INDIANA, Pa., Oct. 29, 2019 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the third quarter of 2019.
Financial Summary
| (dollars in thousands, | For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||
| except per share data) | September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
| Reported Results | |||||||||||||||||||
| Net income | $ | 26,644 | $ | 27,280 | $ | 25,149 | $ | 78,513 | $ | 80,500 | |||||||||
| Diluted earnings per share | $ | 0.27 | $ | 0.28 | $ | 0.25 | $ | 0.80 | $ | 0.81 | |||||||||
| Return on average assets | 1.31 | % | 1.37 | % | 1.30 | % | 1.32 | % | 1.44 | % | |||||||||
| Return on average equity | 10.22 | % | 10.84 | % | 10.28 | % | 10.39 | % | 11.53 | % | |||||||||
| Operating Results (non-GAAP)(1) | |||||||||||||||||||
| Core net income | $ | 29,597 | $ | 27,307 | $ | 25,168 | $ | 81,493 | $ | 81,791 | |||||||||
| Core diluted earnings per share | $ | 0.30 | $ | 0.28 | $ | 0.25 | $ | 0.83 | $ | 0.82 | |||||||||
| Core return on average assets | 1.46 | % | 1.37 | % | 1.30 | % | 1.37 | % | 1.46 | % | |||||||||
| Return on average tangible common equity | 14.62 | % | 15.47 | % | 15.01 | % | 14.90 | % | 16.88 | % | |||||||||
| Core return on average tangible common equity | 16.20 | % | 15.48 | % | 15.02 | % | 15.45 | % | 17.14 | % | |||||||||
| Core efficiency ratio | 55.73 | % | 56.80 | % | 57.82 | % | 56.87 | % | 57.05 | % | |||||||||
| Net interest margin (FTE) | 3.76 | % | 3.75 | % | 3.67 | % | 3.75 | % | 3.71 | % | |||||||||
(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.
Third Quarter 2019 Highlights
Earnings
- Third quarter GAAP net income was $26.6 million, or $0.27 diluted earnings per share.
- Core net income (non-GAAP)(1) was $29.6 million, or $0.30 diluted earnings per share, an increase of $0.02 from the previous quarter and $0.05 from the third quarter of 2018.
- Total revenue grew $1.6 million, or 7.0% annualized from the prior quarter.
- Net interest income (FTE) increased $1.3 million from the prior quarter.
- Noninterest income grew $0.3 million from the prior quarter.
- Total noninterest expense increased $2.7 million from the previous quarter, but includes $3.7 million in merger and acquisition related expenses resulting from the completion of the Company’s acquisition of 14 former Santander branches in Central Pennsylvania.
- Provision for credit losses totaled $2.7 million, a decrease of $0.1 million as compared to the prior quarter.
Franchise Growth
- On September 6, 2019, the Company completed its acquisition of 14 Santander branches in Central Pennsylvania. This acquisition included $471 million in deposits (including $52 million in noninterest bearing deposits) and $100 million of loans at close.
- Total loans grew $101 million from the prior quarter and include $100 million in loans acquired in the aforementioned branch acquisition.
- Excluding acquired loans, consumer and consumer real estate loans grew $39 million and $24 million, respectively, from the prior quarter. This growth offset a high level of payoffs experienced in the Company’s commercial loan categories.
- On a year-to-date basis, total loans (excluding acquired balances) have grown $234 million, or 5.4% annualized.
- Average deposits grew $212 million from the prior quarter and include $123 million in average deposits acquired in the aforementioned branch acquisition.
- On a year-to-date basis, average quarterly deposits (excluding acquired balances) have grown $334 million, or 7.5% annualized, and grew by 5.8% annualized (excluding acquired balances) during the third quarter.
Profitability
- Return on average assets decreased six basis points from the previous quarter to 1.31%.
- Core return on average assets (non-GAAP)(1) increased nine basis points from the previous quarter to 1.46%.
- The core return on average tangible common equity (non-GAAP)(1) for the third quarter of 2019 was 16.20%.
- The core efficiency ratio (non-GAAP)(1) improved to 55.73% compared to 56.8% in the previous quarter.
- The net interest margin of 3.76% increased by one basis point from the previous quarter.
“Our third quarter financial results demonstrate consistent improvement in our company’s performance trajectory,” stated T. Michael Price, President and Chief Executive Officer. “Our underlying fundamentals remain strong across multiple business lines and geographies, and we remain focused on optimizing growth opportunities in our newer markets in Ohio and Central Pennsylvania. During the quarter we completed our acquisition of 14 former Santander branches and welcomed 83 talented employees and nearly 23,000 new households to First Commonwealth. Our success can be traced back to our talented team of individuals who continually deliver on our mission of improving the financial lives of our neighbors and their businesses.”
Earnings
Net income for the third quarter of 2019 was $26.6 million, as compared to $27.3 million in the previous quarter and $25.1 million for the third quarter of 2018. Core net income (non-GAAP)(1) for the third quarter of 2019 was $29.6 million, an increase of $2.3 million from the previous quarter and an increase of $4.4 million from the third quarter of 2018. The increase from the previous quarter was driven by a $1.3 million (pre-tax) increase in net interest income and a $1.0 million (pre-tax) decrease in noninterest expense (excluding merger and acquisition expenses). The increase from the prior year quarter was primarily due to a nine basis point increase in the net interest margin, strong fee income growth and well controlled expenses.
Net income for the first nine months of 2019 was $78.5 million, as compared to $80.5 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 nine months of 2018 and a $9.2 million (pre-tax) increase in operating expenses, partially offset by a $16.7 million (pre-tax) increase in revenue and a $1.4 million decrease in the provision for credit losses.
Net Interest Income and Net Interest Margin
During the third quarter of 2019, net interest income (FTE) was $68.9 million, an increase of $1.3 million from the previous quarter. The increase in net interest income was the result of a $33 million increase in average mortgage loans, a $29 million increase in indirect auto loans and a six basis point decrease in funding costs as the Company was able to pay down higher cost short-term borrowings for a portion of the quarter following the completion of the aforementioned acquisition on September 6, 2019.
The net interest margin for the third quarter of 2019 was 3.76%, an increase of one basis point from the previous quarter and an increase of nine basis points from the third quarter of 2018. The net interest margin in the third quarter benefited from a 25 basis point increase in the yield on indirect auto loans and a 21 basis point decrease in the cost of short-term borrowings, partially offset by a 13 basis point decrease in the yield on variable rate commercial loans.
Average noninterest bearing deposits grew by $63 million in the third quarter of 2019 compared to the previous quarter. Excluding noninterest bearing deposits acquired through the aforementioned branch acquisition, average noninterest bearing deposits grew $41 million, or 10.9% annualized from the previous quarter.
Credit Quality
The provision for credit losses totaled $2.7 million for the quarter ended September 30, 2019, a decrease of $0.1 million compared to the prior quarter. The decrease is primarily due to a continuation of the long-term trend of improvement in credit quality.
Nonperforming loans were $35.3 million for the quarter ended September 30, 2019, a decrease of $0.2 million from previous quarter and a decrease of $4.5 million from the same quarter last year. Nonperforming loans as a percentage of total loans were 0.58%, 0.59% and 0.70% for the periods ended September 30, 2019, June 30, 2019 and September 30, 2018, respectively.
During the third quarter of 2019, net charge-offs (recoveries) were $3.7 million, compared to $1.4 million in the prior quarter and $3.5 million in the third quarter of 2018.
For the originated loan portfolio at September 30, 2019, the general allowance for credit losses to total originated non-impaired loans was 0.87%, compared to 0.88% at June 30, 2019 and 0.89% at September 30, 2018.
Noninterest Income and Noninterest Expense
Noninterest income (excluding net security gains) totaled $22.2 million for the third quarter of 2019, as compared to $21.9 million in the previous quarter and $19.8 million for the third quarter of 2018. The increase from the previous quarter was primarily due to a $0.5 million increase in mortgage banking revenue, a $0.5 million increase in service charges and card-related interchange income and seasonally higher Trust fee income, partially offset by a $0.4 million decrease in swap fees and a $0.8 million decrease in gain on sale of other loans due to a $0.5 million decrease in gain on sale of SBA loans and a $0.4 million gain on sale of a commercial loan in the previous quarter.
Noninterest expense (excluding merger-related expenses) totaled $51.2 million for the third quarter of 2019 as compared to $52.2 million for the second quarter of 2019 and $49.5 million for the third quarter of 2018. The decrease from the previous quarter was primarily driven by a $1.1 million decrease in unfunded commitment reserve expense, $0.9 million in write-downs of two OREO properties in the previous quarter and a $0.5 million decrease in FDIC insurance due to a quarterly assessment credit, partially offset by a $0.5 million increase in hospitalization expense.
Full time equivalent staff was 1,511 at September 30, 2019, 1,438 at June 30, 2019 and 1,417 at September 30, 2018.
Dividends and Capital
First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.10 per share, which is payable on November 22, 2019 to shareholders of record as of November 8, 2019. This dividend represents a 2.9% projected annual yield utilizing the October 28, 2019 closing market price of $13.95.
First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2019 were 14.1%, 11.8%, 10.1% and 10.7%, respectively. First Commonwealth’s current capital ratios exceed the well-capitalized thresholds of federal bank regulatory agencies.
Conference Call
First Commonwealth will host a quarterly conference call to discuss its financial results for the third quarter 2019 on Wednesday, October 30, 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 # 10135957. 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 147 community banking offices in 28 counties throughout western and central Pennsylvania and throughout Ohio, as well as business banking centers in Pittsburgh, Pennsylvania, and Canton, Cleveland and Columbus, Ohio. The company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson and Lewis Center, 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 Nine Months Ended | ||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
| SUMMARY RESULTS OF OPERATIONS | |||||||||||||||||||
| Net interest income (FTE) (1) | $ | 68,875 | $ | 67,581 | $ | 64,311 | $ | 202,398 | $ | 188,682 | |||||||||
| Provision for credit losses | 2,708 | 2,835 | 2,961 | 9,638 | 11,032 | ||||||||||||||
| Noninterest income | 22,179 | 21,906 | 19,757 | 62,957 | 68,108 | ||||||||||||||
| Noninterest expense | 54,897 | 52,229 | 49,530 | 156,856 | 145,532 | ||||||||||||||
| Net income | 26,644 | 27,280 | 25,149 | 78,513 | 80,500 | ||||||||||||||
| Core net income (5) | 29,597 | 27,307 | 25,168 | 81,493 | 81,791 | ||||||||||||||
| Earnings per common share (diluted) | $ | 0.27 | $ | 0.28 | $ | 0.25 | $ | 0.80 | $ | 0.81 | |||||||||
| Core earnings per common share (diluted) (6) | $ | 0.30 | $ | 0.28 | $ | 0.25 | $ | 0.83 | $ | 0.82 | |||||||||
| KEY FINANCIAL RATIOS | |||||||||||||||||||
| Return on average assets | 1.31 | % | 1.37 | % | 1.30 | % | 1.32 | % | 1.44 | % | |||||||||
| Core return on average assets (7) | 1.46 | % | 1.37 | % | 1.30 | % | 1.37 | % | 1.46 | % | |||||||||
| Return on average shareholders' equity | 10.22 | % | 10.84 | % | 10.28 | % | 10.39 | % | 11.53 | % | |||||||||
| Return on average tangible common equity (8) | 14.62 | % | 15.47 | % | 15.01 | % | 14.90 | % | 16.88 | % | |||||||||
| Core return on average tangible common equity (9) | 16.20 | % | 15.48 | % | 15.02 | % | 15.45 | % | 17.14 | % | |||||||||
| Core efficiency ratio (2)(10) | 55.73 | % | 56.80 | % | 57.82 | % | 56.87 | % | 57.05 | % | |||||||||
| Net interest margin (FTE) (1) | 3.76 | % | 3.75 | % | 3.67 | % | 3.75 | % | 3.71 | % | |||||||||
| Book value per common share | $ | 10.57 | $ | 10.37 | $ | 9.69 | |||||||||||||
| Tangible book value per common share (11) | 7.31 | 7.46 | 6.82 | ||||||||||||||||
| Market value per common share | 13.47 | 13.47 | 16.14 | ||||||||||||||||
| Cash dividends declared per common share | 0.10 | 0.10 | 0.09 | $ | 0.30 | $ | 0.26 | ||||||||||||
| ASSET QUALITY RATIOS | |||||||||||||||||||
| Nonperforming loans as a percent of end-of-period loans (3) | 0.58 | % | 0.59 | % | 0.70 | % | |||||||||||||
| Nonperforming assets as a percent of total assets (3) | 0.46 | % | 0.47 | % | 0.57 | % | |||||||||||||
| Net charge-offs as a percent of average loans (annualized) (4) | 0.25 | % | 0.10 | % | 0.25 | % | |||||||||||||
| Allowance for credit losses as a percent of nonperforming loans (4) | 141.64 | % | 143.62 | % | 127.35 | % | |||||||||||||
| Allowance for credit losses as a percent of end-of-period loans (4) | 0.82 | % | 0.85 | % | 0.90 | % | |||||||||||||
| Allowance for credit losses (originated loans and leases) as a percent of total originated loans and leases | 0.91 | % | 0.92 | % | 0.98 | % | |||||||||||||
| CAPITAL RATIOS | |||||||||||||||||||
| Shareholders' equity as a percent of total assets | 12.7 | % | 12.7 | % | 12.7 | % | |||||||||||||
| Tangible common equity as a percent of tangible assets (12) | 9.2 | % | 9.4 | % | 9.3 | % | |||||||||||||
| Leverage Ratio | 10.1 | % | 10.4 | % | 10.5 | % | |||||||||||||
| Risk Based Capital - Tier I | 11.8 | % | 12.2 | % | 12.6 | % | |||||||||||||
| Risk Based Capital - Total | 14.1 | % | 14.6 | % | 15.1 | % | |||||||||||||
| Common Equity - Tier I | 10.7 | % | 11.2 | % | 11.4 | % | |||||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | ||||||||||||||||
| CONSOLIDATED FINANCIAL DATA | ||||||||||||||||
| Unaudited | ||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| INCOME STATEMENT | ||||||||||||||||
| Interest income | $ | 82,575 | $ | 82,057 | $ | 74,873 | $ | 244,226 | $ | 214,312 | ||||||
| Interest expense | 14,130 | 14,931 | 11,060 | 43,169 | 27,139 | |||||||||||
| Net Interest Income | 68,445 | 67,126 | 63,813 | 201,057 | 187,173 | |||||||||||
| Taxable equivalent adjustment (1) | 430 | 455 | 498 | 1,341 | 1,509 | |||||||||||
| Net Interest Income (FTE) | 68,875 | 67,581 | 64,311 | 202,398 | 188,682 | |||||||||||
| Provision for credit losses | 2,708 | 2,835 | 2,961 | 9,638 | 11,032 | |||||||||||
| Net Interest Income after Provision for Credit Losses (FTE) | 66,167 | 64,746 | 61,350 | 192,760 | 177,650 | |||||||||||
| Net securities gains | 9 | 6 | — | 15 | 8,102 | |||||||||||
| Trust income | 2,325 | 1,970 | 2,206 | 6,221 | 6,014 | |||||||||||
| Service charges on deposit accounts | 4,954 | 4,593 | 4,589 | 13,792 | 13,418 | |||||||||||
| Insurance and retail brokerage commissions | 1,912 | 2,014 | 1,872 | 5,887 | 5,560 | |||||||||||
| Income from bank owned life insurance | 1,540 | 1,442 | 1,579 | 4,408 | 5,241 | |||||||||||
| Gain on sale of mortgage loans | 2,599 | 2,074 | 1,542 | 6,101 | 4,267 | |||||||||||
| Gain on sale of other loans and assets | 970 | 1,777 | 643 | 3,831 | 3,548 | |||||||||||
| Card-related interchange income | 5,629 | 5,441 | 5,044 | 15,800 | 14,929 | |||||||||||
| Derivative mark-to-market | (45 | ) | (17 | ) | — | (88 | ) | 789 | ||||||||
| Swap fee income | 421 | 820 | 528 | 1,634 | 1,115 | |||||||||||
| Other income | 1,865 | 1,786 | 1,754 | 5,356 | 5,125 | |||||||||||
| Total Noninterest Income | 22,179 | 21,906 | 19,757 | 62,957 | 68,108 | |||||||||||
| Salaries and employee benefits | 28,674 | 27,311 | 26,553 | 83,205 | 77,580 | |||||||||||
| Net occupancy | 4,521 | 4,441 | 4,341 | 13,878 | 12,932 | |||||||||||
| Furniture and equipment | 3,904 | 3,824 | 3,424 | 11,396 | 10,611 | |||||||||||
| Data processing | 2,825 | 2,619 | 2,853 | 7,988 | 7,764 | |||||||||||
| Pennsylvania shares tax | 1,189 | 1,260 | 1,248 | 3,365 | 3,398 | |||||||||||
| Advertising and promotion | 1,140 | 1,231 | 1,200 | 3,611 | 3,185 | |||||||||||
| Intangible amortization | 865 | 745 | 817 | 2,364 | 2,430 | |||||||||||
| Collection and repossession | 649 | 460 | 630 | 1,656 | 2,060 | |||||||||||
| Other professional fees and services | 969 | 1,032 | 962 | 2,755 | 3,000 | |||||||||||
| FDIC insurance | 35 | 555 | 217 | 1,164 | 1,590 | |||||||||||
| Litigation and operational losses | 308 | 555 | 435 | 1,264 | 811 | |||||||||||
| Loss on sale or write-down of assets | 152 | 1,181 | 181 | 1,398 | 875 | |||||||||||
| Merger and acquisition related | 3,738 | 34 | 24 | 3,772 | 1,634 | |||||||||||
| Other operating expenses | 5,928 | 6,981 | 6,645 | 19,040 | 17,662 | |||||||||||
| Total Noninterest Expense | 54,897 | 52,229 | 49,530 | 156,856 | 145,532 | |||||||||||
| Income before Income Taxes | 33,449 | 34,423 | 31,577 | 98,861 | 100,226 | |||||||||||
| Taxable equivalent adjustment (1) | 430 | 455 | 498 | 1,341 | 1,509 | |||||||||||
| Income tax provision | 6,375 | 6,688 | 5,930 | 19,007 | 18,217 | |||||||||||
| Net Income | $ | 26,644 | $ | 27,280 | $ | 25,149 | $ | 78,513 | $ | 80,500 | ||||||
| Shares Outstanding at End of Period | 98,319,081 | 98,499,937 | 100,361,434 | 98,319,081 | 100,361,434 | |||||||||||
| Average Shares Outstanding Assuming Dilution | 98,547,898 | 98,600,609 | 100,490,812 | 98,615,787 | 99,197,568 | |||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||||
| Unaudited | |||||||||||
| (dollars in thousands) | |||||||||||
| September 30, | June 30, | September 30, | |||||||||
| 2019 | 2019 | 2018 | |||||||||
| BALANCE SHEET (Period End) | |||||||||||
| Assets | |||||||||||
| Cash and due from banks | $ | 112,241 | $ | 95,047 | $ | 93,162 | |||||
| Interest-bearing bank deposits | 16,408 | 1,233 | 3,022 | ||||||||
| Securities available for sale, at fair value | 823,944 | 895,471 | 914,085 | ||||||||
| Securities held to maturity, at amortized cost | 357,890 | 373,453 | 389,621 | ||||||||
| Loans held for sale | 20,288 | 16,036 | 8,287 | ||||||||
| Loans | 6,099,561 | 6,003,059 | 5,662,782 | ||||||||
| Allowance for credit losses | (50,035 | ) | (51,061 | ) | (50,746 | ) | |||||
| Net loans | 6,049,526 | 5,951,998 | 5,612,036 | ||||||||
| Goodwill and other intangibles | 320,505 | 286,545 | 288,028 | ||||||||
| Other assets | 451,225 | 451,071 | 378,104 | ||||||||
| Total Assets | $ | 8,152,027 | $ | 8,070,854 | $ | 7,686,345 | |||||
| Liabilities and Shareholders' Equity | |||||||||||
| Noninterest-bearing demand deposits | $ | 1,657,507 | $ | 1,528,307 | $ | 1,451,284 | |||||
| Interest-bearing demand deposits | 263,312 | 238,406 | 181,504 | ||||||||
| Savings deposits | 3,867,034 | 3,530,705 | 3,453,461 | ||||||||
| Time deposits | 890,143 | 858,547 | 808,894 | ||||||||
| Total interest-bearing deposits | 5,020,489 | 4,627,658 | 4,443,859 | ||||||||
| Total deposits | 6,677,996 | 6,155,965 | 5,895,143 | ||||||||
| Short-term borrowings | 83,735 | 555,080 | 587,806 | ||||||||
| Long-term borrowings | 234,404 | 234,623 | 185,266 | ||||||||
| Total borrowings | 318,139 | 789,703 | 773,072 | ||||||||
| Other liabilities | 116,862 | 103,355 | 45,199 | ||||||||
| Shareholders' equity | 1,039,030 | 1,021,831 | 972,931 | ||||||||
| Total Liabilities and Shareholders' Equity | $ | 8,152,027 | $ | 8,070,854 | $ | 7,686,345 | |||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION |
| CONSOLIDATED FINANCIAL DATA |
| Unaudited |
| (dollars in thousands) |
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||
| September 30, | Yield/ | June 30, | Yield/ | September 30, | Yield/ | September 30, | Yield/ | September 30, | Yield/ | |||||||||||||||||
| 2019 | Rate | 2019 | Rate | 2018 | Rate | 2019 | Rate | 2018 | Rate | |||||||||||||||||
| NET INTEREST MARGIN | ||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Loans (FTE)(1)(3) | $ | 6,042,822 | 4.93 | % | $ | 5,949,332 | 4.97 | % | $ | 5,657,390 | 4.66 | % | $ | 5,935,427 | 4.95 | % | $ | 5,541,600 | 4.58 | % | ||||||
| Securities and interest-bearing bank deposits (FTE) (1) | 1,226,270 | 2.58 | % | 1,279,032 | 2.75 | % | 1,289,178 | 2.73 | % | 1,273,594 | 2.73 | % | 1,250,952 | 2.79 | % | |||||||||||
| Total Interest-Earning Assets (FTE) (1) | 7,269,092 | 4.53 | % | 7,228,364 | 4.58 | % | 6,946,568 | 4.30 | % | 7,209,021 | 4.55 | % | 6,792,552 | 4.25 | % | |||||||||||
| Noninterest-earning assets | 780,960 | 758,110 | 715,461 | 763,417 | 702,938 | |||||||||||||||||||||
| Total Assets | $ | 8,050,052 | $ | 7,986,474 | $ | 7,662,029 | $ | 7,972,438 | $ | 7,495,490 | ||||||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||
| Interest-bearing demand and savings deposits | $ | 3,933,091 | 0.61 | % | $ | 3,777,016 | 0.59 | % | $ | 3,657,439 | 0.40 | % | $ | 3,796,768 | 0.58 | % | $ | 3,627,308 | 0.34 | % | ||||||
| Time deposits | 863,714 | 1.75 | % | 870,603 | 1.72 | % | 786,912 | 1.18 | % | 866,746 | 1.68 | % | 718,164 | 1.03 | % | |||||||||||
| Short-term borrowings | 323,041 | 1.99 | % | 533,716 | 2.27 | % | 569,666 | 1.81 | % | 489,562 | 2.21 | % | 614,103 | 1.61 | % | |||||||||||
| Long-term borrowings | 234,497 | 4.51 | % | 211,087 | 5.01 | % | 185,401 | 5.24 | % | 210,353 | 4.96 | % | 135,368 | 5.05 | % | |||||||||||
| Total Interest-Bearing Liabilities | 5,354,343 | 1.05 | % | 5,392,422 | 1.11 | % | 5,199,418 | 0.84 | % | 5,363,429 | 1.08 | % | 5,094,943 | 0.71 | % | |||||||||||
| Noninterest-bearing deposits | 1,560,478 | 1,497,199 | 1,447,948 | 1,507,826 | 1,426,566 | |||||||||||||||||||||
| Other liabilities | 101,328 | 87,429 | 44,261 | 90,956 | 40,492 | |||||||||||||||||||||
| Shareholders' equity | 1,033,903 | 1,009,424 | 970,402 | 1,010,227 | 933,489 | |||||||||||||||||||||
| Total Noninterest-Bearing Funding Sources | 2,695,709 | 2,594,052 | 2,462,611 | 2,609,009 | 2,400,547 | |||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 8,050,052 | $ | 7,986,474 | $ | 7,662,029 | $ | 7,972,438 | $ | 7,495,490 | ||||||||||||||||
| Net Interest Margin (FTE) (annualized)(1) | 3.76 | % | 3.75 | % | 3.67 | % | 3.75 | % | 3.71 | % | ||||||||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||
| Unaudited | |||||||||
| (dollars in thousands) | |||||||||
| September 30, | June 30, | September 30, | |||||||
| 2019 | 2019 | 2018 | |||||||
| Loan Portfolio Detail | |||||||||
| Commercial Loan Portfolio: | |||||||||
| Commercial, financial, agricultural and other | $ | 1,210,936 | $ | 1,236,424 | $ | 1,116,204 | |||
| Commercial real estate | 2,124,240 | 2,118,582 | 2,136,431 | ||||||
| Real estate construction | 334,533 | 361,028 | 249,498 | ||||||
| Total Commercial | 3,669,709 | 3,716,034 | 3,502,133 | ||||||
| Consumer Loan Portfolio: | |||||||||
| Closed-end mortgages | 1,081,170 | 1,060,348 | 1,008,411 | ||||||
| Home equity lines of credit | 585,050 | 519,093 | 524,927 | ||||||
| Real estate construction | 85,748 | 80,826 | 48,897 | ||||||
| Total Real Estate - Consumer | 1,751,968 | 1,660,267 | 1,582,235 | ||||||
| Auto loans | 553,617 | 515,569 | 476,536 | ||||||
| Direct installment | 46,704 | 40,568 | 33,415 | ||||||
| Personal lines of credit | 70,441 | 63,155 | 59,927 | ||||||
| Student loans | 7,122 | 7,466 | 8,536 | ||||||
| Total Other Consumer | 677,884 | 626,758 | 578,414 | ||||||
| Total Consumer Portfolio | 2,429,852 | 2,287,025 | 2,160,649 | ||||||
| Total Portfolio Loans | 6,099,561 | 6,003,059 | 5,662,782 | ||||||
| Loans held for sale | 20,288 | 16,036 | 8,287 | ||||||
| Total Loans | $ | 6,119,849 | $ | 6,019,095 | $ | 5,671,069 | |||
| September 30, | June 30, | September 30, | |||||||
| 2019 | 2019 | 2018 | |||||||
| ASSET QUALITY DETAIL | |||||||||
| Nonperforming Loans: | |||||||||
| Loans on nonaccrual basis | $ | 16,227 | $ | 15,665 | $ | 17,921 | |||
| Troubled debt restructured loans on nonaccrual basis | 11,074 | 10,914 | 13,876 | ||||||
| Troubled debt restructured loans on accrual basis | 8,024 | 8,975 | 8,052 | ||||||
| Total Nonperforming Loans | $ | 35,325 | $ | 35,554 | $ | 39,849 | |||
| Other real estate owned ("OREO") | 1,622 | 1,884 | 3,874 | ||||||
| Repossessions ("Repos") | 486 | 319 | 135 | ||||||
| Total Nonperforming Assets | $ | 37,433 | $ | 37,757 | $ | 43,858 | |||
| Loans past due in excess of 90 days and still accruing | 2,054 | 2,656 | 1,647 | ||||||
| Classified loans | 50,719 | 49,975 | 50,079 | ||||||
| Criticized loans | 128,691 | 117,976 | 141,591 | ||||||
| Nonperforming assets as a percentage of total loans, plus OREO and Repos | 0.61 | % | 0.63 | % | 0.77 | % | |||
| Allowance for credit losses | $ | 50,035 | $ | 51,061 | $ | 50,746 | |||
| FIRST COMMONWEALTH FINANCIAL CORPORATION |
| CONSOLIDATED FINANCIAL DATA |
| Unaudited |
| (dollars in thousands) |
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net Charge-offs (Recoveries): | ||||||||||||||||
| Commercial, financial, agricultural and other | $ | 729 | $ | 301 | $ | 2,516 | $ | 1,952 | $ | 2,834 | ||||||
| Real estate construction | (74 | ) | (42 | ) | (92 | ) | (158 | ) | (99 | ) | ||||||
| Commercial real estate | 1,301 | (38 | ) | (36 | ) | 1,521 | 2,288 | |||||||||
| Residential real estate | 366 | (15 | ) | 226 | 427 | 709 | ||||||||||
| Loans to individuals | 1,412 | 1,221 | 915 | 3,625 | 2,852 | |||||||||||
| Net Charge-offs | $ | 3,734 | $ | 1,427 | $ | 3,529 | $ | 7,367 | $ | 8,584 | ||||||
| Net charge-offs as a percentage of average loans outstanding (annualized) (4) | 0.25 | % | 0.10 | % | 0.25 | % | 0.17 | % | 0.21 | % | ||||||
| Provision for credit losses as a percentage of net charge-offs | 72.52 | % | 198.67 | % | 83.90 | % | 130.83 | % | 128.52 | % | ||||||
| Provision for credit losses | $ | 2,708 | $ | 2,835 | $ | 2,961 | $ | 9,638 | $ | 11,032 | ||||||
| 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 Nine Months Ended | |||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net Income | $ | 26,644 | $ | 27,280 | $ | 25,149 | $ | 78,513 | $ | 80,500 | ||||||
| Intangible amortization | 865 | 745 | 817 | 2,364 | 2,430 | |||||||||||
| Tax benefit of amortization of intangibles | (182 | ) | (156 | ) | (172 | ) | (496 | ) | (510 | ) | ||||||
| Net Income, adjusted for tax affected amortization of intangibles | 27,327 | 27,869 | 25,794 | 80,381 | 82,420 | |||||||||||
| Average Tangible Equity: | ||||||||||||||||
| Total shareholders' equity | $ | 1,033,903 | $ | 1,009,424 | $ | 970,402 | $ | 1,010,227 | $ | 933,489 | ||||||
| Less: intangible assets | 292,529 | 286,781 | 288,570 | 288,749 | 280,485 | |||||||||||
| Tangible Equity | 741,374 | 722,643 | 681,832 | 721,478 | 653,004 | |||||||||||
| Less: preferred stock | — | — | — | — | — | |||||||||||
| Tangible Common Equity | $ | 741,374 | $ | 722,643 | $ | 681,832 | $ | 721,478 | $ | 653,004 | ||||||
| (8)Return on Average Tangible Common Equity | 14.62 | % | 15.47 | % | 15.01 | % | 14.90 | % | 16.88 | % | ||||||
| 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 Nine Months Ended | |||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Core Net Income: | ||||||||||||||||
| Total Net Income | $ | 26,644 | $ | 27,280 | $ | 25,149 | $ | 78,513 | $ | 80,500 | ||||||
| Merger & acquisition related expenses | 3,738 | 34 | 24 | 3,772 | 1,634 | |||||||||||
| Tax benefit of merger & acquisition related expenses | (785 | ) | (7 | ) | (5 | ) | (792 | ) | (343 | ) | ||||||
| (5) Core net income | 29,597 | 27,307 | 25,168 | 81,493 | 81,791 | |||||||||||
| Average Shares Outstanding Assuming Dilution | 98,547,898 | 98,600,609 | 100,490,812 | 98,615,787 | 99,197,568 | |||||||||||
| (6) Core Earnings per common share (diluted) | $ | 0.30 | $ | 0.28 | $ | 0.25 | $ | 0.83 | $ | 0.82 | ||||||
| Intangible amortization | 865 | 745 | 817 | 2,364 | 2,430 | |||||||||||
| Tax benefit of amortization of intangibles | (182 | ) | (156 | ) | (172 | ) | (496 | ) | (510 | ) | ||||||
| Core Net Income, adjusted for tax affected amortization of intangibles | $ | 30,280 | $ | 27,896 | $ | 25,813 | $ | 83,361 | $ | 83,711 | ||||||
| (9) Core Return on Average Tangible Common Equity | 16.20 | % | 15.48 | % | 15.02 | % | 15.45 | % | 17.14 | % | ||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Core Return on Average Assets: | ||||||||||||||||
| Total Net Income | $ | 26,644 | $ | 27,280 | $ | 25,149 | $ | 78,513 | $ | 80,500 | ||||||
| Total Average Assets | 8,050,052 | 7,986,474 | 7,662,029 | 7,972,438 | 7,495,490 | |||||||||||
| Return on Average Assets | 1.31 | % | 1.37 | % | 1.30 | % | 1.32 | % | 1.44 | % | ||||||
| Core Net Income (5) | $ | 29,597 | $ | 27,307 | $ | 25,168 | $ | 81,493 | $ | 81,791 | ||||||
| Total Average Assets | 8,050,052 | 7,986,474 | 7,662,029 | 7,972,438 | 7,495,490 | |||||||||||
| (7) Core Return on Average Assets | 1.46 | % | 1.37 | % | 1.30 | % | 1.37 | % | 1.46 | % | ||||||
| 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 Nine Months Ended | |||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Core Efficiency Ratio: | ||||||||||||||||
| Total Noninterest Expense | $ | 54,897 | $ | 52,229 | $ | 49,530 | $ | 156,856 | $ | 145,532 | ||||||
| Adjustments to Noninterest Expense: | ||||||||||||||||
| Unfunded commitment reserve | (466 | ) | 612 | 82 | (235 | ) | 41 | |||||||||
| Intangible amortization | 865 | 745 | 817 | 2,364 | 2,430 | |||||||||||
| Merger and acquisition related | 3,738 | 34 | 24 | 3,772 | 1,634 | |||||||||||
| Noninterest Expense - Core | $ | 50,760 | $ | 50,838 | $ | 48,607 | $ | 150,955 | $ | 141,427 | ||||||
| Net interest income, fully tax equivalent | $ | 68,875 | $ | 67,581 | $ | 64,311 | $ | 202,398 | $ | 188,682 | ||||||
| Total noninterest income | 22,179 | 21,906 | 19,757 | 62,957 | 68,108 | |||||||||||
| Net securities gains | (9 | ) | (6 | ) | — | (15 | ) | (8,102 | ) | |||||||
| Total Revenue | $ | 91,045 | $ | 89,481 | $ | 84,068 | $ | 265,340 | $ | 248,688 | ||||||
| Adjustments to Revenue: | ||||||||||||||||
| Derivative mark-to-market | (45 | ) | (17 | ) | — | (88 | ) | 789 | ||||||||
| Total Revenue - Core | $ | 91,090 | $ | 89,498 | $ | 84,068 | $ | 265,428 | $ | 247,899 | ||||||
| (10)Core Efficiency Ratio | 55.73 | % | 56.80 | % | 57.82 | % | 56.87 | % | 57.05 | % | ||||||
| September 30, | June 30, | September 30, | ||||||||||||||
| 2019 | 2019 | 2018 | ||||||||||||||
| Tangible Equity: | ||||||||||||||||
| Total shareholders' equity | $ | 1,039,030 | $ | 1,021,831 | $ | 972,931 | ||||||||||
| Less: intangible assets | 320,505 | 286,545 | 288,028 | |||||||||||||
| Tangible Equity | 718,525 | 735,286 | 684,903 | |||||||||||||
| Less: preferred stock | — | — | — | |||||||||||||
| Tangible Common Equity | $ | 718,525 | $ | 735,286 | $ | 684,903 | ||||||||||
| Tangible Assets: | ||||||||||||||||
| Total assets | $ | 8,152,027 | $ | 8,070,854 | $ | 7,686,345 | ||||||||||
| Less: intangible assets | 320,505 | 286,545 | 288,028 | |||||||||||||
| Tangible Assets | $ | 7,831,522 | $ | 7,784,309 | $ | 7,398,317 | ||||||||||
| (12)Tangible Common Equity as a percentage of Tangible Assets | 9.17 | % | 9.45 | % | 9.26 | % | ||||||||||
| Shares Outstanding at End of Period | 98,319,081 | 98,499,937 | 100,361,434 | |||||||||||||
| (11)Tangible Book Value Per Common Share | $ | 7.31 | $ | 7.46 | $ | 6.82 | ||||||||||
| 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. | ||||||||||||||||