First Commonwealth Announces Second Quarter 2022 Earnings; Declares Quarterly Dividend

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INDIANA, Pa., July 26, 2022 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the second quarter of 2022.

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,
  2022   2022   2021   2022   2021 
Reported Results         
Net income$30,754  $27,726  $29,619  $58,480  $69,389 
Diluted earnings per share$0.33  $0.29  $0.31  $0.62  $0.72 
Return on average assets 1.28%   1.18%   1.26%   1.23%   1.51% 
Return on average equity 11.60%   10.15%   10.82%   10.86%   12.87% 
          
Operating Results (non-GAAP)(1)         
Core net income$30,643  $27,814  $29,777  $58,458  $69,632 
Core diluted earnings per share$0.33  $0.29  $0.31  $0.62  $0.72 
Core pre-tax pre-provision net revenue$42,352  $36,537  $42,943  $78,889  $87,989 
Provision expense$4,099  $1,964  $5,413  $6,063  $1,023 
Net charge-offs$1,528  $1,134  $3,927  $2,662  $7,197 
Reserve build/(release)(2)$2,415  ($1,334)  $275  $1,081   ($4,271) 
Core return on average assets (ROAA) 1.28%   1.18%   1.26%   1.23%   1.51% 
Core pre-tax pre-provision ROAA 1.77%   1.56%   1.82%   1.66%   1.91% 
Return on average tangible common equity 16.81%   14.52%   15.54%   15.64%   18.50% 
Core return on average tangible common equity 16.75%   14.57%   15.62%   15.63%   18.56% 
Core efficiency ratio 55.87%   59.47%   53.21%   57.61%   53.20% 
Net interest margin (FTE) 3.38%   3.19%   3.17%   3.29%   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 2022 Highlights

  • Net income of $30.8 million and diluted earnings per share totaled $0.33, an increase of $3.0 million, or $0.04 per share from the prior quarter and an increase of $1.1 million, or $0.02 from the second quarter of 2021
  • Core pre-tax pre-provision net revenue (PPNR)(1) totaled $42.4 million, an increase of $5.8 million from the previous quarter and a decrease of $0.6 million from the second quarter of 2021
  • The Company achieved positive operating leverage during the second quarter of 2022
    • Core revenue(1) grew $6.3 million, or 27.5% annualized, from the prior quarter
    • Core noninterest expense(1) increased $0.2 million, or 1.5% annualized, from the prior quarter
  • Total loans (excluding Paycheck Protection Program (PPP) loans) increased $186.0 million, or 10.8% annualized from the previous quarter, driven by strong consumer loan growth
    • Year-to-date annualized loan growth (excluding PPP loans) was 9.9%
    • Average loans (excluding PPP loans) increased $173.4 million, or 10.2% annualized, from the previous quarter
  • Net interest income (FTE) of $73.9 million increased $5.5 million from the previous quarter and increased $5.4 million from the second quarter of 2021
  • Noninterest income of $24.5 million (excluding net security gains) increased $0.5 million from the previous quarter, but decreased $1.6 million from the second quarter of 2021 due to lower gain on sale of mortgage loans
  • Noninterest expense of $55.7 million was unchanged from the previous quarter
  • Total PPP loans decreased $15.9 million from the previous quarter, resulting in a total PPP loan balance at June 30, 2022 of $12.9 million
  • Average deposits increased $133.1 million, or 6.7% annualized compared to the prior quarter
    • Average noninterest-bearing deposits grew $65.9 million, or 10.0% annualized, compared to the prior quarter
  • Total shareholder’s equity decreased $18.5 million from the previous quarter due to a $28.9 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
  • First Commonwealth Bank (the Bank) has been recognized for the fourth consecutive year by Forbes as one of the World’s Best Banks for 2022

Profitability

  • The core efficiency ratio(1) of 55.87% improved 360 basis points from the previous quarter and increased 266 basis points from the second quarter of 2021
  • The return on average assets (ROA) improved 10 basis points to 1.28% compared to previous quarter
  • Core pre-tax pre-provision ROA(1) for the quarter ended June 30, 2022 was 1.77% as compared to 1.56% in the prior quarter and 1.82% in the second quarter of 2021
  • The net interest margin of 3.38% increased 19 basis points compared to the prior quarter and increased 21 basis points as compared to the second quarter of 2021

Asset quality

  • The provision for credit losses was $4.1 million, an increase of $2.1 million compared to the previous quarter
  • The allowance for credit losses as a percentage of end-of-period loans (excluding PPP loans) was 1.32%, which was unchanged from the previous quarter
  • Total criticized loans decreased $27.3 million from the previous quarter
    • Total nonperforming assets of $36.4 million decreased $2.1 million from the previous quarter
  • Net charge-offs on loans totaled $1.5 million, an increase of $0.4 million from the previous quarter
    • Net charge-offs as a percentage of average loans outstanding (excluding PPP loans, annualized) was 0.09% in the second quarter of 2022 as compared to 0.07% in the previous quarter

Strong capital and liquidity positions

  • On April 25, 2022, the Board of Directors authorized a 4.3% increase in the quarterly cash dividend to shareholders
  • Bank-level Tier 1 Capital ratio of 11.5%, which represents $262.4 million in excess capital above the regulatory “well capitalized” requirement of 8.0%
  • A total of 715,307 shares at a weighted average price of $13.50 were repurchased during the second quarter of 2022 under the company’s previously authorized share repurchase program.   The remaining repurchase capacity under the current program was $10.3 million as of June 30, 2022

“I am encouraged by our results this quarter.   As expected, our loan growth accelerated and was primarily led by our reinvigorated consumer categories, bringing our year-to-date annualized loan growth to 9.9% (excluding PPP) and well within our high single-digit target,” stated T. Michael Price, President and Chief Executive Officer.   “We remain committed to achieving positive operating leverage in 2022 despite revenue headwinds from slowing Mortgage banking income as our asset sensitive balance sheet and stable funding sourced deposit franchise are expected to further benefit from the rising interest rate environment.   And while our current credit costs reflect a benign economic environment, with a lower-risk, more diversified loan portfolio and enhanced credit administration function, we believe we are well positioned to navigate the potential challenges of a recessionary environment while continuing to enhance shareholder value.”

Earnings

Net income for the second quarter of 2022 was $30.8 million, or $0.33 per share, compared to $27.7 million, or $0.29 per share in the first quarter of 2022 and $29.6 million, or $0.31 per share for the second quarter of 2021.

Net Interest Income and Net Interest Margin

Net interest income (FTE) of $73.9 million increased $5.5 million from the previous quarter and increased $5.4 million from the prior year quarter.   The increase from the previous quarter was primarily due to a 19 basis point increase in the yield on interest-earning assets due to higher yields on variable and adjustable rate loans and $1.2 million in deferred interest and fees recognized from a nonaccrual loan that was resolved during the quarter, which was offset by a $1.2 million decrease in fees and interest on PPP loans.   Interest and fee income recognized on PPP loans totaled $0.6 million in the second quarter of 2022 as compared to $1.8 million in the prior quarter.  

The net interest margin for the second quarter of 2022 was 3.38%, an increase of 19 basis points from the previous quarter and an increase of 21 basis points from the second quarter of 2021.   The increase from the previous quarter was due primarily to a 22 basis point increase in the yield on loans (excluding PPP loans) and a 6 basis point impact due to the aforementioned interest and fees recognized from the resolution of a nonaccrual loan, partially offset by a 192 basis point decrease in the yield on PPP loans (inclusive of loan forgiveness).   The total cost of funds was 0.15% in the second quarter of 2022, which was unchanged from the previous quarter.

Total average deposits grew $133.1 million in the second quarter of 2022 as compared to the previous quarter.   Average noninterest bearing deposits grew $65.9 million and offset a $20.1 million decrease in average time deposits.  

Asset Quality

Provision expense in the second quarter of 2022 totaled $4.1 million as compared to $2.0 million in the previous quarter.   The increase in provision expense during the quarter was primarily driven by strong loan growth, which resulted in a $2.1 million increase in the allowance for credit losses (ACL).   The ACL was also impacted by an increase of $5.1 million in the quantitative model due to various inputs such as the unemployment rate, Gross Domestic Product (GDP) forecast, prepayment speeds and max capacity levels. This increase was largely offset by a decrease in qualitative factors of $4.6 million, primarily due to lower reserve adjustments for COVID-related high risk portfolios.  

At June 30, 2022, nonperforming loans totaled $35.7 million, a decrease of $1.8 million from the previous quarter and a decrease of $17.1 million from the second quarter of 2021.   Nonperforming loans represented 0.50% of total loans (excluding PPP loans) as compared to 0.54% and 0.82% for the periods ended March 31, 2022 and June 30, 2021, respectively.

At June 30, 2022, criticized loans totaled $146.8 million, a decrease of $27.3 million from the previous quarter.  

During the second quarter of 2022, net charge-offs were $1.5 million as compared to $1.1 million in the previous quarter and $3.9 million in the second quarter of 2021.  

Net charge-offs as a percentage of average loans (excluding PPP, annualized) were 0.09%, 0.07% and 0.25% for the periods ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively.

Noninterest Income and Noninterest Expense

Noninterest income (excluding net security gains) totaled $24.5 million for the second quarter of 2022, as compared to $24.0 million for the first quarter of 2022 and $26.1 million for the second quarter of 2021.  

The $0.5 million increase from the previous quarter was primarily due to a $0.7 million increase in interest rate swap fees, a $0.6 million increase in card-related interchange income, a $0.3 million increase in service charges on deposits and a $0.3 million increase in gain on sale of Mortgage loans partially offset by a $1.4 million decrease in gain on sale of SBA loans.

Noninterest expense totaled $55.7 million for the second quarter of 2022, as compared to $55.7 million for the first quarter of 2022 and $51.5 million for the second quarter of 2021.   In comparison with the prior quarter, a $0.6 million decrease in occupancy expense due to seasonally higher snow removal in the previous quarter was offset by a $0.3 million increase in data processing expense and a $0.2 million increase in marketing and promotion expense.  

The core efficiency ratio was 55.87% during the second quarter of 2022 as compared to 59.47% in the previous quarter and 53.21% in the second quarter of 2021.

Full time equivalent staff was 1,409 at June 30, 2022, 1,432 at March 31, 2022, and 1,392 at June 30, 2021.   The decrease from the prior quarter was the result of an increase in the company’s open positions in the bank’s retail branch network.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.12 per share, which represents a 4.3% increase from the second quarter of 2021.   The cash dividend is payable on August 19, 2022 to shareholders of record as of August 5, 2022. This dividend represents a 3.4% projected annual yield utilizing the July 25, 2022 closing market price of $14.32.

First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at June 30, 2022 were 14.6%, 12.2%, 9.8% and 11.2% 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 second quarter of 2022 on Wednesday, July 27, 2022 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 118 community banking offices in 26 counties throughout western and central Pennsylvania and throughout Ohio, as well as business banking operations in Pittsburgh, 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) the effects of   the COVID-19 pandemic on First Commonwealth and its customers; (2) volatility and disruption in national and international financial markets; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (4) inflation, interest rate, commodity price, securities market and monetary fluctuations; (5) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which First Commonwealth or its customers must comply; (6) the soundness of other financial institutions; (7) political instability; (8) impairment of First Commonwealth’s goodwill or other intangible assets; (9) acts of God or of war or terrorism; (10) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (11) changes in consumer spending, 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 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.   Further, statements about the potential effects of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, clients, third parties and us.  

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,
  2022   2022   2021   2022   2021 
SUMMARY RESULTS OF OPERATIONS         
Net interest income$73,662  $68,172  $68,199  $141,834  $137,641 
Provision for credit losses 4,099   1,964   5,413   6,063   1,023 
Noninterest income 24,509   23,976   26,086   48,485   53,441 
Noninterest expense 55,679   55,724   51,542   111,403   103,401 
Net income 30,754   27,726   29,619   58,480   69,389 
Core net income(5) 30,643   27,814   29,777   58,458   69,632 
Earnings per common share (diluted)$0.33  $0.29  $0.31  $0.62  $0.72 
Core earnings per common share (diluted)(6)$0.33  $0.29  $0.31  $0.62  $0.72 
KEY FINANCIAL RATIOS         
Return on average assets 1.28%  1.18%  1.26%  1.23%  1.51%
Core return on average assets(7) 1.28%  1.18%  1.26%  1.23%  1.51%
Return on average assets, pre-provision, pre-tax 1.78%  1.55%  1.81%  1.66%  1.90%
Core return on average assets, pre-provision, pre-tax 1.77%  1.56%  1.82%  1.66%  1.91%
Return on average shareholders' equity 11.60%  10.15%  10.82%  10.86%  12.87%
Return on average tangible common equity(8) 16.81%  14.52%  15.54%  15.64%  18.50%
Core return on average tangible common equity(9) 16.75%  14.57%  15.62%  15.63%  18.56%
Core efficiency ratio(2)(10) 55.87%  59.47%  53.21%  57.61%  53.20%
Net interest margin (FTE)(1) 3.38%  3.19%  3.17%  3.29%  3.29%
          
Book value per common share$11.20  $11.32  $11.50     
Tangible book value per common share(11) 7.85   7.99   8.22     
Market value per common share 13.42   15.16   14.07     
Cash dividends declared per common share 0.120   0.115   0.115   0.235   0.225 
ASSET QUALITY RATIOS         
Nonperforming loans as a percent of end-of-period loans and leases(3) 0.50%  0.54%  0.78%    
Nonperforming loans as a percent of end-of-period loans and leases, excluding PPP loans(3) 0.50%  0.54%  0.82%    
Nonperforming assets as a percent of total assets(3) 0.38%  0.40%  0.57%    
Nonperforming assets as a percent of total assets, excluding PPP loans(3) 0.38%  0.40%  0.59%    
Net charge-offs as a percent of average loans and leases (annualized)(4) 0.09%  0.07%  0.23%    
Net charge-offs as a percent of average loans and leases,, excluding PPP loans (annualized)(4) 0.09%  0.07%  0.25%    
Allowance for credit losses as a percent of nonperforming loans(4) 262.25%  243.38%  183.81%    
Allowance for credit losses as a percent of end-of-period loans and leases(4) 1.31%  1.31%  1.44%    
Allowance for credit losses as a percent of end-of-period loans and leases, excluding PPP loans(4) 1.32%  1.32%  1.50%    
CAPITAL RATIOS         
Shareholders' equity as a percent of total assets 11.0%  11.1%  11.8%    
Tangible common equity as a percent of tangible assets(12) 8.0%  8.1%  8.7%    
Tangible common equity as a percent of tangible assets, excluding PPP loans(12) 8.0%  8.1%  9.0%    
Leverage Ratio 9.8%  9.8%  9.6%    
Risk Based Capital - Tier I 12.2%  12.2%  12.6%    
Risk Based Capital - Total 14.6%  14.7%  15.2%    
Common Equity - Tier I 11.2%  11.3%  11.6%    


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,
  2022  2022 2021   2022  2021
INCOME STATEMENT      
Interest income$76,728 $71,244$72,051  $147,972 $146,112
Interest expense 3,066  3,072 3,852   6,138  8,471
Net Interest Income 73,662  68,172 68,199   141,834  137,641
Provision for credit losses 4,099  1,964 5,413   6,063  1,023
Net Interest Income after Provision for Credit Losses 69,563  66,208 62,786   135,771  136,618
Net securities gains   2 10   2  16
Trust income 2,573  2,713 2,706   5,286  5,222
Service charges on deposit accounts 4,886  4,615 4,310   9,501  8,357
Insurance and retail brokerage commissions 2,486  2,272 1,978   4,758  4,150
Income from bank owned life insurance 1,383  1,508 1,509   2,891  3,460
Gain on sale of mortgage loans 1,561  1,282 3,084   2,843  8,130
Gain on sale of other loans and assets 1,099  2,319 2,111   3,418  3,801
Card-related interchange income 7,137  6,490 7,406   13,627  13,833
Derivative mark-to-market 42  347 (277)  389  1,153
Swap fee income 1,154  453 1,252   1,607  1,398
Other income 2,188  1,975 1,997   4,163  3,921
Total Noninterest Income 24,509  23,976 26,086   48,485  53,441
Salaries and employee benefits 30,949  30,932 28,347   61,881  57,018
Net occupancy 4,170  4,787 3,881   8,957  8,654
Furniture and equipment 3,857  3,730 3,866   7,587  7,814
Data processing 3,470  3,188 3,192   6,658  6,244
Pennsylvania shares tax 913  1,005 1,258   1,918  2,090
Advertising and promotion 1,434  1,226 1,355   2,660  2,679
Intangible amortization 862  862 863   1,724  1,729
Other professional fees and services 1,197  1,221 1,091   2,418  1,842
FDIC insurance 702  698 438   1,400  1,134
Litigation and operational losses 629  600 556   1,229  1,035
Loss on sale or write-down of assets 86  75 43   161  52
COVID-19 related 62  17 232   79  306
Branch consolidation (202) 98 (22)  (104) 18
Other operating expenses 7,550  7,285 6,442   14,835  12,786
Total Noninterest Expense 55,679  55,724 51,542   111,403  103,401
Income before Income Taxes 38,393  34,460 37,330   72,853  86,658
Income tax provision 7,639  6,734 7,711   14,373  17,269
Net Income$30,754 $27,726$29,619  $58,480 $69,389
       
Shares Outstanding at End of Period 93,705,120  94,299,039 96,201,628   93,705,120  96,201,628
Average Shares Outstanding Assuming Dilution 94,245,770  94,311,324 96,282,425   94,273,808  96,255,475
       


FIRST COMMONWEALTH FINANCIAL CORPORATION   
CONSOLIDATED FINANCIAL DATA     
Unaudited     
(dollars in thousands)     
      
 June 30, March 31, June 30,
  2022   2022   2021 
BALANCE SHEET (Period End)     
Assets     
Cash and due from banks$120,267  $120,289  $89,505 
Interest-bearing bank deposits 179,533   404,516   194,948 
Securities available for sale, at fair value 877,287   946,346   1,102,057 
Securities held to maturity, at amortized cost 492,229   512,911   554,225 
Loans held for sale 12,876   10,506   19,530 
      
Loans and leases 7,119,754   6,952,112   6,740,535 
Allowance for credit losses (93,603)  (91,188)  (97,038)
Net loans and leases 7,026,151   6,860,924   6,643,497 
      
Goodwill and other intangibles 313,449   314,066   315,497 
Other assets 504,635   472,566   483,143 
Total Assets$9,526,427  $9,642,124  $9,402,402 
      
Liabilities and Shareholders' Equity     
Noninterest-bearing demand deposits$2,726,242  $2,719,645  $2,617,651 
      
Interest-bearing demand deposits 273,360   305,623   269,451 
Savings deposits 4,708,868   4,782,445   4,566,815 
Time deposits 345,075   364,134   431,102 
Total interest-bearing deposits 5,327,303   5,452,202   5,267,368 
      
Total deposits 8,053,545   8,171,847   7,885,019 
      
Short-term borrowings 88,923   95,748   107,372 
Long-term borrowings 181,752   182,012   182,767 
Total borrowings 270,675   277,760   290,139 
      
Other liabilities 153,049   124,898   120,825 
Shareholders' equity 1,049,158   1,067,619   1,106,419 
Total Liabilities and Shareholders' Equity$9,526,427  $9,642,124  $9,402,402 


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/
  2022Rate 2022Rate 2021Rate  2022Rate 2021Rate
NET INTEREST MARGIN         
            
Assets           
Loans and leases, excluding PPP loans (FTE)(1)(3)$7,015,8863.95%$6,842,4813.73%$6,341,8053.80% $6,929,6623.84%$6,317,0783.86%
PPP Loans 20,29012.02% 51,14713.93% 429,9175.11%  35,63413.38% 459,4825.89%
Securities and interest-bearing bank deposits (FTE)(1) 1,734,1261.68% 1,809,1311.54% 1,886,1841.43%  1,771,4211.61% 1,709,1291.48%
Total Interest-Earning Assets (FTE)(1) 8,770,3023.52% 8,702,7593.33% 8,657,9063.35%  8,736,7173.43% 8,485,6893.49%
Noninterest-earning assets 830,167  821,819  793,777   826,016  806,267 
Total Assets$9,600,469 $9,524,578 $9,451,683  $9,562,733 $9,291,956 
            
Liabilities and Shareholders' Equity           
Interest-bearing demand and savings deposits$5,067,6920.05%$4,980,3900.04%$4,858,5310.07% $5,024,2830.04%$4,731,8800.08%
Time deposits 354,4030.26% 374,4840.29% 458,6380.47%  364,3880.27% 493,2590.62%
Short-term borrowings 95,5610.08% 115,5440.07% 114,9660.09%  105,4970.07% 117,1550.10%
Long-term borrowings 181,8594.96% 182,1194.98% 206,4954.65%  181,9884.97% 219,7314.52%
Total Interest-Bearing Liabilities 5,699,5150.22% 5,652,5370.22% 5,638,6300.27%  5,676,1560.22% 5,562,0250.31%
Noninterest-bearing deposits 2,711,458  2,645,551  2,604,695   2,678,686  2,509,818 
Other liabilities 125,646  119,075  110,264   122,379  132,729 
Shareholders' equity 1,063,850  1,107,415  1,098,094   1,085,512  1,087,384 
Total Noninterest-Bearing Funding Sources 3,900,954  3,872,041  3,813,053   3,886,577  3,729,931 
Total Liabilities and Shareholders' Equity$9,600,469 $9,524,578 $9,451,683  $9,562,733 $9,291,956 
            
Net Interest Margin (FTE) (annualized)(1) 3.38% 3.19% 3.17%  3.29% 3.29%


FIRST COMMONWEALTH FINANCIAL CORPORATION 
CONSOLIDATED FINANCIAL DATA   
Unaudited   
(dollars in thousands)   
 June 30,March 31,June 30,
  2022  2022  2021 
Loan and Lease Portfolio Detail   
Commercial Loan and Lease Portfolio:   
Commercial, financial, agricultural and other$1,136,593 $1,092,311 $1,081,822 
Paycheck Protection Program 12,928  28,874  292,355 
Commercial real estate 2,319,094  2,344,281  2,205,758 
Equipment Finance loans and leases 21,062  2,505   
Real estate construction 292,400  307,411  317,496 
Total Commercial 3,782,077  3,775,382  3,897,431 
    
Consumer Loan Portfolio:   
Closed-end mortgages 1,567,561  1,467,133  1,259,798 
Home equity lines of credit 532,640  539,088  568,985 
Real estate construction 100,592  91,577  97,320 
Total Real Estate - Consumer 2,200,793  2,097,798  1,926,103 
    
Auto & RV loans 1,047,104  984,001  829,150 
Direct installment 35,245  37,751  28,805 
Personal lines of credit 50,249  52,614  53,720 
Student loans 4,286  4,566  5,326 
Total Other Consumer 1,136,884  1,078,932  917,001 
Total Consumer Portfolio 3,337,677  3,176,730  2,843,104 
Total Portfolio Loans and Leases 7,119,754  6,952,112  6,740,535 
Loans held for sale 12,876  10,506  19,530 
Total Loans and Leases$7,132,630 $6,962,618 $6,760,065 
    
    
 June 30,March 31,June 30,
  2022  2022  2021 
ASSET QUALITY DETAIL   
Nonperforming Loans:   
Loans on nonaccrual basis$19,594 $20,490 $22,219 
Loans held for sale on a nonaccrual basis      
Troubled debt restructured loans on nonaccrual basis 9,694  10,090  23,981 
Troubled debt restructured loans on accrual basis 6,404  6,887  6,593 
Total Nonperforming Loans$35,692 $37,467 $52,793 
Other real estate owned ("OREO") 93  667  394 
Repossessions ("Repos") 621  397  440 
Total Nonperforming Assets$36,406 $38,531 $53,627 
Loans past due in excess of 90 days and still accruing 3,155  1,921  903 
Classified loans 46,798  75,270  55,957 
Criticized loans 146,780  174,060  250,427 
    
Nonperforming assets as a percentage of total loans and leases, plus OREO and Repos(4) 0.51% 0.55% 0.80%
Allowance for credit losses$93,603 $91,188 $97,038 
    


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,
  2022  2022  2021   2022  2021 
Net Charge-offs (Recoveries):      
Commercial, financial, agricultural and other$430 $395 $3,784  $825 $4,263 
Real estate construction     (135)    (135)
Commercial real estate 547  (14) 6   533  1,517 
Residential real estate (26) 110  (160)  84  (92)
Loans to individuals 577  643  432   1,220  1,644 
Net Charge-offs$1,528 $1,134 $3,927  $2,662 $7,197 
       
Net charge-offs as a percentage of average loans outstanding (annualized)(4) 0.09% 0.07% 0.23%  0.08% 0.21%
Net charge-offs as a percentage of average loans outstanding, excluding PPP loans (annualized)(4) 0.09% 0.07% 0.25%  0.08% 0.23%
Provision for credit losses as a percentage of net charge-offs 268.26% 173.19% 137.84%  227.76% 14.21%
Provision for credit losses$4,099 $1,964 $5,413  $6,063 $1,023 


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 21%.
(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 Six Months Ended
 June 30,March 31,June 30, June 30,June 30,
  2022 2022 2021  2022 2021
       
Interest income$76,728$71,244$72,051 $147,972$146,112
Adjustment to fully taxable equivalent basis(1) 244 253 290  498 598
Interest income adjusted to fully taxable equivalent basis (non-GAAP) 76,972 71,497 72,341  148,470 146,710
Interest expense 3,066 3,072 3,852  6,138 8,471
Net interest income, (FTE)(1)$73,906$68,425$68,489 $142,332$138,239


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,
  2022  2022  2021   2022  2021 
       
Net Income$30,754 $27,726 $29,619  $58,480 $69,389 
Intangible amortization 862  862  863   1,724  1,729 
Tax benefit of amortization of intangibles (181) (181) (181)  (362) (363)
Net Income, adjusted for tax affected amortization of intangibles$31,435 $28,407 $30,301  $59,842 $70,755 
       
Average Tangible Equity:      
Total shareholders' equity$1,063,850 $1,107,415 $1,098,094  $1,085,512 $1,087,384 
Less: intangible assets 313,617  314,235  315,776   313,924  316,105 
Tangible Equity 750,233  793,180  782,318   771,588  771,279 
Less: preferred stock           
Tangible Common Equity$750,233 $793,180 $782,318  $771,588 $771,279 
       
(8)Return on Average Tangible Common Equity 16.81% 14.52% 15.54%  15.64% 18.50%
       


 For the Three Months Ended For the Six Months Ended
 June 30,March 31,June 30, June 30,June 30,
  2022  2022  2021   2022  2021 
       
Core Net Income:      
Total Net Income$30,754 $27,726 $29,619  $58,480 $69,389 
Net securities gains   (2) (10)  (2) (16)
Tax benefit of net securities gains     2     3 
COVID-19 related 62  17  232   79  306 
Tax benefit of COVID 19 related (13) (4) (49)  (17) (64)
Branch consolidation related (202) 98  (22)  (104) 18 
Tax benefit of bank consolidation related expenses 42  (21) 5   22  (4)
(5)Core net income$30,643 $27,814 $29,777  $58,458 $69,632 
Average Shares Outstanding Assuming Dilution 94,245,770  94,311,324  96,282,425   94,273,808  96,255,475 
(6)Core Earnings per common share (diluted)$0.33 $0.29 $0.31  $0.62 $0.72 
       
Intangible amortization 862  862  863   1,724  1,729 
Tax benefit of amortization of intangibles (181) (181) (181)  (362) (363)
Core Net Income, adjusted for tax affected amortization of intangibles$31,324 $28,495 $30,459  $59,820 $70,998 
       
(9)Core Return on Average Tangible Common Equity 16.75% 14.57% 15.62%  15.63% 18.56%


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,
  2022  2022  2021   2022  2021 
Core Return on Average Assets:      
Total Net Income$30,754 $27,726 $29,619  $58,480 $69,389 
Total Average Assets 9,600,469  9,524,578  9,451,683   9,562,733  9,291,956 
Return on Average Assets 1.28% 1.18% 1.26%  1.23% 1.51%
       
Core Net Income(5)$30,643 $27,814 $29,777  $58,458 $69,632 
Total Average Assets 9,600,469  9,524,578  9,451,683   9,562,733  9,291,956 
(7)Core Return on Average Assets 1.28% 1.18% 1.26%  1.23% 1.51%


 For the Three Months Ended For the Six Months Ended
 June 30,March 31,June 30, June 30,June 30,
  2022  2022  2021   2022  2021 
Core Efficiency Ratio:      
Total Noninterest Expense$55,679 $55,724 $51,542  $111,403 $103,401 
Adjustments to Noninterest Expense:      
Intangible amortization 862  862  863   1,724  1,729 
COVID-19 related 62  17  232   79  306 
Branch consolidation related (202) 98  (22)  (104) 18 
Noninterest Expense - Core$54,957 $54,747 $50,469  $109,704 $101,348 
       
Net interest income, (FTE)$73,906 $68,425 $68,489  $142,332 $138,239 
Total noninterest income 24,509  23,976  26,086   48,485  53,441 
Net securities gains   (2) (10)  (2) (16)
Total Revenue 98,415  92,399  94,565   190,815  191,664 
       
Adjustments to Revenue:      
Derivative mark-to-market 42  347  (277)  389  1,153 
Total Revenue - Core$98,373 $92,052 $94,842  $190,426 $190,511 
       
(10)Core Efficiency Ratio 55.87% 59.47% 53.21%  57.61% 53.20%


FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)


DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES  
    
 June 30,March 31,June 30,
  2022  2022  2021 
Tangible Equity:   
Total shareholders' equity$1,049,158 $1,067,619 $1,106,419 
Less: intangible assets 313,449  314,066  315,497 
Tangible Equity 735,709  753,553  790,922 
Less: preferred stock      
Tangible Common Equity$735,709 $753,553 $790,922 
    
Tangible Assets:   
Total assets$9,526,427 $9,642,124 $9,402,402 
Less: intangible assets 313,449  314,066  315,497 
Tangible Assets$9,212,978 $9,328,058 $9,086,905 
Less: PPP loans 12,928  28,874  292,355 
Tangible Assets, excluding PPP loans$9,200,050 $9,299,184 $8,794,550 
    
(12)Tangible Common Equity as a percentage of Tangible Assets 7.99% 8.08% 8.70%
(12)Tangible Common Equity as a percentage ofTangible Assets, excluding PPP loans 8.00% 8.10% 8.99%
    
Shares Outstanding at End of Period 93,705,120  94,299,039  96,201,628 
(11)Tangible Book Value Per Common Share$7.85 $7.99 $8.22 


 For the Three Months Ended For the Six Months Ended
 June 30,March 31,June 30, June 30,June 30,
  2022  2022  2021   2022  2021 
Pre-tax pre-provision income:      
Net interest income$73,662 $68,172 $68,199  $141,834 $137,641 
Noninterest income 24,509  23,976  26,086   48,485  53,441 
Noninterest expense 55,679  55,724  51,542   111,403  103,401 
Pre-tax pre-provision income$42,492 $36,424 $42,743  $78,916 $87,681 
       
Net securities gains$ $(2)$(10) $(2)$(16)
COVID-19 related 62  17  232   79  306 
Branch consolidation (202) 98  (22)  (104) 18 
Core pre-tax pre-provision income$42,352 $36,537 $42,943  $78,889 $87,989 
       
Net charge-offs$1,528 $1,134 $3,927  $2,662 $7,197 


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 Six Months Ended
 June 30,March 31,June 30, June 30,June 30,
  2022  2022  2021   2022  2021 
Core Net Interest Margin:      
Net Interest Income (FTE)$73,906 $68,425 $68,489  $142,332 $138,239 
Less: Income from PPP Loans 608  1,757  5,473   2,365  13,415 
Less: Income from Excess Cash 644  108  88   752  162 
Core Net Interest Income (FTE)$72,654 $66,560 $62,928  $139,215 $124,662 
       
Average Interest-Earning Assets$8,770,302 $8,702,759 $8,657,906  $8,736,717 $8,485,689 
Less: PPP Loans 20,290  51,147  429,917   35,634  459,482 
Less: Excess Cash 324,896  277,570  352,093   301,364  340,681 
Core Average Interest-Earning Assets$8,425,116 $8,374,042 $7,875,896  $8,399,719 $7,685,526 
       
Core Net Interest Margin (Non-GAAP) 3.46% 3.22% 3.20%  3.34% 3.27%

 


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