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First Commonwealth Announces Strong First Quarter 2019 Earnings; Declares Quarterly Dividend

INDIANA, Pa., April 23, 2019 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (FCF) today announced financial results for the first quarter of 2019.  Net income for the first quarter of 2019 was $24.6 million, resulting in diluted earnings per share of $0.25, as compared to net income of $23.3 million and diluted earnings per share of $0.24 for the first quarter of 2018, an increase of $1.3 million and $0.01, or 5.7% and 4.2%, respectively.

First Quarter 2019 Highlights

  • On April 22, 2019, the company announced it has signed a definitive agreement to acquire 14 branches in Central Pennsylvania with approximately $525 million of deposits and $120 million of retail and business loans from Santander Bank, N.A.
  • The net interest margin expanded by five basis points to 3.75% compared to the prior quarter.
  • Total loans grew by $94.7 million compared to the previous quarter, or 6.5% annualized.
  • Total average deposits grew by $107.6 million compared to the previous quarter, or 7.3% annualized.
    • The loan-to-deposit ratio fell 2% from the previous quarter to 96%
  • Strong core returns on average assets and tangible common equity (non-GAAP) of 1.27% and 14.59%, respectively.
  • Continued strong expense control as demonstrated by a stable core efficiency ratio of 58.18% (non-GAAP).
  • Tangible book value per share grew by $0.23, or 13.2% (annualized) from the previous quarter.
  • Recognized by Forbes as one of the “World’s Best Banks” for 2019.

“I am pleased with our results this quarter and I am even more encouraged by the momentum we are generating in our loan and deposit growth, further fueling the expansion of our net interest margin,” stated T. Michael Price, President and Chief Executive Officer.  “Yesterday’s signing of an agreement to purchase 14 Central Pennsylvania branches and $525 million in deposits is an excellent opportunity to complement our existing Western Pennsylvania footprint.  I am confident that our expansion plans underway this year, along with our investments in our digital platform, will continue to position First Commonwealth toward becoming one of the premier community banks in the country.”

Financial Summary

(dollars in thousands, For the Three Months Ended
except per share data) March 31,   December 31,   March 31,
   2019
   2018
   2018
Reported Results          
Net income $24,589   $26,998   $23,270
Diluted earnings per share $0.25   $0.27   $0.24
Return on average assets  1.27%    1.39%    1.29%
Return on average equity  10.11%    11.06%    10.57%
           
Operating Results (non-GAAP)(1)          
Core net income $24,589   $27,000   $23,536
Core diluted earnings per share $0.25   $0.27   $0.24
Core return on average assets  1.27%    1.39%    1.31%
Return on average tangible common equity  14.59%    16.09%    15.56%
Core return on average tangible common equity  14.59%    16.09%    15.73%
Core efficiency ratio  58.18%    57.45%    58.21%
Net interest margin (FTE)  3.75%    3.70%    3.69%

(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 first quarter of 2019 was $24.6 million, as compared to $23.3 million for the first quarter of 2018, an increase of $1.3 million, or 5.7%, year-over-year.

Core net income (adjusted for acquisition expenses) was $24.6 million, as compared to $23.5 million for the first quarter of 2018 and $27.0 million in the fourth quarter of 2018, an increase of $1.1 million, or 4.5%, year-over-year and a decrease of $2.4 million from the prior quarter.

Net Interest Margin and Net Interest Income

The net interest margin for the first quarter of 2019 was 3.75%, an increase of five basis points from the previous quarter and an increase of six basis points from the first quarter of 2018.  The increase from the fourth quarter of 2018 was due primarily to a 12 basis point increase in the yield on interest-earning assets, partially offset by a seven basis point increase in funding costs.

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 March, June, September and December of 2018, along with the ability to pay down higher cost short-term borrowings with strong deposit growth.

Total average interest-earning assets increased $107.0 million from the previous quarter due to strong commercial and industrial loan growth.

Total average deposits grew by $107.6 million in the first quarter of 2019 compared to the previous quarter.  Growth was driven by a $76.0 million increase in average interest-bearing transaction accounts, a $23.8 million increase in average time deposits and a $7.8 million increase in average noninterest-bearing deposits.

Credit Quality

Asset quality trends continued to improve during the quarter.  At March 31, 2019, nonperforming loans totaled $31.3 million, a decrease of $0.7 million from December 31, 2018 and a decrease of $26.0 million from March 31, 2018.

Nonperforming loans as a percentage of total loans were 0.53%, 0.55% and 1.06% for the periods ended March 31, 2019, December 31, 2018 and March 31, 2018, respectively.

The provision for credit losses totaled $4.1 million for the quarter ended March 31, 2019, an increase of $2.6 million as compared to the prior quarter and a decrease of $2.8 million from the same quarter last year.  The increase from the previous quarter was due in part to the release of $1.7 million in excess specific reserves in the fourth quarter related to the successful resolution of a commercial credit, as well as reserves for strong organic loan growth.

For the originated loan portfolio at March 31, 2019, the allowance for credit losses to total originated loans was 0.92%, compared to 0.90% at December 31, 2018 and 1.07% at March 31, 2018.

During the first quarter of 2019, net charge-offs were $2.2 million, compared to $4.5 million in the prior quarter and $1.5 million in the first quarter of 2018.  Net charge-offs were 0.15%, 0.31% and 0.11% of average loans (annualized) for the periods ended March 31, 2019, December 31, 2018 and March 31, 2018, respectively.

Noninterest Income and Noninterest Expense

Noninterest income totaled $18.9 million for the first quarter of 2019, as compared to $20.5 million for the fourth quarter of 2018 and $19.2 million for the first quarter of 2018 (excluding net securities gains).  The $0.3 million decrease from the previous year was due to a decrease of $0.8 million in swap-related derivative mark-to-market income, which was partially offset by an increase of $0.5 million in gain on sale of loans and other assets due to higher Small Business Administration (“SBA”) lending activities as compared to the first quarter of 2018.

The $1.7 million decrease in noninterest income from the prior quarter was the result of $1.0 million less in service charges and card-related interchange income (driven by seasonally lower volume and six more processing days in the fourth quarter), as well as a $0.6 million decrease in gain sale of loans and other assets due to a gain on the sale of a nonperforming loan in the prior quarter and a $0.4 million insurance recovery in the prior quarter.  This was partially offset by a $0.3 million increase in gain on sale of mortgage loans.

Net securities gains were $2.8 million during the first quarter of 2018; no such gains were recorded in the current or previous quarter.  The gains in the prior year quarter were attributable to the successful auction calls of two pooled trust preferred securities, for which the company had previously recognized an other-than-temporary impairment charge.

Noninterest expense (excluding merger-related expenses) totaled $49.7 million for the first quarter of 2019, as compared to $50.0 million for the fourth quarter of 2018 and $46.5 million for the first quarter of 2018.  The $0.3 million decrease from the previous quarter was primarily the result of a $0.7 million decrease in other professional fees and a $0.6 million decrease in Pennsylvania state shares tax.  These decreases were partially offset by a $0.6 million increase in occupancy expenses (due primarily to higher snow removal expense during the first quarter) and a $0.5 million increase in advertising and promotion expense as the company invests in expanding its brand into new markets.

The $3.2 million increase in noninterest expense from the first quarter of 2018 was driven largely by higher expenses following the company’s recent acquisition of Foundation Bank on May 1, 2018, as well as the expansion of its commercial, SBA and mortgage lending teams.

Full time equivalent staff was 1,417 at March 31, 2019, 1,426 at December 31, 2018, and 1,365 at March 31, 2018.  The increase from the prior year quarter is the result of the addition of employees from acquisitions and the hiring of additional talent in our new markets and business lines.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.10 per share, which is payable on May 17, 2019 to shareholders of record as of May 3, 2019. This dividend represents a 3.0% projected annual yield utilizing the April 22, 2019 closing market price of $13.28.

First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at March 31, 2019 were 14.6%, 12.2%, 10.3% and 11.1%, 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 2019 on Wednesday, April 24, 2019 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 # 10130417.  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 (FCF), headquartered in Indiana, Pennsylvania, is a financial services company with 137 community banking offices in 22 counties throughout western and central Pennsylvania and throughout Ohio, as well as corporate banking centers in Pittsburgh, Pennsylvania, and Cleveland and Columbus, Ohio. The company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson 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
  March 31,   December 31,   March 31,
  2019   2018   2018
SUMMARY RESULTS OF OPERATIONS          
Net interest income (FTE) (1) $ 65,943     $ 65,514     $ 60,178  
Provision for credit losses 4,095     1,499     6,903  
Noninterest income 18,872     20,529     22,043  
Noninterest expense 49,730     50,024     46,873  
Net income 24,589     26,998     23,270  
Core net income (5) 24,589     27,000     23,536  
           
Earnings per common share (diluted) $ 0.25     $ 0.27     $ 0.24  
Core earnings per common share (diluted) (6) $ 0.25     $ 0.27     $ 0.24  
           
KEY FINANCIAL RATIOS          
           
Return on average assets 1.27 %   1.39 %   1.29 %
Core return on average assets (7) 1.27 %   1.39 %   1.31 %
Return on average shareholders' equity 10.11 %   11.06 %   10.57 %
Return on average tangible common equity (8) 14.59 %   16.09 %   15.56 %
Core return on average tangible common equity (9) 14.59 %   16.09 %   15.73 %
Core efficiency ratio (2)(10) 58.18 %   57.45 %   58.21 %
Net interest margin (FTE) (1) 3.75 %   3.70 %   3.69 %
           
Book value per common share $ 10.12     $ 9.90     $ 9.21  
Tangible book value per common share (11) 7.21     6.98     6.45  
Market value per common share 12.60     12.08     14.13  
Cash dividends declared per common share 0.10     0.09     0.08  
           
ASSET QUALITY RATIOS          
Nonperforming loans as a percent of end-of-period loans (3) 0.53 %   0.55 %   1.06 %
Nonperforming assets as a percent of total assets (3) 0.45 %   0.46 %   0.83 %
Net charge-offs as a percent of average loans (annualized) (4) 0.15 %   0.31 %   0.11 %
Allowance for credit losses as a percent of nonperforming loans (4) 158.74 %   149.14 %   93.84 %
Allowance for credit losses as a percent of end-of-period loans (4) 0.85 %   0.83 %   1.00 %
Allowance for credit losses (originated loans and leases) as a percent of total originated loans and leases 0.92 %   0.90 %   1.07 %
           
CAPITAL RATIOS          
Shareholders' equity as a percent of total assets 12.5 %   12.5 %   12.3 %
Tangible common equity as a percent of tangible assets (12) 9.3 %   9.1 %   8.9 %
Leverage Ratio 10.3 %   10.3 %   10.1 %
Risk Based Capital - Tier I 12.2 %   12.3 %   11.9 %
Risk Based Capital - Total 14.6 %   14.7 %   12.9 %
Common Equity - Tier I 11.1 %   11.1 %   10.7 %


   
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,
  2019 2018 2018
INCOME STATEMENT      
  Interest income $ 79,594   $ 77,945   $ 66,499  
  Interest expense 14,108   12,896   6,814  
Net Interest Income 65,486   65,049   59,685  
  Taxable equivalent adjustment (1) 457   465   493  
Net Interest Income  (FTE) 65,943   65,514   60,178  
  Provision for credit losses 4,095   1,499   6,903  
Net Interest Income after Provision for Credit Losses (FTE) 61,848   64,015   53,275  
       
  Net securities gains     2,840  
  Trust income 1,926   1,887   1,928  
  Service charges on deposit accounts 4,245   4,757   4,406  
  Insurance and retail brokerage commissions 1,961   1,866   1,868  
  Income from bank owned life insurance 1,426   1,445   1,494  
  Gain on sale of mortgage loans 1,428   1,169   1,484  
  Gain on sale of other loans and assets 1,084   1,725   574  
  Card-related interchange income 4,730   5,258   4,742  
Derivative mark-to-market (26 ) (2 ) 789  
Swap fee income 393   759   290  
  Other income 1,705   1,665   1,628  
Total Noninterest Income 18,872   20,529   22,043  
       
  Salaries and employee benefits 27,220   27,535   24,873  
  Net occupancy 4,916   4,287   4,369  
  Furniture and equipment 3,668   3,636   3,540  
  Data processing 2,544   2,706   2,433  
  Pennsylvania shares tax 916   1,477   903  
  Advertising and promotion 1,240   771   809  
  Intangible amortization 754   787   784  
  Collection and repossession 547   702   823  
  Other professional fees and services 754   1,473   1,007  
  FDIC insurance 574   417   776  
  Litigation and operational losses 401   351   179  
  Loss on sale or write-down of assets 65   205   197  
  Merger and acquisition related   3   337  
  Other operating expenses 6,131   5,674   5,843  
Total Noninterest Expense 49,730   50,024   46,873  
       
Income before Income Taxes 30,990   34,520   28,445  
  Taxable equivalent adjustment (1) 457   465   493  
  Income tax provision 5,944   7,057   4,682  
Net Income $ 24,589   $ 26,998   $ 23,270  
       
Shares Outstanding at End of Period 98,625,806   98,518,668   97,603,151  
Average Shares Outstanding Assuming Dilution 98,706,827   99,358,759   97,601,162  
       


FIRST COMMONWEALTH FINANCIAL CORPORATION      
CONSOLIDATED FINANCIAL DATA          
Unaudited          
(dollars in thousands)          
           
  March 31,   December 31,   March 31,
  2019   2018   2018
BALANCE SHEET (Period End)          
Assets          
  Cash and due from banks $ 100,724     $ 95,934     $ 65,886  
  Interest-bearing bank deposits 23,168     3,013     9,736  
  Securities available for sale, at fair value 918,479     941,373     837,277  
  Securities held to maturity, at amortized cost 384,909     393,855     410,430  
  Loans held for sale 9,627     11,881     9,759  
           
  Loans 5,871,070     5,774,139     5,381,305  
  Allowance for credit losses (49,653 )   (47,764 )   (53,732 )
  Net loans 5,821,417     5,726,375     5,327,573  
           
  Goodwill and other intangibles 287,078     287,240     269,403  
  Lease right of use 47,566          
  Other assets 379,705     368,584     390,703  
Total Assets $ 7,972,673     $ 7,828,255     $ 7,320,767  
           
Liabilities and Shareholders' Equity          
  Noninterest-bearing demand deposits $ 1,510,566     $ 1,466,213     $ 1,443,747  
           
  Interest-bearing demand deposits 211,548     180,209     187,286  
  Savings deposits 3,517,350     3,401,354     3,428,967  
  Time deposits 891,296     850,216     643,522  
  Total interest-bearing deposits 4,620,194     4,431,779     4,259,775  
           
  Total deposits 6,130,760     5,897,992     5,703,522  
           
  Short-term borrowings 565,616     721,823     588,016  
  Long-term borrowings 184,841     185,056     87,676  
  Total borrowings 750,457     906,879     675,692  
           
  Lease liabilities 51,371          
  Other liabilities 42,066     47,995     42,204  
  Shareholders' equity 998,019     975,389     899,349  
Total Liabilities and Shareholders' Equity $ 7,972,673     $ 7,828,255     $ 7,320,767  


 
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/
  2019 Rate 2018 Rate 2018 Rate
NET INTEREST MARGIN        
             
Assets            
Loans (FTE)(1)(3) $ 5,811,587   4.94 % $ 5,704,468   4.81 % $ 5,413,677   4.41 %
Securities and interest bearing bank deposits (FTE) (1) 1,316,445   2.86 % 1,316,488   2.79 % 1,198,728   2.75 %
Total Interest-Earning Assets (FTE) (1) 7,128,032   4.55 % 7,020,956   4.43 % 6,612,405   4.11 %
Noninterest-earning assets 750,876     712,047     687,977    
Total Assets $ 7,878,908     $ 7,733,003     $ 7,300,382    
             
Liabilities and Shareholders' Equity            
Interest-bearing demand and savings deposits $ 3,677,387   0.53 % $ 3,601,354   0.45 % $ 3,573,153   0.25 %
Time deposits 865,944   1.57 % 842,123   1.40 % 633,214   0.83 %
Short-term borrowings 615,140   2.27 % 633,363   2.10 % 672,135   1.38 %
Long-term borrowings 184,931   5.47 % 185,144   5.29 % 87,780   4.52 %
Total Interest-Bearing Liabilities 5,343,402   1.07 % 5,261,984   0.97 % 4,966,282   0.56 %
Noninterest-bearing deposits 1,464,750     1,456,983     1,400,218    
Other liabilities 83,920     45,445     41,264    
Shareholders' equity 986,836     968,591     892,618    
Total Noninterest-Bearing Funding Sources 2,535,506     2,471,019     2,334,100    
Total Liabilities and Shareholders' Equity $ 7,878,908     $ 7,733,003     $ 7,300,382    
             
Net Interest Margin (FTE) (annualized)(1)   3.75 %   3.70 %   3.69 %


   
FIRST COMMONWEALTH FINANCIAL CORPORATION  
CONSOLIDATED FINANCIAL DATA      
Unaudited      
(dollars in thousands)      
  March 31, December 31, March 31,
  2019 2018 2018
Loan Portfolio Detail      
Commercial Loan Portfolio:      
Commercial, financial, agricultural and other $ 1,180,320   $ 1,138,473   $ 1,131,594  
Commercial real estate 2,138,376   2,123,544   2,027,072  
Real estate construction 324,903   305,875   222,251  
Total Commercial 3,643,599   3,567,892   3,380,917  
       
Consumer Loan Portfolio:      
Closed-end mortgages 1,048,097   1,037,124   916,130  
Home equity lines of credit 517,252   525,281   518,493  
Real estate construction 64,484   53,103   24,710  
Total Real Estate - Consumer 1,629,833   1,615,508   1,459,333  
       
Auto loans 491,605   481,954   451,445  
Direct installment 36,625   37,454   23,820  
Personal lines of credit 61,599   63,131   56,145  
Student loans 7,809   8,200   9,645  
Total Other Consumer 597,638   590,739   541,055  
Total Consumer Portfolio 2,227,471   2,206,247   2,000,388  
Total Portfolio Loans 5,871,070   5,774,139   5,381,305  
Loans held for sale 9,627   11,881   9,759  
Total Loans $ 5,880,697   $ 5,786,020   $ 5,391,064  
       
       
  March 31, December 31, March 31,
  2019 2018 2018
ASSET QUALITY DETAIL      
Nonperforming Loans:      
Loans on nonaccrual basis $ 16,286   $ 11,509   $ 28,317  
Troubled debt restructured loans on nonaccrual basis 5,874   11,761   10,233  
Troubled debt restructured loans on accrual basis 9,120   8,757   18,707  
  Total Nonperforming Loans $ 31,280   $ 32,027   $ 57,257  
Other real estate owned ("OREO") 3,993   3,935   2,997  
Repossessions ("Repos") 342   266   162  
  Total Nonperforming Assets $ 35,615   $ 36,228   $ 60,416  
Loans past due in excess of 90 days and still accruing 1,509   1,582   1,955  
Classified loans 39,428   40,241   78,154  
Criticized loans 120,501   127,235   126,438  
       
Nonperforming assets as a percentage of total loans, plus OREO and Repos 0.61 % 0.63 % 1.12 %
Allowance for credit losses $ 49,653   $ 47,764   $ 53,732  
       


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)


  For the Three Months Ended
  March 31, December 31, March 31,
  2019 2018 2018
Net Charge-offs (Recoveries):      
  Commercial, financial, agricultural and other $ 922   $ 1,672   $ 27  
  Real estate construction (42 ) (42 ) (7 )
  Commercial real estate 258   1,489   99  
  Residential real estate 76   243   379  
  Loans to individuals 992   1,119   971  
Net Charge-offs $ 2,206   $ 4,481   $ 1,469  
       
Net charge-offs as a percentage of average loans outstanding (annualized) (4) 0.15 % 0.31 % 0.11 %
Provision for credit losses as a percentage of net charge-offs 185.63 % 33.45 % 469.91 %
Provision for credit losses $ 4,095   $ 1,499   $ 6,903  


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% for 2019 and  2018.
(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,
  2019 2018 2018
       
Net Income $ 24,589   $ 26,998   $ 23,270  
Intangible amortization 754   787   784  
Tax benefit of amortization of intangibles (158 ) (165 ) (165 )
Net Income, adjusted for tax affected amortization of intangibles 25,185   27,620   23,889  
       
Average Tangible Equity:      
  Total shareholders' equity $ 986,836   $ 968,591   $ 892,618  
  Less: intangible assets 286,874   287,610   269,947  
  Tangible Equity 699,962   680,981   622,671  
  Less: preferred stock      
  Tangible Common Equity $ 699,962   $ 680,981   $ 622,671  
       
(8)Return on Average Tangible Common Equity 14.59 % 16.09 % 15.56 %
       


 
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,
  2019 2018 2018
       
Core Net Income:      
Total Net Income $ 24,589   $ 26,998   $ 23,270  
Merger & acquisition related expenses   3   337  
Tax benefit of merger & acquisition related expenses   (1 ) (71 )
(5) Core net income 24,589   27,000   23,536  
Average Shares Outstanding Assuming Dilution 98,706,827   99,358,759   97,601,162  
(6) Core Earnings per common share (diluted) $ 0.25   $ 0.27   $ 0.24  
       
Intangible amortization 754   787   784  
Tax benefit of amortization of intangibles (158 ) (165 ) (165 )
Core Net Income, adjusted for tax affected amortization of intangibles $ 25,185   $ 27,622   $ 24,155  
       
(9) Core Return on Average Tangible Common Equity 14.59 % 16.09 % 15.73 %
       
       
  For the Three Months Ended
  March 31, December 31, March 31,
  2019 2018 2018
Core Return on Average Assets:      
Total Net Income $ 24,589   $ 26,998   $ 23,270  
Total Average Assets 7,878,908   7,733,003   7,300,382  
Return on Average Assets 1.27 % 1.39 % 1.29 %
       
Core Net Income (5) $ 24,589   $ 27,000   $ 23,536  
Total Average Assets 7,878,908   7,733,003   7,300,382  
(7) Core Return on Average Assets 1.27 % 1.39 % 1.31 %


 
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,
  2019 2018 2018
Core Efficiency Ratio:      
Total Noninterest Expense $ 49,730   $ 50,024   $ 46,873  
Adjustments to Noninterest Expense:      
Unfunded commitment reserve (381 ) (203 ) 5  
Intangible amortization 754   787   784  
Merger and acquisition related   3   337  
Noninterest Expense - Core $ 49,357   $ 49,437   $ 45,747  
       
Net interest income, fully tax equivalent $ 65,943   $ 65,514   $ 60,178  
Total noninterest income 18,872   20,529   22,043  
Net securities gains     (2,840 )
Total Revenue $ 84,815   $ 86,043   $ 79,381  
       
Adjustments to Revenue:      
Derivative mark-to-market (26 ) (2 ) 789  
Total Revenue - Core $ 84,841   $ 86,045   $ 78,592  
       
(10)Core Efficiency Ratio 58.18 % 57.45 % 58.21 %
       
       
  March 31, December 31, March 31,
  2019 2018 2018
Tangible Equity:      
  Total shareholders' equity $ 998,019   $ 975,389   $ 899,349  
  Less: intangible assets 287,078   287,240   269,403  
  Tangible Equity 710,941   688,149   629,946  
  Less: preferred stock      
  Tangible Common Equity $ 710,941   $ 688,149   $ 629,946  
       
Tangible Assets:      
  Total assets $ 7,972,673   $ 7,828,255   $ 7,320,767  
  Less: intangible assets 287,078   287,240   269,403  
  Tangible Assets $ 7,685,595   $ 7,541,015   $ 7,051,364  
       
(12)Tangible Common Equity as a percentage of Tangible Assets 9.25 % 9.13 % 8.93 %
       
  Shares Outstanding at End of Period 98,625,806   98,518,668   97,603,151  
(11)Tangible Book Value Per Common Share $ 7.21   $ 6.98   $ 6.45  
       
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.
 

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