INDIANA, PA --(Marketwired - October 25, 2017) - First Commonwealth Financial Corporation (
Third Quarter 2017 Highlights
Earnings
- Third quarter net income was $21.3 million (or $0.22 diluted earnings per share), the highest level of quarterly net income in the history of the company. Core net income (adjusted for acquisition expenses) was $21.2 million, or $0.22 diluted earnings per share.
- Core earnings per share increased $0.01 from the previous quarter and $0.03 from the prior year quarter; an increase of 14.9% (annualized) and 15.8%, respectively.
- Total revenue grew $2.7 million, or 13.7% (annualized) from the prior quarter.
- Net interest income (FTE) increased $1.8 million, or 12.0% (annualized) from the prior quarter.
- Noninterest income grew $0.9 million, or 18.8% (annualized) from the prior quarter.
- Total noninterest expense decreased $10.9 million from the previous quarter, primarily due to $9.9 million of one-time merger expenses related to the acquisition of DCB Financial Corp. in the previous quarter.
- Provision for credit losses totaled $1.2 million, an increase of $2.8 million as compared to the prior quarter, in part due to the recognition of $3.1 million in recoveries in the previous quarter.
- The annualized return on average tangible common equity for the third quarter of 2017 was 14.04%.
Profitability
- The net interest margin improved seven basis points to 3.61% compared to the prior quarter.
- The core return on average assets (adjusted for acquisition expenses) improved 3 basis points to 1.14% compared to the prior quarter.
- The core efficiency ratio improved to 57.96%, driven by expanding revenue streams and well-controlled operational expenses.
Franchise Growth
- Tangible book value per share grew $0.16, or 10.3% (annualized) from the previous quarter.
"This was another strong quarter for our company. And the successful integration of our recent acquisitions has propelled our earnings to record levels," stated T. Michael Price, President and Chief Executive Officer. "As we look ahead, we must continue to navigate a potentially rising interest rate environment and make decisions that will profitably grow our business without assuming unnecessary risk. As we do, our focus remains centered on those strategies that will ensure long-term benefits for our stakeholders."
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, | ||||
| 2017 | 2017 | 2016 | 2017 | 2016 | |||||
| Reported Results | |||||||||
| Net income | $21,283 | $14,013 | $17,196 | $51,184 | $41,676 | ||||
| Diluted earnings per share | $0.22 | $0.14 | $0.19 | $0.54 | $0.47 | ||||
| Return on average assets | 1.14% | 0.76% | 1.02% | 0.96% | 0.83% | ||||
| Return on average equity | 9.50% | 6.44% | 9.14% | 8.15% | 7.53% | ||||
| Core Operating Results (non-GAAP) (1) | |||||||||
| Core net income | $21,238 | $20,428 | $17,273 | $57,952 | $41,909 | ||||
| Core diluted earnings per share | $0.22 | $0.21 | $0.19 | $0.61 | $0.47 | ||||
| Core return on average assets | 1.14% | 1.11% | 1.03% | 1.08% | 0.84% | ||||
| Return on average tangible common equity | 14.04% | 9.74% | 11.77% | 11.89% | 9.75% | ||||
| Core return on average tangible common equity | 14.01% | 14.03% | 11.82% | 13.42% | 9.80% | ||||
| Core efficiency ratio | 57.96% | 60.19% | 56.65% | 59.49% | 57.67% | ||||
| Net interest margin (FTE) | 3.61% | 3.54% | 3.29% | 3.55% | 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. | |
Earnings
Net income for the third quarter of 2017 was $21.3 million, as compared to $17.2 million for the third quarter of 2016, an increase of $4.1 million, or 23.8%, year-over-year.
Net income for the nine months ending September 30, 2017 was $51.2 million, as compared to $41.7 million for the same period in 2016, an increase of $9.5 million, or 22.8%, year-over-year.
Net Interest Margin and Net Interest Income
The net interest margin for the third quarter of 2017 was 3.61%, an increase of 7 basis points from the previous quarter and an increase of 32 basis points from the third quarter of 2016. The increase from the second quarter of 2017 was due primarily to a 10 basis point increase in the yield on interest-earning assets, partially offset by a 3 basis point increase in funding costs. The impact of purchase accounting accretion added 5 basis points to the net interest margin in both the current and the previous quarter.
The increase from the previous year is primarily due to improved yields on variable and adjustable loan portfolios, following the Federal Reserve's decisions to increase short-term rates in December of 2016, March of 2017 and June of 2017, along with the ability to pay down higher cost short-term borrowings following our recent acquisitions.
The yield on interest-earning assets increased by 36 basis points and funding costs increased 4 basis points from the year-ago quarter.
Total average earning assets decreased $6.7 million from the previous quarter mostly due to selective runoff in the securities portfolio, partially offset by $40.7 million growth in average loans.
Total average deposits grew by $51.7 million in the third quarter of 2017 compared to the previous quarter. Growth was driven by a $69.7 million increase in transaction accounts, partially offset by an $18.0 million decrease in time deposits.
Credit Quality
The provision for credit losses totaled $1.2 million for the quarter ended September 30, 2017, an increase of $2.8 million as compared to the prior quarter and a decrease of $2.2 million from the same quarter last year. The increase from the prior quarter is primarily due to the recognition of $3.1 million of recoveries in the prior quarter.
At September 30, 2017, nonperforming loans were $38.8 million, a decrease of $1.4 million from June 30, 2017 and a decrease of $16.0 million from September 30, 2016. Nonperforming loans as a percentage of total loans were 0.72%, 0.75% and 1.13% for the periods ended September 30, 2017, June 30, 2017 and September 30, 2016, respectively.
During the third quarter of 2017, net charge-offs (recoveries) were $1.1 million or 0.08% of average loans, compared to ($1.0) million in the prior quarter and $8.5 million in the third quarter of 2016. Net charge-offs (recoveries) in the second quarter of 2017 included recoveries for two large commercial credits totaling $3.1 million.
For the originated loan portfolio at September 30, 2017, the allowance for credit losses to total originated loans was 0.97%, compared to 0.98% at June 30, 2017 and 1.13% at September 30, 2016.
Noninterest Income and Noninterest Expense
Noninterest income (excluding net security gains) totaled $19.7 million for the third quarter of 2017, as compared to $19.0 million for the second quarter of 2017 and $17.0 million for the third quarter of 2016. Trust income increased $0.4 million and $0.6 million from the prior quarter and the year-ago quarter, respectively, primarily due to acquired customer relationships and higher market values of clients' accounts. Service charges and card-related interchange income increased $1.9 million year-over-year, primarily due to an expanded customer base as a result of recent acquisitions. Gain on sale of mortgage loans totaled $1.4 million and represents the highest quarterly total since the company reentered the traditional mortgage business in 2014.
Noninterest expense (excluding merger-related expenses) totaled $47.4 million for the third quarter of 2017, as compared to $48.4 million for the second quarter of 2017 and $38.6 million for the third quarter of 2016. The $1.0 million decrease from the previous quarter was primarily the result of a $1.1 million decrease in write-downs on OREO properties. The $8.8 million increase from the third quarter of 2016 was driven in part by higher operating expenses following the Company's recent acquisitions, along with increased intangible asset amortization expense.
Full time equivalent staff at September 30, 2017 was 1,366, 1,426 at June 30, 2017 and 1,179 at September 30, 2016. The increase from the prior year is the result of the addition of employees from acquisitions and the continued expansion of the mortgage and commercial banking businesses in Ohio.
Dividends and Capital
First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.08 per share, which is payable on November 17, 2017 to shareholders of record as of November 6, 2017. This dividend represents a 2.3% projected annual yield utilizing the October 24, 2017 closing market price of $14.12.
First Commonwealth's capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2017 were 12.5%, 11.6%, 9.8% and 10.4%, respectively. First Commonwealth's current capital levels exceed the fully phased-in Basel III capital requirements issued by U.S. bank regulators.
Conference Call
First Commonwealth will host a quarterly conference call to discuss its financial results for the third quarter 2017 on Wednesday, October 25, 2017 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-844-792-3645 or through the company's web page, http://www.fcbanking.com/InvestorRelations . A replay of the call will be available approximately one hour following the conclusion of the conference by dialing 1-877-344-7529 and entering the access code #10112938. A link to the webcast replay will also be accessible on the company's web page for 30 days.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation (
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 First Commonwealth's 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); (6) the soundness of other financial institutions; (7) political instability; (8) impairment of First Commonwealth's goodwill or other intangible assets; (9) acts of God or of war or terrorism; (10) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (11) changes in consumer spending, borrowings and savings habits; (12) changes in the financial performance and/or condition of First Commonwealth's borrowers; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) First Commonwealth's ability to attract and retain qualified employees; (16) changes in the competitive environment in First Commonwealth's markets and among banking organizations and other financial service providers; (17) the ability to increase market share and control expenses; (18) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (19) the reliability of First Commonwealth's vendors, internal control systems or information systems; (20) the costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals; and (21) other risks and uncertainties described in 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.
| 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, | |||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| SUMMARY RESULTS OF OPERATIONS | |||||||||||||||||||
| Net interest income (FTE) (1) | $ | 60,667 | $ | 58,896 | $ | 50,569 | $ | 172,381 | $ | 150,352 | |||||||||
| Provision for credit losses | 1,214 | (1,609 | ) | 3,408 | 2,834 | 20,306 | |||||||||||||
| Noninterest income | 19,790 | 18,904 | 16,994 | 55,626 | 46,267 | ||||||||||||||
| Noninterest expense | 47,361 | 58,263 | 38,696 | 148,389 | 114,250 | ||||||||||||||
| Net income | 21,283 | 14,013 | 17,196 | 51,184 | 41,676 | ||||||||||||||
| Core net income (5) | 21,238 | 20,428 | 17,273 | 57,952 | 41,909 | ||||||||||||||
| Earnings per common share (diluted) | $ | 0.22 | $ | 0.14 | $ | 0.19 | $ | 0.54 | $ | 0.47 | |||||||||
| Core earnings per common share (diluted) (6) | $ | 0.22 | $ | 0.21 | $ | 0.19 | $ | 0.61 | $ | 0.47 | |||||||||
| KEY FINANCIAL RATIOS | |||||||||||||||||||
| Return on average assets | 1.14 | % | 0.76 | % | 1.02 | % | 0.96 | % | 0.83 | % | |||||||||
| Core return on average assets (7) | 1.14 | % | 1.11 | % | 1.03 | % | 1.08 | % | 0.84 | % | |||||||||
| Return on average shareholders' equity | 9.50 | % | 6.44 | % | 9.14 | % | 8.15 | % | 7.53 | % | |||||||||
| Return on average tangible common equity (8) | 14.04 | % | 9.74 | % | 11.77 | % | 11.89 | % | 9.75 | % | |||||||||
| Core return on average tangible common equity (9) | 14.01 | % | 14.03 | % | 11.82 | % | 13.42 | % | 9.80 | % | |||||||||
| Core efficiency ratio (2)(10) | 57.96 | % | 60.19 | % | 56.65 | % | 59.49 | % | 57.67 | % | |||||||||
| Net interest margin (FTE) (1) | 3.61 | % | 3.54 | % | 3.29 | % | 3.55 | % | 3.28 | % | |||||||||
| Book value per common share | $ | 9.17 | $ | 9.02 | $ | 8.45 | |||||||||||||
| Tangible book value per common share (11) | 6.39 | 6.23 | 6.59 | ||||||||||||||||
| Market value per common share | 14.13 | 12.68 | 10.09 | ||||||||||||||||
| Cash dividends declared per common share | 0.08 | 0.08 | 0.07 | $ | 0.24 | $ | 0.21 | ||||||||||||
| ASSET QUALITY RATIOS | |||||||||||||||||||
| Nonperforming loans as a percent of end-of-period loans (3) | 0.72 | % | 0.75 | % | 1.13 | % | |||||||||||||
| Nonperforming assets as a percent of total assets (3) | 0.61 | % | 0.63 | % | 0.94 | % | |||||||||||||
| Net charge-offs as a percent of average loans (annualized) | 0.08 | % | (0.07 | )% | 0.70 | % | |||||||||||||
| Allowance for credit losses as a percent of nonperforming loans (4) | 124.16 | % | 119.61 | % | 99.83 | % | |||||||||||||
| Allowance for credit losses as a percent of end-of-period loans (4) | 0.90 | % | 0.89 | % | 1.13 | % | |||||||||||||
| Allowance for credit losses (originated loans and leases) as a percent of originated loans and leases | 0.97 | % | 0.98 | % | 1.13 | % | |||||||||||||
| CAPITAL RATIOS | |||||||||||||||||||
| Shareholders' equity as a percent of total assets | 12.1 | % | 11.9 | % | 11.3 | % | |||||||||||||
| Tangible common equity as a percent of tangible assets (12) | 8.8 | % | 8.5 | % | 9.0 | % | |||||||||||||
| Leverage Ratio | 9.8 | % | 9.6 | % | 10.0 | % | |||||||||||||
| Risk Based Capital - Tier I | 11.6 | % | 11.3 | % | 11.6 | % | |||||||||||||
| Risk Based Capital - Total | 12.5 | % | 12.2 | % | 12.6 | % | |||||||||||||
| Common Equity - Tier I | 10.4 | % | 10.2 | % | 10.3 | % | |||||||||||||
| 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, | |||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| INCOME STATEMENT | |||||||||||||||||||
| Interest income | $ | 65,411 | $ | 63,120 | $ | 54,479 | $ | 184,710 | $ | 161,682 | |||||||||
| Interest expense | 5,848 | 5,303 | 4,861 | 15,500 | 14,166 | ||||||||||||||
| Net Interest Income | 59,563 | 57,817 | 49,618 | 169,210 | 147,516 | ||||||||||||||
| Taxable equivalent adjustment (1) | 1,104 | 1,079 | 951 | 3,171 | 2,836 | ||||||||||||||
| Net Interest Income (FTE) | 60,667 | 58,896 | 50,569 | 172,381 | 150,352 | ||||||||||||||
| Provision for credit losses | 1,214 | (1,609 | ) | 3,408 | 2,834 | 20,306 | |||||||||||||
| Net Interest Income after Provision for Credit Losses (FTE) | 59,453 | 60,505 | 47,161 | 169,547 | 130,046 | ||||||||||||||
| Net securities gains (losses) | 92 | (49 | ) | - | 695 | 28 | |||||||||||||
| Trust income | 2,147 | 1,711 | 1,523 | 5,275 | 4,098 | ||||||||||||||
| Service charges on deposit accounts | 4,803 | 4,736 | 3,975 | 13,858 | 11,528 | ||||||||||||||
| Insurance and retail brokerage commissions | 2,128 | 2,442 | 2,104 | 6,652 | 6,048 | ||||||||||||||
| Income from bank owned life insurance | 1,472 | 1,449 | 1,350 | 4,213 | 3,957 | ||||||||||||||
| Gain on sale of mortgage loans | 1,418 | 1,315 | 1,235 | 3,710 | 2,850 | ||||||||||||||
| Gain on sale of other loans and assets | 503 | 457 | 387 | 1,267 | 1,048 | ||||||||||||||
| Card-related interchange income | 4,780 | 4,842 | 3,698 | 13,873 | 11,039 | ||||||||||||||
| Derivative mark-to-market | (14 | ) | (37 | ) | 470 | (49 | ) | (1,075 | ) | ||||||||||
| Swap fee income | 217 | 314 | 725 | 458 | 1,985 | ||||||||||||||
| Other income | 2,244 | 1,724 | 1,527 | 5,674 | 4,761 | ||||||||||||||
| Total Noninterest Income | 19,790 | 18,904 | 16,994 | 55,626 | 46,267 | ||||||||||||||
| Salaries and employee benefits | 26,169 | 25,298 | 20,647 | 74,933 | 62,212 | ||||||||||||||
| Net occupancy | 3,715 | 4,121 | 3,176 | 11,597 | 9,843 | ||||||||||||||
| Furniture and equipment | 3,342 | 3,323 | 2,847 | 9,753 | 8,596 | ||||||||||||||
| Data processing | 2,229 | 2,345 | 1,832 | 6,659 | 5,379 | ||||||||||||||
| Pennsylvania shares tax | 1,093 | 1,161 | 914 | 3,070 | 2,764 | ||||||||||||||
| Advertising and promotion | 941 | 988 | 750 | 2,735 | 1,940 | ||||||||||||||
| Intangible amortization | 844 | 846 | 67 | 2,262 | 318 | ||||||||||||||
| Collection and repossession | 402 | 443 | 760 | 1,342 | 1,803 | ||||||||||||||
| Other professional fees and services | 1,300 | 1,096 | 1,202 | 3,355 | 2,866 | ||||||||||||||
| FDIC insurance | 696 | 977 | 1,105 | 2,466 | 3,205 | ||||||||||||||
| Litigation and operational losses | 598 | 277 | 295 | 1,107 | 1,174 | ||||||||||||||
| Loss on sale or write-down of assets | 167 | 1,220 | 188 | 1,486 | 629 | ||||||||||||||
| Merger and acquisition related | (69 | ) | 9,870 | 118 | 10,412 | 358 | |||||||||||||
| Other operating expenses | 5,934 | 6,298 | 4,795 | 17,212 | 13,163 | ||||||||||||||
| Total Noninterest Expense | 47,361 | 58,263 | 38,696 | 148,389 | 114,250 | ||||||||||||||
| Income before Income Taxes | 31,882 | 21,146 | 25,459 | 76,784 | 62,063 | ||||||||||||||
| Taxable equivalent adjustment (1) | 1,104 | 1,079 | 951 | 3,171 | 2,836 | ||||||||||||||
| Income tax provision | 9,495 | 6,054 | 7,312 | 22,429 | 17,551 | ||||||||||||||
| Net Income | $ | 21,283 | $ | 14,013 | $ | 17,196 | $ | 51,184 | $ | 41,676 | |||||||||
| Shares Outstanding at End of Period | 97,475,575 | 97,483,067 | 88,992,077 | 97,475,575 | 88,992,077 | ||||||||||||||
| Average Shares Outstanding Assuming Dilution | 97,457,470 | 97,232,288 | 88,858,204 | 94,578,490 | 88,843,939 | ||||||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||||||
| Unaudited | |||||||||||||
| (dollars in thousands) | |||||||||||||
| September 30, | June 30, | September 30, | |||||||||||
| 2017 | 2017 | 2016 | |||||||||||
| BALANCE SHEET (Period End) | |||||||||||||
| Assets | |||||||||||||
| Cash and due from banks | $ | 98,319 | $ | 103,602 | $ | 76,456 | |||||||
| Interest-bearing bank deposits | 29,709 | 12,310 | 5,097 | ||||||||||
| Securities available for sale, at fair value | 810,946 | 820,586 | 867,725 | ||||||||||
| Securities held to maturity, at amortized cost | 436,081 | 450,886 | 389,513 | ||||||||||
| Loans held for sale | 17,100 | 9,785 | 7,855 | ||||||||||
| Loans | 5,375,847 | 5,374,782 | 4,860,652 | ||||||||||
| Allowance for credit losses | (48,176 | ) | (48,067 | ) | (54,734 | ) | |||||||
| Net loans | 5,327,671 | 5,326,715 | 4,805,918 | ||||||||||
| Goodwill and other intangibles | 271,347 | 272,030 | 165,349 | ||||||||||
| Other assets | 393,166 | 387,472 | 348,570 | ||||||||||
| Total Assets | $ | 7,384,339 | $ | 7,383,386 | $ | 6,666,483 | |||||||
| Liabilities and Shareholders' Equity | |||||||||||||
| Noninterest-bearing demand deposits | $ | 1,416,814 | $ | 1,404,081 | $ | 1,241,627 | |||||||
| Interest-bearing demand deposits | 264,731 | 237,801 | 87,507 | ||||||||||
| Savings deposits | 3,290,978 | 3,330,351 | 2,552,754 | ||||||||||
| Time deposits | 582,534 | 560,902 | 577,092 | ||||||||||
| Total interest-bearing deposits | 4,138,243 | 4,129,054 | 3,217,353 | ||||||||||
| Total deposits | 5,555,057 | 5,533,135 | 4,458,980 | ||||||||||
| Short-term borrowings | 805,825 | 846,137 | 1,330,327 | ||||||||||
| Long-term borrowings | 88,155 | 88,389 | 81,059 | ||||||||||
| Total borrowings | 893,980 | 934,526 | 1,411,386 | ||||||||||
| Other liabilities | 41,001 | 36,260 | 44,330 | ||||||||||
| Shareholders' equity | 894,301 | 879,465 | 751,787 | ||||||||||
| Total Liabilities and Shareholders' Equity | $ | 7,384,339 | $ | 7,383,386 | $ | 6,666,483 | |||||||
| 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/ | ||||||||||||||||||||||
| 2017 | Rate | 2017 | Rate | 2016 | Rate | 2017 | Rate | 2016 | Rate | ||||||||||||||||||||||
| NET INTEREST MARGIN | |||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||
| Loans (FTE) (1)(3) | $ | 5,398,815 | 4.28 | % | $ | 5,358,089 | 4.18 | % | $ | 4,839,206 | 3.90 | % | $ | 5,226,320 | 4.17 | % | $ | 4,806,061 | 3.88 | % | |||||||||||
| Securities and interest bearing bank deposits (FTE) (1) | 1,265,416 | 2.60 | % | 1,312,814 | 2.57 | % | 1,284,493 | 2.49 | % | 1,263,614 | 2.63 | % | 1,312,146 | 2.53 | % | ||||||||||||||||
| Total Interest-Earning Assets (FTE) (1) | 6,664,231 | 3.96 | % | 6,670,903 | 3.86 | % | 6,123,699 | 3.60 | % | 6,489,934 | 3.87 | % | 6,118,207 | 3.59 | % | ||||||||||||||||
| Noninterest-earning assets | 713,142 | 710,913 | 555,977 | 668,517 | 549,969 | ||||||||||||||||||||||||||
| Total Assets | $ | 7,377,373 | $ | 7,381,816 | $ | 6,679,676 | $ | 7,158,451 | $ | 6,668,176 | |||||||||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||||
| Interest-bearing demand and savings deposits | $ | 3,576,365 | 0.18 | % | $ | 3,513,479 | 0.15 | % | $ | 2,652,562 | 0.18 | % | $ | 3,398,428 | 0.15 | % | $ | 2,622,574 | 0.15 | % | |||||||||||
| Time deposits | 562,868 | 0.64 | % | 580,874 | 0.60 | % | 586,470 | 0.65 | % | 572,128 | 0.62 | % | 586,638 | 0.63 | % | ||||||||||||||||
| Short-term borrowings | 829,954 | 1.16 | % | 902,547 | 0.98 | % | 1,391,766 | 0.57 | % | 887,463 | 0.96 | % | 1,447,207 | 0.58 | % | ||||||||||||||||
| Long-term borrowings | 88,256 | 4.18 | % | 88,351 | 4.08 | % | 81,128 | 3.67 | % | 85,843 | 4.07 | % | 81,268 | 3.62 | % | ||||||||||||||||
| Total Interest-Bearing Liabilities | 5,057,443 | 0.46 | % | 5,085,251 | 0.42 | % | 4,711,926 | 0.41 | % | 4,943,862 | 0.42 | % | 4,737,687 | 0.40 | % | ||||||||||||||||
| Noninterest-bearing deposits | 1,393,024 | 1,386,240 | 1,153,945 | 1,337,328 | 1,129,511 | ||||||||||||||||||||||||||
| Other liabilities | 38,125 | 38,092 | 65,727 | 37,415 | 61,631 | ||||||||||||||||||||||||||
| Shareholders' equity | 888,781 | 872,233 | 748,078 | 839,846 | 739,347 | ||||||||||||||||||||||||||
| Total Noninterest-Bearing Funding Sources | 2,319,930 | 2,296,565 | 1,967,750 | 2,214,589 | 1,930,489 | ||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 7,377,373 | $ | 7,381,816 | $ | 6,679,676 | $ | 7,158,451 | $ | 6,668,176 | |||||||||||||||||||||
| Net Interest Margin (FTE) (annualized) (1) | 3.61 | % | 3.54 | % | 3.29 | % | 3.55 | % | 3.28 | % | |||||||||||||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||||||||
| Unaudited | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| September 30, | June 30, | September 30, | |||||||||||||
| 2017 | 2017 | 2016 | |||||||||||||
| Loan Portfolio Detail | |||||||||||||||
| Commercial Loan Portfolio: | |||||||||||||||
| Commercial, financial, agricultural and other | $ | 1,154,225 | $ | 1,199,800 | $ | 1,207,447 | |||||||||
| Commercial real estate | 1,990,264 | 1,963,001 | 1,683,015 | ||||||||||||
| Real estate construction | 259,129 | 249,255 | 229,375 | ||||||||||||
| Total Commercial | 3,403,618 | 3,412,056 | 3,119,837 | ||||||||||||
| Consumer Loan Portfolio: | |||||||||||||||
| Closed-end mortgages | 893,809 | 886,335 | 719,049 | ||||||||||||
| Home equity lines of credit | 529,613 | 530,591 | 466,710 | ||||||||||||
| Total Real Estate - Consumer | 1,423,422 | 1,416,926 | 1,185,759 | ||||||||||||
| Auto loans | 454,320 | 450,561 | 467,222 | ||||||||||||
| Direct installment | 24,995 | 24,501 | 24,578 | ||||||||||||
| Personal lines of credit | 58,880 | 59,450 | 50,086 | ||||||||||||
| Student loans | 10,612 | 11,288 | 13,170 | ||||||||||||
| Total Other Consumer | 548,807 | 545,800 | 555,056 | ||||||||||||
| Total Consumer Portfolio | 1,972,229 | 1,962,726 | 1,740,815 | ||||||||||||
| Total Portfolio Loans | 5,375,847 | 5,374,782 | 4,860,652 | ||||||||||||
| Loans held for sale | 17,100 | 9,785 | 7,855 | ||||||||||||
| Total Loans | $ | 5,392,947 | $ | 5,384,567 | $ | 4,868,507 | |||||||||
| September 30, | June 30, | September 30, | |||||||||||||
| 2017 | 2017 | 2016 | |||||||||||||
| ASSET QUALITY DETAIL | |||||||||||||||
| Nonperforming Loans: | |||||||||||||||
| Loans on nonaccrual basis | $ | 14,943 | $ | 15,553 | $ | 27,817 | |||||||||
| Troubled debt restructured loans on nonaccrual basis | 11,408 | 11,868 | 12,723 | ||||||||||||
| Troubled debt restructured loans on accrual basis | 12,451 | 12,764 | 14,286 | ||||||||||||
| Total Nonperforming Loans | $ | 38,802 | $ | 40,185 | $ | 54,826 | |||||||||
| Other real estate owned ("OREO") | 5,701 | 5,964 | 7,686 | ||||||||||||
| Repossessions ("Repos") | 200 | 208 | 310 | ||||||||||||
| Total Nonperforming Assets | $ | 44,703 | $ | 46,357 | $ | 62,822 | |||||||||
| Loans past due in excess of 90 days and still accruing | 1,332 | 1,898 | 2,343 | ||||||||||||
| Classified loans | 65,948 | 69,748 | 97,259 | ||||||||||||
| Criticized loans | 125,034 | 160,220 | 137,264 | ||||||||||||
| Nonperforming assets as a percentage of total loans, plus OREO and Repos | 0.83 | % | 0.86 | % | 1.29 | % | |||||||||
| Allowance for credit losses | $ | 48,176 | $ | 48,067 | $ | 54,734 | |||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION |
| CONSOLIDATED FINANCIAL DATA |
| Unaudited |
| (dollars in thousands) |
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| Net Charge-offs (Recoveries): | ||||||||||||||||||||
| Commercial, financial, agricultural and other | $ | 315 | $ | (1,816 | ) | $ | 7,100 | $ | 1,956 | $ | 13,047 | |||||||||
| Real estate construction | (373 | ) | (43 | ) | - | (470 | ) | (227 | ) | |||||||||||
| Commercial real estate | (25 | ) | (4 | ) | (10 | ) | (115 | ) | (385 | ) | ||||||||||
| Residential real estate | 276 | 55 | 227 | 676 | 569 | |||||||||||||||
| Loans to individuals | 912 | 808 | 1,178 | 2,796 | 3,380 | |||||||||||||||
| Net Charge-offs | $ | 1,105 | $ | (1,000 | ) | $ | 8,495 | $ | 4,843 | $ | 16,384 | |||||||||
| Net charge-offs as a percentage of average loans outstanding (annualized) | 0.08 | % | (0.07 | )% | 0.70 | % | 0.12 | % | 0.46 | % | ||||||||||
| Provision for credit losses as a percentage of net charge-offs | 109.86 | % | 160.90 | % | 40.12 | % | 58.52 | % | 123.94 | % | ||||||||||
| Provision for credit losses | $ | 1,214 | $ | (1,609 | ) | $ | 3,408 | $ | 2,834 | $ | 20,306 | |||||||||
| 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 Nine Months Ended | ||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Net Income | $ | 21,283 | $ | 14,013 | $ | 17,196 | $ | 51,184 | $ | 41,676 | |||||||||||
| Intangible amortization | 844 | 846 | 67 | 2,262 | 318 | ||||||||||||||||
| Tax benefit of amortization of intangibles | (295 | ) | (296 | ) | (23 | ) | (792 | ) | (111 | ) | |||||||||||
| Net Income, adjusted for tax affected amortization of intangibles | 21,832 | 14,563 | 17,240 | 52,654 | 41,883 | ||||||||||||||||
| Average Tangible Equity: | |||||||||||||||||||||
| Total shareholders' equity | $ | 888,781 | $ | 872,233 | $ | 748,078 | $ | 839,846 | $ | 739,347 | |||||||||||
| Less: intangible assets | 271,670 | 272,488 | 165,449 | 247,679 | 165,547 | ||||||||||||||||
| Tangible Equity | 617,111 | 599,745 | 582,629 | 592,167 | 573,800 | ||||||||||||||||
| Less: preferred stock | - | - | - | - | - | ||||||||||||||||
| Tangible Common Equity | $ | 617,111 | $ | 599,745 | $ | 582,629 | $ | 592,167 | $ | 573,800 | |||||||||||
| (8) Return on Average Tangible Common Equity | 14.04 | % | 9.74 | % | 11.77 | % | 11.89 | % | 9.75 | % | |||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION |
| CONSOLIDATED FINANCIAL DATA |
| Unaudited |
| (dollars in thousands, except per share data) |
| DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
| Core Net Income: | |||||||||||||||||||||||
| Total Net Income | $ | 21,283 | $ | 14,013 | $ | 17,196 | $ | 51,184 | $ | 41,676 | |||||||||||||
| Merger & Acquisition related expenses | (69 | ) | 9,870 | 118 | 10,412 | 358 | |||||||||||||||||
| Tax benefit of merger & acquisition related expenses | 24 | (3,455 | ) | (41 | ) | (3,644 | ) | (125 | ) | ||||||||||||||
| (5) Core net income | 21,238 | 20,428 | 17,273 | 57,952 | 41,909 | ||||||||||||||||||
| Average Shares Outstanding Assuming Dilution | 97,457,470 | 97,232,288 | 88,858,204 | 94,578,490 | 88,843,939 | ||||||||||||||||||
| (6) Core Earnings per common share (diluted) | $ | 0.22 | $ | 0.21 | $ | 0.19 | $ | 0.61 | $ | 0.47 | |||||||||||||
| Intangible amortization | 844 | 846 | 67 | 2,262 | 318 | ||||||||||||||||||
| Tax benefit of amortization of intangibles | (295 | ) | (296 | ) | (23 | ) | (792 | ) | (111 | ) | |||||||||||||
| Core Net Income, adjusted for tax affected amortization of intangibles | $ | 21,787 | $ | 20,978 | $ | 17,317 | $ | 59,422 | $ | 42,116 | |||||||||||||
| (9) Core Return on Average Tangible Common Equity | 14.01 | % | 14.03 | % | 11.82 | % | 13.42 | % | 9.80 | % | |||||||||||||
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
| Core Return on Average Assets: | |||||||||||||||||||||||
| Total Net Income | $ | 21,283 | $ | 14,013 | $ | 17,196 | $ | 51,184 | $ | 41,676 | |||||||||||||
| Total Average Assets | 7,377,373 | 7,381,816 | 6,679,676 | 7,158,451 | 6,668,176 | ||||||||||||||||||
| Return on Average Assets | 1.14 | % | 0.76 | % | 1.02 | % | 0.96 | % | 0.83 | % | |||||||||||||
| Core Net Income (5) | $ | 21,238 | $ | 20,428 | $ | 17,273 | $ | 57,952 | $ | 41,909 | |||||||||||||
| Total Average Assets | 7,377,373 | 7,381,816 | 6,679,676 | 7,158,451 | 6,668,176 | ||||||||||||||||||
| (7) Core Return on Average Assets | 1.14 | % | 1.11 | % | 1.03 | % | 1.08 | % | 0.84 | % | |||||||||||||
| 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 Nine Months Ended | |||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
| Core Efficiency Ratio: | ||||||||||||||||||||||
| Total Noninterest Expense | $ | 47,361 | $ | 58,263 | $ | 38,696 | $ | 148,389 | $ | 114,250 | ||||||||||||
| Adjustments to Noninterest Expense: | ||||||||||||||||||||||
| Unfunded commitment reserve | (1 | ) | 664 | 503 | 451 | (412 | ) | |||||||||||||||
| Intangible amortization | 844 | 846 | 67 | 2,262 | 318 | |||||||||||||||||
| Merger and acquisition related | (69 | ) | 9,870 | 118 | 10,412 | 358 | ||||||||||||||||
| Noninterest Expense - Core | $ | 46,587 | $ | 46,883 | $ | 38,008 | $ | 135,264 | $ | 113,986 | ||||||||||||
| Net interest income, fully tax equivalent | $ | 60,667 | $ | 58,896 | $ | 50,569 | $ | 172,381 | $ | 150,352 | ||||||||||||
| Total noninterest income | 19,790 | 18,904 | 16,994 | 55,626 | 46,267 | |||||||||||||||||
| Net securities gains | (92 | ) | 49 | - | (695 | ) | (28 | ) | ||||||||||||||
| Total Revenue | $ | 80,365 | $ | 77,849 | $ | 67,563 | $ | 227,312 | $ | 196,591 | ||||||||||||
| Adjustments to Revenue: | ||||||||||||||||||||||
| Derivative mark-to-market | (14 | ) | (37 | ) | 470 | (49 | ) | (1,075 | ) | |||||||||||||
| Total Revenue - Core | $ | 80,379 | $ | 77,886 | $ | 67,093 | $ | 227,361 | $ | 197,666 | ||||||||||||
| (10) Core Efficiency Ratio | 57.96 | % | 60.19 | % | 56.65 | % | 59.49 | % | 57.67 | % | ||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||||||||||
| 2017 | 2017 | 2016 | ||||||||||||||||||||
| Tangible Equity: | ||||||||||||||||||||||
| Total shareholders' equity | $ | 894,301 | $ | 879,465 | $ | 751,787 | ||||||||||||||||
| Less: intangible assets | 271,347 | 272,030 | 165,349 | |||||||||||||||||||
| Tangible Equity | 622,954 | 607,435 | 586,438 | |||||||||||||||||||
| Less: preferred stock | - | - | - | |||||||||||||||||||
| Tangible Common Equity | $ | 622,954 | $ | 607,435 | $ | 586,438 | ||||||||||||||||
| Tangible Assets: | ||||||||||||||||||||||
| Total assets | $ | 7,384,339 | $ | 7,383,386 | $ | 6,666,483 | ||||||||||||||||
| Less: intangible assets | 271,347 | 272,030 | 165,349 | |||||||||||||||||||
| Tangible Assets | $ | 7,112,992 | $ | 7,111,356 | $ | 6,501,134 | ||||||||||||||||
| (12) Tangible Common Equity as a percentage of Tangible Assets | 8.76 | % | 8.54 | % | 9.02 | % | ||||||||||||||||
| Shares Outstanding at End of Period | 97,475,575 | 97,483,067 | 88,992,077 | |||||||||||||||||||
| (11) Tangible Book Value Per Common Share | $ | 6.39 | $ | 6.23 | $ | 6.59 | ||||||||||||||||
| 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. | ||||||||||||||||||||||
Media Relations: Amy Jeffords Assistant Vice President / Communications and Community Relations Phone: 724-463-6806 E-mail: AJeffords@fcbanking.com Investor Relations: Ryan M. Thomas Vice President / Finance and Investor Relations Phone: 724-463-1690 E-mail: RThomas1@fcbanking.com
