Pennsylvania | 001-11138 | 25-1428528 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
601 Philadelphia Street, Indiana, PA | 15701 | |||
(Address of principal executive offices) | (Zip Code) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 7.01 | Regulation FD Disclosure |
Item 9.01 | Financial Statements and Exhibits |
99.1 | Press Release announcing First Quarter 2014 Financial Results and Declaration of Quarterly Dividend. |
FIRST COMMONWEALTH FINANCIAL CORPORATION | ||||
By: | /s/ Robert E. Rout | |||
Name: | Robert E. Rout | |||
Title: | Executive Vice President and Chief Financial Officer |
• | Net income of $12.3 million, or $0.13 diluted earnings per share. |
• | Operation: Excellence IT conversion expense of $2.4 million, or $0.02 diluted earnings per share, including technology conversion charges and accelerated depreciation for hardware and software to be replaced. |
• | Partial insurance recovery of $0.9 million for a 2012 external fraud loss. |
• | $1.2 million gain on sale of registered investment advisory business. |
• | Nonperforming loans decreased $3.2 million, or 5%, from the fourth quarter of 2013 and $22.1 million, or 28%, over the last 12 months. |
FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||
CONSOLIDATED FINANCIAL DATA | |||||||||||
Unaudited | |||||||||||
(dollars in thousands, except per share data) | |||||||||||
For the Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
2014 | 2013 | 2013 | |||||||||
SUMMARY RESULTS OF OPERATIONS | |||||||||||
Net interest income (FTE)(1) | $ | 46,468 | $ | 47,303 | $ | 46,447 | |||||
Provision for credit losses | 3,231 | 1,216 | 4,497 | ||||||||
Noninterest income | 14,920 | 13,264 | 14,885 | ||||||||
Noninterest expense | 39,887 | 45,327 | 41,454 | ||||||||
Net income | 12,300 | 9,259 | 10,553 | ||||||||
Earnings per common share (diluted) | $ | 0.13 | $ | 0.10 | $ | 0.11 | |||||
KEY FINANCIAL RATIOS | |||||||||||
Return on average assets | 0.80 | % | 0.60 | % | 0.71 | % | |||||
Return on average shareholders' equity | 6.97 | % | 5.14 | % | 5.73 | % | |||||
Efficiency ratio(2) | 64.98 | % | 73.15 | % | 67.59 | % | |||||
Net interest margin (FTE)(1) | 3.33 | % | 3.35 | % | 3.45 | % | |||||
Book value per common share | $ | 7.61 | $ | 7.47 | $ | 7.53 | |||||
Tangible book value per common share(4) | 5.90 | 5.78 | 5.90 | ||||||||
Market value per common share | 9.04 | 8.82 | 7.46 | ||||||||
Cash dividends declared per common share | 0.07 | 0.06 | 0.05 | ||||||||
ASSET QUALITY RATIOS | |||||||||||
Allowance for credit losses as a percent of | |||||||||||
end-of-period loans | 1.28 | % | 1.27 | % | 1.48 | % | |||||
Allowance for credit losses as a percent of | |||||||||||
nonperforming loans | 96.98 | % | 91.31 | % | 79.54 | % | |||||
Nonperforming loans as a percent of | |||||||||||
end-of-period loans | 1.32 | % | 1.39 | % | 1.86 | % | |||||
Nonperforming assets as a percent of | |||||||||||
total assets | 1.08 | % | 1.15 | % | 1.47 | % | |||||
Net charge-offs as a percent of average loans | |||||||||||
(annualized) | 0.28 | % | 0.18 | % | 0.90 | % | |||||
CAPITAL RATIOS | |||||||||||
Shareholders' equity as a percent of total assets | 11.54 | % | 11.45 | % | 12.26 | % | |||||
Tangible common equity as a percent of tangible assets(3) | 9.20 | % | 9.09 | % | 9.87 | % | |||||
Leverage Ratio | 10.04 | % | 10.00 | % | 11.15 | % | |||||
Risk Based Capital - Tier I | 12.40 | % | 12.10 | % | 13.27 | % | |||||
Risk Based Capital - Total | 13.57 | % | 13.26 | % | 14.52 | % |
FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||
CONSOLIDATED FINANCIAL DATA | |||||||||||
Unaudited | |||||||||||
(dollars in thousands, except share data) | |||||||||||
For the Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
2014 | 2013 | 2013 | |||||||||
INCOME STATEMENT | |||||||||||
Interest income | $ | 50,506 | $ | 51,308 | $ | 51,761 | |||||
Interest expense | 4,915 | 5,002 | 6,343 | ||||||||
Net Interest Income | 45,591 | 46,306 | 45,418 | ||||||||
Taxable equivalent adjustment(1) | 877 | 997 | 1,029 | ||||||||
Net Interest Income (FTE) | 46,468 | 47,303 | 46,447 | ||||||||
Provision for credit losses | 3,231 | 1,216 | 4,497 | ||||||||
Net Interest Income after Provision for Credit Losses (FTE) | 43,237 | 46,087 | 41,950 | ||||||||
Changes in fair value on impaired securities | 4,147 | 4,851 | 1,864 | ||||||||
Non-credit related gains on securities not expected to be sold | |||||||||||
(recognized in other comprehensive income) | (4,147 | ) | (4,851 | ) | (1,864 | ) | |||||
Net Impairment Losses | — | — | — | ||||||||
Net securities (losses) gains | — | (1,395 | ) | 4 | |||||||
Trust income | 1,435 | 1,489 | 1,663 | ||||||||
Service charges on deposit accounts | 3,792 | 4,209 | 3,401 | ||||||||
Insurance and retail brokerage commissions | 1,395 | 1,382 | 1,417 | ||||||||
Income from bank owned life insurance | 1,369 | 1,320 | 1,428 | ||||||||
Gain on sale of assets | 1,581 | 97 | 275 | ||||||||
Card related interchange income | 3,366 | 3,532 | 3,188 | ||||||||
Derivative mark to market | (58 | ) | 155 | 989 | |||||||
Other income | 2,040 | 2,475 | 2,520 | ||||||||
Total Noninterest Income | 14,920 | 13,264 | 14,885 | ||||||||
Salaries and employee benefits | 21,044 | 21,724 | 21,793 | ||||||||
Net occupancy expense | 3,506 | 3,477 | 3,635 | ||||||||
Furniture and equipment expense (5) | 5,330 | 5,255 | 3,272 | ||||||||
Data processing expense | 1,468 | 1,498 | 1,516 | ||||||||
Pennsylvania shares tax expense | 711 | 1,415 | 1,190 | ||||||||
Intangible amortization | 178 | 216 | 358 | ||||||||
Collection and repossession expense | 709 | 974 | 1,151 | ||||||||
Other professional fees and services | 1,024 | 966 | 969 | ||||||||
FDIC insurance | 1,049 | 1,054 | 1,050 | ||||||||
Operational losses | (689 | ) | 325 | 338 | |||||||
Conversion related expenses | 354 | 2,523 | — | ||||||||
Other operating expenses | 5,203 | 5,900 | 6,182 | ||||||||
Total Noninterest Expense | 39,887 | 45,327 | 41,454 | ||||||||
Income before Income Taxes | 18,270 | 14,024 | 15,381 | ||||||||
Taxable equivalent adjustment(1) | 877 | 997 | 1,029 | ||||||||
Income tax provision | 5,093 | 3,768 | 3,799 | ||||||||
Net Income | $ | 12,300 | $ | 9,259 | $ | 10,553 | |||||
Shares Outstanding at End of Period | 94,223,883 | 95,245,215 | 99,298,120 | ||||||||
Average Shares Outstanding Assuming Dilution | 94,568,059 | 95,138,836 | 99,305,414 | ||||||||
(5) - Includes $2.1 million and $2.0 million of accelerated depreciation expense related to the technology conversion for the | |||||||||||
three-month periods ended March 31, 2014 and December 31, 2013, respectively. |
FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||
CONSOLIDATED FINANCIAL DATA | |||||||||||
Unaudited | |||||||||||
(dollars in thousands) | |||||||||||
March 31, | December 31, | March 31, | |||||||||
2014 | 2013 | 2013 | |||||||||
BALANCE SHEET (Period End) | |||||||||||
Assets | |||||||||||
Cash and due from banks | $ | 82,327 | $ | 74,427 | $ | 53,991 | |||||
Interest-bearing bank deposits | 9,087 | 3,012 | 1,780 | ||||||||
Securities | 1,385,086 | 1,353,809 | 1,325,560 | ||||||||
Loans | 4,252,213 | 4,283,833 | 4,218,810 | ||||||||
Allowance for credit losses | (54,506 | ) | (54,225 | ) | (62,262 | ) | |||||
Net loans | 4,197,707 | 4,229,608 | 4,156,548 | ||||||||
Goodwill and other intangibles | 160,504 | 161,267 | 161,973 | ||||||||
Other assets | 374,686 | 392,738 | 399,187 | ||||||||
Total Assets | $ | 6,209,397 | $ | 6,214,861 | $ | 6,099,039 | |||||
Liabilities and Shareholders' Equity | |||||||||||
Noninterest-bearing demand deposits | $ | 966,956 | $ | 912,361 | $ | 883,307 | |||||
Interest-bearing demand deposits | 91,399 | 89,149 | 90,276 | ||||||||
Savings deposits | 2,474,923 | 2,506,631 | 2,510,615 | ||||||||
Time deposits | 1,114,539 | 1,095,722 | 1,227,380 | ||||||||
Total interest-bearing deposits | 3,680,861 | 3,691,502 | 3,828,271 | ||||||||
Total deposits | 4,647,817 | 4,603,863 | 4,711,578 | ||||||||
Short-term borrowings | 572,965 | 626,615 | 308,100 | ||||||||
Long-term borrowings | 216,435 | 216,552 | 280,068 | ||||||||
Total borrowings | 789,400 | 843,167 | 588,168 | ||||||||
Other liabilities | 55,397 | 56,134 | 51,565 | ||||||||
Shareholders' equity | 716,783 | 711,697 | 747,728 | ||||||||
Total Liabilities and Shareholders' Equity | $ | 6,209,397 | $ | 6,214,861 | $ | 6,099,039 | |||||
FIRST COMMONWEALTH FINANCIAL CORPORATION |
CONSOLIDATED FINANCIAL DATA |
Unaudited |
(dollars in thousands) |
For the Three Months Ended | |||||||||||||||
March 31, | Yield/ | December 31, | Yield/ | March 31, | Yield/ | ||||||||||
2014 | Rate | 2013 | Rate | 2013 | Rate | ||||||||||
NET INTEREST MARGIN (Quarterly Averages) | |||||||||||||||
Assets | |||||||||||||||
Loans (FTE)(1) | $ | 4,307,373 | 4.14 | % | $ | 4,277,981 | 4.17 | % | $ | 4,222,606 | 4.38 | % | |||
Securities and interest bearing bank deposits (FTE)(1) | 1,350,917 | 2.22 | % | 1,318,332 | 2.21 | % | 1,238,020 | 2.34 | % | ||||||
Total Interest-Earning Assets (FTE)(1) | 5,658,290 | 3.68 | % | 5,596,313 | 3.71 | % | 5,460,626 | 3.92 | % | ||||||
Noninterest-earning assets | 564,689 | 565,809 | 569,277 | ||||||||||||
Total Assets | $ | 6,222,979 | $ | 6,162,122 | $ | 6,029,903 | |||||||||
Liabilities and Shareholders' Equity | |||||||||||||||
Interest-bearing demand and savings deposits | $ | 2,557,406 | 0.10 | % | $ | 2,605,992 | 0.10 | % | $ | 2,606,695 | 0.15 | % | |||
Time deposits | 1,130,062 | 1.03 | % | 1,117,567 | 1.05 | % | 1,141,576 | 1.14 | % | ||||||
Short-term borrowings | 653,045 | 0.29 | % | 561,976 | 0.28 | % | 355,912 | 0.25 | % | ||||||
Long-term borrowings | 216,503 | 1.76 | % | 216,618 | 1.76 | % | 280,152 | 2.80 | % | ||||||
Total Interest-Bearing Liabilities | 4,557,016 | 0.44 | % | 4,502,153 | 0.44 | % | 4,384,335 | 0.59 | % | ||||||
Noninterest-bearing deposits | 896,286 | 895,652 | 849,007 | ||||||||||||
Other liabilities | 53,563 | 49,270 | 49,295 | ||||||||||||
Shareholders' equity | 716,114 | 715,047 | 747,266 | ||||||||||||
Total Noninterest-Bearing Funding Sources | 1,665,963 | 1,659,969 | 1,645,568 | ||||||||||||
Total Liabilities and Shareholders' Equity | $ | 6,222,979 | $ | 6,162,122 | $ | 6,029,903 | |||||||||
Net Interest Margin (FTE) (annualized)(1) | 3.33 | % | 3.35 | % | 3.45 | % |
FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||
CONSOLIDATED FINANCIAL DATA | |||||||||||
Unaudited | |||||||||||
(dollars in thousands) | |||||||||||
March 31, | December 31, | March 31, | |||||||||
2014 | 2013 | 2013 | |||||||||
ASSET QUALITY DETAIL | |||||||||||
Nonperforming Loans: | |||||||||||
Loans on nonaccrual basis | $ | 33,353 | $ | 28,908 | $ | 31,576 | |||||
Troubled debt restructured loans on nonaccrual basis | 12,327 | 16,980 | 32,565 | ||||||||
Troubled debt restructured loans on accrual basis | 10,523 | 13,495 | 14,140 | ||||||||
Total Nonperforming Loans | $ | 56,203 | $ | 59,383 | $ | 78,281 | |||||
Other real estate owned ("OREO") | 10,080 | 11,728 | 10,933 | ||||||||
Repossessions ("Repo") | 544 | 322 | 742 | ||||||||
Total Nonperforming Assets | $ | 66,827 | $ | 71,433 | $ | 89,956 | |||||
Loans past due in excess of 90 days and still accruing | $ | 2,450 | $ | 2,505 | $ | 3,927 | |||||
Criticized loans | 147,456 | 162,361 | 154,866 | ||||||||
Nonperforming assets as a percentage of total loans, | |||||||||||
plus OREO and Repos | 1.57 | % | 1.66 | % | 2.13 | % | |||||
Allowance for credit losses | $ | 54,506 | $ | 54,225 | $ | 62,262 | |||||
For the Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
2014 | 2013 | 2013 | |||||||||
Net Charge-offs (Recoveries): | |||||||||||
Commercial, financial, agricultural and other | $ | 1,516 | $ | 987 | $ | 410 | |||||
Real estate construction | (169 | ) | (361 | ) | 72 | ||||||
Commercial real estate | 120 | 447 | 8,447 | ||||||||
Residential real estate | 851 | 33 | (401 | ) | |||||||
Loans to individuals | 632 | 842 | 894 | ||||||||
Net Charge-offs | $ | 2,950 | $ | 1,948 | $ | 9,422 | |||||
Net charge-offs as a percentage of average loans | |||||||||||
outstanding (annualized) | 0.28 | % | 0.18 | % | 0.90 | % | |||||
Provision for credit losses as a percentage of net charge-offs | 109.53 | % | 62.42 | % | 47.73 | % | |||||
Provision for credit losses | $ | 3,231 | $ | 1,216 | $ | 4,497 | |||||
FIRST COMMONWEALTH FINANCIAL CORPORATION |
CONSOLIDATED FINANCIAL DATA |
Unaudited |
(dollars in thousands, except per share data) |
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||
(1) Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the 35% federal income tax | ||||||||||||
statutory rate. | ||||||||||||
(2) Efficiency ratio is "total noninterest expense" as a percentage of total revenue. Total revenue consists of "net interest | ||||||||||||
income, on a fully taxable equivalent basis," plus "total noninterest income," excluding "net impairment losses" and "net | ||||||||||||
securities gains." | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||
2014 | 2013 | 2013 | ||||||||||
Tangible Equity: | ||||||||||||
Total shareholders' equity | $ | 716,783 | $ | 711,697 | $ | 747,728 | ||||||
Less: intangible assets | 160,504 | 161,267 | 161,973 | |||||||||
Tangible Equity | 556,279 | 550,430 | 585,755 | |||||||||
Less: preferred stock | — | — | — | |||||||||
Tangible Common Equity | $ | 556,279 | $ | 550,430 | $ | 585,755 | ||||||
Tangible Assets: | ||||||||||||
Total assets | $ | 6,209,397 | $ | 6,214,861 | $ | 6,099,039 | ||||||
Less: intangible assets | 160,504 | 161,267 | 161,973 | |||||||||
Tangible Assets | $ | 6,048,893 | $ | 6,053,594 | $ | 5,937,066 | ||||||
(3)Tangible Common Equity as a percentage of | ||||||||||||
Tangible Assets | 9.20 | % | 9.09 | % | 9.87 | % | ||||||
Shares Outstanding at End of Period | 94,223,883 | 95,245,215 | 99,298,120 | |||||||||
(4)Tangible Book Value Per Common Share | $ | 5.90 | $ | 5.78 | $ | 5.90 | ||||||
Note: Management believes that it is a 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. |