Fair Values of Assets and Liabilities (Tables)

3 Months Ended

9 Months Ended

Sep. 30, 2020

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Inputs, Assets, Quantitative Information

In accordance with ASU No. 2011-4, the following table provides information related to quantitative inputs and assumptions used in Level 3 fair value measurements.

	Fair Value (dollars in thousands)			Valuation Technique	Unobservable Inputs	Range / (weighted average)
September 30, 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	6,546			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:

	September 30, 2020
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities - Residential	$	—	$	7,541	$	—	$	7,541
Mortgage-Backed Securities - Commercial	—		218,552		—		218,552
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities - Residential	—		543,543		—		543,543
Other Government-Sponsored Enterprises	—		100,993		—		100,993
Obligations of States and Political Subdivisions	—		13,167		—		13,167
Corporate Securities	—		24,440		—		24,440
Total Securities Available for Sale	—		908,236		—		908,236
Other Investments	—		11,296		1,670		12,966
Loans Held for Sale	—		37,998		—		37,998
Premises and Equipment, net	—		442		—		442
Other Assets(a)	—		60,563		6,546		67,109
Total Assets	$	—	$	1,018,535	$	8,216	$	1,026,751
Other Liabilities(a)	$	—	$	67,241	$	—	$	67,241
Total Liabilities	$	—	$	67,241	$	—	$	67,241

(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

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:

	September 30, 2020
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Impaired loans	$	—	$	28,793	$	13,517	$	42,310
Other real estate owned	—		1,183		—		1,183
Total Assets	$	—	$	29,976	$	13,517	$	43,493

	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 September 30,				For the Nine Months Ended September 30,
	2020		2019		2020		2019
	(dollars in thousands)
Impaired loans2	$	(3,695)	$	(954)	$	(9,940)	$	(2,606)
Other real estate owned	(4)		(42)		(4)		(51)
Total losses	$	(3,699)	$	(996)	$	(9,944)	$	(2,657)

Carrying Amounts and Fair Values of Financial Instruments

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

	September 30, 2020
			Fair Value Measurements Using:
	Carrying Amount		Total		Level 1		Level 2		Level 3
	(dollars in thousands)
Financial assets
Cash and due from banks	$	97,060	$	97,060	$	97,060	$	—	$	—
Interest-bearing deposits	283,037		283,037		283,037		—		—
Securities available for sale	908,236		908,236		—		908,236		—
Securities held to maturity	268,638		276,988		—		276,988		—
Other investments	12,966		12,966		—		11,296		1,670
Loans held for sale	37,998		37,998		—		37,998		—
Loans	6,949,716		7,391,037		—		28,793		7,362,244
Financial liabilities
Deposits	7,703,907		7,707,618		—		7,707,618		—
Short-term borrowings	122,356		121,828		—		121,828		—
Subordinated debt	170,572		164,565		—		—		164,565
Long-term debt	56,424		58,372		—		58,372		—
Capital lease obligation	6,494		6,494		—		6,494		—

	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		—

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques

For the nine months ended September 30, 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	—		751		751
Issuances	—		—		—
Sales	—		—		—
Settlements	—		—		—
Transfers from Level 3	—		—		—
Transfers into Level 3	—		—		—
Balance, end of period	$	1,670	$	6,546	$	8,216

	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	—		198		198
Included in other comprehensive income	—		—		—
Purchases, issuances, sales and settlements
Purchases	—		1,237		1,237
Issuances	—		—		—
Sales	—		—		—
Settlements	—		—		—
Transfers from Level 3	—		—		—
Transfers into Level 3	—		—		—
Balance, end of period	$	1,670	$	4,131	$	5,801

During the nine months ended September 30, 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 September 30, 2020 and 2019.

For the three months ended September 30, 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	$	6,406	$	8,076
Total gains or losses
Included in earnings	—		—		—
Included in other comprehensive income	—		—		—
Purchases, issuances, sales and settlements
Purchases	—		140		140
Issuances	—		—		—
Sales	—		—		—
Settlements	—		—		—
Transfers from Level 3	—		—		—
Transfers into Level 3	—		—		—
Balance, end of period	$	1,670	$	6,546	$	8,216

	2019
	Other Investments		Other Assets		Total
	(dollars in thousands)
Balance, beginning of period	$	1,670	$	3,312	$	4,982
Total gains or losses
Included in earnings	—		245		245
Included in other comprehensive income	—		—		—
Purchases, issuances, sales and settlements
Purchases	—		574		574
Issuances	—		—		—
Sales	—		—		—
Settlements	—		—		—
Transfers from Level 3	—		—		—
Transfers into Level 3	—		—		—
Balance, end of period	$	1,670	$	4,131	$	5,801

During the three months ended September 30, 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 September 30, 2020 and 2019.