First Commonwealth Announces Second Quarter 2023 Earnings; Declares Quarterly Dividend
INDIANA, Pa., July 25, 2023 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the second quarter of 2023.
Financial Summary
| (dollars in thousands, | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||
| except per share data) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Reported Results | |||||||||||||||||||
| Net income | $ | 42,781 | $ | 30,224 | $ | 30,754 | $ | 73,005 | $ | 58,480 | |||||||||
| Diluted earnings per share | $ | 0.42 | $ | 0.30 | $ | 0.33 | $ | 0.72 | $ | 0.62 | |||||||||
| Return on average assets | 1.54 | % | 1.17 | % | 1.28 | % | 1.36 | % | 1.23 | % | |||||||||
| Return on average equity | 13.90 | % | 10.56 | % | 11.60 | % | 12.29 | % | 10.86 | % | |||||||||
| Operating Results (non-GAAP)(1) | |||||||||||||||||||
| Core net income | $ | 42,734 | $ | 45,387 | $ | 30,643 | $ | 88,121 | $ | 58,458 | |||||||||
| Core diluted earnings per share | $ | 0.42 | $ | 0.45 | $ | 0.33 | $ | 0.87 | $ | 0.62 | |||||||||
| Core pre-tax pre-provision net revenue | $ | 56,344 | $ | 54,481 | $ | 42,352 | $ | 110,825 | $ | 78,889 | |||||||||
| Provision for credit losses | $ | 2,790 | $ | (2,650 | ) | $ | 4,099 | $ | 140 | $ | 6,063 | ||||||||
| Provision for credit losses - acquisition day 1 non-PCD | $ | — | $ | 10,653 | $ | — | $ | 10,653 | $ | — | |||||||||
| Net charge-offs | $ | 8,665 | $ | 1,173 | $ | 1,528 | $ | 9,838 | $ | 2,662 | |||||||||
| Reserve build/(release)(2) | $ | (339 | ) | $ | 30,979 | $ | 2,415 | $ | 30,640 | $ | 1,081 | ||||||||
| Core return on average assets (ROAA) | 1.54 | % | 1.75 | % | 1.28 | % | 1.64 | % | 1.23 | % | |||||||||
| Core pre-tax pre-provision ROAA | 2.03 | % | 2.11 | % | 1.77 | % | 2.06 | % | 1.66 | % | |||||||||
| Return on average tangible common equity | 20.68 | % | 15.75 | % | 16.81 | % | 18.30 | % | 15.64 | % | |||||||||
| Core return on average tangible common equity | 20.66 | % | 23.42 | % | 16.75 | % | 21.99 | % | 15.63 | % | |||||||||
| Core efficiency ratio | 52.80 | % | 52.41 | % | 55.87 | % | 52.61 | % | 57.61 | % | |||||||||
| Net interest margin (FTE) | 3.85 | % | 4.01 | % | 3.38 | % | 3.93 | % | 3.29 | % | |||||||||
(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. A full reconciliation of non-GAAP financial measures can be found at the end of the financial statements which accompany this release.
(2) Reserve build/(release) represents the net change in the Company's allowance for credit losses (ACL) from the prior period.
Second Quarter 2023 Highlights
- Net income of
$42.8 million and diluted earnings per share of$0.42 represented an increase of$12.6 million , or$0.12 per share, from the prior quarter and an increase of$12.0 million , or$0.09 per share, from the second quarter of 2022- The results from the previous quarter included
$19.2 million of merger-related expenses, including$8.5 million of noninterest expense and impacts to the provision for credit losses of$10.7 million , related to the Company’s acquisition of Centric Financial Corporation (Centric) on January 31, 2023
- The results from the previous quarter included
- Core pre-tax pre-provision net revenue (PPNR)(1) totaled
$56.3 million , an increase of$1.9 million from the previous quarter and an increase of$14.0 million from the second quarter of 2022 - Total loans increased
$148.1 million , or6.9% annualized, from the previous quarter, driven by strong commercial loan growth, including$44.9 million growth in Equipment Finance loans- Average loans increased
$387.6 million , or18.7% annualized, from the previous quarter, due in part to the inclusion of acquired loan balances on the Company’s balance sheet for the entirety of the second quarter, as compared to only two months of the first quarter
- Average loans increased
- Average deposits increased
$433.5 million , or20.0% annualized, compared to the prior quarter, due in part to the inclusion of acquired deposit balances on the Company’s balance sheet for the entirety of the second quarter, as compared to only two months of the first quarter- Excluding deposits acquired in the Centric acquisition, average deposits increased by
$221.4 million , or10.8% annualized - End of period deposits decreased
$88.7 million compared to the prior quarter 82.0% of deposits were insured or secured as of June 30, 2023
- Excluding deposits acquired in the Centric acquisition, average deposits increased by
- The loan-to-deposit ratio increased 250 basis points to
96.4% at the end of the second quarter of 2023- Loans and available for sale (AFS) securities as a percentage of total deposits was
105.0% as of June 30, 2023
- Loans and available for sale (AFS) securities as a percentage of total deposits was
- Record net interest income (FTE) of
$98.1 million increased$3.5 million from the previous quarter and increased$24.2 million from the second quarter of 2022 - Noninterest income of
$24.5 million increased$1.6 million from the previous quarter due in part to higher gain on sale of mortgage loans - Noninterest expense (excluding merger-related expense) of
$66.0 million increased$3.2 million from the previous quarter due primarily to elevated hospitalization expenses - Total shareholder’s equity increased
$7.4 million from the previous quarter due to a$29.9 million increase in retained earnings, partially offset by a$14.0 million decrease in accumulated other comprehensive income (AOCI) resulting from the impact of higher interest rates on the fair value of the Company’s available for sale investment portfolio and interest rate swap agreements- Tangible book value per share increased
$0.11 , or5.3% annualized, from the previous quarter - AOCI as a percentage of tangible common equity increased 157 basis points to
16.4% in the second quarter of 2023
- Tangible book value per share increased
- First Commonwealth Bank (the Bank) has been recognized for the fifth consecutive year by Forbes as one of the World’s Best Banks for 2023
Profitability
- The core efficiency ratio(1) of
52.8% increased 39 basis points from the previous quarter, but improved 306 basis points from the second quarter of 2022 - The return on average assets (ROA) improved 37 basis points to
1.54% compared to previous quarter- The core return on average assets(1) decreased 22 basis points to
1.54% compared to the previous quarter but improved 26 basis points from the second quarter of 2023
- The core return on average assets(1) decreased 22 basis points to
- Core pre-tax pre-provision ROA(1) for the quarter ended June 30, 2023 was
2.03% as compared to2.11% in the prior quarter and1.77% in the second quarter of 2022 - The net interest margin of
3.85% decreased 16 basis points compared to the prior quarter and increased 47 basis points as compared to the second quarter of 2022- Centric purchasing accounting marks contributed 14 basis points to the margin in the second quarter, an increase of 8 basis points from the prior quarter
- The retention of approximately
$250 million of additional cash on the Bank’s balance sheet for liquidity purposes had a negative impact on the net interest margin of 10 basis points in the second quarter
Asset quality
- The provision for credit losses was
$2.8 million , a decrease of$5.2 million compared to the previous quarter- Provision expense in the prior quarter included
$10.7 million related to day-1 Non-Purchase Credit Deteriorated (PCD) loans resulting from the Centric acquisition
- Provision expense in the prior quarter included
- The allowance for credit losses as a percentage of end-of-period loans was
1.52% , a decrease of 3 basis points from the previous quarter - Total criticized loans increased
$17.2 million from the previous quarter, from$189.9 million , or2.2% of total loans and leases, to$207.1 million , or2.3% of total loans and leases- Total nonperforming assets of
$49.3 million increased$4.1 million from the previous quarter
- Total nonperforming assets of
Net charge-offs on loans totaled
- Net charge-offs as a percentage of average loans outstanding was
0.40% in the second quarter of 2023 as compared to0.06% in the previous quarter,0.35% of which was attributable to the aforementioned charge off of acquired loans
Strong capital and liquidity positions
- Total available liquidity of
$4.3 billion at June 30, 2023- Cash and AFS securities as a percentage of total assets increased 26 basis points to
10.9% - Total available liquidity represented
258% of uninsured/unsecured deposits, and combined with cash represented285% of uninsured/unsecured deposits
- Cash and AFS securities as a percentage of total assets increased 26 basis points to
- On April 24, 2023, the Board of Directors authorized a
4.2% increase in the quarterly cash dividend to shareholders - Bank-level Tier 1 Capital ratio of
10.7% , which represents$245.7 million in excess capital above the regulatory “well capitalized” requirement of8.0% - A total of 766,393 shares at a weighted average price of
$11.92 were repurchased during the second quarter of 2023 under the Company’s previously authorized share repurchase program. The remaining repurchase capacity under the current program was$21.1 million as of June 30, 2023
“I’m pleased with our progress this quarter, as we continue to grow the company strategically while posting a core efficiency ratio of
Earnings
Net income for the second quarter of 2023 was
Net Interest Income and Net Interest Margin
Net interest income (FTE) of
The net interest margin for the second quarter of 2023 was
Total average deposits grew
Asset Quality
Provision expense in the second quarter of 2023 totaled
The allowance for credit losses in the second quarter of 2023 totaled
The allowance for credit losses as a percentage of end-of-period loans in the second quarter of 2023 was
At June 30, 2023, nonperforming loans totaled
Nonperforming loans represented
During the second quarter of 2023, net charge-offs were
Net charge-offs as a percentage of average loans were
Noninterest Income and Noninterest Expense
Noninterest income totaled
The
Noninterest expense (excluding (
The core efficiency ratio was
Full time equivalent staff was 1,483 at June 30, 2023, 1,536 at March 31, 2023, and 1,409 at June 30, 2022.
Dividends and Capital
First Commonwealth declared a common stock quarterly dividend of
First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at June 30, 2023 were
Conference Call
First Commonwealth will host a quarterly conference call to discuss its financial results for the second quarter of 2023 on Wednesday, July 26, 2023 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-888-330-3181 conference ID # 4651379 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 1-800-770-2030 and entering the conference ID # 4651379. A link to the webcast replay will also be accessible on the Company’s webpage for 30 days.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation (NYSE: FCF), headquartered in Indiana, Pennsylvania, is a financial services company with 126 community banking offices in 30 counties throughout western and central Pennsylvania and throughout Ohio, as well as commercial lending operations in Pittsburgh and Harrisburg, Pennsylvania, and Canton, Cleveland, Columbus and Cincinnati, Ohio. The Company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson and Lewis Center, Ohio. First Commonwealth provides a full range of commercial banking, consumer banking, mortgage, equipment finance, wealth management and insurance products and services through its subsidiaries First Commonwealth Bank and First Commonwealth Insurance Agency. For more information about First Commonwealth or to open an account today, please visit www.fcbanking.com.
Forward-Looking Statements
Certain statements contained in this release that are not historical facts may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the Securities and Exchange Commission, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute “forward-looking statements” as well. These statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of words such as “may,” “will,” “should,” “could,” “would,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate” or words of similar meaning. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including uncertainties regarding the impact of the COVID-19 pandemic, and could be affected by many factors, including, but not limited to: (1) volatility and disruption in national and international financial markets; (2) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (3) inflation, interest rate, commodity price, securities market and monetary fluctuations; (4) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which First Commonwealth or its customers must comply; (5) the soundness of other financial institutions; (6) political instability; (7) impairment of First Commonwealth’s goodwill or other intangible assets; (8) acts of God or of war or terrorism; (9) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (10) changes in consumer spending, borrowings and savings habits; (11) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (12) technological changes; (13) acquisitions and integration of acquired businesses; (14) First Commonwealth’s ability to attract and retain qualified employees; (15) changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (16) the ability to increase market share and control expenses; (17) 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; (18) the reliability of First Commonwealth’s vendors, internal control systems or information systems; (19) 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 (20) other risks and uncertainties described in this report and in the other reports that we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K.
In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements in this release. We undertake no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Media Relations:
Jonathan E. Longwill
Vice President / Communications and Media Relations
Phone: 724-463-6806
E-mail: JLongwill@fcbanking.com
Investor Relations:
Ryan M. Thomas
Vice President / Finance and Investor Relations
Phone: 724-463-1690
E-mail: RThomas1@fcbanking.com
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||||||||||||
| Unaudited | |||||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| SUMMARY RESULTS OF OPERATIONS | |||||||||||||||||||
| Net interest income | $ | 97,824 | $ | 94,358 | $ | 73,662 | $ | 192,182 | $ | 141,834 | |||||||||
| Provision for credit losses | 2,790 | (2,650 | ) | 4,099 | 140 | 6,063 | |||||||||||||
| Provision for credit losses — acquisition day 1 non-PCD | — | 10,653 | — | 10,653 | — | ||||||||||||||
| Noninterest income | 24,523 | 22,963 | 24,509 | 47,486 | 48,485 | ||||||||||||||
| Noninterest expense | 65,943 | 71,381 | 55,679 | 137,324 | 111,403 | ||||||||||||||
| Net income | 42,781 | 30,224 | 30,754 | 73,005 | 58,480 | ||||||||||||||
| Core net income(5) | 42,734 | 45,387 | 30,643 | 88,121 | 58,458 | ||||||||||||||
| Earnings per common share (diluted) | $ | 0.42 | $ | 0.30 | $ | 0.33 | $ | 0.72 | $ | 0.62 | |||||||||
| Core earnings per common share (diluted)(6) | $ | 0.42 | $ | 0.45 | $ | 0.33 | $ | 0.87 | $ | 0.62 | |||||||||
| KEY FINANCIAL RATIOS | |||||||||||||||||||
| Return on average assets | 1.54 | % | 1.17 | % | 1.28 | % | 1.36 | % | 1.23 | % | |||||||||
| Core return on average assets(7) | 1.54 | % | 1.75 | % | 1.28 | % | 1.64 | % | 1.23 | % | |||||||||
| Return on average assets, pre-provision, pre-tax | 2.03 | % | 1.78 | % | 1.78 | % | 1.91 | % | 1.66 | % | |||||||||
| Core return on average assets, pre-provision, pre-tax | 2.03 | % | 2.11 | % | 1.77 | % | 2.06 | % | 1.66 | % | |||||||||
| Return on average shareholders' equity | 13.90 | % | 10.56 | % | 11.60 | % | 12.29 | % | 10.86 | % | |||||||||
| Return on average tangible common equity(8) | 20.68 | % | 15.75 | % | 16.81 | % | 18.30 | % | 15.64 | % | |||||||||
| Core return on average tangible common equity(9) | 20.66 | % | 23.42 | % | 16.75 | % | 21.99 | % | 15.63 | % | |||||||||
| Core efficiency ratio(2)(10) | 52.80 | % | 52.41 | % | 55.87 | % | 52.61 | % | 57.61 | % | |||||||||
| Net interest margin (FTE)(1) | 3.85 | % | 4.01 | % | 3.38 | % | 3.93 | % | 3.29 | % | |||||||||
| Book value per common share | $ | 12.03 | $ | 11.87 | $ | 11.20 | |||||||||||||
| Tangible book value per common share(11) | 8.24 | 8.13 | 7.85 | ||||||||||||||||
| Market value per common share | 12.65 | 12.43 | 13.42 | ||||||||||||||||
| Cash dividends declared per common share | 0.125 | 0.120 | 0.120 | 0.245 | 0.235 | ||||||||||||||
| ASSET QUALITY RATIOS | |||||||||||||||||||
| Nonperforming loans and leases as a percent of end-of-period loans and leases(3) | 0.54 | % | 0.51 | % | 0.50 | % | |||||||||||||
| Nonperforming assets as a percent of total assets(3) | 0.44 | % | 0.41 | % | 0.38 | % | |||||||||||||
| Net charge-offs as a percent of average loans and leases (annualized)(4) | 0.40 | % | 0.06 | % | 0.09 | % | |||||||||||||
| Allowance for credit losses as a percent of nonperforming loans and leases(4) | 278.17 | % | 302.67 | % | 262.25 | % | |||||||||||||
| Allowance for credit losses as a percent of end-of-period loans and leases(4) | 1.52 | % | 1.55 | % | 1.31 | % | |||||||||||||
| CAPITAL RATIOS | |||||||||||||||||||
| Shareholders' equity as a percent of total assets | 10.9 | % | 11.0 | % | 11.0 | % | |||||||||||||
| Tangible common equity as a percent of tangible assets(12) | 7.7 | % | 7.8 | % | 8.0 | % | |||||||||||||
| Leverage Ratio | 9.8 | % | 10.2 | % | 9.8 | % | |||||||||||||
| Risk Based Capital - Tier I | 11.5 | % | 11.5 | % | 12.2 | % | |||||||||||||
| Risk Based Capital - Total | 13.7 | % | 13.8 | % | 14.6 | % | |||||||||||||
| Common Equity - Tier I | 10.8 | % | 10.8 | % | 11.2 | % | |||||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | ||||||||||||||
| CONSOLIDATED FINANCIAL DATA | ||||||||||||||
| Unaudited | ||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||
| INCOME STATEMENT | ||||||||||||||
| Interest income | $ | 131,267 | $ | 114,589 | $ | 76,728 | $ | 245,856 | $ | 147,972 | ||||
| Interest expense | 33,443 | 20,231 | 3,066 | 53,674 | 6,138 | |||||||||
| Net Interest Income | 97,824 | 94,358 | 73,662 | 192,182 | 141,834 | |||||||||
| Provision for credit losses | 2,790 | (2,650 | ) | 4,099 | 140 | 6,063 | ||||||||
| Provision for credit losses - acquisition day 1 non-PCD | — | 10,653 | — | 10,653 | — | |||||||||
| Net Interest Income after Provision for Credit Losses | 95,034 | 86,355 | 69,563 | 181,389 | 135,771 | |||||||||
| Net securities gains | — | — | — | — | 2 | |||||||||
| Trust income | 2,532 | 2,486 | 2,573 | 5,018 | 5,286 | |||||||||
| Service charges on deposit accounts | 5,324 | 4,918 | 4,886 | 10,242 | 9,501 | |||||||||
| Insurance and retail brokerage commissions | 2,314 | 2,552 | 2,486 | 4,866 | 4,758 | |||||||||
| Income from bank owned life insurance | 1,195 | 1,227 | 1,383 | 2,422 | 2,891 | |||||||||
| Gain on sale of mortgage loans | 1,253 | 652 | 1,561 | 1,905 | 2,843 | |||||||||
| Gain on sale of other loans and assets | 1,891 | 2,086 | 1,099 | 3,977 | 3,418 | |||||||||
| Card-related interchange income | 7,372 | 6,829 | 7,137 | 14,201 | 13,627 | |||||||||
| Derivative mark-to-market | 81 | (89 | ) | 42 | (8 | ) | 389 | |||||||
| Swap fee income | 332 | 245 | 1,154 | 577 | 1,607 | |||||||||
| Other income | 2,229 | 2,057 | 2,188 | 4,286 | 4,163 | |||||||||
| Total Noninterest Income | 24,523 | 22,963 | 24,509 | 47,486 | 48,485 | |||||||||
| Salaries and employee benefits | 36,735 | 34,264 | 30,949 | 70,999 | 61,881 | |||||||||
| Net occupancy | 4,784 | 5,018 | 4,170 | 9,802 | 8,957 | |||||||||
| Furniture and equipment | 4,284 | 4,238 | 3,857 | 8,522 | 7,587 | |||||||||
| Data processing | 3,763 | 3,404 | 3,470 | 7,167 | 6,658 | |||||||||
| Pennsylvania shares tax | 1,173 | 1,252 | 913 | 2,425 | 1,918 | |||||||||
| Advertising and promotion | 1,327 | 1,663 | 1,434 | 2,990 | 2,660 | |||||||||
| Intangible amortization | 1,282 | 1,147 | 862 | 2,429 | 1,724 | |||||||||
| Other professional fees and services | 1,182 | 1,591 | 1,197 | 2,773 | 2,418 | |||||||||
| FDIC insurance | 1,277 | 1,417 | 702 | 2,694 | 1,400 | |||||||||
| Litigation and operational losses | 894 | 743 | 629 | 1,637 | 1,229 | |||||||||
| Loss on sale or write-down of assets | 6 | 41 | 86 | 47 | 161 | |||||||||
| Merger and acquisition | (60 | ) | 8,541 | — | 8,481 | — | ||||||||
| Other operating expenses | 9,296 | 8,062 | 7,410 | 17,358 | 14,810 | |||||||||
| Total Noninterest Expense | 65,943 | 71,381 | 55,679 | 137,324 | 111,403 | |||||||||
| Income before Income Taxes | 53,614 | 37,937 | 38,393 | 91,551 | 72,853 | |||||||||
| Income tax provision | 10,833 | 7,713 | 7,639 | 18,546 | 14,373 | |||||||||
| Net Income | $ | 42,781 | $ | 30,224 | $ | 30,754 | $ | 73,005 | $ | 58,480 | ||||
| Shares Outstanding at End of Period | 102,444,915 | 103,193,127 | 93,705,120 | 102,444,915 | 93,705,120 | |||||||||
| Average Shares Outstanding Assuming Dilution | 102,760,266 | 99,779,816 | 94,245,770 | 101,281,899 | 94,273,808 | |||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||||
| Unaudited | |||||||||||
| (dollars in thousands) | |||||||||||
| June 30, | March 31, | June 30, | |||||||||
| 2023 | 2023 | 2022 | |||||||||
| BALANCE SHEET (Period End) | |||||||||||
| Assets | |||||||||||
| Cash and due from banks | $ | 123,095 | $ | 113,692 | $ | 120,267 | |||||
| Interest-bearing bank deposits | 325,774 | 282,110 | 179,533 | ||||||||
| Securities available for sale, at fair value | 784,503 | 786,813 | 877,287 | ||||||||
| Securities held to maturity, at amortized cost | 439,922 | 451,278 | 492,229 | ||||||||
| Loans held for sale | 16,300 | 11,050 | 12,876 | ||||||||
| Loans and leases | 8,799,836 | 8,656,945 | 7,119,754 | ||||||||
| Allowance for credit losses | (133,546 | ) | (133,885 | ) | (93,603 | ) | |||||
| Net loans and leases | 8,666,290 | 8,523,060 | 7,026,151 | ||||||||
| Goodwill and other intangibles | 388,451 | 385,998 | 313,449 | ||||||||
| Other assets | 574,269 | 559,751 | 504,635 | ||||||||
| Total Assets | $ | 11,318,604 | $ | 11,113,752 | $ | 9,526,427 | |||||
| Liabilities and Shareholders' Equity | |||||||||||
| Noninterest-bearing demand deposits | $ | 2,624,344 | $ | 2,698,225 | $ | 2,726,242 | |||||
| Interest-bearing demand deposits | 611,156 | 547,015 | 273,360 | ||||||||
| Savings deposits | 4,935,124 | 5,127,037 | 4,708,868 | ||||||||
| Time deposits | 975,654 | 862,671 | 345,075 | ||||||||
| Total interest-bearing deposits | 6,521,934 | 6,536,723 | 5,327,303 | ||||||||
| Total deposits | 9,146,278 | 9,234,948 | 8,053,545 | ||||||||
| Short-term borrowings | 542,839 | 278,978 | 88,923 | ||||||||
| Long-term borrowings | 187,276 | 187,531 | 181,752 | ||||||||
| Total borrowings | 730,115 | 466,509 | 270,675 | ||||||||
| Other liabilities | 209,792 | 187,281 | 153,049 | ||||||||
| Shareholders' equity | 1,232,419 | 1,225,014 | 1,049,158 | ||||||||
| Total Liabilities and Shareholders' Equity | $ | 11,318,604 | $ | 11,113,752 | $ | 9,526,427 | |||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION |
| CONSOLIDATED FINANCIAL DATA |
| Unaudited |
| (dollars in thousands) |
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||
| June 30, | Yield/ | March 31, | Yield/ | June 30, | Yield/ | June 30, | Yield/ | June 30, | Yield/ | ||||||||||||
| 2023 | Rate | 2023 | Rate | 2022 | Rate | 2023 | Rate | 2022 | Rate | ||||||||||||
| NET INTEREST MARGIN | |||||||||||||||||||||
| Assets | |||||||||||||||||||||
| Loans and leases (FTE)(1)(3) | $ | 8,689,021 | 5.58 | % | $ | 8,301,449 | 5.27 | % | $ | 7,036,176 | 3.97 | % | $ | 8,496,305 | 5.43 | % | $ | 6,965,296 | 3.89 | % | |
| Securities and interest-bearing bank deposits (FTE)(1) | 1,535,136 | 2.77 | % | 1,279,477 | 2.20 | % | 1,734,126 | 1.68 | % | 1,408,014 | 2.51 | % | 1,771,421 | 1.61 | % | ||||||
| Total Interest-Earning Assets (FTE)(1) | 10,224,157 | 5.16 | % | 9,580,926 | 4.86 | % | 8,770,302 | 3.52 | % | 9,904,319 | 5.02 | % | 8,736,717 | 3.43 | % | ||||||
| Noninterest-earning assets | 932,756 | 907,982 | 830,167 | 920,437 | 826,016 | ||||||||||||||||
| Total Assets | $ | 11,156,913 | $ | 10,488,908 | $ | 9,600,469 | $ | 10,824,756 | $ | 9,562,733 | |||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||
| Interest-bearing demand and savings deposits | $ | 5,595,336 | 1.35 | % | $ | 5,312,086 | 0.88 | % | $ | 5,067,692 | 0.05 | % | $ | 5,454,494 | 1.13 | % | $ | 5,024,283 | 0.04 | % | |
| Time deposits | 930,447 | 3.03 | % | 682,144 | 2.34 | % | 354,403 | 0.26 | % | 806,981 | 2.74 | % | 364,388 | 0.27 | % | ||||||
| Short-term borrowings | 434,783 | 4.79 | % | 266,932 | 3.65 | % | 95,561 | 0.08 | % | 351,321 | 4.36 | % | 105,497 | 0.07 | % | ||||||
| Long-term borrowings | 187,379 | 5.03 | % | 185,367 | 5.06 | % | 181,859 | 4.96 | % | 186,378 | 5.04 | % | 181,988 | 4.97 | % | ||||||
| Total Interest-Bearing Liabilities | 7,147,945 | 1.88 | % | 6,446,529 | 1.27 | % | 5,699,515 | 0.22 | % | 6,799,174 | 1.59 | % | 5,676,156 | 0.22 | % | ||||||
| Noninterest-bearing deposits | 2,580,842 | 2,678,849 | 2,711,458 | 2,629,575 | 2,678,686 | ||||||||||||||||
| Other liabilities | 193,292 | 202,476 | 125,646 | 197,860 | 122,379 | ||||||||||||||||
| Shareholders' equity | 1,234,834 | 1,161,054 | 1,063,850 | 1,198,147 | 1,085,512 | ||||||||||||||||
| Total Noninterest-Bearing Funding Sources | 4,008,968 | 4,042,379 | 3,900,954 | 4,025,582 | 3,886,577 | ||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 11,156,913 | $ | 10,488,908 | $ | 9,600,469 | $ | 10,824,756 | $ | 9,562,733 | |||||||||||
| Net Interest Margin (FTE) (annualized)(1) | 3.85 | % | 4.01 | % | 3.38 | % | 3.93 | % | 3.29 | % | |||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||
| Unaudited | |||||||||
| (dollars in thousands) | |||||||||
| June 30, | March 31, | June 30, | |||||||
| 2023 | 2023 | 2022 | |||||||
| Loan and Lease Portfolio Detail | |||||||||
| Commercial Loan and Lease Portfolio: | |||||||||
| Commercial, financial, agricultural and other | $ | 1,347,842 | $ | 1,361,858 | $ | 1,149,521 | |||
| Commercial real estate | 3,004,962 | 2,991,930 | 2,319,094 | ||||||
| Equipment Finance loans and leases | 154,152 | 109,221 | 21,062 | ||||||
| Real estate construction | 474,720 | 422,831 | 292,400 | ||||||
| Total Commercial | 4,981,676 | 4,885,840 | 3,782,077 | ||||||
| Consumer Loan Portfolio: | |||||||||
| Closed-end mortgages | 1,858,660 | 1,807,941 | 1,567,561 | ||||||
| Home equity lines of credit | 505,449 | 515,926 | 532,640 | ||||||
| Real estate construction | 100,079 | 119,071 | 100,592 | ||||||
| Total Real Estate - Consumer | 2,464,188 | 2,442,938 | 2,200,793 | ||||||
| Auto & RV loans | 1,272,557 | 1,244,874 | 1,047,104 | ||||||
| Direct installment | 28,881 | 30,381 | 35,245 | ||||||
| Personal lines of credit | 49,168 | 49,399 | 50,249 | ||||||
| Student loans | 3,366 | 3,513 | 4,286 | ||||||
| Total Other Consumer | 1,353,972 | 1,328,167 | 1,136,884 | ||||||
| Total Consumer Portfolio | 3,818,160 | 3,771,105 | 3,337,677 | ||||||
| Total Portfolio Loans and Leases | 8,799,836 | 8,656,945 | 7,119,754 | ||||||
| Loans held for sale | 16,300 | 11,050 | 12,876 | ||||||
| Total Loans and Leases | $ | 8,816,136 | $ | 8,667,995 | $ | 7,132,630 | |||
| June 30, | March 31, | June 30, | |||||||
| 2023 | 2023 | 2022 | |||||||
| ASSET QUALITY DETAIL | |||||||||
| Nonperforming Loans and Leases: | |||||||||
| Loans and leases on nonaccrual basis * | $ | 29,322 | $ | 29,413 | $ | 29,288 | |||
| Loans on nonaccrual basis - Centric acquisition | 18,687 | 14,821 | — | ||||||
| Troubled debt restructured loans on accrual basis * | — | — | 6,404 | ||||||
| Total Nonperforming Loans and Leases | $ | 48,009 | $ | 44,234 | $ | 35,692 | |||
| Other real estate owned ("OREO") | 324 | 424 | 93 | ||||||
| Repossessions ("Repos") | 1,004 | 553 | 621 | ||||||
| Total Nonperforming Assets | $ | 49,337 | $ | 45,211 | $ | 36,406 | |||
| Loans past due in excess of 90 days and still accruing | 2,474 | 1,440 | 3,155 | ||||||
| Classified loans and leases | 76,419 | 76,962 | 46,798 | ||||||
| Criticized loans and leases | 207,071 | 189,873 | 146,780 | ||||||
| Nonperforming assets as a percentage of total loans and leases, plus OREO and Repos(4) | 0.56 | % | 0.52 | % | 0.51 | % | |||
| Allowance for credit losses | $ | 133,546 | $ | 133,885 | $ | 93,603 | |||
| *TDR's were eliminated as of January 1, 2023 as part of implementing ASU 2022-02, Financial Instruments Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. | |||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION |
| CONSOLIDATED FINANCIAL DATA |
| Unaudited |
| (dollars in thousands) |
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net Charge-offs (Recoveries): | ||||||||||||||||
| Commercial, financial, agricultural and other | $ | 6,582 | $ | 504 | $ | 430 | $ | 7,086 | $ | 825 | ||||||
| Real estate construction | — | — | — | — | — | |||||||||||
| Commercial real estate | 1,423 | (42 | ) | 547 | 1,381 | 533 | ||||||||||
| Residential real estate | (32 | ) | 41 | (26 | ) | 9 | 84 | |||||||||
| Loans to individuals | 692 | 670 | 577 | 1,362 | 1,220 | |||||||||||
| Net Charge-offs | $ | 8,665 | $ | 1,173 | $ | 1,528 | $ | 9,838 | $ | 2,662 | ||||||
| Net charge-offs as a percentage of average loans and leases outstanding (annualized)(4) | 0.40 | % | 0.06 | % | 0.09 | % | 0.23 | % | 0.08 | % | ||||||
| Provision for credit losses as a percentage of net charge-offs | 32.20 | % | (225.92)% | 268.26 | % | 1.42 | % | 227.76 | % | |||||||
| Provision for credit losses | $ | 2,790 | $ | (2,650 | ) | $ | 4,099 | $ | 140 | $ | 6,063 | |||||
| DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES | |||||||||||
| 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. | |||||||||||
| (1)Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the federal income tax statutory rate of | |||||||||||
| (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 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 Six Months Ended | ||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||
| Interest income | $ | 131,267 | $ | 114,589 | $ | 76,728 | $ | 245,856 | $ | 147,972 | |
| Adjustment to fully taxable equivalent basis(1) | 305 | 305 | 244 | 610 | 498 | ||||||
| Interest income adjusted to fully taxable equivalent basis (non-GAAP) | 131,572 | 114,894 | 76,972 | 246,466 | 148,470 | ||||||
| Interest expense | 33,443 | 20,231 | 3,066 | 53,674 | 6,138 | ||||||
| Net interest income, (FTE)(1) | $ | 98,129 | $ | 94,663 | $ | 73,906 | $ | 192,792 | $ | 142,332 | |
| 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 Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net Income | $ | 42,781 | $ | 30,224 | $ | 30,754 | $ | 73,005 | $ | 58,480 | ||||||
| Intangible amortization | 1,282 | 1,147 | 862 | 2,429 | 1,724 | |||||||||||
| Tax benefit of amortization of intangibles | (269 | ) | (241 | ) | (181 | ) | (510 | ) | (362 | ) | ||||||
| Net Income, adjusted for tax affected amortization of intangibles | $ | 43,794 | $ | 31,130 | $ | 31,435 | $ | 74,924 | $ | 59,842 | ||||||
| Average Tangible Equity: | ||||||||||||||||
| Total shareholders' equity | $ | 1,234,834 | $ | 1,161,054 | $ | 1,063,850 | $ | 1,198,147 | $ | 1,085,512 | ||||||
| Less: intangible assets | 385,567 | 359,431 | 313,617 | 372,571 | 313,924 | |||||||||||
| Tangible Equity | 849,267 | 801,623 | 750,233 | 825,576 | 771,588 | |||||||||||
| Less: preferred stock | — | — | — | — | — | |||||||||||
| Tangible Common Equity | $ | 849,267 | $ | 801,623 | $ | 750,233 | $ | 825,576 | $ | 771,588 | ||||||
| (8)Return on Average Tangible Common Equity | 20.68 | % | 15.75 | % | 16.81 | % | 18.30 | % | 15.64 | % | ||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Core Net Income: | ||||||||||||||||
| Total Net Income | $ | 42,781 | $ | 30,224 | $ | 30,754 | $ | 73,005 | $ | 58,480 | ||||||
| Net securities gains | — | — | — | — | (2 | ) | ||||||||||
| Merger and acquisition related expenses | (60 | ) | 8,541 | — | 8,481 | — | ||||||||||
| Tax benefit of merger and acquisition related expenses | 13 | (1,794 | ) | — | (1,781 | ) | — | |||||||||
| COVID-19 related | — | — | 62 | — | 79 | |||||||||||
| Tax benefit of COVID-19 related | — | — | (13 | ) | — | (17 | ) | |||||||||
| Provision for credit losses - acquisition day 1 non-PCD | — | 10,653 | — | 10,653 | — | |||||||||||
| Tax benefit of provision for credit losses - acquisition day 1 non-PCD | — | (2,237 | ) | — | (2,237 | ) | — | |||||||||
| Branch consolidation related | — | — | (202 | ) | — | (104 | ) | |||||||||
| Tax benefit of bank consolidation related expenses | — | — | 42 | — | 22 | |||||||||||
| (5)Core net income | $ | 42,734 | $ | 45,387 | $ | 30,643 | $ | 88,121 | $ | 58,458 | ||||||
| Average Shares Outstanding Assuming Dilution | 102,760,266 | 99,779,816 | 94,245,770 | 101,281,899 | 94,273,808 | |||||||||||
| (6)Core Earnings per common share (diluted) | $ | 0.42 | $ | 0.45 | $ | 0.33 | $ | 0.87 | $ | 0.62 | ||||||
| Intangible amortization | 1,282 | 1,147 | 862 | 2,429 | 1,724 | |||||||||||
| Tax benefit of amortization of intangibles | (269 | ) | (241 | ) | (181 | ) | (510 | ) | (362 | ) | ||||||
| Core Net Income, adjusted for tax affected amortization of intangibles | $ | 43,747 | $ | 46,293 | $ | 31,324 | $ | 90,040 | $ | 59,820 | ||||||
| (9)Core Return on Average Tangible Common Equity | 20.66 | % | 23.42 | % | 16.75 | % | 21.99 | % | 15.63 | % | ||||||
| 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 Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Core Return on Average Assets: | ||||||||||||||||
| Total Net Income | $ | 42,781 | $ | 30,224 | $ | 30,754 | $ | 73,005 | $ | 58,480 | ||||||
| Total Average Assets | 11,156,913 | 10,488,908 | 9,600,469 | 10,824,756 | 9,562,733 | |||||||||||
| Return on Average Assets | 1.54 | % | 1.17 | % | 1.28 | % | 1.36 | % | 1.23 | % | ||||||
| Core Net Income(5) | $ | 42,734 | $ | 45,387 | $ | 30,643 | $ | 88,121 | $ | 58,458 | ||||||
| Total Average Assets | 11,156,913 | 10,488,908 | 9,600,469 | 10,824,756 | 9,562,733 | |||||||||||
| (7)Core Return on Average Assets | 1.54 | % | 1.75 | % | 1.28 | % | 1.64 | % | 1.23 | % | ||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Core Efficiency Ratio: | ||||||||||||||||
| Total Noninterest Expense | $ | 65,943 | $ | 71,381 | $ | 55,679 | $ | 137,324 | $ | 111,403 | ||||||
| Adjustments to Noninterest Expense: | ||||||||||||||||
| Intangible amortization | 1,282 | 1,147 | 862 | 2,429 | 1,724 | |||||||||||
| Merger and acquisition related | (60 | ) | 8,541 | — | 8,481 | — | ||||||||||
| COVID-19 related | — | — | 62 | — | 79 | |||||||||||
| Branch consolidation related | — | — | (202 | ) | — | (104 | ) | |||||||||
| Noninterest Expense - Core | $ | 64,721 | $ | 61,693 | $ | 54,957 | $ | 126,414 | $ | 109,704 | ||||||
| Net interest income, (FTE) | $ | 98,129 | $ | 94,663 | $ | 73,906 | $ | 192,792 | $ | 142,332 | ||||||
| Total noninterest income | 24,523 | 22,963 | 24,509 | 47,486 | 48,485 | |||||||||||
| Net securities gains | — | — | — | — | (2 | ) | ||||||||||
| Total Revenue | 122,652 | 117,626 | 98,415 | 240,278 | 190,815 | |||||||||||
| Adjustments to Revenue: | ||||||||||||||||
| Derivative mark-to-market | 81 | (89 | ) | 42 | (8 | ) | 389 | |||||||||
| Total Revenue - Core | $ | 122,571 | $ | 117,715 | $ | 98,373 | $ | 240,286 | $ | 190,426 | ||||||
| (10)Core Efficiency Ratio | 52.80 | % | 52.41 | % | 55.87 | % | 52.61 | % | 57.61 | % | ||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION |
| CONSOLIDATED FINANCIAL DATA |
| Unaudited |
| (dollars in thousands) |
| DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES | |||||||||
| June 30, | March 31, | June 30, | |||||||
| 2023 | 2023 | 2022 | |||||||
| Tangible Equity: | |||||||||
| Total shareholders' equity | $ | 1,232,419 | $ | 1,225,014 | $ | 1,049,158 | |||
| Less: intangible assets | 388,451 | 385,998 | 313,449 | ||||||
| Tangible Equity | 843,968 | 839,016 | 735,709 | ||||||
| Less: preferred stock | — | — | — | ||||||
| Tangible Common Equity | $ | 843,968 | $ | 839,016 | $ | 735,709 | |||
| Tangible Assets: | |||||||||
| Total assets | $ | 11,318,604 | $ | 11,113,752 | $ | 9,526,427 | |||
| Less: intangible assets | 388,451 | 385,998 | 313,449 | ||||||
| Tangible Assets | $ | 10,930,153 | $ | 10,727,754 | $ | 9,212,978 | |||
| (12)Tangible Common Equity as a percentage of Tangible Assets | 7.72 | % | 7.82 | % | 7.99 | % | |||
| Shares Outstanding at End of Period | 102,444,915 | 103,193,127 | 93,705,120 | ||||||
| (11)Tangible Book Value Per Common Share | $ | 8.24 | $ | 8.13 | $ | 7.85 | |||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||
| Pre-tax pre-provision income: | ||||||||||||||
| Net interest income | $ | 97,824 | $ | 94,358 | $ | 73,662 | $ | 192,182 | $ | 141,834 | ||||
| Noninterest income | 24,523 | 22,963 | 24,509 | 47,486 | 48,485 | |||||||||
| Noninterest expense | 65,943 | 71,381 | 55,679 | 137,324 | 111,403 | |||||||||
| Pre-tax pre-provision income | $ | 56,404 | $ | 45,940 | $ | 42,492 | $ | 102,344 | $ | 78,916 | ||||
| Net securities gains | $ | — | $ | — | $ | — | $ | — | $ | (2 | ) | |||
| Merger and acquisition related expenses | (60 | ) | 8,541 | — | 8,481 | — | ||||||||
| COVID-19 related | — | — | 62 | — | 79 | |||||||||
| Branch consolidation | — | — | (202 | ) | — | (104 | ) | |||||||
| Core pre-tax pre-provision income | $ | 56,344 | $ | 54,481 | $ | 42,352 | $ | 110,825 | $ | 78,889 | ||||
| Net charge-offs | $ | 8,665 | $ | 1,173 | $ | 1,528 | $ | 9,838 | $ | 2,662 | ||||
