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Securities Available for Sale | 12 Months Ended
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Dec. 31, 2012
Securities Available for Sale | Note 8—Securities Available for Sale Below is an analysis of the amortized cost and fair values of securities available for sale at December 31:
|  | 2012 |  |  | 2011 |
|  | 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 |  | $ | 27,883 |  |  | $ | 3,781 |  |  | $ | 0 |  |  | $ | 31,664 |  |  | $ | 32,139 |  |  | $ | 4,061 |  |  | $ | (6 | ) |  | $ | 36,194 |
Obligations of U.S. Government-Sponsored Enterprises: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-Backed Securities—Residential |  |  | 839,102 |  |  |  | 25,691 |  |  |  | (392 | ) |  |  | 864,401 |  |  |  | 771,196 |  |  |  | 29,835 |  |  |  | 0 |  |  |  | 801,031 |
Mortgage-Backed Securities—Commercial |  |  | 148 |  |  |  | 1 |  |  |  | 0 |  |  |  | 149 |  |  |  | 193 |  |  |  | 1 |  |  |  | (1 | ) |  |  | 193 |
Other Government—Sponsored Enterprises |  |  | 241,970 |  |  |  | 766 |  |  |  | (72 | ) |  |  | 242,664 |  |  |  | 267,807 |  |  |  | 973 |  |  |  | (132 | ) |  |  | 268,648 |
Obligations of States and Political Subdivisions |  |  | 82 |  |  |  | 4 |  |  |  | 0 |  |  |  | 86 |  |  |  | 444 |  |  |  | 15 |  |  |  | 0 |  |  |  | 459 |
Corporate Securities |  |  | 6,703 |  |  |  | 288 |  |  |  | 0 |  |  |  | 6,991 |  |  |  | 11,811 |  |  |  | 162 |  |  |  | (562 | ) |  |  | 11,411 |
Pooled Trust Preferred Collateralized Debt Obligations |  |  | 51,866 |  |  |  | 3 |  |  |  | (28,496 | ) |  |  | 23,373 |  |  |  | 54,762 |  |  |  | 3 |  |  |  | (31,785 | ) |  |  | 22,980 |
Total Debt Securities |  |  | 1,167,754 |  |  |  | 30,534 |  |  |  | (28,960 | ) |  |  | 1,169,328 |  |  |  | 1,138,352 |  |  |  | 35,050 |  |  |  | (32,486 | ) |  |  | 1,140,916 |
Equities |  |  | 1,859 |  |  |  | 116 |  |  |  | 0 |  |  |  | 1,975 |  |  |  | 1,860 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,860 |
Total Securities Available for Sale |  | $ | 1,169,613 |  |  | $ | 30,650 |  |  | $ | (28,960 | ) |  | $ | 1,171,303 |  |  | $ | 1,140,212 |  |  | $ | 35,050 |  |  | $ | (32,486 | ) |  | $ | 1,142,776 |
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 effects on earnings and interest rate risk positions. During 2012, $5.1 million in single issue trust preferred securities and $0.2 million in pooled trust preferred securities were called by their issuers, providing security gains of $0.2 million. In 2011, $5.2 million in single issue trust preferred securities and $1.2 million in corporate debentures owned by a non-bank subsidiary of First Commonwealth were sold in order to reinvest the proceeds in more liquid assets for that subsidiary. The amounts sold represent the subsidiaries entire portfolio of these investments and resulted in a net gain of $0.3 million. Additionally, $3.0 million in single issue trust preferred securities held by another subsidiary were called, resulting in a gain of $0.1 million. Also during 2011, the Company executed its strategy to liquidate its obligations of states and political subdivisions in order to mitigate future credit risk and improve its tax position. Investments in obligations of states and political subdivisions totaled $0.5 million and $47.8 million as of December 31, 2011 and 2010, respectively. This decline is a result of $4.2 million in maturities and $42.5 million in sales which provided $0.3 million in recognized gains. At December 31, 2012 and 2011, investments in obligations of states and political subdivisions had an amortized cost of $82 thousand and $0.4 million, respectively, and were classified as available for sale. None of these securities were in an unrealized loss position. 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 fair value of debt securities at December 31, 2012, by contractual maturity, are shown below:
|  | Amortized Cost |  |  | Estimated Fair Value |
|  | (dollars in thousands) |
Due within 1 year |  | $ | 0 |  |  | $ | 0 |
Due after 1 but within 5 years |  |  | 242,052 |  |  |  | 242,750 |
Due after 5 but within 10 years |  |  | 0 |  |  |  | 0 |
Due after 10 years |  |  | 58,569 |  |  |  | 30,364 |
|  |  | 300,621 |  |  |  | 273,114 |
Mortgage-Backed Securities (a) |  |  | 867,133 |  |  |  | 896,214 |
Total debt securities |  | $ | 1,167,754 |  |  | $ | 1,169,328 |
(a) | Mortgage Backed Securities include an amortized cost of $28 million and a fair value of $32 million for Obligations of U.S. Government agencies issued by Ginnie Mae and Obligations of U.S. Government-sponsored enterprises issued by Fannie Mae and Freddie Mac which had an amortized cost of $839 million and a fair value of $864 million.
Proceeds from sale, gross gains (losses) realized on sales, maturities and other-than-temporary impairment charges related to securities available for sale were as follows for the years ended December 31:
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (dollars in thousands) |
Proceeds from sale |  | $ | 0 |  |  | $ | 76,914 |  |  | $ | 143,503 |
Gross gains (losses) realized: |  |  |  |  |  |  |  |  |  |  |  |
Sales Transactions: |  |  |  |  |  |  |  |  |  |  |  |
Gross gains |  | $ | 0 |  |  | $ | 2,368 |  |  | $ | 2,892 |
Gross losses |  |  | 0 |  |  |  | (258 | ) |  |  | (790 | )
|  |  | 0 |  |  |  | 2,110 |  |  |  | 2,102 |
Maturities, calls and impairment: |  |  |  |  |  |  |  |  |  |  |  |
Gross gains |  |  | 192 |  |  |  | 75 |  |  |  | 270 |
Gross losses |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Other-than-temporary impairment |  |  | 0 |  |  |  | 0 |  |  |  | (9,193 | )
|  |  | 192 |  |  |  | 75 |  |  |  | (8,923 | )
Net gains (losses) and impairment |  | $ | 192 |  |  | $ | 2,185 |  |  | $ | (6,821 | )
Securities available for sale with an approximate fair value of $631.0 million and $668.8 million were pledged as of December 31, 2012 and 2011, respectively, to secure public deposits and for other purposes required or permitted by law.

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