
	March 31, 2021								December 31, 2020
	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	$	6,067	$	623	$	—	$	6,690	$	6,492	$	738	$	—	$	7,230
Mortgage-Backed Securities – Commercial	268,890		4,597		(586)		272,901		182,823		8,357		—		191,180
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	724,611		11,082		(7,025)		728,668		481,109		14,924		—		496,033

Other Government-Sponsored Enterprises	1,000		—		(25)		975		100,996		2		—		100,998
Obligations of States and Political Subdivisions	9,647		132		(214)		9,565		11,154		243		—		11,397
Corporate Securities	23,146		1,388		(75)		24,459		22,941		1,444		—		24,385



Total Securities Available for Sale	$	1,033,361	$	17,822	$	(7,925)	$	1,043,258	$	805,515	$	25,708	$	—	$	831,223

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.


	Amortized Cost		Estimated Fair Value
	(dollars in thousands)
Due within 1 year	$	5,000	$	5,086
Due after 1 but within 5 years	12,870		13,670
Due after 5 but within 10 years	15,923		16,243
Due after 10 years	—		—
	33,793		34,999
Mortgage-Backed Securities (a)	999,568		1,008,259
Total Debt Securities	$	1,033,361	$	1,043,258

(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 $275.0 million and a fair value of $279.6 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $724.6 million and a fair value of $728.7 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 three months ended March 31:


	2021		2020
	(dollars in thousands)
Proceeds from sales	$	—	$	—
Gross gains (losses) realized:
Sales transactions:
Gross gains	$	—	$	—
Gross losses	—		—
	—		—
Maturities
Gross gains	6		19
Gross losses	—		—

	6		19
Net gains and impairment	$	6	$	19

Securities available for sale with an estimated fair value of $621.9 million and $792.1 million were pledged as of March 31, 2021 and December 31, 2020, respectively, to secure public deposits and for other purposes required or permitted by law.


	March 31, 2021								December 31, 2020
	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	$	2,679	$	123	$	—	$	2,802	$	2,766	$	138	$	—	$	2,904
Mortgage-Backed Securities- Commercial	58,484		992		(512)		58,964		36,799		1,441		—		38,240
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	279,970		4,134		(3,763)		280,341		277,351		5,389		(10)		282,730
Mortgage-Backed Securities – Commercial	9,121		316		—		9,437		9,737		344		—		10,081

Obligations of States and Political Subdivisions	35,109		484		(264)		35,329		34,391		705		—		35,096
Debt Securities Issued by Foreign Governments	800		—		—		800		800		—		—		800




Total Securities Held to Maturity	$	407,833	$	6,049	$	(5,764)	$	408,118	$	361,844	$	8,017	$	(10)	$	369,851

The amortized cost and estimated fair value of debt securities held to maturity at March 31, 2021, 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	$	2,887	$	2,904
Due after 1 but within 5 years	5,117		5,179
Due after 5 but within 10 years	45,774		44,717
Due after 10 years	3,801		3,774
	57,579		56,574
Mortgage-Backed Securities (a)	350,254		351,544
Total Debt Securities	$	407,833	$	408,118

(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 $61.2 million and a fair value of $61.8 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $289.1 million and a fair value of $289.8 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 $305.8 million and $228.1 million were pledged as of March 31, 2021 and December 31, 2020, respectively, to secure public deposits and for other purposes required or permitted by law.

As a member of the Federal Home Loan Bank ("FHLB"), First Commonwealth is required to purchase and hold stock in the FHLB to satisfy membership and borrowing requirements. The level of stock required to be held is dependent on the amount of First Commonwealth's mortgage-related assets and outstanding borrowings with the FHLB. This stock is restricted in that it can only be sold to the FHLB or to another member institution, and all sales of FHLB stock must be at par. As a result of these

restrictions, FHLB stock is unlike other investment securities insofar as there is no trading market for FHLB stock and the transfer price is determined by FHLB membership rules and not by market participants. As of March 31, 2021 and December 31, 2020, our FHLB stock totaled $11.8 million and $10.6 million, respectively, and is included in “Other investments” on the unaudited Consolidated Statements of Financial Condition.

FHLB stock is held as a long-term investment and its value is determined based on the ultimate recoverability of the par value. First Commonwealth evaluates impairment quarterly and has concluded that the par value of its investment in FHLB stock will be recovered. Accordingly, no impairment charge was recorded on these securities during the three months ended March 31, 2021.

As of both March 31, 2021 and December 31, 2020, "Other investments" also includes $1.7 million in equity securities. These securities do not have a readily determinable fair value and are carried at cost. During the three-months ended March 31, 2021 and 2020, there were no gains or losses recognized through earnings on equity securities. On a quarterly basis, management evaluates equity securities by reviewing the severity and duration of decline in estimated fair value, research reports, analysts’ recommendations, credit rating changes, news stories, annual reports, regulatory filings, impact of interest rate changes and other relevant information.

First Commonwealth utilizes the specific identification method to determine the net gain or loss on debt securities and the average cost method to determine the net gain or loss on equity securities.

The following table presents the gross unrealized losses and estimated fair values at March 31, 2021 for both available for sale and held to maturity securities by investment category and time frame for which securities have been in a continuous unrealized loss position:


	Less Than 12 Months				12 Months or More				Total
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(dollars in thousands)
Obligations of U.S. Government Agencies:

Mortgage-Backed Securities – Commercial	$	91,266	$	(1,098)	$	—	$	—	$	91,266	$	(1,098)
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	481,498		(10,788)		—		—		481,498		(10,788)

Other Government-Sponsored Enterprises	21,421		(1,250)		—		—		21,421		(1,250)
Obligations of States and Political Subdivisions	16,919		(478)		—		—		16,919		(478)

Corporate Securities	5,125		(75)		—		—		5,125		(75)



Total Securities	$	616,229	$	(13,689)	$	—	$	—	$	616,229	$	(13,689)

At March 31, 2021, fixed income securities issued by U.S. Government-sponsored enterprises comprised 88% of total unrealized losses due to changes in market interest rates. At March 31, 2021, there are 49 debt securities in an unrealized loss position.

The following table presents the gross unrealized losses and estimated fair values at December 31, 2020 by investment category and time frame for which securities have been in a continuous unrealized loss position:


	Less Than 12 Months				12 Months or More				Total
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(dollars in thousands)



Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	$	3,755	$	(10)	$	—	$	—	$	3,755	$	(10)





Total Securities	$	3,755	$	(10)	$	—	$	—	$	3,755	$	(10)

As of March 31, 2021, our corporate securities had an amortized cost and an estimated fair value of $23.1 million and $24.5 million, respectively. As of December 31, 2020, our corporate securities had an amortized cost and estimated fair value of $22.9 million and $24.4 million, respectively. Corporate securities are comprised of debt issued by large regional banks. There was one corporate security in an unrealized loss position as of March 31, 2021 and none as of December 31, 2020. When unrealized losses exist, management reviews each of the issuer’s asset quality, earnings trends and capital position to determine whether the unrealized loss position is a result of credit losses. All interest payments on the corporate securities are being made as contractually required.