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 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Item 7.01 | Regulation FD Disclosure |
Item 9.01 | Financial Statements and Exhibits |
99.1 | Press Release announcing Fourth Quarter and Full-Year 2016 Financial Results and Declaration of Quarterly Dividend. |
FIRST COMMONWEALTH FINANCIAL CORPORATION | ||||
By: | /s/ James R. Reske | |||
Name: | James R. Reske | |||
Title: | Executive Vice President, Chief Financial Officer and Treasurer |
• | Completed the acquisition of 13 FirstMerit branches in Canton and Ashtabula, Ohio enhancing our presence in Northeast Ohio by building on existing loan production offices in Cleveland and suburban Akron; and |
• | Announced the acquisition of DCB Financial Corp. in Lewis Center, Ohio building upon our acquisition of Columbus-based First Community Bank in 2015. This transaction has received all necessary regulatory approvals and is expected to close in the second quarter of 2017. |
• | Return on average assets improved to 1.07% and is at the highest level since the second quarter of 2005; |
◦ | Core return on average assets (excluding acquisition expenses) improved to 1.18%; |
• | Return on average tangible common equity improved to 12.46%, the highest level since the second quarter of 2008; |
◦ | Core return on average tangible common equity (excluding acquisition expenses) improved to 13.73%; and |
• | The net interest margin improved 15 basis points to 3.44%. |
• | Record fourth quarter net income was $17.9 million, or $0.20 diluted earnings per share. Core net income (adjusted for acquisition expenses) was $19.7 million, or $0.22 diluted earnings per share. Net income was impacted by the following items: |
◦ | Net interest income of $52.5 million increased by $2.0 million compared to the prior quarter, primarily as a result of the increase in interest rates in December combined with the ability to pay down short-term borrowings following the aforementioned branch acquisition; |
◦ | Noninterest income of $17.7 million, excluding net securities gains, increased by $0.7 million compared to the prior quarter, driven by service charges on deposit accounts, including increased interchange income, and a positive derivative mark-to-market of commercial loan interest rate swaps; |
◦ | Noninterest expense of $45.7 million increased $7.0 million from the previous quarter primarily due to $2.8 million, or $0.02 diluted earnings per share, of one-time acquisition expense related to the FirstMerit branch purchase and increased incentive accruals to align with improved financial performance and productivity; and |
◦ | Provision for credit losses of ($1.8) million, a decrease of $5.2 million from the previous quarter, primarily due to recoveries on loans previously charged off in prior periods and improved asset quality. |
(dollars in thousands, | For the Three Months Ended | For the Years Ended | ||||||||||||
except per share data) | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||
Reported Results | ||||||||||||||
Net income | $17,914 | $17,196 | $10,061 | $59,590 | $50,143 | |||||||||
Diluted earnings per share | $0.20 | $0.19 | $0.11 | $0.67 | $0.56 | |||||||||
Return on average assets | 1.07 | % | 1.02 | % | 0.61 | % | 0.89 | % | 0.78 | % | ||||
Return on average equity | 9.46 | % | 9.14 | % | 5.50 | % | 8.02 | % | 6.98 | % | ||||
Core Operating Results (non-GAAP)(1) | ||||||||||||||
Core net income | $19,744 | $17,273 | $10,642 | $61,652 | $50,742 | |||||||||
Core diluted earnings per share | $0.22 | $0.19 | $0.12 | $0.69 | $0.57 | |||||||||
Core return on average assets | 1.18 | % | 1.03 | % | 0.65 | % | 0.93 | % | 0.79 | % | ||||
Return on average tangible common equity | 12.46 | % | 11.77 | % | 7.16 | % | 10.43 | % | 9.10 | % | ||||
Core return on average tangible common equity | 13.73 | % | 11.82 | % | 7.57 | % | 10.79 | % | 9.20 | % | ||||
Core efficiency ratio | 61.70 | % | 56.65 | % | 60.31 | % | 58.71 | % | 61.99 | % | ||||
Net interest margin (FTE) | 3.44 | % | 3.29 | % | 3.26 | % | 3.32 | % | 3.28 | % |
(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. See supplemental information included with the release for "non-GAAP Financial Measures and Key Performance Indicators" and additional information. |
FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||||||||||
CONSOLIDATED FINANCIAL DATA | |||||||||||||||||||
Unaudited | |||||||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||||||
For the Three Months Ended | For the Years Ended | ||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
SUMMARY RESULTS OF OPERATIONS | |||||||||||||||||||
Net interest income (FTE) (1) | $ | 52,529 | $ | 50,569 | $ | 49,179 | $ | 202,881 | $ | 191,941 | |||||||||
Provision for credit losses | (1,826 | ) | 3,408 | 6,130 | 18,480 | 14,948 | |||||||||||||
Noninterest income | 18,332 | 16,994 | 15,282 | 64,599 | 61,325 | ||||||||||||||
Noninterest expense | 45,675 | 38,696 | 43,129 | 159,925 | 163,874 | ||||||||||||||
Net income | 17,914 | 17,196 | 10,061 | 59,590 | 50,143 | ||||||||||||||
Core net income (5) | 19,744 | 17,273 | 10,642 | 61,652 | 50,742 | ||||||||||||||
Earnings per common share (diluted) | $ | 0.20 | $ | 0.19 | $ | 0.11 | $ | 0.67 | $ | 0.56 | |||||||||
Core earnings per common share (diluted) (6) | $ | 0.22 | $ | 0.19 | $ | 0.12 | $ | 0.69 | $ | 0.57 | |||||||||
KEY FINANCIAL RATIOS | |||||||||||||||||||
Return on average assets | 1.07 | % | 1.02 | % | 0.61 | % | 0.89 | % | 0.78 | % | |||||||||
Core return on average assets (7) | 1.18 | % | 1.03 | % | 0.65 | % | 0.93 | % | 0.79 | % | |||||||||
Return on average shareholders' equity | 9.46 | % | 9.14 | % | 5.50 | % | 8.02 | % | 6.98 | % | |||||||||
Return on average tangible common equity (8) | 12.46 | % | 11.77 | % | 7.16 | % | 10.43 | % | 9.10 | % | |||||||||
Core return on average tangible common equity (9) | 13.73 | % | 11.82 | % | 7.57 | % | 10.79 | % | 9.20 | % | |||||||||
Core efficiency ratio (2)(10) | 61.70 | % | 56.65 | % | 60.31 | % | 58.71 | % | 61.99 | % | |||||||||
Net interest margin (FTE) (1) | 3.44 | % | 3.29 | % | 3.26 | % | 3.32 | % | 3.28 | % | |||||||||
Book value per common share | $ | 8.43 | $ | 8.45 | $ | 8.09 | |||||||||||||
Tangible book value per common share (11) | 6.20 | 6.59 | 6.23 | ||||||||||||||||
Market value per common share | 14.18 | 10.09 | 9.07 | ||||||||||||||||
Cash dividends declared per common share | 0.07 | 0.07 | 0.07 | $ | 0.28 | $ | 0.28 | ||||||||||||
ASSET QUALITY RATIOS | |||||||||||||||||||
Nonperforming loans as a percent of end-of-period loans (3) | 0.86 | % | 1.13 | % | 1.08 | % | |||||||||||||
Nonperforming assets as a percent of total assets (3) | 0.73 | % | 0.94 | % | 0.92 | % | |||||||||||||
Net charge-offs as a percent of average loans (annualized) | 0.22 | % | 0.70 | % | 0.32 | % | |||||||||||||
Allowance for credit losses as a percent of nonperforming loans (4) | 120.02 | % | 99.83 | % | 99.94 | % | |||||||||||||
Allowance for credit losses as a percent of end-of-period loans (4) | 1.03 | % | 1.13 | % | 1.08 | % | |||||||||||||
CAPITAL RATIOS | |||||||||||||||||||
Shareholders' equity as a percent of total assets | 11.2 | % | 11.3 | % | 11.0 | % | |||||||||||||
Tangible common equity as a percent of tangible assets (12) | 8.5 | % | 9.0 | % | 8.7 | % | |||||||||||||
Leverage Ratio | 9.8 | % | 10.0 | % | 9.9 | % | |||||||||||||
Risk Based Capital - Tier I | 11.3 | % | 11.6 | % | 11.3 | % | |||||||||||||
Risk Based Capital - Total | 12.3 | % | 12.6 | % | 12.3 | % | |||||||||||||
Common Equity - Tier I | 10.1 | % | 10.3 | % | 10.0 | % |
FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||||||||
CONSOLIDATED FINANCIAL DATA | |||||||||||||||||
Unaudited | |||||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||||
For the Three Months Ended | For the Years Ended | ||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||
INCOME STATEMENT | |||||||||||||||||
Interest income | $ | 55,932 | $ | 54,479 | $ | 52,335 | $ | 217,614 | $ | 204,071 | |||||||
Interest expense | 4,413 | 4,861 | 4,086 | 18,579 | 15,595 | ||||||||||||
Net Interest Income | 51,519 | 49,618 | 48,249 | 199,035 | 188,476 | ||||||||||||
Taxable equivalent adjustment (1) | 1,010 | 951 | 930 | 3,846 | 3,465 | ||||||||||||
Net Interest Income (FTE) | 52,529 | 50,569 | 49,179 | 202,881 | 191,941 | ||||||||||||
Provision for credit losses | (1,826 | ) | 3,408 | 6,130 | 18,480 | 14,948 | |||||||||||
Net Interest Income after Provision for Credit Losses (FTE) | 54,355 | 47,161 | 43,049 | 184,401 | 176,993 | ||||||||||||
Net securities (losses) gains | 589 | — | (278 | ) | 617 | (153 | ) | ||||||||||
Trust income | 1,268 | 1,523 | 1,323 | 5,366 | 5,834 | ||||||||||||
Service charges on deposit accounts | 4,341 | 3,975 | 4,048 | 15,869 | 15,319 | ||||||||||||
Insurance and retail brokerage commissions | 1,916 | 2,104 | 1,986 | 7,964 | 8,522 | ||||||||||||
Income from bank owned life insurance | 1,424 | 1,350 | 1,323 | 5,381 | 5,412 | ||||||||||||
Gain on sale of mortgage loans | 1,236 | 1,235 | 565 | 4,086 | 2,421 | ||||||||||||
Gain on sale of other loans and assets | 363 | 387 | 427 | 1,411 | 1,855 | ||||||||||||
Card-related interchange income | 3,916 | 3,698 | 3,717 | 14,955 | 14,501 | ||||||||||||
Derivative mark-to-market | 1,294 | 470 | 146 | 219 | (274 | ) | |||||||||||
Swap fee income | 374 | 725 | 120 | 2,359 | 847 | ||||||||||||
Other income | 1,611 | 1,527 | 1,905 | 6,372 | 7,041 | ||||||||||||
Total Noninterest Income | 18,332 | 16,994 | 15,282 | 64,599 | 61,325 | ||||||||||||
Salaries and employee benefits | 24,913 | 20,647 | 22,822 | 87,125 | 89,161 | ||||||||||||
Net occupancy | 3,307 | 3,176 | 3,194 | 13,150 | 13,712 | ||||||||||||
Furniture and equipment | 3,028 | 2,847 | 2,757 | 11,624 | 10,737 | ||||||||||||
Data processing | 2,050 | 1,832 | 1,618 | 7,429 | 6,123 | ||||||||||||
Pennsylvania shares tax | 1,061 | 914 | 1,076 | 3,825 | 4,693 | ||||||||||||
Advertising and promotion | 661 | 750 | 692 | 2,601 | 2,638 | ||||||||||||
Intangible amortization | 229 | 67 | 136 | 547 | 605 | ||||||||||||
Collection and repossession | 447 | 760 | 597 | 2,250 | 2,826 | ||||||||||||
Other professional fees and services | 1,049 | 1,202 | 1,157 | 3,915 | 4,034 | ||||||||||||
FDIC insurance | 698 | 1,105 | 967 | 3,903 | 4,014 | ||||||||||||
Litigation and operational losses | 246 | 295 | 482 | 1,420 | 2,119 | ||||||||||||
Loss on sale or write-down of assets | 526 | 188 | 1,075 | 1,155 | 3,112 | ||||||||||||
Merger and acquisition related | 2,815 | 118 | 894 | 3,173 | 922 | ||||||||||||
Other operating expenses | 4,645 | 4,795 | 5,662 | 17,808 | 19,178 | ||||||||||||
Total Noninterest Expense | 45,675 | 38,696 | 43,129 | 159,925 | 163,874 | ||||||||||||
Income before Income Taxes | 27,012 | 25,459 | 15,202 | 89,075 | 74,444 | ||||||||||||
Taxable equivalent adjustment (1) | 1,010 | 951 | 930 | 3,846 | 3,465 | ||||||||||||
Income tax provision | 8,088 | 7,312 | 4,211 | 25,639 | 20,836 | ||||||||||||
Net Income | $ | 17,914 | $ | 17,196 | $ | 10,061 | $ | 59,590 | $ | 50,143 | |||||||
Shares Outstanding at End of Period | 89,007,077 | 88,992,007 | 88,961,268 | 89,007,077 | 88,961,268 | ||||||||||||
Average Shares Outstanding Assuming Dilution | 88,887,387 | 88,858,204 | 88,850,049 | 88,851,573 | 89,356,767 | ||||||||||||
FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||
CONSOLIDATED FINANCIAL DATA | |||||||||||
Unaudited | |||||||||||
(dollars in thousands) | |||||||||||
December 31, | September 30, | December 31, | |||||||||
2016 | 2016 | 2015 | |||||||||
BALANCE SHEET (Period End) | |||||||||||
Assets | |||||||||||
Cash and due from banks | $ | 91,033 | $ | 76,456 | $ | 66,644 | |||||
Interest-bearing bank deposits | 24,644 | 5,097 | 2,808 | ||||||||
Securities available for sale, at fair value | 815,110 | 867,725 | 949,512 | ||||||||
Securities held to maturity, at amortized cost | 372,513 | 389,513 | 384,324 | ||||||||
Loans held for sale | 7,052 | 7,855 | 5,763 | ||||||||
Loans | 4,879,347 | 4,860,652 | 4,683,750 | ||||||||
Allowance for credit losses | (50,185 | ) | (54,734 | ) | (50,812 | ) | |||||
Net loans | 4,829,162 | 4,805,918 | 4,632,938 | ||||||||
Goodwill and other intangibles | 198,496 | 165,349 | 165,731 | ||||||||
Other assets | 346,008 | 348,570 | 359,170 | ||||||||
Total Assets | $ | 6,684,018 | $ | 6,666,483 | $ | 6,566,890 | |||||
Liabilities and Shareholders' Equity | |||||||||||
Noninterest-bearing demand deposits | $ | 1,268,786 | $ | 1,241,627 | $ | 1,116,689 | |||||
Interest-bearing demand deposits | 114,043 | 87,507 | 86,365 | ||||||||
Savings deposits | 2,972,747 | 2,552,754 | 2,390,607 | ||||||||
Time deposits | 591,832 | 577,092 | 602,233 | ||||||||
Total interest-bearing deposits | 3,678,622 | 3,217,353 | 3,079,205 | ||||||||
Total deposits | 4,947,408 | 4,458,980 | 4,195,894 | ||||||||
Short-term borrowings | 867,943 | 1,330,327 | 1,510,825 | ||||||||
Long-term borrowings | 80,916 | 81,059 | 81,481 | ||||||||
Total borrowings | 948,859 | 1,411,386 | 1,592,306 | ||||||||
Other liabilities | 37,822 | 44,330 | 59,144 | ||||||||
Shareholders' equity | 749,929 | 751,787 | 719,546 | ||||||||
Total Liabilities and Shareholders' Equity | $ | 6,684,018 | $ | 6,666,483 | $ | 6,566,890 |
FIRST COMMONWEALTH FINANCIAL CORPORATION |
CONSOLIDATED FINANCIAL DATA |
Unaudited |
(dollars in thousands) |
For the Three Months Ended | For the Years Ended | |||||||||||||||||||||||||
December 31, | Yield/ | September 30, | Yield/ | December 31, | Yield/ | December 31, | Yield/ | December 31, | Yield/ | |||||||||||||||||
2016 | Rate | 2016 | Rate | 2015 | Rate | 2016 | Rate | 2015 | Rate | |||||||||||||||||
NET INTEREST MARGIN | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Loans (FTE)(1)(3) | $ | 4,856,579 | 3.99 | % | $ | 4,839,206 | 3.90 | % | $ | 4,684,215 | 3.83 | % | $ | 4,818,759 | 3.91 | % | $ | 4,553,634 | 3.86 | % | ||||||
Securities and interest bearing bank deposits (FTE) (1) | 1,225,600 | 2.66 | % | 1,284,493 | 2.49 | % | 1,295,982 | 2.46 | % | 1,290,392 | 2.56 | % | 1,297,788 | 2.45 | % | |||||||||||
Total Interest-Earning Assets (FTE) (1) | 6,082,179 | 3.72 | % | 6,123,699 | 3.60 | % | 5,980,197 | 3.53 | % | 6,109,151 | 3.63 | % | 5,851,422 | 3.55 | % | |||||||||||
Noninterest-earning assets | 555,920 | 555,977 | 550,568 | 551,465 | 547,229 | |||||||||||||||||||||
Total Assets | $ | 6,638,099 | $ | 6,679,676 | $ | 6,530,765 | $ | 6,660,616 | $ | 6,398,651 | ||||||||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||
Interest-bearing demand and savings deposits | $ | 2,768,287 | 0.14 | % | $ | 2,652,562 | 0.18 | % | $ | 2,507,385 | 0.12 | % | $ | 2,659,202 | 0.14 | % | $ | 2,509,950 | 0.11 | % | ||||||
Time deposits | 577,851 | 0.63 | % | 586,470 | 0.65 | % | 615,781 | 0.62 | % | 584,429 | 0.63 | % | 689,247 | 0.68 | % | |||||||||||
Short-term borrowings | 1,210,619 | 0.58 | % | 1,391,766 | 0.57 | % | 1,428,818 | 0.46 | % | 1,387,737 | 0.58 | % | 1,252,531 | 0.40 | % | |||||||||||
Long-term borrowings | 80,984 | 3.82 | % | 81,128 | 3.67 | % | 96,669 | 3.01 | % | 81,197 | 3.67 | % | 119,277 | 2.60 | % | |||||||||||
Total Interest-Bearing Liabilities | 4,637,741 | 0.38 | % | 4,711,926 | 0.41 | % | 4,648,653 | 0.35 | % | 4,712,565 | 0.39 | % | 4,571,005 | 0.34 | % | |||||||||||
Noninterest-bearing deposits | 1,195,862 | 1,153,945 | 1,097,013 | 1,146,189 | 1,052,886 | |||||||||||||||||||||
Other liabilities | 50,837 | 65,727 | 58,887 | 58,918 | 56,036 | |||||||||||||||||||||
Shareholders' equity | 753,659 | 748,078 | 726,212 | 742,944 | 718,724 | |||||||||||||||||||||
Total Noninterest-Bearing Funding Sources | 2,000,358 | 1,967,750 | 1,882,112 | 1,948,051 | 1,827,646 | |||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 6,638,099 | $ | 6,679,676 | $ | 6,530,765 | $ | 6,660,616 | $ | 6,398,651 | ||||||||||||||||
Net Interest Margin (FTE) (annualized)(1) | 3.44 | % | 3.29 | % | 3.26 | % | 3.32 | % | 3.28 | % |
FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||
CONSOLIDATED FINANCIAL DATA | |||||||||
Unaudited | |||||||||
(dollars in thousands) | |||||||||
December 31, | September 30, | December 31, | |||||||
2016 | 2016 | 2015 | |||||||
Loan Portfolio Detail | |||||||||
Commercial Loan Portfolio: | |||||||||
Commercial, financial, agricultural and other | $ | 1,139,547 | $ | 1,207,447 | $ | 1,150,906 | |||
Commercial real estate | 1,742,210 | 1,683,015 | 1,479,000 | ||||||
Real estate construction | 219,621 | 229,375 | 220,736 | ||||||
Total Commercial | 3,101,378 | 3,119,837 | 2,850,642 | ||||||
Consumer Loan Portfolio: | |||||||||
Closed-end mortgages | 713,471 | 719,049 | 753,586 | ||||||
Home equity lines of credit | 515,721 | 466,710 | 470,879 | ||||||
Total Real Estate - Consumer | 1,229,192 | 1,185,759 | 1,224,465 | ||||||
Auto loans | 458,610 | 467,222 | 519,809 | ||||||
Direct installment | 24,381 | 24,578 | 25,993 | ||||||
Personal lines of credit | 53,339 | 50,086 | 47,424 | ||||||
Student loans | 12,447 | 13,170 | 15,417 | ||||||
Total Other Consumer | 548,777 | 555,056 | 608,643 | ||||||
Total Consumer Portfolio | 1,777,969 | 1,740,815 | 1,833,108 | ||||||
Total Portfolio Loans | 4,879,347 | 4,860,652 | 4,683,750 | ||||||
Loans held for sale | 7,052 | 7,855 | 5,763 | ||||||
Total Loans | $ | 4,886,399 | $ | 4,868,507 | $ | 4,689,513 | |||
December 31, | September 30, | December 31, | |||||||
2016 | 2016 | 2015 | |||||||
ASSET QUALITY DETAIL | |||||||||
Nonperforming Loans: | |||||||||
Loans on nonaccrual basis | $ | 16,301 | $ | 27,817 | $ | 24,345 | |||
Troubled debt restructured loans held for sale on nonaccrual basis | — | — | — | ||||||
Troubled debt restructured loans on nonaccrual basis | 11,722 | 12,723 | 12,360 | ||||||
Troubled debt restructured loans on accrual basis | 13,790 | 14,286 | 14,139 | ||||||
Total Nonperforming Loans | $ | 41,813 | $ | 54,826 | $ | 50,844 | |||
Other real estate owned ("OREO") | 6,805 | 7,686 | 9,398 | ||||||
Repossessions ("Repos") | 242 | 310 | 227 | ||||||
Total Nonperforming Assets | $ | 48,860 | $ | 62,822 | $ | 60,469 | |||
Loans past due in excess of 90 days and still accruing | 2,131 | 2,343 | 2,455 | ||||||
Classified loans | 92,705 | 97,259 | 86,440 | ||||||
Criticized loans | 134,372 | 137,264 | 133,963 | ||||||
Nonperforming assets as a percentage of total loans, plus OREO and Repos | 1.00 | % | 1.29 | % | 1.29 | % | |||
Allowance for credit losses | $ | 50,185 | $ | 54,734 | $ | 50,812 | |||
FIRST COMMONWEALTH FINANCIAL CORPORATION |
CONSOLIDATED FINANCIAL DATA |
Unaudited |
(dollars in thousands) |
For the Three Months Ended | For the Years Ended | |||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net Charge-offs (Recoveries): | ||||||||||||||||
Commercial, financial, agricultural and other | $ | 2,392 | $ | 7,100 | $ | 2,675 | $ | 15,439 | $ | 10,332 | ||||||
Real estate construction | (335 | ) | — | 8 | (562 | ) | (76 | ) | ||||||||
Commercial real estate | (567 | ) | (10 | ) | 246 | (952 | ) | 1,309 | ||||||||
Residential real estate | 139 | 227 | 18 | 708 | 952 | |||||||||||
Loans to individuals | 1,094 | 1,178 | 889 | 4,474 | 3,670 | |||||||||||
Net Charge-offs | $ | 2,723 | $ | 8,495 | $ | 3,836 | $ | 19,107 | $ | 16,187 | ||||||
Net charge-offs as a percentage of average loans outstanding (annualized) | 0.22 | % | 0.70 | % | 0.32 | % | 0.40 | % | 0.36 | % | ||||||
Provision for credit losses as a percentage of net charge-offs | (67.06 | )% | 40.12 | % | 159.80 | % | 96.72 | % | 92.35 | % | ||||||
Provision for credit losses | $ | (1,826 | ) | $ | 3,408 | $ | 6,130 | $ | 18,480 | $ | 14,948 |
DEFINITIONS AND 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) 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 Years Ended | |||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net Income | $ | 17,914 | $ | 17,196 | $ | 10,061 | $ | 59,590 | $ | 50,143 | ||||||
Intangible amortization | 229 | 67 | 136 | 547 | 605 | |||||||||||
Tax benefit of amortization of intangibles | (80 | ) | (23 | ) | (48 | ) | (191 | ) | (212 | ) | ||||||
Net Income, adjusted for tax affected amortization of intangibles | 18,063 | 17,240 | 10,149 | 59,946 | 50,536 | |||||||||||
Average Tangible Equity: | ||||||||||||||||
Total shareholders' equity | $ | 753,659 | $ | 748,078 | $ | 726,212 | $ | 742,944 | $ | 718,724 | ||||||
Less: intangible assets | 177,081 | 165,449 | 164,222 | 168,446 | 163,206 | |||||||||||
Tangible Equity | 576,578 | 582,629 | 561,990 | 574,498 | 555,518 | |||||||||||
Less: preferred stock | — | — | — | — | — | |||||||||||
Tangible Common Equity | $ | 576,578 | $ | 582,629 | $ | 561,990 | $ | 574,498 | $ | 555,518 | ||||||
(8)Return on Average Tangible Common Equity | 12.46 | % | 11.77 | % | 7.16 | % | 10.43 | % | 9.10 | % | ||||||
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 Years Ended | |||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Core Net Income: | ||||||||||||||||
Total Net Income | $ | 17,914 | $ | 17,196 | $ | 10,061 | $ | 59,590 | $ | 50,143 | ||||||
Merger & Acquisition related expenses | 2,815 | 118 | 894 | 3,173 | 922 | |||||||||||
Tax benefit of merger & acquisition related expenses | (985 | ) | (41 | ) | (313 | ) | (1,111 | ) | (323 | ) | ||||||
(5) Core net income | 19,744 | 17,273 | 10,642 | 61,652 | 50,742 | |||||||||||
Average Shares Outstanding Assuming Dilution | 88,887,387 | 88,858,204 | 88,850,049 | 88,851,573 | 89,356,767 | |||||||||||
(6) Core Earnings per common share (diluted) | $ | 0.22 | $ | 0.19 | $ | 0.12 | $ | 0.69 | $ | 0.57 | ||||||
Intangible amortization | 229 | 67 | 136 | 547 | 605 | |||||||||||
Tax benefit of amortization of intangibles | (80 | ) | (23 | ) | (48 | ) | (191 | ) | (212 | ) | ||||||
Core Net Income, adjusted for tax affected amortization of intangibles | $ | 19,893 | $ | 17,317 | $ | 10,730 | $ | 62,008 | $ | 51,135 | ||||||
(9) Core Return on Average Tangible Common Equity | 13.73 | % | 11.82 | % | 7.57 | % | 10.79 | % | 9.20 | % | ||||||
For the Three Months Ended | For the Years Ended | |||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Core Return on Average Assets: | ||||||||||||||||
Total Net Income | $ | 17,914 | $ | 17,196 | $ | 10,061 | $ | 59,590 | $ | 50,143 | ||||||
Total Average Assets | 6,638,099 | 6,679,676 | 6,530,765 | 6,660,616 | 6,398,651 | |||||||||||
Return on Average Assets | 1.07 | % | 1.02 | % | 0.61 | % | 0.89 | % | 0.78 | % | ||||||
Core Net Income (5) | $ | 19,744 | $ | 17,273 | $ | 10,642 | $ | 61,652 | $ | 50,742 | ||||||
Total Average Assets | 6,638,099 | 6,679,676 | 6,530,765 | 6,660,616 | 6,398,651 | |||||||||||
(7) Core Return on Average Assets | 1.18 | % | 1.03 | % | 0.65 | % | 0.93 | % | 0.79 | % |
FIRST COMMONWEALTH FINANCIAL CORPORATION |
CONSOLIDATED FINANCIAL DATA |
Unaudited |
(dollars in thousands) |
DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||
For the Three Months Ended | For the Years Ended | |||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Core Efficiency Ratio: | ||||||||||||||||
Total Noninterest Expense | $ | 45,675 | $ | 38,696 | $ | 43,129 | $ | 159,925 | $ | 163,874 | ||||||
Adjustments to Noninterest Expense: | ||||||||||||||||
Unfunded commitment reserve | 71 | 503 | 630 | (341 | ) | 1,368 | ||||||||||
Pennsylvania shares tax dispute | — | — | — | — | 709 | |||||||||||
Intangible amortization | 229 | 67 | 136 | 547 | 605 | |||||||||||
Severance | — | — | 2,111 | — | 2,111 | |||||||||||
Merger and acquisition related | 2,815 | 118 | 894 | 3,173 | 922 | |||||||||||
Loss on sale or writedown of assets | — | — | 400 | — | 886 | |||||||||||
Noninterest Expense - Core | $ | 42,560 | $ | 38,008 | $ | 38,958 | $ | 156,546 | $ | 157,273 | ||||||
Net interest income, fully tax equivalent | $ | 52,529 | $ | 50,569 | $ | 49,179 | $ | 202,881 | $ | 191,941 | ||||||
Total noninterest income | 18,332 | 16,994 | 15,282 | 64,599 | 61,325 | |||||||||||
Net securities (gains) losses | (589 | ) | — | 278 | (617 | ) | 153 | |||||||||
Total Revenue | $ | 70,272 | $ | 67,563 | $ | 64,739 | $ | 266,863 | $ | 253,419 | ||||||
Adjustments to Revenue: | ||||||||||||||||
Derivative mark-to-market | 1,294 | 470 | 146 | 219 | (274 | ) | ||||||||||
Total Revenue - Core | $ | 68,978 | $ | 67,093 | $ | 64,593 | $ | 266,644 | $ | 253,693 | ||||||
(10)Core Efficiency Ratio | 61.70 | % | 56.65 | % | 60.31 | % | 58.71 | % | 61.99 | % | ||||||
December 31, | September 30, | December 31, | ||||||||||||||
2016 | 2016 | 2015 | ||||||||||||||
Tangible Equity: | ||||||||||||||||
Total shareholders' equity | $ | 749,929 | $ | 751,787 | $ | 719,546 | ||||||||||
Less: intangible assets | 198,496 | 165,349 | 165,731 | |||||||||||||
Tangible Equity | 551,433 | 586,438 | 553,815 | |||||||||||||
Less: preferred stock | — | — | — | |||||||||||||
Tangible Common Equity | $ | 551,433 | $ | 586,438 | $ | 553,815 | ||||||||||
Tangible Assets: | ||||||||||||||||
Total assets | $ | 6,684,018 | $ | 6,666,483 | $ | 6,566,890 | ||||||||||
Less: intangible assets | 198,496 | 165,349 | 165,731 | |||||||||||||
Tangible Assets | $ | 6,485,522 | $ | 6,501,134 | $ | 6,401,159 | ||||||||||
(12)Tangible Common Equity as a percentage of Tangible Assets | 8.50 | % | 9.02 | % | 8.65 | % | ||||||||||
Shares Outstanding at End of Period | 89,007,077 | 88,992,007 | 88,961,268 | |||||||||||||
(11)Tangible Book Value Per Common Share | $ | 6.20 | $ | 6.59 | $ | 6.23 | ||||||||||
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. |
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