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First Commonwealth Announces Third Quarter 2019 Earnings; Declares Quarterly Dividend

INDIANA, Pa., Oct. 29, 2019 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (FCF) today announced financial results for the third quarter of 2019.

Financial Summary

(dollars in thousands, For the Three Months Ended   For the Nine Months Ended
except per share data) September 30,   June 30,   September 30,   September 30,   September 30,
    2019     2019     2018     2019     2018
Reported Results                  
Net income $ 26,644     $ 27,280     $ 25,149     $ 78,513     $ 80,500  
Diluted earnings per share $ 0.27     $ 0.28     $ 0.25     $ 0.80     $ 0.81  
Return on average assets   1.31 %     1.37 %     1.30 %     1.32 %     1.44 %
Return on average equity   10.22 %     10.84 %     10.28 %     10.39 %     11.53 %
                   
Operating Results (non-GAAP)(1)                  
Core net income $ 29,597     $ 27,307     $ 25,168     $ 81,493     $ 81,791  
Core diluted earnings per share $ 0.30     $ 0.28     $ 0.25     $ 0.83     $ 0.82  
Core return on average assets   1.46 %     1.37 %     1.30 %     1.37 %     1.46 %
Return on average tangible common equity   14.62 %     15.47 %     15.01 %     14.90 %     16.88 %
Core return on average tangible common equity   16.20 %     15.48 %     15.02 %     15.45 %     17.14 %
Core efficiency ratio   55.73 %     56.80 %     57.82 %     56.87 %     57.05 %
Net interest margin (FTE)   3.76 %     3.75 %     3.67 %     3.75 %     3.71 %

(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.
               

Third Quarter 2019 Highlights

 Earnings

  • Third quarter GAAP net income was $26.6 million, or $0.27 diluted earnings per share.
    • Core net income (non-GAAP)(1) was $29.6 million, or $0.30 diluted earnings per share, an increase of $0.02 from the previous quarter and $0.05 from the third quarter of 2018.
  • Total revenue grew $1.6 million, or 7.0% annualized from the prior quarter.
    • Net interest income (FTE) increased $1.3 million from the prior quarter.
    • Noninterest income grew $0.3 million from the prior quarter.
  • Total noninterest expense increased $2.7 million from the previous quarter, but includes $3.7 million in merger and acquisition related expenses resulting from the completion of the Company’s acquisition of 14 former Santander branches in Central Pennsylvania.
  • Provision for credit losses totaled $2.7 million, a decrease of $0.1 million as compared to the prior quarter.

Franchise Growth

  • On September 6, 2019, the Company completed its acquisition of 14 Santander branches in Central Pennsylvania.  This acquisition included $471 million in deposits (including $52 million in noninterest bearing deposits) and $100 million of loans at close.
  • Total loans grew $101 million from the prior quarter and include $100 million in loans acquired in the aforementioned branch acquisition.
    • Excluding acquired loans, consumer and consumer real estate loans grew $39 million and $24 million, respectively, from the prior quarter. This growth offset a high level of payoffs experienced in the Company’s commercial loan categories.
    • On a year-to-date basis, total loans (excluding acquired balances) have grown $234 million, or 5.4% annualized.
  • Average deposits grew $212 million from the prior quarter and include $123 million in average deposits acquired in the aforementioned branch acquisition.
    • On a year-to-date basis, average quarterly deposits (excluding acquired balances) have grown $334 million, or 7.5% annualized, and grew by 5.8% annualized (excluding acquired balances) during the third quarter.

Profitability

  • Return on average assets decreased six basis points from the previous quarter to 1.31%.
    • Core return on average assets (non-GAAP)(1) increased nine basis points from the previous quarter to 1.46%.
  • The core return on average tangible common equity (non-GAAP)(1) for the third quarter of 2019 was 16.20%.
  • The core efficiency ratio (non-GAAP)(1) improved to 55.73% compared to 56.8% in the previous quarter.
  • The net interest margin of 3.76% increased by one basis point from the previous quarter.

“Our third quarter financial results demonstrate consistent improvement in our company’s performance trajectory,” stated T. Michael Price, President and Chief Executive Officer.  “Our underlying fundamentals remain strong across multiple business lines and geographies, and we remain focused on optimizing growth opportunities in our newer markets in Ohio and Central Pennsylvania.  During the quarter we completed our acquisition of 14 former Santander branches and welcomed 83 talented employees and nearly 23,000 new households to First Commonwealth.  Our success can be traced back to our talented team of individuals who continually deliver on our mission of improving the financial lives of our neighbors and their businesses.”

Earnings

Net income for the third quarter of 2019 was $26.6 million, as compared to $27.3 million in the previous quarter and $25.1 million for the third quarter of 2018.  Core net income (non-GAAP)(1) for the third quarter of 2019 was $29.6 million, an increase of $2.3 million from the previous quarter and an increase of $4.4 million from the third quarter of 2018.  The increase from the previous quarter was driven by a $1.3 million (pre-tax) increase in net interest income and a $1.0 million (pre-tax) decrease in noninterest expense (excluding merger and acquisition expenses). The increase from the prior year quarter was primarily due to a nine basis point increase in the net interest margin, strong fee income growth and well controlled expenses.

Net income for the first nine months of 2019 was $78.5 million, as compared to $80.5 million for the same period in 2018.  The decrease from the prior year was primarily due to an $8.1 million (pre-tax) gain on the sale and successful auction calls of the Company’s remaining pooled trust preferred securities in the first nine months of 2018 and a $9.2 million (pre-tax) increase in operating expenses, partially offset by a $16.7 million (pre-tax) increase in revenue and a $1.4 million decrease in the provision for credit losses.

Net Interest Income and Net Interest Margin

During the third quarter of 2019, net interest income (FTE) was $68.9 million, an increase of $1.3 million from the previous quarter.  The increase in net interest income was the result of a $33 million increase in average mortgage loans, a $29 million increase in indirect auto loans and a six basis point decrease in funding costs as the Company was able to pay down higher cost short-term borrowings for a portion of the quarter following the completion of the aforementioned acquisition on September 6, 2019.

The net interest margin for the third quarter of 2019 was 3.76%, an increase of one basis point from the previous quarter and an increase of nine basis points from the third quarter of 2018.  The net interest margin in the third quarter benefited from a 25 basis point increase in the yield on indirect auto loans and a 21 basis point decrease in the cost of short-term borrowings, partially offset by a 13 basis point decrease in the yield on variable rate commercial loans.

Average noninterest bearing deposits grew by $63 million in the third quarter of 2019 compared to the previous quarter.  Excluding noninterest bearing deposits acquired through the aforementioned branch acquisition, average noninterest bearing deposits grew $41 million, or 10.9% annualized from the previous quarter.

Credit Quality

The provision for credit losses totaled $2.7 million for the quarter ended September 30, 2019, a decrease of $0.1 million compared to the prior quarter.  The decrease is primarily due to a continuation of the long-term trend of improvement in credit quality.

Nonperforming loans were $35.3 million for the quarter ended September 30, 2019, a decrease of $0.2 million from previous quarter and a decrease of $4.5 million from the same quarter last year.  Nonperforming loans as a percentage of total loans were 0.58%, 0.59% and 0.70% for the periods ended September 30, 2019, June 30, 2019 and September 30, 2018, respectively.

During the third quarter of 2019, net charge-offs (recoveries) were $3.7 million, compared to $1.4 million in the prior quarter and $3.5 million in the third quarter of 2018.

For the originated loan portfolio at September 30, 2019, the general allowance for credit losses to total originated non-impaired loans was 0.87%, compared to 0.88% at June 30, 2019 and 0.89% at September 30, 2018.

Noninterest Income and Noninterest Expense

Noninterest income (excluding net security gains) totaled $22.2 million for the third quarter of 2019, as compared to $21.9 million in the previous quarter and $19.8 million for the third quarter of 2018.  The increase from the previous quarter was primarily due to a $0.5 million increase in mortgage banking revenue, a $0.5 million increase in service charges and card-related interchange income and seasonally higher Trust fee income, partially offset by a $0.4 million decrease in swap fees and a $0.8 million decrease in gain on sale of other loans due to a $0.5 million decrease in gain on sale of SBA loans and a $0.4 million gain on sale of a commercial loan in the previous quarter.

Noninterest expense (excluding merger-related expenses) totaled $51.2 million for the third quarter of 2019 as compared to $52.2 million for the second quarter of 2019 and $49.5 million for the third quarter of 2018.  The decrease from the previous quarter was primarily driven by a $1.1 million decrease in unfunded commitment reserve expense, $0.9 million in write-downs of two OREO properties in the previous quarter and a $0.5 million decrease in FDIC insurance due to a quarterly assessment credit, partially offset by a $0.5 million increase in hospitalization expense.

Full time equivalent staff was 1,511 at September 30, 2019, 1,438 at June 30, 2019 and 1,417 at September 30, 2018.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.10 per share, which is payable on November 22, 2019 to shareholders of record as of November 8, 2019. This dividend represents a 2.9% projected annual yield utilizing the October 28, 2019 closing market price of $13.95.

First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2019 were 14.1%, 11.8%, 10.1% and 10.7%, respectively.  First Commonwealth’s current capital ratios exceed the well-capitalized thresholds of federal bank regulatory agencies.

Conference Call

First Commonwealth will host a quarterly conference call to discuss its financial results for the third quarter 2019 on Wednesday, October 30, 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 # 10135957.  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 147 community banking offices in 28 counties throughout western and central Pennsylvania and throughout Ohio, as well as business banking centers in Pittsburgh, Pennsylvania, and Canton, Cleveland and Columbus, 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

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) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (7)  changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (8) political instability; (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) First Commonwealth’s ability to attract and retain qualified employees; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) the reliability of First Commonwealth’s vendors, internal control systems or information systems; (16) the ability to increase market share and control expenses; (17) impairment of First Commonwealth’s goodwill or other intangible assets; (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 soundness of other financial institutions; (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.

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   For the Nine Months Ended
  September 30,   June 30,   September 30,   September 30,   September 30,
  2019   2019   2018   2019   2018
SUMMARY RESULTS OF OPERATIONS                  
Net interest income (FTE) (1) $ 68,875     $ 67,581     $ 64,311     $ 202,398     $ 188,682  
Provision for credit losses 2,708     2,835     2,961     9,638     11,032  
Noninterest income 22,179     21,906     19,757     62,957     68,108  
Noninterest expense 54,897     52,229     49,530     156,856     145,532  
Net income 26,644     27,280     25,149     78,513     80,500  
Core net income (5) 29,597     27,307     25,168     81,493     81,791  
                   
Earnings per common share (diluted) $ 0.27     $ 0.28     $ 0.25     $ 0.80     $ 0.81  
Core earnings per common share (diluted) (6) $ 0.30     $ 0.28     $ 0.25     $ 0.83     $ 0.82  
                   
KEY FINANCIAL RATIOS                  
                   
Return on average assets 1.31 %   1.37 %   1.30 %   1.32 %   1.44 %
Core return on average assets (7) 1.46 %   1.37 %   1.30 %   1.37 %   1.46 %
Return on average shareholders' equity 10.22 %   10.84 %   10.28 %   10.39 %   11.53 %
Return on average tangible common equity (8) 14.62 %   15.47 %   15.01 %   14.90 %   16.88 %
Core return on average tangible common equity (9) 16.20 %   15.48 %   15.02 %   15.45 %   17.14 %
Core efficiency ratio (2)(10) 55.73 %   56.80 %   57.82 %   56.87 %   57.05 %
Net interest margin (FTE) (1) 3.76 %   3.75 %   3.67 %   3.75 %   3.71 %
                   
Book value per common share $ 10.57     $ 10.37     $ 9.69          
Tangible book value per common share (11) 7.31     7.46     6.82          
Market value per common share 13.47     13.47     16.14          
Cash dividends declared per common share 0.10     0.10     0.09     $ 0.30     $ 0.26  
                   
ASSET QUALITY RATIOS                  
Nonperforming loans as a percent of end-of-period loans (3) 0.58 %   0.59 %   0.70 %        
Nonperforming assets as a percent of total assets (3) 0.46 %   0.47 %   0.57 %        
Net charge-offs as a percent of average loans (annualized) (4) 0.25 %   0.10 %   0.25 %        
Allowance for credit losses as a percent of nonperforming loans (4) 141.64 %   143.62 %   127.35 %        
Allowance for credit losses as a percent of end-of-period loans (4) 0.82 %   0.85 %   0.90 %        
Allowance for credit losses (originated loans and leases) as a percent of total originated loans and leases 0.91 %   0.92 %   0.98 %        
                   
CAPITAL RATIOS                  
Shareholders' equity as a percent of total assets 12.7 %   12.7 %   12.7 %        
Tangible common equity as a percent of tangible assets (12) 9.2 %   9.4 %   9.3 %        
Leverage Ratio 10.1 %   10.4 %   10.5 %        
Risk Based Capital - Tier I 11.8 %   12.2 %   12.6 %        
Risk Based Capital - Total 14.1 %   14.6 %   15.1 %        
Common Equity - Tier I 10.7 %   11.2 %   11.4 %        


FIRST COMMONWEALTH FINANCIAL CORPORATION        
CONSOLIDATED FINANCIAL DATA            
Unaudited            
(dollars in thousands, except per share data)            
  For the Three Months Ended   For the Nine Months Ended
  September 30, June 30, September 30,   September 30, September 30,
  2019 2019 2018   2019 2018
INCOME STATEMENT            
  Interest income $ 82,575   $ 82,057   $ 74,873     $ 244,226   $ 214,312  
  Interest expense 14,130   14,931   11,060     43,169   27,139  
Net Interest Income 68,445   67,126   63,813     201,057   187,173  
  Taxable equivalent adjustment (1) 430   455   498     1,341   1,509  
Net Interest Income  (FTE) 68,875   67,581   64,311     202,398   188,682  
  Provision for credit losses 2,708   2,835   2,961     9,638   11,032  
Net Interest Income after Provision for Credit Losses (FTE) 66,167   64,746   61,350     192,760   177,650  
             
  Net securities gains 9   6       15   8,102  
  Trust income 2,325   1,970   2,206     6,221   6,014  
  Service charges on deposit accounts 4,954   4,593   4,589     13,792   13,418  
  Insurance and retail brokerage commissions 1,912   2,014   1,872     5,887   5,560  
  Income from bank owned life insurance 1,540   1,442   1,579     4,408   5,241  
  Gain on sale of mortgage loans 2,599   2,074   1,542     6,101   4,267  
  Gain on sale of other loans and assets 970   1,777   643     3,831   3,548  
  Card-related interchange income 5,629   5,441   5,044     15,800   14,929  
Derivative mark-to-market (45 ) (17 )     (88 ) 789  
Swap fee income 421   820   528     1,634   1,115  
  Other income 1,865   1,786   1,754     5,356   5,125  
Total Noninterest Income 22,179   21,906   19,757     62,957   68,108  
             
  Salaries and employee benefits 28,674   27,311   26,553     83,205   77,580  
  Net occupancy 4,521   4,441   4,341     13,878   12,932  
  Furniture and equipment 3,904   3,824   3,424     11,396   10,611  
  Data processing 2,825   2,619   2,853     7,988   7,764  
  Pennsylvania shares tax 1,189   1,260   1,248     3,365   3,398  
  Advertising and promotion 1,140   1,231   1,200     3,611   3,185  
  Intangible amortization 865   745   817     2,364   2,430  
  Collection and repossession 649   460   630     1,656   2,060  
  Other professional fees and services 969   1,032   962     2,755   3,000  
  FDIC insurance 35   555   217     1,164   1,590  
  Litigation and operational losses 308   555   435     1,264   811  
  Loss on sale or write-down of assets 152   1,181   181     1,398   875  
  Merger and acquisition related 3,738   34   24     3,772   1,634  
  Other operating expenses 5,928   6,981   6,645     19,040   17,662  
Total Noninterest Expense 54,897   52,229   49,530     156,856   145,532  
             
Income before Income Taxes 33,449   34,423   31,577     98,861   100,226  
  Taxable equivalent adjustment (1) 430   455   498     1,341   1,509  
  Income tax provision 6,375   6,688   5,930     19,007   18,217  
Net Income $ 26,644   $ 27,280   $ 25,149     $ 78,513   $ 80,500  
             
Shares Outstanding at End of Period 98,319,081 98,499,937 100,361,434   98,319,081 100,361,434
Average Shares Outstanding Assuming Dilution 98,547,898 98,600,609 100,490,812   98,615,787 99,197,568
             


FIRST COMMONWEALTH FINANCIAL CORPORATION      
CONSOLIDATED FINANCIAL DATA          
Unaudited          
(dollars in thousands)          
           
  September 30,   June 30,   September 30,
  2019   2019   2018
BALANCE SHEET (Period End)          
Assets          
  Cash and due from banks $ 112,241     $ 95,047     $ 93,162  
  Interest-bearing bank deposits 16,408     1,233     3,022  
  Securities available for sale, at fair value 823,944     895,471     914,085  
  Securities held to maturity, at amortized cost 357,890     373,453     389,621  
  Loans held for sale 20,288     16,036     8,287  
           
  Loans 6,099,561     6,003,059     5,662,782  
  Allowance for credit losses (50,035 )   (51,061 )   (50,746 )
  Net loans 6,049,526     5,951,998     5,612,036  
           
  Goodwill and other intangibles 320,505     286,545     288,028  
  Other assets 451,225     451,071     378,104  
Total Assets $ 8,152,027     $ 8,070,854     $ 7,686,345  
           
Liabilities and Shareholders' Equity          
  Noninterest-bearing demand deposits $ 1,657,507     $ 1,528,307     $ 1,451,284  
           
  Interest-bearing demand deposits 263,312     238,406     181,504  
  Savings deposits 3,867,034     3,530,705     3,453,461  
  Time deposits 890,143     858,547     808,894  
  Total interest-bearing deposits 5,020,489     4,627,658     4,443,859  
           
  Total deposits 6,677,996     6,155,965     5,895,143  
           
  Short-term borrowings 83,735     555,080     587,806  
  Long-term borrowings 234,404     234,623     185,266  
  Total borrowings 318,139     789,703     773,072  
           
  Other liabilities 116,862     103,355     45,199  
  Shareholders' equity 1,039,030     1,021,831     972,931  
Total Liabilities and Shareholders' Equity $ 8,152,027     $ 8,070,854     $ 7,686,345  


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


  For the Three Months Ended   For the Nine Months Ended
  September 30, Yield/ June 30, Yield/ September 30, Yield/   September 30, Yield/ September 30, Yield/
  2019 Rate 2019 Rate 2018 Rate   2019 Rate 2018 Rate
NET INTEREST MARGIN                  
                       
Assets                      
Loans (FTE)(1)(3) $ 6,042,822   4.93 % $ 5,949,332   4.97 % $ 5,657,390   4.66 %   $ 5,935,427   4.95 % $ 5,541,600   4.58 %
Securities and interest-bearing bank deposits (FTE) (1) 1,226,270   2.58 % 1,279,032   2.75 % 1,289,178   2.73 %   1,273,594   2.73 % 1,250,952   2.79 %
Total Interest-Earning Assets (FTE) (1) 7,269,092   4.53 % 7,228,364   4.58 % 6,946,568   4.30 %   7,209,021   4.55 % 6,792,552   4.25 %
Noninterest-earning assets 780,960     758,110     715,461       763,417     702,938    
Total Assets $ 8,050,052     $ 7,986,474     $ 7,662,029       $ 7,972,438     $ 7,495,490    
                       
Liabilities and Shareholders' Equity                      
Interest-bearing demand and savings deposits $ 3,933,091   0.61 % $ 3,777,016   0.59 % $ 3,657,439   0.40 %   $ 3,796,768   0.58 % $ 3,627,308   0.34 %
Time deposits 863,714   1.75 % 870,603   1.72 % 786,912   1.18 %   866,746   1.68 % 718,164   1.03 %
Short-term borrowings 323,041   1.99 % 533,716   2.27 % 569,666   1.81 %   489,562   2.21 % 614,103   1.61 %
Long-term borrowings 234,497   4.51 % 211,087   5.01 % 185,401   5.24 %   210,353   4.96 % 135,368   5.05 %
Total Interest-Bearing Liabilities 5,354,343   1.05 % 5,392,422   1.11 % 5,199,418   0.84 %   5,363,429   1.08 % 5,094,943   0.71 %
Noninterest-bearing deposits 1,560,478     1,497,199     1,447,948       1,507,826     1,426,566    
Other liabilities 101,328     87,429     44,261       90,956     40,492    
Shareholders' equity 1,033,903     1,009,424     970,402       1,010,227     933,489    
Total Noninterest-Bearing Funding Sources 2,695,709     2,594,052     2,462,611       2,609,009     2,400,547    
Total Liabilities and Shareholders' Equity $ 8,050,052     $ 7,986,474     $ 7,662,029       $ 7,972,438     $ 7,495,490    
                       
Net Interest Margin (FTE) (annualized)(1)   3.76 %   3.75 %   3.67 %     3.75 %   3.71 %


FIRST COMMONWEALTH FINANCIAL CORPORATION  
CONSOLIDATED FINANCIAL DATA      
Unaudited      
(dollars in thousands)      
  September 30, June 30, September 30,
  2019 2019 2018
Loan Portfolio Detail      
Commercial Loan Portfolio:      
Commercial, financial, agricultural and other $ 1,210,936   $ 1,236,424   $ 1,116,204  
Commercial real estate 2,124,240   2,118,582   2,136,431  
Real estate construction 334,533   361,028   249,498  
Total Commercial 3,669,709   3,716,034   3,502,133  
       
Consumer Loan Portfolio:      
Closed-end mortgages 1,081,170   1,060,348   1,008,411  
Home equity lines of credit 585,050   519,093   524,927  
Real estate construction 85,748   80,826   48,897  
Total Real Estate - Consumer 1,751,968   1,660,267   1,582,235  
       
Auto loans 553,617   515,569   476,536  
Direct installment 46,704   40,568   33,415  
Personal lines of credit 70,441   63,155   59,927  
Student loans 7,122   7,466   8,536  
Total Other Consumer 677,884   626,758   578,414  
Total Consumer Portfolio 2,429,852   2,287,025   2,160,649  
Total Portfolio Loans 6,099,561   6,003,059   5,662,782  
Loans held for sale 20,288   16,036   8,287  
Total Loans $ 6,119,849   $ 6,019,095   $ 5,671,069  
       
       
  September 30, June 30, September 30,
  2019 2019 2018
ASSET QUALITY DETAIL      
Nonperforming Loans:      
Loans on nonaccrual basis $ 16,227   $ 15,665   $ 17,921  
Troubled debt restructured loans on nonaccrual basis 11,074   10,914   13,876  
Troubled debt restructured loans on accrual basis 8,024   8,975   8,052  
  Total Nonperforming Loans $ 35,325   $ 35,554   $ 39,849  
Other real estate owned ("OREO") 1,622   1,884   3,874  
Repossessions ("Repos") 486   319   135  
  Total Nonperforming Assets $ 37,433   $ 37,757   $ 43,858  
Loans past due in excess of 90 days and still accruing 2,054   2,656   1,647  
Classified loans 50,719   49,975   50,079  
Criticized loans 128,691   117,976   141,591  
       
Nonperforming assets as a percentage of total loans, plus OREO and Repos 0.61 % 0.63 % 0.77 %
Allowance for credit losses $ 50,035   $ 51,061   $ 50,746  
       


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


  For the Three Months Ended   For the Nine Months Ended
  September 30, June 30, September 30,   September 30, September 30,
  2019 2019 2018   2019 2018
Net Charge-offs (Recoveries):            
  Commercial, financial, agricultural and other $ 729   $ 301   $ 2,516     $ 1,952   $ 2,834  
  Real estate construction (74 ) (42 ) (92 )   (158 ) (99 )
  Commercial real estate 1,301   (38 ) (36 )   1,521   2,288  
  Residential real estate 366   (15 ) 226     427   709  
  Loans to individuals 1,412   1,221   915     3,625   2,852  
Net Charge-offs $ 3,734   $ 1,427   $ 3,529     $ 7,367   $ 8,584  
             
Net charge-offs as a percentage of average loans outstanding (annualized) (4) 0.25 % 0.10 % 0.25 %   0.17 % 0.21 %
Provision for credit losses as a percentage of net charge-offs 72.52 % 198.67 % 83.90 %   130.83 % 128.52 %
Provision for credit losses $ 2,708   $ 2,835   $ 2,961     $ 9,638   $ 11,032  


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   For the Nine Months Ended
  September 30, June 30, September 30,   September 30, September 30,
  2019 2019 2018   2019 2018
             
Net Income $ 26,644   $ 27,280   $ 25,149     $ 78,513   $ 80,500  
Intangible amortization 865   745   817     2,364   2,430  
Tax benefit of amortization of intangibles (182 ) (156 ) (172 )   (496 ) (510 )
Net Income, adjusted for tax affected amortization of intangibles 27,327   27,869   25,794     80,381   82,420  
             
Average Tangible Equity:            
  Total shareholders' equity $ 1,033,903   $ 1,009,424   $ 970,402     $ 1,010,227   $ 933,489  
  Less: intangible assets 292,529   286,781   288,570     288,749   280,485  
  Tangible Equity 741,374   722,643   681,832     721,478   653,004  
  Less: preferred stock            
  Tangible Common Equity $ 741,374   $ 722,643   $ 681,832     $ 721,478   $ 653,004  
             
(8)Return on Average Tangible Common Equity 14.62 % 15.47 % 15.01 %   14.90 % 16.88 %
             


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)


DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES          
     
  For the Three Months Ended   For the Nine Months Ended
  September 30, June 30, September 30,   September 30, September 30,
  2019 2019 2018   2019 2018
             
Core Net Income:            
Total Net Income $ 26,644   $ 27,280   $ 25,149     $ 78,513   $ 80,500  
Merger & acquisition related expenses 3,738   34   24     3,772   1,634  
Tax benefit of merger & acquisition related expenses (785 ) (7 ) (5 )   (792 ) (343 )
(5) Core net income 29,597   27,307   25,168     81,493   81,791  
Average Shares Outstanding Assuming Dilution 98,547,898 98,600,609 100,490,812   98,615,787 99,197,568
(6) Core Earnings per common share (diluted) $ 0.30   $ 0.28   $ 0.25     $ 0.83   $ 0.82  
             
Intangible amortization 865   745   817     2,364   2,430  
Tax benefit of amortization of intangibles (182 ) (156 ) (172 )   (496 ) (510 )
Core Net Income, adjusted for tax affected amortization of intangibles $ 30,280   $ 27,896   $ 25,813     $ 83,361   $ 83,711  
             
(9) Core Return on Average Tangible Common Equity 16.20 % 15.48 % 15.02 %   15.45 % 17.14 %
             
             
  For the Three Months Ended   For the Nine Months Ended
  September 30, June 30, September 30,   September 30, September 30,
  2019 2019 2018   2019 2018
Core Return on Average Assets:            
Total Net Income $ 26,644   $ 27,280   $ 25,149     $ 78,513   $ 80,500  
Total Average Assets 8,050,052   7,986,474   7,662,029     7,972,438   7,495,490  
Return on Average Assets 1.31 % 1.37 % 1.30 %   1.32 % 1.44 %
             
Core Net Income (5) $ 29,597   $ 27,307   $ 25,168     $ 81,493   $ 81,791  
Total Average Assets 8,050,052   7,986,474   7,662,029     7,972,438   7,495,490  
(7) Core Return on Average Assets 1.46 % 1.37 % 1.30 %   1.37 % 1.46 %


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


DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES          
             
  For the Three Months Ended   For the Nine Months Ended
  September 30, June 30, September 30,   September 30, September 30,
  2019 2019 2018   2019 2018
Core Efficiency Ratio:            
Total Noninterest Expense $ 54,897   $ 52,229   $ 49,530     $ 156,856   $ 145,532  
Adjustments to Noninterest Expense:            
Unfunded commitment reserve (466 ) 612   82     (235 ) 41  
Intangible amortization 865   745   817     2,364   2,430  
Merger and acquisition related 3,738   34   24     3,772   1,634  
Noninterest Expense - Core $ 50,760   $ 50,838   $ 48,607     $ 150,955   $ 141,427  
             
Net interest income, fully tax equivalent $ 68,875   $ 67,581   $ 64,311     $ 202,398   $ 188,682  
Total noninterest income 22,179   21,906   19,757     62,957   68,108  
Net securities gains (9 ) (6 )     (15 ) (8,102 )
Total Revenue $ 91,045   $ 89,481   $ 84,068     $ 265,340   $ 248,688  
             
Adjustments to Revenue:            
Derivative mark-to-market (45 ) (17 )     (88 ) 789  
Total Revenue - Core $ 91,090   $ 89,498   $ 84,068     $ 265,428   $ 247,899  
             
(10)Core Efficiency Ratio 55.73 % 56.80 % 57.82 %   56.87 % 57.05 %
             
             
  September 30, June 30, September 30,      
  2019 2019 2018      
Tangible Equity:            
  Total shareholders' equity $ 1,039,030   $ 1,021,831   $ 972,931        
  Less: intangible assets 320,505   286,545   288,028        
  Tangible Equity 718,525   735,286   684,903        
  Less: preferred stock            
  Tangible Common Equity $ 718,525   $ 735,286   $ 684,903        
             
Tangible Assets:            
  Total assets $ 8,152,027   $ 8,070,854   $ 7,686,345        
  Less: intangible assets 320,505   286,545   288,028        
  Tangible Assets $ 7,831,522   $ 7,784,309   $ 7,398,317        
             
(12)Tangible Common Equity as a percentage of Tangible Assets 9.17 % 9.45 % 9.26 %      
             
  Shares Outstanding at End of Period 98,319,081   98,499,937   100,361,434        
(11)Tangible Book Value Per Common Share $ 7.31   $ 7.46   $ 6.82        
             
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.