SOURCE: First Commonwealth Financial Corporation

First Commonwealth Financial Corporation

April 26, 2016 07:00 ET

First Commonwealth Announces First Quarter 2016 Financial Results; Declares Quarterly Dividend

INDIANA, PA--(Marketwired - April 26, 2016) - First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the first quarter of 2016.

First Quarter 2016 Highlights

Profitability

  • Loans experienced solid growth from the prior quarter of 9.8% on an annualized basis;
  • Deposits grew 10.1% from the prior quarter on an annualized basis;
  • The net interest margin expanded three basis points from the prior quarter to 3.29%; and
  • The efficiency ratio improved to 60.10% driven by lower operational expenses.

  Net Income

  • First quarter net income was $12.5 million, or $0.14 diluted earnings per share. Net income was impacted by the following items:
    • Net interest income increased by $0.6 million as compared to the prior quarter, primarily as a result of strong commercial loan growth and expansion in the net interest margin, and is at the highest level since the fourth quarter of 2010;
    • Noninterest income benefited from $0.7 million in gains on the sale of mortgage loans and $0.4 million of swap income, as well as a 7.9% increase in service charges on deposit accounts and card-related interchange income over the prior year period; offset by a negative fair market value adjustment for commercial loan interest rate swaps of $1.0 million;
    • Noninterest expense of $38.1 million is at the lowest level since the fourth quarter of 2007; and
    • Provision for credit losses totaled $6.5 million, an increase of $0.4 million from the previous quarter, due primarily to a $6.0 million specific reserve for a steel and aluminum servicing company placed into nonperforming status in the first quarter of 2016.

"I am encouraged by our results this quarter, particularly with commercial loan growth and our continuing improvement with efficiency. I'm also pleased with the progress our team has made thus far in 2016 with the build out of our presence in Ohio," stated T. Michael Price, President and Chief Executive Officer. "This quarter also marks our third consecutive quarter of positive operating leverage, in that revenue growth has outpaced expenses. This was no small task in the face of today's operating environment."

   
   
Financial Summary  
   
(dollars in thousands,   For the Three Months Ended  
except per share data)   March 31,     December 31,     March 31,  
    2016     2015     2015  
Net income   $ 12,473     $ 10,061     $ 14,221  
Diluted earnings per share   $ 0.14     $ 0.11     $ 0.16  
Return on average assets     0.76 %     0.61 %     0.91 %
Return on average common equity     6.87 %     5.50 %     8.03 %
Efficiency ratio (1)     60.10 %     66.62 %     64.20 %
Core efficiency ratio (1)     59.53 %     60.31 %     62.82 %
Net interest margin (FTE)     3.29 %     3.26 %     3.35 %
(1) See Supplemental Information - Definitions and reconciliation of non-GAAP financial measures 
 
 

Financial Results Summary

For the three months ended March 31, 2016, net income was $12.5 million, or $0.14 diluted earnings per share, compared to net income of $10.1 million, or $0.11 diluted earnings per share, in the fourth quarter of 2015 and net income of $14.2 million, or $0.16 diluted earnings per share, in the first quarter of 2015. The increase in net income compared to the fourth quarter of 2015 was driven by a $5.0 million decrease in noninterest expense as a result of one-time severance, acquisition and real-estate expenses during the fourth quarter of 2015 and a $0.6 million increase in net interest income in the first quarter of 2016, offset by a decrease of $1.8 million in noninterest income, excluding net securities gains. The decrease in net income compared to the first quarter of 2015 was primarily driven by an increase in the provision for credit losses of $5.4 million, offset by lower noninterest expense of $1.7 million.

Return on average assets and return on average equity were 0.76% and 6.87%, respectively, for the first quarter of 2016, as compared to 0.91% and 8.03% in the first quarter of 2015.

Net Interest Income and Net Interest Margin

First quarter 2016 net interest income, on a fully taxable-equivalent basis, increased by $0.6 million to $49.7 million as compared to the fourth quarter of 2015. The increase from the prior quarter was primarily the result of strong commercial loan growth combined with a three basis point increase in the net interest margin to 3.29%. The yield on interest-earning assets improved by six basis points, offset by a four basis point increase in funding costs. A $96.3 million increase in average interest-earning assets also contributed to the improvement in net interest income.

As compared to the first quarter of 2015, net interest income, on a fully taxable-equivalent basis, increased by $1.8 million. The net interest margin of 3.29% in the first quarter of 2016 was six basis points lower than in the first quarter of 2015, of which seven basis points was attributable to a $1.0 million FHLB special dividend received in the first quarter of 2015, a four basis point increase in funding costs and a three basis point decline in the yield on interest-earning assets between the periods, partially offset by a $258.6 million, or 4.4%, increase in average interest-earning assets.

Total deposits grew by $105.8 million in the first quarter, for an annualized growth rate of 10.1%. Average deposits increased $25.3 million in the first quarter of 2016 from the prior quarter. Average deposits decreased $47.4 million from the year-ago quarter, which include the addition of $89.9 million in deposits acquired as part of the First Community acquisition, due in part to the intentional runoff of higher-cost brokered time deposits in 2015. Average brokered time deposits of $3.4 million were relatively flat compared to the fourth quarter of 2015; however, brokered deposits decreased $118.4 million from the year-ago quarter. Average short-term borrowings increased $68.4 million from the prior quarter and increased $398.4 million over the year-ago period, partly due to the aforementioned runoff in brokered deposits. Average noninterest-bearing demand deposits were flat as compared to the prior quarter and increased $94.2 million from the year-ago quarter, due in part to the addition of $11.6 million related to the First Community acquisition. Noninterest-bearing demand deposits currently comprise 26.9% of total deposits. Average interest-bearing demand and savings deposits increased $46.5 million from the prior quarter and $52.8 million from the year-ago period, which includes the addition of $36.1 million related to the First Community acquisition.

Credit Quality

The provision for credit losses totaled $6.5 million for the three months ended March 31, 2016, an increase of $0.4 million as compared to the prior quarter and an increase of $5.4 million from the same quarter last year. The first quarter 2016 provision for credit losses included a $6.0 million specific reserve for a steel servicing company placed into nonperforming status in the first quarter of 2016.

At March 31, 2016, nonperforming loans were $61.8 million, an increase of $11.0 million from December 31, 2015 and an increase of $12.6 million from March 31, 2015. The increase from the fourth quarter of 2015 was primarily related to the aforementioned commercial credit placed into nonperforming status in the first quarter of 2016. Nonperforming loans as a percentage of total loans were 1.29%, 1.08% and 1.11% for the periods ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively.

During the first quarter of 2016, net charge-offs were $2.1 million, compared to $3.8 million in the prior quarter and $6.5 million in the first quarter of 2015. Net charge-offs in the first quarter of 2016 included a $1.1 million charge-off of a previously established reserve for an energy company that was classified as nonaccrual in the third quarter of 2013. Net charge-offs in the fourth quarter of 2015 included a $2.0 million charge-off of a previously established reserve for a manufacturing company that was classified as nonaccrual in the third quarter of 2015. Net charge-offs for the first quarter of 2015 included $3.1 million for the aforementioned loan to an energy company and a $1.2 million write-down on a nonaccrual loan to an equipment distributor.

The allowance for credit losses was $55.2 million at March 31, 2016, and as a percentage of total loans outstanding was 1.15%, 1.08% and 1.05% for March 31, 2016, December 31, 2015 and March 31, 2015, respectively. General reserves as a percentage of non-impaired loans were 0.88%, 0.94% and 0.98% for March 31, 2016, December 31, 2015 and March 31, 2015, respectively.

Other real estate owned (OREO) acquired through foreclosure was $8.6 million at March 31, 2016 as compared to $9.4 million at December 31, 2015 and $7.0 million at March 31, 2015. There were no significant additions to OREO in the first quarter of 2016.

Noninterest Income

Noninterest income, excluding net securities gains, decreased $1.8 million in the first quarter of 2016 as compared to the prior quarter and decreased $0.4 million compared to the same quarter last year. The decrease from the prior quarter is primarily the result of a $1.2 million decline in the fair market value of commercial loan interest rate swaps (offset by a $0.4 million increase in swap income) and a decrease of $0.5 million in service charges on deposit accounts and card-related interchange income as a result of seasonal fluctuations.

The decrease from the prior-year period of $0.4 million is primarily related to a decline of $0.8 million in the fair market value of commercial loan interest rate swaps (offset by a $0.1 million increase in swap income), offset by a $0.5 million increase in service charges on deposit accounts and card-related interchange income and a $0.2 million increase in gain on the sale of mortgage loans.

Noninterest Expense

Noninterest expense decreased $5.0 million in the first quarter of 2016 from the prior quarter and decreased $1.7 million as compared to the first quarter of 2015. The decrease compared to the prior quarter is primarily attributable to several one-time expenses in the fourth quarter of 2015, which included a $2.1 million one-time severance charge for the realignment of our consumer businesses, $0.9 million of one-time expenses related to the acquisition of First Community Bank, and $0.6 million related to the disposition of two former headquarter bank facilities. In addition, provision expense associated with the reserve for unfunded loan commitments, which is included in other operating expenses, decreased $1.0 million compared to the fourth quarter of 2015.

Noninterest expense decreased $1.7 million in the first quarter of 2016 as compared to the first quarter of 2015 and is primarily attributable to decreases of $0.4 million in occupancy expense related to lower snow removal and utilities, a decline of $0.9 million in the reserve for unfunded loan commitments, which is included in other operating expenses, lower operational losses of $0.8 million due to abnormally high debit card fraud losses as a result of merchant breaches in the first quarter of 2015, offset by a $0.3 million increase in data processing expense due to the issuance of chip debit cards to our customers during the first quarter of 2016.

Full time equivalent staff declined to 1,216 at March 31, 2016 from 1,265 and 1,299 at December 31, 2015 and March 31 2015, respectively. The decrease is primarily attributable to staff reductions as a result of the realignment of our consumer businesses, offset by the recent expansion of mortgage and retail banking in our Ohio market.

The efficiency ratio, calculated as total noninterest expense as a percentage of total revenue (which consists of net interest income on a fully taxable equivalent basis plus total noninterest income, excluding net securities gains), was 60.10% and 64.20% for the three months ended March 31, 2016 and 2015, respectively. The core efficiency ratio, which excludes securities gains and losses, amortization of intangible assets and other nonrecurring items, was 59.53% and 62.82% for the three months ended March 31, 2016 and 2015, respectively. The Consolidated Financial Highlights accompanying this news release include additional information regarding reconciliations of non-GAAP financial measures to reported amounts, including a reconciliation of the core efficiency ratio.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.07 per share, which is payable on May 20, 2016 to shareholders of record as of May 6, 2016. This dividend represents a 3.1% projected annual yield utilizing the April 25, 2016 closing market price of $9.17.

On January 27, 2016, First Commonwealth's Board of Directors authorized an additional $25.0 million common stock repurchase program, under which the corporation repurchased 19,447 shares at an average price of $8.42 per share in the first quarter, totaling $0.2 million.

First Commonwealth's capital ratios for Total, Tier I, Leverage and Common Equity Tier I at March 31, 2016 were 12.1%, 11.1%, 9.8% and 9.9%, respectively. Our current capital levels meet the fully-phased in Basel III capital requirements issued by the U.S. bank regulators.

Conference Call

First Commonwealth will host a quarterly conference call to discuss its financial results for the first quarter 2016 on Wednesday, April 27, 2016 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 two hours following the conclusion of the conference. A link to the call replay will be accessible at this 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 $6.7 billion in total assets and 110 banking offices in 17 counties throughout western and central Pennsylvania and central Ohio, and a Corporate Banking Center in northeast 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 our 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) with which First Commonwealth 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 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.

       
       
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,  
    2016   2015   2015  
SUMMARY RESULTS OF OPERATIONS                    
Net interest income (FTE) (1)   $ 49,749   $ 49,179   $ 47,990  
Provision for credit losses     6,526     6,130     1,159  
Noninterest income     13,715     15,282     14,191  
Noninterest expense     38,144     43,129     39,854  
Net income     12,473     10,061     14,221  
                     
Earnings per common share (diluted)   $ 0.14   $ 0.11   $ 0.16  
                     
KEY FINANCIAL RATIOS                    
                     
Return on average assets     0.76 %   0.61 %   0.91 %
Return on average shareholders' equity     6.87 %   5.50 %   8.03 %
Return on average tangible common equity (8)     8.88 %   7.10 %   10.39 %
Efficiency ratio (2)     60.10 %   66.62 %   64.20 %
Core efficiency ratio (3)     59.53 %   60.31 %   62.82 %
Net interest margin (FTE) (1)     3.29 %   3.26 %   3.35 %
                     
Book value per common share   $ 8.24   $ 8.09   $ 7.95  
Tangible book value per common share (7)     6.38     6.23     6.13  
Market value per common share     8.86     9.07     9.00  
Cash dividends declared per common share     0.07     0.07     0.07  
                     
ASSET QUALITY RATIOS                    
Nonperforming loans as a percent of end-of-period loans (4)     1.29 %   1.08 %   1.11 %
Nonperforming assets as a percent of total assets (4)     1.06 %   0.92 %   0.89 %
Net charge-offs as a percent of average loans (annualized)     0.18 %   0.32 %   0.59 %
Allowance for credit losses as a percent of nonperforming loans (5)     89.33 %   99.94 %   101.09 %
Allowance for credit losses as a percent of end-of-period loans (5)     1.15 %   1.08 %   1.05 %
                     
CAPITAL RATIOS                    
Shareholders' equity as a percent of total assets     10.9 %   11.0 %   11.3 %
Tangible common equity as a percent of tangible assets (6)     8.7 %   8.7 %   8.9 %
Leverage Ratio     9.8 %   9.9 %   9.9 %
Risk Based Capital - Tier I     11.1 %   11.3 %   11.4 %
Risk Based Capital - Total     12.1 %   12.3 %   12.3 %
Common Equity - Tier I     9.9 %   10.0 %   10.1 %
                     
                     
       
       
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,  
    2016   2015   2015  
INCOME STATEMENT                    
  Interest income   $ 53,353   $ 52,335   $ 51,085  
  Interest expense     4,546     4,086     3,913  
Net Interest Income     48,807     48,249     47,172  
  Taxable equivalent adjustment (1)     942     930     818  
Net Interest Income (FTE)     49,749     49,179     47,990  
  Provision for credit losses     6,526     6,130     1,159  
Net Interest Income after Provision for Credit Losses (FTE)     43,223     43,049     46,831  
                     
  Net securities (losses) gains     -     (278 )   105  
  Trust income     1,255     1,323     1,421  
  Service charges on deposit accounts     3,708     4,048     3,318  
  Insurance and retail brokerage commissions     1,959     1,986     2,195  
  Income from bank owned life insurance     1,296     1,323     1,354  
  Gain on sale of mortgage loans     683     565     439  
  Gain on sale of other loans and assets     195     427     224  
  Card-related interchange income     3,557     3,717     3,418  
  Derivative mark-to-market     (1,014 )   146     (230 )
  Other income     2,076     2,025     1,947  
Total Noninterest Income     13,715     15,282     14,191  
                     
  Salaries and employee benefits     21,677     22,822     21,892  
  Net occupancy     3,481     3,194     3,911  
  Furniture and equipment     2,867     2,757     2,680  
  Data processing     1,759     1,618     1,438  
  Pennsylvania shares tax     758     1,076     794  
  Intangible amortization     137     136     156  
  Collection and repossession     569     597     511  
  Other professional fees and services     791     1,157     930  
  FDIC insurance     1,038     967     1,059  
  Litigation and operational losses     244     482     1,000  
  Loss on sale or write-down of assets     96     1,075     262  
  Merger and acquisition related     -     894     -  
  Other operating expenses     4,727     6,354     5,221  
Total Noninterest Expense     38,144     43,129     39,854  
                     
Income before Income Taxes     18,794     15,202     21,168  
  Taxable equivalent adjustment (1)     942     930     818  
  Income tax provision     5,379     4,211     6,129  
Net Income   $ 12,473   $ 10,061   $ 14,221  
                     
Shares Outstanding at End of Period     88,959,315     88,961,268     89,656,007  
Average Shares Outstanding Assuming Dilution     88,845,201     88,850,049     90,889,035  
                     
                     
           
           
FIRST COMMONWEALTH FINANCIAL CORPORATION          
CONSOLIDATED FINANCIAL DATA              
Unaudited              
(dollars in thousands)              
               
               
    March 31,   December 31,   March 31,  
    2016   2015   2015  
BALANCE SHEET (Period End)                    
Assets                    
  Cash and due from banks   $ 62,141   $ 66,644   $ 62,161  
  Interest-bearing bank deposits     11,024     2,808     3,124  
  Securities available for sale, at fair value     950,795     949,512     1,316,361  
  Securities held to maturity, at amortized cost     396,444     384,324     30,253  
  Loans held for sale     5,849     5,763     5,892  
                     
    Loans     4,798,755     4,683,750     4,437,601  
    Allowance for credit losses     (55,222 )   (50,812 )   (46,697 )
  Net loans     4,743,533     4,632,938     4,390,904  
                     
  Goodwill and other intangibles     165,594     165,731     162,937  
  Other assets     363,774     359,170     360,210  
Total Assets   $ 6,699,154   $ 6,566,890   $ 6,331,842  
                     
Liabilities and Shareholders' Equity                    
  Noninterest-bearing demand deposits   $ 1,155,795   $ 1,116,689   $ 1,039,929  
                     
    Interest-bearing demand deposits     92,125     86,365     73,112  
    Savings deposits     2,467,978     2,390,607     2,462,986  
    Time deposits     585,757     602,233     717,722  
  Total interest-bearing deposits     3,145,860     3,079,205     3,253,820  
                     
  Total deposits     4,301,655     4,195,894     4,293,749  
                     
    Short-term borrowings     1,518,742     1,510,825     1,125,520  
    Long-term borrowings     81,342     81,481     136,491  
  Total borrowings     1,600,084     1,592,306     1,262,011  
                     
  Other liabilities     64,101     59,144     63,222  
  Shareholders' equity     733,314     719,546     712,860  
Total Liabilities and Shareholders' Equity   $ 6,699,154   $ 6,566,890   $ 6,331,842  
                     
                     
 
 
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/
    2016 Rate   2015 Rate   2015 Rate
NET INTEREST MARGIN            
                         
Assets                        
  Loans (FTE)(1)(4)   $ 4,745,252 3.88%   $ 4,684,215 3.83%   $ 4,478,240 3.92%
  Securities and interest bearing bank deposits (FTE) (1)     1,331,233 2.57%     1,295,982 2.46%     1,339,682 2.60%
    Total Interest-Earning Assets (FTE) (1)     6,076,485 3.59%     5,980,197 3.53%     5,817,922 3.62%
  Noninterest-earning assets     541,109       550,568       540,469  
Total Assets   $ 6,617,594     $ 6,530,765     $ 6,358,391  
                         
Liabilities and Shareholders' Equity                        
  Interest-bearing demand and savings deposits   $ 2,553,896 0.11%   $ 2,507,385 0.12%   $ 2,501,145 0.10%
  Time deposits     594,929 0.62%     615,781 0.62%     789,272 0.77%
  Short-term borrowings     1,503,013 0.60%     1,428,818 0.46%     1,141,098 0.34%
  Long-term borrowings     81,409 3.57%     96,669 3.01%     147,389 2.22%
    Total Interest-Bearing Liabilities     4,733,247 0.39%     4,648,653 0.35%     4,578,904 0.35%
  Noninterest-bearing deposits     1,096,692       1,097,013       1,002,498  
  Other liabilities     57,301       58,887       58,674  
  Shareholders' equity     730,354       726,212       718,315  
    Total Noninterest-Bearing Funding Sources     1,884,347       1,882,112       1,779,487  
Total Liabilities and Shareholders' Equity   $ 6,617,594     $ 6,530,765     $ 6,358,391  
                         
Net Interest Margin (FTE) (annualized) (1)       3.29%       3.26%       3.35%
                         
                         
   
   
FIRST COMMONWEALTH FINANCIAL CORPORATION  
CONSOLIDATED FINANCIAL DATA        
Unaudited        
(dollars in thousands)        
    March 31, December 31, March 31,
    2016 2015 2015
Loan Portfolio Detail                    
  Commercial Loan Portfolio:                    
    Commercial, financial, agricultural and other   $ 1,190,384   $ 1,150,906   $ 1,066,788  
    Commercial real estate     1,552,904     1,479,000     1,400,276  
    Real estate construction     256,856     220,736     107,882  
      Total Commercial     3,000,144     2,850,642     2,574,946  
                     
  Consumer Loan Portfolio:                    
    Closed-end mortgages     745,924     753,586     751,599  
    Home equity lines of credit     467,038     470,879     458,912  
      Total Real Estate - Consumer     1,212,962     1,224,465     1,210,511  
                     
    Auto loans     499,897     519,809     566,450  
    Direct installment     25,126     25,993     26,296  
    Personal lines of credit     45,905     47,424     41,301  
    Student loans     14,721     15,417     18,097  
      Total Other Consumer     585,649     608,643     652,144  
      Total Consumer Portfolio     1,798,611     1,833,108     1,862,655  
        Total Portfolio Loans     4,798,755     4,683,750     4,437,601  
      Loans held for sale     5,849     5,763     5,892  
        Total Loans   $ 4,804,604   $ 4,689,513   $ 4,443,493  
                     
                     
      March 31,     December 31,     March 31,  
      2016     2015     2015  
ASSET QUALITY DETAIL                    
Nonperforming Loans:                    
Loans on nonaccrual basis   $ 33,470   $ 24,345   $ 24,587  
Troubled debt restructured loans held for sale on nonaccrual basis     -     -     3,011  
Troubled debt restructured loans on nonaccrual basis     13,366     12,360     8,978  
Troubled debt restructured loans on accrual basis     14,979     14,139     12,630  
    Total Nonperforming Loans   $ 61,815   $ 50,844   $ 49,206  
Other real estate owned ("OREO")     8,636     9,398     7,025  
Repossessions ("Repos")     345     227     417  
    Total Nonperforming Assets   $ 70,796   $ 60,469   $ 56,648  
Loans past due in excess of 90 days and still accruing     1,330     2,455     4,245  
Classified loans     110,816     86,440     58,393  
Criticized loans     142,625     133,963     122,216  
                     
Nonperforming assets as a percentage of total loans, plus OREO and Repos     1.47 %   1.29 %   1.27 %
Allowance for credit losses   $ 55,222   $ 50,812   $ 46,697  
                     
                     
 
 
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
    For the Three Months Ended
    March 31,   December 31,   March 31,
    2016   2015   2015
Net Charge-offs (Recoveries):                        
  Commercial, financial, agricultural and other   $ 1,258     $ 2,675     $ 4,880  
  Real estate construction     (223 )     8       -  
  Commercial real estate     (491 )     246       64  
  Residential real estate     264       18       470  
  Loans to individuals     1,308       889       1,099  
Net Charge-offs   $ 2,116     $ 3,836     $ 6,513  
                         
Net charge-offs as a percentage of average loans outstanding (annualized)     0.18 %     0.32 %     0.59 %
Provision for credit losses as a percentage of net charge-offs     308.41 %     159.80 %     17.80 %
Provision for credit losses   $ 6,526     $ 6,130     $ 1,159  
                         
 
DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES
           
(1) Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the 35% federal income tax statutory rate.
(2) Efficiency ratio is "total noninterest expense" as a percentage of total revenue. Total revenue consists of "net interest income, on a fully taxable equivalent basis," plus "total noninterest income," excluding "net impairment losses" and "net securities gains."
(3) 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.
(4) Includes held for sale loans.
(5) Excludes held for sale loans.
           
  For the Three Months Ended
  March 31,   December 31,   March 31,
  2016   2015   2015
Core Efficiency Ratio:                      
  Total Noninterest Expense $ 38,144     $ 43,129     $ 39,854  
    Adjustments to Noninterest Expense:                      
      Unfunded commitment reserve   (375 )     630       506  
      Intangible amortization   137       136       156  
      Severance   -       2,111       -  
      Merger and acquisition related   -       894       -  
      Loss on sale or writedown of assets   -       400       50  
        Noninterest Expense - Core $ 38,382     $ 38,958     $ 39,142  
                       
      Net interest income, fully tax equivalent $ 49,749     $ 49,179     $ 47,990  
      Total noninterest income   13,715       15,282       14,191  
      Net securities (losses) gains   -       (278 )     105  
        Total Revenue $ 63,464     $ 64,739     $ 62,076  
                       
      Adjustments to Revenue:                      
        Derivative mark-to-market   (1,014 )     146       (230 )
          Total Revenue - Core $ 64,478     $ 64,593     $ 62,306  
                       
(3) Core Efficiency Ratio   59.53 %     60.31 %     62.82 %
                       
                       
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES        
 
      March 31,   December 31,   March 31,
      2016   2015   2015
Tangible Equity:                          
  Total shareholders' equity     $ 733,314     $ 719,546     $ 712,860  
  Less: intangible assets       165,594       165,731       162,937  
    Tangible Equity       567,720       553,815       549,923  
  Less: preferred stock       -       -       -  
    Tangible Common Equity     $ 567,720     $ 553,815     $ 549,923  
                           
Tangible Assets:                          
  Total assets     $ 6,699,154     $ 6,566,890     $ 6,331,842  
  Less: intangible assets       165,594       165,731       162,937  
    Tangible Assets     $ 6,533,560     $ 6,401,159     $ 6,168,905  
                           
(6) Tangible Common Equity as a percentage of Tangible Assets       8.69 %     8.65 %     8.91 %
                           
  Shares Outstanding at End of Period       88,959,315       88,961,268       89,656,007  
(7) Tangible Book Value Per Common Share     $ 6.38     $ 6.23     $ 6.13  
                           
                           
        For the Three Months Ended  
        March 31,       December 31,       March 31,  
        2016       2015       2015  
Average Tangible Equity:                          
  Total shareholders' equity     $ 730,354     $ 726,212     $ 718,315  
  Less: intangible assets       165,666       164,222       163,020  
    Tangible Equity       564,688       561,990       555,295  
  Less: preferred stock       -       -       -  
    Tangible Common Equity     $ 564,688     $ 561,990     $ 555,295  
                           
(8) Return on Average Tangible Common Equity       8.88 %     7.10 %     10.39 %
                           
Note: Management believes that it is a 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.  
   
   

Contact Information

  • Media Relations:
    Amy Jeffords
    Communications & Community Relations
    Phone: 724-463-6806
    E-mail: AJeffords@fcbanking.com

    Investor Relations:
    Ryan M. Thomas
    Finance and Investor Relations
    Phone: 724-463-1690
    E-mail: RThomas1@fcbanking.com