INDIANA, Pa., July 23, 2019 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the second quarter of 2019.
Second Quarter 2019 Highlights
Earnings
- Second quarter net income was $27.3 million, or $0.28 diluted earnings per share, an increase of $0.03 from the prior quarter.
- Total revenue grew $4.7 million, or 5.5% from the prior quarter.
- Noninterest income grew $3.0 million, or 16.1% from the prior quarter.
- Net interest income (FTE) increased $1.6 million, or 2.5% from the prior quarter.
- Total noninterest expense increased $2.5 million, or 5.0% from the previous quarter, and includes $1.1 million in losses and write-downs related to the sale of two OREO properties and a write-down of a branch facility.
- Provision for credit losses totaled $2.8 million, a decrease of $1.3 million as compared to the prior quarter.
Franchise Growth
- Total loans grew $138 million, or 9.4% on an annualized basis from the prior quarter.
- Average deposits grew $137 million, or 9.1% on an annualized basis from the prior quarter.
- Tangible book value per share (non-GAAP)(1) grew $0.25, or 13.9% on an annualized basis from the prior quarter.
- On June 27, 2019, the company’s banking subsidiary, First Commonwealth Bank, announced it had received all necessary regulatory approvals for its acquisition of 14 Santander branches in Central Pennsylvania, which is expected to be completed in September 2019.
Profitability
- Return on average assets improved 10 basis points from the previous quarter to 1.37%.
- The return on average tangible common equity for the second quarter of 2019 was 15.47%.
- The core efficiency ratio (non-GAAP)(1) improved to 56.8% compared to 58.2% in the previous quarter.
- The net interest margin of 3.75% was unchanged from the previous quarter.
“We had an impressive first half of the year, as our loan and deposit growth has exceeded our expectations,” stated T. Michael Price, President and Chief Executive Officer. “Our Regional President model has been the key to our growth so far this year, enabling cross-functional teamwork to better serve our customers. I am also pleased with the production coming from recent investments in our Mortgage, SBA and Commercial Lending capabilities. These additional sources of fee income and core deposits will serve us well as we navigate the current interest rate environment.” Price continued, “We expect 2019 to be an exciting year for First Commonwealth as we further execute on our mission, expand our presence within our footprint, including Central Pennsylvania and Ohio, and introduce new initiatives to drive profitable growth and maximize shareholder value.”
Financial Summary
| (dollars in thousands, | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||
| except per share data) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
| Reported Results | |||||||||||||||||||
| Net income | $ | 27,280 | $ | 24,589 | $ | 32,081 | $ | 51,869 | $ | 55,351 | |||||||||
| Diluted earnings per share | $ | 0.28 | $ | 0.25 | $ | 0.32 | $ | 0.53 | $ | 0.56 | |||||||||
| Return on average assets | 1.37 | % | 1.27 | % | 1.71 | % | 1.32 | % | 1.51 | % | |||||||||
| Return on average equity | 10.84 | % | 10.11 | % | 13.74 | % | 10.48 | % | 12.20 | % | |||||||||
| Operating Results (non-GAAP)(1) | |||||||||||||||||||
| Core net income | $ | 27,307 | $ | 24,589 | $ | 33,087 | $ | 51,896 | $ | 56,623 | |||||||||
| Core diluted earnings per share | $ | 0.28 | $ | 0.25 | $ | 0.33 | $ | 0.53 | $ | 0.57 | |||||||||
| Core return on average assets | 1.37 | % | 1.27 | % | 1.76 | % | 1.32 | % | 1.54 | % | |||||||||
| Return on average tangible common equity | 15.47 | % | 14.59 | % | 20.08 | % | 15.04 | % | 17.89 | % | |||||||||
| Core return on average tangible common equity | 15.48 | % | 14.59 | % | 20.70 | % | 15.05 | % | 18.29 | % | |||||||||
| Core efficiency ratio | 56.80 | % | 58.18 | % | 55.23 | % | 57.47 | % | 56.66 | % | |||||||||
| Net interest margin (FTE) | 3.75 | % | 3.75 | % | 3.78 | % | 3.75 | % | 3.74 | % | |||||||||
| (1) | Core operating results are a non-GAAP measure used by management to measure performance in operating the business that management believes enhances investors' ability to better understand the underlying business performance and trends related to core business activities. A full reconciliation of non-GAAP financial measures can be found at the end of the financial statements which accompany this release. |
Earnings
Net income for the second quarter of 2019 was $27.3 million, as compared to $24.6 million in the previous quarter and $32.1 million for the second quarter of 2018. The increase from the previous quarter was primarily driven by strong fee income growth and a stable net interest margin. The decrease from the prior year was primarily due to a $5.3 million (pre-tax) gain from successful auction calls of the Company’s remaining pooled trust preferred securities in the year ago quarter.
Net income for the first six months of 2019 was $51.9 million, as compared to $55.4 million for the same period in 2018. The decrease from the prior year was primarily due to an $8.1 million (pre-tax) gain on the sale and successful auction calls of the Company’s remaining pooled trust preferred securities in the first six months of 2018.
Net Interest Income and Net Interest Margin
During the second quarter of 2019, net interest income (FTE) was $67.6 million, an increase of $1.6 million from the previous quarter. The increase in net interest income was the result of a $100 million increase in average interest-earning assets and a $32 million, or 8.9% (annualized), increase in average noninterest bearing deposits.
The net interest margin for the second quarter of 2019 was unchanged from the previous quarter at 3.75% and decreased three basis points compared to the second quarter of 2018. In the second quarter of 2019, strong core deposit growth, together with a favorable shift in the mix of earning assets (as strong loan growth more than offset a decrease of approximately $37.4 million in securities), combined to offset higher interest bearing deposit costs.
The decrease in the net interest margin from the prior year was due to the recognition of $1.5 million in deferred interest from the sale of one commercial loan and the successful auction call of the company’s remaining trust preferred security portfolio during the second quarter of 2018, which contributed approximately nine basis points to the net interest margin.
Total average deposits grew by $137 million in the second quarter of 2019 compared to the previous quarter. Growth was driven by a $100 million increase in average interest-bearing demand and savings deposits and a $32 million increase in average noninterest-bearing deposits.
Credit Quality
The provision for credit losses totaled $2.8 million for the quarter ended June 30, 2019, a decrease of $1.3 million compared to the prior quarter. The decrease is primarily due to a continuation of the long-term trend of improvements in credit quality.
Nonperforming loans were $35.6 million for the quarter ended June 30, 2019, an increase of $4.3 million from previous quarter and a decrease of $10.3 million from the same quarter last year. Nonperforming loans as a percentage of total loans were 0.59%, 0.53% and 0.81% for the periods ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively.
During the second quarter of 2019, net charge-offs (recoveries) were $1.4 million, compared to $2.2 million in the prior quarter and $3.6 million in the second quarter of 2018. Net charge-offs in the second quarter of 2018 included a $2.2 million charge-off of one commercial real estate credit.
For the originated loan portfolio at June 30, 2019, the general allowance for credit losses to total originated non-impaired loans was 0.88%, compared to 0.89% at March 31, 2019 and 0.88% at June 30, 2018.
Noninterest Income and Noninterest Expense
Noninterest income (excluding net security gains) totaled $21.9 million for the second quarter of 2019, as compared to $18.9 million in the previous quarter and $21.0 million for the second quarter of 2018. The increase from the previous quarter was primarily due to a $0.7 million increase in card-related interchange income, a $0.6 million increase in mortgage banking revenue, a $0.4 million gain on the sale of a commercial loan and a $0.3 million increase in gain on sale of SBA loans.
Non-interest income during the second quarter of 2018 included net securities gains of $5.3 million as a result of the successful auction call and open market sale of the company’s remaining pooled trust preferred securities during the second quarter of 2018.
Noninterest expense (excluding merger-related expenses) totaled $52.2 million for the second quarter of 2019 as compared to $49.7 million for the first quarter of 2019 and $47.9 million for the second quarter of 2018. The increase from the previous quarter was primarily driven by a $1.0 million increase in unfunded commitment reserves due to higher construction loan originations, $0.9 million in write-downs of two OREO properties, and a $0.2 million write-down of a former bank facility. In addition, Pennsylvania shares tax increased $0.3 million in comparison to the previous quarter due to educational improvement tax credits recognized in the first quarter of 2019.
Full time equivalent staff was 1,438 at June 30, 2019 and 1,417 at March 31, 2019 and was 1,438 at June 30, 2018.
Dividends and Capital
First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.10 per share, which is payable on August 16, 2019 to shareholders of record as of August 2, 2019. This dividend represents a 3.1% projected annual yield utilizing the July 22, 2019 closing market price of $13.03.
First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at June 30, 2019 were 14.6%, 12.2%, 10.4% and 11.2%, respectively. First Commonwealth’s current capital levels exceed the fully phased-in Basel III capital requirements issued by U.S. bank regulators.
Conference Call
First Commonwealth will host a quarterly conference call to discuss its financial results for the second quarter 2019 on Wednesday, July 24, 2019 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-844-792-3645 or through the company’s web page, http://www.fcbanking.com/InvestorRelations. A replay of the call will be available approximately one hour following the conclusion of the conference by dialing 1-877-344-7529 and entering the access code # 10133127. A link to the webcast replay will also be accessible on the company’s web page for 30 days.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation (NYSE: FCF), headquartered in Indiana, Pennsylvania, is a financial services company with 133 community banking offices in 22 counties throughout western and central Pennsylvania and throughout Ohio, as well as corporate banking centers in Pittsburgh, Pennsylvania, and Cleveland and Columbus, Ohio. The company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson and Dublin, Ohio. First Commonwealth provides a full range of commercial banking, consumer banking, mortgage, wealth management and insurance products and services through its subsidiaries First Commonwealth Bank and First Commonwealth Insurance Agency. For more information about First Commonwealth or to open an account today, please visit www.fcbanking.com.
Forward-Looking Statements
This release contains forward-looking statements about First Commonwealth’s future plans, strategies and financial performance. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may." Such statements are based on assumptions and involve risks and uncertainties, many of which are beyond First Commonwealth’s control. Factors that could cause actual results, performance or achievements to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national and international economic conditions and the impact they may have on First Commonwealth and its customers; (2) volatility and disruption in national and international financial markets; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (4) inflation, interest rate, commodity price, securities market and monetary fluctuations; (5) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance); (6) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (7) changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (8) political instability; (9) acts of God or of war or terrorism; (10) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (11) changes in consumer spending, borrowings and savings habits; (12) First Commonwealth’s ability to attract and retain qualified employees; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) the reliability of First Commonwealth’s vendors, internal control systems or information systems; (16) the ability to increase market share and control expenses; (17) impairment of First Commonwealth’s goodwill or other intangible assets; (18) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (19) the soundness of other financial institutions; (20) the costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals; and (21) other risks and uncertainties described in the reports that First Commonwealth files with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K. Forward-looking statements speak only as of the date on which they are made. First Commonwealth undertakes no obligation to update any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
Media Relations:
Jonathan E. Longwill
Vice President / Communications and Media Relations
Phone: 724-463-6806
E-mail: JLongwill@fcbanking.com
Investor Relations
Ryan M. Thomas
Vice President / Finance and Investor Relations
Phone: 724-463-1690
E-mail: RThomas1@fcbanking.com
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||||||||||||
| Unaudited | |||||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
| SUMMARY RESULTS OF OPERATIONS | |||||||||||||||||||
| Net interest income (FTE) (1) | $ | 67,581 | $ | 65,943 | $ | 64,192 | $ | 133,524 | $ | 124,371 | |||||||||
| Provision for credit losses | 2,835 | 4,095 | 1,168 | 6,930 | 8,071 | ||||||||||||||
| Noninterest income | 21,906 | 18,872 | 26,308 | 40,778 | 48,351 | ||||||||||||||
| Noninterest expense | 52,229 | 49,730 | 49,129 | 101,959 | 96,002 | ||||||||||||||
| Net income | 27,280 | 24,589 | 32,081 | 51,869 | 55,351 | ||||||||||||||
| Core net income (5) | 27,307 | 24,589 | 33,087 | 51,896 | 56,623 | ||||||||||||||
| Earnings per common share (diluted) | $ | 0.28 | $ | 0.25 | $ | 0.32 | $ | 0.53 | $ | 0.56 | |||||||||
| Core earnings per common share (diluted) (6) | $ | 0.28 | $ | 0.25 | $ | 0.33 | $ | 0.53 | $ | 0.57 | |||||||||
| KEY FINANCIAL RATIOS | |||||||||||||||||||
| Return on average assets | 1.37 | % | 1.27 | % | 1.71 | % | 1.32 | % | 1.51 | % | |||||||||
| Core return on average assets (7) | 1.37 | % | 1.27 | % | 1.76 | % | 1.32 | % | 1.54 | % | |||||||||
| Return on average shareholders' equity | 10.84 | % | 10.11 | % | 13.74 | % | 10.48 | % | 12.20 | % | |||||||||
| Return on average tangible common equity (8) | 15.47 | % | 14.59 | % | 20.08 | % | 15.04 | % | 17.89 | % | |||||||||
| Core return on average tangible common equity (9) | 15.48 | % | 14.59 | % | 20.70 | % | 15.05 | % | 18.29 | % | |||||||||
| Core efficiency ratio (2)(10) | 56.80 | % | 58.18 | % | 55.23 | % | 57.47 | % | 56.66 | % | |||||||||
| Net interest margin (FTE) (1) | 3.75 | % | 3.75 | % | 3.78 | % | 3.75 | % | 3.74 | % | |||||||||
| Book value per common share | $ | 10.37 | $ | 10.12 | $ | 9.57 | |||||||||||||
| Tangible book value per common share (11) | 7.46 | 7.21 | 6.69 | ||||||||||||||||
| Market value per common share | 13.47 | 12.60 | 15.51 | ||||||||||||||||
| Cash dividends declared per common share | 0.10 | 0.10 | 0.09 | $ | 0.20 | $ | 0.17 | ||||||||||||
| ASSET QUALITY RATIOS | |||||||||||||||||||
| Nonperforming loans as a percent of end-of-period loans (3) | 0.59 | % | 0.53 | % | 0.81 | % | |||||||||||||
| Nonperforming assets as a percent of total assets (3) | 0.47 | % | 0.45 | % | 0.65 | % | |||||||||||||
| Net charge-offs as a percent of average loans (annualized) (4) | 0.10 | % | 0.15 | % | 0.26 | % | |||||||||||||
| Allowance for credit losses as a percent of nonperforming loans (4) | 143.62 | % | 158.74 | % | 111.89 | % | |||||||||||||
| Allowance for credit losses as a percent of end-of-period loans (4) | 0.85 | % | 0.85 | % | 0.91 | % | |||||||||||||
| Allowance for credit losses (originated loans and leases) as a percent of total originated loans and leases | 0.92 | % | 0.92 | % | 1.01 | % | |||||||||||||
| CAPITAL RATIOS | |||||||||||||||||||
| Shareholders' equity as a percent of total assets | 12.7 | % | 12.5 | % | 12.6 | % | |||||||||||||
| Tangible common equity as a percent of tangible assets (12) | 9.4 | % | 9.3 | % | 9.1 | % | |||||||||||||
| Leverage Ratio | 10.4 | % | 10.3 | % | 10.4 | % | |||||||||||||
| Risk Based Capital - Tier I | 12.2 | % | 12.2 | % | 12.3 | % | |||||||||||||
| Risk Based Capital - Total | 14.6 | % | 14.6 | % | 14.8 | % | |||||||||||||
| Common Equity - Tier I | 11.2 | % | 11.1 | % | 11.2 | % | |||||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | ||||||||||||||||
| CONSOLIDATED FINANCIAL DATA | ||||||||||||||||
| Unaudited | ||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| INCOME STATEMENT | ||||||||||||||||
| Interest income | $ | 82,057 | $ | 79,594 | $ | 72,940 | $ | 161,651 | $ | 139,439 | ||||||
| Interest expense | 14,931 | 14,108 | 9,265 | 29,039 | 16,079 | |||||||||||
| Net Interest Income | 67,126 | 65,486 | 63,675 | 132,612 | 123,360 | |||||||||||
| Taxable equivalent adjustment (1) | 455 | 457 | 517 | 912 | 1,011 | |||||||||||
| Net Interest Income (FTE) | 67,581 | 65,943 | 64,192 | 133,524 | 124,371 | |||||||||||
| Provision for credit losses | 2,835 | 4,095 | 1,168 | 6,930 | 8,071 | |||||||||||
| Net Interest Income after Provision for Credit Losses (FTE) | 64,746 | 61,848 | 63,024 | 126,594 | 116,300 | |||||||||||
| Net securities gains | 6 | — | 5,262 | 6 | 8,102 | |||||||||||
| Trust income | 1,970 | 1,926 | 1,880 | 3,896 | 3,808 | |||||||||||
| Service charges on deposit accounts | 4,593 | 4,245 | 4,423 | 8,838 | 8,829 | |||||||||||
| Insurance and retail brokerage commissions | 2,014 | 1,961 | 1,820 | 3,975 | 3,688 | |||||||||||
| Income from bank owned life insurance | 1,442 | 1,426 | 2,168 | 2,868 | 3,662 | |||||||||||
| Gain on sale of mortgage loans | 2,074 | 1,428 | 1,241 | 3,502 | 2,725 | |||||||||||
| Gain on sale of other loans and assets | 1,777 | 1,084 | 2,331 | 2,861 | 2,905 | |||||||||||
| Card-related interchange income | 5,441 | 4,730 | 5,143 | 10,171 | 9,885 | |||||||||||
| Derivative mark-to-market | (17 | ) | (26 | ) | — | (43 | ) | 789 | ||||||||
| Swap fee income | 820 | 393 | 297 | 1,213 | 587 | |||||||||||
| Other income | 1,786 | 1,705 | 1,743 | 3,491 | 3,371 | |||||||||||
| Total Noninterest Income | 21,906 | 18,872 | 26,308 | 40,778 | 48,351 | |||||||||||
| Salaries and employee benefits | 27,311 | 27,220 | 26,154 | 54,531 | 51,027 | |||||||||||
| Net occupancy | 4,441 | 4,916 | 4,222 | 9,357 | 8,591 | |||||||||||
| Furniture and equipment | 3,824 | 3,668 | 3,647 | 7,492 | 7,187 | |||||||||||
| Data processing | 2,619 | 2,544 | 2,478 | 5,163 | 4,911 | |||||||||||
| Pennsylvania shares tax | 1,260 | 916 | 1,247 | 2,176 | 2,150 | |||||||||||
| Advertising and promotion | 1,231 | 1,240 | 1,176 | 2,471 | 1,985 | |||||||||||
| Intangible amortization | 745 | 754 | 829 | 1,499 | 1,613 | |||||||||||
| Collection and repossession | 460 | 547 | 607 | 1,007 | 1,430 | |||||||||||
| Other professional fees and services | 1,032 | 754 | 1,031 | 1,786 | 2,038 | |||||||||||
| FDIC insurance | 555 | 574 | 597 | 1,129 | 1,373 | |||||||||||
| Litigation and operational losses | 555 | 401 | 197 | 956 | 376 | |||||||||||
| Loss on sale or write-down of assets | 1,181 | 65 | 497 | 1,246 | 694 | |||||||||||
| Merger and acquisition related | 34 | — | 1,273 | 34 | 1,610 | |||||||||||
| Other operating expenses | 6,981 | 6,131 | 5,174 | 13,112 | 11,017 | |||||||||||
| Total Noninterest Expense | 52,229 | 49,730 | 49,129 | 101,959 | 96,002 | |||||||||||
| Income before Income Taxes | 34,423 | 30,990 | 40,203 | 65,413 | 68,649 | |||||||||||
| Taxable equivalent adjustment (1) | 455 | 457 | 517 | 912 | 1,011 | |||||||||||
| Income tax provision | 6,688 | 5,944 | 7,605 | 12,632 | 12,287 | |||||||||||
| Net Income | $ | 27,280 | $ | 24,589 | $ | 32,081 | $ | 51,869 | $ | 55,351 | ||||||
| Shares Outstanding at End of Period | 98,499,937 | 98,625,806 | 100,364,567 | 98,499,937 | 100,364,567 | |||||||||||
| Average Shares Outstanding Assuming Dilution | 98,600,609 | 98,706,827 | 99,504,409 | 98,651,810 | 98,529,160 | |||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||||
| Unaudited | |||||||||||
| (dollars in thousands) | |||||||||||
| June 30, | March 31, | June 30, | |||||||||
| 2019 | 2019 | 2018 | |||||||||
| BALANCE SHEET (Period End) | |||||||||||
| Assets | |||||||||||
| Cash and due from banks | $ | 95,047 | $ | 100,724 | $ | 101,744 | |||||
| Interest-bearing bank deposits | 1,233 | 23,168 | 2,237 | ||||||||
| Securities available for sale, at fair value | 895,471 | 918,479 | 876,570 | ||||||||
| Securities held to maturity, at amortized cost | 373,453 | 384,909 | 403,019 | ||||||||
| Loans held for sale | 16,036 | 9,627 | 7,038 | ||||||||
| Loans | 6,003,059 | 5,871,070 | 5,640,106 | ||||||||
| Allowance for credit losses | (51,061 | ) | (49,653 | ) | (51,314 | ) | |||||
| Net loans | 5,951,998 | 5,821,417 | 5,588,792 | ||||||||
| Goodwill and other intangibles | 286,545 | 287,078 | 289,051 | ||||||||
| Other assets | 451,071 | 427,271 | 380,304 | ||||||||
| Total Assets | $ | 8,070,854 | $ | 7,972,673 | $ | 7,648,755 | |||||
| Liabilities and Shareholders' Equity | |||||||||||
| Noninterest-bearing demand deposits | $ | 1,528,307 | $ | 1,510,566 | $ | 1,489,058 | |||||
| Interest-bearing demand deposits | 238,406 | 211,548 | 126,296 | ||||||||
| Savings deposits | 3,530,705 | 3,517,350 | 3,516,714 | ||||||||
| Time deposits | 858,547 | 891,296 | 781,506 | ||||||||
| Total interest-bearing deposits | 4,627,658 | 4,620,194 | 4,424,516 | ||||||||
| Total deposits | 6,155,965 | 6,130,760 | 5,913,574 | ||||||||
| Short-term borrowings | 555,080 | 565,616 | 545,187 | ||||||||
| Long-term borrowings | 234,623 | 184,841 | 185,568 | ||||||||
| Total borrowings | 789,703 | 750,457 | 730,755 | ||||||||
| Other liabilities | 103,355 | 93,437 | 43,641 | ||||||||
| Shareholders' equity | 1,021,831 | 998,019 | 960,785 | ||||||||
| Total Liabilities and Shareholders' Equity | $ | 8,070,854 | $ | 7,972,673 | $ | 7,648,755 | |||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | ||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL DATA | ||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||
| June 30, | Yield/ | March 31, | Yield/ | June 30, | Yield/ | June 30, | Yield/ | June 30, | Yield/ | |||||||||||||||||
| 2019 | Rate | 2019 | Rate | 2018 | Rate | 2019 | Rate | 2018 | Rate | |||||||||||||||||
| NET INTEREST MARGIN | ||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Loans (FTE)(1)(3) | $ | 5,949,332 | 4.97 | % | $ | 5,811,587 | 4.94 | % | $ | 5,551,053 | 4.65 | % | $ | 5,880,840 | 4.95 | % | $ | 5,482,745 | 4.53 | % | ||||||
| Securities and interest-bearing bank deposits (FTE) (1) | 1,279,032 | 2.75 | % | 1,316,445 | 2.86 | % | 1,263,956 | 2.89 | % | 1,297,636 | 2.81 | % | 1,231,522 | 2.82 | % | |||||||||||
| Total Interest-Earning Assets (FTE) (1) | 7,228,364 | 4.58 | % | 7,128,032 | 4.55 | % | 6,815,009 | 4.32 | % | 7,178,476 | 4.57 | % | 6,714,267 | 4.22 | % | |||||||||||
| Noninterest-earning assets | 758,110 | 750,876 | 705,076 | 754,512 | 696,573 | |||||||||||||||||||||
| Total Assets | $ | 7,986,474 | $ | 7,878,908 | $ | 7,520,085 | $ | 7,932,988 | $ | 7,410,840 | ||||||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||
| Interest-bearing demand and savings deposits | $ | 3,777,016 | 0.59 | % | $ | 3,677,387 | 0.53 | % | $ | 3,650,406 | 0.35 | % | $ | 3,727,477 | 0.56 | % | $ | 3,611,993 | 0.31 | % | ||||||
| Time deposits | 870,603 | 1.72 | % | 865,944 | 1.57 | % | 732,677 | 1.02 | % | 868,286 | 1.64 | % | 683,220 | 0.93 | % | |||||||||||
| Short-term borrowings | 533,716 | 2.27 | % | 615,140 | 2.27 | % | 601,633 | 1.66 | % | 574,203 | 2.27 | % | 636,689 | 1.52 | % | |||||||||||
| Long-term borrowings | 211,087 | 5.01 | % | 184,931 | 5.47 | % | 131,851 | 5.12 | % | 198,081 | 5.22 | % | 109,937 | 4.88 | % | |||||||||||
| Total Interest-Bearing Liabilities | 5,392,422 | 1.11 | % | 5,343,402 | 1.07 | % | 5,116,567 | 0.73 | % | 5,368,047 | 1.09 | % | 5,041,839 | 0.64 | % | |||||||||||
| Noninterest-bearing deposits | 1,497,199 | 1,464,750 | 1,431,007 | 1,481,064 | 1,415,698 | |||||||||||||||||||||
| Other liabilities | 87,429 | 83,920 | 35,918 | 85,685 | 38,576 | |||||||||||||||||||||
| Shareholders' equity | 1,009,424 | 986,836 | 936,593 | 998,192 | 914,727 | |||||||||||||||||||||
| Total Noninterest-Bearing Funding Sources | 2,594,052 | 2,535,506 | 2,403,518 | 2,564,941 | 2,369,001 | |||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 7,986,474 | $ | 7,878,908 | $ | 7,520,085 | $ | 7,932,988 | $ | 7,410,840 | ||||||||||||||||
| Net Interest Margin (FTE) (annualized)(1) | 3.75 | % | 3.75 | % | 3.78 | % | 3.75 | % | 3.74 | % | ||||||||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||
| Unaudited | |||||||||
| (dollars in thousands) | |||||||||
| June 30, | March 31, | June 30, | |||||||
| 2019 | 2019 | 2018 | |||||||
| Loan Portfolio Detail | |||||||||
| Commercial Loan Portfolio: | |||||||||
| Commercial, financial, agricultural and other | $ | 1,236,424 | $ | 1,180,320 | $ | 1,130,638 | |||
| Commercial real estate | 2,118,582 | 2,138,376 | 2,172,615 | ||||||
| Real estate construction | 361,028 | 324,903 | 221,206 | ||||||
| Total Commercial | 3,716,034 | 3,643,599 | 3,524,459 | ||||||
| Consumer Loan Portfolio: | |||||||||
| Closed-end mortgages | 1,060,348 | 1,048,097 | 996,324 | ||||||
| Home equity lines of credit | 519,093 | 517,252 | 522,526 | ||||||
| Real estate construction | 80,826 | 64,484 | 38,619 | ||||||
| Total Real Estate - Consumer | 1,660,267 | 1,629,833 | 1,557,469 | ||||||
| Auto loans | 515,569 | 491,605 | 459,333 | ||||||
| Direct installment | 40,568 | 36,625 | 31,915 | ||||||
| Personal lines of credit | 63,155 | 61,599 | 57,789 | ||||||
| Student loans | 7,466 | 7,809 | 9,141 | ||||||
| Total Other Consumer | 626,758 | 597,638 | 558,178 | ||||||
| Total Consumer Portfolio | 2,287,025 | 2,227,471 | 2,115,647 | ||||||
| Total Portfolio Loans | 6,003,059 | 5,871,070 | 5,640,106 | ||||||
| Loans held for sale | 16,036 | 9,627 | 7,038 | ||||||
| Total Loans | $ | 6,019,095 | $ | 5,880,697 | $ | 5,647,144 | |||
| June 30, | March 31, | June 30, | |||||||
| 2019 | 2019 | 2018 | |||||||
| ASSET QUALITY DETAIL | |||||||||
| Nonperforming Loans: | |||||||||
| Loans on nonaccrual basis | $ | 15,665 | $ | 16,286 | $ | 16,128 | |||
| Troubled debt restructured loans on nonaccrual basis | 10,914 | 5,874 | 18,573 | ||||||
| Troubled debt restructured loans on accrual basis | 8,975 | 9,120 | 11,162 | ||||||
| Total Nonperforming Loans | $ | 35,554 | $ | 31,280 | $ | 45,863 | |||
| Other real estate owned ("OREO") | 1,884 | 3,993 | 3,757 | ||||||
| Repossessions ("Repos") | 319 | 342 | 298 | ||||||
| Total Nonperforming Assets | $ | 37,757 | $ | 35,615 | $ | 49,918 | |||
| Loans past due in excess of 90 days and still accruing | 2,656 | 1,509 | 1,725 | ||||||
| Classified loans | 49,975 | 39,428 | 60,511 | ||||||
| Criticized loans | 117,976 | 120,501 | 142,145 | ||||||
| Nonperforming assets as a percentage of total loans, plus OREO and Repos | 0.63 | % | 0.61 | % | 0.88 | % | |||
| Allowance for credit losses | $ | 51,061 | $ | 49,653 | $ | 51,314 | |||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | ||||||||||||||||
| CONSOLIDATED FINANCIAL DATA | ||||||||||||||||
| Unaudited | ||||||||||||||||
| (dollars in thousands) | ||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net Charge-offs (Recoveries): | ||||||||||||||||
| Commercial, financial, agricultural and other | $ | 301 | $ | 922 | $ | 291 | $ | 1,223 | $ | 318 | ||||||
| Real estate construction | (42 | ) | (42 | ) | — | (84 | ) | (7 | ) | |||||||
| Commercial real estate | (38 | ) | 258 | 2,225 | 220 | 2,324 | ||||||||||
| Residential real estate | (15 | ) | 76 | 104 | 61 | 483 | ||||||||||
| Loans to individuals | 1,221 | 992 | 966 | 2,213 | 1,937 | |||||||||||
| Net Charge-offs | $ | 1,427 | $ | 2,206 | $ | 3,586 | $ | 3,633 | $ | 5,055 | ||||||
| Net charge-offs as a percentage of average loans outstanding (annualized) (4) | 0.10 | % | 0.15 | % | 0.26 | % | 0.12 | % | 0.19 | % | ||||||
| Provision for credit losses as a percentage of net charge-offs | 198.67 | % | 185.63 | % | 32.57 | % | 190.75 | % | 159.66 | % | ||||||
| Provision for credit losses | $ | 2,835 | $ | 4,095 | $ | 1,168 | $ | 6,930 | $ | 8,071 | ||||||
| DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||
| (1) Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the federal income tax statutory rate of 21% for 2019 and 2018. | ||||||||||||||||
| (2) Core efficiency ratio excludes from total revenue the impact of derivative mark-to-market and excludes from "total noninterest expense" the amortization of intangibles, unfunded commitment expense and any other unusual items deemed by management to not be related to normal operations, such as merger, acquisition and severance costs. | ||||||||||||||||
| (3) Includes held for sale loans. | ||||||||||||||||
| (4) Excludes held for sale loans. | ||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net Income | $ | 27,280 | $ | 24,589 | $ | 32,081 | $ | 51,869 | $ | 55,351 | ||||||
| Intangible amortization | 745 | 754 | 829 | 1,499 | 1,613 | |||||||||||
| Tax benefit of amortization of intangibles | (156 | ) | (158 | ) | (174 | ) | (315 | ) | (339 | ) | ||||||
| Net Income, adjusted for tax affected amortization of intangibles | 27,869 | 25,185 | 32,736 | 53,053 | 56,625 | |||||||||||
| Average Tangible Equity: | ||||||||||||||||
| Total shareholders' equity | $ | 1,009,424 | $ | 986,836 | $ | 936,593 | $ | 998,192 | $ | 914,727 | ||||||
| Less: intangible assets | 286,781 | 286,874 | 282,734 | 286,828 | 276,376 | |||||||||||
| Tangible Equity | 722,643 | 699,962 | 653,859 | 711,364 | 638,351 | |||||||||||
| Less: preferred stock | — | — | — | — | — | |||||||||||
| Tangible Common Equity | $ | 722,643 | $ | 699,962 | $ | 653,859 | $ | 711,364 | $ | 638,351 | ||||||
| (8) Return on Average Tangible Common Equity | 15.47 | % | 14.59 | % | 20.08 | % | 15.04 | % | 17.89 | % | ||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | ||||||||||||||||
| CONSOLIDATED FINANCIAL DATA | ||||||||||||||||
| Unaudited | ||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||
| DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Core Net Income: | ||||||||||||||||
| Total Net Income | $ | 27,280 | $ | 24,589 | $ | 32,081 | $ | 51,869 | $ | 55,351 | ||||||
| Merger & acquisition related expenses | 34 | — | 1,273 | 34 | 1,610 | |||||||||||
| Tax benefit of merger & acquisition related expenses | (7 | ) | — | (267 | ) | (7 | ) | (338 | ) | |||||||
| (5) Core net income | 27,307 | 24,589 | 33,087 | 51,896 | 56,623 | |||||||||||
| Average Shares Outstanding Assuming Dilution | 98,600,609 | 98,706,827 | 99,504,409 | 98,651,810 | 98,529,160 | |||||||||||
| (6) Core Earnings per common share (diluted) | $ | 0.28 | $ | 0.25 | $ | 0.33 | $ | 0.53 | $ | 0.57 | ||||||
| Intangible amortization | 745 | 754 | 829 | 1,499 | 1,613 | |||||||||||
| Tax benefit of amortization of intangibles | (156 | ) | (158 | ) | (174 | ) | (315 | ) | (339 | ) | ||||||
| Core Net Income, adjusted for tax affected amortization of intangibles | $ | 27,896 | $ | 25,185 | $ | 33,742 | $ | 53,080 | $ | 57,897 | ||||||
| (9) Core Return on Average Tangible Common Equity | 15.48 | % | 14.59 | % | 20.70 | % | 15.05 | % | 18.29 | % | ||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Core Return on Average Assets: | ||||||||||||||||
| Total Net Income | $ | 27,280 | $ | 24,589 | $ | 32,081 | $ | 51,869 | $ | 55,351 | ||||||
| Total Average Assets | 7,986,474 | 7,878,908 | 7,520,085 | 7,932,988 | 7,410,840 | |||||||||||
| Return on Average Assets | 1.37 | % | 1.27 | % | 1.71 | % | 1.32 | % | 1.51 | % | ||||||
| Core Net Income (5) | $ | 27,307 | $ | 24,589 | $ | 33,087 | $ | 51,896 | $ | 56,623 | ||||||
| Total Average Assets | 7,986,474 | 7,878,908 | 7,520,085 | 7,932,988 | 7,410,840 | |||||||||||
| (7) Core Return on Average Assets | 1.37 | % | 1.27 | % | 1.76 | % | 1.32 | % | 1.54 | % | ||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | ||||||||||||||||
| CONSOLIDATED FINANCIAL DATA | ||||||||||||||||
| Unaudited | ||||||||||||||||
| (dollars in thousands) | ||||||||||||||||
| DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Core Efficiency Ratio: | ||||||||||||||||
| Total Noninterest Expense | $ | 52,229 | $ | 49,730 | $ | 49,129 | $ | 101,959 | $ | 96,002 | ||||||
| Adjustments to Noninterest Expense: | ||||||||||||||||
| Unfunded commitment reserve | 612 | (381 | ) | (46 | ) | 231 | (41 | ) | ||||||||
| Intangible amortization | 745 | 754 | 829 | 1,499 | 1,613 | |||||||||||
| Merger and acquisition related | 34 | — | 1,273 | 34 | 1,610 | |||||||||||
| Noninterest Expense - Core | $ | 50,838 | $ | 49,357 | $ | 47,073 | $ | 100,195 | $ | 92,820 | ||||||
| Net interest income, fully tax equivalent | $ | 67,581 | $ | 65,943 | $ | 64,192 | $ | 133,524 | $ | 124,371 | ||||||
| Total noninterest income | 21,906 | 18,872 | 26,308 | 40,778 | 48,351 | |||||||||||
| Net securities gains | (6 | ) | — | (5,262 | ) | (6 | ) | (8,102 | ) | |||||||
| Total Revenue | $ | 89,481 | $ | 84,815 | $ | 85,238 | $ | 174,296 | $ | 164,620 | ||||||
| Adjustments to Revenue: | ||||||||||||||||
| Derivative mark-to-market | (17 | ) | (26 | ) | — | (43 | ) | 789 | ||||||||
| Total Revenue - Core | $ | 89,498 | $ | 84,841 | $ | 85,238 | $ | 174,339 | $ | 163,831 | ||||||
| (10)Core Efficiency Ratio | 56.80 | % | 58.18 | % | 55.23 | % | 57.47 | % | 56.66 | % | ||||||
| June 30, | March 31, | June 30, | ||||||||||||||
| 2019 | 2019 | 2018 | ||||||||||||||
| Tangible Equity: | ||||||||||||||||
| Total shareholders' equity | $ | 1,021,831 | $ | 998,019 | $ | 960,785 | ||||||||||
| Less: intangible assets | 286,545 | 287,078 | 289,051 | |||||||||||||
| Tangible Equity | 735,286 | 710,941 | 671,734 | |||||||||||||
| Less: preferred stock | — | — | — | |||||||||||||
| Tangible Common Equity | $ | 735,286 | $ | 710,941 | $ | 671,734 | ||||||||||
| Tangible Assets: | ||||||||||||||||
| Total assets | $ | 8,070,854 | $ | 7,972,673 | $ | 7,648,755 | ||||||||||
| Less: intangible assets | 286,545 | 287,078 | 289,051 | |||||||||||||
| Tangible Assets | $ | 7,784,309 | $ | 7,685,595 | $ | 7,359,704 | ||||||||||
| (12)Tangible Common Equity as a percentage of Tangible Assets | 9.45 | % | 9.25 | % | 9.13 | % | ||||||||||
| Shares Outstanding at End of Period | 98,499,937 | 98,625,806 | 100,364,567 | |||||||||||||
| (11)Tangible Book Value Per Common Share | $ | 7.46 | $ | 7.21 | $ | 6.69 | ||||||||||
| Note: Management believes that it is standard practice in the banking industry to present these non-GAAP measures. These measures provide useful information to management and investors by allowing them to make peer comparisons. | ||||||||||||||||