
	2022								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	$	4,127	$	37	$	(181)	$	3,983	$	5,242	$	420	$	—	$	5,662
Mortgage-Backed Securities – Commercial	324,306		—		(52,890)		271,416		365,024		1,725		(4,459)		362,290
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	527,777		59		(78,847)		448,989		632,687		6,308		(9,021)		629,974

Other Government-Sponsored Enterprises	1,000		—		(118)		882		1,000		—		(19)		981
Obligations of States and Political Subdivisions	9,482		—		(1,295)		8,187		9,538		89		(103)		9,524
Corporate Securities	32,010		179		(2,985)		29,204		32,088		973		(112)		32,949



Total Securities Available for Sale	$	898,702	$	275	$	(136,316)	$	762,661	$	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 40 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	$	5,001	$	4,997
Due after 1 but within 5 years	8,881		8,654
Due after 5 but within 10 years	28,610		24,622
Due after 10 years	—		—
	42,492		38,273
Mortgage-Backed Securities (a)	856,210		724,388
Total Debt Securities	$	898,702	$	762,661

(a)Mortgage Backed Securities include an amortized cost of $328.4 million and a fair value of $275.4 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $527.8 million and a fair value of $449.0 million for Obligations of U.S. Government-sponsored enterprises issued by Fannie Mae and Freddie Mac.


	2022		2021		2020
	(dollars in thousands)
Proceeds from sales	$	—	$	—	$	—
Gross (losses) gains realized:
Sales Transactions:
Gross gains	$	—	$	—	$	—
Gross losses	—		—		—
	—		—		—
Maturities
Gross gains	2		16		70
Gross losses	—		—		—

	2		16		70
Net gains	$	2	$	16	$	70

Securities available for sale with an approximate fair value of $626.7 million and $759.1 million were pledged as of December 31, 2022 and 2021, respectively, to secure public deposits and for other purposes required or permitted by law.


	2022								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	$	2,008	$	—	$	(224)	$	1,784	$	2,409	$	101	$	—	$	2,510
Mortgage-Backed Securities – Commercial	75,229		—		(14,196)		61,033		91,439		305		(1,939)		89,805
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	329,267		—		(53,002)		276,265		387,848		2,800		(5,758)		384,890
Mortgage-Backed Securities – Commercial	4,794		—		(129)		4,665		7,309		148		—		7,457
Other Government-Sponsored Enterprises	22,221		—		(4,501)		17,720		21,904		—		(625)		21,279
Obligations of States and Political Subdivisions	26,643		—		(2,865)		23,778		29,402		414		(103)		29,713
Debt Securities Issued by Foreign Governments	1,000		—		(40)		960		1,000		—		(3)		997




Total Securities Held to Maturity	$	461,162	$	—	$	(74,957)	$	386,205	$	541,311	$	3,768	$	(8,428)	$	536,651

The amortized cost and estimated fair value of debt securities held to maturity at December 31, 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	$	1,145	$	1,143
Due after 1 but within 5 years	9,819		9,315
Due after 5 but within 10 years	38,337		31,570
Due after 10 years	563		430
	49,864		42,458
Mortgage-Backed Securities (a)	411,298		343,747
Total Debt Securities	$	461,162	$	386,205

(a)Mortgage Backed Securities include an amortized cost of $77.2 million and a fair value of $62.8 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of $334.1 million and a fair value of $280.9 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 $368.8 million and $313.9 million were pledged as of December 31, 2022 and 2021, respectively, to secure public deposits 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 December 31, 2022 and 2021, our FHLB stock totaled $25.2 million and $11.7 million, respectively and is included in “Other investments” on the 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 for the year ended December 31, 2022.

At both December 31, 2022 and 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. For the years ended December 31, 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 research reports, analysts’ recommendations, credit rating changes, news stories, annual reports, regulatory filings, impact of interest rate changes and other relevant information.

On January 1, 2020, First Commonwealth adopted Topic 326, which requires estimated credit losses on held to maturity securities be recorded as an allowance for credit loss instead of a reduction in the amortized cost of the securities.

We review our investment portfolio on a quarterly basis for indications of impairment. For available for sale securities the review includes analyzing the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and whether we are more likely than not to sell the security. We evaluate whether we 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 evaluated for impairment on a quarterly basis using historical probability of default and loss given default information specific to the investment category. If this evaluation determines that credit losses exist, an allowance for credit loss is recorded and included in earnings as a component of credit loss expense.

The following table presents the gross unrealized losses and estimated fair values at December 31, 2022 for available for sale securities for which an allowance for credit losses has not been recorded and held to maturity securities by investment category and time frame for which the 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	$	3,734	$	(405)	$	—	$	—	$	3,734	$	(405)
Mortgage-Backed Securities – Commercial	92,208		(12,364)		240,241		(54,722)		332,449		(67,086)
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	239,760		(21,543)		482,195		(110,306)		721,955		(131,849)
Mortgage-Backed Securities – Commercial	4,666		(129)		—		—		4,666		(129)
Other Government-Sponsored Enterprises	—		—		18,603		(4,619)		18,603		(4,619)
Obligations of States and Political Subdivisions	21,234		(1,979)		9,230		(2,181)		30,464		(4,160)
Debt Securities Issued by Foreign Governments	587		(13)		373		(27)		960		(40)
Corporate Securities	14,406		(590)		12,632		(2,395)		27,038		(2,985)



Total Securities	$	376,595	$	(37,023)	$	763,274	$	(174,250)	$	1,139,869	$	(211,273)

At December 31, 2022, fixed income securities issued by U.S. Government Agencies and U.S. Government-sponsored enterprises comprised 97% of total unrealized losses. All unrealized losses are a result of changes in market interest rates. At December 31, 2022, there were 209 debt securities in an unrealized loss position. There were no equity securities in an unrealized loss position at December 31, 2022.

The following table presents the gross unrealized losses and estimated fair value at December 31, 2021 for both available for sale and held to maturity securities by investment category and time frame for which the securities had 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)
Obligations 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 December 31, 2022, our corporate securities had an amortized cost and estimated fair value of $32.0 million and $29.2 million, respectively, and were comprised of debt for large regional banks. At December 31, 2021, these securities had an amortized cost of $32.1 million and estimated fair value of $32.9 million. When unrealized losses exist, management reviews each of the issuer’s asset quality, earnings trend 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.