First Commonwealth Announces First Quarter 2021 Earnings; Increases Quarterly Dividend

| Source: First Commonwealth Financial Corporation First Commonwealth Financial Corporation

INDIANA, Pa., April 27, 2021 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the first quarter of 2021.

Financial Summary

(dollars in thousands,For the Three Months Ended
except per share data)March 31, December 31, March 31,
 2021
  2020
  2020
Reported Results     
Net income$39,770  $25,683 $4,727
Diluted earnings per share$0.41
 $0.27 $0.05
Return on average assets1.77% 1.12% 0.23%
Return on average equity14.98% 9.48% 1.77%
      
Operating Results (non-GAAP)(1)     
Core net income$39,855 $26,102 $4,730
Core diluted earnings per share$0.41
 $0.27 $0.05
Core pre-tax pre-provision net revenue$45,046 $40,092 $36,730
Provision expense($4,390) $7,680 $30,967
Net charge-offs$3,270 $4,825 $3,529
Reserve build/(release)(2)($4,546) $13,002 $27,439
Core return on average assets (ROAA)1.77% 1.14% 0.23%
Core pre-tax pre-provision ROAA2.00% 1.75% 1.77%
Return on average tangible common equity21.58% 13.80% 2.92%
Core return on average tangible common equity21.63% 14.02% 2.92%
Core efficiency ratio53.18% 56.00% 58.19%
Net interest margin (FTE)3.40% 3.26% 3.65%

(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.
(2) Reserve build/(release) represents the net change in the Company's allowance for credit losses (ACL) from the prior period.
        

First Quarter 2021 Highlights

Financial results

  • Net income of $39.8 million and diluted earnings per share totaled $0.41, an increase of $14.1 million, or $0.14 per share from the previous quarter
  • Pre-tax pre-provision net revenue (PPNR)(1) totaled $44.9 million, an increase of $5.4 million from the previous quarter and an increase of $8.2 million from the first quarter of 2020
    • PPNR ROAA of 2.00% increased by 27 basis points from the previous quarter
  • The Company achieved positive operating leverage during the first quarter of 2021
    • Core revenue(1) grew $0.8 million, or 0.9% from the prior quarter
    • Core noninterest expense(1) decreased $2.2 million, or 4.2%, from the prior quarter
  • Net interest income (FTE) of $69.8 million increased $1.9 million from the previous quarter
  • Noninterest income of $27.3 million (excluding net security gains) increased $0.8 million from the previous quarter
  • Noninterest expense of $51.9 million decreased $2.7 million from the previous quarter
  • Portfolio loans (excluding Paycheck Protection Program (PPP) loans) decreased $23.9 million from the previous quarter despite consumer loan growth, due in part to commercial loan payoffs
  • Approximately $215.7 million of PPP loans were forgiven in the first quarter, offset by $215.3 million in new PPP loan production, resulting in the total PPP loan balance at March 31, 2021 of $478.5 million, which was fairly consistent with the balance at December 31, 2020 of $478.9 million.
  • Average deposits increased $20.4 million, or 1.1% annualized compared to the prior quarter despite $81.1 million in intentional time deposit runoff
    • End of period deposits grew by $430.6 million from the end of the fourth quarter
    • Average noninterest-bearing deposits grew $100.9 million, or 17.4% annualized compared to the prior quarter
  • Tangible book value per share grew 9.7% annualized compared to the prior quarter and 6.2% year-over-year
  • First Commonwealth Bank has been recognized for the third consecutive year by Forbes as one of the World’s Best Banks for 2021

Profitability

  • The core efficiency ratio(1) improved 282 basis points to 53.18% compared to the prior quarter
  • The return on average assets (ROA) improved 65 basis points to 1.77% compared to the prior quarter
  • Pre-tax pre-provision ROA(1) for the quarter ended March 31, 2021 was 2.00% as compared to 1.73% in the prior quarter and 1.77% in the prior year quarter
  • The net interest margin of 3.40% increased 14 basis points compared to the prior quarter and decreased 25 basis points as compared to the prior year quarter

Strong capital and liquidity positions

  • On April 26, 2021, the Board of Directors authorized a 4.5% increase in the quarterly cash dividend to shareholders
  • Bank-level Tier 1 Capital ratio of 12.00%, which represents $271.0 million in excess capital above the regulatory “well capitalized” requirement of 8.0%
  • Total available liquidity of $4.5 billion
  • On January 26, 2021, the Company announced that its Board of Directors authorized a new $25.0 million share repurchase program of the Company’s common stock. A total of 28,012 shares were purchased under this program during the first quarter of 2021 for a weighted average price of $13.99 per share.

Asset quality

  • The provision for credit losses was $(4.4) million, a decrease of $12.1 million from the previous quarter
  • Reserve build/(release)(2) totaled $(4.5) million, bringing reserves to total loans (excluding PPP) down to 1.55% from 1.61% last quarter
  • Nonaccrual loans of $43.7 million decreased $1.9 million from the previous quarter
  • Net charge-offs on loans totaled $3.3 million, a decrease of $1.5 million from the previous quarter
    • Net charge-offs as a percentage of average loans outstanding (annualized) was 0.20% in the first quarter of 2021, down from 0.28% last quarter

“While the reserve release is certainly a positive reflection of our asset quality trends and the improved macroeconomic environment, the trajectory of our fundamental operating performance is even more encouraging,” stated T. Michael Price, President and Chief Executive Officer. “Our consumer loans are growing, our commercial pipelines have started to build and our fee generating businesses all had another solid quarter. At the same time, the team helped 2,500 small and mid-sized businesses secure roughly $255 million in PPP funding during the quarter.” Price continued, “Last week, Forbes released their list of the World’s Best Banks for 2021. For the third year in a row, First Commonwealth is proud to be one of 75 banks from the United States receiving this distinction. This recognition gives us even more confidence that our Company is well-positioned to reward all of our stakeholders.”

Earnings

Net income for the first quarter of 2021 was $39.8 million, or $0.41 per share, compared to $25.7 million, or $0.27 per share in the fourth quarter of 2020 and $4.7 million, or $0.05 per share for the first quarter of 2020.

Net Interest Income and Net Interest Margin

Net interest income (FTE) of $69.8 million increased $1.9 million from the previous quarter and $1.6 million from the prior year quarter. The increase from the prior quarter was primarily due to a $2.4 million increase in fees and interest on PPP loans and a $189.4 million increase in average investment securities, partially offset by an $81.1 million decrease in higher cost time deposits. Interest and fee income recognized on PPP loans totaled $7.9 million in the first quarter as compared to $5.5 million in the prior quarter.

The net interest margin for the first quarter of 2021 was 3.40%, an increase of 14 basis points from the previous quarter and a decrease of 25 basis points from the first quarter of 2021. The increase from the fourth quarter of 2020 was due primarily to a 258 basis point increase in the yield on PPP loans (inclusive of loan forgiveness) and a six basis point decrease in the cost of deposits, partially offset by a 1 basis point increase in the yield on loans.

Total average deposits grew $20.4 million in the first quarter of 2021 as compared to the previous quarter. Balance sheet management strategies that reduced deposits by the end of the fourth quarter were offset by deposit growth in the first quarter of $430.6 million. Average noninterest bearing deposits grew $100.9 million and offset an $81.1 million decrease in average time deposits.

Asset Quality

The Company adopted CECL on December 31, 2020, effective January 1, 2020.

Provision expense in the first quarter of 2021 totaled $(4.4) million, a decrease of $12.1 million from the previous quarter. The provision expense in the fourth quarter 2020 included $3.2 million for unfunded commitments as a result of the adoption of CECL and use of life-of-loan loss rates.

At March 31, 2021, nonperforming loans totaled $50.4 million, a decrease of $3.7 million from the previous quarter and a decrease of $8.8 million from the previous year quarter. Nonperforming loans represented 0.80% of total loans (excluding PPP) as of March 31, 2021, down from 0.86% and 0.93% for the periods ended December 31, 2020 and March 31, 2020, respectively.

At March 31, 2021, criticized loans totaled $272.1 million, a decrease of $30.7 million from the previous quarter.

During the first quarter of 2021, net charge-offs were $3.3 million, compared to $4.8 million in the prior quarter and $3.5 million in the first quarter of 2020. Net charge-offs were 0.20%, 0.28% and 0.23% of average loans for the periods ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

Noninterest Income and Noninterest Expense

Noninterest income totaled $27.3 million for the first quarter of 2021, as compared to $26.6 million for the fourth quarter of 2020 and $19.3 million for the first quarter of 2020 (excluding net securities gains). There were no material securities gains during the current or comparable quarters.

The $0.8 million increase from the previous quarter was primarily due to a $1.8 million increase in the derivative mark-to-market adjustment on interest rate swaps as a result of changes in fair value due to movement in bond spreads, swap rates and counterparty credit risk. This increase was partially offset by a $0.6 million decrease in fee income related to new interest rate swaps due to lower commercial demand. Income from mortgage gain on sale improved by $0.4 million over the prior quarter but was offset by a $0.9 million negative interest rate hedge adjustment.

Noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses) totaled $51.7 million for the first quarter of 2021, as compared to $54.0 million for the fourth quarter of 2020 and $50.2 million for the first quarter of 2020. The $2.3 million decrease from the previous quarter was primarily the result of a $2.7 million decrease in salaries and benefits due to a $1.0 million seasonal decrease in hospitalization expense, a $0.7 million decrease in incentive expense and an increase of $0.5 million in deferred expense related to PPP originations. The decrease from the previous quarter was partially offset by a $1.1 million increase in occupancy expense due to seasonal snow removal expense and maintenance.

The core efficiency ratio was 53.18% during the first quarter of 2021 as compared to 56.00% in the previous quarter and 58.19% in the first quarter of 2020.

Full time equivalent staff was 1,387 at March 31, 2021, 1,389 at December 31, 2020, and 1,510 at March 31, 2020. The decrease from the prior year quarter is the result of a company-wide hiring freeze implemented at the end of the first quarter of 2020 and the consolidation of 20% of the bank’s branch facilities in the fourth quarter of 2020.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.115 per share, which represents a 4.5% increase from the previous quarter. The cash dividend is payable on May 21, 2021 to shareholders of record as of May 7, 2021. This dividend represents a 3.2% projected annual yield utilizing the April 26, 2021 closing market price of $14.34.

First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at March 31, 2021 were 15.3%, 12.6%, 9.7% and 11.6% 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 first quarter of 2021 on Wednesday, April 28, 2021 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-833-302-1887 conference ID # 4592861 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 1-800-585-8367 and entering the conference ID # 4592861. A link to the webcast replay will also be accessible on the company’s web.

About First Commonwealth Financial Corporation

First Commonwealth Financial Corporation (NYSE: FCF), headquartered in Indiana, Pennsylvania, is a financial services Company with 119 community banking offices in 26 counties throughout western and central Pennsylvania and throughout Ohio, as well as business banking operations in Pittsburgh, Pennsylvania, and Canton, Cleveland, Columbus and Cincinnati, 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

Certain statements contained in this release that are not historical facts may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the Securities and Exchange Commission, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute “forward-looking statements” as well. These statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of words such as “may,” “will,” “should,” “could,” “would,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate” or words of similar meaning. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including uncertainties regarding the impact of the COVID-19 pandemic, and could be affected by many factors, including, but not limited to: (1) the effects of the COVID-19 pandemic 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) with which First Commonwealth or its customers must comply; (6) the soundness of other financial institutions; (7) political instability; (8) impairment of First Commonwealth’s goodwill or other intangible assets; (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) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) First Commonwealth’s ability to attract and retain qualified employees; (16) changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (17) the ability to increase market share and control expenses; (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 reliability of First Commonwealth’s vendors, internal control systems or information systems; (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 this report and in the other reports that we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. Further, statements about the potential effects of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, clients, third parties and us.

In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements in this release. We undertake no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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
 March 31, December 31, March 31,
 2021 2020 2020
SUMMARY RESULTS OF OPERATIONS     
Net interest income$69,442   $67,492  $67,724 
Provision for credit losses(4,390)  7,680  30,967 
Noninterest income27,355   26,622  19,273 
Noninterest expense51,859   54,552  50,271 
Net income39,770   25,683  4,727 
Core net income (5)39,855   26,102  4,730 
Earnings per common share (diluted)$0.41   $0.27  $0.05 
Core earnings per common share (diluted) (6)$0.41   $0.27  $0.05 
KEY FINANCIAL RATIOS     
Return on average assets1.77 % 1.12% 0.23%
Core return on average assets (7)1.77 % 1.14% 0.23%
Return on average assets, pre-provision, pre-tax2.00 % 1.73% 1.77%
Core return on average assets, pre-provision, pre-tax2.00 % 1.75% 1.77%
Return on average shareholders' equity14.98 % 9.48% 1.77%
Return on average tangible common equity (8)21.58 % 13.80% 2.92%
Core return on average tangible common equity (9)21.63 % 14.02% 2.92%
Core efficiency ratio (2)(10)53.18 % 56.00% 58.19%
Net interest margin (FTE) (1)3.40 % 3.26% 3.65%
      
Book value per common share$11.30   $11.12  $10.79 
Tangible book value per common share (11)8.01   7.82  7.54 
Market value per common share14.37   10.94  9.14 
Cash dividends declared per common share0.11   0.11  0.11 
ASSET QUALITY RATIOS     
Nonperforming loans as a percent of end-of-period loans (3)0.75 % 0.80% 0.93%
Nonperforming loans as a percent of end-of-period loans, excluding PPP loans (3)0.80 % 0.86% 0.93%
Nonperforming assets as a percent of total assets (3)0.55 % 0.62% 0.74%
Nonperforming assets as a percent of total assets, excluding PPP loans (3)0.58 % 0.65% 0.74%
Net charge-offs as a percent of average loans (annualized) (4)0.20 % 0.28% 0.23%
Net charge-offs as a percent of average loans, excluding PPP loans (annualized) (4)0.21 % 0.30% 0.23%
Allowance for credit losses as a percent of nonperforming loans (4)192.06 % 187.43% 133.71%
Allowance for credit losses as a percent of end-of-period loans (4)1.44 % 1.50% 1.25%
Allowance for credit losses as a percent of end-of-period loans, excluding PPP loans (4)1.55  % 1.61 % 1.25 %
CAPITAL RATIOS     
Shareholders' equity as a percent of total assets11.5 % 11.8% 12.4%
Tangible common equity as a percent of tangible assets (12)8.5 % 8.6% 9.0%
Tangible common equity as a percent of tangible assets, excluding PPP loans (12)8.9 % 9.1% 9.0%
Leverage Ratio9.7 % 9.4% 9.9%
Risk Based Capital - Tier I12.6 % 12.2% 11.6%
Risk Based Capital - Total15.3 % 14.9% 14.2%
Common Equity - Tier I11.6 % 11.2% 10.5%


FIRST COMMONWEALTH FINANCIAL CORPORATION 
CONSOLIDATED FINANCIAL DATA   
Unaudited   
(dollars in thousands, except per share data)   
 For the Three Months Ended
 March 31,December 31,March 31,
 202120202020
INCOME STATEMENT   
Interest income$74,061 $73,306 $79,329 
Interest expense4,619 5,814 11,605 
Net Interest Income69,442 67,492 67,724 
Provision for credit losses(4,390)7,680 30,967 
Net Interest Income after Provision for Credit Losses73,832  59,812  36,757  
Net securities gains6 23 19 
Trust income2,516 2,327 2,111 
Service charges on deposit accounts4,047 4,321 4,745 
Insurance and retail brokerage commissions2,172 1,868 1,995 
Income from bank owned life insurance1,951 1,589 1,616 
Gain on sale of mortgage loans5,046 5,538 2,546 
Gain on sale of other loans and assets1,690 1,676 699 
Card-related interchange income6,427 6,377 5,262 
Derivative mark-to-market1,430 (399)(1,741)
Swap fee income146 724 214 
Other income1,924 2,578 1,807 
Total Noninterest Income27,355 26,622 19,273 
Salaries and employee benefits28,671 31,388 29,977 
Net occupancy4,773 3,668 4,973 
Furniture and equipment3,948 3,925 3,778 
Data processing3,052 2,739 2,467 
Pennsylvania shares tax832 1,254 738 
Advertising and promotion1,324 879 1,150 
Contributions731 439 472 
Intangible amortization866 897 934 
Other professional fees and services751 1,131 898 
FDIC insurance696 1,062 28 
Litigation and operational losses479 373 390 
Loss on sale or write-down of assets9 264 213 
COVID-19 related74 307 23 
Voluntary early retirement— 118 — 
Branch consolidation40 128 — 
Other operating expenses5,613 5,980 4,230 
Total Noninterest Expense51,859 54,552 50,271 
Income before Income Taxes49,328 31,882 5,759 
Income tax provision9,558 6,199 1,032 
Net Income$39,770 $25,683 $4,727 
    
Shares Outstanding at End of Period96,248,476 96,130,751 98,015,396 
Average Shares Outstanding Assuming Dilution96,233,647 96,344,398 98,361,494 
    


FIRST COMMONWEALTH FINANCIAL CORPORATION   
CONSOLIDATED FINANCIAL DATA     
Unaudited     
(dollars in thousands)     
      
 March 31, December 31, March 31,
 2021 2020 2020
BALANCE SHEET (Period End)     
Assets     
Cash and due from banks$83,989  $100,009  $118,413 
Interest-bearing bank deposits420,645  256,572  15,762 
Securities available for sale, at fair value1,056,703  843,450  992,041 
Securities held to maturity, at amortized cost407,833  361,844  318,256 
Loans held for sale20,604  33,436  25,783 
      
Loans6,736,894  6,761,183  6,313,944 
Allowance for credit losses(96,763) (101,309) (79,075)
Net loans6,640,131  6,659,874  6,234,869 
      
Goodwill and other intangibles316,148  316,820  318,891 
Other assets470,936  496,099  491,090 
Total Assets$9,416,989  $9,068,104  $8,515,105 
      
Liabilities and Shareholders' Equity     
Noninterest-bearing demand deposits$2,616,303  $2,319,958  $1,751,524 
      
Interest-bearing demand deposits267,571  250,353  326,122 
Savings deposits4,501,456  4,305,391  4,034,759 
Time deposits483,926  562,964  810,683 
Total interest-bearing deposits5,252,953  5,118,708  5,171,564 
      
Total deposits7,869,256  7,438,666  6,923,088 
      
Short-term borrowings110,762  117,373  146,971 
Long-term borrowings233,012  233,255  233,955 
Total borrowings343,774  350,628  380,926 
      
Other liabilities116,479  210,193  153,167 
Shareholders' equity1,087,480  1,068,617  1,057,924 
Total Liabilities and Shareholders' Equity$9,416,989  $9,068,104  $8,515,105 


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)


 For the Three Months Ended
 March 31,Yield/December 31,Yield/March 31,Yield/
 2021Rate2020Rate2020Rate
NET INTEREST MARGIN     
       
Assets      
Loans, excluding PPP loans (FTE)(1)(3)$6,292,076 3.91%$6,387,174 3.90%$6,255,825 4.63%
PPP Loans489,375 6.58%548,279 4.00%— —%
Securities and interest-bearing bank deposits (FTE) (1)1,530,107 1.54%1,340,756 1.62%1,255,699 2.46%
Total Interest-Earning Assets (FTE) (1)8,311,558 3.63%8,276,209 3.54%7,511,524 4.27%
Noninterest-earning assets818,896  845,094  825,797  
Total Assets$9,130,454  $9,121,303  $8,337,321  
       
Liabilities and Shareholders' Equity      
Interest-bearing demand and savings deposits$4,603,822 0.10%$4,603,255 0.14%$4,215,323 0.48%
Time deposits528,265 0.75%609,350 1.05%825,966 1.65%
Short-term borrowings119,369 0.11%131,806 0.10%202,314 1.17%
Long-term borrowings233,113 4.41%233,352 4.37%234,050 4.41%
Total Interest-Bearing Liabilities5,484,569 0.34%5,577,763 0.41%5,477,653 0.85%
Noninterest-bearing deposits2,413,887  2,313,009  1,676,362  
Other liabilities155,443  152,396  111,988  
Shareholders' equity1,076,555  1,078,135  1,071,318  
Total Noninterest-Bearing Funding Sources3,645,885  3,543,540  2,859,668  
Total Liabilities and Shareholders' Equity$9,130,454  $9,121,303  $8,337,321  
       
Net Interest Margin (FTE) (annualized)(1) 3.40% 3.26% 3.65%


FIRST COMMONWEALTH FINANCIAL CORPORATION 
CONSOLIDATED FINANCIAL DATA   
Unaudited   
(dollars in thousands)   
 March 31,December 31,March 31,
 202120202020
Loan Portfolio Detail   
Commercial Loan Portfolio:   
Commercial, financial, agricultural and other$1,077,218  $1,077,132  $1,272,240  
Paycheck Protection Program478,453  478,854  —  
Commercial real estate2,167,506  2,211,569  2,190,098  
Real estate construction316,207  340,850  332,814  
Total Commercial4,039,384  4,108,405  3,795,152  
    
Consumer Loan Portfolio:   
Closed-end mortgages1,178,640  1,165,951  1,103,281  
Home equity lines of credit577,975  584,641  587,859  
Real estate construction88,373  86,371  80,644  
Total Real Estate - Consumer1,844,988  1,836,963  1,771,784  
    
Auto loans759,061  712,800  626,256  
Direct installment32,143  36,165  46,029  
Personal lines of credit55,719  61,072  68,240  
Student loans5,599  5,778  6,483  
Total Other Consumer852,522  815,815  747,008  
Total Consumer Portfolio2,697,510  2,652,778  2,518,792  
Total Portfolio Loans6,736,894  6,761,183  6,313,944  
Loans held for sale20,604  33,436  25,783  
Total Loans$6,757,498  $6,794,619  $6,339,727  
    
    
 March 31,December 31,March 31,
 202120202020
ASSET QUALITY DETAIL   
Nonperforming Loans:   
Loans on nonaccrual basis$23,056  $30,801  $46,109  
Loans held for sale on a nonaccrual basis—  13  —  
Troubled debt restructured loans on nonaccrual basis20,628  14,740  5,522  
Troubled debt restructured loans on accrual basis6,697  8,512  7,509  
Total Nonperforming Loans$50,381  $54,066  $59,140  
Other real estate owned ("OREO")916  1,215  2,697  
Repossessions ("Repos")833  613  836  
Total Nonperforming Assets$52,130  $55,894  $62,673  
Loans past due in excess of 90 days and still accruing1,079  1,523  1,427  
Classified loans72,026  76,179  90,233  
Criticized loans272,143  302,813  117,535  
    
Nonperforming assets as a percentage of total loans, plus OREO and Repos (4)0.77 %0.83 %0.99 %
Allowance for credit losses$96,763  $101,309  $79,075  
    


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)


 For the Three Months Ended
 March 31,December 31,March 31,
 202120202020
Net Charge-offs (Recoveries):   
Commercial, financial, agricultural and other$479  $1,027 $405 
Real estate construction—  — — 
Commercial real estate1,511  2,364 222 
Residential real estate68  5 502 
Loans to individuals1,212  1,429 2,400 
Net Charge-offs$3,270  $4,825 $3,529 
    
Net charge-offs as a percentage of average loans outstanding (annualized) (4)0.20 %0.28%0.23%
Net charge-offs as a percentage of average loans outstanding, excluding PPP loans (annualized) (4)0.21 %0.30%0.23%
Provision for credit losses as a percentage of net charge-offs(134.25)%159.17%877.50%
Provision for credit losses$(4,390) $7,680 $30,967 


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%.
(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
 March 31,December 31,March 31,
 202120202020
    
Interest income$74,061  $73,306  $79,329  
Adjustment to fully taxable equivalent basis (1)309  333  397  
Interest income adjusted to fully taxable equivalent basis (non-GAAP)74,370  73,639  79,726  
Interest expense4,619  5,814  11,605  
Net interest income, (FTE)$69,751  $67,825  $68,121  


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
 March 31,December 31,March 31,
 202120202020
    
Net Income$39,770  $25,683  $4,727  
Intangible amortization866  897  934  
Tax benefit of amortization of intangibles(182) (188) (196) 
Net Income, adjusted for tax affected amortization of intangibles$40,454  $26,392  $5,465  
    
Average Tangible Equity:   
Total shareholders' equity$1,076,555  $1,078,135  $1,071,318  
Less: intangible assets316,438  317,178  319,269  
Tangible Equity760,117  760,957  752,049  
Less: preferred stock—   —   —   
Tangible Common Equity$760,117  $760,957  $752,049  
    
(8)Return on Average Tangible Common Equity21.58 %13.80 %2.92 %
    


 For the Three Months Ended
 March 31,December 31,March 31,
 202120202020
    
Core Net Income:   
Total Net Income$39,770  $25,683  $4,727  
Net securities gains(6) (23) (19) 
Tax benefit of net securities gains1  5  4  
COVID-19 related74  307  23  
Tax benefit of COVID 19 related(16) (64) (5) 
Early retirement related—  118  —  
Tax benefit of early retirement related expenses—  (25) —  
Branch consolidation related40  128  —  
Tax benefit of bank consolidation related expenses(8) (27) —  
(5) Core net income$39,855  $26,102  $4,730  
Average Shares Outstanding Assuming Dilution96,233,647 96,344,398 98,361,494 
(6) Core Earnings per common share (diluted)$0.41  $0.27  $0.05  
    
Intangible amortization866  897  934  
Tax benefit of amortization of intangibles(182) (188) (196) 
Core Net Income, adjusted for tax affected amortization of intangibles$40,539  $26,811  $5,468  
    
(9) Core Return on Average Tangible Common Equity21.63 %14.02 %2.92 %


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
 March 31,December 31,March 31,
 202120202020
Core Return on Average Assets:   
Total Net Income$39,770  $25,683  $4,727  
Total Average Assets9,130,454  9,121,303  8,337,321  
Return on Average Assets1.77 %1.12 %0.23 %
    
Core Net Income (5)$39,855  $26,102  $4,730  
Total Average Assets9,130,454  9,121,303  8,337,321  
(7) Core Return on Average Assets1.77 %1.14 %0.23 %


 For the Three Months Ended
 March 31,December 31,March 31,
 202120202020
Core Efficiency Ratio:   
Total Noninterest Expense$51,859  $54,552  $50,271  
Adjustments to Noninterest Expense:   
Unfunded commitment reserve—  —  (2,539) 
Intangible amortization866  897  934  
COVID-19 related74  307  23  
Early retirement related—  118  —  
Branch consolidation related40  128  —  
Noninterest Expense - Core$50,879  $53,102  $51,853   
    
Net interest income, (FTE)$69,751  $67,825  $68,121  
Total noninterest income27,355  26,622  19,273  
Net securities gains(6) (23) (19) 
Total Revenue97,100  94,424  87,375  
    
Adjustments to Revenue:   
Derivative mark-to-market1,430  (399) (1,741) 
Total Revenue - Core$95,670  $94,823  $89,116  
    
(10)Core Efficiency Ratio53.18 %56.00 %58.19 %


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)


DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES  
    
 March 31,December 31,March 31,
 202120202020
Tangible Equity:   
Total shareholders' equity$1,087,480  $1,068,617  $1,057,924  
Less: intangible assets316,148  316,820  318,891  
Tangible Equity771,332  751,797  739,033  
Less: preferred stock—  —  —  
Tangible Common Equity$771,332  $751,797  $739,033  
    
Tangible Assets:   
Total assets$9,416,989  $9,068,104  $8,515,105  
Less: intangible assets316,148  316,820  318,891  
Tangible Assets$9,100,841  $8,751,284  $8,196,214  
Less: PPP loans478,453  478,854  —  
Tangible Assets, excluding PPP loans$8,622,388  $8,272,430  $8,196,214  
    
(12)Tangible Common Equity as a percentage of Tangible Assets8.48 %8.59 %9.02 %
(12)Tangible Common Equity as a percentage of Tangible Assets, excluding PPP loans8.95 %9.09 %9.02 %
    
Shares Outstanding at End of Period96,248,476  96,130,751  98,015,396  
(11)Tangible Book Value Per Common Share$8.01  $7.82  $7.54  
    
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.


 For the Three Months Ended
 March 31,December 31,March 31,
  2021  2020  2020 
Pre-tax pre-provision income:   
Net interest income$69,442 $67,492 $67,724 
Noninterest income 27,355  26,622  19,273 
Noninterest expense 51,859  54,552  50,271 
Pre-tax pre-provision income$44,938 $39,562 $36,726 
    
Net securities gains($6)($23)($19)
COVID-19 related 74  307  23 
Voluntary early retirement —  118  — 
Branch consolidation 40  128  — 
Core pre-tax pre-provision income$45,046 $40,092 $36,730 
    
Net charge-offs$3,270 $4,825 $3,529