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Investment Securities
 12 Months Ended
Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities

Securities Available for Sale
Below is an analysis of the amortized cost and fair values of securities available for sale at December 31:
 
2019
 
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
$
7,745

 
$
596

 
$
—

 
$
8,341

 
$
9,011

 
$
479

 
$
(84
)
 
$
9,406

Mortgage-Backed Securities – Commercial
186,316

 
2,983

 
(166
)
 
189,133

 
169,633

 
214

 
(2,103
)
 
167,744

Obligations of U.S. Government-Sponsored Enterprises:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-Backed Securities – Residential
660,777

 
4,113

 
(2,943
)
 
661,947

 
686,906

 
1,846

 
(15,391
)
 
673,361

Other Government-Sponsored Enterprises
1,000

 
—

 
—

 
1,000

 
10,000

 
12

 
—

 
10,012

Obligations of States and Political Subdivisions
17,738

 
171

 
—

 
17,909

 
27,592

 
126

 
(6
)
 
27,712

Corporate Securities
22,919

 
1,043

 
—

 
23,962

 
20,912

 
321

 
(221
)
 
21,012

Total Securities Available for Sale
$
896,495

 
$
8,906

 
$
(3,109
)
 
$
902,292

 
$
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 December 31, 2019, by contractual maturity, are shown below:
 
Amortized
Cost
 
Estimated
Fair Value
 
(dollars in thousands)
Due within 1 year
$
—

 
$
—

Due after 1 but within 5 years
35,886

 
36,554

Due after 5 but within 10 years
5,771

 
6,317

Due after 10 years
—

 
—

 
41,657

 
42,871

Mortgage-Backed Securities (a)
854,838

 
859,421

Total Debt Securities
$
896,495

 
$
902,292

 
(a)
Mortgage Backed Securities include an amortized cost of $194.1 million and a fair value of $197.5 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $660.8 million and a fair value of $661.9 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 years ended December 31:
 
2019
 
2018
 
2017
 
(dollars in thousands)
Proceeds from sales
$
948

 
$
15,939

 
$
143,660

Gross (losses) gains realized:
 
 
 
 
 
Sales Transactions:
 
 
 
 
 
Gross gains
$
—

 
$
4,719

 
$
359

Gross losses
(7
)
 
—

 
(316
)
 
(7
)
 
4,719

 
43

Maturities and impairment
 
 
 
 
 
Gross gains
29

 
3,383

 
5,057

Gross losses
—

 
—

 
(60
)
Other-than-temporary impairment
—

 
—

 
—

 
29

 
3,383

 
4,997

Net gains and impairment
$
22

 
$
8,102

 
$
5,040

Gross losses on sales transactions recognized in 2019 were the result of the sale of one municipal security after its credit rating was withdrawn. Gross gains from maturities recognized in 2019 were the result of calls on ten municipal securities. Gross gains from sales transactions of $4.7 million were recognized in 2018 as a result of the sale of the remaining pooled trust preferred security portfolio. Gross gains from maturities and impairment of $3.4 million were recognized in 2018 as a result of successful auction calls on PreSTL XIV and PreSTL IX, two of our pooled trust preferred securities.
During 2017, proceeds from sales of investments include the liquidation of the DCB investment portfolio as well as the sale of small positions in CMO and MBS investments. Gross gains from maturities and impairments resulted from the early redemption of two pooled trust preferred securities. The successful auction call of PreSTL XIII provided a gain of $4.3 million and the liquidation of PreSTL VII by senior note holders resulted in a gain of $0.7 million.
Securities available for sale with an approximate fair value of $584.8 million and $636.3 million were pledged as of December 31, 2019 and 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 December 31:.
 
2019
 
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
$
3,392

 
$
57

 
$
—

 
$
3,449

 
$
3,635

 
$
—

 
$
(97
)
 
$
3,538

Mortgage-Backed Securities – Commercial
51,291

 
18

 
(184
)
 
51,125

 
55,221

 
—

 
(2,327
)
 
52,894

Obligations of U.S. Government-Sponsored Enterprises:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-Backed Securities – Residential
229,667

 
1,377

 
(294
)
 
230,750

 
279,109

 
212

 
(7,254
)
 
272,067

Mortgage-Backed Securities – Commercial
12,081

 
67

 
—

 
12,148

 
13,159

 
—

 
(258
)
 
12,901

Obligations of States and Political Subdivisions
40,092

 
554

 
—

 
40,646

 
42,331

 
175

 
(313
)
 
42,193

Debt Securities Issued by Foreign Governments
600

 
—

 
—

 
600

 
400

 
—

 
—

 
400

Total Securities Held to Maturity
$
337,123

 
$
2,073

 
$
(478
)
 
$
338,718

 
$
393,855

 
$
387

 
$
(10,249
)
 
$
383,993


The amortized cost and estimated fair value of debt securities held to maturity at December 31, 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
$
1,327

 
$
1,331

Due after 1 but within 5 years
7,541

 
7,621

Due after 5 but within 10 years
31,824

 
32,294

Due after 10 years
—

 
—

 
40,692

 
41,246

Mortgage-Backed Securities (a)
296,431

 
297,472

Total Debt Securities
$
337,123

 
$
338,718

(a)
Mortgage Backed Securities include an amortized cost of $54.7 million and a fair value of $54.6 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $241.7 million and a fair value of $242.9 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 $306.8 million and $250.3 million were pledged as of December 31, 2019 and 2018, respectively, to secure public deposits for other purposes required or permitted by law.