First Commonwealth Announces First Quarter 2016 Financial Results; Declares Quarterly Dividend
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INDIANA, PA -- (Marketwired) -- 04/26/16 -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the first quarter of 2016.
First Quarter 2016 Highlights
Profitability
- Loans experienced solid growth from the prior quarter of 9.8% on an annualized basis;
- Deposits grew 10.1% from the prior quarter on an annualized basis;
- The net interest margin expanded three basis points from the prior quarter to 3.29%; and
- The efficiency ratio improved to 60.10% driven by lower operational expenses.
Net Income
- First quarter net income was $12.5 million, or $0.14 diluted earnings per share. Net income was impacted by the following items:
- Net interest income increased by $0.6 million as compared to the prior quarter, primarily as a result of strong commercial loan growth and expansion in the net interest margin, and is at the highest level since the fourth quarter of 2010;
- Noninterest income benefited from $0.7 million in gains on the sale of mortgage loans and $0.4 million of swap income, as well as a 7.9% increase in service charges on deposit accounts and card-related interchange income over the prior year period; offset by a negative fair market value adjustment for commercial loan interest rate swaps of $1.0 million;
- Noninterest expense of $38.1 million is at the lowest level since the fourth quarter of 2007; and
- Provision for credit losses totaled $6.5 million, an increase of $0.4 million from the previous quarter, due primarily to a $6.0 million specific reserve for a steel and aluminum servicing company placed into nonperforming status in the first quarter of 2016.
"I am encouraged by our results this quarter, particularly with commercial loan growth and our continuing improvement with efficiency. I'm also pleased with the progress our team has made thus far in 2016 with the build out of our presence in Ohio," stated T. Michael Price, President and Chief Executive Officer. "This quarter also marks our third consecutive quarter of positive operating leverage, in that revenue growth has outpaced expenses. This was no small task in the face of today's operating environment."
Financial Summary
(dollars in thousands, For the Three Months Ended
-----------------------------------------------
except per share data) March 31, December 31, March 31,
2016 2015 2015
-----------------------------------------------
Net income $ 12,473 $ 10,061 $ 14,221
Diluted earnings per share $ 0.14 $ 0.11 $ 0.16
Return on average assets 0.76% 0.61% 0.91%
Return on average common
equity 6.87% 5.50% 8.03%
Efficiency ratio (1) 60.10% 66.62% 64.20%
Core efficiency ratio (1) 59.53% 60.31% 62.82%
Net interest margin (FTE) 3.29% 3.26% 3.35%
(1) See Supplemental Information - Definitions and reconciliation of non-GAAP financial measures
Financial Results Summary
For the three months ended March 31, 2016, net income was $12.5 million, or $0.14 diluted earnings per share, compared to net income of $10.1 million, or $0.11 diluted earnings per share, in the fourth quarter of 2015 and net income of $14.2 million, or $0.16 diluted earnings per share, in the first quarter of 2015. The increase in net income compared to the fourth quarter of 2015 was driven by a $5.0 million decrease in noninterest expense as a result of one-time severance, acquisition and real-estate expenses during the fourth quarter of 2015 and a $0.6 million increase in net interest income in the first quarter of 2016, offset by a decrease of $1.8 million in noninterest income, excluding net securities gains. The decrease in net income compared to the first quarter of 2015 was primarily driven by an increase in the provision for credit losses of $5.4 million, offset by lower noninterest expense of $1.7 million.
Return on average assets and return on average equity were 0.76% and 6.87%, respectively, for the first quarter of 2016, as compared to 0.91% and 8.03% in the first quarter of 2015.
Net Interest Income and Net Interest Margin
First quarter 2016 net interest income, on a fully taxable-equivalent basis, increased by $0.6 million to $49.7 million as compared to the fourth quarter of 2015. The increase from the prior quarter was primarily the result of strong commercial loan growth combined with a three basis point increase in the net interest margin to 3.29%. The yield on interest-earning assets improved by six basis points, offset by a four basis point increase in funding costs. A $96.3 million increase in average interest-earning assets also contributed to the improvement in net interest income.
As compared to the first quarter of 2015, net interest income, on a fully taxable-equivalent basis, increased by $1.8 million. The net interest margin of 3.29% in the first quarter of 2016 was six basis points lower than in the first quarter of 2015, of which seven basis points was attributable to a $1.0 million FHLB special dividend received in the first quarter of 2015, a four basis point increase in funding costs and a three basis point decline in the yield on interest-earning assets between the periods, partially offset by a $258.6 million, or 4.4%, increase in average interest-earning assets.
Total deposits grew by $105.8 million in the first quarter, for an annualized growth rate of 10.1%. Average deposits increased $25.3 million in the first quarter of 2016 from the prior quarter. Average deposits decreased $47.4 million from the year-ago quarter, which include the addition of $89.9 million in deposits acquired as part of the First Community acquisition, due in part to the intentional runoff of higher-cost brokered time deposits in 2015. Average brokered time deposits of $3.4 million were relatively flat compared to the fourth quarter of 2015; however, brokered deposits decreased $118.4 million from the year-ago quarter. Average short-term borrowings increased $68.4 million from the prior quarter and increased $398.4 million over the year-ago period, partly due to the aforementioned runoff in brokered deposits. Average noninterest-bearing demand deposits were flat as compared to the prior quarter and increased $94.2 million from the year-ago quarter, due in part to the addition of $11.6 million related to the First Community acquisition. Noninterest-bearing demand deposits currently comprise 26.9% of total deposits. Average interest-bearing demand and savings deposits increased $46.5 million from the prior quarter and $52.8 million from the year-ago period, which includes the addition of $36.1 million related to the First Community acquisition.
Credit Quality
The provision for credit losses totaled $6.5 million for the three months ended March 31, 2016, an increase of $0.4 million as compared to the prior quarter and an increase of $5.4 million from the same quarter last year. The first quarter 2016 provision for credit losses included a $6.0 million specific reserve for a steel servicing company placed into nonperforming status in the first quarter of 2016.
At March 31, 2016, nonperforming loans were $61.8 million, an increase of $11.0 million from December 31, 2015 and an increase of $12.6 million from March 31, 2015. The increase from the fourth quarter of 2015 was primarily related to the aforementioned commercial credit placed into nonperforming status in the first quarter of 2016. Nonperforming loans as a percentage of total loans were 1.29%, 1.08% and 1.11% for the periods ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively.
During the first quarter of 2016, net charge-offs were $2.1 million, compared to $3.8 million in the prior quarter and $6.5 million in the first quarter of 2015. Net charge-offs in the first quarter of 2016 included a $1.1 million charge-off of a previously established reserve for an energy company that was classified as nonaccrual in the third quarter of 2013. Net charge-offs in the fourth quarter of 2015 included a $2.0 million charge-off of a previously established reserve for a manufacturing company that was classified as nonaccrual in the third quarter of 2015. Net charge-offs for the first quarter of 2015 included $3.1 million for the aforementioned loan to an energy company and a $1.2 million write-down on a nonaccrual loan to an equipment distributor.
The allowance for credit losses was $55.2 million at March 31, 2016, and as a percentage of total loans outstanding was 1.15%, 1.08% and 1.05% for March 31, 2016, December 31, 2015 and March 31, 2015, respectively. General reserves as a percentage of non-impaired loans were 0.88%, 0.94% and 0.98% for March 31, 2016, December 31, 2015 and March 31, 2015, respectively.
Other real estate owned (OREO) acquired through foreclosure was $8.6 million at March 31, 2016 as compared to $9.4 million at December 31, 2015 and $7.0 million at March 31, 2015. There were no significant additions to OREO in the first quarter of 2016.
Noninterest Income
Noninterest income, excluding net securities gains, decreased $1.8 million in the first quarter of 2016 as compared to the prior quarter and decreased $0.4 million compared to the same quarter last year. The decrease from the prior quarter is primarily the result of a $1.2 million decline in the fair market value of commercial loan interest rate swaps (offset by a $0.4 million increase in swap income) and a decrease of $0.5 million in service charges on deposit accounts and card-related interchange income as a result of seasonal fluctuations.
The decrease from the prior-year period of $0.4 million is primarily related to a decline of $0.8 million in the fair market value of commercial loan interest rate swaps (offset by a $0.1 million increase in swap income), offset by a $0.5 million increase in service charges on deposit accounts and card-related interchange income and a $0.2 million increase in gain on the sale of mortgage loans.
Noninterest Expense
Noninterest expense decreased $5.0 million in the first quarter of 2016 from the prior quarter and decreased $1.7 million as compared to the first quarter of 2015. The decrease compared to the prior quarter is primarily attributable to several one-time expenses in the fourth quarter of 2015, which included a $2.1 million one-time severance charge for the realignment of our consumer businesses, $0.9 million of one-time expenses related to the acquisition of First Community Bank, and $0.6 million related to the disposition of two former headquarter bank facilities. In addition, provision expense associated with the reserve for unfunded loan commitments, which is included in other operating expenses, decreased $1.0 million compared to the fourth quarter of 2015.
Noninterest expense decreased $1.7 million in the first quarter of 2016 as compared to the first quarter of 2015 and is primarily attributable to decreases of $0.4 million in occupancy expense related to lower snow removal and utilities, a decline of $0.9 million in the reserve for unfunded loan commitments, which is included in other operating expenses, lower operational losses of $0.8 million due to abnormally high debit card fraud losses as a result of merchant breaches in the first quarter of 2015, offset by a $0.3 million increase in data processing expense due to the issuance of chip debit cards to our customers during the first quarter of 2016.
Full time equivalent staff declined to 1,216 at March 31, 2016 from 1,265 and 1,299 at December 31, 2015 and March 31 2015, respectively. The decrease is primarily attributable to staff reductions as a result of the realignment of our consumer businesses, offset by the recent expansion of mortgage and retail banking in our Ohio market.
The efficiency ratio, calculated as total noninterest expense as a percentage of total revenue (which consists of net interest income on a fully taxable equivalent basis plus total noninterest income, excluding net securities gains), was 60.10% and 64.20% for the three months ended March 31, 2016 and 2015, respectively. The core efficiency ratio, which excludes securities gains and losses, amortization of intangible assets and other nonrecurring items, was 59.53% and 62.82% for the three months ended March 31, 2016 and 2015, respectively. The Consolidated Financial Highlights accompanying this news release include additional information regarding reconciliations of non-GAAP financial measures to reported amounts, including a reconciliation of the core efficiency ratio.
Dividends and Capital
First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.07 per share, which is payable on May 20, 2016 to shareholders of record as of May 6, 2016. This dividend represents a 3.1% projected annual yield utilizing the April 25, 2016 closing market price of $9.17.
On January 27, 2016, First Commonwealth's Board of Directors authorized an additional $25.0 million common stock repurchase program, under which the corporation repurchased 19,447 shares at an average price of $8.42 per share in the first quarter, totaling $0.2 million.
First Commonwealth's capital ratios for Total, Tier I, Leverage and Common Equity Tier I at March 31, 2016 were 12.1%, 11.1%, 9.8% and 9.9%, respectively. Our current capital levels meet the fully-phased in Basel III capital requirements issued by the U.S. bank regulators.
Conference Call
First Commonwealth will host a quarterly conference call to discuss its financial results for the first quarter 2016 on Wednesday, April 27, 2016 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-844-792-3645 or through the company's web page, http://www.fcbanking.com/InvestorRelations. A replay of the call will be available approximately two hours following the conclusion of the conference. A link to the call replay will be accessible at this web page for 30 days.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation (NYSE: FCF), headquartered in Indiana, Pennsylvania, is a financial services company with $6.7 billion in total assets and 110 banking offices in 17 counties throughout western and central Pennsylvania and central Ohio, and a Corporate Banking Center in northeast 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
This release contains forward-looking statements about First Commonwealth's future plans, strategies and financial performance. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may." Such statements are based on assumptions and involve risks and uncertainties, many of which are beyond our control. Factors that could cause actual results, performance or achievements to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national and international economic conditions and the impact they may have on First Commonwealth and its customers; (2) volatility and disruption in national and international financial markets; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (4) inflation, interest rate, commodity price, securities market and monetary fluctuations; (5) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which First Commonwealth 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 the reports that First Commonwealth files with the Securities and Exchange Commission, including its most recent Annual Report on Form 10‐K. Forward-looking statements speak only as of the date on which they are made. First Commonwealth undertakes no obligation to update any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except
per share data)
For the Three Months Ended
---------------------------------------------
March 31, December 31, March 31,
2016 2015 2015
---------------------------------------------
SUMMARY RESULTS OF OPERATIONS
Net interest income (FTE) (1) $ 49,749 $ 49,179 $ 47,990
Provision for credit losses 6,526 6,130 1,159
Noninterest income 13,715 15,282 14,191
Noninterest expense 38,144 43,129 39,854
Net income 12,473 10,061 14,221
Earnings per common share
(diluted) $ 0.14 $ 0.11 $ 0.16
KEY FINANCIAL RATIOS
Return on average assets 0.76% 0.61% 0.91%
Return on average
shareholders' equity 6.87% 5.50% 8.03%
Return on average tangible
common equity (8) 8.88% 7.10% 10.39%
Efficiency ratio (2) 60.10% 66.62% 64.20%
Core efficiency ratio (3) 59.53% 60.31% 62.82%
Net interest margin (FTE) (1) 3.29% 3.26% 3.35%
Book value per common share $ 8.24 $ 8.09 $ 7.95
Tangible book value per common
share (7) 6.38 6.23 6.13
Market value per common share 8.86 9.07 9.00
Cash dividends declared per
common share 0.07 0.07 0.07
ASSET QUALITY RATIOS
Nonperforming loans as a
percent of end-of-period
loans (4) 1.29% 1.08% 1.11%
Nonperforming assets as a
percent of total assets (4) 1.06% 0.92% 0.89%
Net charge-offs as a percent
of average loans (annualized) 0.18% 0.32% 0.59%
Allowance for credit losses as
a percent of nonperforming
loans (5) 89.33% 99.94% 101.09%
Allowance for credit losses as
a percent of end-of-period
loans (5) 1.15% 1.08% 1.05%
CAPITAL RATIOS
Shareholders' equity as a
percent of total assets 10.9% 11.0% 11.3%
Tangible common equity as a
percent of tangible assets
(6) 8.7% 8.7% 8.9%
Leverage Ratio 9.8% 9.9% 9.9%
Risk Based Capital - Tier I 11.1% 11.3% 11.4%
Risk Based Capital - Total 12.1% 12.3% 12.3%
Common Equity - Tier I 9.9% 10.0% 10.1%
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except
per share data)
For the Three Months Ended
---------------------------------------------
March 31, December 31, March 31,
2016 2015 2015
---------------------------------------------
INCOME STATEMENT
Interest income $ 53,353 $ 52,335 $ 51,085
Interest expense 4,546 4,086 3,913
---------------------------------------------
Net Interest Income 48,807 48,249 47,172
Taxable equivalent
adjustment (1) 942 930 818
---------------------------------------------
Net Interest Income (FTE) 49,749 49,179 47,990
Provision for credit losses 6,526 6,130 1,159
---------------------------------------------
Net Interest Income after
Provision for Credit Losses
(FTE) 43,223 43,049 46,831
Net securities (losses)
gains - (278) 105
Trust income 1,255 1,323 1,421
Service charges on deposit
accounts 3,708 4,048 3,318
Insurance and retail
brokerage commissions 1,959 1,986 2,195
Income from bank owned life
insurance 1,296 1,323 1,354
Gain on sale of mortgage
loans 683 565 439
Gain on sale of other loans
and assets 195 427 224
Card-related interchange
income 3,557 3,717 3,418
Derivative mark-to-market (1,014) 146 (230)
Other income 2,076 2,025 1,947
---------------------------------------------
Total Noninterest Income 13,715 15,282 14,191
Salaries and employee
benefits 21,677 22,822 21,892
Net occupancy 3,481 3,194 3,911
Furniture and equipment 2,867 2,757 2,680
Data processing 1,759 1,618 1,438
Pennsylvania shares tax 758 1,076 794
Intangible amortization 137 136 156
Collection and repossession 569 597 511
Other professional fees and
services 791 1,157 930
FDIC insurance 1,038 967 1,059
Litigation and operational
losses 244 482 1,000
Loss on sale or write-down
of assets 96 1,075 262
Merger and acquisition
related - 894 -
Other operating expenses 4,727 6,354 5,221
---------------------------------------------
Total Noninterest Expense 38,144 43,129 39,854
Income before Income Taxes 18,794 15,202 21,168
Taxable equivalent
adjustment (1) 942 930 818
Income tax provision 5,379 4,211 6,129
---------------------------------------------
Net Income $ 12,473 $ 10,061 $ 14,221
=============================================
Shares Outstanding at End of
Period 88,959,315 88,961,268 89,656,007
Average Shares Outstanding
Assuming Dilution 88,845,201 88,850,049 90,889,035
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
March 31, December 31, March 31,
2016 2015 2015
---------------------------------------------
BALANCE SHEET (Period End)
Assets
Cash and due from banks $ 62,141 $ 66,644 $ 62,161
Interest-bearing bank
deposits 11,024 2,808 3,124
Securities available for
sale, at fair value 950,795 949,512 1,316,361
Securities held to maturity,
at amortized cost 396,444 384,324 30,253
Loans held for sale 5,849 5,763 5,892
Loans 4,798,755 4,683,750 4,437,601
Allowance for credit
losses (55,222) (50,812) (46,697)
---------------------------------------------
Net loans 4,743,533 4,632,938 4,390,904
Goodwill and other
intangibles 165,594 165,731 162,937
Other assets 363,774 359,170 360,210
---------------------------------------------
Total Assets $ 6,699,154 $ 6,566,890 $ 6,331,842
=============================================
Liabilities and Shareholders'
Equity
Noninterest-bearing demand
deposits $ 1,155,795 $ 1,116,689 $ 1,039,929
Interest-bearing demand
deposits 92,125 86,365 73,112
Savings deposits 2,467,978 2,390,607 2,462,986
Time deposits 585,757 602,233 717,722
---------------------------------------------
Total interest-bearing
deposits 3,145,860 3,079,205 3,253,820
Total deposits 4,301,655 4,195,894 4,293,749
Short-term borrowings 1,518,742 1,510,825 1,125,520
Long-term borrowings 81,342 81,481 136,491
---------------------------------------------
Total borrowings 1,600,084 1,592,306 1,262,011
Other liabilities 64,101 59,144 63,222
Shareholders' equity 733,314 719,546 712,860
---------------------------------------------
Total Liabilities and
Shareholders' Equity $ 6,699,154 $ 6,566,890 $ 6,331,842
=============================================
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
For the Three Months Ended
---------------------------------------------------------
March 31, Yield/ December 31, Yield/ March 31, Yield/
2016 Rate 2015 Rate 2015 Rate
---------------------------------------------------------
NET INTEREST MARGIN
Assets
Loans
(FTE)(1)(4) $4,745,252 3.88% $ 4,684,215 3.83% $4,478,240 3.92%
Securities and
interest
bearing bank
deposits (FTE)
(1) 1,331,233 2.57% 1,295,982 2.46% 1,339,682 2.60%
---------- -------------- ----------
Total
Interest-
Earning
Assets (FTE)
(1) 6,076,485 3.59% 5,980,197 3.53% 5,817,922 3.62%
Noninterest-
earning assets 541,109 550,568 540,469
---------- -------------- ----------
Total Assets $6,617,594 $ 6,530,765 $6,358,391
========== ============== ==========
Liabilities and
Shareholders'
Equity
Interest-bearing
demand and
savings
deposits $2,553,896 0.11% $ 2,507,385 0.12% $2,501,145 0.10%
Time deposits 594,929 0.62% 615,781 0.62% 789,272 0.77%
Short-term
borrowings 1,503,013 0.60% 1,428,818 0.46% 1,141,098 0.34%
Long-term
borrowings 81,409 3.57% 96,669 3.01% 147,389 2.22%
---------- -------------- ----------
Total
Interest-
Bearing
Liabilities 4,733,247 0.39% 4,648,653 0.35% 4,578,904 0.35%
Noninterest-
bearing
deposits 1,096,692 1,097,013 1,002,498
Other
liabilities 57,301 58,887 58,674
Shareholders'
equity 730,354 726,212 718,315
---------- -------------- ----------
Total
Noninterest-
Bearing
Funding
Sources 1,884,347 1,882,112 1,779,487
---------- -------------- ----------
Total Liabilities
and Shareholders'
Equity $6,617,594 $ 6,530,765 $6,358,391
========== ============== ==========
Net Interest
Margin (FTE)
(annualized) (1) 3.29% 3.26% 3.35%
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
March 31, December 31, March 31,
2016 2015 2015
-----------------------------------------
Loan Portfolio Detail
Commercial Loan Portfolio:
Commercial, financial,
agricultural and other $ 1,190,384 $ 1,150,906 $ 1,066,788
Commercial real estate 1,552,904 1,479,000 1,400,276
Real estate construction 256,856 220,736 107,882
-----------------------------------------
Total Commercial 3,000,144 2,850,642 2,574,946
Consumer Loan Portfolio:
Closed-end mortgages 745,924 753,586 751,599
Home equity lines of credit 467,038 470,879 458,912
-----------------------------------------
Total Real Estate - Consumer 1,212,962 1,224,465 1,210,511
Auto loans 499,897 519,809 566,450
Direct installment 25,126 25,993 26,296
Personal lines of credit 45,905 47,424 41,301
Student loans 14,721 15,417 18,097
-----------------------------------------
Total Other Consumer 585,649 608,643 652,144
-----------------------------------------
Total Consumer Portfolio 1,798,611 1,833,108 1,862,655
-----------------------------------------
Total Portfolio Loans 4,798,755 4,683,750 4,437,601
Loans held for sale 5,849 5,763 5,892
-----------------------------------------
Total Loans $ 4,804,604 $ 4,689,513 $ 4,443,493
=========================================
March 31, December 31, March 31,
2016 2015 2015
-----------------------------------------
ASSET QUALITY DETAIL
Nonperforming Loans:
Loans on nonaccrual basis $ 33,470 $ 24,345 $ 24,587
Troubled debt restructured loans
held for sale on nonaccrual basis - - 3,011
Troubled debt restructured loans
on nonaccrual basis 13,366 12,360 8,978
Troubled debt restructured loans
on accrual basis 14,979 14,139 12,630
-----------------------------------------
Total Nonperforming Loans $ 61,815 $ 50,844 $ 49,206
Other real estate owned ("OREO") 8,636 9,398 7,025
Repossessions ("Repos") 345 227 417
-----------------------------------------
Total Nonperforming Assets $ 70,796 $ 60,469 $ 56,648
Loans past due in excess of 90
days and still accruing 1,330 2,455 4,245
Classified loans 110,816 86,440 58,393
Criticized loans 142,625 133,963 122,216
Nonperforming assets as a
percentage of total loans, plus
OREO and Repos 1.47% 1.29% 1.27%
Allowance for credit losses $ 55,222 $ 50,812 $ 46,697
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
For the Three Months Ended
March 31, December 31, March 31,
2016 2015 2015
--------------------------------------
Net Charge-offs (Recoveries):
Commercial, financial, agricultural
and other $ 1,258 $ 2,675 $ 4,880
Real estate construction (223) 8 -
Commercial real estate (491) 246 64
Residential real estate 264 18 470
Loans to individuals 1,308 889 1,099
--------------------------------------
Net Charge-offs $ 2,116 $ 3,836 $ 6,513
Net charge-offs as a percentage of
average loans outstanding
(annualized) 0.18% 0.32% 0.59%
Provision for credit losses as a
percentage of net charge-offs 308.41% 159.80% 17.80%
Provision for credit losses $ 6,526 $ 6,130 $ 1,159
DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES
(1) Net interest income has been computed on a fully taxable equivalent
basis ("FTE") using the 35% federal income tax statutory rate.
(2) Efficiency ratio is "total noninterest expense" as a percentage of total
revenue. Total revenue consists of "net interest income, on a fully taxable
equivalent basis," plus "total noninterest income," excluding "net
impairment losses" and "net securities gains."
(3) 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.
(4) Includes held for sale loans.
(5) Excludes held for sale loans.
For the Three Months Ended
March 31, December 31, March 31,
2016 2015 2015
-----------------------------------
Core Efficiency Ratio:
Total Noninterest Expense $ 38,144 $ 43,129 $ 39,854
Adjustments to Noninterest Expense:
Unfunded commitment reserve (375) 630 506
Intangible amortization 137 136 156
Severance - 2,111 -
Merger and acquisition related - 894 -
Loss on sale or writedown of assets - 400 50
-----------------------------------
Noninterest Expense - Core $ 38,382 $ 38,958 $ 39,142
Net interest income, fully tax
equivalent $ 49,749 $ 49,179 $ 47,990
Total noninterest income 13,715 15,282 14,191
Net securities (losses) gains - (278) 105
-----------------------------------
Total Revenue $ 63,464 $ 64,739 $ 62,076
Adjustments to Revenue:
Derivative mark-to-market (1,014) 146 (230)
-----------------------------------
Total Revenue - Core $ 64,478 $ 64,593 $ 62,306
(3) Core Efficiency Ratio 59.53% 60.31% 62.82%
FIRST COMMONWEALTH FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)
DEFINITIONS AND RECONCILIATION OF NON-GAAP
MEASURES
March 31, December 31, March 31,
2016 2015 2015
-----------------------------------------
Tangible Equity:
Total shareholders' equity $ 733,314 $ 719,546 $ 712,860
Less: intangible assets 165,594 165,731 162,937
-----------------------------------------
Tangible Equity 567,720 553,815 549,923
Less: preferred stock - - -
-----------------------------------------
Tangible Common Equity $ 567,720 $ 553,815 $ 549,923
Tangible Assets:
Total assets $ 6,699,154 $ 6,566,890 $ 6,331,842
Less: intangible assets 165,594 165,731 162,937
-----------------------------------------
Tangible Assets $ 6,533,560 $ 6,401,159 $ 6,168,905
(6) Tangible Common Equity as a
percentage of Tangible Assets 8.69% 8.65% 8.91%
Shares Outstanding at End of
Period 88,959,315 88,961,268 89,656,007
(7) Tangible Book Value Per
Common Share $ 6.38 $ 6.23 $ 6.13
For the Three Months Ended
-----------------------------------------
March 31, December 31, March 31,
2016 2015 2015
-----------------------------------------
Average Tangible Equity:
Total shareholders' equity $ 730,354 $ 726,212 $ 718,315
Less: intangible assets 165,666 164,222 163,020
-----------------------------------------
Tangible Equity 564,688 561,990 555,295
Less: preferred stock - - -
-----------------------------------------
Tangible Common Equity $ 564,688 $ 561,990 $ 555,295
(8) Return on Average Tangible
Common Equity 8.88% 7.10% 10.39%
Note: Management believes that it is a standard practice in the banking
industry to present these non-GAAP measures. These measures provide useful
information to management and investors by allowing them to make peer
comparisons.
Media Relations:Amy JeffordsCommunications & Community RelationsPhone: 724-463-6806E-mail: [email protected] Relations:Ryan M. ThomasFinance and Investor RelationsPhone: 724-463-1690E-mail: [email protected]
Source: First Commonwealth Financial Corporation
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