Below is an analysis of the amortized cost and estimated fair values of securities available for sale at:


	September 30, 2022								December 31, 2021
	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	$	4,456	$	65	$	(232)	$	4,289	$	5,242	$	420	$	—	$	5,662
Mortgage-Backed Securities – Commercial	334,730		—		(51,477)		283,253		365,024		1,725		(4,459)		362,290
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	545,165		24		(83,676)		461,513		632,687		6,308		(9,021)		629,974

Other Government-Sponsored Enterprises	1,000		—		(127)		873		1,000		—		(19)		981
Obligations of States and Political Subdivisions	9,494		—		(1,322)		8,172		9,538		89		(103)		9,524
Corporate Securities	32,030		161		(2,876)		29,315		32,088		973		(112)		32,949



Total Securities Available for Sale	$	926,875	$	250	$	(139,710)	$	787,415	$	1,045,579	$	9,515	$	(13,714)	$	1,041,380

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 September 30, 2022, by contractual maturity, are shown below.


	Amortized Cost		Estimated Fair Value
	(dollars in thousands)
Due within 1 year	$	4,999	$	4,985
Due after 1 but within 5 years	8,880		8,611
Due after 5 but within 10 years	28,645		24,764
Due after 10 years	—		—
	42,524		38,360
Mortgage-Backed Securities (a)	884,351		749,055
Total Debt Securities	$	926,875	$	787,415

(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 $339.2 million and a fair value of $287.5 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $545.2 million and a fair value of $461.5 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 and maturities related to securities held to maturity and securities available for sale were as follows for the nine months ended September 30:


	2022		2021
	(dollars in thousands)
Proceeds from sales	$	—	$	—
Gross gains (losses) realized:
Sales transactions:
Gross gains	$	—	$	—
Gross losses	—		—
	—		—
Maturities
Gross gains	2		16
Gross losses	—		—

	2		16
Net gains	$	2	$	16

Securities available for sale with an estimated fair value of $647.9 million and $759.1 million were pledged as of September 30, 2022 and December 31, 2021, respectively, to secure public deposits and for other purposes required or permitted by law.

Below is an analysis of the amortized cost and fair values of debt securities held to maturity at:


	September 30, 2022								December 31, 2021
	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	$	2,029	$	—	$	(240)	$	1,789	$	2,409	$	101	$	—	$	2,510
Mortgage-Backed Securities- Commercial	77,896		—		(14,224)		63,672		91,439		305		(1,939)		89,805
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	338,959		—		(56,872)		282,087		387,848		2,800		(5,758)		384,890
Mortgage-Backed Securities – Commercial	5,434		—		(123)		5,311		7,309		148		—		7,457
Other Government-Sponsored Enterprises	22,141		—		(4,756)		17,385		21,904		—		(625)		21,279
Obligations of States and Political Subdivisions	27,331		—		(3,377)		23,954		29,402		414		(103)		29,713
Debt Securities Issued by Foreign Governments	1,000		—		(38)		962		1,000		—		(3)		997




Total Securities Held to Maturity	$	474,790	$	—	$	(79,630)	$	395,160	$	541,311	$	3,768	$	(8,428)	$	536,651

The amortized cost and estimated fair value of debt securities held to maturity at September 30, 2022, 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	$	611	$	611
Due after 1 but within 5 years	8,236		7,875
Due after 5 but within 10 years	41,062		33,416
Due after 10 years	563		399
	50,472		42,301
Mortgage-Backed Securities (a)	424,318		352,859
Total Debt Securities	$	474,790	$	395,160

(b)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 $79.9 million and a fair value of $65.5 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $344.4 million and a fair value of $287.4 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 $340.9 million and $313.9 million were pledged as of September 30, 2022 and December 31, 2021, 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 September 30, 2022 and December 31, 2021, our FHLB stock totaled $14.3 million and $11.7 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 and nine months ended September 30, 2022.

As of both September 30, 2022 and December 31, 2021, "Other investments" also includes $1.2 million in equity securities. These securities do not have a readily determinable fair value and are carried at cost. During the nine-months ended September 30, 2022 and 2021, 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.

are more likely than not to sell debt securities based upon our investment strategy for the particular type of security and our cash flow needs, liquidity position, capital adequacy, tax position and interest rate risk position. Held-to-maturity securities are

The following table presents the gross unrealized losses and estimated fair values at September 30, 2022 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 – Residential	$	3,845	$	(472)	$	—	$	—	$	3,845	$	(472)
Mortgage-Backed Securities – Commercial	188,467		(30,122)		158,458		(35,579)		346,925		(65,701)
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	292,688		(33,319)		448,625		(107,229)		741,313		(140,548)
Mortgage-Backed Securities – Commercial	5,311		(123)		—		—		5,311		(123)
Other Government-Sponsored Enterprises	—		—		18,258		(4,883)		18,258		(4,883)
Obligations of States and Political Subdivisions	24,485		(3,081)		7,166		(1,618)		31,651		(4,699)
Debt Securities Issued by Foreign Governments	962		(38)		—		—		962		(38)
Corporate Securities	23,004		(1,991)		4,167		(885)		27,171		(2,876)



Total Securities	$	538,762	$	(69,146)	$	636,674	$	(150,194)	$	1,175,436	$	(219,340)

At September 30, 2022, fixed income securities issued by the U.S. Government and U.S. Government-sponsored enterprises comprised 96% of total unrealized losses. All unrealized losses are the result of changes in market interest rates. At September 30, 2022, there are 218 debt securities in an unrealized loss position.

The following table presents the gross unrealized losses and estimated fair values at December 31, 2021 by investment category and the 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	$	320,414	$	(6,398)	$	—	$	—	$	320,414	$	(6,398)
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	658,965		(14,779)		—		—		658,965		(14,779)

Other Government-Sponsored Enterprises	22,261		(644)		—		—		22,261		(644)
Obligation of States and Political Subdivisions	11,213		(206)		—		—		11,213		(206)
Debt Securities Issued by Foreign Governments	997		(3)		—		—		997		(3)
Corporate Securities	19,013		(112)		—		—		19,013		(112)

Total Securities	$	1,032,863	$	(22,142)	$	—	$	—	$	1,032,863	$	(22,142)

As of September 30, 2022, our corporate securities had an amortized cost and an estimated fair value of $32.0 million and $29.3 million, respectively. As of December 31, 2021, our corporate securities had an amortized cost and estimated fair value of $32.1 million and $32.9 million, respectively. Corporate securities are comprised of debt issued by large regional banks. There were six and four corporate securities, respectively, in an unrealized loss position as of September 30, 2022 and December 31, 2021. 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.