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First Commonwealth Announces Third Quarter 2021 Earnings; Declares Quarterly Dividend and Authorization of a $25 Million Share Repurchase Program

INDIANA, Pa., Oct. 26, 2021 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the third quarter of 2021.

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,

2021

2021

2020

2021

2020

Reported Results

Net income

$34,092

$29,619

$19,186

$103,481

$47,764

Diluted earnings per share

$0.36

$0.31

$0.20

$1.08

$0.49

Return on average assets

1.42

%

1.26

%

0.81

%

1.48

%

0.71

%

Return on average equity

12.14

%

10.82

%

7.01

%

12.62

%

5.92

%

Operating Results (non-GAAP)(1)

Core net income

$34,131

$29,777

$23,889

$103,764

$52,795

Core diluted earnings per share

$0.36

$0.31

$0.24

$1.08

$0.54

Core pre-tax pre-provision net revenue

$42,913

$42,943

$40,844

$130,903

$113,727

Provision expense

$330

$5,413

$11,212

$1,353

$49,038

Net charge-offs

$2,277

$3,927

$4,346

$9,474

$12,368

Reserve build/(release)(2)

($2,853

)

$275

$6,866

($7,124

)

$36,670

Core return on average assets (ROAA)

1.43

%

1.26

%

1.01

%

1.48

%

0.79

%

Core pre-tax pre-provision ROAA

1.79

%

1.82

%

1.73

%

1.87

%

1.70

%

Return on average tangible common equity

17.28

%

15.54

%

10.29

%

18.08

%

8.80

%

Core return on average tangible common equity

17.30

%

15.62

%

12.72

%

18.13

%

9.69

%

Core efficiency ratio

55.27

%

53.21

%

54.31

%

53.90

%

56.37

%

Net interest margin (FTE)

3.23

%

3.17

%

3.11

%

3.27

%

3.34

%

(1) Core operating results are a non-GAAP measure used by management to measure performance in operating the business that management believes enhances investors' ability to better understand the underlying business performance and trends related to core business activities. A full reconciliation of non-GAAP financial measures can be found at the end of the financial statements which accompany this release.
(2) Reserve build/(release) represents the net change in the Company's allowance for credit losses (ACL) from the prior period.

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Third Quarter 2021 Highlights

  • Net income of $34.1 million and diluted earnings per share totaled $0.36, an increase of $4.5 million, or $0.05 from the previous quarter and an increase of $14.9 million, or $0.16 per share from the third quarter of 2020

  • Core pre-tax pre-provision net revenue (PPNR)(1) totaled $42.9 million, which was unchanged from the prior quarter but was an increase of $2.1 million from the third quarter of 2020

  • Operating leverage was positive during the first nine months of 2021

    • Core revenue(1) grew $16.6 million, or 6.1%, from the prior year

    • Core noninterest expense(1) increased $2.2 million, or 1.4%, from the prior year

  • Portfolio loans (excluding Paycheck Protection Program (PPP) loans) increased $132.3 million, or 8.2% annualized from the previous quarter, driven by strong consumer loan growth and improved commercial loan production

    • Year-to-date loan growth (excluding PPP loans) was $298.1 million, or 6.3% annualized

    • Average loans (excluding PPP loans) increased $196.7 million, or 12.4% annualized, from the previous quarter

  • Total PPP loans decreased $140.3 million from the previous quarter resulting in a total PPP loan balance at September 30, 2021 of $152.1 million

  • Net interest income (FTE) of $70.9 million increased $2.4 million from the previous quarter due primarily to a $196.7 million increase in average loans (excluding PPP loans)

  • Noninterest income of $27.2 million (excluding net security gains) increased $1.2 million from the previous quarter and increased $0.5 million from the third quarter of 2020

  • Noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses) of $55.0 million increased $3.7 million from the previous quarter and increased $2.6 million from the third quarter of 2020

  • Average deposits increased $41.8 million, or 2.1% annualized compared to the prior quarter, despite $41.4 million in intentional time deposit runoff

    • End of period deposits grew $51.5 million, or 2.6% annualized, from the previous quarter

    • Average noninterest-bearing deposits grew $42.4 million, or 6.5% annualized, compared to the prior quarter

  • Tangible book value per share grew 7.8% annualized compared to the prior quarter and 7.6% year-over-year

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

  • The Bank was recently named the #1 Small Business Association (SBA) lender in the SBA’s designated Pittsburgh District for the fiscal year ending September 30, 2021

Profitability

  • Core return on average assets (ROAA) improved 17 basis points to 1.43% compared to the previous quarter and increased 42 basis points compared to the third quarter of 2020

  • Core pre-tax pre-provision ROA(1) for the quarter ended September 30, 2021 was 1.79% as compared to 1.82% in the prior quarter and 1.73% in the third quarter of 2020

  • The net interest margin of 3.23% increased six basis points compared to the prior quarter and increased 12 basis points as compared to third quarter of 2020

  • The core efficiency ratio(1) of 55.27% increased 206 basis points from the previous quarter

Strong capital position

  • Bank-level Tier 1 Capital ratio of 11.9%, which represents $278.4 million in excess capital above the regulatory “well capitalized” requirement of 8.0%

  • A total of 997,517 shares at a weighted average price of $13.35 were purchased during the third quarter of 2021 under the company’s previously authorized share repurchase program. The remaining repurchase capacity under the current program was $10.3 million as of September 30, 2021

  • On October 26, 2021, the Board of Directors authorized an additional $25 million share repurchase program

Asset quality

  • The provision for credit losses was $0.3 million, a decrease of $5.1 million compared to the previous quarter and a decrease of $10.9 million from the third quarter of 2020

  • The allowance for credit losses as a percentage of end-of-period loans (excluding PPP loans) was 1.43% compared to 1.50% in the previous quarter

  • Total criticized loans decreased $52.0 million from the previous quarter

    • Total nonperforming assets decreased $14.6 million from the previous quarter

  • Net charge-offs on loans totaled $2.3 million, a decrease of $1.7 million from the previous quarter

    • Net charge-offs as a percentage of average loans outstanding (excluding PPP loans, annualized) was 0.14% in the third quarter of 2021 as compared to 0.25% in the previous quarter

“Our third quarter results reflect good momentum in our fundamental performance. Excluding PPP forgiveness, loans grew at an 8.2% annualized rate and was broad-based across nearly all of our consumer and commercial categories,” stated T. Michael Price, President and Chief Executive Officer. “Our quarterly results were also supported by diversified revenue sources with strong contributions coming from mortgage banking, SBA lending, wealth management and insurance revenues. Our SBA team has produced a particularly strong year, climbing to the #1 ranking in the SBA’s Pittsburgh District.” Price continued, “I am genuinely excited about the progress we have made with our traditional lending engines as well as our investments and progress on the digital front. I believe these efforts, along with our new investment into equipment finance, have positioned First Commonwealth to continue to be a leading financial services company for the businesses and communities we serve.”

Earnings

Net income for the third quarter of 2021 was $34.1 million, or $0.36 per share, compared to $29.6 million, or $0.31 per share in the second quarter of 2021 and $19.2 million, or $0.20 per share for the third quarter of 2020.

Net Interest Income and Net Interest Margin

Net interest income (FTE) of $70.9 million increased $2.4 million from the previous quarter and increased $4.1 million from the prior year quarter. The increase from the previous quarter was primarily due to a $196.7 million increase in average loans (excluding PPP loans) and a $1.2 million increase in fees on PPP loans, partially offset by a $204.7 million decrease in PPP loans. Interest and fee income recognized on PPP loans totaled $5.7 million in the third quarter of 2021 as compared to $5.5 million in the prior quarter.

The net interest margin for the third quarter of 2021 was 3.23%, an increase of six basis points from the previous quarter and an increase of 12 basis points from the third quarter of 2020. The increase from the previous quarter was due primarily to the recognition of fees on PPP loans and a two basis point decrease in the cost of funds.

Total average deposits grew $41.8 million in the third quarter of 2021 as compared to the previous quarter. Average noninterest bearing deposits grew $42.4 million and offset a $41.4 million decrease in average time deposits.

Total end-of-period deposits grew $51.5 million from the previous quarter.

Asset Quality

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

Provision expense in the third quarter of 2021 totaled $0.3 million as compared to $5.4 million in the previous quarter. The provision expense during the quarter reflected a $2.4 million decrease in qualitative reserves due to improved economic forecasts and a $2.0 million decrease in specific reserves, partially offset by a $1.4 million increase in reserves for strong end-of-period loan growth and a $0.9 million expense for unfunded commitment reserves.

At September 30, 2021, nonperforming loans totaled $38.1 million, a decrease of $14.7 million from the previous quarter and a decrease of $11.6 million from the third quarter of 2020. Nonperforming loans represented 0.58% of total loans (excluding PPP loans) as compared to 0.82% and 0.78% for the periods ended June 30, 2021 and September 30, 2020, respectively. Subsequent to September 30, 2021, a $6.9 million nonperforming loan (equal to 0.10% of total loans) was sold at par.

At September 30, 2021, criticized loans totaled $198.5 million, a decrease of $52.0 million from the previous quarter.

During the third quarter of 2021, net charge-offs were $2.3 million as compared to $3.9 million in the previous quarter and $4.3 million in the third quarter of 2020. Net charge-offs in the second quarter of 2021 were negatively impacted by a $3.6 million charge-off related to an individual commercial borrower.

Net charge-offs as a percentage of average loans (excluding PPP, annualized) were 0.14%, 0.25% and 0.27% for the periods ended September 30, 2021, June 30, 2021 and September 30, 2020, respectively.

Noninterest Income and Noninterest Expense

Noninterest income (excluding net security gains) totaled $27.2 million for the third quarter of 2021, as compared to $26.1 million for the second quarter of 2021 and $26.7 million for the third quarter of 2020.

The $1.1 million increase from the previous quarter was primarily due to a $0.7 million increase in gain on sale of SBA loans, a $0.5 million increase in service charges on deposit accounts, a $0.4 million increase in gain on sale of mortgage loans and a $0.4 million increase in Trust revenue due primarily to annual tax preparation fees. These increases were partially offset by $0.9 million decrease in swap fee income and a $0.4 million decrease in card-related interchange income.

Noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses) totaled $55.0 million for the third quarter of 2021, as compared to $51.3 million for the second quarter of 2021 and $52.4 million for the third quarter of 2020. The $3.7 million increase from the previous quarter was primarily the result of a $2.7 million increase in salaries and employee benefits driven by a $1.2 million increase in incentives due to improved financial performance, a $0.5 million increase in salaries due in part to the company’s previously announced entry into the equipment finance business, $0.5 million reduction in deferred FAS-91 expenses and a $0.4 million increase in hospitalization expense. The increase in the quarter was also impacted by a $0.4 million increase in FDIC insurance expense.

The core efficiency ratio was 55.27% during the third quarter of 2021 as compared to 53.21% in the previous quarter and 54.31% in the third quarter of 2020.

Full time equivalent staff was 1,409 at September 30, 2021, 1,392 at June 30, 2021, and 1,399 at September 30, 2020. The increase from the previous quarter was partially the result of new hires related to the company’s previously announced entry into the equipment finance business.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.115 per share, which represents a 4.5% increase from the third quarter of 2020. The cash dividend is payable on November 19, 2021 to shareholders of record as of November 5, 2021. This dividend represents a 3.2% projected annual yield utilizing the October 25, 2021 closing market price of $14.54.

First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2021 were 15.0%, 12.4%, 9.6% and 11.5%, 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 third quarter of 2021 on Wednesday, October 27, 2021 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-888-660-6510 conference ID # 7758595 or through the company’s web page, http://www.fcbanking.com/InvestorRelations. A replay of the call will be available approximately one hour following the conclusion of the conference by dialing 1-800-770-2030 and entering the conference ID # 7758595. A link to the webcast replay will also be accessible on the company’s webpage for 30 days.

About First Commonwealth Financial Corporation

First Commonwealth Financial Corporation (NYSE: FCF), headquartered in Indiana, Pennsylvania, is a financial services Company with 119 community banking offices in 26 counties throughout western and central Pennsylvania and throughout Ohio, as well as business banking operations in Pittsburgh, Pennsylvania, and Canton, Cleveland, Columbus and Cincinnati, Ohio. The Company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson, and Lewis Center, Ohio. First Commonwealth provides a full range of commercial banking, consumer banking, mortgage, equipment finance, wealth management and insurance products and services through its subsidiaries First Commonwealth Bank and First Commonwealth Insurance Agency. For more information about First Commonwealth or to open an account today, please visit www.fcbanking.com.

Forward-Looking Statements

Certain statements contained in this release that are not historical facts may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the Securities and Exchange Commission, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute “forward-looking statements” as well. These statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of words such as “may,” “will,” “should,” “could,” “would,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate” or words of similar meaning. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including uncertainties regarding the impact of the COVID-19 pandemic, and could be affected by many factors, including, but not limited to: (1) the effects of the COVID-19 pandemic on First Commonwealth and its customers; (2) volatility and disruption in national and international financial markets; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (4) inflation, interest rate, commodity price, securities market and monetary fluctuations; (5) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which First Commonwealth or its customers must comply; (6) the soundness of other financial institutions; (7) political instability; (8) impairment of First Commonwealth’s goodwill or other intangible assets; (9) acts of God or of war or terrorism; (10) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (11) changes in consumer spending, borrowings and savings habits; (12) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) First Commonwealth’s ability to attract and retain qualified employees; (16) changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (17) the ability to increase market share and control expenses; (18) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (19) the reliability of First Commonwealth’s vendors, internal control systems or information systems; (20) the costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals; and (21) other risks and uncertainties described in this report and in the other reports that we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. Further, statements about the potential effects of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, clients, third parties and us.

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

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

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

FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)

For the Three Months Ended

For the Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2021

2021

2020

2021

2020

SUMMARY RESULTS OF OPERATIONS

Net interest income

$

70,645

$

68,199

$

66,369

$

208,287

$

200,779

Provision for credit losses

330

5,413

11,212

1,353

49,038

Noninterest income

27,245

26,086

26,769

80,686

67,854

Noninterest expense

55,027

51,542

58,247

158,429

161,274

Net income

34,092

29,619

19,186

103,481

47,764

Core net income (5)

34,131

29,777

23,889

103,764

52,795

Earnings per common share (diluted)

$

0.36

$

0.31

$

0.20

$

1.08

$

0.49

Core earnings per common share (diluted) (6)

$

0.36

$

0.31

$

0.24

$

1.08

$

0.54

KEY FINANCIAL RATIOS

Return on average assets

1.42

%

1.26

%

0.81

%

1.48

%

0.71

%

Core return on average assets (7)

1.43

%

1.26

%

1.01

%

1.48

%

0.79

%

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

1.79

%

1.81

%

1.48

%

1.86

%

1.61

%

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

1.79

%

1.82

%

1.73

%

1.87

%

1.70

%

Return on average shareholders' equity

12.14

%

10.82

%

7.01

%

12.62

%

5.92

%

Return on average tangible common equity (8)

17.28

%

15.54

%

10.29

%

18.08

%

8.80

%

Core return on average tangible common equity (9)

17.30

%

15.62

%

12.72

%

18.13

%

9.69

%

Core efficiency ratio (2)(10)

55.27

%

53.21

%

54.31

%

53.90

%

56.37

%

Net interest margin (FTE) (1)

3.23

%

3.17

%

3.11

%

3.27

%

3.34

%

Book value per common share

$

11.69

$

11.50

$

11.07

Tangible book value per common share (11)

8.38

8.22

7.79

Market value per common share

13.63

14.07

7.74

Cash dividends declared per common share

0.115

0.115

0.110

0.340

0.330

ASSET QUALITY RATIOS

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

0.56

%

0.78

%

0.71

%

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

0.58

%

0.82

%

0.78

%

Nonperforming assets as a percent of total assets (3)

0.41

%

0.57

%

0.55

%

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

0.42

%

0.59

%

0.59

%

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

0.13

%

0.23

%

0.25

%

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

0.14

%

0.25

%

0.27

%

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

247.30

%

183.81

%

177.58

%

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

1.40

%

1.44

%

1.27

%

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

1.43

%

1.50

%

1.38

%

CAPITAL RATIOS

Shareholders' equity as a percent of total assets

11.7

%

11.8

%

11.5

%

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

8.7

%

8.7

%

8.4

%

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

8.9

%

9.0

%

9.0

%

Leverage Ratio

9.6

%

9.6

%

8.9

%

Risk Based Capital - Tier I

12.4

%

12.6

%

11.8

%

Risk Based Capital - Total

15.0

%

15.2

%

14.4

%

Common Equity - Tier I

11.5

%

11.6

%

10.7

%


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,

2021

2021

2020

2021

2020

INCOME STATEMENT

Interest income

$

74,196

$

72,051

$

73,593

$

220,308

$

227,903

Interest expense

3,551

3,852

7,224

12,021

27,124

Net Interest Income

70,645

68,199

66,369

208,287

200,779

Provision for credit losses

330

5,413

11,212

1,353

49,038

Net Interest Income after Provision for Credit Losses

70,315

62,786

55,157

206,934

151,741

Net securities gains

10

20

16

47

Trust income

3,118

2,706

2,554

8,340

6,774

Service charges on deposit accounts

4,770

4,310

4,035

13,127

12,066

Insurance and retail brokerage commissions

2,218

1,978

2,156

6,368

5,982

Income from bank owned life insurance

1,486

1,509

1,547

4,946

4,963

Gain on sale of mortgage loans

3,485

3,084

6,437

11,615

13,226

Gain on sale of other loans and assets

2,480

2,111

1,871

6,281

3,151

Card-related interchange income

7,052

7,406

6,441

20,885

17,589

Derivative mark-to-market

218

(277

)

(160

)

1,371

(2,122

)

Swap fee income

317

1,252

41

1,715

864

Other income

2,101

1,997

1,827

6,022

5,314

Total Noninterest Income

27,245

26,086

26,769

80,686

67,854

Salaries and employee benefits

31,066

28,347

28,823

88,084

87,573

Net occupancy

3,960

3,881

4,609

12,614

13,979

Furniture and equipment

4,052

3,866

4,033

11,866

11,468

Data processing

3,196

3,192

2,741

9,440

7,804

Pennsylvania shares tax

1,257

1,258

1,254

3,347

3,246

Advertising and promotion

1,150

1,355

1,115

3,829

3,800

Intangible amortization

868

863

939

2,597

2,792

Other professional fees and services

1,308

1,091

937

3,150

2,755

FDIC insurance

830

438

876

1,964

1,637

Litigation and operational losses

589

556

329

1,624

1,038

Loss on sale or write-down of assets

171

43

63

223

416

COVID-19 related

50

232

125

357

567

Voluntary early retirement

3,304

3,304

Branch consolidation

(22

)

2,544

18

2,544

Other operating expenses

6,530

6,442

6,555

19,316

18,351

Total Noninterest Expense

55,027

51,542

58,247

158,429

161,274

Income before Income Taxes

42,533

37,330

23,679

129,191

58,321

Income tax provision

8,441

7,711

4,493

25,710

10,557

Net Income

$

34,092

$

29,619

$

19,186

$

103,481

$

47,764

Shares Outstanding at End of Period

95,209,685

96,201,628

96,924,781

95,209,685

96,924,781

Average Shares Outstanding Assuming Dilution

95,892,304

96,282,425

98,160,143

96,130,602

98,224,506


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

September 30,

June 30,

September 30,

2021

2021

2020

BALANCE SHEET (Period End)

Assets

Cash and due from banks

$

94,579

$

89,505

$

97,060

Interest-bearing bank deposits

240,095

194,948

283,037

Securities available for sale, at fair value

1,137,675

1,102,057

921,202

Securities held to maturity, at amortized cost

548,057

554,225

268,638

Loans held for sale

19,925

19,530

37,998

Loans

6,732,580

6,740,535

6,949,716

Allowance for credit losses

(94,185

)

(97,038

)

(88,307

)

Net loans

6,638,395

6,643,497

6,861,409

Goodwill and other intangibles

315,092

315,497

317,423

Other assets

484,036

483,143

502,599

Total Assets

$

9,477,854

$

9,402,402

$

9,289,366

Liabilities and Shareholders' Equity

Noninterest-bearing demand deposits

$

2,656,229

$

2,617,651

$

2,301,821

Interest-bearing demand deposits

265,782

269,451

315,806

Savings deposits

4,609,393

4,566,815

4,425,119

Time deposits

405,081

431,102

661,161

Total interest-bearing deposits

5,280,256

5,267,368

5,402,086

Total deposits

7,936,485

7,885,019

7,703,907

Short-term borrowings

117,754

107,372

122,356

Long-term borrowings

182,519

182,767

233,490

Total borrowings

300,273

290,139

355,846

Other liabilities

128,241

120,825

156,782

Shareholders' equity

1,112,855

1,106,419

1,072,831

Total Liabilities and Shareholders' Equity

$

9,477,854

$

9,402,402

$

9,289,366


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/

2021

Rate

2021

Rate

2020

Rate

2021

Rate

2020

Rate

NET INTEREST MARGIN

Assets

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

$

6,538,477

3.75

%

$

6,341,805

3.80

%

$

6,402,968

3.97

%

$

6,391,688

3.82

%

$

6,343,862

4.25

%

PPP Loans

225,262

10.05

%

429,917

5.11

%

572,434

2.67

%

380,551

6.72

%

326,957

2.69

%

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

1,937,385

1.43

%

1,886,184

1.43

%

1,553,252

1.59

%

1,786,050

1.46

%

1,407,609

1.98

%

Total Interest-Earning Assets (FTE) (1)

8,701,124

3.39

%

8,657,906

3.35

%

8,528,654

3.45

%

8,558,289

3.45

%

8,078,428

3.79

%

Noninterest-earning assets

801,377

793,777

861,311

804,619

846,887

Total Assets

$

9,502,501

$

9,451,683

$

9,389,965

$

9,362,908

$

8,925,315

Liabilities and Shareholders' Equity

Interest-bearing demand and savings deposits

$

4,899,328

0.07

%

$

4,858,531

0.07

%

$

4,818,576

0.20

%

$

4,788,309

0.08

%

$

4,535,072

0.30

%

Time deposits

417,274

0.36

%

458,638

0.47

%

696,227

1.28

%

467,653

0.54

%

766,106

1.49

%

Short-term borrowings

118,112

0.06

%

114,966

0.09

%

124,670

0.11

%

117,478

0.09

%

146,270

0.61

%

Long-term borrowings

182,623

4.92

%

206,495

4.65

%

233,588

4.37

%

207,225

4.64

%

233,818

4.40

%

Total Interest-Bearing Liabilities

5,617,337

0.25

%

5,638,630

0.27

%

5,873,061

0.49

%

5,580,665

0.29

%

5,681,266

0.64

%

Noninterest-bearing deposits

2,647,089

2,604,695

2,281,200

2,556,078

2,030,364

Other liabilities

124,286

110,264

147,603

129,883

136,655

Shareholders' equity

1,113,789

1,098,094

1,088,101

1,096,282

1,077,030

Total Noninterest-Bearing Funding Sources

3,885,164

3,813,053

3,516,904

3,782,243

3,244,049

Total Liabilities and Shareholders' Equity

$

9,502,501

$

9,451,683

$

9,389,965

$

9,362,908

$

8,925,315

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

3.23

%

3.17

%

3.11

%

3.27

%

3.34

%


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

September 30,

June 30,

September 30,

2021

2021

2020

Loan Portfolio Detail

Commercial Loan Portfolio:

Commercial, financial, agricultural and other

$

1,072,489

$

1,081,822

$

1,163,268

Paycheck Protection Program

152,102

292,355

573,468

Commercial real estate

2,231,890

2,205,758

2,215,311

Real estate construction

318,120

317,496

366,936

Total Commercial

3,774,601

3,897,431

4,318,983

Consumer Loan Portfolio:

Closed-end mortgages

1,311,052

1,259,798

1,154,366

Home equity lines of credit

564,323

568,985

589,654

Real estate construction

105,896

97,320

86,053

Total Real Estate - Consumer

1,981,271

1,926,103

1,830,073

Auto loans

886,367

829,150

692,475

Direct installment

32,509

28,805

40,081

Personal lines of credit

52,667

53,720

62,155

Student loans

5,165

5,326

5,949

Total Other Consumer

976,708

917,001

800,660

Total Consumer Portfolio

2,957,979

2,843,104

2,630,733

Total Portfolio Loans

6,732,580

6,740,535

6,949,716

Loans held for sale

19,925

19,530

37,998

Total Loans

$

6,752,505

$

6,760,065

$

6,987,714

September 30,

June 30,

September 30,

2021

2021

2020

ASSET QUALITY DETAIL

Nonperforming Loans:

Loans on nonaccrual basis

$

14,466

$

22,219

$

38,139

Loans held for sale on a nonaccrual basis

Troubled debt restructured loans on nonaccrual basis

16,210

23,981

4,511

Troubled debt restructured loans on accrual basis

7,410

6,593

7,078

Total Nonperforming Loans

$

38,086

$

52,793

$

49,728

Other real estate owned ("OREO")

502

394

1,079

Repossessions ("Repos")

453

440

685

Total Nonperforming Assets

$

39,041

$

53,627

$

51,492

Loans past due in excess of 90 days and still accruing

1,135

903

1,249

Classified loans

58,780

55,957

80,190

Criticized loans

195,791

250,427

188,957

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

0.58

%

0.80

%

0.74

%

Allowance for credit losses

$

94,185

$

97,038

$

88,307


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,

2021

2021

2020

2021

2020

Net Charge-offs (Recoveries):

Commercial, financial, agricultural and other

$

1,960

$

3,784

$

3,338

$

6,223

$

4,977

Real estate construction

(135

)

(135

)

(26

)

Commercial real estate

12

6

(110

)

1,529

2,263

Residential real estate

(87

)

(160

)

117

(179

)

621

Loans to individuals

392

432

1,001

2,036

4,533

Net Charge-offs

$

2,277

$

3,927

$

4,346

$

9,474

$

12,368

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

0.13

%

0.23

%

0.25

%

0.19

%

0.25

%

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

0.14

%

0.25

%

0.27

%

0.20

%

0.26

%

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

14.49

%

137.84

%

257.98

%

14.28

%

396.49

%

Provision for credit losses

$

330

$

5,413

$

11,212

$

1,353

$

49,038


DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES

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

(2) Core efficiency ratio excludes from total revenue the impact of derivative mark-to-market and excludes from "total noninterest expense" the amortization of intangibles, unfunded commitment expense and any other unusual items deemed by management to not be related to normal operations, such as merger, acquisition and severance costs.

(3) Includes held for sale loans.

(4) Excludes held for sale loans.

For the Three Months Ended

For the Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2021

2021

2020

2021

2020

Interest income

$

74,196

$

72,051

$

73,593

$

220,308

$

227,903

Adjustment to fully taxable equivalent basis (1)

235

290

373

834

1,129

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

74,431

72,341

73,966

221,142

229,032

Interest expense

3,551

3,852

7,224

12,021

27,124

Net interest income, (FTE) (1)

$

70,880

$

68,489

$

66,742

$

209,121

$

201,908


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,

2021

2021

2020

2021

2020

Net Income

$

34,092

$

29,619

$

19,186

$

103,481

$

47,764

Intangible amortization

868

863

939

2,597

2,792

Tax benefit of amortization of intangibles

(182

)

(181

)

(197

)

(545

)

(586

)

Net Income, adjusted for tax affected amortization of intangibles

$

34,778

$

30,301

$

19,928

$

105,533

$

49,970

Average Tangible Equity:

Total shareholders' equity

$

1,113,789

$

1,098,094

$

1,088,101

$

1,096,282

$

1,077,030

Less: intangible assets

315,303

315,776

317,702

315,835

318,483

Tangible Equity

798,486

782,318

770,399

780,447

758,547

Less: preferred stock

Tangible Common Equity

$

798,486

$

782,318

$

770,399

$

780,447

$

758,547

(8)Return on Average Tangible Common Equity

17.28

%

15.54

%

10.29

%

18.08

%

8.80

%


For the Three Months Ended

For the Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2021

2021

2020

2021

2020

Core Net Income:

Total Net Income

$

34,092

$

29,619

$

19,186

$

103,481

$

47,764

Net securities gains

(10

)

(20

)

(16

)

(47

)

Tax benefit of net securities gains

2

4

3

10

COVID-19 related

50

232

125

357

567

Tax benefit of COVID 19 related

(11

)

(49

)

(26

)

(75

)

(119

)

Early retirement related

3,304

3,304

Tax benefit of early retirement related expenses

(694

)

(694

)

Branch consolidation related

(22

)

2,544

18

2,544

Tax benefit of bank consolidation related expenses

5

(534

)

(4

)

(534

)

(5) Core net income

$

34,131

$

29,777

$

23,889

$

103,764

$

52,795

Average Shares Outstanding Assuming Dilution

95,892,304

96,282,425

98,160,143

96,130,602

98,224,506

(6) Core Earnings per common share (diluted)

$

0.36

$

0.31

$

0.24

$

1.08

$

0.54

Intangible amortization

868

863

939

2,597

2,792

Tax benefit of amortization of intangibles

(182

)

(181

)

(197

)

(545

)

(586

)

Core Net Income, adjusted for tax affected amortization of intangibles

$

34,817

$

30,459

$

24,631

$

105,816

$

55,001

(9) Core Return on Average Tangible Common Equity

17.30

%

15.62

%

12.72

%

18.13

%

9.69

%


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,

2021

2021

2020

2021

2020

Core Return on Average Assets:

Total Net Income

$

34,092

$

29,619

$

19,186

$

103,481

$

47,764

Total Average Assets

9,502,501

9,451,683

9,389,965

9,362,908

8,925,315

Return on Average Assets

1.42

%

1.26

%

0.81

%

1.48

%

0.71

%

Core Net Income (5)

$

34,131

$

29,777

$

23,889

$

103,764

$

52,795

Total Average Assets

9,502,501

9,451,683

9,389,965

9,362,908

8,925,315

(7) Core Return on Average Assets

1.43

%

1.26

%

1.01

%

1.48

%

0.79

%


For the Three Months Ended

For the Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2021

2021

2020

2021

2020

Core Efficiency Ratio:

Total Noninterest Expense

$

55,027

$

51,542

$

58,247

$

158,429

$

161,274

Adjustments to Noninterest Expense:

Unfunded commitment reserve

471

(1,181

)

Intangible amortization

868

863

939

2,597

2,792

COVID-19 related

50

232

125

357

567

Early retirement related

3,304

3,304

Branch consolidation related

(22

)

2,544

18

2,544

Noninterest Expense - Core

$

54,109

$

50,469

$

50,864

$

155,457

$

153,248

Net interest income, (FTE)

$

70,880

$

68,489

$

66,742

$

209,121

$

201,908

Total noninterest income

27,245

26,086

26,769

80,686

67,854

Net securities gains

(10

)

(20

)

(16

)

(47

)

Total Revenue

98,125

94,565

93,491

289,791

269,715

Adjustments to Revenue:

Derivative mark-to-market

218

(277

)

(160

)

1,371

(2,122

)

Total Revenue - Core

$

97,907

$

94,842

$

93,651

$

288,420

$

271,837

(10)Core Efficiency Ratio

55.27

%

53.21

%

54.31

%

53.90

%

56.37

%


FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES

September 30,

June 30,

September 30,

2021

2021

2020

Tangible Equity:

Total shareholders' equity

$

1,112,855

$

1,106,419

$

1,072,831

Less: intangible assets

315,092

315,497

317,423

Tangible Equity

797,763

790,922

755,408

Less: preferred stock

Tangible Common Equity

$

797,763

$

790,922

$

755,408

Tangible Assets:

Total assets

$

9,477,854

$

9,402,402

$

9,289,366

Less: intangible assets

315,092

315,497

317,423

Tangible Assets

$

9,162,762

$

9,086,905

$

8,971,943

Less: PPP loans

152,102

292,355

573,468

Tangible Assets, excluding PPP loans

$

9,010,660

$

8,794,550

$

8,398,475

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

8.71

%

8.70

%

8.42

%

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

8.85

%

8.99

%

8.99

%

Shares Outstanding at End of Period

95,209,685

96,201,628

96,924,781

(11)Tangible Book Value Per Common Share

$

8.38

$

8.22

$

7.79

Note: Management believes that it is standard practice in the banking industry to present these non-GAAP measures. These measures provide useful information to management and investors by allowing them to make peer comparisons.


For the Three Months Ended

For the Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2021

2021

2020

2021

2020

Pre-tax pre-provision income:

Net interest income

$70,645

$68,199

$66,369

$208,287

$200,779

Noninterest income

27,245

26,086

26,769

80,686

67,854

Noninterest expense

55,027

51,542

58,247

158,429

161,274

Pre-tax pre-provision income

$42,863

$42,743

$34,891

$130,544

$107,359

Net securities gains

$0

($10

)

($20

)

($16

)

($47

)

COVID-19 related

50

232

125

357

567

Voluntary early retirement

3,304

3,304

Branch consolidation

0

(22

)

2,544

18

2,544

Core pre-tax pre-provision income

$42,913

$42,943

$40,844

$130,903

$113,727

Net charge-offs

$2,277

$3,927

$4,346

$9,474

$12,368