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First Commonwealth Announces First Quarter 2021 Earnings; Increases Quarterly Dividend

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INDIANA, Pa., April 27, 2021 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the first quarter of 2021.

Financial Summary

(dollars in thousands,

For the Three Months Ended

except per share data)

March 31,

December 31,

March 31,

2021

2020

2020

Reported Results

Net income

$39,770

$25,683

$4,727

Diluted earnings per share

$0.41

$0.27

$0.05

Return on average assets

1.77

%

1.12

%

0.23

%

Return on average equity

14.98

%

9.48

%

1.77

%

Operating Results (non-GAAP)(1)

Core net income

$39,855

$26,102

$4,730

Core diluted earnings per share

$0.41

$0.27

$0.05

Core pre-tax pre-provision net revenue

$45,046

$40,092

$36,730

Provision expense

($4,390)

$7,680

$30,967

Net charge-offs

$3,270

$4,825

$3,529

Reserve build/(release)(2)

($4,546)

$13,002

$27,439

Core return on average assets (ROAA)

1.77

%

1.14

%

0.23

%

Core pre-tax pre-provision ROAA

2.00

%

1.75

%

1.77

%

Return on average tangible common equity

21.58

%

13.80

%

2.92

%

Core return on average tangible common equity

21.63

%

14.02

%

2.92

%

Core efficiency ratio

53.18

%

56.00

%

58.19

%

Net interest margin (FTE)

3.40

%

3.26

%

3.65

%

(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. A full reconciliation of non-GAAP financial measures can be found at the end of the financial statements which accompany this release.
(2) Reserve build/(release) represents the net change in the Company's allowance for credit losses (ACL) from the prior period.

First Quarter 2021 Highlights

Financial results

  • Net income of $39.8 million and diluted earnings per share totaled $0.41, an increase of $14.1 million, or $0.14 per share from the previous quarter

  • Pre-tax pre-provision net revenue (PPNR)(1) totaled $44.9 million, an increase of $5.4 million from the previous quarter and an increase of $8.2 million from the first quarter of 2020

    • PPNR ROAA of 2.00% increased by 27 basis points from the previous quarter

  • The Company achieved positive operating leverage during the first quarter of 2021

    • Core revenue(1) grew $0.8 million, or 0.9% from the prior quarter

    • Core noninterest expense(1) decreased $2.2 million, or 4.2%, from the prior quarter

  • Net interest income (FTE) of $69.8 million increased $1.9 million from the previous quarter

  • Noninterest income of $27.3 million (excluding net security gains) increased $0.8 million from the previous quarter

  • Noninterest expense of $51.9 million decreased $2.7 million from the previous quarter

  • Portfolio loans (excluding Paycheck Protection Program (PPP) loans) decreased $23.9 million from the previous quarter despite consumer loan growth, due in part to commercial loan payoffs

  • Approximately $215.7 million of PPP loans were forgiven in the first quarter, offset by $215.3 million in new PPP loan production, resulting in the total PPP loan balance at March 31, 2021 of $478.5 million, which was fairly consistent with the balance at December 31, 2020 of $478.9 million.

  • Average deposits increased $20.4 million, or 1.1% annualized compared to the prior quarter despite $81.1 million in intentional time deposit runoff

    • End of period deposits grew by $430.6 million from the end of the fourth quarter

    • Average noninterest-bearing deposits grew $100.9 million, or 17.4% annualized compared to the prior quarter

  • Tangible book value per share grew 9.7% annualized compared to the prior quarter and 6.2% year-over-year

  • First Commonwealth Bank has been recognized for the third consecutive year by Forbes as one of the World’s Best Banks for 2021

Profitability

  • The core efficiency ratio(1) improved 282 basis points to 53.18% compared to the prior quarter

  • The return on average assets (ROA) improved 65 basis points to 1.77% compared to the prior quarter

  • Pre-tax pre-provision ROA(1) for the quarter ended March 31, 2021 was 2.00% as compared to 1.73% in the prior quarter and 1.77% in the prior year quarter

  • The net interest margin of 3.40% increased 14 basis points compared to the prior quarter and decreased 25 basis points as compared to the prior year quarter

Strong capital and liquidity positions

  • On April 26, 2021, the Board of Directors authorized a 4.5% increase in the quarterly cash dividend to shareholders

  • Bank-level Tier 1 Capital ratio of 12.00%, which represents $271.0 million in excess capital above the regulatory “well capitalized” requirement of 8.0%

  • Total available liquidity of $4.5 billion

  • On January 26, 2021, the Company announced that its Board of Directors authorized a new $25.0 million share repurchase program of the Company’s common stock. A total of 28,012 shares were purchased under this program during the first quarter of 2021 for a weighted average price of $13.99 per share.

Asset quality

  • The provision for credit losses was $(4.4) million, a decrease of $12.1 million from the previous quarter

  • Reserve build/(release)(2) totaled $(4.5) million, bringing reserves to total loans (excluding PPP) down to 1.55% from 1.61% last quarter

  • Nonaccrual loans of $43.7 million decreased $1.9 million from the previous quarter

  • Net charge-offs on loans totaled $3.3 million, a decrease of $1.5 million from the previous quarter

    • Net charge-offs as a percentage of average loans outstanding (annualized) was 0.20% in the first quarter of 2021, down from 0.28% last quarter

“While the reserve release is certainly a positive reflection of our asset quality trends and the improved macroeconomic environment, the trajectory of our fundamental operating performance is even more encouraging,” stated T. Michael Price, President and Chief Executive Officer. “Our consumer loans are growing, our commercial pipelines have started to build and our fee generating businesses all had another solid quarter. At the same time, the team helped 2,500 small and mid-sized businesses secure roughly $255 million in PPP funding during the quarter.” Price continued, “Last week, Forbes released their list of the World’s Best Banks for 2021. For the third year in a row, First Commonwealth is proud to be one of 75 banks from the United States receiving this distinction. This recognition gives us even more confidence that our Company is well-positioned to reward all of our stakeholders.”

Earnings

Net income for the first quarter of 2021 was $39.8 million, or $0.41 per share, compared to $25.7 million, or $0.27 per share in the fourth quarter of 2020 and $4.7 million, or $0.05 per share for the first quarter of 2020.

Net Interest Income and Net Interest Margin

Net interest income (FTE) of $69.8 million increased $1.9 million from the previous quarter and $1.6 million from the prior year quarter. The increase from the prior quarter was primarily due to a $2.4 million increase in fees and interest on PPP loans and a $189.4 million increase in average investment securities, partially offset by an $81.1 million decrease in higher cost time deposits. Interest and fee income recognized on PPP loans totaled $7.9 million in the first quarter as compared to $5.5 million in the prior quarter.

The net interest margin for the first quarter of 2021 was 3.40%, an increase of 14 basis points from the previous quarter and a decrease of 25 basis points from the first quarter of 2021. The increase from the fourth quarter of 2020 was due primarily to a 258 basis point increase in the yield on PPP loans (inclusive of loan forgiveness) and a six basis point decrease in the cost of deposits, partially offset by a 1 basis point increase in the yield on loans.

Total average deposits grew $20.4 million in the first quarter of 2021 as compared to the previous quarter. Balance sheet management strategies that reduced deposits by the end of the fourth quarter were offset by deposit growth in the first quarter of $430.6 million. Average noninterest bearing deposits grew $100.9 million and offset an $81.1 million decrease in average time deposits.

Asset Quality

The Company adopted CECL on December 31, 2020, effective January 1, 2020.

Provision expense in the first quarter of 2021 totaled $(4.4) million, a decrease of $12.1 million from the previous quarter. The provision expense in the fourth quarter 2020 included $3.2 million for unfunded commitments as a result of the adoption of CECL and use of life-of-loan loss rates.

At March 31, 2021, nonperforming loans totaled $50.4 million, a decrease of $3.7 million from the previous quarter and a decrease of $8.8 million from the previous year quarter. Nonperforming loans represented 0.80% of total loans (excluding PPP) as of March 31, 2021, down from 0.86% and 0.93% for the periods ended December 31, 2020 and March 31, 2020, respectively.

At March 31, 2021, criticized loans totaled $272.1 million, a decrease of $30.7 million from the previous quarter.

During the first quarter of 2021, net charge-offs were $3.3 million, compared to $4.8 million in the prior quarter and $3.5 million in the first quarter of 2020. Net charge-offs were 0.20%, 0.28% and 0.23% of average loans for the periods ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

Noninterest Income and Noninterest Expense

Noninterest income totaled $27.3 million for the first quarter of 2021, as compared to $26.6 million for the fourth quarter of 2020 and $19.3 million for the first quarter of 2020 (excluding net securities gains). There were no material securities gains during the current or comparable quarters.

The $0.8 million increase from the previous quarter was primarily due to a $1.8 million increase in the derivative mark-to-market adjustment on interest rate swaps as a result of changes in fair value due to movement in bond spreads, swap rates and counterparty credit risk. This increase was partially offset by a $0.6 million decrease in fee income related to new interest rate swaps due to lower commercial demand. Income from mortgage gain on sale improved by $0.4 million over the prior quarter but was offset by a $0.9 million negative interest rate hedge adjustment.

Noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses) totaled $51.7 million for the first quarter of 2021, as compared to $54.0 million for the fourth quarter of 2020 and $50.2 million for the first quarter of 2020. The $2.3 million decrease from the previous quarter was primarily the result of a $2.7 million decrease in salaries and benefits due to a $1.0 million seasonal decrease in hospitalization expense, a $0.7 million decrease in incentive expense and an increase of $0.5 million in deferred expense related to PPP originations. The decrease from the previous quarter was partially offset by a $1.1 million increase in occupancy expense due to seasonal snow removal expense and maintenance.

The core efficiency ratio was 53.18% during the first quarter of 2021 as compared to 56.00% in the previous quarter and 58.19% in the first quarter of 2020.

Full time equivalent staff was 1,387 at March 31, 2021, 1,389 at December 31, 2020, and 1,510 at March 31, 2020. The decrease from the prior year quarter is the result of a company-wide hiring freeze implemented at the end of the first quarter of 2020 and the consolidation of 20% of the bank’s branch facilities in the fourth quarter of 2020.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.115 per share, which represents a 4.5% increase from the previous quarter. The cash dividend is payable on May 21, 2021 to shareholders of record as of May 7, 2021. This dividend represents a 3.2% projected annual yield utilizing the April 26, 2021 closing market price of $14.34.

First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at March 31, 2021 were 15.3%, 12.6%, 9.7% and 11.6% 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 first quarter of 2021 on Wednesday, April 28, 2021 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-833-302-1887 conference ID # 4592861 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 1-800-585-8367 and entering the conference ID # 4592861. A link to the webcast replay will also be accessible on the company’s web.

About First Commonwealth Financial Corporation

First Commonwealth Financial Corporation (NYSE: FCF), headquartered in Indiana, Pennsylvania, is a financial services Company with 119 community banking offices in 26 counties throughout western and central Pennsylvania and throughout Ohio, as well as business banking operations in Pittsburgh, Pennsylvania, and Canton, Cleveland, Columbus and Cincinnati, Ohio. The Company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson, and Lewis Center, 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

Certain statements contained in this release that are not historical facts may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the Securities and Exchange Commission, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute “forward-looking statements” as well. These statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of words such as “may,” “will,” “should,” “could,” “would,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate” or words of similar meaning. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including uncertainties regarding the impact of the COVID-19 pandemic, and could be affected by many factors, including, but not limited to: (1) the effects of the COVID-19 pandemic 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 or its customers 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 this report and in the other reports that we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. Further, statements about the potential effects of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, clients, third parties and us.

In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements in this release. We undertake no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Media Relations:
Jonathan E. Longwill
Vice President / Communications and Media Relations
Phone: 724-463-6806
E-mail: JLongwill@fcbanking.com

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


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)

For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

SUMMARY RESULTS OF OPERATIONS

Net interest income

$

69,442

$

67,492

$

67,724

Provision for credit losses

(4,390

)

7,680

30,967

Noninterest income

27,355

26,622

19,273

Noninterest expense

51,859

54,552

50,271

Net income

39,770

25,683

4,727

Core net income (5)

39,855

26,102

4,730

Earnings per common share (diluted)

$

0.41

$

0.27

$

0.05

Core earnings per common share (diluted) (6)

$

0.41

$

0.27

$

0.05

KEY FINANCIAL RATIOS

Return on average assets

1.77

%

1.12

%

0.23

%

Core return on average assets (7)

1.77

%

1.14

%

0.23

%

Return on average assets, pre-provision, pre-tax

2.00

%

1.73

%

1.77

%

Core return on average assets, pre-provision, pre-tax

2.00

%

1.75

%

1.77

%

Return on average shareholders' equity

14.98

%

9.48

%

1.77

%

Return on average tangible common equity (8)

21.58

%

13.80

%

2.92

%

Core return on average tangible common equity (9)

21.63

%

14.02

%

2.92

%

Core efficiency ratio (2)(10)

53.18

%

56.00

%

58.19

%

Net interest margin (FTE) (1)

3.40

%

3.26

%

3.65

%

Book value per common share

$

11.30

$

11.12

$

10.79

Tangible book value per common share (11)

8.01

7.82

7.54

Market value per common share

14.37

10.94

9.14

Cash dividends declared per common share

0.11

0.11

0.11

ASSET QUALITY RATIOS

Nonperforming loans as a percent of end-of-period loans (3)

0.75

%

0.80

%

0.93

%

Nonperforming loans as a percent of end-of-period loans, excluding PPP loans (3)

0.80

%

0.86

%

0.93

%

Nonperforming assets as a percent of total assets (3)

0.55

%

0.62

%

0.74

%

Nonperforming assets as a percent of total assets, excluding PPP loans (3)

0.58

%

0.65

%

0.74

%

Net charge-offs as a percent of average loans (annualized) (4)

0.20

%

0.28

%

0.23

%

Net charge-offs as a percent of average loans, excluding PPP loans (annualized) (4)

0.21

%

0.30

%

0.23

%

Allowance for credit losses as a percent of nonperforming loans (4)

192.06

%

187.43

%

133.71

%

Allowance for credit losses as a percent of end-of-period loans (4)

1.44

%

1.50

%

1.25

%

Allowance for credit losses as a percent of end-of-period loans, excluding PPP loans (4)

1.55

%

1.61

%

1.25

%

CAPITAL RATIOS

Shareholders' equity as a percent of total assets

11.5

%

11.8

%

12.4

%

Tangible common equity as a percent of tangible assets (12)

8.5

%

8.6

%

9.0

%

Tangible common equity as a percent of tangible assets, excluding PPP loans (12)

8.9

%

9.1

%

9.0

%

Leverage Ratio

9.7

%

9.4

%

9.9

%

Risk Based Capital - Tier I

12.6

%

12.2

%

11.6

%

Risk Based Capital - Total

15.3

%

14.9

%

14.2

%

Common Equity - Tier I

11.6

%

11.2

%

10.5

%


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)

For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

INCOME STATEMENT

Interest income

$

74,061

$

73,306

$

79,329

Interest expense

4,619

5,814

11,605

Net Interest Income

69,442

67,492

67,724

Provision for credit losses

(4,390

)

7,680

30,967

Net Interest Income after Provision for Credit Losses

73,832

59,812

36,757

Net securities gains

6

23

19

Trust income

2,516

2,327

2,111

Service charges on deposit accounts

4,047

4,321

4,745

Insurance and retail brokerage commissions

2,172

1,868

1,995

Income from bank owned life insurance

1,951

1,589

1,616

Gain on sale of mortgage loans

5,046

5,538

2,546

Gain on sale of other loans and assets

1,690

1,676

699

Card-related interchange income

6,427

6,377

5,262

Derivative mark-to-market

1,430

(399

)

(1,741

)

Swap fee income

146

724

214

Other income

1,924

2,578

1,807

Total Noninterest Income

27,355

26,622

19,273

Salaries and employee benefits

28,671

31,388

29,977

Net occupancy

4,773

3,668

4,973

Furniture and equipment

3,948

3,925

3,778

Data processing

3,052

2,739

2,467

Pennsylvania shares tax

832

1,254

738

Advertising and promotion

1,324

879

1,150

Contributions

731

439

472

Intangible amortization

866

897

934

Other professional fees and services

751

1,131

898

FDIC insurance

696

1,062

28

Litigation and operational losses

479

373

390

Loss on sale or write-down of assets

9

264

213

COVID-19 related

74

307

23

Voluntary early retirement

118

Branch consolidation

40

128

Other operating expenses

5,613

5,980

4,230

Total Noninterest Expense

51,859

54,552

50,271

Income before Income Taxes

49,328

31,882

5,759

Income tax provision

9,558

6,199

1,032

Net Income

$

39,770

$

25,683

$

4,727

Shares Outstanding at End of Period

96,248,476

96,130,751

98,015,396

Average Shares Outstanding Assuming Dilution

96,233,647

96,344,398

98,361,494


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

March 31,

December 31,

March 31,

2021

2020

2020

BALANCE SHEET (Period End)

Assets

Cash and due from banks

$

83,989

$

100,009

$

118,413

Interest-bearing bank deposits

420,645

256,572

15,762

Securities available for sale, at fair value

1,056,703

843,450

992,041

Securities held to maturity, at amortized cost

407,833

361,844

318,256

Loans held for sale

20,604

33,436

25,783

Loans

6,736,894

6,761,183

6,313,944

Allowance for credit losses

(96,763

)

(101,309

)

(79,075

)

Net loans

6,640,131

6,659,874

6,234,869

Goodwill and other intangibles

316,148

316,820

318,891

Other assets

470,936

496,099

491,090

Total Assets

$

9,416,989

$

9,068,104

$

8,515,105

Liabilities and Shareholders' Equity

Noninterest-bearing demand deposits

$

2,616,303

$

2,319,958

$

1,751,524

Interest-bearing demand deposits

267,571

250,353

326,122

Savings deposits

4,501,456

4,305,391

4,034,759

Time deposits

483,926

562,964

810,683

Total interest-bearing deposits

5,252,953

5,118,708

5,171,564

Total deposits

7,869,256

7,438,666

6,923,088

Short-term borrowings

110,762

117,373

146,971

Long-term borrowings

233,012

233,255

233,955

Total borrowings

343,774

350,628

380,926

Other liabilities

116,479

210,193

153,167

Shareholders' equity

1,087,480

1,068,617

1,057,924

Total Liabilities and Shareholders' Equity

$

9,416,989

$

9,068,104

$

8,515,105


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)


For the Three Months Ended

March 31,

Yield/

December 31,

Yield/

March 31,

Yield/

2021

Rate

2020

Rate

2020

Rate

NET INTEREST MARGIN

Assets

Loans, excluding PPP loans (FTE)(1)(3)

$

6,292,076

3.91

%

$

6,387,174

3.90

%

$

6,255,825

4.63

%

PPP Loans

489,375

6.58

%

548,279

4.00

%

%

Securities and interest-bearing bank deposits (FTE) (1)

1,530,107

1.54

%

1,340,756

1.62

%

1,255,699

2.46

%

Total Interest-Earning Assets (FTE) (1)

8,311,558

3.63

%

8,276,209

3.54

%

7,511,524

4.27

%

Noninterest-earning assets

818,896

845,094

825,797

Total Assets

$

9,130,454

$

9,121,303

$

8,337,321

Liabilities and Shareholders' Equity

Interest-bearing demand and savings deposits

$

4,603,822

0.10

%

$

4,603,255

0.14

%

$

4,215,323

0.48

%

Time deposits

528,265

0.75

%

609,350

1.05

%

825,966

1.65

%

Short-term borrowings

119,369

0.11

%

131,806

0.10

%

202,314

1.17

%

Long-term borrowings

233,113

4.41

%

233,352

4.37

%

234,050

4.41

%

Total Interest-Bearing Liabilities

5,484,569

0.34

%

5,577,763

0.41

%

5,477,653

0.85

%

Noninterest-bearing deposits

2,413,887

2,313,009

1,676,362

Other liabilities

155,443

152,396

111,988

Shareholders' equity

1,076,555

1,078,135

1,071,318

Total Noninterest-Bearing Funding Sources

3,645,885

3,543,540

2,859,668

Total Liabilities and Shareholders' Equity

$

9,130,454

$

9,121,303

$

8,337,321

Net Interest Margin (FTE) (annualized)(1)

3.40

%

3.26

%

3.65

%


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

March 31,

December 31,

March 31,

2021

2020

2020

Loan Portfolio Detail

Commercial Loan Portfolio:

Commercial, financial, agricultural and other

$

1,077,218

$

1,077,132

$

1,272,240

Paycheck Protection Program

478,453

478,854

Commercial real estate

2,167,506

2,211,569

2,190,098

Real estate construction

316,207

340,850

332,814

Total Commercial

4,039,384

4,108,405

3,795,152

Consumer Loan Portfolio:

Closed-end mortgages

1,178,640

1,165,951

1,103,281

Home equity lines of credit

577,975

584,641

587,859

Real estate construction

88,373

86,371

80,644

Total Real Estate - Consumer

1,844,988

1,836,963

1,771,784

Auto loans

759,061

712,800

626,256

Direct installment

32,143

36,165

46,029

Personal lines of credit

55,719

61,072

68,240

Student loans

5,599

5,778

6,483

Total Other Consumer

852,522

815,815

747,008

Total Consumer Portfolio

2,697,510

2,652,778

2,518,792

Total Portfolio Loans

6,736,894

6,761,183

6,313,944

Loans held for sale

20,604

33,436

25,783

Total Loans

$

6,757,498

$

6,794,619

$

6,339,727

March 31,

December 31,

March 31,

2021

2020

2020

ASSET QUALITY DETAIL

Nonperforming Loans:

Loans on nonaccrual basis

$

23,056

$

30,801

$

46,109

Loans held for sale on a nonaccrual basis

13

Troubled debt restructured loans on nonaccrual basis

20,628

14,740

5,522

Troubled debt restructured loans on accrual basis

6,697

8,512

7,509

Total Nonperforming Loans

$

50,381

$

54,066

$

59,140

Other real estate owned ("OREO")

916

1,215

2,697

Repossessions ("Repos")

833

613

836

Total Nonperforming Assets

$

52,130

$

55,894

$

62,673

Loans past due in excess of 90 days and still accruing

1,079

1,523

1,427

Classified loans

72,026

76,179

90,233

Criticized loans

272,143

302,813

117,535

Nonperforming assets as a percentage of total loans, plus OREO and Repos (4)

0.77

%

0.83

%

0.99

%

Allowance for credit losses

$

96,763

$

101,309

$

79,075


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)


For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Net Charge-offs (Recoveries):

Commercial, financial, agricultural and other

$

479

$

1,027

$

405

Real estate construction

Commercial real estate

1,511

2,364

222

Residential real estate

68

5

502

Loans to individuals

1,212

1,429

2,400

Net Charge-offs

$

3,270

$

4,825

$

3,529

Net charge-offs as a percentage of average loans outstanding (annualized) (4)

0.20

%

0.28

%

0.23

%

Net charge-offs as a percentage of average loans outstanding, excluding PPP loans (annualized) (4)

0.21

%

0.30

%

0.23

%

Provision for credit losses as a percentage of net charge-offs

(134.25

)

%

159.17

%

877.50

%

Provision for credit losses

$

(4,390

)

$

7,680

$

30,967


DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES

(1) Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the federal income tax statutory rate of 21%.

(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

March 31,

December 31,

March 31,

2021

2020

2020

Interest income

$

74,061

$

73,306

$

79,329

Adjustment to fully taxable equivalent basis (1)

309

333

397

Interest income adjusted to fully taxable equivalent basis (non-GAAP)

74,370

73,639

79,726

Interest expense

4,619

5,814

11,605

Net interest income, (FTE)

$

69,751

$

67,825

$

68,121


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

March 31,

December 31,

March 31,

2021

2020

2020

Net Income

$

39,770

$

25,683

$

4,727

Intangible amortization

866

897

934

Tax benefit of amortization of intangibles

(182

)

(188

)

(196

)

Net Income, adjusted for tax affected amortization of intangibles

$

40,454

$

26,392

$

5,465

Average Tangible Equity:

Total shareholders' equity

$

1,076,555

$

1,078,135

$

1,071,318

Less: intangible assets

316,438

317,178

319,269

Tangible Equity

760,117

760,957

752,049

Less: preferred stock

Tangible Common Equity

$

760,117

$

760,957

$

752,049

(8)Return on Average Tangible Common Equity

21.58

%

13.80

%

2.92

%


For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Core Net Income:

Total Net Income

$

39,770

$

25,683

$

4,727

Net securities gains

(6

)

(23

)

(19

)

Tax benefit of net securities gains

1

5

4

COVID-19 related

74

307

23

Tax benefit of COVID 19 related

(16

)

(64

)

(5

)

Early retirement related

118

Tax benefit of early retirement related expenses

(25

)

Branch consolidation related

40

128

Tax benefit of bank consolidation related expenses

(8

)

(27

)

(5) Core net income

$

39,855

$

26,102

$

4,730

Average Shares Outstanding Assuming Dilution

96,233,647

96,344,398

98,361,494

(6) Core Earnings per common share (diluted)

$

0.41

$

0.27

$

0.05

Intangible amortization

866

897

934

Tax benefit of amortization of intangibles

(182

)

(188

)

(196

)

Core Net Income, adjusted for tax affected amortization of intangibles

$

40,539

$

26,811

$

5,468

(9) Core Return on Average Tangible Common Equity

21.63

%

14.02

%

2.92

%


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

March 31,

December 31,

March 31,

2021

2020

2020

Core Return on Average Assets:

Total Net Income

$

39,770

$

25,683

$

4,727

Total Average Assets

9,130,454

9,121,303

8,337,321

Return on Average Assets

1.77

%

1.12

%

0.23

%

Core Net Income (5)

$

39,855

$

26,102

$

4,730

Total Average Assets

9,130,454

9,121,303

8,337,321

(7) Core Return on Average Assets

1.77

%

1.14

%

0.23

%


For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Core Efficiency Ratio:

Total Noninterest Expense

$

51,859

$

54,552

$

50,271

Adjustments to Noninterest Expense:

Unfunded commitment reserve

(2,539

)

Intangible amortization

866

897

934

COVID-19 related

74

307

23

Early retirement related

118

Branch consolidation related

40

128

Noninterest Expense - Core

$

50,879

$

53,102

$

51,853

Net interest income, (FTE)

$

69,751

$

67,825

$

68,121

Total noninterest income

27,355

26,622

19,273

Net securities gains

(6

)

(23

)

(19

)

Total Revenue

97,100

94,424

87,375

Adjustments to Revenue:

Derivative mark-to-market

1,430

(399

)

(1,741

)

Total Revenue - Core

$

95,670

$

94,823

$

89,116

(10)Core Efficiency Ratio

53.18

%

56.00

%

58.19

%


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)


DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES

March 31,

December 31,

March 31,

2021

2020

2020

Tangible Equity:

Total shareholders' equity

$

1,087,480

$

1,068,617

$

1,057,924

Less: intangible assets

316,148

316,820

318,891

Tangible Equity

771,332

751,797

739,033

Less: preferred stock

Tangible Common Equity

$

771,332

$

751,797

$

739,033

Tangible Assets:

Total assets

$

9,416,989

$

9,068,104

$

8,515,105

Less: intangible assets

316,148

316,820

318,891

Tangible Assets

$

9,100,841

$

8,751,284

$

8,196,214

Less: PPP loans

478,453

478,854

Tangible Assets, excluding PPP loans

$

8,622,388

$

8,272,430

$

8,196,214

(12)Tangible Common Equity as a percentage of Tangible Assets

8.48

%

8.59

%

9.02

%

(12)Tangible Common Equity as a percentage of Tangible Assets, excluding PPP loans

8.95

%

9.09

%

9.02

%

Shares Outstanding at End of Period

96,248,476

96,130,751

98,015,396

(11)Tangible Book Value Per Common Share

$

8.01

$

7.82

$

7.54

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.


For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Pre-tax pre-provision income:

Net interest income

$69,442

$67,492

$67,724

Noninterest income

27,355

26,622

19,273

Noninterest expense

51,859

54,552

50,271

Pre-tax pre-provision income

$44,938

$39,562

$36,726

Net securities gains

($6

)

($23

)

($19

)

COVID-19 related

74

307

23

Voluntary early retirement

118

Branch consolidation

40

128

Core pre-tax pre-provision income

$45,046

$40,092

$36,730

Net charge-offs

$3,270

$4,825

$3,529