SOURCE: First Commonwealth Financial Corporation

First Commonwealth Financial Corporation

October 25, 2017 07:00 ET

First Commonwealth Delivers Record Third Quarter 2017 Earnings; Declares Quarterly Dividend

INDIANA, PA--(Marketwired - October 25, 2017) - First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the third quarter of 2017.

Third Quarter 2017 Highlights

Earnings

  • Third quarter net income was $21.3 million (or $0.22 diluted earnings per share), the highest level of quarterly net income in the history of the company. Core net income (adjusted for acquisition expenses) was $21.2 million, or $0.22 diluted earnings per share.
    • Core earnings per share increased $0.01 from the previous quarter and $0.03 from the prior year quarter; an increase of 14.9% (annualized) and 15.8%, respectively.
  • Total revenue grew $2.7 million, or 13.7% (annualized) from the prior quarter.
    • Net interest income (FTE) increased $1.8 million, or 12.0% (annualized) from the prior quarter.
    • Noninterest income grew $0.9 million, or 18.8% (annualized) from the prior quarter.
  • Total noninterest expense decreased $10.9 million from the previous quarter, primarily due to $9.9 million of one-time merger expenses related to the acquisition of DCB Financial Corp. in the previous quarter.
  • Provision for credit losses totaled $1.2 million, an increase of $2.8 million as compared to the prior quarter, in part due to the recognition of $3.1 million in recoveries in the previous quarter.
  • The annualized return on average tangible common equity for the third quarter of 2017 was 14.04%.

Profitability

  • The net interest margin improved seven basis points to 3.61% compared to the prior quarter.
  • The core return on average assets (adjusted for acquisition expenses) improved 3 basis points to 1.14% compared to the prior quarter.
  • The core efficiency ratio improved to 57.96%, driven by expanding revenue streams and well-controlled operational expenses.

Franchise Growth

  • Tangible book value per share grew $0.16, or 10.3% (annualized) from the previous quarter.

"This was another strong quarter for our company. And the successful integration of our recent acquisitions has propelled our earnings to record levels," stated T. Michael Price, President and Chief Executive Officer. "As we look ahead, we must continue to navigate a potentially rising interest rate environment and make decisions that will profitably grow our business without assuming unnecessary risk. As we do, our focus remains centered on those strategies that will ensure long-term benefits for our stakeholders."

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,
  2017  2017  2016  2017  2016
Reported Results              
Net income $21,283  $14,013  $17,196  $51,184  $41,676
Diluted earnings per share $0.22  $0.14  $0.19  $0.54  $0.47
Return on average assets 1.14%  0.76%  1.02%  0.96%  0.83%
Return on average equity 9.50%  6.44%  9.14%  8.15%  7.53%
               
Core Operating Results (non-GAAP)(1)              
Core net income $21,238  $20,428  $17,273  $57,952  $41,909
Core diluted earnings per share $0.22  $0.21  $0.19  $0.61  $0.47
Core return on average assets 1.14%  1.11%  1.03%  1.08%  0.84%
Return on average tangible common equity 14.04%  9.74%  11.77%  11.89%  9.75%
Core return on average tangible common equity 14.01%  14.03%  11.82%  13.42%  9.80%
Core efficiency ratio 57.96%  60.19%  56.65%  59.49%  57.67%
Net interest margin (FTE) 3.61%  3.54%  3.29%  3.55%  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 third quarter of 2017 was $21.3 million, as compared to $17.2 million for the third quarter of 2016, an increase of $4.1 million, or 23.8%, year-over-year.

Net income for the nine months ending September 30, 2017 was $51.2 million, as compared to $41.7 million for the same period in 2016, an increase of $9.5 million, or 22.8%, year-over-year.

Net Interest Margin and Net Interest Income

The net interest margin for the third quarter of 2017 was 3.61%, an increase of 7 basis points from the previous quarter and an increase of 32 basis points from the third quarter of 2016. The increase from the second quarter of 2017 was due primarily to a 10 basis point increase in the yield on interest-earning assets, partially offset by a 3 basis point increase in funding costs. The impact of purchase accounting accretion added 5 basis points to the net interest margin in both the current and the previous quarter.

The increase from the previous year is primarily due to improved yields on variable and adjustable loan portfolios, following the Federal Reserve's decisions 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 36 basis points and funding costs increased 4 basis points from the year-ago quarter.

Total average earning assets decreased $6.7 million from the previous quarter mostly due to selective runoff in the securities portfolio, partially offset by $40.7 million growth in average loans.

Total average deposits grew by $51.7 million in the third quarter of 2017 compared to the previous quarter. Growth was driven by a $69.7 million increase in transaction accounts, partially offset by an $18.0 million decrease in time deposits.

Credit Quality

The provision for credit losses totaled $1.2 million for the quarter ended September 30, 2017, an increase of $2.8 million as compared to the prior quarter and a decrease of $2.2 million from the same quarter last year. The increase from the prior quarter is primarily due to the recognition of $3.1 million of recoveries in the prior quarter.

At September 30, 2017, nonperforming loans were $38.8 million, a decrease of $1.4 million from June 30, 2017 and a decrease of $16.0 million from September 30, 2016. Nonperforming loans as a percentage of total loans were 0.72%, 0.75% and 1.13% for the periods ended September 30, 2017, June 30, 2017 and September 30, 2016, respectively.

During the third quarter of 2017, net charge-offs (recoveries) were $1.1 million or 0.08% of average loans, compared to ($1.0) million in the prior quarter and $8.5 million in the third quarter of 2016. Net charge-offs (recoveries) in the second quarter of 2017 included recoveries for two large commercial credits totaling $3.1 million.

For the originated loan portfolio at September 30, 2017, the allowance for credit losses to total originated loans was 0.97%, compared to 0.98% at June 30, 2017 and 1.13% at September 30, 2016.

Noninterest Income and Noninterest Expense

Noninterest income (excluding net security gains) totaled $19.7 million for the third quarter of 2017, as compared to $19.0 million for the second quarter of 2017 and $17.0 million for the third quarter of 2016. Trust income increased $0.4 million and $0.6 million from the prior quarter and the year-ago quarter, respectively, primarily due to acquired customer relationships and higher market values of clients' accounts. Service charges and card-related interchange income increased $1.9 million year-over-year, primarily due to an expanded customer base as a result of recent acquisitions. Gain on sale of mortgage loans totaled $1.4 million and represents the highest quarterly total since the company reentered the traditional mortgage business in 2014.

Noninterest expense (excluding merger-related expenses) totaled $47.4 million for the third quarter of 2017, as compared to $48.4 million for the second quarter of 2017 and $38.6 million for the third quarter of 2016. The $1.0 million decrease from the previous quarter was primarily the result of a $1.1 million decrease in write-downs on OREO properties. The $8.8 million increase from the third quarter of 2016 was driven in part by higher operating expenses following the Company's recent acquisitions, along with increased intangible asset amortization expense.

Full time equivalent staff at September 30, 2017 was 1,366, 1,426 at June 30, 2017 and 1,179 at September 30, 2016. The increase from the prior year is the result of the addition of employees from acquisitions and the continued 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 November 17, 2017 to shareholders of record as of November 6, 2017. This dividend represents a 2.3% projected annual yield utilizing the October 24, 2017 closing market price of $14.12.

First Commonwealth's capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2017 were 12.5%, 11.6%, 9.8% and 10.4%, 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 third quarter 2017 on Wednesday, October 25, 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 #10112938. 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); (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 Nine Months Ended  
  September 30,   June 30,   September 30,   September 30,   September 30,  
  2017   2017   2016   2017   2016  
SUMMARY RESULTS OF OPERATIONS                         
Net interest income (FTE) (1) $60,667   $58,896   $50,569   $172,381   $150,352  
Provision for credit losses  1,214    (1,609 )  3,408    2,834    20,306  
Noninterest income  19,790    18,904    16,994    55,626    46,267  
Noninterest expense  47,361    58,263    38,696    148,389    114,250  
Net income  21,283    14,013    17,196    51,184    41,676  
Core net income (5)  21,238    20,428    17,273    57,952    41,909  
                          
Earnings per common share (diluted) $0.22   $0.14   $0.19   $0.54   $0.47  
Core earnings per common share (diluted) (6) $0.22   $0.21   $0.19   $0.61   $0.47  
                          
KEY FINANCIAL RATIOS                         
                          
Return on average assets  1.14 %  0.76 %  1.02 %  0.96 %  0.83 %
Core return on average assets (7)  1.14 %  1.11 %  1.03 %  1.08 %  0.84 %
Return on average shareholders' equity  9.50 %  6.44 %  9.14 %  8.15 %  7.53 %
Return on average tangible common equity (8)  14.04 %  9.74 %  11.77 %  11.89 %  9.75 %
Core return on average tangible common equity (9)  14.01 %  14.03 %  11.82 %  13.42 %  9.80 %
Core efficiency ratio (2)(10)  57.96 %  60.19 %  56.65 %  59.49 %  57.67 %
Net interest margin (FTE) (1)  3.61 %  3.54 %  3.29 %  3.55 %  3.28 %
                          
Book value per common share $9.17   $9.02   $8.45            
Tangible book value per common share (11)  6.39    6.23    6.59            
Market value per common share  14.13    12.68    10.09            
Cash dividends declared per common share  0.08    0.08    0.07   $0.24   $0.21  
                          
ASSET QUALITY RATIOS                         
Nonperforming loans as a percent of end-of-period loans (3)  0.72 %  0.75 %  1.13 %          
Nonperforming assets as a percent of total assets (3)  0.61 %  0.63 %  0.94 %          
Net charge-offs as a percent of average loans (annualized)  0.08 %  (0.07 )%  0.70 %          
Allowance for credit losses as a percent of nonperforming loans (4)  124.16 %  119.61 %  99.83 %          
Allowance for credit losses as a percent of end-of-period loans (4)  0.90 %  0.89 %  1.13 %          
Allowance for credit losses (originated loans and leases) as a percent of originated loans and leases  0.97 %  0.98 %  1.13 %          
                          
CAPITAL RATIOS                         
Shareholders' equity as a percent of total assets  12.1 %  11.9 %  11.3 %          
Tangible common equity as a percent of tangible assets (12)  8.8 %  8.5 %  9.0 %          
Leverage Ratio  9.8 %  9.6 %  10.0 %          
Risk Based Capital - Tier I  11.6 %  11.3 %  11.6 %          
Risk Based Capital - Total  12.5 %  12.2 %  12.6 %          
Common Equity - Tier I  10.4 %  10.2 %  10.3 %          
                    
                    
                    
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,
  2017  2017  2016  2017  2016
INCOME STATEMENT                        
 Interest income $65,411   $63,120   $54,479  $184,710   $161,682  
 Interest expense  5,848    5,303    4,861   15,500    14,166  
Net Interest Income  59,563    57,817    49,618   169,210    147,516  
 Taxable equivalent adjustment (1)  1,104    1,079    951   3,171    2,836  
Net Interest Income (FTE)  60,667    58,896    50,569   172,381    150,352  
 Provision for credit losses  1,214    (1,609 )  3,408   2,834    20,306  
Net Interest Income after Provision for Credit Losses (FTE)  59,453    60,505    47,161   169,547    130,046  
                         
 Net securities gains (losses)  92    (49 )  -   695    28  
 Trust income  2,147    1,711    1,523   5,275    4,098  
 Service charges on deposit accounts  4,803    4,736    3,975   13,858    11,528  
 Insurance and retail brokerage commissions  2,128    2,442    2,104   6,652    6,048  
 Income from bank owned life insurance  1,472    1,449    1,350   4,213    3,957  
 Gain on sale of mortgage loans  1,418    1,315    1,235   3,710    2,850  
 Gain on sale of other loans and assets  503    457    387   1,267    1,048  
 Card-related interchange income  4,780    4,842    3,698   13,873    11,039  
 Derivative mark-to-market  (14 )  (37 )  470   (49 )  (1,075 )
 Swap fee income  217    314    725   458    1,985  
 Other income  2,244    1,724    1,527   5,674    4,761  
Total Noninterest Income  19,790    18,904    16,994   55,626    46,267  
                         
 Salaries and employee benefits  26,169    25,298    20,647   74,933    62,212  
 Net occupancy  3,715    4,121    3,176   11,597    9,843  
 Furniture and equipment  3,342    3,323    2,847   9,753    8,596  
 Data processing  2,229    2,345    1,832   6,659    5,379  
 Pennsylvania shares tax  1,093    1,161    914   3,070    2,764  
 Advertising and promotion  941    988    750   2,735    1,940  
 Intangible amortization  844    846    67   2,262    318  
 Collection and repossession  402    443    760   1,342    1,803  
 Other professional fees and services  1,300    1,096    1,202   3,355    2,866  
 FDIC insurance  696    977    1,105   2,466    3,205  
 Litigation and operational losses  598    277    295   1,107    1,174  
 Loss on sale or write-down of assets  167    1,220    188   1,486    629  
 Merger and acquisition related  (69 )  9,870    118   10,412    358  
 Other operating expenses  5,934    6,298    4,795   17,212    13,163  
Total Noninterest Expense  47,361    58,263    38,696   148,389    114,250  
                         
Income before Income Taxes  31,882    21,146    25,459   76,784    62,063  
 Taxable equivalent adjustment (1)  1,104    1,079    951   3,171    2,836  
 Income tax provision  9,495    6,054    7,312   22,429    17,551  
Net Income $21,283   $14,013   $17,196  $51,184   $41,676  
                         
Shares Outstanding at End of Period  97,475,575    97,483,067    88,992,077   97,475,575    88,992,077  
Average Shares Outstanding Assuming Dilution  97,457,470    97,232,288    88,858,204   94,578,490    88,843,939  
                         
                   
                   
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
         
  September 30,  June 30,  September 30,
  2017  2017  2016
BALANCE SHEET (Period End)               
Assets               
 Cash and due from banks $98,319   $103,602   $76,456  
 Interest-bearing bank deposits  29,709    12,310    5,097  
 Securities available for sale, at fair value  810,946    820,586    867,725  
 Securities held to maturity, at amortized cost  436,081    450,886    389,513  
 Loans held for sale  17,100    9,785    7,855  
                 
  Loans  5,375,847    5,374,782    4,860,652  
  Allowance for credit losses  (48,176 )  (48,067 )  (54,734 )
 Net loans  5,327,671    5,326,715    4,805,918  
                 
 Goodwill and other intangibles  271,347    272,030    165,349  
 Other assets  393,166    387,472    348,570  
Total Assets $7,384,339   $7,383,386   $6,666,483  
                
Liabilities and Shareholders' Equity               
 Noninterest-bearing demand deposits $1,416,814   $1,404,081   $1,241,627  
                 
  Interest-bearing demand deposits  264,731    237,801    87,507  
  Savings deposits  3,290,978    3,330,351    2,552,754  
  Time deposits  582,534    560,902    577,092  
 Total interest-bearing deposits  4,138,243    4,129,054    3,217,353  
                 
 Total deposits  5,555,057    5,533,135    4,458,980  
                 
  Short-term borrowings  805,825    846,137    1,330,327  
  Long-term borrowings  88,155    88,389    81,059  
 Total borrowings  893,980    934,526    1,411,386  
                 
 Other liabilities  41,001    36,260    44,330  
 Shareholders' equity  894,301    879,465    751,787  
Total Liabilities and Shareholders' Equity $7,384,339   $7,383,386   $6,666,483  
            
            
            
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/
  2017  Rate  2017  Rate  2016  Rate  2017  Rate  2016  Rate
NET INTEREST MARGIN                                      
                                         
Assets                                        
 Loans (FTE)(1)(3) $5,398,815  4.28 % $5,358,089  4.18 % $4,839,206  3.90 % $5,226,320  4.17 % $4,806,061  3.88 %
 Securities and interest bearing bank deposits (FTE) (1)  1,265,416  2.60 %  1,312,814  2.57 %  1,284,493  2.49 %  1,263,614  2.63 %  1,312,146  2.53 %
  Total Interest-Earning Assets (FTE) (1)  6,664,231  3.96 %  6,670,903  3.86 %  6,123,699  3.60 %  6,489,934  3.87 %  6,118,207  3.59 %
 Noninterest-earning assets  713,142       710,913       555,977       668,517       549,969     
Total Assets $7,377,373      $7,381,816      $6,679,676      $7,158,451      $6,668,176     
                                         
Liabilities and Shareholders' Equity                                        
 Interest-bearing demand and savings deposits $3,576,365  0.18 % $3,513,479  0.15 % $2,652,562  0.18 % $3,398,428  0.15 % $2,622,574  0.15 %
 Time deposits  562,868  0.64 %  580,874  0.60 %  586,470  0.65 %  572,128  0.62 %  586,638  0.63 %
 Short-term borrowings  829,954  1.16 %  902,547  0.98 %  1,391,766  0.57 %  887,463  0.96 %  1,447,207  0.58 %
 Long-term borrowings  88,256  4.18 %  88,351  4.08 %  81,128  3.67 %  85,843  4.07 %  81,268  3.62 %
  Total Interest-Bearing Liabilities  5,057,443  0.46 %  5,085,251  0.42 %  4,711,926  0.41 %  4,943,862  0.42 %  4,737,687  0.40 %
 Noninterest-bearing deposits  1,393,024       1,386,240       1,153,945       1,337,328       1,129,511     
 Other liabilities  38,125       38,092       65,727       37,415       61,631     
 Shareholders' equity  888,781       872,233       748,078       839,846       739,347     
  Total Noninterest-Bearing Funding Sources  2,319,930       2,296,565       1,967,750       2,214,589       1,930,489     
Total Liabilities and Shareholders' Equity $7,377,373      $7,381,816      $6,679,676      $7,158,451      $6,668,176     
                                         
Net Interest Margin (FTE) (annualized)(1)     3.61 %     3.54 %     3.29 %     3.55 %     3.28 %
                              
                              
                              
FIRST COMMONWEALTH FINANCIAL CORPORATION   
CONSOLIDATED FINANCIAL DATA         
Unaudited         
(dollars in thousands)         
   September 30,  June 30,  September 30,
   2017  2017  2016
Loan Portfolio Detail                
 Commercial Loan Portfolio:                
  Commercial, financial, agricultural and other  $1,154,225   $1,199,800   $1,207,447  
  Commercial real estate   1,990,264    1,963,001    1,683,015  
  Real estate construction   259,129    249,255    229,375  
   Total Commercial   3,403,618    3,412,056    3,119,837  
                 
 Consumer Loan Portfolio:                
  Closed-end mortgages   893,809    886,335    719,049  
  Home equity lines of credit   529,613    530,591    466,710  
   Total Real Estate - Consumer   1,423,422    1,416,926    1,185,759  
                  
 Auto loans   454,320    450,561    467,222  
 Direct installment   24,995    24,501    24,578  
 Personal lines of credit   58,880    59,450    50,086  
 Student loans   10,612    11,288    13,170  
  Total Other Consumer   548,807    545,800    555,056  
  Total Consumer Portfolio   1,972,229    1,962,726    1,740,815  
   Total Portfolio Loans   5,375,847    5,374,782    4,860,652  
  Loans held for sale   17,100    9,785    7,855  
   Total Loans  $5,392,947   $5,384,567   $4,868,507  
                 
                 
   September 30,  June 30,  September 30,
   2017  2017  2016
ASSET QUALITY DETAIL                
Nonperforming Loans:                
Loans on nonaccrual basis  $14,943   $15,553   $27,817  
Troubled debt restructured loans on nonaccrual basis   11,408    11,868    12,723  
Troubled debt restructured loans on accrual basis   12,451    12,764    14,286  
  Total Nonperforming Loans  $38,802   $40,185   $54,826  
Other real estate owned ("OREO")   5,701    5,964    7,686  
Repossessions ("Repos")   200    208    310  
  Total Nonperforming Assets  $44,703   $46,357   $62,822  
Loans past due in excess of 90 days and still accruing   1,332    1,898    2,343  
Classified loans   65,948    69,748    97,259  
Criticized loans   125,034    160,220    137,264  
                 
Nonperforming assets as a percentage of total loans, plus OREO and Repos   0.83 %  0.86 %  1.29 %
Allowance for credit losses  $48,176   $48,067   $54,734  
                 
             
             
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
  For the Three Months Ended  For the Nine Months Ended
  September 30,  June 30,  September 30,  September 30,  September 30,
  2017  2017  2016  2017  2016
Net Charge-offs (Recoveries):                         
 Commercial, financial, agricultural and other $315   $(1,816 ) $7,100   $1,956   $13,047  
 Real estate construction  (373 )  (43 )  -    (470 )  (227 )
 Commercial real estate  (25 )  (4 )  (10 )  (115 )  (385 )
 Residential real estate  276    55    227    676    569  
 Loans to individuals  912    808    1,178    2,796    3,380  
Net Charge-offs $1,105   $(1,000 ) $8,495   $4,843   $16,384  
                          
Net charge-offs as a percentage of average loans outstanding (annualized)  0.08 %  (0.07 )%  0.70 %  0.12 %  0.46 %
Provision for credit losses as a percentage of net charge-offs  109.86 %  160.90 %  40.12 %  58.52 %  123.94 %
Provision for credit losses $1,214   $(1,609 ) $3,408   $2,834   $20,306  
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 Nine Months Ended
  September 30,  June 30,  September 30,  September 30,  September 30,
  2017  2017  2016  2017  2016
                          
Net Income $21,283   $14,013   $17,196   $51,184   $41,676  
 Intangible amortization  844    846    67    2,262    318  
 Tax benefit of amortization of intangibles  (295 )  (296 )  (23 )  (792 )  (111 )
  Net Income, adjusted for tax affected amortization of intangibles  21,832    14,563    17,240    52,654    41,883  
                          
Average Tangible Equity:                         
 Total shareholders' equity $888,781   $872,233   $748,078   $839,846   $739,347  
 Less: intangible assets  271,670    272,488    165,449    247,679    165,547  
  Tangible Equity  617,111    599,745    582,629    592,167    573,800  
 Less: preferred stock  -    -    -    -    -  
  Tangible Common Equity $617,111   $599,745   $582,629   $592,167   $573,800  
                          
(8) Return on Average Tangible Common Equity  14.04 %  9.74 %  11.77 %  11.89 %  9.75 %
                          
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 Nine Months Ended
  September 30,  June 30,  September 30,  September 30,  September 30,
  2017  2017  2016  2017  2016
                          
Core Net Income:                         
 Total Net Income $21,283   $14,013   $17,196   $51,184   $41,676  
  Merger & Acquisition related expenses  (69 )  9,870    118    10,412    358  
  Tax benefit of merger & acquisition related expenses  24    (3,455 )  (41 )  (3,644 )  (125 )
 (5) Core net income  21,238    20,428    17,273    57,952    41,909  
  Average Shares Outstanding Assuming Dilution  97,457,470    97,232,288    88,858,204    94,578,490    88,843,939  
  (6) Core Earnings per common share (diluted) $0.22   $0.21   $0.19   $0.61   $0.47  
                            
   Intangible amortization  844    846    67    2,262    318  
   Tax benefit of amortization of intangibles  (295 )  (296 )  (23 )  (792 )  (111 )
    Core Net Income, adjusted for tax affected amortization of intangibles $21,787   $20,978   $17,317   $59,422   $42,116  
                          
(9) Core Return on Average Tangible Common Equity  14.01 %  14.03 %  11.82 %  13.42 %  9.80 %
                          
                          
  For the Three Months Ended  For the Nine Months Ended
  September 30,  June 30,  September 30,  September 30,  September 30,
  2017  2017  2016  2017  2016
Core Return on Average Assets:                         
 Total Net Income $21,283   $14,013   $17,196   $51,184   $41,676  
 Total Average Assets  7,377,373    7,381,816    6,679,676    7,158,451    6,668,176  
  Return on Average Assets  1.14 %  0.76 %  1.02 %  0.96 %  0.83 %
                           
 Core Net Income (5) $21,238   $20,428   $17,273   $57,952   $41,909  
 Total Average Assets  7,377,373    7,381,816    6,679,676    7,158,451    6,668,176  
  (7) Core Return on Average Assets  1.14 %  1.11 %  1.03 %  1.08 %  0.84 %
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 Nine Months Ended
  September 30,  June 30,  September 30,  September 30,  September 30,
  2017  2017  2016  2017  2016
Core Efficiency Ratio:                         
 Total Noninterest Expense $47,361   $58,263   $38,696   $148,389   $114,250  
  Adjustments to Noninterest Expense:                         
  Unfunded commitment reserve  (1 )  664    503    451    (412 )
  Intangible amortization  844    846    67    2,262    318  
  Merger and acquisition related  (69 )  9,870    118    10,412    358  
   Noninterest Expense - Core $46,587   $46,883   $38,008   $135,264   $113,986  
                           
  Net interest income, fully tax equivalent $60,667   $58,896   $50,569   $172,381   $150,352  
  Total noninterest income  19,790    18,904    16,994    55,626    46,267  
  Net securities gains  (92 )  49    -    (695 )  (28 )
   Total Revenue $80,365   $77,849   $67,563   $227,312   $196,591  
                           
 Adjustments to Revenue:                         
  Derivative mark-to-market  (14 )  (37 )  470    (49 )  (1,075 )
   Total Revenue - Core $80,379   $77,886   $67,093   $227,361   $197,666  
                          
(10)Core Efficiency Ratio  57.96 %  60.19 %  56.65 %  59.49 %  57.67 %
                          
                          
  September 30,  June 30,  September 30,           
  2017  2017  2016           
Tangible Equity:                         
 Total shareholders' equity $894,301   $879,465   $751,787            
 Less: intangible assets  271,347    272,030    165,349            
  Tangible Equity  622,954    607,435    586,438            
 Less: preferred stock  -    -    -            
  Tangible Common Equity $622,954   $607,435   $586,438            
                          
Tangible Assets:                         
 Total assets $7,384,339   $7,383,386   $6,666,483            
 Less: intangible assets  271,347    272,030    165,349            
  Tangible Assets $7,112,992   $7,111,356   $6,501,134            
                          
(12) Tangible Common Equity as a percentage of Tangible Assets  8.76 %  8.54 %  9.02 %          
                          
Shares Outstanding at End of Period  97,475,575    97,483,067    88,992,077            
(11) Tangible Book Value Per Common Share $6.39   $6.23   $6.59            
                          
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