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First Commonwealth Financial Corp (FCF) Q4 2018 Earnings Conference Call Transcript

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First Commonwealth Financial Corp  (NYSE: FCF)
Q4 2018 Earnings Conference Call
Jan. 30, 2019, 2:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the First Commonwealth Bank's Fourth Quarter Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Mr. Ryan Thomas, Vice President of Finance and Investor Relations. Please go ahead.

Ryan M. Thomas -- Vice President of Finance and Investor Relations

Thank you, Shawn. As a reminder, a copy of today's earnings release can be accessed by logging on to fcbanking.com and selecting the Investor Relations link at the top of the page. We have also included a slide presentation on our Investor Relations website with supplemental financial information that maybe referenced throughout today's call.

With me in the room today are Mike Price, President and CEO of First Commonwealth Financial Corporation; and Jim Reske, Executive Vice President and Chief Financial Officer. After brief comments from management, we will open the phone call to your questions. For that portion of the call, we will be joined by Jane Grebenc, Chief Revenue Officer and President of First Commonwealth Bank; Brian Karrip, our Chief Credit Officer; and Mark Lopushansky, our Chief Treasury Officer.

Before we begin, I would like to caution listeners that this conference call will contain forward-looking statements. Please refer to our forward-looking statements disclaimer on page 2 of the slide presentation for a description of risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements.

Today's call will also include non-GAAP financial measures. Non-GAAP financial measures should be viewed in addition to and not as an alternative for our reported results prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of GAAP to non-GAAP operating measures can be found on page 13 of today's slide presentation.

Now, I would like to turn the call over to Mike Price.

Thomas Michael Price -- President and Chief Executive Officer

Thanks, Ryan, and good afternoon, everyone. In the fourth quarter, core earnings per share of $0.27 reflected margin expansion of 3 basis points to 3.70%. Our loan growth was strong at $115 million or 8.1% annualized. Core return on assets improved to 1.39% in the fourth quarter. The core efficiency ratio of 57.45% improved as well, but was somewhat higher than our sub-55% target. Improved credit quality led to provision expense of only $1.5 million.

Looking back on 2018, I wanted to begin by highlighting several themes. First, 2018 represents First Commonwealth's sixth consecutive year of double-digit core earnings-per-share growth. In 2018, even adjusting for the change in the tax rate and security gains, core earnings per share was up double-digits again year-over-year. Second, our deposit franchise continues to be a strength of the Bank and provides stable low cost funding. Additionally, as interest rates increased over the last 12 months, our deposit franchise proved resilient as a commercially anchored base, loyal consumers and disciplined pricing kept our deposit betas under control.

Third, loans grew 6.7%, including the Cincinnati acquisition in 2018. But there is a little more to the story. Simply put, our portfolio has become more granular and our key credit quality metrics are at the best levels in over a decade. Fourth, our non-interest income was up substantially year-over-year. Our fee businesses finished the year on a strong note to include SBA, mortgage and wealth. Fifth, on the heels of four successful Ohio acquisitions, we've built a capable commercial banking franchise, an engine for future growth in each market. We are seeing strong traction in Northern Ohio, Columbus and Cincinnati in both loans and deposits.

Building on several of these 2018 themes with a little bit more detail, for the full year of 2018, net income of $107.5 million was a record for First Commonwealth and produced core earnings per share for the year of $1.10 and a core ROA of 1.44% and a core efficiency ratio of 57.15%. Loan growth of 6.7% occurred despite significant larger loan payoffs, loan growth was balanced in 2018 between commercial and consumer loans.

I was combing through our 2019 forecast prior to the call and the largest single growth category in 2019 is C&I lending. But also mentioned the provision expense for loan losses totaled $12.5 million in 2018, as key measures of credit quality, including delinquency, non-performing loans and classified loans were among the lowest year-end figures at the Bank in over a decade. For example, over the four quarters of 2018, the ratio of non-performing loans to total loans declined steadily from 1.06% to 0.81% to 0.70%. And finally to 55 basis points at the end of the fourth quarter. Similarly, our classified loans fell from 10.89% of risk-based capital at the end of the first quarter of 2018 to 4.49% at year-end.

Just a few other noteworthy items for 2018. Yesterday, we announced 11.1% increase in the dividend from $0.09 to $0.10 per share. In May, First Commonwealth Bank issued 10-year and 15-year subordinated debentures notes each totaling $50 million, and the Bank received an investment grade rating of -- from S&P during that process. During the fourth quarter, we also announced and completed a $25 million stock buyback. Lastly, our mobile banking, bill pay and online utilization at the end of the 2018 were all above the 75th percentile of our peers in penetration.

In summary, we're pleased with the Company's progress to a high performing Bank and are excited about our prospect in the years to come. Catalyst for earnings growth in recent years have included four well-executed acquisitions, aggressive cost takeout and subsequent reinvestment in talent, digital and new platforms for growth and also the build out of a strong independent credit and enterprise risk platforms. We believe First Commonwealth is well positioned to fulfill our mission and to grow and prosper as an organization, and we're even more excited about the next five years than the last five years.

And with that, I'll turn it over to Jim.

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

Thanks, Mike. Fourth quarter financial results were favorable, but fairly uneventful. I do, however, have a few minor technical things to note. First, as Mike mentioned, the margin expanded by 3 basis points, consistent with our previous guidance of gradual quarter-over-quarter margin expansion. Non-maturity deposit betas remained in control at 20% in the fourth quarter and 25% for the full year. And loan replacement yields were positive across the board for an effective loan beta of 60%.

Purchase accounting contributed 5 basis points to the net interest margin in the fourth quarter, unchanged from the prior quarter. Second, we note that non-interest income, excluding securities gains, was up appreciably year-over-year. There was a change in revenue recognition accounting rules that affected the whole industry in 2018. That, in our case, suppressed non-interest income by approximately $3.4 million in 2018, $2.5 million of which hit the insurance and retail brokerage line.

Now, the accounting change suppresses non-interest expense by the same amount, and so it's a wash to the bottom line, but it does affect year-over-year comparisons of fee income. After adjusting for this accounting rule change and for security gains and even for gains on the sale from non-performing loans in the second and fourth quarters, non-interest income was up by $6.7 million over last year as the fee businesses contributed significantly in 2018.

Third, our fourth quarter results reflect a $1.7 million release of specific reserves related to the successful resolution of the C&I credit in early January. I would note that because the C&I payoff came in the first few days of January, we were able to true-up the reserve at 12/31 and release $1.7 million in excess specific reserves in the fourth quarter that have been provided for in previous quarters. But the loan remained on the books at 12/31 with a balance of approximately $6 million. That loan balance is, therefore, included in the 12/31 non-performing loan totals in asset quality ratios. The full balance will be deducted from non-performing and non-accrual loan balances and reserve coverage ratios in the first quarter.

Finally, hospitalization expense was up by $1.3 million from last quarter. Our hospitalization expense tends to run about $2 million per quarter, and it was $3.4 million in the fourth quarter. We often see a spike in hospitalization expense in the fourth quarter after deductibles are met and on top of that, we had some additional shock claims in the fourth quarter.

As is our custom in the first call of the year, I'd like to take a moment to provide a little bit of guidance for you as to the financial trends we expect to see for the year ahead. First and most importantly, in terms of the net interest margin, we reiterate our guidance that we expect to see slow and steady quarterly improvement. For some time now, the Bank has been markedly asset-sensitive as we position the balance sheet to take advantage of a rising rate environment.

Our interest rate risk position for 2019, however, leans more toward neutrality or mild asset sensitivity rather than strong asset sensitivity. The reason for this is a mortgage platform that we launched several years ago, which is now up to speed and generating longer-term assets, about half of which are sold and about half of which remain in our portfolio.

Not only does this create a barbell counterweight to our short-term LIBOR-based commercial variable loans, but it also adds an incremental layer to the balance sheet that is very liability sensitive, which is enough to move the entire balance sheet to neutrality. In fact, when we were preparing our budgets toward the end of 2018, our third party rate forecast was still calling for full rate hikes, and we noticed that our projected financial results were almost completely unchanged where we ran our models with no hikes at all. For the record, our third party rate forecast now calls for two hikes in the second half of 2019, which seems to us to be much more reasonable.

Beyond the margin, I'll quickly mention a few other items that you may find useful. We continue to expect loan growth in the mid-single digits and are optimistic that a slowdown in payoffs compared to 2018 combined with some measure of mortgage retention will contribute to our ability to achieve that growth. We expect deposit growth to be commensurate with loan growth, consistent with our recent experience.

In terms of deposit betas, we are forecasting increased deposit betas compared to our recent experience, and that assumption contributes to our asset neutrality. We have been fortunate to hold the line of beta to this point and at some point in the cycle, it's reasonable to think that the pace of betas will pickup if rates continue to rise. Of course, if rates don't rise at all, beta assumptions will be an irrelevant concept, but we believe that market competition for deposits is likely to persist for some time, even without rate increases, putting pressure on the margin that could blunt the impact of positive loan replacement yield.

Operating expense, that is non-interest expense less intangible amortization, should be in line with the fourth quarter at about $49 million to $50 million per quarter. Increased revenue from a slowly expanding margins should bring the efficiency ratio down below our 55% target by the end of 2019. Fee income is expected to grow modestly at approximately 2% to 3% over adjusted 2018 levels. Mortgage gain on sale is expected to increase only modestly as we continue to retain approximately half of our mortgage production on balance sheet in 2019.

We expect SBA gain on sale to continue to build momentum, while swap income is actually expected to decrease slightly as fewer customers take advantage of the opportunity to lock in fixed rates in a higher rate environment. We expect credit expense to be in line with long-term averages, as reduced expense reflecting our improving asset quality is offset by provision expense to loan growth. And finally, our effective tax rate stands at 19.3%.

And with that, we'll take any questions you may have.

Questions and Answers:

Operator

We will now begin the question-and-answer session. (Operator Instructions) Our first question comes from Frank Schiraldi with Sandler O'Neill. Please go ahead.

Frank Schiraldi -- Sandler O'Neill -- Analyst

Good afternoon.

Thomas Michael Price -- President and Chief Executive Officer

Good afternoon.

Frank Schiraldi -- Sandler O'Neill -- Analyst

Just a couple of questions, if I could. Just first, Jim, you mentioned the margin, you talked about how many rate hikes are baked into it, but it sounds like it doesn't really matter all that much how many we get. So your guidance for slow and steady quarterly improvement, is that still, would you say along the lines of 3 bps a quarter?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

Yes, that's about right, Frank. 2 bps to 3 bps a quarter seems about right to us. In any given quarter, it's hard to predict it with perfection, but that's what we expect.

Frank Schiraldi -- Sandler O'Neill -- Analyst

And is that core to the purchase accounting offsetting any of that?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

So the purchase -- not much. The purchase accounting, like I said, was 5 basis points last quarter, it's 5 basis points this quarter. I did actually look at the exact number this quarter, it declined by a grand total of $68,000 quarter-over-quarter on a bank that has several hundred million dollars of spread income. So it has almost no effect -- the fade out of that number has almost no effect.

Frank Schiraldi -- Sandler O'Neill -- Analyst

So on a linked-quarter basis, you expect the variance there will be pretty small, it sounds like?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

Yes. I think it ends up being -- it rounds to less than 1 basis point of margin per quarter of NIM fade out, if that helps.

Frank Schiraldi -- Sandler O'Neill -- Analyst

Right. And then just lastly, just obviously nice to see the dividend increase and you completed, it sounds like from Mike's comments, the buyback that you had just put in place. So how do you think about buybacks from here? How do you think about additional authorizations and the stock level here for buybacks?

Thomas Michael Price -- President and Chief Executive Officer

I think we'd like to be in the market with a buyback, to be opportunistic from time to time, but our first preference to deploy capital is organic growth and then other, as we've demonstrated in the past, smaller accretive opportunities that are both strategic and accretive in the first year of the acquisition.

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

That's exactly right. We see smooth, steady increases in the dividends and returning capital to shareholders in the form of buybacks to be an effective way to manage capital, but as Mike mentioned, our first preference is always organic growth or acquisitions. We just can't -- we plan the acquisitions, they come and they're available.

Thomas Michael Price -- President and Chief Executive Officer

And our batting average on acquisitions is -- we probably have looked at 25 to 30 things Jim to do before. So we're pretty picky.

Frank Schiraldi -- Sandler O'Neill -- Analyst

Got you. I mean, you've certainly got very -- pretty aggressive on the buyback in the fourth quarter. So is it fair to say if -- well, if prices got back down to where we saw in December that you would get again more aggressive on the buyback?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

No, I don't know. First of all, we don't have any buyback in place and certainly nothing to announce in that, but speaking hypothetically about buybacks and our philosophy in the future, the fourth quarter was a real opportunity given the reaction to the third quarter earnings release. So we saw that as a real buying opportunity. And of course, that helps our -- to probably getting the shares out of circulation, helps our share count and our earnings per share for both the fourth quarter and the full year 2019.

I think we probably will be a little less aggressive on future buybacks if we go down that road in the future at some point. It's a little bit like you're saying, Frank, being really having some dry powder at some point to be able to buy on stock dips. So if the price were to go down from here, you would want some kind of authorization so you could buy on that, but again, speaking purely hypothetically.

I would note, by the way, just for the record are the, price at which we did the repurchase in the fourth quarter was $13.36 average price, and I think that's actually a little less than we're trading today.

Frank Schiraldi -- Sandler O'Neill -- Analyst

Okay. Got you. Thank you.

Thomas Michael Price -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Steve Moss with B. Riley FBR. Please go ahead.

Zach Weiss -- B. Riley FBR -- Analyst

Hi. Good afternoon.

Thomas Michael Price -- President and Chief Executive Officer

Good afternoon, Steve.

Zach Weiss -- B. Riley FBR -- Analyst

This is Zach Weiss from Steve's team. Thank you for taking the question. I guess first one on the loan to deposit ratio, just curious how high you all are willing to take that if we end up getting loan growth in excess of deposit growth? And would funding for that come from securities or wholesale funding in your mind? Thanks.

Thomas Michael Price -- President and Chief Executive Officer

We look to keep pace with loan growth through deposit growth. We haven't been extraordinarily aggressive with CDs and time deposits. So we have that bid in our hip pocket. We -- our time portfolio is probably undersized relative to our peers. We have a nice commercial base of deposits and that's really where we're focused on growing.

Zach Weiss -- B. Riley FBR -- Analyst

Okay. Great. Thank you. And then on credit, I may have missed it when you touched on this, but how should we expect the loan loss reserve to trend from here in 2019 and maybe the incremental credit cost from the provisioning on if we're going to get outsized C&I growth in the upcoming year?

Thomas Michael Price -- President and Chief Executive Officer

Probably trend a little higher. And I mean, it dipped somewhat, but as Jim mentioned, we just -- we had some cleanup in credit in the fourth quarter. And our numbers, like our reserve coverage and other lead indicators look as good as they've looked in a long time.

Zach Weiss -- B. Riley FBR -- Analyst

Okay. Thank you very much.

Operator

Our next question comes from Russell Gunther with DA Davidson. Please go ahead.

Russell Gunther -- D.A. Davidson -- Analyst

Hey, good afternoon, guys.

Thomas Michael Price -- President and Chief Executive Officer

Good afternoon.

Russell Gunther -- D.A. Davidson -- Analyst

I wanted to circle back to the margin discussion. I appreciate your thoughts on the outlook for '19 and hear you loud and clear on some of the mortgage retention. But as you think of that mid-single digit growth, could you share with us sort of your thoughts on the mix of that growth, be it C&I, CRE throughout the portfolio? Thank you.

Thomas Michael Price -- President and Chief Executive Officer

Yes. As we look at our plan that we put together and just presented to the Board a month or so ago, probably the largest proportion of that growth, mid-single digit, is on the commercial side and the largest proportion of that is C&I lending. And that's really across the board. It's everything from a dealer floor plan to SBA. This smaller end of C&I up through, what we call, middle market. So that's our focus and that's really been our focus as we build commercial franchise and kind of a chassis on top of the acquisition opportunities in Ohio. And we also -- on the other side of the ball, on the retail side, we'll do -- I think we'll do a nice job again in mortgage, and our branches have really made terrific progress with their loan productivity and what used to be running away from us in a little negative, of it kind of right at the ship there and it's neutral to growing slightly. So that's pretty much the whole gamut.

Russell Gunther -- D.A. Davidson -- Analyst

I appreciate that. And then on the fee side, the 2% to 3% growth off of adjusted, I saw that the SBA was up a little bit this quarter. If you could just share with us kind of what that dollar amount was in 4Q '18 and sort of what you're expecting within that vertical from a fee perspective?

Thomas Michael Price -- President and Chief Executive Officer

Yes. I'm looking at the origination number, I'm not looking at the income number, so forgive me.

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

We may have to get back to you on the question. I'm not sure I have the actual breakout of exact dollar amount.

Russell Gunther -- D.A. Davidson -- Analyst

Okay, no worries. And then just last one for me, the expense side of things. I want to make sure I heard you. The $49 million to $50 million a quarter excludes intangible amortization expense. Correct?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

That's correct.

Russell Gunther -- D.A. Davidson -- Analyst

Okay. Got you. And then the 55% core efficiency target is something you'd expect to reach by the end of '19 or would we end the full -- would we be able to post sort of 2019 full year 55%, just how should I think about that?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

The former, not the latter. Yeah, by the end (multiple speakers) yeah, we never be clear. By the end, not (inaudible).

Russell Gunther -- D.A. Davidson -- Analyst

Appreciate it, guys. That's it for me.

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

Thank you.

Operator

Our next question comes from Collyn Gilbert with KBW. Please go ahead.

Collyn Gilbert -- KBW -- Analyst

Thanks. Good afternoon, guys. Mike, if we could just talk a little bit more about the favorable C&I growth that you're seeing and the optimism that you have surrounding that segment, how much of your anticipated growth in '19 is from current customers coming back into the fold or new customers? I know you offered that Ohio, you're seeing some good opportunities, but are there any other geographies too that are driving some of the favorable results that you're expecting this year?

Thomas Michael Price -- President and Chief Executive Officer

We're just seeing pretty good pipelines and growth that built throughout the year in Ohio. We also saw a nice growth, unusually, in our community PA markets, particularly on the smaller end of the C&I portfolio. And just -- this is more tactical, I think Jane Grebenc and the team are just doing a lot of things like blitzes, calling, it's fairly tactical, I think, in terms of how we're getting results and winning on both the deposit and the loan side. I don't know if that's helpful, Collyn?

Collyn Gilbert -- KBW -- Analyst

It is helpful. And then also to -- I don't know, Jim, if you have a dollar amount of commercial loan paydowns that you guys saw throughout '18 or even in the fourth quarter?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

Yes. I don't think I would disclose the exact guideline, but I can tell you, for commercial loans with a little bit of a crescendo in the third quarter, then came down in the fourth quarter. And I'll rattle off these numbers for you. This is -- the quarterly progression in commercial loan paydown is going quarter-to-quarter, $241 million in the first quarter, $190 million in the second quarter, $311 million in third quarter, and then now to $262 million in the fourth quarter. So slowdown on pay -- and commercial loan payoffs really did help enhance our loan growth rate in the fourth quarter.

Thomas Michael Price -- President and Chief Executive Officer

Yes. You also saw some construction loans and some draws on existing loans that really helped and again, the Ohio markets kick in.

Collyn Gilbert -- KBW -- Analyst

Okay. Okay, that's helpful. And then, Mike, could you just give us your thoughts on the M&A environment. I mean, you guys are obviously been very active there and how you sort of see the opportunities unfolding as it relates to M&A in '19?

Thomas Michael Price -- President and Chief Executive Officer

We have -- we did not see a lot of add backs in 2018. It's really that simple. Just a few things, we saw some kind of national opportunities which were not our cup of tea. Ideally, it would be in our geographies and perhaps have an overlap and a little bit of a takeout or a slight expansion in the contiguous market, which would be natural for us, but other than Foundation Bank in Cincinnati in the first half of the year, there didn't seem to be much out there in our backyard. Jim, anything you want to add?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

No, I think that's exactly right. It's a continuation of our previously iterated M&A strategy.

Collyn Gilbert -- KBW -- Analyst

Okay. So it will be quite -- I mean, your expectation is M&A will be -- you're anticipating it to be fairly quiet going forward?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

It's hard to anticipate, because it's opportunistic. We're looking for opportunities within our markets for overlap acquisitions, the depositories where we could take out costs, growing in continuous -- contiguous circles around our current markets without reaching too far geographically. That's the consistent message now for a while. It just depends when those banks come up for sale.

Thomas Michael Price -- President and Chief Executive Officer

I mean, to go out and make a call on a customer, none of us need to get on a plane. We can drive and get back the same day. And we know the markets. And so that's -- for better or worse, that's been a focus of ours.

Collyn Gilbert -- KBW -- Analyst

Okay. Okay, great. And then just one last question. Have you guys seen any impact or do you anticipate any impact in the first quarter from the government shutdown?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

A little bit. Very minor, we have talked about that with some of our customers through our branch network trying to give forbearance really to few individuals that might have been affected by this shut down. But it's all anecdotal, we want to be a kind of bank, which respond to those customers, it's not enough to affect financial results.

Thomas Michael Price -- President and Chief Executive Officer

I don't believe so. I think with the marketing function and the commercial function really set up a nice hotline, and we probably had several dozen calls where we were handling consumers and businesses one by one that were impacted by the shutdown. And so we were very responsive. I was really proud of the team. We kind of watched SBA lending closely and as well because that would obviously be more impacted.

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

Right. Some of that affects our ability to sell the SBA loans, the guaranteed portion of the SBA loans during shut down.

Collyn Gilbert -- KBW -- Analyst

Okay.

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

Speaking of SBA, by the way, I know that's why returned to that question from the earlier call about the amount of fee income from SBA loans, there was about $0.5 million in the fourth quarter. And -- so that's from zero year-ago quarter, so it's expected to grow from there.

Collyn Gilbert -- KBW -- Analyst

Okay, great. Thanks, guys.

Thomas Michael Price -- President and Chief Executive Officer

Thanks, Collyn.

Operator

(Operator Instructions) Our next question comes from Daniel Cardenas with Raymond James. Please go ahead.

Daniel Cardenas -- Raymond James & Associates -- Analyst

Thanks, guys, and congrats on a nice quarter. Really most of my questions have been asked and answered, but just kind of want to get a sense. I appreciate the color on the non-performers and the cleanup that we can potentially expect here in Q1. But can you give us maybe a little bit of color as to what you're seeing on the watch list, are there any trends out there that are beginning to concern you? I mean credit metrics have been very good for a while, and we've seen some improvement throughout the course of '18 for you guys. But is there any sense that maybe we're hitting the tipping point here in your operating markets?

Thomas Michael Price -- President and Chief Executive Officer

I can't resist. We have our Chief Credit Officer here. Brian, any comments from you?

Brian G. Karrip -- Executive Vice President and Chief Credit Officer

Thanks, Mike. We continue to track, monitor and manage credit risk within the Bank. Our watch list is actually down quarter-to-quarter, and we continue to think our portfolio is well behaved and well marked.

Daniel Cardenas -- Raymond James & Associates -- Analyst

Okay, great. And then on the buyback, was that done toward the end of the quarter?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

No, it's actually done shortly after we came out of the blackout after the third quarter earnings release. So I think by rule, we have to be out of the market for two trading days after the earnings release, and we were given a price drop. We were in the market on the third day (multiple speakers). So it was executed basically in the middle of the quarter.

Daniel Cardenas -- Raymond James & Associates -- Analyst

Okay. So, then as I think about a weighted average share count for you guys, what would be a good number to use?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

We might have that, weighted average share count for the fourth quarter.

Daniel Cardenas -- Raymond James & Associates -- Analyst

Would that fourth quarter number be good for '19 I guess is what I'm asking?

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

Oh. Yes. That would, yes.

Daniel Cardenas -- Raymond James & Associates -- Analyst

Okay, great. All right. Thanks, guys.

Thomas Michael Price -- President and Chief Executive Officer

Thank you.

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

Let me just go back and clarify that.

Thomas Michael Price -- President and Chief Executive Officer

Sure.

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

They don't want to use the fourth quarter average into that. But by the end of the period, you could just carry the end of the period because there are no issuances or buybacks in the 2019 so just stick with the fourth quarter year-end share count number for 2019.

Daniel Cardenas -- Raymond James & Associates -- Analyst

All right, perfect. Thank you.

Operator

There are no further questions in the audio queue. This concludes our question-and-answer session. I would now like to turn the conference back over to Mr. Mike Price, President and CEO.

Thomas Michael Price -- President and Chief Executive Officer

We just appreciate your interest in our Company, and Jim and I and others are a phone call away if we can be helpful on questions about our performance. Thank you very much.

Operator

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.

Duration: 32 minutes

Call participants:

Ryan M. Thomas -- Vice President of Finance and Investor Relations

Thomas Michael Price -- President and Chief Executive Officer

James R. Reske -- Executive Vice President, Chief Financial Officer and Treasurer

Frank Schiraldi -- Sandler O'Neill -- Analyst

Zach Weiss -- B. Riley FBR -- Analyst

Russell Gunther -- D.A. Davidson -- Analyst

Collyn Gilbert -- KBW -- Analyst

Daniel Cardenas -- Raymond James & Associates -- Analyst

Brian G. Karrip -- Executive Vice President and Chief Credit Officer

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