• First Commonwealth Announces Third Quarter 2021 Earnings; Declares Quarterly Dividend and Authorization of a $25 Million Share Repurchase Program

    Source: Nasdaq GlobeNewswire / 26 Oct 2021 17:00:01   America/New_York

    INDIANA, Pa., Oct. 26, 2021 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the third quarter of 2021.

    Financial Summary

    (dollars in thousands,For the Three Months Ended For the Nine Months Ended
    except per share data)September 30, June 30, September 30, September 30, September 30,
     2021
    		 2021
    		 2020
    		 2021
    		 2020
    Reported Results         
    Net income$34,092  $29,619  $19,186  $103,481  $47,764 
    Diluted earnings per share$0.36  $0.31  $0.20  $1.08  $0.49 
    Return on average assets1.42% 1.26% 0.81% 1.48% 0.71%
    Return on average equity12.14% 10.82% 7.01% 12.62% 5.92%
              
    Operating Results (non-GAAP)(1)         
    Core net income$34,131  $29,777  $23,889  $103,764  $52,795 
    Core diluted earnings per share$0.36  $0.31  $0.24  $1.08  $0.54 
    Core pre-tax pre-provision net revenue$42,913  $42,943  $40,844  $130,903  $113,727 
    Provision expense$330  $5,413  $11,212  $1,353  $49,038 
    Net charge-offs$2,277  $3,927  $4,346  $9,474  $12,368 
    Reserve build/(release)(2)($2,853) $275  $6,866  ($7,124) $36,670 
    Core return on average assets (ROAA)1.43% 1.26% 1.01% 1.48% 0.79%
    Core pre-tax pre-provision ROAA1.79% 1.82% 1.73% 1.87% 1.70%
    Return on average tangible common equity17.28% 15.54% 10.29% 18.08% 8.80%
    Core return on average tangible common equity17.30% 15.62% 12.72% 18.13% 9.69%
    Core efficiency ratio55.27% 53.21% 54.31% 53.90% 56.37%
    Net interest margin (FTE)3.23% 3.17% 3.11% 3.27% 3.34%

    (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.

    Third Quarter 2021 Highlights

    • Net income of $34.1 million and diluted earnings per share totaled $0.36, an increase of $4.5 million, or $0.05 from the previous quarter and an increase of $14.9 million, or $0.16 per share from the third quarter of 2020
    • Core pre-tax pre-provision net revenue (PPNR)(1) totaled $42.9 million, which was unchanged from the prior quarter but was an increase of $2.1 million from the third quarter of 2020
    • Operating leverage was positive during the first nine months of 2021
      • Core revenue(1) grew $16.6 million, or 6.1%, from the prior year
      • Core noninterest expense(1) increased $2.2 million, or 1.4%, from the prior year
    • Portfolio loans (excluding Paycheck Protection Program (PPP) loans) increased $132.3 million, or 8.2% annualized from the previous quarter, driven by strong consumer loan growth and improved commercial loan production
      • Year-to-date loan growth (excluding PPP loans) was $298.1 million, or 6.3% annualized
      • Average loans (excluding PPP loans) increased $196.7 million, or 12.4% annualized, from the previous quarter
    • Total PPP loans decreased $140.3 million from the previous quarter resulting in a total PPP loan balance at September 30, 2021 of $152.1 million
    • Net interest income (FTE) of $70.9 million increased $2.4 million from the previous quarter due primarily to a $196.7 million increase in average loans (excluding PPP loans)
    • Noninterest income of $27.2 million (excluding net security gains) increased $1.2 million from the previous quarter and increased $0.5 million from the third quarter of 2020
    • Noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses) of $55.0 million increased $3.7 million from the previous quarter and increased $2.6 million from the third quarter of 2020
    • Average deposits increased $41.8 million, or 2.1% annualized compared to the prior quarter, despite $41.4 million in intentional time deposit runoff
      • End of period deposits grew $51.5 million, or 2.6% annualized, from the previous quarter
      • Average noninterest-bearing deposits grew $42.4 million, or 6.5% annualized, compared to the prior quarter
    • Tangible book value per share grew 7.8% annualized compared to the prior quarter and 7.6% 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
    • The Bank was recently named the #1 Small Business Association (SBA) lender in the SBA’s designated Pittsburgh District for the fiscal year ending September 30, 2021

    Profitability

    • Core return on average assets (ROAA) improved 17 basis points to 1.43% compared to the previous quarter and increased 42 basis points compared to the third quarter of 2020
    • Core pre-tax pre-provision ROA(1) for the quarter ended September 30, 2021 was 1.79% as compared to 1.82% in the prior quarter and 1.73% in the third quarter of 2020
    • The net interest margin of 3.23% increased six basis points compared to the prior quarter and increased 12 basis points as compared to third quarter of 2020
    • The core efficiency ratio(1) of 55.27% increased 206 basis points from the previous quarter

    Strong capital position

    • Bank-level Tier 1 Capital ratio of 11.9%, which represents $278.4 million in excess capital above the regulatory “well capitalized” requirement of 8.0%
    • A total of 997,517 shares at a weighted average price of $13.35 were purchased during the third quarter of 2021 under the company’s previously authorized share repurchase program.   The remaining repurchase capacity under the current program was $10.3 million as of September 30, 2021
    • On October 26, 2021, the Board of Directors authorized an additional $25 million share repurchase program

    Asset quality

    • The provision for credit losses was $0.3 million, a decrease of $5.1 million compared to the previous quarter and a decrease of $10.9 million from the third quarter of 2020
    • The allowance for credit losses as a percentage of end-of-period loans (excluding PPP loans) was 1.43% compared to 1.50% in the previous quarter
    • Total criticized loans decreased $52.0 million from the previous quarter
      • Total nonperforming assets decreased $14.6 million from the previous quarter
    • Net charge-offs on loans totaled $2.3 million, a decrease of $1.7 million from the previous quarter
      • Net charge-offs as a percentage of average loans outstanding (excluding PPP loans, annualized) was 0.14% in the third quarter of 2021 as compared to 0.25% in the previous quarter

    “Our third quarter results reflect good momentum in our fundamental performance.   Excluding PPP forgiveness, loans grew at an 8.2% annualized rate and was broad-based across nearly all of our consumer and commercial categories,” stated T. Michael Price, President and Chief Executive Officer.   “Our quarterly results were also supported by diversified revenue sources with strong contributions coming from mortgage banking, SBA lending, wealth management and insurance revenues.   Our SBA team has produced a particularly strong year, climbing to the #1 ranking in the SBA’s Pittsburgh District.” Price continued, “I am genuinely excited about the progress we have made with our traditional lending engines as well as our investments and progress on the digital front.   I believe these efforts, along with our new investment into equipment finance, have positioned First Commonwealth to continue to be a leading financial services company for the businesses and communities we serve.”

    Earnings

    Net income for the third quarter of 2021 was $34.1 million, or $0.36 per share, compared to $29.6 million, or $0.31 per share in the second quarter of 2021 and $19.2 million, or $0.20 per share for the third quarter of 2020.

    Net Interest Income and Net Interest Margin

    Net interest income (FTE) of $70.9 million increased $2.4 million from the previous quarter and increased $4.1 million from the prior year quarter.   The increase from the previous quarter was primarily due to a $196.7 million increase in average loans (excluding PPP loans) and a $1.2 million increase in fees on PPP loans, partially offset by a $204.7 million decrease in PPP loans.   Interest and fee income recognized on PPP loans totaled $5.7 million in the third quarter of 2021 as compared to $5.5 million in the prior quarter.  

    The net interest margin for the third quarter of 2021 was 3.23%, an increase of six basis points from the previous quarter and an increase of 12 basis points from the third quarter of 2020.   The increase from the previous quarter was due primarily to the recognition of fees on PPP loans and a two basis point decrease in the cost of funds.  

    Total average deposits grew $41.8 million in the third quarter of 2021 as compared to the previous quarter.   Average noninterest bearing deposits grew $42.4 million and offset a $41.4 million decrease in average time deposits.  

    Total end-of-period deposits grew $51.5 million from the previous quarter.  

    Asset Quality

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

    Provision expense in the third quarter of 2021 totaled $0.3 million as compared to $5.4 million in the previous quarter.   The provision expense during the quarter reflected a $2.4 million decrease in qualitative reserves due to improved economic forecasts and a $2.0 million decrease in specific reserves, partially offset by a $1.4 million increase in reserves for strong end-of-period loan growth and a $0.9 million expense for unfunded commitment reserves.  

    At September 30, 2021, nonperforming loans totaled $38.1 million, a decrease of $14.7 million from the previous quarter and a decrease of $11.6 million from the third quarter of 2020.   Nonperforming loans represented 0.58% of total loans (excluding PPP loans) as compared to 0.82% and 0.78% for the periods ended June 30, 2021 and September 30, 2020, respectively. Subsequent to September 30, 2021, a $6.9 million nonperforming loan (equal to 0.10% of total loans) was sold at par.

    At September 30, 2021, criticized loans totaled $198.5 million, a decrease of $52.0 million from the previous quarter.  

    During the third quarter of 2021, net charge-offs were $2.3 million as compared to $3.9 million in the previous quarter and $4.3 million in the third 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 0.14%, 0.25% and 0.27% for the periods ended September 30, 2021, June 30, 2021 and September 30, 2020, respectively.

    Noninterest Income and Noninterest Expense

    Noninterest income (excluding net security gains) totaled $27.2 million for the third quarter of 2021, as compared to $26.1 million for the second quarter of 2021 and $26.7 million for the third quarter of 2020.  

    The $1.1 million increase from the previous quarter was primarily due to a $0.7 million increase in gain on sale of SBA loans, a $0.5 million increase in service charges on deposit accounts, a $0.4 million increase in gain on sale of mortgage loans and a $0.4 million increase in Trust revenue due primarily to annual tax preparation fees.   These increases were partially offset by $0.9 million decrease in swap fee income and a $0.4 million decrease in card-related interchange income.

    Noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses) totaled $55.0 million for the third quarter of 2021, as compared to $51.3 million for the second quarter of 2021 and $52.4 million for the third quarter of 2020.   The $3.7 million increase from the previous quarter was primarily the result of a $2.7 million increase in salaries and employee benefits driven by a $1.2 million increase in incentives due to improved financial performance, a $0.5 million increase in salaries due in part to the company’s previously announced entry into the equipment finance business, $0.5 million reduction in deferred FAS-91 expenses and a $0.4 million increase in hospitalization expense.   The increase in the quarter was also impacted by a $0.4 million increase in FDIC insurance expense.

    The core efficiency ratio was 55.27% during the third quarter of 2021 as compared to 53.21% in the previous quarter and 54.31% in the third quarter of 2020.

    Full time equivalent staff was 1,409 at September 30, 2021, 1,392 at June 30, 2021, and 1,399 at September 30, 2020.   The increase from the previous quarter was partially the result of new hires related to the company’s previously announced entry into the equipment finance business.

    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 third quarter of 2020.   The cash dividend is payable on November 19, 2021 to shareholders of record as of November 5, 2021.   This dividend represents a 3.2% projected annual yield utilizing the October 25, 2021 closing market price of $14.54.

    First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2021 were 15.0%, 12.4%, 9.6% and 11.5%, respectively.   First Commonwealth’s current capital levels exceed the fully phased-in Basel III capital requirements issued by U.S. bank regulators.

    Conference Call

    First Commonwealth will host a quarterly conference call to discuss its financial results for the third quarter of 2021 on Wednesday, October 27, 2021 at 2:00 PM (ET).   The call can be accessed by dialing (toll free) 1-888-660-6510 conference ID # 7758595 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 # 7758595.   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, 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 Nine Months Ended
     September 30, June 30, September 30, September 30, September 30,
     2021 2021 2020 2021 2020
    SUMMARY RESULTS OF OPERATIONS         
    Net interest income$70,645  $68,199  $66,369  $208,287  $200,779 
    Provision for credit losses330  5,413  11,212  1,353  49,038 
    Noninterest income27,245  26,086  26,769  80,686  67,854 
    Noninterest expense55,027  51,542  58,247  158,429  161,274 
    Net income34,092  29,619  19,186  103,481  47,764 
    Core net income (5)34,131  29,777  23,889  103,764  52,795 
    Earnings per common share (diluted)$0.36  $0.31  $0.20  $1.08  $0.49 
    Core earnings per common share (diluted) (6)$0.36  $0.31  $0.24  $1.08  $0.54 
    KEY FINANCIAL RATIOS         
    Return on average assets1.42% 1.26% 0.81% 1.48% 0.71%
    Core return on average assets (7)1.43% 1.26% 1.01% 1.48% 0.79%
    Return on average assets, pre-provision, pre-tax1.79% 1.81% 1.48% 1.86% 1.61%
    Core return on average assets, pre-provision, pre-tax1.79% 1.82% 1.73% 1.87% 1.70%
    Return on average shareholders' equity12.14% 10.82% 7.01% 12.62% 5.92%
    Return on average tangible common equity (8)17.28% 15.54% 10.29% 18.08% 8.80%
    Core return on average tangible common equity (9)17.30% 15.62% 12.72% 18.13% 9.69%
    Core efficiency ratio (2)(10)55.27% 53.21% 54.31% 53.90% 56.37%
    Net interest margin (FTE) (1)3.23% 3.17% 3.11% 3.27% 3.34%
              
    Book value per common share$11.69  $11.50  $11.07     
    Tangible book value per common share (11)8.38  8.22  7.79     
    Market value per common share13.63  14.07  7.74     
    Cash dividends declared per common share0.115  0.115  0.110  0.340  0.330 
    ASSET QUALITY RATIOS         
    Nonperforming loans as a percent of end-of-period loans (3)0.56% 0.78% 0.71%    
    Nonperforming loans as a percent of end-of-period loans, excluding PPP loans (3)0.58% 0.82% 0.78%    
    Nonperforming assets as a percent of total assets (3)0.41% 0.57% 0.55%    
    Nonperforming assets as a percent of total assets, excluding PPP loans (3)0.42% 0.59% 0.59%    
    Net charge-offs as a percent of average loans (annualized) (4)0.13% 0.23% 0.25%    
    Net charge-offs as a percent of average loans, excluding PPP loans (annualized) (4)0.14% 0.25% 0.27%    
    Allowance for credit losses as a percent of nonperforming loans (4)247.30% 183.81% 177.58%    
    Allowance for credit losses as a percent of end-of-period loans (4)1.40% 1.44% 1.27%    
    Allowance for credit losses as a percent of end-of-period loans, excluding PPP loans (4)1.43% 1.50% 1.38%    
    CAPITAL RATIOS         
    Shareholders' equity as a percent of total assets11.7% 11.8% 11.5%    
    Tangible common equity as a percent of tangible assets (12)8.7% 8.7% 8.4%    
    Tangible common equity as a percent of tangible assets, excluding PPP loans (12)8.9% 9.0% 9.0%    
    Leverage Ratio9.6% 9.6% 8.9%    
    Risk Based Capital - Tier I12.4% 12.6% 11.8%    
    Risk Based Capital - Total15.0% 15.2% 14.4%    
    Common Equity - Tier I11.5% 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 Nine Months Ended
     September 30,
    		 June 30,
    		 September 30, September 30,
    		 September 30,
     2021
    		 2021
    		 2020 2021
    		 2020
    INCOME STATEMENT      
    Interest income$74,196  $72,051  $73,593  $220,308  $227,903 
    Interest expense3,551  3,852  7,224  12,021  27,124 
    Net Interest Income70,645  68,199  66,369  208,287  200,779 
    Provision for credit losses330  5,413  11,212  1,353  49,038 
    Net Interest Income after Provision for Credit Losses70,315  62,786  55,157  206,934  151,741 
    Net securities gains—  10  20  16  47 
    Trust income3,118  2,706  2,554  8,340  6,774 
    Service charges on deposit accounts4,770  4,310  4,035  13,127  12,066 
    Insurance and retail brokerage commissions2,218  1,978  2,156  6,368  5,982 
    Income from bank owned life insurance1,486  1,509  1,547  4,946  4,963 
    Gain on sale of mortgage loans3,485  3,084  6,437  11,615  13,226 
    Gain on sale of other loans and assets2,480  2,111  1,871  6,281  3,151 
    Card-related interchange income7,052  7,406  6,441  20,885  17,589 
    Derivative mark-to-market218  (277) (160) 1,371  (2,122)
    Swap fee income317  1,252  41  1,715  864 
    Other income2,101  1,997  1,827  6,022  5,314 
    Total Noninterest Income27,245  26,086  26,769  80,686  67,854 
    Salaries and employee benefits31,066  28,347  28,823  88,084  87,573 
    Net occupancy3,960  3,881  4,609  12,614  13,979 
    Furniture and equipment4,052  3,866  4,033  11,866  11,468 
    Data processing3,196  3,192  2,741  9,440  7,804 
    Pennsylvania shares tax1,257  1,258  1,254  3,347  3,246 
    Advertising and promotion1,150  1,355  1,115  3,829  3,800 
    Intangible amortization868  863  939  2,597  2,792 
    Other professional fees and services1,308  1,091  937  3,150  2,755 
    FDIC insurance830  438  876  1,964  1,637 
    Litigation and operational losses589  556  329  1,624  1,038 
    Loss on sale or write-down of assets171  43  63  223  416 
    COVID-19 related50  232  125  357  567 
    Voluntary early retirement—  —  3,304  —  3,304 
    Branch consolidation—  (22) 2,544  18  2,544 
    Other operating expenses6,530  6,442  6,555  19,316  18,351 
    Total Noninterest Expense55,027  51,542  58,247  158,429  161,274 
    Income before Income Taxes42,533  37,330  23,679  129,191  58,321 
    Income tax provision8,441  7,711  4,493  25,710  10,557 
    Net Income$34,092  $29,619  $19,186  $103,481  $47,764 
           
    Shares Outstanding at End of Period95,209,685  96,201,628  96,924,781  95,209,685  96,924,781 
    Average Shares Outstanding Assuming Dilution95,892,304  96,282,425  98,160,143  96,130,602  98,224,506 
           


        
    FIRST COMMONWEALTH FINANCIAL CORPORATION   
    CONSOLIDATED FINANCIAL DATA     
    Unaudited     
    (dollars in thousands)     
          
     September 30, June 30, September 30,
     2021 2021 2020
    BALANCE SHEET (Period End)     
    Assets     
    Cash and due from banks$94,579  $89,505  $97,060 
    Interest-bearing bank deposits240,095  194,948  283,037 
    Securities available for sale, at fair value1,137,675  1,102,057  921,202 
    Securities held to maturity, at amortized cost548,057  554,225  268,638 
    Loans held for sale19,925  19,530  37,998 
          
    Loans6,732,580  6,740,535  6,949,716 
    Allowance for credit losses(94,185) (97,038) (88,307)
    Net loans6,638,395  6,643,497  6,861,409 
          
    Goodwill and other intangibles315,092  315,497  317,423 
    Other assets484,036  483,143  502,599 
    Total Assets$9,477,854  $9,402,402  $9,289,366 
          
    Liabilities and Shareholders' Equity     
    Noninterest-bearing demand deposits$2,656,229  $2,617,651  $2,301,821 
          
    Interest-bearing demand deposits265,782  269,451  315,806 
    Savings deposits4,609,393  4,566,815  4,425,119 
    Time deposits405,081  431,102  661,161 
    Total interest-bearing deposits5,280,256  5,267,368  5,402,086 
          
    Total deposits7,936,485  7,885,019  7,703,907 
          
    Short-term borrowings117,754  107,372  122,356 
    Long-term borrowings182,519  182,767  233,490 
    Total borrowings300,273  290,139  355,846 
          
    Other liabilities128,241  120,825  156,782 
    Shareholders' equity1,112,855  1,106,419  1,072,831 
    Total Liabilities and Shareholders' Equity$9,477,854  $9,402,402  $9,289,366 
                


     
    FIRST COMMONWEALTH FINANCIAL CORPORATION  
    CONSOLIDATED FINANCIAL DATA  
    Unaudited
    (dollars in thousands)
        
     For the Three Months Ended For the Nine Months Ended
     September 30,Yield/June 30,Yield/September 30,Yield/ September 30,Yield/September 30,Yield/
     2021Rate2021Rate2020Rate 2021Rate2020Rate
    NET INTEREST MARGIN          
                
    Assets           
    Loans, excluding PPP loans (FTE)(1)(3)$6,538,477 3.75%$6,341,805 3.80%$6,402,968 3.97% $6,391,688 3.82%$6,343,862 4.25%
    PPP Loans225,262 10.05%429,917 5.11%572,434 2.67% 380,551 6.72%326,957 2.69%
    Securities and interest-bearing bank deposits (FTE) (1)1,937,385 1.43%1,886,184 1.43%1,553,252 1.59% 1,786,050 1.46%1,407,609 1.98%
    Total Interest-Earning Assets (FTE) (1)8,701,124 3.39%8,657,906 3.35%8,528,654 3.45% 8,558,289 3.45%8,078,428 3.79%
    Noninterest-earning assets801,377  793,777  861,311   804,619  846,887  
    Total Assets$9,502,501  $9,451,683  $9,389,965   $9,362,908  $8,925,315  
                
    Liabilities and Shareholders' Equity           
    Interest-bearing demand and savings deposits$4,899,328 0.07%$4,858,531 0.07%$4,818,576 0.20% $4,788,309 0.08%$4,535,072 0.30%
    Time deposits417,274 0.36%458,638 0.47%696,227 1.28% 467,653 0.54%766,106 1.49%
    Short-term borrowings118,112 0.06%114,966 0.09%124,670 0.11% 117,478 0.09%146,270 0.61%
    Long-term borrowings182,623 4.92%206,495 4.65%233,588 4.37% 207,225 4.64%233,818 4.40%
    Total Interest-Bearing Liabilities5,617,337 0.25%5,638,630 0.27%5,873,061 0.49% 5,580,665 0.29%5,681,266 0.64%
    Noninterest-bearing deposits2,647,089  2,604,695  2,281,200   2,556,078  2,030,364  
    Other liabilities124,286  110,264  147,603   129,883  136,655  
    Shareholders' equity1,113,789  1,098,094  1,088,101   1,096,282  1,077,030  
    Total Noninterest-Bearing Funding Sources3,885,164  3,813,053  3,516,904   3,782,243  3,244,049  
    Total Liabilities and Shareholders' Equity$9,502,501  $9,451,683  $9,389,965   $9,362,908  $8,925,315  
                
    Net Interest Margin (FTE) (annualized)(1) 3.23% 3.17% 3.11%  3.27% 3.34%
                     


      
    FIRST COMMONWEALTH FINANCIAL CORPORATION 
    CONSOLIDATED FINANCIAL DATA   
    Unaudited   
    (dollars in thousands)   
     September 30,
    		 June 30,
    		 September 30,
     2021
    		 2021
    		 2020
    Loan Portfolio Detail   
    Commercial Loan Portfolio:   
    Commercial, financial, agricultural and other$1,072,489  $1,081,822  $1,163,268 
    Paycheck Protection Program152,102  292,355  573,468 
    Commercial real estate2,231,890  2,205,758  2,215,311 
    Real estate construction318,120  317,496  366,936 
    Total Commercial3,774,601  3,897,431  4,318,983 
        
    Consumer Loan Portfolio:   
    Closed-end mortgages1,311,052  1,259,798  1,154,366 
    Home equity lines of credit564,323  568,985  589,654 
    Real estate construction105,896  97,320  86,053 
    Total Real Estate - Consumer1,981,271  1,926,103  1,830,073 
        
    Auto loans886,367  829,150  692,475 
    Direct installment32,509  28,805  40,081 
    Personal lines of credit52,667  53,720  62,155 
    Student loans5,165  5,326  5,949 
    Total Other Consumer976,708  917,001  800,660 
    Total Consumer Portfolio2,957,979  2,843,104  2,630,733 
    Total Portfolio Loans6,732,580  6,740,535  6,949,716 
    Loans held for sale19,925  19,530  37,998 
    Total Loans$6,752,505  $6,760,065  $6,987,714 
        
        
     September 30,
    		 June 30,
    		 September 30,
     2021
    		 2021
    		 2020
    ASSET QUALITY DETAIL   
    Nonperforming Loans:   
    Loans on nonaccrual basis$14,466  $22,219  $38,139 
    Loans held for sale on a nonaccrual basis—  —  — 
    Troubled debt restructured loans on nonaccrual basis16,210  23,981  4,511 
    Troubled debt restructured loans on accrual basis7,410  6,593  7,078 
    Total Nonperforming Loans$38,086  $52,793  $49,728 
    Other real estate owned ("OREO")502  394  1,079 
    Repossessions ("Repos")453  440  685 
    Total Nonperforming Assets$39,041  $53,627  $51,492 
    Loans past due in excess of 90 days and still accruing1,135  903  1,249 
    Classified loans58,780  55,957  80,190 
    Criticized loans195,791  250,427  188,957 
        
    Nonperforming assets as a percentage of total loans, plus OREO and Repos (4)0.58% 0.80% 0.74%
    Allowance for credit losses$94,185  $97,038  $88,307 
        


     
    FIRST COMMONWEALTH FINANCIAL CORPORATION  
    CONSOLIDATED FINANCIAL DATA  
    Unaudited
    (dollars in thousands)
        
     For the Three Months Ended For the Nine Months Ended
     September 30,
    		 June 30,
    		 September 30, September 30,
    		 September 30,
     2021
    		 2021
    		 2020 2021
    		 2020
    Net Charge-offs (Recoveries):      
    Commercial, financial, agricultural and other$1,960  $3,784  $3,338  $6,223  $4,977 
    Real estate construction—  (135) —  (135) (26)
    Commercial real estate12  6  (110) 1,529  2,263 
    Residential real estate(87) (160) 117  (179) 621 
    Loans to individuals392  432  1,001  2,036  4,533 
    Net Charge-offs$2,277  $3,927  $4,346  $9,474  $12,368 
           
    Net charge-offs as a percentage of average loans outstanding (annualized) (4)0.13% 0.23% 0.25% 0.19% 0.25%
    Net charge-offs as a percentage of average loans outstanding, excluding PPP loans (annualized) (4)0.14% 0.25% 0.27% 0.20% 0.26%
    Provision for credit losses as a percentage of net charge-offs14.49% 137.84% 257.98% 14.28% 396.49%
    Provision for credit losses$330  $5,413  $11,212  $1,353  $49,038 


    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 Nine Months Ended
     September 30,
    		 June 30,
    		 September 30, September 30,
    		 September 30,
     2021
    		 2021
    		 2020 2021
    		 2020
           
    Interest income$74,196  $72,051  $73,593  $220,308  $227,903 
    Adjustment to fully taxable equivalent basis (1)235  290  373  834  1,129 
    Interest income adjusted to fully taxable equivalent basis (non-GAAP)74,431  72,341  73,966  221,142  229,032 
    Interest expense3,551  3,852  7,224  12,021  27,124 
    Net interest income, (FTE) (1)$70,880  $68,489  $66,742  $209,121  $201,908 
                        


     
    FIRST COMMONWEALTH FINANCIAL CORPORATION  
    CONSOLIDATED FINANCIAL DATA  
    Unaudited
    (dollars in thousands, except per share data)
     
    DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES   
           
     For the Three Months Ended For the Nine Months Ended
     September 30,
    		 June 30,
    		 September 30, September 30,
    		 September 30,
     2021
    		 2021
    		 2020 2021
    		 2020
           
    Net Income$34,092  $29,619  $19,186  $103,481  $47,764 
    Intangible amortization868  863  939  2,597  2,792 
    Tax benefit of amortization of intangibles(182) (181) (197) (545) (586)
    Net Income, adjusted for tax affected amortization of intangibles$34,778  $30,301  $19,928  $105,533  $49,970 
           
    Average Tangible Equity:      
    Total shareholders' equity$1,113,789  $1,098,094  $1,088,101  $1,096,282  $1,077,030 
    Less: intangible assets315,303  315,776  317,702  315,835  318,483 
    Tangible Equity798,486  782,318  770,399  780,447  758,547 
    Less: preferred stock—  —  —  —  — 
    Tangible Common Equity$798,486  $782,318  $770,399  $780,447  $758,547 
           
    (8)Return on Average Tangible Common Equity17.28% 15.54% 10.29% 18.08% 8.80%


     For the Three Months Ended For the Nine Months Ended
     September 30,
    		 June 30,
    		 September 30, September 30,
    		 September 30,
     2021
    		 2021
    		 2020 2021
    		 2020
           
    Core Net Income:      
    Total Net Income$34,092  $29,619  $19,186  $103,481  $47,764 
    Net securities gains—  (10) (20) (16) (47)
    Tax benefit of net securities gains—  2  4  3  10 
    COVID-19 related50  232  125  357  567 
    Tax benefit of COVID 19 related(11) (49) (26) (75) (119)
    Early retirement related—  —  3,304  —  3,304 
    Tax benefit of early retirement related expenses—  —  (694) —  (694)
    Branch consolidation related—  (22) 2,544  18  2,544 
    Tax benefit of bank consolidation related expenses—  5  (534) (4) (534)
    (5) Core net income$34,131  $29,777  $23,889  $103,764  $52,795 
    Average Shares Outstanding Assuming Dilution95,892,304  96,282,425  98,160,143  96,130,602  98,224,506 
    (6) Core Earnings per common share (diluted)$0.36  $0.31  $0.24  $1.08  $0.54 
           
    Intangible amortization868  863  939  2,597  2,792 
    Tax benefit of amortization of intangibles(182) (181) (197) (545) (586)
    Core Net Income, adjusted for tax affected amortization of intangibles$34,817  $30,459  $24,631  $105,816  $55,001 
           
    (9) Core Return on Average Tangible Common Equity17.30% 15.62% 12.72% 18.13% 9.69%
                   


     
    FIRST COMMONWEALTH FINANCIAL CORPORATION  
    CONSOLIDATED FINANCIAL DATA  
    Unaudited
    (dollars in thousands, except per share data)
          
    DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES     
       
     For the Three Months Ended For the Nine Months Ended
     September 30,
    		 June 30,
    		 September 30, September 30,
    		 September 30,
     2021
    		 2021
    		 2020 2021
    		 2020
    Core Return on Average Assets:      
    Total Net Income$34,092  $29,619  $19,186  $103,481  $47,764 
    Total Average Assets9,502,501  9,451,683  9,389,965  9,362,908  8,925,315 
    Return on Average Assets1.42% 1.26% 0.81% 1.48% 0.71%
           
    Core Net Income (5)$34,131  $29,777  $23,889  $103,764  $52,795 
    Total Average Assets9,502,501  9,451,683  9,389,965  9,362,908  8,925,315 
    (7) Core Return on Average Assets1.43% 1.26% 1.01% 1.48% 0.79%


     For the Three Months Ended For the Nine Months Ended
     September 30,
    		 June 30,
    		 September 30, September 30,
    		 September 30,
     2021
    		 2021
    		 2020 2021
    		 2020
    Core Efficiency Ratio:      
    Total Noninterest Expense$55,027  $51,542  $58,247  $158,429  $161,274 
    Adjustments to Noninterest Expense:      
    Unfunded commitment reserve—  —  471  —  (1,181)
    Intangible amortization868  863  939  2,597  2,792 
    COVID-19 related50  232  125  357  567 
    Early retirement related—  —  3,304  —  3,304 
    Branch consolidation related—  (22) 2,544  18  2,544 
    Noninterest Expense - Core$54,109  $50,469  $50,864  $155,457  $153,248 
           
    Net interest income, (FTE)$70,880  $68,489  $66,742  $209,121  $201,908 
    Total noninterest income27,245  26,086  26,769  80,686  67,854 
    Net securities gains—  (10) (20) (16) (47)
    Total Revenue98,125  94,565  93,491  289,791  269,715 
           
    Adjustments to Revenue:      
    Derivative mark-to-market218  (277) (160) 1,371  (2,122)
    Total Revenue - Core$97,907  $94,842  $93,651  $288,420  $271,837 
           
    (10)Core Efficiency Ratio55.27% 53.21% 54.31% 53.90% 56.37%
                   


     
    FIRST COMMONWEALTH FINANCIAL CORPORATION  
    CONSOLIDATED FINANCIAL DATA  
    Unaudited
    (dollars in thousands)
       
    DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES  
        
     September 30,
    		 June 30,
    		 September 30,
     2021
    		 2021
    		 2020
    Tangible Equity:   
    Total shareholders' equity$1,112,855  $1,106,419  $1,072,831 
    Less: intangible assets315,092  315,497  317,423 
    Tangible Equity797,763  790,922  755,408 
    Less: preferred stock—  —  — 
    Tangible Common Equity$797,763  $790,922  $755,408 
        
    Tangible Assets:   
    Total assets$9,477,854  $9,402,402  $9,289,366 
    Less: intangible assets315,092  315,497  317,423 
    Tangible Assets$9,162,762  $9,086,905  $8,971,943 
    Less: PPP loans152,102  292,355  573,468 
    Tangible Assets, excluding PPP loans$9,010,660  $8,794,550  $8,398,475 
        
    (12)Tangible Common Equity as a percentage of Tangible Assets8.71% 8.70% 8.42%
    (12)Tangible Common Equity as a percentage of Tangible Assets, excluding PPP loans8.85% 8.99% 8.99%
        
    Shares Outstanding at End of Period95,209,685  96,201,628  96,924,781 
    (11)Tangible Book Value Per Common Share$8.38  $8.22  $7.79 
        
    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 Nine Months Ended
     September 30,
    		 June 30,
    		 September 30, September 30,
    		 September 30,
     2021
    		 2021 2020 2021 2020
    Pre-tax pre-provision income:      
    Net interest income$70,645  $68,199  $66,369  $208,287  $200,779 
    Noninterest income 27,245   26,086   26,769   80,686   67,854 
    Noninterest expense 55,027   51,542   58,247   158,429   161,274 
    Pre-tax pre-provision income$42,863  $42,743  $34,891  $130,544  $107,359 
           
    Net securities gains$0  ($10) ($20) ($16) ($47)
    COVID-19 related 50   232   125   357   567 
    Voluntary early retirement —   —   3,304   —   3,304 
    Branch consolidation 0   (22)  2,544   18   2,544 
    Core pre-tax pre-provision income$42,913  $42,943  $40,844  $130,903  $113,727 
           
    Net charge-offs$2,277  $3,927  $4,346  $9,474  $12,368 
                        

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