represent loans with modifications to the rate as well as payment as a result of re-amortization. For both 2019 and 2018 the changes in loan balances between the pre-modification balance and the post-modification balance are due to customer payments.



	For the Three Months Ended September 30, 2019
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	1	$	—	$	—	$	95	$	95	$	96	$	—
Residential real estate	3	—		32		53		85		85		—
Loans to individuals	2	—		—		37		37		34		—
Total	6	$	—	$	32	$	185	$	217	$	215	$	—



	For the Three Months Ended, September 30, 2018
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	1	$	74	$	—	$	—	$	74	$	74	$	—
Residential real estate	7	65		70		230		365		338		—
Loans to individuals	6	—		26		17		43		40		—
Total	14	$	139	$	96	$	247	$	482	$	452	$	—

The troubled debt restructurings included in the above tables are also included in the impaired loan tables provided earlier in this note. Loans defined as modified due to a change in rate may include loans that were modified for a change in rate as well as a re-amortization of the principal and an extension of the maturity. For the three months ended September 30, 2019 and 2018, $32 thousand and $96 thousand, respectively, of total rate modifications represent loans with modifications to the rate as well as payment as a result of re-amortization. For both 2019 and 2018 the changes in loan balances between the pre-modification balance and the post-modification balance are due to customer payments.

A troubled debt restructuring is considered to be in default when a restructured loan is 90 days or more past due. The following table provides information related to loans that were restructured within the past twelve months and that were considered to be in default during the nine months ended September 30:



	2019			2018
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(dollars in thousands)
Commercial, financial, agricultural and other	—	$	—	1	$	272
Residential real estate	3	70		1	49
Loans to individuals	—	—		1	8
Total	3	$	70	3	$	329



	For the Nine Months Ended September 30, 2019
	Commercial, financial, agricultural and other			Real estate construction		Residential real estate			Commercial real estate			Loans to individuals			Total
	(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance	$	19,235		$	2,002	$	3,934		$	18,382		$	4,033		$	47,586
Charge-offs	(1,584		)	—		(617		)	(305		)	(4,049		)	(6,555		)
Recoveries	180			158		190			160			419			1,107
Provision (credit)	2,109			250		409			790			4,310			7,868
Ending balance	19,940			2,410		3,916			19,027			4,713			50,006
Acquired loans:
Beginning balance	139			—		35			4			—			178
Charge-offs	(601		)	—		(46		)	(1,376		)	(9		)	(2,032		)
Recoveries	53			—		46			—			14			113
Provision (credit)	416			—		(34		)	1,393			(5		)	1,770
Ending balance	7			—		1			21			—			29
Total ending balance	$	19,947		$	2,410	$	3,917		$	19,048		$	4,713		$	50,035
Ending balance: individually evaluated for impairment	$	1,054		$	—	$	4		$	488		$	—		$	1,546
Ending balance: collectively evaluated for impairment	18,893			2,410		3,913			18,560			4,713			48,489
Loans:
Ending balance	1,210,936			420,281		1,666,220			2,124,240			677,884			6,099,561
Ending balance: individually evaluated for impairment	10,417			—		4,102			10,825			—			25,344
Ending balance: collectively evaluated for impairment	1,200,519			420,281		1,662,118			2,113,415			677,884			6,074,217



	For the Nine Months Ended September 30, 2018
	Commercial, financial, agricultural and other			Real estate construction			Residential real estate			Commercial real estate			Loans to individuals			Total
	(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance	$	23,418		$	1,349		$	2,753		$	17,328		$	3,404		$	48,252
Charge-offs	(3,443		)	—			(949		)	(2,411		)	(3,321		)	(10,124		)
Recoveries	671			93			222			123			460			1,569
Provision (credit)	1,343			150			1,584			4,623			3,274			10,974
Ending balance	21,989			1,592			3,610			19,663			3,817			50,671
Acquired loans:
Beginning balance	11			—			6			29			—			46
Charge-offs	(93		)	—			(57		)	—			(15		)	(165		)
Recoveries	31			6			75			—			24			136
Provision (credit)	71			(6		)	23			(21		)	(9		)	58
Ending balance	20			—			47			8			—			75
Total ending balance	$	22,009		$	1,592		$	3,657		$	19,671		$	3,817		$	50,746
Ending balance: individually evaluated for impairment	$	3,474		$	—		$	167		$	1,722		$	—		$	5,363
Ending balance: collectively evaluated for impairment	18,535			1,592			3,490			17,949			3,817			45,383
Loans:
Ending balance	1,116,204			298,395			1,533,338			2,136,431			578,414			5,662,782
Ending balance: individually evaluated for impairment	12,864			—			4,522			12,012			—			29,398
Ending balance: collectively evaluated for impairment	1,103,340			298,395			1,528,816			2,124,419			578,414			5,633,384



	For the Three Months Ended September 30, 2019
	Commercial, financial, agricultural and other			Real estate construction			Residential real estate			Commercial real estate			Loans to individuals			Total
	(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance	$	20,678		$	2,491		$	4,133		$	19,287		$	4,407		$	50,996
Charge-offs	(742		)	—			(383		)	(6		)	(1,571		)	(2,702		)
Recoveries	41			74			6			81			162			364
Provision (credit)	(37		)	(155		)	160			(335		)	1,715			1,348
Ending balance	19,940			2,410			3,916			19,027			4,713			50,006
Acquired loans:
Beginning balance	15			—			25			25			—			65
Charge-offs	(49		)	—			—			(1,376		)	(3		)	(1,428		)
Recoveries	21			—			11			—			—			32
Provision (credit)	20			—			(35		)	1,372			3			1,360
Ending balance	7			—			1			21			—			29
Total ending balance	$	19,947		$	2,410		$	3,917		$	19,048		$	4,713		$	50,035



	For the Three Months Ended, September 30, 2018
	Commercial, financial, agricultural and other			Real estate construction		Residential real estate			Commercial real estate		Loans to individuals			Total
	(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance	$	25,082		$	1,262	$	3,556		$	17,731	$	3,527		$	51,158
Charge-offs	(2,582		)	—		(268		)	—		(1,076		)	(3,926		)
Recoveries	53			92		26			36		153			360
Provision (credit)	(564		)	238		296			1,896		1,213			3,079
Ending balance	21,989			1,592		3,610			19,663		3,817			50,671
Acquired loans:
Beginning balance	23			—		127			6		—			156
Charge-offs	—			—		(9		)	—		(4		)	(13		)
Recoveries	13			—		25			—		12			50
Provision (credit)	(16		)	—		(96		)	2		(8		)	(118		)
Ending balance	20			—		47			8		—			75
Total ending balance	$	22,009		$	1,592	$	3,657		$	19,671	$	3,817		$	50,746