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First Commonwealth Announces First Quarter 2022 Earnings; Increases Quarterly Dividend

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First Commonwealth Financial Corporation
First Commonwealth Financial Corporation

INDIANA, Pa., April 26, 2022 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the first quarter of 2022.

Financial Summary

(dollars in thousands,

For the Three Months Ended

except per share data)

March 31,

December 31,

March 31,

2022

2021

2021

Reported Results

Net income

$

27,726

$

34,776

$

39,770

Diluted earnings per share

$

0.29

$

0.37

$

0.41

Return on average assets

1.18

%

1.45

%

1.77

%

Return on average equity

10.15

%

12.36

%

14.98

%

Operating Results (non-GAAP)(1)

Core net income

$

27,814

$

34,753

$

39,855

Core diluted earnings per share

$

0.29

$

0.37

$

0.41

Core pre-tax pre-provision net revenue

$

36,537

$

40,868

$

45,046

Provision expense

$

1,964

($

2,729

)

($

4,390

)

Net charge-offs

$

1,134

($

1,064

)

$

3,270

Reserve build/(release)(2)

($

1,334

)

($

1,663

)

($

4,546

)

Core return on average assets (ROAA)

1.18

%

1.45

%

1.77

%

Core pre-tax pre-provision ROAA

1.56

%

1.71

%

2.00

%

Return on average tangible common equity

14.52

%

17.56

%

21.58

%

Core return on average tangible common equity

14.57

%

17.55

%

21.63

%

Core efficiency ratio

59.47

%

57.06

%

53.18

%

Net interest margin (FTE)

3.19

%

3.23

%

3.40

%

(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 2022 Highlights

Financial results

  • Net income of $27.7 million and diluted earnings per share totaled $0.29, a decrease of $7.1 million, or $0.08 per share from the previous quarter

  • Core pre-tax pre-provision net revenue (PPNR)(1) totaled $36.5 million, a decrease of $4.3 million from the previous quarter and a decrease of $8.5 million from the first quarter of 2021, primarily as a result of declines in income related to the Paycheck Protection Program (PPP) and noninterest income

    • PPNR ROAA was 1.55% in the first quarter of 2022 as compared to 1.71% in the previous quarter

  • Net interest income (FTE) of $68.4 million decreased $2.1 million from the previous quarter and $1.3 million from the first quarter of 2021 as a result of a decline in PPP income

    • Total fees and interest recognized from PPP loans totaled $1.8 million in the first quarter of 2022, a decrease of $2.3 million from the previous quarter and a decrease of $6.2 million from the first quarter of 2021

    • Approximately $42.4 million of PPP loans were forgiven in the first quarter of 2022, resulting in total remaining PPP loan balances at March 31, 2022 of $28.9 million

  • Noninterest income of $24.0 million decreased $2.1 million from the previous quarter due primarily to a $0.7 million decrease in gain on sale of Mortgage loans, a $0.6 million decrease in card-related interchange income, a $0.6 million decrease in the derivative mark-to-market adjustment on interest rate swaps, and a $0.4 million decrease in fee income related to new interest rate swaps

  • Noninterest expense of $55.7 million increased $0.3 million from the previous quarter

  • Total loans (excluding PPP loans) increased $147.2 million, or 8.8% annualized from the previous quarter

  • Average deposits increased $69.9 million, or 3.6% annualized compared to the prior quarter despite $21.0 million in intentional time deposit runoff

    • End of period deposits grew by $189.3 million from the previous quarter, or 9.6% annualized

  • Total shareholder’s equity decreased $41.8 million from the previous quarter due to a $59.4 million decrease in accumulated other comprehensive income (AOCI) resulting from the impact of higher interest rates on the fair value of the company’s available for sale investment portfolio and interest rate swap agreements

  • First Commonwealth Bank has been recognized for the fourth consecutive year by Forbes as one of the World’s Best Banks for 2022

Profitability

  • The net interest margin of 3.19% declined 4 basis points compared to the prior quarter

    • The core net interest margin(1) (adjusted for PPP income and excess cash) improved 5 basis points to 3.22%

  • The core efficiency ratio(1) increased by 241 basis points to 59.47% compared to the prior quarter

  • The return on average assets (ROAA) declined 27 basis points to 1.18% compared to the prior quarter

  • Core pre-tax pre-provision ROAA(1) (which is not adjusted for PPP) for the quarter ended March 31, 2022 was 1.56% as compared to 1.71% in the prior quarter and 2.00% in the prior year quarter

Strong capital and liquidity positions

  • On April 25, 2022, the Board of Directors authorized a 4.3% increase in the quarterly cash dividend to shareholders

  • Bank-level Tier 1 Capital ratio of 11.5%, which represents $257.5 million in excess capital above the regulatory “well capitalized” requirement of 8.0%

  • There were no shares repurchased during the first quarter of 2022. As previously announced on October 26, 2021, the Board of Directors authorized a $25 million share repurchase program. The remaining capacity under the current program was $20.0 million as of March 31, 2022.

Asset quality

  • The provision for credit losses was $2.0 million, an increase of $4.7 million from the previous quarter

  • Reserve build/(release)(2) was $(1.3) million, bringing reserves to total loans (excluding PPP) down to 1.32% from 1.37% in the previous quarter

  • Nonperforming loans of $37.5 million decreased $17.7 million from the previous quarter

  • Net charge-offs on loans totaled $1.1 million, an increase of $2.2 million from the previous quarter

    • Net charge-offs/(recoveries) as a percentage of average loans outstanding (annualized) was 0.07% in the first quarter of 2022, an increase from (0.06%) in the previous quarter

“We delivered a strong quarter of broad-based loan growth and solid financial results in the first quarter,” stated T. Michael Price, President and Chief Executive Officer. “Growth in commercial and consumer real estate lending along with a resilient indirect auto business produced annualized loan growth of 8.8%. While we did experience an anticipated slowdown in fee income from record levels in our Mortgage business, our asset sensitive balance sheet is well positioned for a rising interest rate environment. I am also pleased to report our de novo Equipment Finance business booked its first loans during the quarter. We expect this business to serve as another source of growth and an added benefit for our clients and shareholders for years to come.”

Earnings

Net income for the first quarter of 2022 was $27.7 million, or $0.29 per share, compared to $34.8 million, or $0.37 per share in the fourth quarter of 2021 and $39.8 million, or $0.41 per share for the first quarter of 2021.

Net Interest Income and Net Interest Margin

Net interest income (FTE) of $68.4 million decreased $2.1 million from the previous quarter and $1.3 million from the prior year quarter. The decrease from the prior quarter was primarily due to a $2.3 million decrease in fees and interest on PPP loans. Interest and fee income recognized on PPP loans totaled $1.8 million in the first quarter as compared to $4.1 million in the prior quarter.

The net interest margin for the first quarter of 2022 was 3.19%, a decrease of four basis points from the previous quarter and a decrease of 21 basis points from the first quarter of 2021. The decrease from the fourth quarter of 2021 was due primarily to the aforementioned decrease in interest and fees on PPP loans partially offset by an eight basis point increase in the yield on investment securities and a two basis point decrease in the cost of interest-bearing demand and savings deposits.

Total average deposits grew $69.9 million in the first quarter of 2022 as compared to the previous quarter. Average interest-bearing demand and savings deposits grew $98.1 million, which was partially offset by a $21.0 million decrease in average time deposits.

Asset Quality

Provision expense in the first quarter of 2022 totaled $2.0 million, an increase of $4.7 million from a negative provision of ($2.7 million) in the previous quarter.

The allowance for credit losses (ACL) as a percentage of end-of-period loans (excluding PPP loans) was 1.32% in the first quarter of 2022 as compared to 1.37% in the previous quarter.

At March 31, 2022, nonperforming loans totaled $37.5 million, a decrease of $17.7 million from the previous quarter and a decrease of $12.9 million from the previous year quarter. Nonperforming loans represented 0.54% of total loans (excluding PPP) as of March 31, 2022, down from 0.81% and 0.80% for the periods ended December 31, 2021 and March 31, 2021, respectively.

At March 31, 2022, criticized loans totaled $174.1 million, a decrease of $24.1 million from the previous quarter.

During the first quarter of 2022, net charge-offs/(recoveries) were $1.1 million, compared to ($1.1) million in the prior quarter and $3.3 million in the first quarter of 2021. Net charge-offs were 0.07%, (0.06%) and 0.20% of average loans (annualized) for the periods ended March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

Noninterest Income and Noninterest Expense

Noninterest income totaled $24.0 million for the first quarter of 2022, as compared to $26.1 million for the fourth quarter of 2021 and $27.4 million for the first quarter of 2021 (excluding net securities gains). There were no material securities gains during the current or comparable quarters.

The $2.1 million decrease from the previous quarter was primarily driven by a $0.7 million decline in Mortgage gain on sale income and a $0.6 million seasonal decrease in card-related interchange income from the previous quarter, as well as a $0.6 million decrease 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) and a $0.4 million decrease in fee income related to new interest rate swaps (due to lower commercial demand). These declines were partially offset by a $0.5 million increase in the gain on sale of Small Business Administration (SBA) loans.

Noninterest expense totaled $55.7 million for the first quarter of 2022, as compared to $55.4 million for the fourth quarter of 2021 and $51.9 million for the first quarter of 2021. The $0.3 million increase from the previous quarter was primarily the result of an $0.8 million increase in net occupancy expense due, in part, to seasonally higher snow removal expense partially offset by a $0.5 million decrease in salaries and benefits due to lower hospitalization and incentive payouts.

The core efficiency ratio was 59.47% during the first quarter of 2022 as compared to 57.06% in the previous quarter and 53.18% in the first quarter of 2021.

Full time equivalent staff was 1,432 at March 31, 2022, 1,426 at December 31, 2021, and 1,387 at March 31, 2021.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.12 per share, which represents a 4.3% increase from the previous quarter. The cash dividend is payable on May 20, 2022 to shareholders of record as of May 6, 2022. This dividend represents a 3.3% projected annual yield utilizing the April 25, 2022 closing market price of $14.41.

First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at March 31, 2022 were 14.7%, 12.2%, 9.8% and 11.3% 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 2022 on Wednesday, April 27, 2022 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-888-330-3181 conference ID # 4651379 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 1-800-770-2030 and entering the conference ID # 4651379. 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 118 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, equipment finance, 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,

2022

2021

2021

SUMMARY RESULTS OF OPERATIONS

Net interest income

$

68,172

$

70,254

$

69,442

Provision for credit losses

1,964

(2,729

)

(4,390

)

Noninterest income

23,976

26,071

27,355

Noninterest expense

55,724

55,428

51,859

Net income

27,726

34,776

39,770

Core net income (5)

27,814

34,753

39,855

Earnings per common share (diluted)

$

0.29

$

0.37

$

0.41

Core earnings per common share (diluted) (6)

$

0.29

$

0.37

$

0.41

KEY FINANCIAL RATIOS

Return on average assets

1.18

%

1.45

%

1.77

%

Core return on average assets (7)

1.18

%

1.45

%

1.77

%

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

1.55

%

1.71

%

2.00

%

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

1.56

%

1.71

%

2.00

%

Return on average shareholders' equity

10.15

%

12.36

%

14.98

%

Return on average tangible common equity (8)

14.52

%

17.56

%

21.58

%

Core return on average tangible common equity (9)

14.57

%

17.55

%

21.63

%

Core efficiency ratio (2)(10)

59.47

%

57.06

%

53.18

%

Net interest margin (FTE) (1)

3.19

%

3.23

%

3.40

%

Book value per common share

$

11.32

$

11.77

$

11.30

Tangible book value per common share (11)

7.99

8.43

8.01

Market value per common share

15.16

16.09

14.37

Cash dividends declared per common share

0.115

0.115

0.110

ASSET QUALITY RATIOS

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

0.54

%

0.80

%

0.75

%

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

0.54

%

0.81

%

0.80

%

Nonperforming assets as a percent of total assets (3)

0.40

%

0.59

%

0.55

%

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

0.40

%

0.59

%

0.58

%

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

0.07

%

(0.06) %

0.20

%

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

0.07

%

(0.06) %

0.21

%

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

243.38

%

167.67

%

192.06

%

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

1.31

%

1.35

%

1.44

%

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

1.32

%

1.37

%

1.55

%

CAPITAL RATIOS

Shareholders' equity as a percent of total assets

11.1

%

11.6

%

11.5

%

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

8.1

%

8.6

%

8.5

%

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

8.1

%

8.7

%

8.9

%

Leverage Ratio

9.8

%

9.7

%

9.7

%

Risk Based Capital - Tier I

12.2

%

12.2

%

12.6

%

Risk Based Capital - Total

14.7

%

14.6

%

15.3

%

Common Equity - Tier I

11.3

%

11.3

%

11.6

%


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,

2022

2021

2021

INCOME STATEMENT

Interest income

$

71,244

$

73,530

$

74,061

Interest expense

3,072

3,276

4,619

Net Interest Income

68,172

70,254

69,442

Provision for credit losses

1,964

(2,729

)

(4,390

)

Net Interest Income after Provision for Credit Losses

66,208

72,983

73,832

Net securities gains

2

6

Trust income

2,713

2,771

2,516

Service charges on deposit accounts

4,615

4,857

4,047

Insurance and retail brokerage commissions

2,272

2,134

2,172

Income from bank owned life insurance

1,508

1,487

1,951

Gain on sale of mortgage loans

1,282

1,940

5,046

Gain on sale of other loans and assets

2,319

1,849

1,690

Card-related interchange income

6,490

7,069

6,427

Derivative mark-to-market

347

973

1,430

Swap fee income

453

828

146

Other income

1,975

2,163

1,924

Total Noninterest Income

23,976

26,071

27,355

Salaries and employee benefits

30,932

31,422

28,671

Net occupancy

4,787

3,972

4,773

Furniture and equipment

3,730

3,776

3,948

Data processing

3,188

2,933

3,052

Pennsylvania shares tax

1,005

1,257

832

Advertising and promotion

1,226

1,154

1,324

Intangible amortization

862

900

866

Other professional fees and services

1,221

1,351

751

FDIC insurance

698

565

696

Litigation and operational losses

600

700

479

Loss on sale or write-down of assets

75

80

9

COVID-19 related

17

92

74

Branch consolidation

98

(121

)

40

Other operating expenses

7,285

7,347

6,344

Total Noninterest Expense

55,724

55,428

51,859

Income before Income Taxes

34,460

43,626

49,328

Income tax provision

6,734

8,850

9,558

Net Income

$

27,726

$

34,776

$

39,770

Shares Outstanding at End of Period

94,299,039

94,233,152

96,248,476

Average Shares Outstanding Assuming Dilution

94,311,324

95,020,353

96,233,647


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

March 31,

December 31,

March 31,

2022

2021

2021

BALANCE SHEET (Period End)

Assets

Cash and due from banks

$

120,289

$

84,738

$

83,989

Interest-bearing bank deposits

404,516

310,634

420,645

Securities available for sale, at fair value

946,346

1,054,218

1,056,703

Securities held to maturity, at amortized cost

512,911

541,311

407,833

Loans held for sale

10,506

18,583

20,604

Loans and leases

6,952,112

6,839,230

6,736,894

Allowance for credit losses

(91,188

)

(92,522

)

(96,763

)

Net loans and leases

6,860,924

6,746,708

6,640,131

Goodwill and other intangibles

314,066

314,516

316,148

Other assets

472,566

474,385

470,936

Total Assets

$

9,642,124

$

9,545,093

$

9,416,989

Liabilities and Shareholders' Equity

Noninterest-bearing demand deposits

$

2,719,645

$

2,658,782

$

2,616,303

Interest-bearing demand deposits

305,623

291,476

267,571

Savings deposits

4,782,445

4,647,197

4,501,456

Time deposits

364,134

385,043

483,926

Total interest-bearing deposits

5,452,202

5,323,716

5,252,953

Total deposits

8,171,847

7,982,498

7,869,256

Short-term borrowings

95,748

138,315

110,762

Long-term borrowings

182,012

182,269

233,012

Total borrowings

277,760

320,584

343,774

Other liabilities

124,898

132,639

116,479

Shareholders' equity

1,067,619

1,109,372

1,087,480

Total Liabilities and Shareholders' Equity

$

9,642,124

$

9,545,093

$

9,416,989


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/

2022

Rate

2021

Rate

2021

Rate

NET INTEREST MARGIN

Assets

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

$

6,842,481

3.73

%

$

6,680,346

3.73

%

$

6,292,076

3.91

%

PPP Loans

51,147

13.93

%

111,544

14.44

%

489,375

6.58

%

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

1,809,131

1.54

%

1,878,755

1.46

%

1,530,107

1.54

%

Total Interest-Earning Assets (FTE) (1)

8,702,759

3.33

%

8,670,645

3.38

%

8,311,558

3.63

%

Noninterest-earning assets

821,819

815,872

818,896

Total Assets

$

9,524,578

$

9,486,517

$

9,130,454

Liabilities and Shareholders' Equity

Interest-bearing demand and savings deposits

$

4,980,390

0.04

%

$

4,882,318

0.06

%

$

4,603,822

0.10

%

Time deposits

374,484

0.29

%

395,444

0.31

%

528,265

0.75

%

Short-term borrowings

115,544

0.07

%

126,695

0.07

%

119,369

0.11

%

Long-term borrowings

182,119

4.98

%

182,371

4.91

%

233,113

4.41

%

Total Interest-Bearing Liabilities

5,652,537

0.22

%

5,586,828

0.23

%

5,484,569

0.34

%

Noninterest-bearing deposits

2,645,551

2,652,812

2,413,887

Other liabilities

119,075

130,373

155,443

Shareholders' equity

1,107,415

1,116,504

1,076,555

Total Noninterest-Bearing Funding Sources

3,872,041

3,899,689

3,645,885

Total Liabilities and Shareholders' Equity

$

9,524,578

$

9,486,517

$

9,130,454

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

3.19

%

3.23

%

3.40

%


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

March 31,

December 31,

March 31,

2022

2021

2021

Loan and Lease Portfolio Detail

Commercial Loan and Lease Portfolio:

Commercial, financial, agricultural and other

$

1,092,311

$

1,102,154

$

1,077,218

Paycheck Protection Program

28,874

71,298

478,453

Commercial real estate

2,344,281

2,251,097

2,167,506

Equipment Finance loans and leases

2,505

Real estate construction

307,411

382,764

316,207

Total Commercial

3,775,382

3,807,313

4,039,384

Consumer Loan Portfolio:

Closed-end mortgages

1,467,133

1,368,816

1,178,640

Home equity lines of credit

539,088

551,434

577,975

Real estate construction

91,577

111,692

88,373

Total Real Estate - Consumer

2,097,798

2,031,942

1,844,988

Auto & RV loans

984,001

901,280

759,061

Direct installment

37,751

40,937

32,143

Personal lines of credit

52,614

52,809

55,719

Student loans

4,566

4,949

5,599

Total Other Consumer

1,078,932

999,975

852,522

Total Consumer Portfolio

3,176,730

3,031,917

2,697,510

Total Portfolio Loans and Leases

6,952,112

6,839,230

6,736,894

Loans held for sale

10,506

18,583

20,604

Total Loans and Leases

$

6,962,618

$

6,857,813

$

6,757,498

March 31,

December 31,

March 31,

2022

2021

2021

ASSET QUALITY DETAIL

Nonperforming Loans:

Loans on nonaccrual basis

$

20,490

$

34,926

$

23,056

Loans held for sale on a nonaccrual basis

Troubled debt restructured loans on nonaccrual basis

10,090

13,134

20,628

Troubled debt restructured loans on accrual basis

6,887

7,120

6,697

Total Nonperforming Loans

$

37,467

$

55,180

$

50,381

Other real estate owned ("OREO")

667

642

916

Repossessions ("Repos")

397

397

833

Total Nonperforming Assets

$

38,531

$

56,219

$

52,130

Loans past due in excess of 90 days and still accruing

1,921

1,606

1,079

Classified loans

75,270

77,563

72,026

Criticized loans

174,060

198,126

272,143

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

0.55

%

0.82

%

0.77

%

Allowance for credit losses

$

91,188

$

92,522

$

96,763


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

For the Three Months Ended

March 31,

December 31,

March 31,

2022

2021

2021

Net Charge-offs (Recoveries):

Commercial, financial, agricultural and other

$

395

$

(1,633

)

$

479

Real estate construction

(11

)

Commercial real estate

(14

)

(5

)

1,511

Residential real estate

110

20

68

Loans to individuals

643

565

1,212

Net Charge-offs

$

1,134

$

(1,064

)

$

3,270

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

0.07

%

(0.06) %

0.20

%

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

0.07

%

(0.06) %

0.21

%

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

173.19

%

256.48

%

(134.25) %

Provision for credit losses

$

1,964

$

(2,729

)

$

(4,390

)


DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES

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.

(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,

2022

2021

2021

Interest income

$

71,244

$

73,530

$

74,061

Adjustment to fully taxable equivalent basis (1)

253

266

309

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

71,497

73,796

74,370

Interest expense

3,072

3,276

4,619

Net interest income, (FTE) (1)

$

68,425

$

70,520

$

69,751


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,

2022

2021

2021

Net Income

$

27,726

$

34,776

$

39,770

Intangible amortization

862

900

866

Tax benefit of amortization of intangibles

(181

)

(189

)

(182

)

Net Income, adjusted for tax affected amortization of intangibles

$

28,407

$

35,487

$

40,454

Average Tangible Equity:

Total shareholders' equity

$

1,107,415

$

1,116,504

$

1,076,555

Less: intangible assets

314,235

314,860

316,438

Tangible Equity

793,180

801,644

760,117

Less: preferred stock

Tangible Common Equity

$

793,180

$

801,644

$

760,117

(8)Return on Average Tangible Common Equity

14.52

%

17.56

%

21.58

%


For the Three Months Ended

March 31,

December 31,

March 31,

2022

2021

2021

Core Net Income:

Total Net Income

$

27,726

$

34,776

$

39,770

Net securities gains

(2

)

(6

)

Tax benefit of net securities gains

1

COVID-19 related

17

92

74

Tax benefit of COVID 19 related

(4

)

(19

)

(16

)

Branch consolidation related

98

(121

)

40

Tax benefit of bank consolidation related expenses

(21

)

25

(8

)

(5) Core net income

$

27,814

$

34,753

$

39,855

Average Shares Outstanding Assuming Dilution

94,311,324

95,020,353

96,233,647

(6) Core Earnings per common share (diluted)

$

0.29

$

0.37

$

0.41

Intangible amortization

862

900

866

Tax benefit of amortization of intangibles

(181

)

(189

)

(182

)

Core Net Income, adjusted for tax affected amortization of intangibles

$

28,495

$

35,464

$

40,539

(9) Core Return on Average Tangible Common Equity

14.57

%

17.55

%

21.63

%


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,

2022

2021

2021

Core Return on Average Assets:

Total Net Income

$

27,726

$

34,776

$

39,770

Total Average Assets

9,524,578

9,486,517

9,130,454

Return on Average Assets

1.18

%

1.45

%

1.77

%

Core Net Income (5)

$

27,814

$

34,753

$

39,855

Total Average Assets

9,524,578

9,486,517

9,130,454

(7) Core Return on Average Assets

1.18

%

1.45

%

1.77

%


For the Three Months Ended

March 31,

December 31,

March 31,

2022

2021

2021

Core Efficiency Ratio:

Total Noninterest Expense

$

55,724

$

55,428

$

51,859

Adjustments to Noninterest Expense:

Intangible amortization

862

900

866

COVID-19 related

17

92

74

Branch consolidation related

98

(121

)

40

Noninterest Expense - Core

$

54,747

$

54,557

$

50,879

Net interest income, (FTE)

$

68,425

$

70,520

$

69,751

Total noninterest income

23,976

26,071

27,355

Net securities gains

(2

)

(6

)

Total Revenue

92,399

96,591

97,100

Adjustments to Revenue:

Derivative mark-to-market

347

973

1,430

Total Revenue - Core

$

92,052

$

95,618

$

95,670

(10)Core Efficiency Ratio

59.47

%

57.06

%

53.18

%


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES

March 31,

December 31,

March 31,

2022

2021

2021

Tangible Equity:

Total shareholders' equity

$

1,067,619

$

1,109,372

$

1,087,480

Less: intangible assets

314,066

314,516

316,148

Tangible Equity

753,553

794,856

771,332

Less: preferred stock

Tangible Common Equity

$

753,553

$

794,856

$

771,332

Tangible Assets:

Total assets

$

9,642,124

$

9,545,093

$

9,416,989

Less: intangible assets

314,066

314,516

316,148

Tangible Assets

$

9,328,058

$

9,230,577

$

9,100,841

Less: PPP loans

28,874

71,298

478,453

Tangible Assets, excluding PPP loans

$

9,299,184

$

9,159,279

$

8,622,388

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

8.08

%

8.61

%

8.48

%

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

8.10

%

8.68

%

8.95

%

Shares Outstanding at End of Period

94,299,039

94,233,152

96,248,476

(11)Tangible Book Value Per Common Share

$

7.99

$

8.43

$

8.01


For the Three Months Ended

March 31,

December 31,

March 31,

2022

2021

2021

Pre-tax pre-provision income:

Net interest income

$68,172

$70,254

$69,442

Noninterest income

23,976

26,071

27,355

Noninterest expense

55,724

55,428

51,859

Pre-tax pre-provision income

$36,424

$40,897

$44,938

Net securities gains

($2

)

$—

($6

)

COVID-19 related

17

92

74

Branch consolidation

98

(121

)

40

Core pre-tax pre-provision income

$36,537

$40,868

$45,046

Net charge-offs

$1,134

($1,064

)

$3,270


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES

For the Three Months Ended

March 31,

December 31,

March 31,

2022

2021

2021

Core Net Interest Margin:

Net Interest Income (FTE)

$

68,425

$

70,520

$

69,751

Less: Income from PPP Loans

1,757

4,059

7,943

Less: Income from Excess Cash

108

100

74

Core Net Interest Income (FTE)

$

66,560

$

66,361

$

61,734

Average Interest-Earning Assets

$

8,702,759

$

8,670,645

$

8,311,558

Less: PPP Loans

51,147

111,544

489,375

Less: Excess Cash

277,570

241,426

329,142

Core Average Interest-Earning Assets

$

8,374,042

$

8,317,675

$

7,493,041

Core Net Interest Margin (Non-GAAP)

3.22

%

3.17

%

3.34

%