EX-99.1 2 fcf-ex991_201510x28x8k.htm EXHIBIT 99.1 PRESS RELEASE Exhibit
                                                

Exhibit 99.1
       
FOR IMMEDIATE RELEASE                

First Commonwealth Announces Third Quarter 2015 Financial Results;
Declares Quarterly Dividend
Indiana, PA, October 28, 2015 - First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the third quarter of 2015.
Third Quarter 2015 Highlights
Franchise Growth
•
Solid loan growth of $80.1 million from the prior quarter, or 7.1% on an annualized basis; and
•
Finalized acquisition of Columbus, Ohio based First Community Bank on October 1st.
Net Income
•
Third quarter net income was $12.4 million, or $0.14 diluted earnings per share. Net income was impacted by the following items:

◦
Net interest income increased by $0.4 million as compared to the prior quarter, primarily as a result of strong commercial loan growth;
◦
Noninterest income benefited from increases in trust income, deposit service charges and mortgage banking revenue. Total noninterest income, excluding net securities gains, decreased $0.8 million from the previous quarter, driven by a $1.4 million decline in the fair market value of commercial loan interest rate swaps;
◦
Noninterest expense decreased $0.4 million from the previous quarter, primarily attributable to a $1.1 million write-down on other real estate owned (OREO) in the second quarter. Third quarter noninterest expense was affected by $0.7 million in additional shares tax expense for a disputed assessment that was settled during the quarter;
◦
Provision for credit losses totaled $4.6 million, an increase of $1.6 million from the linked quarter and $2.5 million from the year ago quarter, due primarily to $2.5 million in specific reserves for two commercial credits;
◦
Asset quality continued to improve, with nonperforming loans decreasing $4.3 million, or 9.5%, compared to the prior quarter.

“I’m pleased with the groundwork we have laid in the last twelve months to grow top line revenue, despite headwinds from an extended low interest rate environment,” stated T. Michael Price, President and Chief Executive Officer. “We extended our footprint westward and we now have plans in place to expand our commercial lending and mortgage origination capabilities in central and northeastern Ohio.”


                                                

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,
 
2015
 
2015
 
2014
 
2015
 
2014
Net income
$12,414
 
$13,447
 
$12,496
 
$40,082
 
$36,724
Diluted earnings per share
$0.14
 
$0.15
 
$0.13
 
$0.45
 
$0.39
Return on average assets
0.78
%
 
0.85
%
 
0.78
%
 
0.84
%
 
0.78
%
Return on average common equity
6.86
%
 
7.57
%
 
6.91
%
 
7.48
%
 
6.83
%
Return on average tangible common equity
8.87
%
 
9.82
%
 
8.89
%
 
9.68
%
 
8.79
%
Efficiency ratio
63.83
%
 
63.96
%
 
66.65
%
 
63.99
%
 
66.25
%
Net interest margin
3.25
%
 
3.26
%
 
3.26
%
 
3.29
%
 
3.28
%
Financial Results Summary
For the three months ended September 30, 2015, net income was $12.4 million, or $0.14 diluted earnings per share, compared to net income of $13.4 million, or $0.15 diluted earnings per share, in the second quarter of 2015 and net income of $12.5 million, or $0.13 diluted earnings per share, in the third quarter of 2014. The decrease in net income compared to the second quarter of 2015 was primarily a result of an increase in the provision for credit losses of $1.6 million and a decrease in noninterest income of $0.8 million, offset by a $0.4 million increase in net interest income and a decrease in noninterest expense of $0.4 million. The decrease in net income compared to the third quarter of 2014 was primarily driven by a decrease in noninterest expense of $1.3 million and an increase in noninterest income of $0.5 million, offset by an increase in the provision for credit losses of $2.5 million.

For the nine months ended September 30, 2015, net income was $40.1 million, or $0.45 diluted earnings per share, compared to net income of $36.7 million, or $0.39 diluted earnings per share, for the comparable period in 2014. The increase in net income compared to 2014 was primarily the result of an increase in net interest income of $2.7 million and a decrease in noninterest expense of $3.1 million, offset by a $1.0 million decrease in noninterest income, excluding net securities gains.

For the nine months ended September 30, 2015, return on average assets and return on average common equity were 0.84% and 7.48%, respectively, as compared to 0.78% and 6.83% in the same period of 2014. Return on average tangible common equity was 9.68% in the first nine months of 2015, as compared to 8.79% for the same period of 2014.

Net Interest Income and Net Interest Margin
Third quarter 2015 net interest income, on a fully taxable-equivalent basis, increased by $0.4 million to $47.6 million, as compared to $47.2 million in the second quarter of 2015. The increase from the prior quarter was primarily the result of $51.9 million of growth in average loan balances. The net interest margin, on a fully taxable-equivalent basis, decreased one basis point from the previous quarter primarily due to a one basis point increase in funding costs.


                                                

As compared to the third quarter of 2014, net interest income, on a fully taxable-equivalent basis, increased by $0.2 million. The increase in net interest income was due to a $162.8 million, or 3.8%, increase in average loans and a five basis point decline in funding costs, offset by a five basis point decline in the yield on interest-earning assets.
For the nine months ended September 30, 2015, net interest income, on a fully taxable-equivalent basis, increased $2.7 million to $142.8 million as compared to the same period of 2014. The increase in net interest income was a result of a $177.8 million, or 4.1%, increase in average loans, an eight basis point decline in funding costs and a special FHLB dividend of $1.0 million, offset by a seven basis point decline in the yield on interest-earning assets.
End of period loan balances increased $80.1 million from the prior quarter and $167.9 million from the year-ago quarter ending September 30, 2014. Based on average balances, loan growth for the third quarter of 2015 was $51.9 million over the prior quarter and $162.8 million over the year-ago quarter. Average deposits decreased $38.0 million in the third quarter of 2015 from the prior quarter and $187.1 million from the year-ago quarter, due in part to the intentional runoff of higher-cost brokered time deposits in favor of more cost-effective short-term borrowings. Average brokered time deposits decreased by $9.3 million in the third quarter of 2015 compared to the prior quarter and $123.6 million from the year-ago quarter. As a result, average short-term borrowings increased $28.3 million from the prior quarter and $292.6 million over the year-ago period. Average noninterest-bearing demand deposits increased $19.5 million as compared to the prior quarter and $69.5 million from the year-ago quarter. Noninterest-bearing demand deposits currently comprise 25.9% of total deposits. Average interest-bearing demand and savings deposits decreased $22.2 million from the prior quarter and $38.4 million from the year-ago period.
Credit Quality
The provision for credit losses totaled $4.6 million for the three months ended September 30, 2015, an increase of $1.6 million as compared to the prior quarter and an increase of $2.5 million from the same quarter last year.
At September 30, 2015, nonperforming loans were $40.8 million, a decrease of $4.3 million from June 30, 2015 and a decrease of $4.4 million from September 30, 2014. Nonperforming loans as a percentage of total loans were 0.89%, 1.00% and 1.03% for the periods ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively.
During the third quarter of 2015, net charge-offs were $1.4 million, compared to $4.4 million in the second quarter of 2015 and $2.0 million in the third quarter of 2014. There were no significant individual charge-offs in the third quarter of 2015. Second quarter 2015 charge-offs included a $2.3 million write-down on a loan to a contractor that was classified as nonaccrual during the fourth quarter of 2014. There were no significant individual charge-offs in the third quarter of 2014.
The allowance for credit losses was $48.5 million at September 30, 2015, and as a percentage of total loans outstanding was 1.06%, 1.01% and 1.15% for September 30, 2015, June 30, 2015 and September 30, 2014, respectively. General reserves as a percentage of non-impaired loans were 0.97%, 0.98% and 1.06% for September 30, 2015, June 30, 2015 and September 30, 2014, respectively. The allowance for credit losses as percentage of nonperforming loans was 118.84%, 106.26% and 112.21% for September 30, 2015, June 30, 2015 and September 30, 2014, respectively.


                                                

OREO acquired through foreclosure increased $4.0 million to $10.5 million during the third quarter due primarily to one commercial relationship.
Noninterest Income
Noninterest income, excluding net securities gains, decreased $0.8 million, or 5.0%, in the third quarter of 2015 as compared to the prior quarter and increased $0.5 million, or 3.4%, compared to the same quarter last year. The decrease from the prior quarter was primarily the result of a $1.4 million decline in the fair market value of commercial loan interest rate swaps. This mark-to-market adjustment was a positive adjustment of $0.6 million in the second quarter and a negative adjustment of $0.8 million in the third quarter. This was offset by a $0.4 million gain on the sale of a commercial loan and a $0.2 million increase in mortgage banking revenue, as well as a $0.1 million increase in trust income and a $0.2 million increase in deposit service charges. The increase from the prior-year period of $0.5 million is primarily related to an increase of $1.1 million in gain on sale of loans and a $0.5 million increase in insurance and retail brokerage commissions due to increased production and the acquisition of a local agency in the fourth quarter of 2014, offset by decreases of $0.7 million in commercial loan swap-related revenues due primarily to declines in the fair market value of commercial loan interest rate swaps.
For the nine months ended September 30, 2015, noninterest income, excluding net securities gains, decreased $1.0 million, or 2.1%, as compared to the same period of 2014, primarily due to a $2.0 million gain from the sale of an OREO property in the second quarter of 2014, a $1.2 million gain from the sale of our registered investment advisory business in the first quarter of 2014, a decrease of $0.8 million in service charges on deposit accounts and a $0.6 million reduction in commercial loan swap-related revenues due primarily to declines in the fair market value of commercial loan interest rate swaps over the same period. These negative variances were partially offset by an increase of $1.8 million in insurance and retail brokerage commissions due to increased production and our agency acquisition, as well as a $2.1 million increase in gain on sale of loans, primarily through mortgage banking.
Noninterest Expense
Noninterest expense decreased $0.4 million in the third quarter of 2015 from the prior quarter and decreased $1.3 million as compared to the third quarter of 2014. The decrease as compared to the linked quarter is primarily attributable to a $1.1 million OREO write-down for one commercial relationship and a $0.4 million loss on the write-down for a building in the second quarter of 2015, offset by $0.7 million of additional shares tax expense for the resolution of a disputed tax assessment in the third quarter of 2015 and a $0.4 million increase in salaries and employee benefits, primarily due to increased commercial loan production. The decrease from the prior year period of $1.3 million includes improvements of $2.2 million in IT conversion-related expenses that were incurred in the third quarter of 2014 and a $0.4 million decrease in net furniture and equipment expense due to less software/hardware maintenance and programing expense post conversion. These improvements in expense in the third quarter of 2015 were offset by the aforementioned $0.7 million shares tax resolution and a $0.2 million increase in salaries and employee benefits.


                                                

For the nine months ending September 30, 2015, noninterest expense decreased $3.1 million, or 2.5%, as compared to the same period of 2014, driven by $7.3 million in IT conversion-related expenses that were incurred in the first nine months of 2014 and a decrease of $1.5 million in furniture and equipment expense related to less software/hardware maintenance and programming expense post conversion. Also affecting the comparison of the periods was a $0.9 million external fraud loss recovery in the prior year period. Increases in expense compared to the year-ago period included $1.2 million in salaries and benefits due in part to the launch of our mortgage initiative and the acquisition of an insurance agency in the fourth quarter of 2014, $0.5 million in occupancy expense due to higher snow removal and utilities, a $1.0 million increase in debit card fraud losses primarily due to large merchant breaches, as well as the aforementioned $1.5 million OREO and building write-downs and a $1.0 million increase in reserves for unfunded loan commitments included in other operating expenses.
Full time equivalent staff declined to 1,263 at September 30, 2015 from 1,388 at September 30, 2014. The decrease is primarily attributable to staffing efficiencies enabled by the completion of our IT systems conversion, refinements to our branch staffing model and the closure of three branch offices in April 2015, offset by the recent launch of our mortgage initiative and the acquisition of an insurance agency.
The efficiency ratio, calculated as total noninterest expense as a percentage of total revenue (which consists of net interest income on a fully taxable equivalent basis plus total noninterest income, excluding net securities gains), was 63.83% and 63.99% for the three and nine months ended September 30, 2015, respectively, as compared to 66.65% and 66.25% for the three and nine months ended September 30, 2014.
Dividends and Capital
First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.07 per share, which is payable on November 20, 2015 to shareholders of record as of November 9, 2015. This dividend represents a 3.0% projected annual yield utilizing the October 27, 2015 closing market price of $9.37.
During the second quarter of 2015, First Commonwealth completed a previously announced $25.0 million common stock repurchase program, under which the corporation repurchased 2,885,020 shares at an average price of $8.70 per share. The company does not currently have an authorized share repurchase plan.
First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2015 were 12.5%, 11.5%, 10.1% and 10.2%, respectively. Our current capital levels meet 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 2015 on Wednesday, October 28, 2015 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-888-317-6016 or accessing a webcast of the call through the company’s web page, 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 replay access code #10073878. A link to the webcast replay will be accessible at www.fcbanking.com/InvestorRelations for 30 days.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation, headquartered in Indiana, Pennsylvania, is a financial services company with $6.4 billion in total assets as of September 30, 2015 and 111 banking offices in 17 counties throughout western and central Pennsylvania and central Ohio, and a Corporate Banking Center in northeast 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.
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 our 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) with which First Commonwealth 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, borrowing and savings habits; (12) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) First Commonwealth’s ability to attract and retain qualified employees; (16) changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (17) the ability to increase market share and control expenses; (18) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (19) the reliability of First Commonwealth’s vendors, internal control systems or information systems; (20) the costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals; and (21) other risks and uncertainties described in the reports that First Commonwealth files with the Securities and Exchange Commission, including its most recent Annual Report on Form 10‐K. Forward-looking statements speak only as of the date on which they are made. First Commonwealth undertakes no obligation to update


                                                

any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
Contact:
Investor Relations:
Ryan M. Thomas
Vice President / Finance and Investor Relations
724-463-1690
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,
 
2015
 
2015
 
2014
 
2015
 
2014
SUMMARY RESULTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
Net interest income (FTE)(1)
$
47,568

 
$
47,205

 
$
47,364

 
$
142,763

 
$
140,029

Provision for credit losses
4,621

 
3,038

 
2,073

 
8,818

 
8,621

Noninterest income
15,505

 
16,347

 
15,050

 
46,043

 
46,972

Noninterest expense
40,257

 
40,634

 
41,568

 
120,745

 
123,851

Net income
12,414

 
13,447

 
12,496

 
40,082

 
36,724

 
 
 
 
 
 
 
 
 
 
Earnings per common share (diluted)
$
0.14

 
$
0.15

 
$
0.13

 
$
0.45

 
$
0.39

 
 
 
 
 
 
 
 
 
 
KEY FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
0.78
%
 
0.85
%
 
0.78
%
 
0.84
%
 
0.78
%
Return on average shareholders' equity
6.86
%
 
7.57
%
 
6.91
%
 
7.48
%
 
6.83
%
Return on average tangible common equity (9)
8.87
%
 
9.82
%
 
8.89
%
 
9.68
%
 
8.79
%
Efficiency ratio(2)
63.83
%
 
63.96
%
 
66.65
%
 
63.99
%
 
66.25
%
Net interest margin (FTE)(1)
3.25
%
 
3.26
%
 
3.26
%
 
3.29
%
 
3.28
%
 
 
 
 
 
 
 
 
 
 
Book value per common share
$
8.12

 
$
7.99

 
$
7.74

 
 
 
 
Tangible book value per common share(4)
6.30

 
6.16

 
5.99

 
 
 
 
Market value per common share
9.09

 
9.59

 
8.39

 
 
 
 
Cash dividends declared per common share
0.07

 
0.07

 
0.07

 
$
0.21

 
$
0.21

 
 
 
 
 
 
 
 
 
 
ASSET QUALITY RATIOS
 
 
 
 
 
 
 
 
 
Nonperforming loans as a percent of end-of-period loans (5)
0.89
%
 
1.00
%
 
1.03
%
 
 
 
 
Nonperforming assets as a percent of total assets (5)
0.81
%
 
0.82
%
 
0.85
%
 
 
 
 
Net charge-offs as a percent of average loans (annualized)
0.13
%
 
0.39
%
 
0.18
%
 
 
 
 
Allowance for credit losses as a percent of nonperforming loans (6)
118.84
%
 
106.26
%
 
112.21
%
 
 
 
 
Allowance for credit losses as a percent of end-of-period loans (6)
1.06
%
 
1.01
%
 
1.15
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CAPITAL RATIOS
 
 
 
 
 
 
 
 
 
Shareholders' equity as a percent of total assets
11.3
%
 
11.3
%
 
11.2
%
 
 
 
 
Tangible common equity as a percent of tangible assets(3)
9.0
%
 
8.9
%
 
8.9
%
 
 
 
 
Leverage Ratio
10.1
%
 
10.0
%
 
9.8
%
 
 
 
 
Risk Based Capital - Tier I
11.5
%
 
11.5
%
 
11.7
%
 
 
 
 
Risk Based Capital - Total
12.5
%
 
12.4
%
 
12.8
%
 
 
 
 
Common Equity - Tier I
10.2
%
 
10.2
%
 
10.4
%
 
 
 
 
(5) - Includes held for sale loans.
 
 
 
 
 
 
 
 
 
(6) - Excludes held for sale loans.
 
 
 
 
 
 
 
 
 


                                                

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,
 
2015
2015
2014
 
2015
2014
INCOME STATEMENT
 
 
 
 
 
 
   Interest income
$
50,501

$
50,150

$
51,089

 
$
151,736

$
151,761

   Interest expense
3,816

3,780

4,536

 
11,509

14,234

Net Interest Income
46,685

46,370

46,553

 
140,227

137,527

   Taxable equivalent adjustment(1)
883

835

811

 
2,536

2,502

Net Interest Income (FTE)
47,568

47,205

47,364

 
142,763

140,029

   Provision for credit losses
4,621

3,038

2,073

 
8,818

8,621

Net Interest Income after Provision for Credit Losses (FTE)
42,947

44,167

45,291

 
133,945

131,408

 
 
 
 
 
 
 
   Net securities gains
—

20

48

 
125

50

   Trust income
1,614

1,476

1,678

 
4,511

4,587

   Service charges on deposit accounts
4,081

3,872

4,099

 
11,271

12,032

   Insurance and retail brokerage commissions
2,163

2,178

1,709

 
6,536

4,704

   Income from bank owned life insurance
1,357

1,378

1,330

 
4,089

4,131

   Gain on sale of loans
1,196

627

67

 
2,262

143

   Gain on sale of other assets
444

354

675

 
1,022

4,345

   Card related interchange income
3,637

3,729

3,599

 
10,784

10,620

Derivative mark-to-market
(783
)
593

(108
)
 
(420
)
175

   Other income
1,796

2,120

1,953

 
5,863

6,185

Total Noninterest Income
15,505

16,347

15,050

 
46,043

46,972

 
 
 
 
 
 
 
   Salaries and employee benefits
22,446

22,001

22,244

 
66,339

65,185

   Net occupancy expense
3,291

3,316

3,180

 
10,518

9,969

   Furniture and equipment expense (7)
2,670

2,630

4,471

 
7,980

15,050

   Data processing expense
1,558

1,509

1,583

 
4,505

4,593

   Pennsylvania shares tax expense
1,713

1,110

1,033

 
3,617

2,782

   Advertising and promotion expense
789

637

861

 
1,946

2,346

   Intangible amortization
157

156

174

 
469

530

   Collection and repossession expense
801

917

783

 
2,229

1,941

   Other professional fees and services
1,007

945

1,050

 
2,882

2,777

   FDIC insurance
963

1,025

926

 
3,047

3,026

   Operational losses (recoveries)
314

323

187

 
1,637

(273
)
   Loss on sale or write-down of assets
140

1,635

61

 
2,037

1,241

   Conversion related expenses (8)
—

—

783

 
—

1,676

   Other operating expenses
4,408

4,430

4,232

 
13,539

13,008

Total Noninterest Expense
40,257

40,634

41,568

 
120,745

123,851

 
 
 
 
 
 
 
Income before Income Taxes
18,195

19,880

18,773

 
59,243

54,529

   Taxable equivalent adjustment(1)
883

835

811

 
2,536

2,502

   Income tax provision
4,898

5,598

5,466

 
16,625

15,303

Net Income
$
12,414

$
13,447

$
12,496

 
$
40,082

$
36,724

 
 
 
 
 
 
 
Shares Outstanding at End of Period
88,961,268

88,960,268

91,722,649

 
88,961,268

91,722,649

Average Shares Outstanding Assuming Dilution
88,813,746

88,939,003

92,578,701

 
89,531,498

93,632,783

 
 
 
 
 
 
 
(7) - Includes $1.4 million and $5.6 million of accelerated depreciation expense related to the technology conversion for the three and nine month periods ended September 30, 2014, respectively.
(8) - Does not include accelerated depreciation expense described in Note 7.


                                                

FIRST COMMONWEALTH FINANCIAL CORPORATION
 
 
 
CONSOLIDATED FINANCIAL DATA
 
 
 
 
 
Unaudited
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30,
 
June 30,
 
September 30,
 
2015
 
2015
 
2014
BALANCE SHEET (Period End)
 
 
 
 
 
Assets
 
 
 
 
 
   Cash and due from banks
$
69,235

 
$
64,321

 
$
78,696

   Interest-bearing bank deposits
3,529

 
3,120

 
5,374

   Securities available for sale, at fair value
1,104,709

 
1,143,072

 
1,383,768

   Securities held to maturity, at amortized cost
154,035

 
131,780

 
—

   Loans held for sale
4,986

 
9,817

 
1,305

 
 
 
 
 
 
     Loans
4,575,735

 
4,490,854

 
4,411,481

     Allowance for credit losses
(48,518
)
 
(45,344
)
 
(50,784
)
   Net loans
4,527,217

 
4,445,510

 
4,360,697

 
 
 
 
 
 
   Goodwill and other intangibles
162,625

 
162,781

 
160,152

   Other assets
358,413

 
356,327

 
366,106

Total Assets
$
6,384,749

 
$
6,316,728

 
$
6,356,098

 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
   Noninterest-bearing demand deposits
$
1,077,234

 
$
1,068,230

 
$
995,014

 
 
 
 
 
 
     Interest-bearing demand deposits
70,662

 
76,865

 
82,221

     Savings deposits
2,427,326

 
2,441,888

 
2,363,464

     Time deposits
586,268

 
623,124

 
931,689

   Total interest-bearing deposits
3,084,256

 
3,141,877

 
3,377,374

 
 
 
 
 
 
   Total deposits
4,161,490

 
4,210,107

 
4,372,388

 
 
 
 
 
 
     Short-term borrowings
1,329,794

 
1,231,917

 
1,034,967

     Long-term borrowings
111,219

 
111,356

 
188,706

   Total borrowings
1,441,013

 
1,343,273

 
1,223,673

 
 
 
 
 
 
   Other liabilities
59,478

 
52,142

 
50,553

   Shareholders' equity
722,768

 
711,206

 
709,484

Total Liabilities and Shareholders' Equity
$
6,384,749

 
$
6,316,728

 
$
6,356,098





                                                

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/
 
2015
Rate
2015
Rate
2014
Rate
 
2015
Rate
2014
Rate
NET INTEREST MARGIN
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Loans (FTE)(1)(5)
$
4,550,882

3.82
%
$
4,498,965

3.87
%
$
4,388,130

3.97
%
 
$
4,509,628

3.87
%
$
4,331,807

4.04
%
Securities and interest bearing bank deposits (FTE)(1)
1,248,495

2.40
%
1,308,016

2.33
%
1,383,554

2.28
%
 
1,298,397

2.45
%
1,370,331

2.28
%
Total Interest-Earning Assets (FTE)(1)
5,799,377

3.52
%
5,806,981

3.52
%
5,771,684

3.57
%
 
5,808,025

3.55
%
5,702,138

3.62
%
Noninterest-earning assets
543,632

 
554,175

 
553,384

 
 
546,103

 
557,971

 
Total Assets
$
6,343,009

 
$
6,361,156

 
$
6,325,068

 
 
$
6,354,128

 
$
6,260,109

 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand and savings deposits
$
2,504,516

0.11
%
$
2,526,744

0.11
%
$
2,466,127

0.10
%
 
$
2,510,814

0.11
%
$
2,511,615

0.10
%
Time deposits
659,445

0.63
%
694,725

0.69
%
954,474

0.98
%
 
714,005

0.70
%
1,065,458

1.00
%
Short-term borrowings
1,232,795

0.41
%
1,204,466

0.37
%
940,156

0.28
%
 
1,193,122

0.38
%
749,269

0.29
%
Long-term borrowings
111,285

2.78
%
122,410

2.57
%
199,435

1.79
%
 
126,896

2.50
%
208,818

1.75
%
Total Interest-Bearing Liabilities
4,508,041

0.34
%
4,548,345

0.33
%
4,560,192

0.39
%
 
4,544,837

0.34
%
4,535,160

0.42
%
Noninterest-bearing deposits
1,065,204

 
1,045,659

 
995,690

 
 
1,038,016

 
953,946

 
Other liabilities
51,586

 
55,042

 
51,327

 
 
55,075

 
52,001

 
Shareholders' equity
718,178

 
712,110

 
717,859

 
 
716,200

 
719,002

 
Total Noninterest-Bearing Funding Sources
1,834,968

 
1,812,811

 
1,764,876

 
 
1,809,291

 
1,724,949

 
Total Liabilities and Shareholders' Equity
$
6,343,009

 
$
6,361,156

 
$
6,325,068

 
 
$
6,354,128

 
$
6,260,109

 
 
 
 
 
 
 
 
 
 
 
 
 
Net Interest Margin (FTE) (annualized)(1)
 
3.25
%
 
3.26
%
 
3.26
%
 
 
3.29
%
 
3.28
%



                                                

FIRST COMMONWEALTH FINANCIAL CORPORATION
 
 
 
 
CONSOLIDATED FINANCIAL DATA
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30,
June 30,
September 30,
 
 
 
 
2015
2015
2014
 
 
 
ASSET QUALITY DETAIL
 
 
 
 
 
 
Nonperforming Loans:
 
 
 
 
 
 
Loans on nonaccrual basis
$
20,220

$
21,776

$
27,310

 
 
 
Troubled debt restructured loans held for sale on nonaccrual basis
—

2,432

—

 
 
 
Troubled debt restructured loans on nonaccrual basis
8,583

8,619

6,783

 
 
 
Troubled debt restructured loans on accrual basis
12,024

12,276

11,164

 
 
 
       Total Nonperforming Loans
$
40,827

$
45,103

$
45,257

 
 
 
Other real estate owned ("OREO")
10,542

6,539

7,751

 
 
 
Repossessions ("Repo")
357

348

902

 
 
 
       Total Nonperforming Assets
$
51,726

$
51,990

$
53,910

 
 
 
Loans past due in excess of 90 days and still accruing
$
2,054

$
1,592

$
2,374

 
 
 
Classified loans
81,723

79,924

63,724

 
 
 
Criticized loans
136,919

120,506

139,449

 
 
 
 
 
 
 
 
 
 
Nonperforming assets as a percentage of total loans, plus OREO
and Repos
1.13
%
1.16
%
1.22
%
 
 
 
Allowance for credit losses
$
48,518

$
45,344

$
50,784

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Nine Months Ended
 
September 30,
June 30,
September 30,
 
September 30,
September 30,
 
2015
2015
2014
 
2015
2014
Net Charge-offs (Recoveries):
 
 
 
 
 
 
       Commercial, financial, agricultural and other
$
75

$
2,702

$
294

 
$
7,657

$
7,732

       Real estate construction
—

(84
)
(132
)
 
(84
)
(173
)
       Commercial real estate
528

471

635

 
1,063

677

       Residential real estate
123

341

454

 
934

1,866

       Loans to individuals
721

961

763

 
2,781

1,960

Net Charge-offs
$
1,447

$
4,391

$
2,014

 
$
12,351

$
12,062

 
 
 
 
 
 
 
Net charge-offs as a percentage of average loans outstanding (annualized)
0.13
%
0.39
%
0.18
%
 
0.37
%
0.37
%
Provision for credit losses as a percentage of net charge-offs
319.35
%
69.19
%
102.93
%
 
71.40
%
71.47
%
Provision for credit losses
$
4,621

$
3,038

$
2,073

 
$
8,818

$
8,621




                                                

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."
  
 
 
 
September 30,
June 30,
September 30,
 
 
 
 
2015
2015
2014
 
 
 
Tangible Equity:
 
 
 
 
 
 
   Total shareholders' equity
$
722,768

$
711,206

$
709,484

 
 
 
   Less: intangible assets
162,625

162,781

160,152

 
 
 
       Tangible Equity
560,143

548,425

549,332

 
 
 
   Less: preferred stock
—

—

—

 
 
 
       Tangible Common Equity
$
560,143

$
548,425

$
549,332

 
 
 
 
 
 
 
 
 
 
Tangible Assets:
 
 
 
 
 
 
   Total assets
$
6,384,749

$
6,316,728

$
6,356,098

 
 
 
   Less: intangible assets
162,625

162,781

160,152

 
 
 
       Tangible Assets
$
6,222,124

$
6,153,947

$
6,195,946

 
 
 
 
 
 
 
 
 
 
(3)Tangible Common Equity as a percentage of
 
 
 
 
 
 
     Tangible Assets
9.00
%
8.91
%
8.87
%
 
 
 
 
 
 
 
 
 
 
   Shares Outstanding at End of Period
88,961,268

88,960,268

91,722,649

 
 
 
(4)Tangible Book Value Per Common Share
$
6.30

$
6.16

$
5.99

 
 
 
 
 
 
 
 
 
 
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.
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Nine Months Ended
 
September 30,
June 30,
September 30,
 
September 30,
September 30,
 
2015
2015
2014
 
2015
2014
Average Tangible Equity:
 
 
 
 
 
 
   Total shareholders' equity
$
718,178

$
712,110

$
717,859

 
$
716,200

$
719,002

   Less: intangible assets
162,709

162,865

160,237

 
162,864

160,603

       Tangible Equity
555,469

549,245

557,622

 
553,336

558,399

   Less: preferred stock
—

—

—

 
—

—

       Tangible Common Equity
$
555,469

$
549,245

$
557,622

 
$
553,336

$
558,399

 
 
 
 
 
 
 
(9)Return on Average Tangible Common Equity
8.87
%
9.82
%
8.89
%
 
9.68
%
8.79
%