EX-99.1 2 fc8636ex991.htm EXHIBIT 99.1

Exhibit 99.1

First Commonwealth Announces 2006 Fourth Quarter and Year-End Financial Results

Net Interest Margin Improves in 2006 over 2005

Expansion in Pittsburgh Region Continues

          INDIANA, Pa., Jan. 24 /PRNewswire-FirstCall/ -- First Commonwealth Financial Corporation (NYSE: FCF), the holding company for First Commonwealth Bank, announced today the financial results for the fourth quarter and year ended December 31, 2006.

          Fourth Quarter Results

          First Commonwealth reported fourth quarter 2006 net income of $12.4 million or $0.17 per diluted share compared to $11.8 million or $0.17 per diluted share in the same period last year.  Fourth quarter results were impacted by a $1.1 million loss on the extinguishment of debt and an increase of $2.3 million in the provision for credit losses compared to the corresponding period in 2005.  Return on average equity was 8.50% and return on average assets was 0.81% for the fourth quarter of 2006, compared to 8.93% and 0.77% respectively for the fourth quarter of 2005. 

          Full Year 2006 Results

          Net income for the twelve months ended December 31, 2006 was $53.0 million or $0.74 per diluted share, compared to $57.8 million or $0.83 per diluted share for the same period last year.  The 2006 results included an increase of $1.3 million in service charges on deposit accounts, a decrease of $1.1 million in other income, an increase of $1.1 million in net occupancy expense and a $1.9 million reduction in other expenses. Return on average equity and return on average assets for the twelve months ended December 31, 2006 was 9.76% and 0.89%, respectively compared to 10.89% and 0.94% for 2005.

          During 2006, First Commonwealth continued to make improvements that are expected to have a positive impact on future financial performance including:

 

*

Expanding its retail footprint into the Pittsburgh area. First Commonwealth Bank opened three new offices and acquired eight offices through its merger with Laurel Savings Bank, which represents a 10% growth in branch locations over 2005.

 

 

 

 

*

First Commonwealth Bank also made plans to construct up to six new branches in the Pittsburgh area in 2007.

 

 

 

 

*

First Commonwealth positioned its balance sheet in response to the flat and inverted yield curve environment. Total borrowings decreased $372 million primarily from cash flows received on the investment portfolio combined with deposit growth.

 

 

 

 

*

In the fourth quarter, $59 million of long-term debt was refinanced with short-term borrowings at lower rates.

          Net Interest Income

          Net interest income for the fourth quarter of 2006 increased $101 thousand to $41.9 million compared to the fourth quarter of 2005.  Fourth quarter 2006 net interest margin (net interest income as a percentage of average earning assets on a fully tax equivalent basis) increased eight basis points (0.08%) to 3.28%, compared to 3.20% in the corresponding period last year.  The improvement in net interest margin was primarily due to an increase in yields on interest-earning assets and a reduction in short-term borrowings and long-term debt offset by an increase in rates paid on interest-bearing liabilities. Due to the relatively flat yield curve First Commonwealth has limited the reinvestment of investment securities proceeds and reduced borrowings. Average investment securities decreased $264.4 million in the fourth quarter of 2006 compared to the same period in 2005.


          Net interest income for the year 2006 was $167.0 million compared to $173.5 million for 2005.  Net interest margin increased three basis points (0.03%) to 3.31% for 2006 compared to 3.28% in 2005.  Interest income increased $21.0 million for the year ended December 31, 2006 compared to the prior year period.  However, interest expense increased $27.5 million as rate increases on interest-bearing liabilities exceeded rate increases on interest-earning assets. The net interest margin improvement was primarily due to the balance sheet positioning discussed above. 

          Non-Interest Income

          Non-interest income for the fourth quarter of 2006 increased $1.9 million to $12.0 million from $10.1 million in the fourth quarter of 2005 and included a securities gain of $610 thousand and increased service charges on deposit accounts of $658 thousand.  The increased service charges are primarily due to the additional branch locations and increased fee structures.

          Year-to-date non-interest income decreased $6.0 million in 2006 compared to 2005.  For the twelve months of 2006, service charges on deposit accounts increased $1.3 million and card related interchange income (which includes income on debit, credit and ATM cards that are issued to consumers and/or businesses) increased $702 thousand mainly due to the additional branch locations, revised fee structures and increased volume. For 2006, other income decreased $1.1 million due to lower gains recorded on the sales of mortgage and student loans and other real estate owned.  In 2005, First Commonwealth recorded one time gains of $13.8 million from the sale of branches and sale of a merchant services business offset by losses on the sales of securities of $7.7 million.

          Non-Interest Expense

          Total non-interest expense for the fourth quarter of 2006 decreased $207 thousand to $37.0 million from $37.2 million in the corresponding quarter last year. The quarter ending December 31, 2006 included a $1.1 million loss on the extinguishment of debt.  Net occupancy expense increased $435 thousand for the three months ended December 31, 2006 compared to the same period in 2005 due to the additional retail branches. Salaries and employee benefits declined $334 thousand in the fourth quarter 2006 from the fourth quarter 2005 level, reflecting a previously planned reduction of the workforce which was offset by the inclusion of $343 thousand of salaries and employee benefit costs due to the Laurel acquisition.

          Total non-interest expense decreased $6.3 million in 2006 compared to 2005 largely as a result of a $5.4 million non-recurring restructuring charge recorded in 2005.  Salary expense decreased $1.8 million for the twelve month period ended December 31, 2006 but was offset by an $860 thousand increase in healthcare costs and a $644 thousand increase in retirement costs. Net occupancy expense increased $1.1 million due to the additional retail branches.  Other expenses decreased by $1.9 million primarily due to a reduction of $1.3 million in other professional fees and the elimination of plastic card interchange expense totaling $884 thousand.  Plastic card interchange expense is no longer incurred since the merchant services business was sold in 2005.  

          Income Tax

          Income tax expense decreased $4.2 million for 2006 compared to 2005.   First Commonwealth’s effective tax rate was 14.6% in 2006 compared to 18.6% in 2005.  This reduction was mainly due to a larger percentage of tax free income.  Pretax income for 2006 decreased $9.1 million compared to 2005.


          Credit Quality and Provision for Credit Losses

          As of December 31, 2006, total nonperforming loans (including loans past due 90 days but still accruing) decreased slightly to $25.3 million from $25.5 million at December 31, 2005. Management believes that the allowance for credit losses is at a level deemed sufficient to absorb losses inherent in the loan portfolio at December 31, 2006. 

          The provision for credit losses for the fourth quarter of 2006 increased $2.3 million to $3.3 million compared to the fourth quarter of 2005. This provision exceeded the net charge-offs for the fourth quarter of 2006 by $563 thousand.

          The $11.5 million provision for credit losses in 2006 reflects an increase of $2.9 million over 2005.  The provision for credit losses exceeded actual credit losses by $1.2 million.  In the fourth quarter of 2006, management continued to monitor the performance of a $29.0 million commercial credit relationship, which was previously disclosed to have deteriorated in the second quarter of 2006.  This credit was not 90 days past due or on a nonaccrual status at December 31, 2006.

          About First Commonwealth Financial Corporation

          First Commonwealth Financial Corporation is a $6.0 billion bank holding company headquartered in Indiana, Pennsylvania.  It operates 110 retail branch offices in 15 counties in western and central Pennsylvania through First Commonwealth Bank, a Pennsylvania chartered bank and trust company.  Financial services and insurance products are also provided through First Commonwealth Insurance Agency and First Commonwealth Financial Advisors, Inc.

          Forward-Looking Statements

          This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the effects of actions taken during 2006 on First Commonwealth’s future financial performance.  Forward-looking statements describe First Commonwealth’s future plans, strategies and expectations and are based on assumptions and involve risks and uncertainties, many of which are beyond the control of First Commonwealth and which may cause actual results, performance or achievements to differ materially from the results, performance or achievements contemplated by the forward-looking statements.  Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts.  They 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.”  Forward-looking statements speak only as of the date they are made.  Such risks and uncertainties include among other things:

 

*

Adverse changes in the economy or business conditions, either nationally or in First Commonwealth’s market areas, could increase credit-related losses and expenses and/or limit growth.

 

 

 

 

*

Increases in defaults by borrowers and other delinquencies could result in increases in First Commonwealth’s provision for losses on loans and related expenses.

 

 

 

 

*

Fluctuations in interest rates and market prices could reduce net interest margin and asset valuations and increase expenses.

 

 

 

 

*

Changes in legislative or regulatory requirements applicable to First Commonwealth and its subsidiaries could increase costs, limit certain operations and adversely affect results of operations.

 

 

 

 

*

Other risks and uncertainties described in First Commonwealth’s reports filed with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K.


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
(Dollar Amounts in Thousands, except per share data)

 

 

For the Quarter Ended
December 31,

 

For the Year Ended
December 31,

 

 

 

 

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

65,362

 

$

57,874

 

$

248,738

 

$

222,090

 

Interest and dividends on investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable interest

 

 

16,680

 

 

17,956

 

 

68,257

 

 

74,864

 

Interest exempt from Federal income taxes

 

 

3,212

 

 

3,273

 

 

12,876

 

 

12,699

 

Dividends

 

 

792

 

 

508

 

 

2,958

 

 

2,225

 

Interest on Federal funds sold

 

 

66

 

 

25

 

 

142

 

 

161

 

Interest on bank deposits

 

 

27

 

 

7

 

 

99

 

 

29

 

 

 

 

 

 

 

Total interest income

 

 

86,139

 

 

79,643

 

 

333,070

 

 

312,068

 

 

 

 

 

 

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

31,634

 

 

22,604

 

 

108,454

 

 

79,070

 

Interest on short-term borrowings

 

 

5,124

 

 

6,443

 

 

25,448

 

 

24,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on subordinated debentures

 

 

2,134

 

 

2,031

 

 

8,419

 

 

7,867

 

Interest on other long-term debt

 

 

5,302

 

 

6,721

 

 

23,786

 

 

27,376

 

 

 

 

 

 

 

Total interest on long-term debt

 

 

7,436

 

 

8,752

 

 

32,205

 

 

35,243

 

 

 

 

 

 

 

Total interest expense

 

 

44,194

 

 

37,799

 

 

166,107

 

 

138,618

 

 

 

 

 

 

 

Net Interest Income

 

 

41,945

 

 

41,844

 

 

166,963

 

 

173,450

 

Provision for credit losses

 

 

3,300

 

 

1,034

 

 

11,544

 

 

8,628

 

 

 

 

 

 

 

Net interest income after provision for credit losses

 

 

38,645

 

 

40,810

 

 

155,419

 

 

164,822

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Net securities gains (losses)

 

 

610

 

 

(8,192

)

 

697

 

 

(7,673

)

Trust income

 

 

1,444

 

 

1,328

 

 

5,801

 

 

5,526

 

Service charges on deposit accounts

 

 

4,593

 

 

3,935

 

 

16,967

 

 

15,710

 

Gain on sale of branches

 

 

0

 

 

8,742

 

 

0

 

 

11,832

 

Gain on sale of merchant services business

 

 

0

 

 

0

 

 

0

 

 

1,991

 

Insurance commissions

 

 

689

 

 

591

 

 

2,804

 

 

3,423

 

Income from bank owned life insurance

 

 

1,502

 

 

1,356

 

 

5,742

 

 

5,391

 

Merchant discount income (loss)

 

 

0

 

 

(725

)

 

0

 

 

1,349

 

Card related interchange income

 

 

1,496

 

 

1,313

 

 

5,583

 

 

4,881

 

Other income

 

 

1,714

 

 

1,728

 

 

6,653

 

 

7,795

 

 

 

 

 

 

 

Total non-interest income

 

 

12,048

 

 

10,076

 

 

44,247

 

 

50,225

 

Non-Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

18,706

 

 

19,040

 

 

72,988

 

 

73,522

 

Net occupancy expense

 

 

3,045

 

 

2,610

 

 

12,077

 

 

10,988

 

Furniture and equipment expense

 

 

3,023

 

 

3,105

 

 

11,703

 

 

11,578

 

Data processing expense

 

 

938

 

 

797

 

 

3,456

 

 

3,535

 

Pennsylvania shares tax expense

 

 

1,363

 

 

1,137

 

 

5,420

 

 

4,876

 

Intangible amortization

 

 

818

 

 

566

 

 

2,607

 

 

2,262

 

Restructuring charges

 

 

0

 

 

2,733

 

 

0

 

 

5,437

 

Loss (Gain) on extinguishment of debt

 

 

1,143

 

 

0

 

 

(410

)

 

0

 

Other expenses

 

 

7,943

 

 

7,198

 

 

29,842

 

 

31,756

 

 

 

 

 

 

 

Total non-interest expense

 

 

36,979

 

 

37,186

 

 

137,683

 

 

143,954

 

 

 

 

 

 

 

Income before income taxes

 

 

13,714

 

 

13,700

 

 

61,983

 

 

71,093

 

Applicable income taxes

 

 

1,316

 

 

1,917

 

 

9,029

 

 

13,257

 

 

 

 

 

 

 

Net Income

 

$

12,398

 

$

11,783

 

$

52,954

 

$

57,836

 

 

 

 

 

 

 

Average Shares Outstanding

 

 

73,026,948

 

 

69,386,338

 

 

70,766,348

 

 

69,276,141

 

Average Shares Outstanding Assuming Dilution

 

 

73,362,224

 

 

69,837,737

 

 

71,133,562

 

 

69,835,285

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.17

 

$

0.17

 

$

0.75

 

$

0.83

 

Diluted earnings per share

 

$

0.17

 

$

0.17

 

$

0.74

 

$

0.83

 

Cash dividends per share

 

$

0.170

 

$

0.170

 

$

0.680

 

$

0.665

 


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
(Dollar Amounts in Thousands, except for share data)

 

 

December 31,
2006

 

December 31,
2005

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Cash and due from banks

 

$

95,134

 

$

84,555

 

Interest-bearing bank deposits

 

 

985

 

 

473

 

Federal funds sold

 

 

0

 

 

1,575

 

Securities available for sale, at market value

 

 

1,644,690

 

 

1,851,986

 

Securities held to maturity, at amortized cost  (Market value $80,156 in 2006 and $89,804 in 2005)

 

 

78,501

 

 

87,757

 

 

 

 

 

 

 

 

 

Loans held for sale

 

 

0

 

 

1,276

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

Portfolio loans

 

 

3,783,874

 

 

3,623,102

 

Unearned income

 

 

(57

)

 

(119

)

Allowance for credit losses

 

 

(42,648

)

 

(39,492

)

 

 

 

 

Net loans

 

 

3,741,169

 

 

3,583,491

 

Premises and equipment

 

 

68,901

 

 

60,860

 

Other real estate owned

 

 

1,507

 

 

1,655

 

Goodwill

 

 

160,366

 

 

122,702

 

Amortizing intangibles, net

 

 

16,869

 

 

15,251

 

Other assets

 

 

235,794

 

 

214,739

 

 

 

 

 

Total assets

 

$

6,043,916

 

$

6,026,320

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Deposits (all domestic):

 

 

 

 

 

 

 

Noninterest-bearing

 

$

522,451

 

$

491,644

 

Interest-bearing

 

 

3,803,989

 

 

3,504,908

 

 

 

 

 

Total deposits

 

 

4,326,440

 

 

3,996,552

 

Short-term borrowings

 

 

500,014

 

 

665,665

 

Other liabilities

 

 

52,681

 

 

43,314

 

 

 

 

 

 

 

 

 

Subordinated debentures

 

 

108,250

 

 

108,250

 

Other long-term debt

 

 

485,170

 

 

691,494

 

 

 

 

 

Total long-term debt

 

 

593,420

 

 

799,744

 

 

 

 

 

Total liabilities

 

 

5,472,555

 

 

5,505,275

 

Shareholders’ equity

 

 

 

 

 

 

 

Preferred stock, $1 par value per share, 3,000,000 shares authorized, none issued

 

 

0

 

 

0

 

Common stock $1 par value per share, 100,000,000 shares authorized:

 

 

 

 

 

 

 

75,100,431 shares issued and 73,916,377 shares outstanding in 2006;

 

 

 

 

 

 

 

71,978,568 shares issued and 70,377,916 shares outstanding in 2005

 

 

75,100

 

 

71,978

 

Additional paid-in capital

 

 

208,313

 

 

173,967

 

Retained earnings

 

 

322,415

 

 

318,569

 

Accumulated other comprehensive loss

 

 

(7,914

)

 

(9,655

)

Treasury stock (1,184,054 and 1,600,652 shares at December 31, 2006 and 2005, respectively,  at cost)

 

 

(14,953

)

 

(20,214

)

Unearned ESOP shares

 

 

(11,600

)

 

(13,600

)

 

 

 

 

Total shareholders’ equity

 

 

571,361

 

 

521,045

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

6,043,916

 

$

6,026,320

 

 

 

 

 

Book value per share

 

$

7.73

 

$

7.40

 

Market value per share

 

$

13.43

 

$

12.93

 


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
(Dollar Amounts in Thousands)

Quarter To Date Average Balance Sheets and Net Interest Analysis At December 31,

 

 

2006

 

 

 

 

 

 

Average
Balance

 

Income/
Expense

 

Yield or
Rate (a)

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

1,944

 

$

27

 

 

5.59

%

Tax free investment securities

 

 

283,970

 

 

3,212

 

 

6.90

%

Taxable investment securities

 

 

1,428,155

 

 

17,472

 

 

4.85

%

Federal funds sold

 

 

4,923

 

 

66

 

 

5.31

%

Loans, net of unearned income (b)(c)(d)

 

 

3,795,900

 

 

65,362

 

 

7.04

%

 

 

 

 

 

 

 

Total interest-earning assets

 

 

5,514,892

 

 

86,139

 

 

6.46

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

Cash

 

 

83,224

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(42,611

)

 

 

 

 

 

 

Other assets

 

 

490,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

530,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

6,045,689

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits (e)

 

$

602,999

 

$

2,930

 

 

1.93

%

Savings deposits (e)

 

 

1,125,970

 

 

5,823

 

 

2.05

%

Time deposits

 

 

2,101,559

 

 

22,881

 

 

4.32

%

Short-term borrowings

 

 

444,028

 

 

5,124

 

 

4.58

%

Long-term debt

 

 

650,187

 

 

7,436

 

 

4.54

%

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

 

4,924,743

 

 

44,194

 

 

3.56

%

Noninterest-bearing liabilities and capital:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits (e)

 

 

507,352

 

 

 

 

 

 

 

Other liabilities

 

 

35,004

 

 

 

 

 

 

 

Shareholders’ equity

 

 

578,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest-bearing funding sources

 

 

1,120,946

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

6,045,689

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income and Net Yield on Interest-Earning Assets

 

 

 

 

$

41,945

 

 

3.28

%

 

 

 

 

 

 

 

 

 

(a)

Yields on interest-earning assets have been computed on a tax equivalent basis using the 35% Federal income tax statutory rate.

(b)

Average balance includes loans held for sale.

(c)

Income on nonaccrual loans is accounted for on the cash basis, and the loan balances are included in interest-earning assets.

(d)

Loan income includes net loan fees.

(e)

Average balances do not include reallocations from noninterest-bearing demand deposits and interest-bearing demand deposits into savings deposits which were made for regulatory purposes.


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
(Dollar Amounts in Thousands)

Quarter To Date Average Balance Sheets and Net Interest Analysis At December 31,

 

 

2005

 

 

 

 

 

 

Average Balance

 

Income/
Expense

 

Yield or
Rate (a)

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

817

 

$

7

 

 

3.42

%

Tax free investment securities

 

 

283,818

 

 

3,273

 

 

7.04

%

Taxable investment securities

 

 

1,692,717

 

 

18,464

 

 

4.33

%

Federal funds sold

 

 

2,377

 

 

25

 

 

4.12

%

Loans, net of unearned income (b)(c)(d)

 

 

3,619,142

 

 

57,874

 

 

6.52

%

 

 

 

 

 

 

 

Total interest-earning assets

 

 

5,598,871

 

 

79,643

 

 

5.88

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

Cash

 

 

80,444

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(41,857

)

 

 

 

 

 

 

Other assets

 

 

434,187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

472,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

6,071,645

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits (e)

 

$

558,573

 

$

1,707

 

 

1.21

%

Savings deposits (e)

 

 

1,257,698

 

 

5,182

 

 

1.63

%

Time deposits

 

 

1,726,513

 

 

15,715

 

 

3.61

%

Short-term borrowings

 

 

685,683

 

 

6,443

 

 

3.73

%

Long-term debt

 

 

802,539

 

 

8,752

 

 

4.33

%

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

 

5,031,006

 

 

37,799

 

 

2.98

%

Noninterest-bearing liabilities and capital:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits (e)

 

 

488,873

 

 

 

 

 

 

 

Other liabilities

 

 

28,012

 

 

 

 

 

 

 

Shareholders’ equity

 

 

523,754

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest-bearing funding sources

 

 

1,040,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

6,071,645

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income and Net Yield on Interest-Earning Assets

 

 

 

 

$

41,844

 

 

3.20

%

 

 

 

 

 

 

 

 

 

(a)

Yields on interest-earning assets have been computed on a tax equivalent basis using the 35% Federal income tax statutory rate.

(b)

Average balance includes loans held for sale.

(c)

Income on nonaccrual loans is accounted for on the cash basis, and the loan balances are included in interest-earning assets.

(d)

Loan income includes net loan fees.

(e)

Average balances do not include reallocations from noninterest-bearing demand deposits and interest-bearing demand deposits into savings deposits which were made for regulatory purposes.


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
(Dollar Amounts in Thousands)

Year To Date Average Balance Sheets and Net Interest Analysis At December 31,

 

 

2006

 

 

 

 

 

 

Average
Balance

 

Income/
Expense

 

Yield or
 Rate (a)

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

1,878

 

$

99

 

 

5.27

%

Tax free investment securities

 

 

281,823

 

 

12,876

 

 

7.03

%

Taxable investment securities

 

 

1,487,267

 

 

71,215

 

 

4.79

%

Federal funds sold

 

 

2,854

 

 

142

 

 

4.99

%

Loans, net of unearned income (b)(c)(d)

 

 

3,707,233

 

 

248,738

 

 

6.92

%

 

 

 

 

 

 

 

Total interest-earning assets

 

 

5,481,055

 

 

333,070

 

 

6.34

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

Cash

 

 

79,509

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(40,510

)

 

 

 

 

 

 

Other assets

 

 

452,915

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

491,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

5,972,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits (e)

 

$

584,717

 

$

10,251

 

 

1.75

%

Savings deposits (e)

 

 

1,138,579

 

 

21,496

 

 

1.89

%

Time deposits

 

 

1,889,731

 

 

76,707

 

 

4.06

%

Short-term borrowings

 

 

568,327

 

 

25,448

 

 

4.48

%

Long-term debt

 

 

724,846

 

 

32,205

 

 

4.44

%

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

 

4,906,200

 

 

166,107

 

 

3.39

%

Noninterest-bearing liabilities and capital:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits (e)

 

 

493,790

 

 

 

 

 

 

 

Other liabilities

 

 

30,526

 

 

 

 

 

 

 

Shareholders’ equity

 

 

542,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest-bearing funding sources

 

 

1,066,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

5,972,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income and Net Yield on  Interest-Earning Assets

 

 

 

 

$

166,963

 

 

3.31

%

 

 

 

 

 

 

 

 

 

(a)

Yields on interest-earning assets have been computed on a tax equivalent basis using the 35% Federal income tax statutory rate.

(b)

Average balance includes loans held for sale.

(c)

Income on nonaccrual loans is accounted for on the cash basis, and the loan balances are included in interest-earning assets.

(d)

Loan income includes net loan fees.

(e)

Average balances do not include reallocations from noninterest-bearing demand deposits and interest-bearing demand deposits into savings deposits which were made for regulatory purposes.


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
(Dollar Amounts in Thousands)

Year To Date Average Balance Sheets and Net Interest Analysis At December 31,

 

 

2005

 

 

 

 

 

 

Average
Balance

 

Income/
Expense

 

Yield or
 Rate (a)

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits with banks

 

$

807

 

$

29

 

 

3.61

%

Tax free investment securities

 

 

279,339

 

 

12,699

 

 

6.99

%

Taxable investment securities

 

 

1,829,449

 

 

77,089

 

 

4.21

%

Federal funds sold

 

 

5,060

 

 

161

 

 

3.18

%

Loans, net of unearned income (b)(c)(d)

 

 

3,597,705

 

 

222,090

 

 

6.36

%

 

 

 

 

 

 

 

Total interest-earning assets

 

 

5,712,360

 

 

312,068

 

 

5.70

%

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

Cash

 

 

80,716

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(41,834

)

 

 

 

 

 

 

Other assets

 

 

430,179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest-earning assets

 

 

469,061

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

6,181,421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits (e)

 

$

563,254

 

$

5,262

 

 

0.93

%

Savings deposits (e)

 

 

1,298,984

 

 

18,885

 

 

1.45

%

Time deposits

 

 

1,643,350

 

 

54,923

 

 

3.34

%

Short-term borrowings

 

 

797,148

 

 

24,305

 

 

3.05

%

Long-term debt

 

 

833,000

 

 

35,243

 

 

4.23

%

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

 

5,135,736

 

 

138,618

 

 

2.70

%

Noninterest-bearing liabilities and capital:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits (e)

 

 

488,305

 

 

 

 

 

 

 

Other liabilities

 

 

26,062

 

 

 

 

 

 

 

Shareholders’ equity

 

 

531,318

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest-bearing funding sources

 

 

1,045,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

6,181,421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income and Net Yield on Interest-Earning Assets

 

 

 

 

$

173,450

 

 

3.28

%

 

 

 

 

 

 

 

 

 

(a)

Yields on interest-earning assets have been computed on a tax equivalent basis using the 35% Federal income tax statutory rate.

(b)

Average balance includes loans held for sale.

(c)

Income on nonaccrual loans is accounted for on the cash basis, and the loan balances are included in interest-earning assets.

(d)

Loan income includes net loan fees.

(e)

Average balances do not include reallocations from noninterest- bearing demand deposits and interest-bearing demand deposits into savings deposits which were made for regulatory purposes.


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
(Dollar Amounts in Thousands)

Asset Quality Data At December 31,

 

 

2006

 

2005

 

 

 

 

 

Loans on nonaccrual basis

 

$

12,043

 

$

11,391

 

Past due more than 90 days

 

 

13,051

 

 

13,977

 

Renegotiated loans

 

 

160

 

 

173

 

 

 

 

 

Total nonperforming loans

 

$

25,254

 

$

25,541

 

Loans outstanding at end of period (a)

 

$

3,783,817

 

$

3,624,259

 

Average loans outstanding (year-to- date) (a)

 

$

3,707,233

 

$

3,597,705

 

Allowance for credit losses

 

$

42,648

 

$

39,492

 

Nonperforming loans as a percent of total loans

 

 

0.67

%

 

0.70

%

Net charge-offs (year-to-date)

 

$

8,980

 

$

10,199

 

Credit losses on loans transferred to held for sale

 

$

1,387

 

$

0

 

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

 

 

0.28

%

 

0.28

%

Allowance for credit losses as a percent of average loans outstanding

 

 

1.15

%

 

1.10

%

Allowance for  credit losses as a percent of nonperforming loans

 

 

168.88

%

 

154.62

%

Other real estate owned

 

$

1,507

 

$

1,655

 

(a)

Includes loans held for sale.

Profitability Ratios

 

 

For the Quarter Ended
December 31,

 

For the Year Ended
December 31,

 

 

 

 

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

Return on average assets

 

 

0.81

%

 

0.77

%

 

0.89

%

 

0.94

%

Return on average equity

 

 

8.50

%

 

8.93

%

 

9.76

%

 

10.89

%

Efficiency ratio (FTE) (b)

 

 

64.08

%

 

67.29

%

 

60.97

%

 

60.66

%

Fully tax equivalent adjustment

 

$

3,711

 

$

3,343

 

$

14,613

 

$

13,649

 

(b)

Efficiency ratio is “total non-interest expense” as a percentage of total revenue.

 

Total revenue consists of “net interest income, on a fully tax-equivalent basis,” plus “total non-interest income.”

SOURCE  First Commonwealth Financial Corporation
          -0-                                                            01/24/2007
          /CONTACT: John Dolan, Executive Vice President and Chief Financial Officer of First Commonwealth Financial Corporation, +1-724- 349-7220 /
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          (FCF)

CO:   First Commonwealth Financial Corporation
ST:   Pennsylvania
IN:    FIN
SU:   ERN