SOURCE: First Commonwealth Financial Corporation

First Commonwealth Financial Corporation

January 28, 2015 08:00 ET

First Commonwealth Announces Fourth Quarter and Full-Year 2014 Financial Results; Declares Quarterly Dividend

INDIANA, PA--(Marketwired - January 28, 2015) - First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the fourth quarter and full-year 2014.

Fourth Quarter 2014 Highlights

Franchise Growth

  • Solid loan growth of $47.0 million from the prior quarter, or 4.3% on an annualized basis.
  • Acquisition of a local insurance agency that expands First Commonwealth's fee-based product lines and provides access to key insurance carriers, which was completed on October 1, 2014.

 Expense

  • Expense reductions of $1.6 million in the fourth quarter as a result of lower technology, employment and other operational expenses following the IT systems conversion.

 Net Income

  • Net income for the fourth quarter was $7.7 million and was impacted by the following items:
    • a $5.6 million ($0.06 diluted earnings per share) after-tax charge for a legal contingency reserve in connection with a preliminary global settlement of a previously disclosed litigation relating to a discontinued bank product known as the Market Rate Savings IRA;
    • a $1.4 million ($0.02 diluted earnings per share) after-tax recovery of an external fraud loss incurred during the third quarter of 2012; and
    • a $0.4 million after-tax charge from the donation of a former headquarters building to a local university.

"2014 was an unprecedented year for our organization," stated T. Michael Price, President and Chief Executive Officer. "We successfully executed a comprehensive systems conversion that has already led to process efficiencies and cost savings. Our newly launched mortgage initiative is ramping up quickly and will be an important component of revenue growth in 2015. Our acquisition of a local insurance agency expanded our carrier access. And we maintained solid loan growth for the last three consecutive quarters. So despite the unusual, non-recurring items that impacted our fourth quarter earnings, we achieved earnings per share growth of 12% in 2014, and remain on track with our strategic initiatives and growth objectives."

  
  
Financial Summary 
  
   For the Three Months Ended   For the Years Ended  
(dollars in thousands, except per share data)  December 31,   September 30,   December 31,   December 31,  
   2014   2014   2013   2014   2013  
Net Income  $7,729   $12,496   $9,259   $44,453   $41,482  
Diluted earnings per share  $0.08   $0.13   $0.10   $0.48   $0.43  
Return on average assets   0.48 %  0.78 %  0.60 %  0.71 %  0.68 %
Return on average equity   4.26 %  6.91 %  5.14 %  6.18 %  5.70 %
Efficiency Ratio   78.45 %  66.65 %  73.15 %  69.23 %  67.52 %
Net Interest Margin   3.22 %  3.26 %  3.35 %  3.27 %  3.39 %
                     
                     

Financial Results Summary

For the three months ended December 31, 2014, net income was $7.7 million, or $0.08 diluted earnings per share, compared to net income of $12.5 million, or $0.13 diluted earnings per share, in the third quarter of 2014 and net income of $9.3 million, or $0.10 diluted earnings per share, in the fourth quarter of 2013. The decrease in net income compared to the third quarter of 2014 was driven by a decrease in noninterest income, excluding net securities gains, of $1.6 million and an increase in noninterest expense of $5.8 million primarily as a result of the aforementioned legal reserve, offset by a partial recovery of $2.1 million for a 2012 external fraud loss. Return on average assets and return on average equity were 0.48% and 4.26%, respectively, compared to 0.60% and 5.14% in 2013. The legal reserve charge reduced return on average assets and return on average equity by 35 basis points and 306 basis points, respectively, in the fourth quarter.

For the year ended December 31, 2014, net income was $44.5 million, or $0.48 diluted earnings per share, compared to net income of $41.5 million, or $0.43 diluted earnings per share, for 2013. The increase in net income compared to 2013 was primarily the result of a decrease in provision expense of $8.0 million, offset by a decline of $1.7 million in net interest income and an increase in noninterest expense of $2.4 million. Noninterest expense included $7.4 million of non-routine technology conversion-related expenses incurred during 2014 (as compared to $4.6 million in 2013) and the previously mentioned legal reserve incurred in the fourth quarter of 2014. Return on average assets and return on average equity were 0.71% and 6.18%, respectively, compared to 0.68% and 5.70% in 2013. The legal reserve charge reduced return on average assets and return on average equity by 9 basis points and 77 basis points, respectively, in 2014.

Net Interest Income and Net Interest Margin

Fourth quarter 2014 net interest income, on a fully taxable-equivalent basis, decreased slightly by $0.4 million to $47.0 million, as compared to $47.4 million in the third quarter of 2014. The decrease from the prior quarter was primarily the result of a four basis point decline in the net interest margin to 3.22% due to lower replacement yields, partially offset by a two basis point decline in funding costs and a $25.4 million increase in average interest-earning assets.

As compared to the fourth quarter of 2013, net interest income, on a fully taxable-equivalent basis, decreased slightly by $0.3 million. The net interest margin of 3.22% in the fourth quarter of 2014 was 13 basis points lower than in the fourth quarter of 2013 due to lower replacement loan yields, despite a $200.7 million, or 3.6%, increase in average interest-earning assets. A 20 basis point decline in the yield on interest-earning assets between the periods was partially offset by a seven basis point decline in funding costs.

For the year ended December 31, 2014, net interest income, on a fully taxable-equivalent, basis decreased $1.7 million to $187.0 million as compared to 2013. Average interest-earning assets increased $166.5 million, or 3.0%; however, lower replacement yields on interest-earning assets compressed the margin by 20 basis points compared to the prior-year period, partially offset by a seven basis point decline in funding costs. The decrease was also impacted by $1.0 million of income recognized on other-than-temporarily impaired pooled trust preferred collateralized debt obligations that received payments, which resulted in a two basis point benefit to the net interest margin in the 2013 year-to-date period. The net interest margin for the year ended December 31, 2014 was 3.27%, 12 basis points lower than the prior-year period.

Based on average balances, loan growth for the fourth quarter of 2014 was $41.9 million over the prior quarter and $152.1 million over the year-ago quarter. Average deposits decreased $28.3 million in the fourth quarter of 2014 from the prior quarter and $231.2 million from the same quarter a year ago, partially due to the intentional runoff of higher-cost deposits in favor of more cost-effective short-term borrowings. As a result, average short-term borrowings increased $71.5 million from the prior quarter and $449.6 million over the year-ago period. Average noninterest-bearing demand deposits were essentially flat as compared to the prior quarter and increased $99.9 million from the year-ago quarter.

Credit Quality

The provision for credit losses totaled $2.6 million for the three months ended December 31, 2014, an increase of $0.5 million as compared to the prior quarter and an increase of $1.4 million from the same quarter last year. For the year ending December 31, 2014, the provision for credit losses was $11.2 million, a decrease of $8.0 million as compared to the $19.2 million provision in the prior-year period.

At December 31, 2014, nonperforming loans were $55.3 million, an increase of $10.0 million from September 30, 2014 and a decrease of $4.1 million from December 31, 2013. The increase is primarily related to one commercial credit totaling $9.9 million that was placed into nonperforming status in the fourth quarter of 2014. This loan had previously been considered a potential problem loan. Nonperforming loans as a percentage of total loans were 1.24%, 1.03% and 1.39% for the periods ended December 31, 2014, September 30, 2014 and December 31, 2013, respectively.

During the fourth quarter of 2014, net charge-offs were $1.3 million, compared to $2.0 million in the prior quarter and $1.9 million in the fourth quarter of 2013. There were no significant individual charge-offs in the fourth and third quarters of 2014 and fourth quarter of 2013. For the year ended December 31, 2014, net charge-offs were $13.4 million, or 0.31% of average loans, compared to $32.2 million, or 0.76% of average loans, for the same period of 2013.

The allowance for credit losses was $52.1 million at December 31, 2014 and as a percentage of total loans outstanding was 1.17%, 1.15% and 1.27% for December 31, 2014, September 30, 2014 and December 31, 2013, respectively. General reserves as a percentage of non-impaired loans were 0.97%, 1.06% and 1.07% for December 31, 2014, September 30, 2014 and December 31, 2013, respectively.

Other real estate owned ("OREO") acquired through foreclosure was $7.2 million at December 31, 2014 as compared to $7.8 million at September 30, 2014 and $11.7 million at December 31, 2013. There were no significant additions to OREO in the fourth quarter of 2014.

Noninterest Income

Noninterest income, excluding net securities gains and losses, decreased $1.6 million, or 10.8%, in the fourth quarter of 2014 as compared to the prior quarter and decreased $1.3 million, or 8.7%, compared to the same quarter last year. The decrease from the prior quarter is primarily the result of a $0.5 million decrease in service charges on deposit accounts, a $0.3 million decrease in trust income and a $0.4 million decrease in commercial loan swap-related revenues included in other income. The decrease from the prior-year period of $1.3 million is primarily related to a decrease of $0.6 million in service charges on deposit accounts and decreases in other revenue of $0.7 million in commercial loan swap-related revenues and $0.4 million in investment management income (due to the sale of our advisory business in the first quarter of 2014), offset by a $0.4 million increase from insurance due to increased production and our recent agency acquisition.

During the fourth quarter of 2014, a gain of $0.5 million was recognized as the result of a recovery on a trust preferred security. In the fourth quarter of 2013, a loss of $1.4 million was recognized when this trust preferred security was liquidated. The $0.5 million received in the fourth quarter of 2014 represents the additional proceeds distributed as part of the final liquidation of the trust.

For the year ended December 31, 2014, noninterest income, excluding securities gains and losses, decreased $1.0 million, or 1.7%, as compared to the same period of 2013. Changes in noninterest income included decreases of $2.3 million in commercial loan swap-related revenues and $1.1 million primarily related to lower investment management income (due to the previously mentioned sale of our advisory business) as well as a decrease of $0.3 million in letter of credit fees over the year-ago period. These decreases were partially offset by increases of $2.9 million from the gain on sale of assets primarily from the sale of an OREO property and the $1.2 million gain from the sale of our registered investment advisory business during 2014, together with increases of $0.5 million in insurance revenues and $0.5 million in interchange revenue compared to the year-ago period.

Noninterest Expense

Noninterest expense increased $5.8 million, or 13.9%, in the fourth quarter of 2014 from the prior quarter and increased $2.0 million, or 4.5%, compared to the fourth quarter of 2013. The increase during the fourth quarter is primarily attributable to the aforementioned legal reserve and building donation to a local university, partially offset by the external fraud recovery and a $2.1 million reduction in IT conversion-related expenses. There was $2.2 million in IT conversion-related expense in the third quarter of 2014 as compared to $0.1 million in the fourth quarter of 2014. In addition, noninterest expense reductions of $1.6 million in the fourth quarter can be directly attributed to the successful completion of the IT conversion in the third quarter of 2014.

The increase in noninterest expense in the fourth quarter of 2014 as compared to the fourth quarter of 2013 is primarily attributable to the aforementioned legal reserve and building donation, offset by the external fraud recovery and reductions of $4.4 million in IT conversion-related expenses. There was $4.5 million in IT conversion-related expense in the fourth quarter of 2013 and $0.1 million in the fourth quarter of 2014.

Despite $2.8 million in increased non-routine technology conversion charges and accelerated depreciation in 2014, as well as the aforementioned legal reserve charge and building donation, noninterest expense increased by only $2.4 million for the year ended December 31, 2014 compared to 2013. Improvements included decreases of $1.9 million in Pennsylvania shares tax expense, $0.4 million in amortization of intangibles, $1.1 million in loan collection costs, and $0.3 million in FDIC expense. Also contributing to the year-over-year comparison of noninterest expense was the aforementioned $3.0 million partial recovery for a 2012 external fraud loss in 2014, a $1.6 million charge for the early extinguishment of debt in 2013 and a $0.8 million contingency accrual for client tax reporting in 2013.

Full time equivalent staff declined to 1,328 at December 31, 2014 from 1,362 at December 31 2013. The decrease is primarily attributable to staff reductions as a result of the completion of our IT systems conversion and reductions in our branch network, offset by the recent launch of our mortgage initiative and the acquisition of an insurance agency.

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 78.45% and 69.23% for the three months and year ended December 31, 2014, respectively, as compared to 73.15% and 67.52% for the three months and year ended December 31, 2013. IT conversion expenses added 0.19% and 2.98% to the efficiency ratio, respectively, for the three months and year ended December 31, 2014. The legal reserve charge increased the efficiency ratio by an additional 14.17% and 3.46% for the three months and year ended December 31, 2014.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.07 per share which is payable on February 20, 2015 to shareholders of record as of February 9, 2015. This dividend represents a 3.3% projected annual yield utilizing the January 27, 2015 closing market price of $8.53.

During the third quarter of 2014, First Commonwealth completed a previously announced $25.0 million common stock repurchase program under which the corporation repurchased 2,924,066 shares at an average price of $8.58 per share. On January 27, 2015, First Commonwealth's Board of Directors authorized an additional $25.0 million common stock repurchase program.

First Commonwealth's capital ratios for Total, Tier I and Leverage at December 31, 2014 were 12.8%, 11.7% and 9.9%, respectively. Our current capital levels would 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 fourth quarter and full-year 2014 on Wednesday, January 28, 2015 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-877-353-0037 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, headquartered in Indiana, Pennsylvania, is a financial services company with $6.4 billion in total assets and 110 banking offices in 15 counties throughout western and central Pennsylvania. 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.

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 and may cause actual results, performance or achievements to differ materially from the results, performance or achievements contemplated by the forward-looking statements. Global and domestic economies could fail to recover from the recent economic downturn or could experience another severe contraction, which could adversely affect our revenues, increase credit-related costs and reduce the values of our assets and liabilities. Global financial markets could experience a recurrence of significant turbulence, which could reduce the availability of funding to certain financial institutions and lead to a tightening of credit, a reduction of business activity, and increased market volatility. Continued stress in the commercial real estate markets, as well as a delay or failure of recovery in the residential real estate markets, could cause additional credit losses and deterioration in asset values. In addition, our business and financial performance is likely to be negatively impacted by effects of recently enacted and future legislation and regulation. Our results could also be adversely affected by continued deterioration in general business and economic conditions; changes in interest rates; deterioration in the credit quality of our loan portfolios or in the value of the collateral securing those loans; deterioration in the value of securities held in our investment securities portfolio; legal and regulatory developments; increased competition from both banks and non-banks; changes in customer behavior and preferences; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; and management's ability to effectively manage credit risk, market risk, operational risk, compliance and legal risk, interest rate risk, and liquidity risk. 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  For the Years Ended  
   December 31,  September 30,  December 31,  December 31,  December 31,  
   2014  2014  2013  2014  2013  
SUMMARY RESULTS OF OPERATIONS  
Net interest income (FTE)(1)  $46,978  $47,364  $47,303  $187,007  $188,732  
Provision for credit losses   2,575   2,073   1,216   11,196   19,227  
Noninterest income   13,887   15,050   13,264   60,859   60,163  
Noninterest expense   47,359   41,568   45,327   171,210   168,824  
Net income   7,729   12,496   9,259   44,453   41,482  
                       
Earnings per common share (diluted)  $0.08  $0.13  $0.10  $0.48  $0.43  
                       
KEY FINANCIAL RATIOS  
Return on average assets   0.48 % 0.78 % 0.60 % 0.71 % 0.68 %
Return on average shareholders' equity   4.26 % 6.91 % 5.14 % 6.18 % 5.70 %
Efficiency ratio(2)   78.45 % 66.65 % 73.15 % 69.23 % 67.52 %
Net interest margin (FTE)(1)   3.22 % 3.26 % 3.35 % 3.27 % 3.39 %
                       
Book value per common share  $7.81  $7.74  $7.47          
Tangible book value per common share(4)   6.03   5.99   5.78          
Market value per common share   9.22   8.39   8.82          
Cash dividends declared per common share   0.07   0.07   0.06  $0.28  $0.23  
   
ASSET QUALITY RATIOS  
Nonperforming loans as a percent of end-of-period loans (5)   1.24 % 1.03 % 1.39 %        
Nonperforming assets as a percent of total assets (5)   0.99 % 0.85 % 1.15 %        
Net charge-offs as a percent of average loans (annualized)   0.12 % 0.18 % 0.18 %        
Allowance for credit losses as a percent of nonperforming loans (6)   94.21 % 112.21 % 91.31 %        
Allowance for credit losses as a percent of end-of-period loans (6)   1.17 % 1.15 % 1.27 %        
   
CAPITAL RATIOS  
Shareholders' equity as a percent of total assets   11.26 % 11.16 % 11.45 %        
Tangible common equity as a percent of tangible assets(3)   8.92 % 8.87 % 9.09 %        
Leverage Ratio   9.85 % 9.79 % 10.00 %        
Risk Based Capital - Tier I   11.73 % 11.73 % 12.10 %        
Risk Based Capital - Total   12.79 % 12.77 % 13.26 %        
(5) - Includes loans held for sale
(6) - Excludes loans held for sale
 
 
FIRST COMMONWEALTH FINANCIAL CORPORATION  
CONSOLIDATED FINANCIAL DATA  
Unaudited  
(dollars in thousands, except per share data)  
  
   For the Three Months Ended  For the Years Ended  
   December 31,  September 30,  December 31,  December 31,  December 31,  
   2014  2014  2013  2014  2013  
INCOME STATEMENT                      
 Interest income  $50,420  $51,089  $51,308  $202,181  $206,358  
 Interest expense   4,267   4,536   5,002   18,501   21,707  
Net Interest Income   46,153   46,553   46,306   183,680   184,651  
 Taxable equivalent adjustment(1)   825   811   997   3,327   4,081  
Net Interest Income (FTE)   46,978   47,364   47,303   187,007   188,732  
 Provision for credit losses   2,575   2,073   1,216   11,196   19,227  
Net Interest Income after Provision for Credit Losses (FTE)   44,403   45,291   46,087   175,811   169,505  
                       
 Net securities gains (losses)   500   48   (1,395 ) 550   (1,158 )
 Trust income   1,413   1,678   1,489   6,000   6,166  
 Service charges on deposit accounts   3,629   4,099   4,209   15,661   15,652  
 Insurance and retail brokerage commissions   1,779   1,709   1,382   6,483   6,005  
 Income from bank owned life insurance   1,371   1,330   1,320   5,502   5,539  
 Gain on sale of assets   508   742   97   4,996   2,153  
 Card related interchange income   3,602   3,599   3,532   14,222   13,746  
 Other income   1,085   1,845   2,630   7,445   12,060  
Total Noninterest Income   13,887   15,050   13,264   60,859   60,163  
                       
 Salaries and employee benefits   22,038   22,244   21,724   87,223   86,012  
 Net occupancy expense   3,150   3,180   3,477   13,119   13,607  
 Furniture and equipment expense (7)   2,762   4,471   5,255   17,812   15,118  
 Contributions   864   23   127   1,431   784  
 Data processing expense   1,531   1,583   1,498   6,124   6,009  
 Advertising and promotion expense   607   861   760   2,953   3,129  
 Pennsylvania shares tax expense   994   1,033   1,415   3,776   5,638  
 Intangible amortization   101   174   216   631   1,064  
 Collection and repossession expense   813   783   974   2,754   3,836  
 Other professional fees and services   1,209   1,050   966   3,986   3,731  
 FDIC insurance   1,028   926   1,054   4,054   4,366  
 Litigation and operational losses   7,059   187   325   6,786   1,115  
 Conversion related expenses (8)   112   783   2,523   1,788   2,588  
 Loss on redemption of subordinated debt   -   -   -   -   1,629  
 Other operating expenses   5,091   4,270   5,013   18,773   20,198  
Total Noninterest Expense   47,359   41,568   45,327   171,210   168,824  
                       
Income before Income Taxes   10,931   18,773   14,024   65,460   60,844  
 Taxable equivalent adjustment(1)   825   811   997   3,327   4,081  
 Income tax provision   2,377   5,466   3,768   17,680   15,281  
Net Income  $7,729  $12,496  $9,259  $44,453  $41,482  
                       
Shares Outstanding at End of Period   91,723,028   91,722,649   95,245,215   91,723,028   95,245,215  
Average Shares Outstanding Assuming Dilution   91,598,411   92,578,701   95,138,836   93,114,654   97,029,832  
   
(7) - Includes $1.4 million and $2.0 million of accelerated depreciation expense related to the technology conversion for the three-month periods ended September 30, 2014 and December 31, 2013, respectively. The years ended December 31, 2014 and 2013 includes $5.6 and $2.0 million in accelerated depreciation, respectively.
   
(8) - Does not include accelerated depreciation expense described in note 7.
   
   
  
  
FIRST COMMONWEALTH FINANCIAL CORPORATION  
CONSOLIDATED FINANCIAL DATA  
Unaudited  
(dollars in thousands)  
              
   December 31,   September 30,   December 31,  
   2014   2014   2013  
BALANCE SHEET (Period End)                
Assets                
 Cash and due from banks  $72,276   $78,696   $74,427  
 Interest-bearing bank deposits   2,262    5,374    3,012  
 Securities   1,354,364    1,383,768    1,353,809  
 Loans held for sale   2,502    1,305    0  
                  
  Loans   4,457,308    4,411,481    4,283,833  
  Allowance for credit losses   (52,051 )  (50,784 )  (54,225 )
 Net loans   4,405,257    4,360,697    4,229,608  
                  
 Goodwill and other intangibles   163,094    160,152    161,267  
 Other assets   360,530    366,106    392,738  
Total Assets  $6,360,285   $6,356,098   $6,214,861  
                 
Liabilities and Shareholders' Equity                
 Noninterest-bearing demand deposits  $989,027   $995,014   $912,361  
                  
  Interest-bearing demand deposits   81,851    82,221    89,149  
  Savings deposits   2,402,288    2,363,464    2,506,631  
  Time deposits   842,345    931,689    1,095,722  
 Total interest-bearing deposits   3,326,484    3,377,374    3,691,502  
                  
 Total deposits   4,315,511    4,372,388    4,603,863  
                  
  Short-term borrowings   1,105,876    1,034,967    626,615  
  Long-term borrowings   161,626    188,706    216,552  
 Total borrowings   1,267,502    1,223,673    843,167  
                  
 Other liabilities   61,127    50,553    56,134  
 Shareholders' equity   716,145    709,484    711,697  
Total Liabilities and Shareholders' Equity  $6,360,285   $6,356,098   $6,214,861  
                 
                 
 
 
FIRST COMMONWEALTH FINANCIAL CORPORATION 
CONSOLIDATED FINANCIAL DATA 
Unaudited 
(dollars in thousands) 
  
   For the Three Months Ended  
   December 31,
2014
 Yield/
Rate
  September 30,
2014
 Yield/
Rate
  December 31,
2013
 Yield/
Rate
 
NET INTEREST MARGIN (Quarterly Averages)                            
   
Assets                         
 Loans (FTE)(1)(5)  $4,430,036  3.89 % $4,388,130  3.97 % $4,277,981  4.17 %
 Securities and interest bearing bank deposits (FTE)(1)   1,367,020  2.26 %  1,383,554  2.28 %  1,318,332  2.21 %
  Total Interest-Earning Assets (FTE)(1)   5,797,056  3.51 %  5,771,684  3.57 %  5,596,313  3.71 %
 Noninterest-earning assets   546,385       553,384       565,809     
Total Assets  $6,343,441      $6,325,068      $6,162,122     
                          
Liabilities and Shareholders' Equity                         
 Interest-bearing demand and savings deposits  $2,475,405  0.10 % $2,466,127  0.10 % $2,605,992  0.10 %
 Time deposits   917,056  0.83 %  954,474  0.98 %  1,117,567  1.05 %
 Short-term borrowings   1,011,612  0.33 %  940,156  0.28 %  561,976  0.28 %
 Long-term borrowings   174,288  1.98 %  199,435  1.79 %  216,618  1.76 %
  Total Interest-Bearing Liabilities   4,578,361  0.37 %  4,560,192  0.39 %  4,502,153  0.44 %
 Noninterest-bearing deposits   995,508       995,690       895,652     
 Other liabilities   49,407       51,327       49,270     
 Shareholders' equity   720,165       717,859       715,047     
  Total Noninterest-Bearing Funding Sources   1,765,080       1,764,876       1,659,969     
Total Liabilities and Shareholders' Equity  $6,343,441      $6,325,068      $6,162,122     
                          
                          
Net Interest Margin (FTE) (annualized)(1)      3.22 %     3.26 %     3.35 %
                   
                   
  
  
FIRST COMMONWEALTH FINANCIAL CORPORATION 
CONSOLIDATED FINANCIAL DATA 
Unaudited 
(dollars in thousands) 
  
   For the Years Ended  
   December 31,
2014
 Yield/
Rate
  December 31,
2013
 Yield/
Rate
 
NET INTEREST MARGIN (Year-to-Date Averages)                 
Assets                 
 Loans (FTE)(1)(5)  $4,356,566  4.00 % $4,255,593  4.23 %
 Securities and interest bearing bank deposits (FTE)(1)   1,369,496  2.27 %  1,303,976  2.32 %
  Total Interest-Earning Assets (FTE)(1)   5,726,062  3.59 %  5,559,569  3.79 %
 Noninterest-earning assets   555,051       572,413     
Total Assets  $6,281,113      $6,131,982     
                  
Liabilities and Shareholders' Equity                 
 Interest-bearing demand and savings deposits  $2,502,488  0.10 % $2,612,847  0.12 %
 Time deposits   1,028,053  0.96 %  1,154,984  1.07 %
 Short-term borrowings   815,394  0.30 %  478,388  0.26 %
 Long-term borrowings   200,114  1.80 %  233,483  2.08 %
  Total Interest-Bearing Liabilities   4,546,049  0.41 %  4,479,702  0.48 %
 Noninterest-bearing deposits   964,422       876,111     
 Other liabilities   51,347       48,335     
 Shareholders' equity   719,295       727,834     
  Total Noninterest-Bearing Funding Sources   1,735,064       1,652,280     
Total Liabilities and Shareholders' Equity  $6,281,113      $6,131,982     
                  
                  
Net Interest Margin (FTE) (annualized)(1)      3.27 %     3.39 %
                  
             
  
  
FIRST COMMONWEALTH FINANCIAL CORPORATION  
CONSOLIDATED FINANCIAL DATA  
Unaudited  
(dollars in thousands)  
   
   December 31,   September 30,   December 31,  
   2014   2014   2013  
ASSET QUALITY DETAIL                
Nonperforming Loans:                
Loans on nonaccrual basis  $25,715   $27,310   $28,908  
Troubled debt restructured loans on nonaccrual basis   16,952    6,783    16,980  
Troubled debt restructured loans on accrual basis   12,584    11,164    13,495  
 Total Nonperforming Loans  $55,251   $45,257   $59,383  
Other real estate owned ("OREO")   7,197    7,751    11,728  
Repossessions ("Repo")   432    902    322  
 Total Nonperforming Assets  $62,880   $53,910   $71,433  
Loans past due in excess of 90 days and still accruing  $2,619   $2,374   $2,505  
Classified loans   67,756    63,724    83,237  
Criticized loans   140,126    139,449    162,361  
Nonperforming assets as a percentage of total loans, plus OREO and Repos   1.41 %  1.22 %  1.66 %
Allowance for credit losses  $52,051   $50,784   $54,225  
                 
   
   For the Three Months Ended  For the Years Ended  
   December 31,  September 30,  December 31,  December 31,  December 31,  
   2014  2014  2013  2014  2013  
Net Charge-offs (Recoveries):                      
 Commercial, financial, agricultural and other  $445  $294  $987  $8,177  $17,944  
 Real estate construction   (871 ) (132 ) (361 ) (1,044 ) 272  
 Commercial real estate   (141 ) 635   447   536   10,377  
 Residential real estate   637   454   33   2,503   550  
 Loans to individuals   1,238   763   842   3,198   3,046  
Net Charge-offs  $1,308  $2,014  $1,948  $13,370  $32,189  
                       
Net charge-offs as a percentage of average loans outstanding (annualized)   0.12 % 0.18 % 0.18 % 0.31 % 0.76 %
Provision for credit losses as a percentage of net charge-offs   196.87 % 102.93 % 62.42 % 83.74 % 59.73 %
Provision for credit losses  $2,575  $2,073  $1,216  $11,196  $19,227  
                       
                       
 
 
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
 
 
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."
   
   
   December 31,   September 30,   December 31,  
   2014   2014   2013  
                 
Tangible Equity:                
 Total shareholders' equity  $716,145   $709,484   $711,697  
 Less: intangible assets   163,094    160,152    161,267  
  Tangible Equity   553,051    549,332    550,430  
 Less: preferred stock   -    -    -  
  Tangible Common Equity  $553,051   $549,332   $550,430  
                 
Tangible Assets:                
 Total assets  $6,360,285   $6,356,098   $6,214,861  
 Less: intangible assets   163,094    160,152    161,267  
  Tangible Assets  $6,197,191   $6,195,946   $6,053,594  
                 
(3)Tangible Common Equity as a percentage of Tangible Assets   8.92 %  8.87 %  9.09 %
                 
 Shares Outstanding at End of Period   91,723,028    91,722,649    95,245,215  
(4)Tangible Book Value Per Common Share  $6.03   $5.99   $5.78  
                 
   
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

  • Contact:
    Media/Investor Relations:
    Richard J. Stimel
    Vice President/Corporate Communications and Investor Relations
    724-463-6806
    RStimel@fcbanking.com