SOURCE: First Commonwealth Financial Corporation

First Commonwealth Financial Corporation

July 26, 2017 07:00 ET

First Commonwealth Announces Strong Second Quarter 2017 Earnings and the Completion of its Acquisition of DCB Financial Corp.; Declares Quarterly Dividend

INDIANA, PA--(Marketwired - July 26, 2017) - First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the second quarter of 2017.

Second Quarter 2017 Highlights

Franchise Growth

  • Total assets grew $574 million compared to the prior quarter following the completion of the acquisition of DCB Financial Corp. in Lewis Center, Ohio on April 3, 2017.
    • Total loans grew $467 million, including $384 million acquired from DCB Financial Corp.
    • Total deposits grew $563 million, including $484 million acquired from DCB Financial Corp.

Earnings

  • Second quarter net income was $14.0 million, or $0.14 diluted earnings per share. Core net income (adjusted for acquisition expenses) was $20.4 million, or $0.21 diluted earnings per share.
    • Core earnings per share increased $0.03 from the previous quarter and $0.07 from the prior year quarter; an increase of 16.7% and 50.0%, respectively.
  • Total revenue grew $8.8 million, or 12.7% from the prior quarter.
    • Net interest income (FTE) increased $6.1 million, or 11.5% from the prior quarter.
    • Noninterest income grew $2.7 million, or 16.4% from the prior quarter.
  • Total noninterest expense increased $15.5 million from the previous quarter and includes $9.9 million of one-time merger-related expenses resulting from the acquisition of DCB Financial Corp.
  • Provision for credit losses totaled ($1.6) million, a decrease of $4.8 million as compared to the prior quarter, in part due to the recognition of $3.1 million in recoveries on two loans that had been charged-off in prior periods.
  • The annualized return on average tangible common equity for the second quarter of 2017 was 9.74% and the core return on average tangible common equity (excluding merger-related expenses) was 14.03%.

Profitability

  • The net interest margin improved four basis points to 3.54% compared to the prior quarter.
  • Core return on average assets (adjusted for acquisition expenses) improved 13 basis points to 1.11% compared to the prior quarter.
  • The core efficiency ratio improved to 60.19%, driven by revenue growth and well-controlled operational expenses.

"Our results in the second quarter and the first six months of 2017 reflect continued progress towards achieving our strategic objectives of growing revenue, controlling expenses and thoughtfully deploying capital," stated T. Michael Price, President and Chief Executive Officer. "And with the closing and integration of DCB Financial Corp. this past quarter, we add another quality building block to our Ohio presence," Price continued. "This new addition not only provides us with deeper penetration into the robust Columbus market, but it also gives us a group of very talented professionals that care about their communities and can help our loyal customers reach their financial goals."

 
Financial Summary
(dollars in thousands, For the Three Months Ended  For the Six Months Ended
except per share data) June 30, March 31, June 30,  June 30, June 30,
  2017 2017 2016  2017 2016
Reported Results           
Net income $14,013 $15,888 $12,007  $29,901 $24,480
Diluted earnings per share $0.14 $0.18 $0.14  $0.32 $0.28
Return on average assets 0.76 % 0.96 % 0.72 %  0.86 % 0.74 %
Return on average equity 6.44 % 8.51 % 6.53 %  7.40 % 6.70 %
            
Core Operating Results (non-GAAP)(1)           
Core net income $20,428 $16,285 $12,163  $36,714 $24,636
Core diluted earnings per share $0.21 $0.18 $0.14  $0.39 $0.28
Core return on average assets 1.11 % 0.98 % 0.73 %  1.05 % 0.74 %
Return on average tangible common equity 9.74 % 11.80 % 8.47 %  10.73 % 8.70 %
Core return on average tangible common equity 14.03 % 12.08 % 8.57 %  13.10 % 8.76 %
Core efficiency ratio 60.19 % 60.49 % 56.88 %  60.33 % 58.19 %
Net interest margin (FTE) 3.54 % 3.50 % 3.27 %  3.52 % 3.28 %
            
            
  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. See supplemental information included with the release for "non-GAAP Financial Measures and Key Performance Indicators" and additional information.

Earnings

Net income for the second quarter of 2017 was $14.0 million, as compared to $12.0 million for the second quarter of 2016. Excluding merger-related expenses of $6.4 million after tax, net income for the second quarter of 2017 was $20.4 million.

Net income for the first six months of 2017 was $29.9 million, as compared to $24.5 million for the same period in 2016. Excluding merger-related expenses of $6.8 million after tax, net income for the first six months of 2017 was $36.7 million.

Net Interest Margin and Net Interest Income

The net interest margin for the second quarter of 2017 was 3.54%, an increase of 4 basis points from the previous quarter and an increase of 27 basis points from the second quarter of 2016. The yield on interest-earning assets increased by 8 basis points and funding costs increased by 4 basis points from the prior quarter. The increase from the previous year is primarily due to improved yields on variable and adjustable loan portfolios following the Federal Reserve's decision to increase short-term rates in December of 2016, March of 2017 and June of 2017, along with the ability to pay down higher cost short-term borrowings following our recent acquisitions. The yield on interest-earning assets increased by 28 basis points and funding costs increased 2 basis points from the year-ago quarter.

Total average earning assets increased $542 million, or 8.8%, from the previous quarter mostly due to the benefit of acquired DCB Financial Corp. balances, as well as average organic loan growth of $58 million and a $101 million increase in the securities portfolio.

Total deposits grew by $563 million in the second quarter of 2017 compared to the previous quarter, which includes $484 million in deposits acquired at the closing of the DCB Financial Corp. acquisition. Total deposits increased by $1.1 billion from the prior year quarter, which includes the addition of $605 million in deposits acquired at the closing of the northern Ohio branch acquisition, as well as the aforementioned acquisition of DCB Financial Corp.

Credit Quality

The provision for credit losses totaled ($1.6) million for the quarter ended June 30, 2017, a decrease of $4.8 million as compared to the prior quarter and a decrease of $12.0 million from the same quarter last year. The decrease from the prior quarter is primarily due to the recognition of $3.1 million of recoveries on two large commercial loans that had been charged-off in prior periods. The decrease from the previous year was due to the aforementioned recoveries and the recognition of a $7.5 million specific reserve for an individual commercial credit in the prior year quarter.

At June 30, 2017, nonperforming loans were $40.2 million, a decrease of $9.7 million from March 31, 2017 and a decrease of $24.2 million from June 30, 2016. The decrease from the first quarter of 2017 was related to the resolution of two commercial manufacturing credits that were placed into nonperforming status in 2016. Nonperforming loans as a percentage of total loans were 0.75%, 1.01% and 1.33% for the periods ended June 30, 2017, March 31, 2017 and June 30, 2016, respectively.

During the second quarter of 2017, net charge-offs (recoveries) were ($1.0) million, compared to $4.7 million in the prior quarter and $5.8 million in the second quarter of 2016. Net charge-offs (recoveries) in the second quarter of 2017 included recoveries for two large commercial credits totaling $3.1 million, which were previously charged-off.

For the originated loan portfolio at June 30, 2017, the allowance for credit losses to total originated loans was 0.98%, compared to 1.01% at March 31, 2017 and 1.24% at June 30, 2016.

Noninterest Income and Noninterest Expense

Noninterest income (excluding net security gains) totaled $19.0 million for the second quarter of 2017 as compared to $16.3 million for the first quarter of 2017 and $15.5 million for the second quarter of 2016. Service charges and card-related interchange income increased $1.0 million and $1.9 million from the prior quarter and the year-ago quarter, respectively, primarily due to acquired customer relationships. Financial advisory and insurance commissions increased $0.7 million and $0.8 million from the prior quarter and year-ago quarter, respectively, due to the aforementioned acquisitions and an expanded sales staff.

Noninterest expense (excluding merger-related expenses) totaled $48.4 million for the second quarter of 2017 as compared to $42.2 million for the first quarter of 2017 and $37.2 million for the second quarter of 2016. The increase from the previous periods was primarily driven by higher operating expenses following the Company's recent acquisitions and $1.1 million in write-downs on OREO properties previously acquired from three commercial customers.

Full time equivalent staff was 1,426 at June 30, 2017 and 1,271 at March 31, 2017 and was 1,168 at June 30, 2016. The increase from the previous periods is the result of the addition of employees from acquisitions and the recent expansion of the mortgage and commercial banking businesses in Ohio.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.08 per share, which is payable on August 18, 2017 to shareholders of record as of August 7, 2017. This dividend represents a 2.4% projected annual yield utilizing the July 25, 2017 closing market price of $13.18.

First Commonwealth's capital ratios for Total, Tier I, Leverage and Common Equity Tier I at June 30, 2017 were 12.2%, 11.3%, 9.6% and 10.2%, respectively. First Commonwealth's current capital levels exceed the fully phased-in Basel III capital requirements issued by U.S. bank regulators.

Conference Call

First Commonwealth will host a quarterly conference call to discuss its financial results for the second quarter 2017 on Wednesday, July 26, 2017 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-844-792-3645 or through the company's web page, http://www.fcbanking.com/InvestorRelations. A replay of the call will be available approximately one hour following the conclusion of the conference by dialing 1-877-344-7529 and entering the access code #10110414. A link to the webcast replay will also be accessible on the company's web page for 30 days.

About First Commonwealth Financial Corporation

First Commonwealth Financial Corporation (NYSE: FCF), headquartered in Indiana, Pennsylvania, is a financial services company with 135 banking offices in 20 counties throughout western and central Pennsylvania and central and northeastern Ohio, as well as a Corporate Banking Center in northeast Ohio and mortgage offices in Stow and Dublin, Ohio. First Commonwealth provides a full range of commercial banking, consumer banking, mortgage, wealth management and insurance products and services through its subsidiaries First Commonwealth Bank and First Commonwealth Insurance Agency. For more information about First Commonwealth or to open an account today, please visit www.fcbanking.com.

Forward-Looking Statements

This release contains forward-looking statements about First Commonwealth's future plans, strategies and financial performance. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may." Such statements are based on assumptions and involve risks and uncertainties, many of which are beyond First Commonwealth's control. Factors that could cause actual results, performance or achievements to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national and international economic conditions and the impact they may have on First Commonwealth and its customers; (2) volatility and disruption in national and international financial markets; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (4) inflation, interest rate, commodity price, securities market and monetary fluctuations; (5) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) 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   For the Six Months Ended
   June 30,  March 31,  June 30,   June 30,  June 30,
   2017  2017  2016   2017  2016
SUMMARY RESULTS OF OPERATIONS                
Net interest income (FTE) (1) $ 58,896   $ 52,818   $ 50,034    $ 111,714   $ 99,783  
Provision for credit losses  (1,609 )  3,229    10,372     1,620    16,898  
Noninterest income  18,904    16,932    15,558     35,836    29,273  
Noninterest expense  58,263    42,765    37,410     101,028    75,554  
Net income  14,013    15,888    12,007     29,901    24,480  
Core net income (5)  20,428    16,285    12,163     36,714    24,636  
                 
Earnings per common share (diluted) $ 0.14   $ 0.18   $ 0.14    $ 0.32   $ 0.28  
Core earnings per common share (diluted) (6) $ 0.21   $ 0.18   $ 0.14    $ 0.39   $ 0.28  
                 
KEY FINANCIAL RATIOS                
                 
Return on average assets  0.76 %  0.96 %  0.72 %   0.86 %  0.74 %
Core return on average assets (7)  1.11 %  0.98 %  0.73 %   1.05 %  0.74 %
Return on average shareholders' equity  6.44 %  8.51 %  6.53 %   7.40 %  6.70 %
Return on average tangible common equity (8)  9.74 %  11.80 %  8.47 %   10.73 %  8.70 %
Core return on average tangible common equity (9)  14.03 %  12.08 %  8.57 %   13.10 %  8.76 %
Core efficiency ratio (2)(10)  60.19 %  60.49 %  56.88 %   60.33 %  58.19 %
Net interest margin (FTE) (1)  3.54 %  3.50 %  3.27 %   3.52 %  3.28 %
                 
Book value per common share $ 9.02   $ 8.54   $ 8.34         
Tangible book value per common share (11)  6.23    6.32    6.48         
Market value per common share  12.68    13.26    9.20         
Cash dividends declared per common share  0.08    0.08    0.07    $ 0.16   $ 0.14  
                 
ASSET QUALITY RATIOS                
Nonperforming loans as a percent of end-of-period loans (3)  0.75 %  1.01 %  1.33 %       
Nonperforming assets as a percent of total assets (3)  0.63 %  0.84 %  1.09 %       
Net charge-offs as a percent of average loans (annualized)  (0.07 )%  0.39 %  0.48 %       
Allowance for credit losses as a percent of nonperforming loans (4)  119.61 %  105.20 %  92.88 %       
Allowance for credit losses as a percent of end-of-period loans (4)  0.89 %  0.99 %  1.24 %       
Allowance for credit losses (originated loans and leases) as a percent of originated loans and leases  0.98 %  1.01 %  1.24 %       
                 
CAPITAL RATIOS                
Shareholders' equity as a percent of total assets  11.9 %  11.2 %  11.0 %       
Tangible common equity as a percent of tangible assets (12)  8.5 %  8.5 %  8.8 %       
Leverage Ratio  9.6 %  9.9 %  9.8 %       
Risk Based Capital - Tier I  11.3 %  11.3 %  11.1 %       
Risk Based Capital - Total  12.2 %  12.3 %  12.2 %       
Common Equity - Tier I  10.2 %  10.1 %  9.9 %       
               
               
FIRST COMMONWEALTH FINANCIAL CORPORATION   
CONSOLIDATED FINANCIAL DATA     
Unaudited     
(dollars in thousands, except per share data)     
   For the Three Months Ended   For the Six Months Ended
   June 30,  March 31,  June 30,   June 30,  June 30,
   2017  2017  2016   2017  2016
INCOME STATEMENT                
 Interest income $ 63,120   $ 56,179   $ 53,850    $ 119,299   $ 107,203  
 Interest expense  5,303    4,349    4,759     9,652    9,305  
Net Interest Income  57,817    51,830    49,091     109,647    97,898  
 Taxable equivalent adjustment (1)  1,079    988    943     2,067    1,885  
Net Interest Income (FTE)  58,896    52,818    50,034     111,714    99,783  
 Provision for credit losses  (1,609 )  3,229    10,372     1,620    16,898  
Net Interest Income after Provision for Credit Losses (FTE)  60,505    49,589    39,662     110,094    82,885  
                 
 Net securities (losses) gains  (49 )  652    28     603    28  
 Trust income  1,711    1,417    1,320     3,128    2,575  
 Service charges on deposit accounts  4,736    4,319    3,845     9,055    7,553  
 Insurance and retail brokerage commissions  2,442    2,082    1,985     4,524    3,944  
 Income from bank owned life insurance  1,449    1,292    1,311     2,741    2,607  
 Gain on sale of mortgage loans  1,315    977    932     2,292    1,615  
 Gain on sale of other loans and assets  457    307    466     764    661  
 Card-related interchange income  4,842    4,251    3,784     9,093    7,341  
 Derivative mark-to-market  (37 )  2    (531 )   (35 )  (1,545 )
 Swap fee income  314    (73 )  800     241    1,260  
 Other income  1,724    1,706    1,618     3,430    3,234  
Total Noninterest Income  18,904    16,932    15,558     35,836    29,273  
                 
 Salaries and employee benefits  25,298    23,466    19,888     48,764    41,565  
 Net occupancy  4,121    3,761    3,186     7,882    6,667  
 Furniture and equipment  3,323    3,088    2,882     6,411    5,749  
 Data processing  2,345    2,085    1,788     4,430    3,547  
 Pennsylvania shares tax  1,161    816    1,092     1,977    1,850  
 Advertising and promotion  988    806    664     1,794    1,190  
 Intangible amortization  846    572    114     1,418    251  
 Collection and repossession  443    497    474     940    1,043  
 Other professional fees and services  1,096    959    873     2,055    1,664  
 FDIC insurance  977    793    1,062     1,770    2,100  
 Litigation and operational losses  277    232    635     509    879  
 Loss on sale or write-down of assets  1,220    99    345     1,319    441  
 Merger and acquisition related  9,870    611    240     10,481    240  
 Other operating expenses  6,298    4,980    4,167     11,278    8,368  
Total Noninterest Expense  58,263    42,765    37,410     101,028    75,554  
                 
Income before Income Taxes  21,146    23,756    17,810     44,902    36,604  
 Taxable equivalent adjustment (1)  1,079    988    943     2,067    1,885  
 Income tax provision  6,054    6,880    4,860     12,934    10,239  
Net Income $ 14,013   $ 15,888   $ 12,007    $ 29,901   $ 24,480  
                 
Shares Outstanding at End of Period  97,483,067  89,113,083  88,949,995   97,483,067  88,949,995
Average Shares Outstanding Assuming Dilution  97,232,288  88,987,671  88,838,614   93,125,939  88,840,683
                 
            
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
         
   June 30,   March 31,   June 30,
   2017   2017   2016
BALANCE SHEET (Period End)           
Assets           
 Cash and due from banks $ 103,602    $ 75,160    $ 68,163  
 Interest-bearing bank deposits  12,310     47,944     30,457  
 Securities available for sale, at fair value  820,586     871,423     913,420  
 Securities held to maturity, at amortized cost  450,886     386,954     405,976  
 Loans held for sale  9,785     9,588     11,613  
            
  Loans  5,374,782     4,907,961     4,843,776  
  Allowance for credit losses  (48,067 )   (48,676 )   (59,821 )
 Net loans  5,326,715     4,859,285     4,783,955  
            
 Goodwill and other intangibles  272,030     197,924     165,481  
 Other assets  387,472     360,699     370,756  
Total Assets $ 7,383,386    $ 6,808,977    $ 6,749,821  
            
Liabilities and Shareholders' Equity           
 Noninterest-bearing demand deposits $ 1,404,081    $ 1,270,136    $ 1,136,629  
            
  Interest-bearing demand deposits  237,801     114,526     88,777  
  Savings deposits  3,330,351     3,030,156     2,582,709  
  Time deposits  560,902     554,911     586,405  
 Total interest-bearing deposits  4,129,054     3,699,593     3,257,891  
            
 Total deposits  5,533,135     4,969,729     4,394,520  
            
  Short-term borrowings  846,137     961,601     1,464,687  
  Long-term borrowings  88,389     80,771     81,201  
 Total borrowings  934,526     1,042,372     1,545,888  
            
 Other liabilities  36,260     35,881     67,627  
 Shareholders' equity  879,465     760,995     741,786  
Total Liabilities and Shareholders' Equity $ 7,383,386    $ 6,808,977    $ 6,749,821  
            
            
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in   thousands)
   For the Three Months Ended   For the Six Months Ended
   June 30, Yield/  March 31, Yield/  June 30, Yield/   June 30, Yield/  June 30, Yield/
   2017 Rate  2017 Rate  2016 Rate   2017 Rate  2016 Rate
NET INTEREST MARGIN                     
                           
Assets                          
 Loans (FTE)(1)(3) $ 5,358,089 4.18 % $ 4,916,759 4.05 % $ 4,833,360 3.86 %  $ 5,138,643 4.11 % $ 4,789,306 3.87 %
 Securities and interest bearing bank deposits (FTE) (1)  1,312,814 2.57 %  1,212,025 2.71 %  1,321,018 2.54 %   1,262,698 2.64 %  1,326,125 2.56 %
 Total Interest-Earning Assets (FTE) (1)  6,670,903 3.86 %  6,128,784 3.78 %  6,154,378 3.58 %   6,401,341 3.82 %  6,115,431 3.59 %
 Noninterest-earning assets  710,913    580,033    552,754     645,835    546,932  
Total Assets $ 7,381,816   $ 6,708,817   $ 6,707,132    $ 7,047,176   $ 6,662,363  
                           
Liabilities and Shareholders' Equity                          
 Interest-bearing demand and savings deposits $ 3,513,479 0.15 % $ 3,100,208 0.12 % $ 2,660,934 0.16 %  $ 3,307,985 0.14 % $ 2,607,415 0.13 %
 Time deposits  580,874 0.60 %  572,750 0.62 %  578,518 0.62 %   576,834 0.61 %  586,723 0.62 %
 Short-term borrowings  902,547 0.98 %  930,998 0.76 %  1,447,452 0.58 %   916,694 0.87 %  1,475,233 0.59 %
 Long-term borrowings  88,351 4.08 %  80,840 3.95 %  81,268 3.62 %   84,616 4.02 %  81,339 3.59 %
 Total Interest-Bearing Liabilities  5,085,251 0.42 %  4,684,796 0.38 %  4,768,172 0.40 %   4,886,129 0.40 %  4,750,710 0.39 %
 Noninterest-bearing deposits  1,386,240    1,230,939    1,137,626     1,309,019    1,117,159  
Other liabilities  38,092    36,005    61,821     37,055    59,561  
Shareholders' equity  872,233    757,077    739,513     814,973    734,933  
 Total Noninterest-Bearing Funding Sources  2,296,565    2,024,021    1,938,960     2,161,047    1,911,653  
Total Liabilities and Shareholders' Equity $ 7,381,816   $ 6,708,817   $ 6,707,132    $ 7,047,176   $ 6,662,363  
                           
Net Interest Margin (FTE) (annualized)(1)    3.54 %    3.50 %    3.27 %     3.52 %    3.28 %
                      
                      
FIRST COMMONWEALTH FINANCIAL CORPORATION 
CONSOLIDATED FINANCIAL DATA   
Unaudited   
(dollars in thousands)   
   June 30,  March 31,  June 30,
   2017  2017  2016
Loan Portfolio Detail         
 Commercial Loan Portfolio:         
 Commercial, financial, agricultural and other $ 1,199,800   $ 1,148,460   $ 1,185,062  
 Commercial real estate  1,963,001    1,761,101    1,648,222  
 Real estate construction  249,255    240,122    242,132  
  Total Commercial  3,412,056    3,149,683    3,075,416  
           
 Consumer Loan Portfolio:         
 Closed-end mortgages  886,335    709,122    732,394  
 Home equity lines of credit  530,591    508,276    466,611  
  Total Real Estate - Consumer  1,416,926    1,217,398    1,199,005  
           
 Auto loans  450,561    453,076    481,887  
 Direct installment  24,501    24,017    25,160  
 Personal lines of credit  59,450    51,948    48,358  
 Student loans  11,288    11,839    13,950  
  Total Other Consumer  545,800    540,880    569,355  
  Total Consumer Portfolio  1,962,726    1,758,278    1,768,360  
   Total Portfolio Loans  5,374,782    4,907,961    4,843,776  
 Loans held for sale  9,785    9,588    11,613  
   Total Loans $ 5,384,567   $ 4,917,549   $ 4,855,389  
          
          
   June 30,  March 31,  June 30,
   2017  2017  2016
ASSET QUALITY DETAIL         
Nonperforming Loans:         
Loans on nonaccrual basis $ 15,553   $ 21,797   $ 38,404  
Loans held for sale on a nonaccrual basis  -    3,613    -  
Troubled debt restructured loans on nonaccrual basis  11,868    10,482    9,672  
Troubled debt restructured loans on accrual basis  12,764    13,990    16,332  
  Total Nonperforming Loans $ 40,185   $ 49,882   $ 64,408  
Other real estate owned ("OREO")  5,964    6,910    8,604  
Repossessions ("Repos")  208    223    291  
  Total Nonperforming Assets $ 46,357   $ 57,015   $ 73,303  
Loans past due in excess of 90 days and still accruing  1,898    2,109    1,384  
Classified loans  69,748    89,427    101,998  
Criticized loans  160,220    129,978    128,280  
          
Nonperforming assets as a percentage of total loans, plus OREO and Repos  0.86 %  1.16 %  1.51 %
Allowance for credit losses $ 48,067   $ 48,676   $ 59,821  
          
       
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
   For the Three Months Ended   For the Six Months Ended
   June 30,  March 31,  June 30,   June 30,  June 30,
   2017  2017  2016   2017  2016
Net Charge-offs (Recoveries):                
 Commercial, financial, agricultural and other $ (1,816 ) $ 3,457   $ 4,689    $ 1,641   $ 5,947  
 Real estate construction  (43 )  (54 )  (4 )   (97 )  (227 )
 Commercial real estate  (4 )  (86 )  116     (90 )  (375 )
 Residential real estate  55    345    78     400    342  
 Loans to individuals  808    1,076    894     1,884    2,202  
Net Charge-offs $ (1,000 ) $ 4,738   $ 5,773    $ 3,738   $ 7,889  
                 
Net charge-offs as a percentage of average loans outstanding (annualized)  (0.07 )%  0.39 %  0.48 %   0.15 %  0.33 %
Provision for credit losses as a percentage of net charge-offs  160.90 %  68.15 %  179.66 %   43.34 %  214.20 %
Provision for credit losses $ (1,609 ) $ 3,229   $ 10,372    $ 1,620   $ 16,898  
                 
                 

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) Core efficiency ratio excludes from total revenue the impact of derivative mark-to-market and excludes from "total noninterest expense" the amortization of intangibles, unfunded commitment expense and any other unusual items deemed by management to not be related to normal operations, such as merger, acquisition and severance costs.
(3) Includes held for sale loans.
(4) Excludes held for sale loans.

                 
   For the Three Months Ended   For the Six Months Ended
   June 30,  March 31,  June 30,   June 30,  June 30,
   2017  2017  2016   2017  2016
                 
Net Income $ 14,013   $ 15,888   $ 12,007    $ 29,901   $ 24,480  
 Intangible amortization  846    572    114     1,418    251  
 Tax benefit of amortization of intangibles  (296 )  (200 )  (40 )   (496 )  (88 )
  Net Income, adjusted for tax affected amortization of intangibles  14,563    16,260    12,081     30,823    24,643  
                 
Average Tangible Equity:                
 Total shareholders' equity $ 872,233   $ 757,077   $ 739,513    $ 814,973   $ 734,933  
 Less: intangible assets  272,488    198,070    165,527     235,484    165,597  
  Tangible Equity  599,745    559,007    573,986     579,489    569,336  
 Less: preferred stock  -    -    -     -    -  
  Tangible Common Equity $ 599,745   $ 559,007   $ 573,986    $ 579,489   $ 569,336  
                 
(8)Return on Average Tangible Common Equity  9.74 %  11.80 %  8.47 %   10.73 %  8.70 %
                 
            
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES    
      
   For the Three Months Ended   For the Six Months Ended
   June 30,  March 31,  June 30,   June 30,  June 30,
   2017  2017  2016   2017  2016
                 
Core Net Income:                
 Total Net Income $ 14,013   $ 15,888   $ 12,007    $ 29,901   $ 24,480  
  Merger & Acquisition related expenses  9,870    611    240     10,481    240  
  Tax benefit of merger & acquisition related expenses  (3,455 )  (214 )  (84 )   (3,668 )  (84 )
 (5)Core net income  20,428    16,285    12,163     36,714    24,636  
  Average Shares Outstanding Assuming Dilution  97,232,288  88,987,671  88,838,614   93,125,939  88,840,683
  (6) Core Earnings per common share (diluted) $ 0.21   $ 0.18   $ 0.14    $ 0.39   $ 0.28  
                 
   Intangible amortization  846    572    114     1,418    251  
   Tax benefit of amortization of intangibles  (296 )  (200 )  (40 )   (496 )  (88 )
    Core Net Income, adjusted for tax affected amortization of intangibles $ 20,978   $ 16,657   $ 12,237    $ 37,636   $ 24,799  
                 
(9) Core Return on Average Tangible Common Equity  14.03 %  12.08 %  8.57 %   13.10 %  8.76 %
                 
                 
   For the Three Months Ended   For the Six Months Ended
   June 30,  March 31,  June 30,   June 30,  June 30,
   2017  2017  2016   2017  2016
Core Return on Average Assets:                
 Total Net Income $ 14,013   $ 15,888   $ 12,007    $ 29,901   $ 24,480  
 Total Average Assets  7,381,816    6,708,817    6,707,132     7,047,176    6,662,363  
  Return on Average Assets  0.76 %  0.96 %  0.72 %   0.86 %  0.74 %
                 
 Core Net Income (5) $ 20,428   $ 16,285   $ 12,163    $ 36,714   $ 24,636  
 Total Average Assets  7,381,816    6,708,817    6,707,132     7,047,176    6,662,363  
  (7)Core Return on Average Assets  1.11 %  0.98 %  0.73 %   1.05 %  0.74 %
                 
                 
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES
            
   For the Three Months Ended   For the Six Months Ended
   June 30,  March 31,  June 30,   June 30,  June 30,
   2017  2017  2016   2017  2016
Core Efficiency Ratio:                
 Total Noninterest Expense $ 58,263   $ 42,765   $ 37,410    $ 101,028   $ 75,554  
  Adjustments to Noninterest Expense:                
   Unfunded commitment reserve  664    (212 )  (540 )   452    (915 )
   Intangible amortization  846    572    114     1,418    251  
   Merger and acquisition related  9,870    611    240     10,481    240  
    Noninterest Expense - Core $ 46,883   $ 41,794   $ 37,596    $ 88,677   $ 75,978  
                  
  Net interest income, fully tax equivalent $ 58,896   $ 52,818   $ 50,034    $ 111,714   $ 99,783  
  Total noninterest income  18,904    16,932    15,558     35,836    29,273  
  Net securities gains  49    (652 )  (28 )   (603 )  (28 )
   Total Revenue $ 77,849   $ 69,098   $ 65,564    $ 146,947   $ 129,028  
                  
  Adjustments to Revenue:                
   Derivative mark-to-market  (37 )  2    (531 )   (35 )  (1,545 )
    Total Revenue - Core $ 77,886   $ 69,096   $ 66,095    $ 146,982   $ 130,573  
                 
(10)Core Efficiency Ratio  60.19 %  60.49 %  56.88 %   60.33 %  58.19 %
                 
                 
   June 30,  March 31,  June 30,       
   2017  2017  2016       
Tangible Equity:                
 Total shareholders' equity $ 879,465   $ 760,995   $ 741,786         
 Less: intangible assets  272,030    197,924    165,481         
  Tangible Equity  607,435    563,071    576,305         
 Less: preferred stock  -    -    -         
  Tangible Common Equity $ 607,435   $ 563,071   $ 576,305         
                 
Tangible Assets:                
 Total assets $ 7,383,386   $ 6,808,977   $ 6,749,821         
 Less: intangible assets  272,030    197,924    165,481         
  Tangible Assets $ 7,111,356   $ 6,611,053   $ 6,584,340         
                 
(12)Tangible Common Equity as a percentage of Tangible Assets  8.54 %  8.52 %  8.75 %       
                 
Shares Outstanding at End of Period  97,483,067    89,113,083    88,949,995         
(11)Tangible Book Value Per Common Share $ 6.23   $ 6.32   $ 6.48         
                 
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.

Contact Information

  • Media Relations:
    Amy Jeffords
    Assistant Vice President / Communications and Community Relations
    Phone: 724-463-6806
    E-mail: AJeffords@fcbanking.com

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