SOURCE: First Commonwealth Financial Corporation

First Commonwealth Financial Corporation

October 28, 2015 08:00 ET

First Commonwealth Announces Third Quarter 2015 Financial Results; Declares Quarterly Dividend

INDIANA, PA--(Marketwired - October 28, 2015) - First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the third quarter of 2015.

Third Quarter 2015 Highlights

Franchise Growth

  • Solid loan growth of $80.1 million from the prior quarter, or 7.1% on an annualized basis; and
  • Finalized acquisition of Columbus, Ohio based First Community Bank on October 1st.

Net Income

  • Third quarter net income was $12.4 million, or $0.14 diluted earnings per share. Net income was impacted by the following items:

    • Net interest income increased by $0.4 million as compared to the prior quarter, primarily as a result of strong commercial loan growth;
    • Noninterest income benefited from increases in trust income, deposit service charges and mortgage banking revenue. Total noninterest income, excluding net securities gains, decreased $0.8 million from the previous quarter, driven by a $1.4 million decline in the fair market value of commercial loan interest rate swaps;
    • Noninterest expense decreased $0.4 million from the previous quarter, primarily attributable to a $1.1 million write-down on other real estate owned (OREO) in the second quarter. Third quarter noninterest expense was affected by $0.7 million in additional shares tax expense for a disputed assessment that was settled during the quarter;
    • Provision for credit losses totaled $4.6 million, an increase of $1.6 million from the linked quarter and $2.5 million from the year ago quarter, due primarily to $2.5 million in specific reserves for two commercial credits;
    • Asset quality continued to improve, with nonperforming loans decreasing $4.3 million, or 9.5%, compared to the prior quarter.

"I'm pleased with the groundwork we have laid in the last twelve months to grow top line revenue, despite headwinds from an extended low interest rate environment," stated T. Michael Price, President and Chief Executive Officer. "We extended our footprint westward and we now have plans in place to expand our commercial lending and mortgage origination capabilities in central and northeastern Ohio."

Financial Summary

       
(dollars in thousands,  For the Three Months Ended  For the Nine Months Ended
except per share data)  September 30, June 30, September 30,  September 30,  September 30,
   2015 2015 2014  2015  2014
Net income  $12,414 $13,447 $12,496  $40,082  $36,724
Diluted earnings per share  $0.14 $0.15 $0.13  $0.45  $0.39
Return on average assets  0.78 % 0.85 % 0.78 %  0.84 %  0.78 %
Return on average common equity  6.86 % 7.57 % 6.91 %  7.48 %  6.83 %
Return on average tangible common equity  8.87 % 9.82 % 8.89 %  9.68 %  8.79 %
Efficiency ratio  63.83 % 63.96 % 66.65 %  63.99 %  66.25 %
Net interest margin  3.25 % 3.26 % 3.26 %  3.29 %  3.28 %
              

Financial Results Summary

For the three months ended September 30, 2015, net income was $12.4 million, or $0.14 diluted earnings per share, compared to net income of $13.4 million, or $0.15 diluted earnings per share, in the second quarter of 2015 and net income of $12.5 million, or $0.13 diluted earnings per share, in the third quarter of 2014. The decrease in net income compared to the second quarter of 2015 was primarily a result of an increase in the provision for credit losses of $1.6 million and a decrease in noninterest income of $0.8 million, offset by a $0.4 million increase in net interest income and a decrease in noninterest expense of $0.4 million. The decrease in net income compared to the third quarter of 2014 was primarily driven by a decrease in noninterest expense of $1.3 million and an increase in noninterest income of $0.5 million, offset by an increase in the provision for credit losses of $2.5 million.

For the nine months ended September 30, 2015, net income was $40.1 million, or $0.45 diluted earnings per share, compared to net income of $36.7 million, or $0.39 diluted earnings per share, for the comparable period in 2014. The increase in net income compared to 2014 was primarily the result of an increase in net interest income of $2.7 million and a decrease in noninterest expense of $3.1 million, offset by a $1.0 million decrease in noninterest income, excluding net securities gains.

For the nine months ended September 30, 2015, return on average assets and return on average common equity were 0.84% and 7.48%, respectively, as compared to 0.78% and 6.83% in the same period of 2014. Return on average tangible common equity was 9.68% in the first nine months of 2015, as compared to 8.79% for the same period of 2014.

Net Interest Income and Net Interest Margin

Third quarter 2015 net interest income, on a fully taxable-equivalent basis, increased by $0.4 million to $47.6 million, as compared to $47.2 million in the second quarter of 2015. The increase from the prior quarter was primarily the result of $51.9 million of growth in average loan balances. The net interest margin, on a fully taxable-equivalent basis, decreased one basis point from the previous quarter primarily due to a one basis point increase in funding costs.

As compared to the third quarter of 2014, net interest income, on a fully taxable-equivalent basis, increased by $0.2 million. The increase in net interest income was due to a $162.8 million, or 3.8%, increase in average loans and a five basis point decline in funding costs, offset by a five basis point decline in the yield on interest-earning assets.

For the nine months ended September 30, 2015, net interest income, on a fully taxable-equivalent basis, increased $2.7 million to $142.8 million as compared to the same period of 2014. The increase in net interest income was a result of a $177.8 million, or 4.1%, increase in average loans, an eight basis point decline in funding costs and a special FHLB dividend of $1.0 million, offset by a seven basis point decline in the yield on interest-earning assets.

End of period loan balances increased $80.1 million from the prior quarter and $167.9 million from the year-ago quarter ending September 30, 2014. Based on average balances, loan growth for the third quarter of 2015 was $51.9 million over the prior quarter and $162.8 million over the year-ago quarter. Average deposits decreased $38.0 million in the third quarter of 2015 from the prior quarter and $187.1 million from the year-ago quarter, due in part to the intentional runoff of higher-cost brokered time deposits in favor of more cost-effective short-term borrowings. Average brokered time deposits decreased by $9.3 million in the third quarter of 2015 compared to the prior quarter and $123.6 million from the year-ago quarter. As a result, average short-term borrowings increased $28.3 million from the prior quarter and $292.6 million over the year-ago period. Average noninterest-bearing demand deposits increased $19.5 million as compared to the prior quarter and $69.5 million from the year-ago quarter. Noninterest-bearing demand deposits currently comprise 25.9% of total deposits. Average interest-bearing demand and savings deposits decreased $22.2 million from the prior quarter and $38.4 million from the year-ago period.

Credit Quality

The provision for credit losses totaled $4.6 million for the three months ended September 30, 2015, an increase of $1.6 million as compared to the prior quarter and an increase of $2.5 million from the same quarter last year.

At September 30, 2015, nonperforming loans were $40.8 million, a decrease of $4.3 million from June 30, 2015 and a decrease of $4.4 million from September 30, 2014. Nonperforming loans as a percentage of total loans were 0.89%, 1.00% and 1.03% for the periods ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively.

During the third quarter of 2015, net charge-offs were $1.4 million, compared to $4.4 million in the second quarter of 2015 and $2.0 million in the third quarter of 2014. There were no significant individual charge-offs in the third quarter of 2015. Second quarter 2015 charge-offs included a $2.3 million write-down on a loan to a contractor that was classified as nonaccrual during the fourth quarter of 2014. There were no significant individual charge-offs in the third quarter of 2014.

The allowance for credit losses was $48.5 million at September 30, 2015, and as a percentage of total loans outstanding was 1.06%, 1.01% and 1.15% for September 30, 2015, June 30, 2015 and September 30, 2014, respectively. General reserves as a percentage of non-impaired loans were 0.97%, 0.98% and 1.06% for September 30, 2015, June 30, 2015 and September 30, 2014, respectively. The allowance for credit losses as percentage of nonperforming loans was 118.84%, 106.26% and 112.21% for September 30, 2015, June 30, 2015 and September 30, 2014, respectively.

OREO acquired through foreclosure increased $4.0 million to $10.5 million during the third quarter due primarily to one commercial relationship.

Noninterest Income

Noninterest income, excluding net securities gains, decreased $0.8 million, or 5.0%, in the third quarter of 2015 as compared to the prior quarter and increased $0.5 million, or 3.4%, compared to the same quarter last year. The decrease from the prior quarter was primarily the result of a $1.4 million decline in the fair market value of commercial loan interest rate swaps. This mark-to-market adjustment was a positive adjustment of $0.6 million in the second quarter and a negative adjustment of $0.8 million in the third quarter. This was offset by a $0.4 million gain on the sale of a commercial loan and a $0.2 million increase in mortgage banking revenue, as well as a $0.1 million increase in trust income and a $0.2 million increase in deposit service charges. The increase from the prior-year period of $0.5 million is primarily related to an increase of $1.1 million in gain on sale of loans and a $0.5 million increase in insurance and retail brokerage commissions due to increased production and the acquisition of a local agency in the fourth quarter of 2014, offset by decreases of $0.7 million in commercial loan swap-related revenues due primarily to declines in the fair market value of commercial loan interest rate swaps.

For the nine months ended September 30, 2015, noninterest income, excluding net securities gains, decreased $1.0 million, or 2.1%, as compared to the same period of 2014, primarily due to a $2.0 million gain from the sale of an OREO property in the second quarter of 2014, a $1.2 million gain from the sale of our registered investment advisory business in the first quarter of 2014, a decrease of $0.8 million in service charges on deposit accounts and a $0.6 million reduction in commercial loan swap-related revenues due primarily to declines in the fair market value of commercial loan interest rate swaps over the same period. These negative variances were partially offset by an increase of $1.8 million in insurance and retail brokerage commissions due to increased production and our agency acquisition, as well as a $2.1 million increase in gain on sale of loans, primarily through mortgage banking.

Noninterest Expense

Noninterest expense decreased $0.4 million in the third quarter of 2015 from the prior quarter and decreased $1.3 million as compared to the third quarter of 2014. The decrease as compared to the linked quarter is primarily attributable to a $1.1 million OREO write-down for one commercial relationship and a $0.4 million loss on the write-down for a building in the second quarter of 2015, offset by $0.7 million of additional shares tax expense for the resolution of a disputed tax assessment in the third quarter of 2015 and a $0.4 million increase in salaries and employee benefits, primarily due to increased commercial loan production. The decrease from the prior year period of $1.3 million includes improvements of $2.2 million in IT conversion-related expenses that were incurred in the third quarter of 2014 and a $0.4 million decrease in net furniture and equipment expense due to less software/hardware maintenance and programing expense post conversion. These improvements in expense in the third quarter of 2015 were offset by the aforementioned $0.7 million shares tax resolution and a $0.2 million increase in salaries and employee benefits.

For the nine months ending September 30, 2015, noninterest expense decreased $3.1 million, or 2.5%, as compared to the same period of 2014, driven by $7.3 million in IT conversion-related expenses that were incurred in the first nine months of 2014 and a decrease of $1.5 million in furniture and equipment expense related to less software/hardware maintenance and programming expense post conversion. Also affecting the comparison of the periods was a $0.9 million external fraud loss recovery in the prior year period. Increases in expense compared to the year-ago period included $1.2 million in salaries and benefits due in part to the launch of our mortgage initiative and the acquisition of an insurance agency in the fourth quarter of 2014, $0.5 million in occupancy expense due to higher snow removal and utilities, a $1.0 million increase in debit card fraud losses primarily due to large merchant breaches, as well as the aforementioned $1.5 million OREO and building write-downs and a $1.0 million increase in reserves for unfunded loan commitments included in other operating expenses.

Full time equivalent staff declined to 1,263 at September 30, 2015 from 1,388 at September 30, 2014. The decrease is primarily attributable to staffing efficiencies enabled by the completion of our IT systems conversion, refinements to our branch staffing model and the closure of three branch offices in April 2015, 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 63.83% and 63.99% for the three and nine months ended September 30, 2015, respectively, as compared to 66.65% and 66.25% for the three and nine months ended September 30, 2014.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.07 per share, which is payable on November 20, 2015 to shareholders of record as of November 9, 2015. This dividend represents a 3.0% projected annual yield utilizing the October 27, 2015 closing market price of $9.37.

During the second quarter of 2015, First Commonwealth completed a previously announced $25.0 million common stock repurchase program, under which the corporation repurchased 2,885,020 shares at an average price of $8.70 per share. The company does not currently have an authorized share repurchase plan.

First Commonwealth's capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2015 were 12.5%, 11.5%, 10.1% and 10.2%, respectively. Our current capital levels meet 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 third quarter of 2015 on Wednesday, October 28, 2015 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-888-317-6016 or accessing a webcast of the call through the company's web page, 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 replay access code #10073878. A link to the webcast replay will be accessible at www.fcbanking.com/InvestorRelations 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 as of September 30, 2015 and 111 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.

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, borrowing 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 Nine Months Ended  
   September 30,  June 30,  September 30,   September 30,  September 30,  
   2015  2015  2014   2015  2014  
SUMMARY RESULTS OF OPERATIONS                       
Net interest income (FTE)(1)  $47,568  $47,205  $47,364   $142,763  $140,029  
Provision for credit losses   4,621   3,038   2,073    8,818   8,621  
Noninterest income   15,505   16,347   15,050    46,043   46,972  
Noninterest expense   40,257   40,634   41,568    120,745   123,851  
Net income   12,414   13,447   12,496    40,082   36,724  
                        
Earnings per common share (diluted)  $0.14  $0.15  $0.13   $0.45  $0.39  
                        
KEY FINANCIAL RATIOS                       
                        
Return on average assets   0.78 % 0.85 % 0.78 %  0.84 % 0.78 %
Return on average shareholders' equity   6.86 % 7.57 % 6.91 %  7.48 % 6.83 %
Return on average tangible common equity (9)   8.87 % 9.82 % 8.89 %  9.68 % 8.79 %
Efficiency ratio(2)   63.83 % 63.96 % 66.65 %  63.99 % 66.25 %
Net interest margin (FTE)(1)   3.25 % 3.26 % 3.26 %  3.29 % 3.28 %
                        
Book value per common share  $8.12  $7.99  $7.74           
Tangible book value per common share(4)   6.30   6.16   5.99           
Market value per common share   9.09   9.59   8.39           
Cash dividends declared per common share   0.07   0.07   0.07   $0.21  $0.21  
                        
ASSET QUALITY RATIOS                       
Nonperforming loans as a percent of end-of-period loans (5)   0.89 % 1.00 % 1.03 %         
Nonperforming assets as a percent of total assets (5)   0.81 % 0.82 % 0.85 %         
Net charge-offs as a percent of average loans (annualized)   0.13 % 0.39 % 0.18 %         
Allowance for credit losses as a percent of nonperforming loans (6)   118.84 % 106.26 % 112.21 %         
Allowance for credit losses as a percent of end-of-period loans (6)   1.06 % 1.01 % 1.15 %         
                        
CAPITAL RATIOS                       
Shareholders' equity as a percent of total assets   11.3 % 11.3 % 11.2 %         
Tangible common equity as a percent of tangible assets(3)   9.0 % 8.9 % 8.9 %         
Leverage Ratio   10.1 % 10.0 % 9.8 %         
Risk Based Capital - Tier I   11.5 % 11.5 % 11.7 %         
Risk Based Capital - Total   12.5 % 12.4 % 12.8 %         
Common Equity - Tier I   10.2 % 10.2 % 10.4          
(5) - Includes held for sale loans.                  
(6) - Excludes held for sale loans.                  
         
         
FIRST COMMONWEALTH FINANCIAL CORPORATION            
CONSOLIDATED FINANCIAL DATA            
Unaudited            
(dollars in thousands, except per share data)         
       
  For the Three Months Ended   For the Nine Months Ended  
  September 30,  June 30,  September 30,   September 30,  September 30,  
  2015  2015  2014   2015  2014  
INCOME STATEMENT                      
 Interest income $50,501  $50,150  $51,089   $151,736  $151,761  
 Interest expense  3,816   3,780   4,536    11,509   14,234  
Net Interest Income  46,685   46,370   46,553    140,227   137,527  
 Taxable equivalent adjustment(1)  883   835   811    2,536   2,502  
Net Interest Income (FTE)  47,568   47,205   47,364    142,763   140,029  
 Provision for credit losses  4,621   3,038   2,073    8,818   8,621  
Net Interest Income after Provision for Credit Losses (FTE)  42,947   44,167   45,291    133,945   131,408  
                       
 Net securities gains  0   20   48    125   50  
 Trust income  1,614   1,476   1,678    4,511   4,587  
 Service charges on deposit accounts  4,081   3,872   4,099    11,271   12,032  
 Insurance and retail brokerage commissions  2,163   2,178   1,709    6,536   4,704  
 Income from bank owned life insurance  1,357   1,378   1,330    4,089   4,131  
 Gain on sale of loans  1,196   627   67    2,262   143  
 Gain on sale of other assets  444   354   675    1,022   4,345  
 Card related interchange income  3,637   3,729   3,599    10,784   10,620  
 Derivative mark-to-market  (783 ) 593   (108 )  (420 ) 175  
 Other income  1,796   2,120   1,953    5,863   6,185  
Total Noninterest Income  15,505   16,347   15,050    46,043   46,972  
                       
 Salaries and employee benefits  22,446   22,001   22,244    66,339   65,185  
 Net occupancy expense  3,291   3,316   3,180    10,518   9,969  
 Furniture and equipment expense (7)  2,670   2,630   4,471    7,980   15,050  
 Data processing expense  1,558   1,509   1,583    4,505   4,593  
 Pennsylvania shares tax expense  1,713   1,110   1,033    3,617   2,782  
 Advertising and promotion expense  789   637   861    1,946   2,346  
 Intangible amortization  157   156   174    469   530  
 Collection and repossession expense  801   917   783    2,229   1,941  
 Other professional fees and services  1,007   945   1,050    2,882   2,777  
 FDIC insurance  963   1,025   926    3,047   3,026  
 Operational losses (recoveries)  314   323   187    1,637   (273 )
 Loss on sale or write-down of assets  140   1,635   61    2,037   1,241  
 Conversion related expenses (8)  0   0   783    0   1,676  
 Other operating expenses  4,408   4,430   4,232    13,539   13,008  
Total Noninterest Expense  40,257   40,634   41,568    120,745   123,851  
                       
Income before Income Taxes  18,195   19,880   18,773    59,243   54,529  
 Taxable equivalent adjustment(1)  883   835   811    2,536   2,502  
 Income tax provision  4,898   5,598   5,466    16,625   15,303  
Net Income $12,414  $13,447  $12,496   $40,082  $36,724  
                       
Shares Outstanding at End of Period  88,961,268   88,960,268   91,722,649    88,961,268   91,722,649  
Average Shares Outstanding Assuming Dilution  88,813,746   88,939,003   92,578,701    89,531,498   93,632,783  
                       
(7) - Includes $1.4 million and $5.6 million of accelerated depreciation expense related to the technology conversion for the three and nine month periods ended September 30, 2014, respectively.  
(8) - Does not include accelerated depreciation expense described in Note 7.  
        
        
FIRST COMMONWEALTH FINANCIAL CORPORATION          
CONSOLIDATED FINANCIAL DATA          
Unaudited          
(dollars in thousands)          
             
             
  September 30,   June 30,   September 30,  
  2015   2015   2014  
BALANCE SHEET (Period End)               
Assets               
 Cash and due from banks $69,235   $64,321   $78,696  
 Interest-bearing bank deposits  3,529    3,120    5,374  
 Securities available for sale, at fair value  1,104,709    1,143,072    1,383,768  
 Securities held to maturity, at amortized cost  154,035    131,780    0  
 Loans held for sale  4,986    9,817    1,305  
                
  Loans  4,575,735    4,490,854    4,411,481  
  Allowance for credit losses  (48,518 )  (45,344 )  (50,784 )
 Net loans  4,527,217    4,445,510    4,360,697  
                
 Goodwill and other intangibles  162,625    162,781    160,152  
 Other assets  358,413    356,327    366,106  
Total Assets $6,384,749   $6,316,728   $6,356,098  
                
Liabilities and Shareholders' Equity               
 Noninterest-bearing demand deposits $1,077,234   $1,068,230   $995,014  
                
  Interest-bearing demand deposits  70,662    76,865    82,221  
  Savings deposits  2,427,326    2,441,888    2,363,464  
  Time deposits  586,268    623,124    931,689  
 Total interest-bearing deposits  3,084,256    3,141,877    3,377,374  
                
 Total deposits  4,161,490    4,210,107    4,372,388  
                
  Short-term borrowings  1,329,794    1,231,917    1,034,967  
  Long-term borrowings  111,219    111,356    188,706  
 Total borrowings  1,441,013    1,343,273    1,223,673  
                
 Other liabilities  59,478    52,142    50,553  
Shareholders' equity  722,768    711,206    709,484  
Total Liabilities and Shareholders' Equity $6,384,749   $6,316,728   $6,356,098  
 
 
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
   For the Three Months Ended   For the Nine Months Ended  
   September 30,  Yield/   June 30,  Yield/   September 30,  Yield/   September 30,  Yield/   September 30,  Yield/  
   2015  Rate   2015  Rate   2014  Rate   2015  Rate   2014  Rate  
NET INTEREST MARGIN                              
                      
                                     
Assets                                         
 Loans (FTE)(1)(5)  $4,550,882  3.82 % $4,498,965  3.87 % $4,388,130  3.97 % $4,509,628  3.87 % $4,331,807  4.04 %
 Securities and interest bearing bank deposits (FTE)(1)   1,248,495  2.40 %  1,308,016  2.33 %  1,383,554  2.28 %  1,298,397  2.45 %  1,370,331  2.28 %
  Total Interest-Earning Assets (FTE)(1)   5,799,377  3.52 %  5,806,981  3.52 %  5,771,684  3.57 %  5,808,025  3.55 %  5,702,138  3.62 %
 Noninterest-earning assets   543,632       554,175       553,384       546,103       557,971     
Total Assets  $6,343,009      $6,361,156      $6,325,068      $6,354,128      $6,260,109     
                                          
Liabilities and Shareholders' Equity                                         
 Interest-bearing demand and savings deposits  $2,504,516  0.11 % $2,526,744  0.11 % $2,466,127  0.10 % $2,510,814  0.11 % $2,511,615  0.10 %
 Time deposits   659,445  0.63 %  694,725  0.69 %  954,474  0.98 %  714,005  0.70 %  1,065,458  1.00 %
 Short-term borrowings   1,232,795  0.41 %  1,204,466  0.37 %  940,156  0.28 %  1,193,122  0.38 %  749,269  0.29 %
 Long-term borrowings   111,285  2.78 %  122,410  2.57 %  199,435  1.79 %  126,896  2.50 %  208,818  1.75 %
  Total Interest-Bearing Liabilities   4,508,041  0.34 %  4,548,345  0.33 %  4,560,192  0.39 %  4,544,837  0.34 %  4,535,160  0.42 %
 Noninterest-bearing deposits   1,065,204       1,045,659       995,690       1,038,016       953,946     
 Other liabilities   51,586       55,042       51,327       55,075       52,001     
 Shareholders' equity   718,178       712,110       717,859       716,200       719,002     
  Total Noninterest-Bearing Funding Sources   1,834,968       1,812,811       1,764,876       1,809,291       1,724,949     
Total Liabilities and Shareholders' Equity  $6,343,009      $6,361,156      $6,325,068      $6,354,128      $6,260,109     
                                          
Net Interest Margin (FTE) (annualized)(1)      3.25 %     3.26 %     3.26 %     3.29 %     3.28 %
                               
                               
FIRST COMMONWEALTH FINANCIAL CORPORATION             
CONSOLIDATED FINANCIAL DATA             
Unaudited             
(dollars in thousands)             
                   
  September 30,  June 30,  September 30,          
  2015  2015  2014          
ASSET QUALITY DETAIL                       
Nonperforming Loans:                       
Loans on nonaccrual basis $20,220  $21,776  $27,310            
Troubled debt restructured loans held for sale on nonaccrual basis  0   2,432   0            
Troubled debt restructured loans on nonaccrual basis  8,583   8,619   6,783            
Troubled debt restructured loans on accrual basis  12,024   12,276   11,164            
 Total Nonperforming Loans $40,827  $45,103  $45,257            
Other real estate owned ("OREO")  10,542   6,539   7,751            
Repossessions ("Repo")  357   348   902            
 Total Nonperforming Assets $51,726  $51,990  $53,910            
Loans past due in excess of 90 days and still accruing $2,054  $1,592  $2,374            
Classified loans  81,723   79,924   63,724            
Criticized loans  136,919   120,506   139,449            
                        
Nonperforming assets as a percentage of total loans, plus OREO and Repos  1.13 % 1.16 % 1.22 %          
Allowance for credit losses $48,518  $45,344  $50,784            
                        
                        
  For the Three Months Ended    For the Nine Months Ended  
  September 30,  June 30,  September 30,    September 30,  September 30,  
  2015  2015  2014    2015  2014  
Net Charge-offs (Recoveries):                       
 Commercial, financial, agricultural and other $75  $2,702  $294    $7,657  $7,732  
 Real estate construction  0   (84 ) (132 )   (84 ) (173 )
 Commercial real estate  528   471   635     1,063   677  
 Residential real estate  123   341   454     934   1,866  
 Loans to individuals  721   961   763     2,781   1,960  
Net Charge-offs $1,447  $4,391  $2,014    $12,351  $12,062  
                        
Net charge-offs as a percentage of average loans outstanding (annualized)  0.13 % 0.39 % 0.18 %   0.37 % 0.37 %
Provision for credit losses as a percentage of net charge-offs  319.35 % 69.19 % 102.93 %   71.40 % 71.47 %
Provision for credit losses $4,621  $3,038  $2,073    $8,818  $8,621  
 
 
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."  
          
   September 30,  June 30,  September 30,         
   2015  2015  2014         
Tangible Equity:                       
 Total shareholders' equity  $722,768  $711,206  $709,484           
 Less: intangible assets   162,625   162,781   160,152           
  Tangible Equity   560,143   548,425   549,332           
 Less: preferred stock   0   0   0           
  Tangible Common Equity  $560,143  $548,425  $549,332           
                        
Tangible Assets:                       
 Total assets  $6,384,749  $6,316,728  $6,356,098           
 Less: intangible assets   162,625   162,781   160,152           
  Tangible Assets  $6,222,124  $6,153,947  $6,195,946           
                        
(3)Tangible Common Equity as a percentage of Tangible Assets   9.00 % 8.91 % 8.87 %         
                        
 Shares Outstanding at End of Period   88,961,268   88,960,268   91,722,649           
(4)Tangible Book Value Per Common Share  $6.30  $6.16  $5.99           
                        
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.  
                        
   For the Three Months Ended   For the Nine Months Ended  
   September 30,  June 30,  September 30,   September 30,  September 30,  
   2015  2015  2014   2015  2014  
Average Tangible Equity:                       
 Total shareholders' equity  $718,178  $712,110  $717,859   $716,200  $719,002  
 Less: intangible assets   162,709   162,865   160,237    162,864   160,603  
  Tangible Equity   555,469   549,245   557,622    553,336   558,399  
 Less: preferred stock   0   0   0    0   0  
  Tangible Common Equity  $555,469  $549,245  $557,622   $553,336  $558,399  
                        
(9)Return on Average Tangible Common Equity   8.87 % 9.82 % 8.89 %  9.68 % 8.79 %
                  

Contact Information

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