• First Commonwealth Announces Second Quarter 2021 Earnings; Declares Quarterly Dividend

    Source: Nasdaq GlobeNewswire / 27 Jul 2021 16:00:01   America/Chicago

    INDIANA, Pa., July 27, 2021 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the second quarter of 2021.

    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,
      2021   2021   2020   2021   2020 
    Reported Results         
    Net income$29,619  $39,770  $23,851  $69,389  $28,578 
    Diluted earnings per share$0.31  $0.41  $0.24  $0.72  $0.29 
    Return on average assets 1.26%   1.77%   1.06%   1.51%   0.66% 
    Return on average equity 10.82%   14.98%   8.95%   12.87%   5.36% 
              
    Operating Results (non-GAAP)(1)         
    Core net income$29,777  $39,855  $24,176  $69,632  $28,906 
    Core diluted earnings per share$0.31  $0.41  $0.25  $0.72  $0.29 
    Core pre-tax pre-provision net revenue$42,943  $45,046  $36,153  $87,989  $72,883 
    Provision expense$5,413  ($4,390)  $6,859  $1,023  $37,826 
    Net charge-offs$3,927  $3,270  $4,493  $7,197  $8,022 
    Reserve build/(release)(2)$275  ($4,546)  $2,366  ($4,271)  $29,804 
    Core return on average assets (ROAA) 1.26%   1.77%   1.08%   1.51%   0.67% 
    Core pre-tax pre-provision ROAA 1.82%   2.00%   1.61%   1.91%   1.69% 
    Return on average tangible common equity 15.54%   21.58%   13.13%   18.50%   8.03% 
    Core return on average tangible common equity 15.62%   21.63%   13.30%   18.56%   8.12% 
    Core efficiency ratio 53.21%   53.18%   56.73%   53.20%   57.46% 
    Net interest margin (FTE) 3.17%   3.40%   3.29%   3.29%   3.46% 

    (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 2021 Highlights

    • Net income of $29.6 million and diluted earnings per share totaled $0.31, an increase of $5.8 million, or $0.07 per share from the second quarter of 2020
    • Core pre-tax pre-provision net revenue (PPNR)(1) totaled $42.9 million, a decrease of $2.1 million from the previous quarter and an increase of $6.8 million from the second quarter of 2020
    • The Company achieved positive operating leverage during the first six months of 2021
      • Core revenue(1) grew $12.3 million, or 6.9%, from the prior year
      • Core noninterest expense(1) decreased $1.0 million, or 1.0%, from the prior year
    • Portfolio loans (excluding Paycheck Protection Program (PPP) loans) increased $189.7 million, or 12.1% annualized from the previous quarter, driven by strong commercial production and continued consumer loan growth
      • Year-to-date annualized portfolio loan growth (excluding PPP loans) was 5.3%
      • Average loans (excluding PPP loans) increased $49.7 million, or 3.2% annualized, from the previous quarter
    • Net interest income (FTE) of $68.5 million decreased $1.3 million from the previous quarter due to lower interest and fees recognized on PPP loans, but increased $1.4 million from the second quarter of 2020
    • Noninterest income of $26.1 million (excluding net security gains) decreased $1.2 million from the previous quarter but increased $4.3 million from the second quarter of 2020
    • Noninterest expense of $51.5 million decreased $0.3 million from the previous quarter and decreased $1.2 million from the second quarter of 2020
    • Total PPP loans decreased $186.1 million from the previous quarter resulting in the total PPP loan balance at June 30, 2021 of $292.4 million
    • Average deposits increased $375.9 million, or 19.9% annualized compared to the prior quarter, despite $69.6 million in intentional time deposit runoff
      • End of period deposits grew $15.8 million from the previous quarter
      • Average noninterest-bearing deposits grew $190.8 million, or 31.6% annualized, compared to the prior quarter
    • Tangible book value per share grew 10.4% annualized compared to the prior quarter and 6.5% year-over-year
    • First Commonwealth Bank (the Bank) has been recognized for the third consecutive year by Forbes as one of the World’s Best Banks for 2021
    • On June 14, 2021, the Bank announced it will enter the equipment leasing and finance business with the addition of Rob Boyer to its executive team as President of First Commonwealth Equipment Finance Group

    Profitability

    • The core efficiency ratio(1) of 53.21% improved 352 basis points from the second quarter of 2020 and was relatively unchanged from the previous quarter
    • The return on average assets (ROA) improved 20 basis points to 1.26% compared to the second quarter of 2020
    • Core pre-tax pre-provision ROA(1) for the quarter ended June 30, 2021 was 1.82% as compared to 2.00% in the prior quarter and 1.61% in the second quarter of 2020
    • The net interest margin of 3.17% decreased 23 basis points compared to the prior quarter and decreased 12 basis points as compared to the prior year quarter

    Strong capital and liquidity positions

    • On April 26, 2021, the Board of Directors authorized a 4.5% increase in the quarterly cash dividend to shareholders
    • Bank-level Tier 1 Capital ratio of 11.9%, which represents $273.0 million in excess capital above the regulatory “well capitalized” requirement of 8.0%
    • Total available liquidity of $4.7 billion
    • A total of 72,724 shares at a weighted average price of $13.95 were purchased during the second quarter of 2021 under the company’s previously authorized share repurchase program.   The remaining repurchase capacity under the current program was $23.6 million as of June 30, 2021

    Asset quality

    • The provision for credit losses was $5.4 million, an increase of $9.8 million compared to the previous quarter when the provision for credit losses was ($4.4) million
    • The allowance for credit losses as a percentage of end-of-period loans (excluding PPP loans) was 1.50% compared to 1.55% in the previous quarter
    • Total criticized loans decreased $21.7 million from the previous quarter
      • Total nonperforming assets increased $1.4 million from the previous quarter
    • Net charge-offs on loans totaled $3.9 million, an increase of $0.7 million from the previous quarter
      • Net charge-offs as a percentage of average loans outstanding (excluding PPP loans, annualized) was 0.25% in the second quarter of 2021 as compared to 0.21% in the previous quarter

    “I am pleased with our results in the second quarter.   As expected, our loan growth accelerated in multiple categories during the second quarter, bringing our year-to-date annualized loan growth to 5.3% excluding PPP, well within our mid-single-digit long-term target,” stated T. Michael Price, President and Chief Executive Officer.   “We remain committed to achieving positive operating leverage despite revenue headwinds from net interest margin compression.   Our track record of controlling expenses continued in the second quarter even while we continued to make investments to drive future growth.   In June, we announced our entry into the equipment finance business through the hiring of Rob Boyer.   Through Rob’s leadership, this new vertical will further diversify our earnings stream, and will benefit both our commercial customers and our shareholders in the long-run.”

    Earnings

    Net income for the second quarter of 2021 was $29.6 million, or $0.31 per share, compared to $39.8 million, or $0.41 per share in the first quarter of 2021 and $23.9 million, or $0.24 per share for the second quarter of 2020.

    Net Interest Income and Net Interest Margin

    Net interest income (FTE) of $68.5 million decreased $1.3 million from the previous quarter and increased $1.4 million from the prior year quarter.   The decrease from the previous quarter was primarily due to a $2.4 million decrease in fees and interest on PPP loans, partially offset by the effects of a $356.1 million increase in average investment securities and a $69.6 million decrease in higher-cost time deposits.   Interest and fee income recognized on PPP loans totaled $5.5 million in the second quarter of 2021 as compared to $7.9 million in the prior quarter.  

    The net interest margin for the second quarter of 2021 was 3.17%, a decrease of 23 basis points from the previous quarter and a decrease of 12 basis points from the second quarter of 2020.   The decrease from the previous quarter was due primarily to an 11 basis point decrease in the yield on loans (excluding PPP loans) and a 147 basis point decrease in the yield on PPP loans (inclusive of loan forgiveness), partially offset by a seven basis point decrease in the cost of interest-bearing liabilities.

    Total average deposits grew $375.9 million in the second quarter of 2021 as compared to the previous quarter.   Average noninterest bearing deposits grew $190.8 million and offset a $69.6 million decrease in average time deposits.  

    Total end-of-period deposits grew $15.8 million from the previous quarter.  

    Asset Quality

    The Company adopted CECL on December 31, 2020, effective January 1, 2020.  

    Provision expense in the second quarter of 2021 totaled $5.4 million as compared to ($4.4) million in the previous quarter.   The provision expense during the quarter was a reflection of an improved economic forecast offset by strong end-of-period loan growth and a $1.2 million increase in unfunded commitment reserves.  

    At June 30, 2021, nonperforming loans totaled $52.8 million, an increase of $2.4 million from the previous quarter and a decrease of $3.2 million from the second quarter of 2020.   Nonperforming loans represented 0.82% of total loans (excluding PPP loans) as compared to 0.80% and 0.88% for the periods ended March 31, 2021 and June 30, 2020, respectively.

    At June 30, 2021, criticized loans totaled $250.4 million, a decrease of $21.7 million from the previous quarter.  

    During the second quarter of 2021, net charge-offs were $3.9 million as compared to $3.3 million in the previous quarter and $4.5 million in the second quarter of 2020.   Net charge-offs in the second quarter of 2021 were negatively impacted by a $3.6 million charge-off related to an individual commercial borrower.

    Net charge-offs as a percentage of average loans (excluding PPP, annualized) were 0.25%, 0.21% and 0.28% for the periods ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

    Noninterest Income and Noninterest Expense

    Noninterest income (excluding net security gains) totaled $26.1 million for the second quarter of 2021, as compared to $27.3 million for the first quarter of 2021 and $21.8 million for the second quarter of 2020.  

    The $1.2 million decrease from the previous quarter was primarily due to a $2.0 million decrease in gain on sale of mortgage loans due to an increase in new mortgage originations being retained in the Bank’s loan portfolio and a $1.7 million decrease in the derivative mark-to-market adjustment on interest rate swaps as a result of changes in fair value due to movement in bond spreads, swap rates and counterparty credit risk, which negatively impacted noninterest income.   These decreases were partially offset by a $1.1 million increase in fee income related to new interest rate swaps due to increased commercial demand and a $1.0 million increase in card-related interchange income.  

    Noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses) totaled $51.3 million for the second quarter of 2021, as compared to $51.7 million for the first quarter of 2021 and $52.3 million for the second quarter of 2020.   The $0.4 million decrease from the previous quarter was primarily the result of a $0.9 million decrease in occupancy expense due to seasonally higher snow removal in the previous quarter and a $0.5 million decrease in contributions, partially offset by a $0.7 million increase in hospitalization expense and a $0.4 million increase in Pennsylvania shares tax.

    The core efficiency ratio was 53.21% during the second quarter of 2021 as compared to 53.18% in the previous quarter and 56.73% in the second quarter of 2020.

    Full time equivalent staff was 1,392 at June 30, 2021, 1,387 at March 31, 2021, and 1,465 at June 30, 2020.   The decrease from the prior year quarter is the result of a company-wide hiring freeze implemented at the end of the first quarter of 2020 and the consolidation of 20% of the Bank’s branch facilities in the fourth quarter of 2020.

    Dividends and Capital

    First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.115 per share, which represents a 4.5% increase from the second quarter of 2020.   The cash dividend is payable on August 20, 2021 to shareholders of record as of August 6, 2021.   This dividend represents a 3.4% projected annual yield utilizing the July 26, 2021 closing market price of $13.41.

    First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at June 30, 2021 were 15.2%, 12.6%, 9.6% and 11.6% 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 2021 on Wednesday, July 28, 2021 at 2:00 PM (ET).   The call can be accessed by dialing (toll free) 1-833-302-1887 conference ID # 2497028 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 1-800-585-8367 and entering the conference ID # 2497028.   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 119 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, 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,
     2021 2021 2020 2021 2020
    SUMMARY RESULTS OF OPERATIONS         
    Net interest income$68,199  $69,442   $66,686  $137,641  $134,410 
    Provision for credit losses5,413  (4,390)  6,859  1,023  37,826 
    Noninterest income26,086  27,355   21,812  53,441  41,085 
    Noninterest expense51,542  51,859   52,756  103,401  103,027 
    Net income29,619  39,770   23,851  69,389  28,578 
    Core net income (5)29,777  39,855   24,176  69,632  28,906 
    Earnings per common share (diluted)$0.31   $0.41    $0.24   $0.72   $0.29  
    Core earnings per common share (diluted) (6)$0.31   $0.41    $0.25   $0.72   $0.29  
    KEY FINANCIAL RATIOS         
    Return on average assets1.26% 1.77 % 1.06% 1.51% 0.66%
    Core return on average assets (7)1.26% 1.77 % 1.08% 1.51% 0.67%
    Return on average assets, pre-provision, pre-tax1.81% 2.00 % 1.59% 1.90% 1.68%
    Core return on average assets, pre-provision, pre-tax1.82% 2.00 % 1.61% 1.91% 1.69%
    Return on average shareholders' equity10.82% 14.98 % 8.95% 12.87% 5.36%
    Return on average tangible common equity (8)15.54% 21.58 % 13.13% 18.50% 8.03%
    Core return on average tangible common equity (9)15.62% 21.63 % 13.30% 18.56% 8.12%
    Core efficiency ratio (2)(10)53.21% 53.18 % 56.73% 53.20% 57.46%
    Net interest margin (FTE) (1)3.17% 3.40 % 3.29% 3.29% 3.46%
              
    Book value per common share$11.50  $11.30   $10.96     
    Tangible book value per common share (11)8.22  8.01   7.72     
    Market value per common share14.07  14.37   8.28     
    Cash dividends declared per common share0.115  0.110   0.110  0.225  0.220 
    ASSET QUALITY RATIOS         
    Nonperforming loans as a percent of end-of-period loans (3)0.78% 0.75 % 0.81%    
    Nonperforming loans as a percent of end-of-period loans, excluding PPP loans (3)0.82 % 0.80  % 0.88 %    
    Nonperforming assets as a percent of total assets (3)0.57% 0.55 % 0.62%    
    Nonperforming assets as a percent of total assets, excluding PPP loans (3)0.59 % 0.58  % 0.66 %    
    Net charge-offs as a percent of average loans (annualized) (4)0.23% 0.20 % 0.27%    
    Net charge-offs as a percent of average loans, excluding PPP loans (annualized) (4)0.25 % 0.21  % 0.28 %    
    Allowance for credit losses as a percent of nonperforming loans (4)183.81% 192.06 % 145.37%    
    Allowance for credit losses as a percent of end-of-period loans (4)1.44% 1.44 % 1.18%    
    Allowance for credit losses as a percent of end-of-period loans, excluding PPP loans (4)1.50% 1.55 % 1.28%    
    CAPITAL RATIOS         
    Shareholders' equity as a percent of total assets11.8% 11.5 % 11.5%    
    Tangible common equity as a percent of tangible assets (12)8.7% 8.5 % 8.4%    
    Tangible common equity as a percent of tangible assets, excluding PPP loans (12)9.0 % 8.9  % 8.9 %    
    Leverage Ratio9.6% 9.7 % 9.3%    
    Risk Based Capital - Tier I12.6% 12.6 % 11.8%    
    Risk Based Capital - Total15.2% 15.3 % 14.4%    
    Common Equity - Tier I11.6% 11.6 % 10.7%    


    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,
     202120212020 20212020
    INCOME STATEMENT      
    Interest income$72,051  $74,061  $74,981   $146,112 $154,310  
    Interest expense3,852  4,619  8,295   8,471 19,900  
    Net Interest Income68,199  69,442  66,686   137,641 134,410  
    Provision for credit losses5,413  (4,390) 6,859   1,023 37,826  
    Net Interest Income after Provision for Credit Losses62,786  73,832  59,827   136,618 96,584  
    Net securities gains10  6  8   16 27  
    Trust income2,706  2,516  2,109   5,222 4,220  
    Service charges on deposit accounts4,310  4,047  3,286   8,357 8,031  
    Insurance and retail brokerage commissions1,978  2,172  1,831   4,150 3,826  
    Income from bank owned life insurance1,509  1,951  1,800   3,460 3,416  
    Gain on sale of mortgage loans3,084  5,046  4,243   8,130 6,789  
    Gain on sale of other loans and assets2,111  1,690  581   3,801 1,280  
    Card-related interchange income7,406  6,427  5,886   13,833 11,148  
    Derivative mark-to-market(277) 1,430  (221)  1,153 (1,962) 
    Swap fee income1,252  146  609   1,398 823  
    Other income1,997  1,924  1,680   3,921 3,487  
    Total Noninterest Income26,086  27,355  21,812   53,441 41,085  
    Salaries and employee benefits28,347  28,671  28,773   57,018 58,750  
    Net occupancy3,881  4,773  4,397   8,654 9,370  
    Furniture and equipment3,866  3,948  3,657   7,814 7,435  
    Data processing3,192  3,052  2,596   6,244 5,063  
    Pennsylvania shares tax1,258  832  1,254   2,090 1,992  
    Advertising and promotion1,355  1,324  1,535   2,679 2,685  
    Intangible amortization863  866  919   1,729 1,853  
    Other professional fees and services1,091  751  920   1,842 1,818  
    FDIC insurance438  696  733   1,134 761  
    Litigation and operational losses556  479  319   1,035 709  
    Loss on sale or write-down of assets43  9  140   52 353  
    COVID-19 related232  74  419   306 442  
    Branch consolidation(22) 40  —   18 —  
    Other operating expenses6,442  6,344  7,094   12,786 11,796  
    Total Noninterest Expense51,542  51,859  52,756   103,401 103,027  
    Income before Income Taxes37,330  49,328  28,883   86,658 34,642  
    Income tax provision7,711  9,558  5,032   17,269 6,064  
    Net Income$29,619  $39,770  $23,851   $69,389 $28,578  
           
    Shares Outstanding at End of Period96,201,628  96,248,476  98,132,697   96,201,628 98,132,697  
    Average Shares Outstanding Assuming Dilution96,282,425  96,233,647  98,146,854   96,255,475 98,254,429  
           


    FIRST COMMONWEALTH FINANCIAL CORPORATION   
    CONSOLIDATED FINANCIAL DATA     
    Unaudited     
    (dollars in thousands)     
          
     June 30, March 31, June 30,
     2021 2021 2020
    BALANCE SHEET (Period End)     
    Assets     
    Cash and due from banks$89,505  $83,989  $108,970 
    Interest-bearing bank deposits194,948  420,645  348,763 
    Securities available for sale, at fair value1,102,057  1,056,703  914,412 
    Securities held to maturity, at amortized cost554,225  407,833  297,986 
    Loans held for sale19,530  20,604  30,409 
          
    Loans6,740,535  6,736,894  6,922,075 
    Allowance for credit losses(97,038) (96,763) (81,441)
    Net loans6,643,497  6,640,131  6,840,634 
          
    Goodwill and other intangibles315,497  316,148  318,072 
    Other assets483,143  470,936  505,409 
    Total Assets$9,402,402  $9,416,989  $9,364,655 
          
    Liabilities and Shareholders' Equity     
    Noninterest-bearing demand deposits$2,617,651  $2,616,303  $2,288,299 
          
    Interest-bearing demand deposits269,451  267,571  327,691 
    Savings deposits4,566,815  4,501,456  4,431,919 
    Time deposits431,102  483,926  734,292 
    Total interest-bearing deposits5,267,368  5,252,953  5,493,902 
          
    Total deposits7,885,019  7,869,256  7,782,201 
          
    Short-term borrowings107,372  110,762  108,484 
    Long-term borrowings182,767  233,012  233,723 
    Total borrowings290,139  343,774  342,207 
          
    Other liabilities120,825  116,479  164,542 
    Shareholders' equity1,106,419  1,087,480  1,075,705 
    Total Liabilities and Shareholders' Equity$9,402,402  $9,416,989  $9,364,655 
                


    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/
     2021Rate2021Rate2020Rate 2021Rate2020Rate
    NET INTEREST MARGIN          
                
    Assets           
    Loans, excluding PPP loans (FTE)(1)(3)$6,341,805 3.80%$6,292,076 3.91%$6,372,145 4.14% $6,317,078 3.86%$6,313,985 4.38%
    PPP Loans429,917 5.11%489,375 6.58%405,738 2.73% 459,482 5.89%202,869 2.73%
    Securities and interest-bearing bank deposits (FTE) (1)1,886,184 1.43%1,530,107 1.54%1,412,275 1.99% 1,709,129 1.48%1,333,987 2.21%
    Total Interest-Earning Assets (FTE) (1)8,657,906 3.35%8,311,558 3.63%8,190,158 3.70% 8,485,689 3.49%7,850,841 3.97%
    Noninterest-earning assets793,777  818,896  853,396   806,267  839,596  
    Total Assets$9,451,683  $9,130,454  $9,043,554   $9,291,956  $8,690,437  
                
    Liabilities and Shareholders' Equity           
    Interest-bearing demand and savings deposits$4,858,531 0.07%$4,603,822 0.10%$4,568,202 0.24% $4,731,880 0.08%$4,391,763 0.36%
    Time deposits458,638 0.47%528,265 0.75%776,892 1.51% 493,259 0.62%801,429 1.58%
    Short-term borrowings114,966 0.09%119,369 0.11%112,063 0.17% 117,155 0.10%157,188 0.81%
    Long-term borrowings206,495 4.65%233,113 4.41%233,819 4.41% 219,731 4.52%233,934 4.41%
    Total Interest-Bearing Liabilities5,638,630 0.27%5,484,569 0.34%5,690,976 0.59% 5,562,025 0.31%5,584,314 0.72%
    Noninterest-bearing deposits2,604,695  2,413,887  2,130,775   2,509,818  1,903,568  
    Other liabilities110,264  155,443  150,254   132,729  131,122  
    Shareholders' equity1,098,094  1,076,555  1,071,549   1,087,384  1,071,433  
    Total Noninterest-Bearing Funding Sources3,813,053   3,645,885   3,352,578    3,729,931   3,106,123   
    Total Liabilities and Shareholders' Equity$9,451,683  $9,130,454  $9,043,554   $9,291,956  $8,690,437  
                
    Net Interest Margin (FTE) (annualized)(1) 3.17% 3.40% 3.29%  3.29% 3.46%


    FIRST COMMONWEALTH FINANCIAL CORPORATION 
    CONSOLIDATED FINANCIAL DATA   
    Unaudited   
    (dollars in thousands)   
     June 30,March 31,June 30,
     202120212020
    Loan Portfolio Detail   
    Commercial Loan Portfolio:   
    Commercial, financial, agricultural and other$1,081,822 $1,077,218 $1,202,212 
    Paycheck Protection Program292,355 478,453 570,887 
    Commercial real estate2,205,758 2,167,506 2,224,710 
    Real estate construction317,496 316,207 339,603 
    Total Commercial3,897,431 4,039,384 4,337,412 
        
    Consumer Loan Portfolio:   
    Closed-end mortgages1,259,798 1,178,640 1,140,101 
    Home equity lines of credit568,985 577,975 583,187 
    Real estate construction97,320 88,373 76,726 
    Total Real Estate - Consumer1,926,103 1,844,988 1,800,014 
        
    Auto loans829,150 759,061 671,202 
    Direct installment28,805 32,143 43,629 
    Personal lines of credit53,720 55,719 63,600 
    Student loans5,326 5,599 6,218 
    Total Other Consumer917,001 852,522 784,649 
    Total Consumer Portfolio2,843,104 2,697,510 2,584,663 
    Total Portfolio Loans6,740,535 6,736,894 6,922,075 
    Loans held for sale19,530 20,604 30,409 
    Total Loans$6,760,065 $6,757,498 $6,952,484 
        
        
     June 30,March 31,June 30,
     202120212020
    ASSET QUALITY DETAIL   
    Nonperforming Loans:   
    Loans on nonaccrual basis$22,219 $23,056 $44,968 
    Loans held for sale on a nonaccrual basis— — — 
    Troubled debt restructured loans on nonaccrual basis23,981 20,628 3,600 
    Troubled debt restructured loans on accrual basis6,593 6,697 7,455 
    Total Nonperforming Loans$52,793 $50,381 $56,023 
    Other real estate owned ("OREO")394 916 1,634 
    Repossessions ("Repos")440 833 537 
    Total Nonperforming Assets$53,627 $52,130 $58,194 
    Loans past due in excess of 90 days and still accruing903 1,079 1,421 
    Classified loans55,957 72,026 76,917 
    Criticized loans250,427 272,143 125,432 
        
    Nonperforming assets as a percentage of total loans, plus OREO and Repos (4)0.80%0.77%0.84%
    Allowance for credit losses$97,038 $96,763 $81,441 
        


    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,
     202120212020 20212020
    Net Charge-offs (Recoveries):      
    Commercial, financial, agricultural and other$3,784  $479  $1,234   $4,263  $1,639  
    Real estate construction(135) —  (26)  (135) (26) 
    Commercial real estate6  1,511  2,151   1,517  2,373  
    Residential real estate(160) 68  2   (92) 504  
    Loans to individuals432  1,212  1,132   1,644  3,532  
    Net Charge-offs$3,927  $3,270  $4,493   $7,197  $8,022  
           
    Net charge-offs as a percentage of average loans outstanding (annualized) (4)0.23 %0.20 %0.27 % 0.21 %0.25 %
    Net charge-offs as a percentage of average loans outstanding, excluding PPP loans (annualized) (4)0.25 %0.21 %0.28 % 0.23 %0.26 %
    Provision for credit losses as a percentage of net charge-offs137.84 %(134.25)%152.66 % 14.21 %471.53 %
    Provision for credit losses$5,413  $(4,390) $6,859   $1,023  $37,826  


    DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES   
           
    (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,
     202120212020 20212020
           
    Interest income$72,051 $74,061 $74,981  $146,112 $154,310 
    Adjustment to fully taxable equivalent basis (1)290 309 359  598 755 
    Interest income adjusted to fully taxable equivalent basis (non-GAAP)72,341 74,370 75,340  146,710 155,065 
    Interest expense3,852 4,619 8,295  8,471 19,900 
    Net interest income, (FTE) (1)$68,489 $69,751 $67,045  $138,239 $135,165 


    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,
     202120212020 20212020
           
    Net Income$29,619  $39,770  $23,851   $69,389  $28,578  
    Intangible amortization863  866  919   1,729  1,853  
    Tax benefit of amortization of intangibles(181) (182) (193)  (363) (389) 
    Net Income, adjusted for tax affected amortization of intangibles$30,301  $40,454  $24,577   $70,755  $30,042  
           
    Average Tangible Equity:      
    Total shareholders' equity$1,098,094  $1,076,555  $1,071,549   $1,087,384  $1,071,433  
    Less: intangible assets315,776  316,438  318,486   316,105  318,877  
    Tangible Equity782,318  760,117  753,063   771,279  752,556  
    Less: preferred stock—  —  —   —  —  
    Tangible Common Equity$782,318  $760,117  $753,063   $771,279  $752,556  
           
    (8)Return on Average Tangible Common Equity15.54 %21.58 %13.13 % 18.50 %8.03 %
           


     For the Three Months Ended For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
     202120212020 20212020
           
    Core Net Income:      
    Total Net Income$29,619  $39,770  $23,851   $69,389  $28,578  
    Net securities gains(10) (6) (8)  (16) (27) 
    Tax benefit of net securities gains2  1  2   3  6  
    COVID-19 related232  74  419   306  442  
    Tax benefit of COVID 19 related(49) (16) (88)  (64) (93) 
    Branch consolidation related(22) 40  —   18  —  
    Tax benefit of bank consolidation related expenses5  (8) —   (4) —  
    (5) Core net income$29,777  $39,855  $24,176   $69,632  $28,906  
    Average Shares Outstanding Assuming Dilution96,282,425  96,233,647  98,146,854   96,255,475  98,254,429  
    (6) Core Earnings per common share (diluted)$0.31  $0.41  $0.25   $0.72  $0.29  
           
    Intangible amortization863  866  919   1,729  1,853  
    Tax benefit of amortization of intangibles(181) (182) (193)  (363) (389) 
    Core Net Income, adjusted for tax affected amortization of intangibles$30,459  $40,539  $24,902   $70,998  $30,370  
           
    (9) Core Return on Average Tangible Common Equity15.62 %21.63 %13.30 % 18.56 %8.12 %


    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,
     202120212020 20212020
    Core Return on Average Assets:      
    Total Net Income$29,619 $39,770 $23,851  $69,389 $28,578 
    Total Average Assets9,451,683 9,130,454 9,043,554  9,291,956 8,690,437 
    Return on Average Assets1.26%1.77%1.06% 1.51%0.66%
           
    Core Net Income (5)$29,777 $39,855 $24,176  $69,632 $28,906 
    Total Average Assets9,451,683 9,130,454 9,043,554  9,291,956 8,690,437 
    (7) Core Return on Average Assets1.26%1.77%1.08% 1.51%0.67%


     For the Three Months Ended For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
     202120212020 20212020
    Core Efficiency Ratio:      
    Total Noninterest Expense$51,542  $51,859  $52,756   $103,401  $103,027  
    Adjustments to Noninterest Expense:      
    Unfunded commitment reserve—  —  887   —  (1,652) 
    Intangible amortization863  866  919   1,729  1,853  
    COVID-19 related232  74  419   306  442  
    Branch consolidation related(22) 40  —   18  —  
    Noninterest Expense - Core$50,469  $50,879  $50,531   $101,348  $102,384  
           
    Net interest income, (FTE)$68,489  $69,751  $67,045   $138,239  $135,165  
    Total noninterest income26,086  27,355  21,812   53,441  41,085  
    Net securities gains(10) (6) (8)  (16) (27) 
    Total Revenue94,565  97,100  88,849   191,664  176,223  
           
    Adjustments to Revenue:      
    Derivative mark-to-market(277) 1,430  (221)  1,153  (1,962) 
    Total Revenue - Core$94,842  $95,670  $89,070   $190,511  $178,185  
           
    (10)Core Efficiency Ratio53.21 %53.18 %56.73 % 53.20 %57.46 %


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


    DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES  
        
     June 30,March 31,June 30,
     202120212020
    Tangible Equity:   
    Total shareholders' equity$1,106,419 $1,087,480 $1,075,705 
    Less: intangible assets315,497 316,148 318,072 
    Tangible Equity790,922 771,332 757,633 
    Less: preferred stock— — — 
    Tangible Common Equity$790,922 $771,332 $757,633 
        
    Tangible Assets:   
    Total assets$9,402,402 $9,416,989 $9,364,655 
    Less: intangible assets315,497 316,148 318,072 
    Tangible Assets$9,086,905 $9,100,841 $9,046,583 
    Less: PPP loans292,355 478,453 570,887 
    Tangible Assets, excluding PPP loans$8,794,550 $8,622,388 $8,475,696 
        
    (12)Tangible Common Equity as a percentage of Tangible Assets8.70%8.48%8.37%
    (12)Tangible Common Equity as a percentage of Tangible Assets, excluding PPP loans8.99%8.95%8.94%
        
    Shares Outstanding at End of Period96,201,628 96,248,476 98,132,697 
    (11)Tangible Book Value Per Common Share$8.22  $8.01  $7.72  
        
    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.


     For the Three Months Ended For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2021  2021  2020   2021  2020 
    Pre-tax pre-provision income:      
    Net interest income$68,199 $69,442 $66,686  $137,641 $134,410 
    Noninterest income 26,086  27,355  21,812   53,441  41,085 
    Noninterest expense 51,542  51,859  52,756   103,401  103,027 
    Pre-tax pre-provision income$42,743 $44,938 $35,742  $87,681 $72,468 
           
    Net securities gains($10) ($6) ($8)  ($16) ($27) 
    COVID-19 related 232  74  419   306  442 
    Branch consolidation (22)  40  —   18  — 
    Core pre-tax pre-provision income$42,943 $45,046 $36,153  $87,989 $72,883 
           
    Net charge-offs$3,927 $3,270 $4,493  $7,197 $8,022 

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