Fair Values of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Inputs, Assets, Quantitative Information

In accordance with ASU No. 2011-4, "Fair Value Measurements (Topic 820)," the following table provides information related to quantitative inputs and assumptions used in March 31, 2020 Level 3 fair value measurements.

	Fair Value (dollars in thousands)			Valuation Technique	Unobservable Inputs	Range / (weighted average)
March 31, 2020
Other Investments	$	1,670		CarryingValue	N/A	N/A
Impaired Loans	758		(a)	Gas Reserve Study	Discount rate	10.00%
					Gas per MMBTU	$1.46 - $1.48 (b)
					Oil per BBL/d	$36.00 - $36.00 (b)
Limited Partnership Investments	6,223			Par Value	N/A	N/A
December 31, 2019
Other Investments	$	1,670		CarryingValue	N/A	N/A
Impaired Loans	884		(a)	Gas Reserve Study	Discount rate	10.00%
					Gas per MMBTU	$2.61 - $3.49 (b)
					Oil per BBL/d	$47.09 - $53.14 (b)
	2,239			Discounted Cash Flow	Discount Rate	$3.84 - $9.50
Limited Partnership Investments	5,795			Par Value	N/A	N/A

(a)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.

(b)Unobservable inputs are defined as follows: MMBTU - million British thermal units; BBL/d - barrels per day.

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:

	March 31, 2020
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities - Residential	$	—	$	8,116	$	—	$	8,116
Mortgage-Backed Securities - Commercial	—		240,757		—		240,757
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities - Residential	—		689,224		—		689,224
Other Government-Sponsored Enterprises	—		1,004		—		1,004
Obligations of States and Political Subdivisions	—		10,027		—		10,027
Corporate Securities	—		23,498		—		23,498
Total Securities Available for Sale	—		972,626		—		972,626
Other Investments	—		17,745		1,670		19,415
Loans Held for Sale	—		25,783		—		25,783
Other Assets(a)	—		57,676		6,223		63,899
Total Assets	$	—	$	1,073,830	$	7,893	$	1,081,723
Other Liabilities(a)	$	—	$	63,976	$	—	$	63,976
Total Liabilities	$	—	$	63,976	$	—	$	63,976

(a)Hedging and non-hedging interest rate derivatives and limited partnership investments

	December 31, 2019
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities - Residential	$	—	$	8,341	$	—	$	8,341
Mortgage-Backed Securities - Commercial	—		189,133		—		189,133
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities - Residential	—		661,947		—		661,947
Other Government-Sponsored Enterprises	—		1,000		—		1,000
Obligations of States and Political Subdivisions	—		17,909		—		17,909
Corporate Securities	—		23,962		—		23,962
Total Securities Available for Sale	—		902,292		—		902,292
Other Investments	—		15,091		1,670		16,761
Loans Held for Sale	—		15,989		—		15,989
Other Assets(a)	—		21,894		5,795		27,689
Total Assets	$	—	$	955,266	$	7,465	$	962,731
Other Liabilities(a)	$	—	$	21,469	$	—	$	21,469
Total Liabilities	$	—	$	21,469	$	—	$	21,469

(a)Hedging and non-hedging interest rate derivatives

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

For the three months ended March 31, changes in Level 3 assets and liabilities measured at fair value on a recurring basis are summarized as follows:

	2020
	Other Investments		Other Assets		Total
	(dollars in thousands)
Balance, beginning of period	$	1,670	$	5,795	$	7,465
Total gains or losses
Included in earnings	—		—		—
Included in other comprehensive income	—		—		—
Purchases, issuances, sales and settlements
Purchases	—		428		428
Issuances	—		—		—
Sales	—		—		—
Settlements	—		—		—
Transfers from Level 3	—		—		—
Transfers into Level 3	—		—		—
Balance, end of period	$	1,670	$	6,223	$	7,893

	2019
	Other Investments		Other Assets		Total
	(dollars in thousands)
Balance, beginning of period	$	1,670	$	2,696	$	4,366
Total gains or losses
Included in earnings	—		—		—
Included in other comprehensive income	—		(47)		(47)
Purchases, issuances, sales and settlements
Purchases	—		551		551
Issuances	—		—		—
Sales	—		—		—
Settlements	—		—		—
Transfers from Level 3	—		—		—
Transfers into Level 3	—		—		—
Balance, end of period	$	1,670	$	3,200	$	4,870

During the three months ended March 31, 2020 and 2019, there were no transfers between fair value Levels 1, 2 or 3. There were no gains or losses included in earnings for the periods presented that are attributable to the change in realized gains (losses) relating to assets held at March 31, 2020 and 2019.

Schedule of Assets Measured on Non-Recurring Basis

The tables below present the balances of assets measured at fair value on a nonrecurring basis at:

	March 31, 2020
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Impaired loans	$	—	$	34,995	$	14,346	$	49,341
Other real estate owned	—		2,935		—		2,935
Total Assets	$	—	$	37,930	$	14,346	$	52,276

	December 31, 2019
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Impaired loans	$	—	$	12,267	$	17,518	$	29,785
Other real estate owned	—		2,608		—		2,608
Total Assets	$	—	$	14,875	$	17,518	$	32,393

Losses Realized on Assets Measured on Non-Recurring Basis

The following losses were realized on the assets measured on a nonrecurring basis:

		For the Three Months Ended March 31,
		2020		2019
	(dollars in thousands)
Impaired loans		$	(8,029)	$	(969)
Other real estate owned		(101)		(49)
Total losses		$	(8,130)	$	(1,018)

Carrying Amounts and Fair Values of Financial Instruments

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

	March 31, 2020
			Fair Value Measurements Using:
	Carrying Amount		Total		Level 1		Level 2		Level 3
	(dollars in thousands)
Financial assets
Cash and due from banks	$	118,413	$	118,413	$	118,413	$	—	$	—
Interest-bearing deposits	15,762		15,762		15,762		—		—
Securities available for sale	972,626		972,626		—		972,626		—
Securities held to maturity	318,256		327,592		—		327,592		—
Other investments	19,415		19,415		—		17,745		1,670
Loans held for sale	25,783		25,783		—		25,783		—
Loans	6,313,944		6,702,184		—		34,995		6,667,189
Financial liabilities
Deposits	6,923,088		6,930,139		—		6,930,139		—
Short-term borrowings	146,971		146,405		—		146,405		—
Subordinated debt	170,490		156,508		—		—		156,508
Long-term debt	56,755		58,804		—		58,804		—
Capital lease obligation	6,710		6,710		—		6,710		—

	December 31, 2019
			Fair Value Measurements Using:
	Carrying Amount		Total		Level 1		Level 2		Level 3
	(dollars in thousands)
Financial assets
Cash and due from banks	$	102,346	$	102,346	$	102,346	$	—	$	—
Interest-bearing deposits	19,510		19,510		19,510		—		—
Securities available for sale	902,292		902,292		—		902,292		—
Securities held to maturity	337,123		338,718		—		338,718		—
Other investments	16,761		16,761		—		15,091		1,670
Loans held for sale	15,989		15,989		—		15,989		—
Loans	6,189,148		6,393,872		—		12,267		6,381,605
Financial liabilities
Deposits	6,677,615		6,677,595		—		6,677,595		—
Short-term borrowings	201,853		201,151		—		201,151		—
Subordinated debt	170,450		171,772		—		—		171,772
Long-term debt	56,917		58,051		—		58,051		—
Capital lease obligation	6,815		6,815		—		6,815		—