First Commonwealth Announces Third Quarter 2015 Financial Results; Declares Quarterly Dividend
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INDIANA, PA -- (Marketwired) -- 10/28/15 -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the third quarter of 2015.
Third Quarter 2015 Highlights
Franchise Growth
- Solid loan growth of $80.1 million from the prior quarter, or 7.1% on an annualized basis; and
- Finalized acquisition of Columbus, Ohio based First Community Bank on October 1st.
Net Income
- Third quarter net income was $12.4 million, or $0.14 diluted earnings per share. Net income was impacted by the following items:
- Net interest income increased by $0.4 million as compared to the prior quarter, primarily as a result of strong commercial loan growth;
- Noninterest income benefited from increases in trust income, deposit service charges and mortgage banking revenue. Total noninterest income, excluding net securities gains, decreased $0.8 million from the previous quarter, driven by a $1.4 million decline in the fair market value of commercial loan interest rate swaps;
- Noninterest expense decreased $0.4 million from the previous quarter, primarily attributable to a $1.1 million write-down on other real estate owned (OREO) in the second quarter. Third quarter noninterest expense was affected by $0.7 million in additional shares tax expense for a disputed assessment that was settled during the quarter;
- Provision for credit losses totaled $4.6 million, an increase of $1.6 million from the linked quarter and $2.5 million from the year ago quarter, due primarily to $2.5 million in specific reserves for two commercial credits;
- Asset quality continued to improve, with nonperforming loans decreasing $4.3 million, or 9.5%, compared to the prior quarter.
"I'm pleased with the groundwork we have laid in the last twelve months to grow top line revenue, despite headwinds from an extended low interest rate environment," stated T. Michael Price, President and Chief Executive Officer. "We extended our footprint westward and we now have plans in place to expand our commercial lending and mortgage origination capabilities in central and northeastern Ohio."
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,
2015 2015 2014 2015 2014
------------------------------------ ---------------------------
Net income $12,414 $13,447 $12,496 $40,082 $36,724
Diluted
earnings
per share $0.14 $0.15 $0.13 $0.45 $0.39
Return on
average
assets 0.78% 0.85% 0.78% 0.84% 0.78%
Return on
average
common
equity 6.86% 7.57% 6.91% 7.48% 6.83%
Return on
average
tangible
common
equity 8.87% 9.82% 8.89% 9.68% 8.79%
Efficiency
ratio 63.83% 63.96% 66.65% 63.99% 66.25%
Net
interest
margin 3.25% 3.26% 3.26% 3.29% 3.28%
Financial Results Summary
For the three months ended September 30, 2015, net income was $12.4 million, or $0.14 diluted earnings per share, compared to net income of $13.4 million, or $0.15 diluted earnings per share, in the second quarter of 2015 and net income of $12.5 million, or $0.13 diluted earnings per share, in the third quarter of 2014. The decrease in net income compared to the second quarter of 2015 was primarily a result of an increase in the provision for credit losses of $1.6 million and a decrease in noninterest income of $0.8 million, offset by a $0.4 million increase in net interest income and a decrease in noninterest expense of $0.4 million. The decrease in net income compared to the third quarter of 2014 was primarily driven by a decrease in noninterest expense of $1.3 million and an increase in noninterest income of $0.5 million, offset by an increase in the provision for credit losses of $2.5 million.
For the nine months ended September 30, 2015, net income was $40.1 million, or $0.45 diluted earnings per share, compared to net income of $36.7 million, or $0.39 diluted earnings per share, for the comparable period in 2014. The increase in net income compared to 2014 was primarily the result of an increase in net interest income of $2.7 million and a decrease in noninterest expense of $3.1 million, offset by a $1.0 million decrease in noninterest income, excluding net securities gains.
For the nine months ended September 30, 2015, return on average assets and return on average common equity were 0.84% and 7.48%, respectively, as compared to 0.78% and 6.83% in the same period of 2014. Return on average tangible common equity was 9.68% in the first nine months of 2015, as compared to 8.79% for the same period of 2014.
Net Interest Income and Net Interest Margin
Third quarter 2015 net interest income, on a fully taxable-equivalent basis, increased by $0.4 million to $47.6 million, as compared to $47.2 million in the second quarter of 2015. The increase from the prior quarter was primarily the result of $51.9 million of growth in average loan balances. The net interest margin, on a fully taxable-equivalent basis, decreased one basis point from the previous quarter primarily due to a one basis point increase in funding costs.
As compared to the third quarter of 2014, net interest income, on a fully taxable-equivalent basis, increased by $0.2 million. The increase in net interest income was due to a $162.8 million, or 3.8%, increase in average loans and a five basis point decline in funding costs, offset by a five basis point decline in the yield on interest-earning assets.
For the nine months ended September 30, 2015, net interest income, on a fully taxable-equivalent basis, increased $2.7 million to $142.8 million as compared to the same period of 2014. The increase in net interest income was a result of a $177.8 million, or 4.1%, increase in average loans, an eight basis point decline in funding costs and a special FHLB dividend of $1.0 million, offset by a seven basis point decline in the yield on interest-earning assets.
End of period loan balances increased $80.1 million from the prior quarter and $167.9 million from the year-ago quarter ending September 30, 2014. Based on average balances, loan growth for the third quarter of 2015 was $51.9 million over the prior quarter and $162.8 million over the year-ago quarter. Average deposits decreased $38.0 million in the third quarter of 2015 from the prior quarter and $187.1 million from the year-ago quarter, due in part to the intentional runoff of higher-cost brokered time deposits in favor of more cost-effective short-term borrowings. Average brokered time deposits decreased by $9.3 million in the third quarter of 2015 compared to the prior quarter and $123.6 million from the year-ago quarter. As a result, average short-term borrowings increased $28.3 million from the prior quarter and $292.6 million over the year-ago period. Average noninterest-bearing demand deposits increased $19.5 million as compared to the prior quarter and $69.5 million from the year-ago quarter. Noninterest-bearing demand deposits currently comprise 25.9% of total deposits. Average interest-bearing demand and savings deposits decreased $22.2 million from the prior quarter and $38.4 million from the year-ago period.
Credit Quality
The provision for credit losses totaled $4.6 million for the three months ended September 30, 2015, an increase of $1.6 million as compared to the prior quarter and an increase of $2.5 million from the same quarter last year.
At September 30, 2015, nonperforming loans were $40.8 million, a decrease of $4.3 million from June 30, 2015 and a decrease of $4.4 million from September 30, 2014. Nonperforming loans as a percentage of total loans were 0.89%, 1.00% and 1.03% for the periods ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively.
During the third quarter of 2015, net charge-offs were $1.4 million, compared to $4.4 million in the second quarter of 2015 and $2.0 million in the third quarter of 2014. There were no significant individual charge-offs in the third quarter of 2015. Second quarter 2015 charge-offs included a $2.3 million write-down on a loan to a contractor that was classified as nonaccrual during the fourth quarter of 2014. There were no significant individual charge-offs in the third quarter of 2014.
The allowance for credit losses was $48.5 million at September 30, 2015, and as a percentage of total loans outstanding was 1.06%, 1.01% and 1.15% for September 30, 2015, June 30, 2015 and September 30, 2014, respectively. General reserves as a percentage of non-impaired loans were 0.97%, 0.98% and 1.06% for September 30, 2015, June 30, 2015 and September 30, 2014, respectively. The allowance for credit losses as percentage of nonperforming loans was 118.84%, 106.26% and 112.21% for September 30, 2015, June 30, 2015 and September 30, 2014, respectively.
OREO acquired through foreclosure increased $4.0 million to $10.5 million during the third quarter due primarily to one commercial relationship.
Noninterest Income
Noninterest income, excluding net securities gains, decreased $0.8 million, or 5.0%, in the third quarter of 2015 as compared to the prior quarter and increased $0.5 million, or 3.4%, compared to the same quarter last year. The decrease from the prior quarter was primarily the result of a $1.4 million decline in the fair market value of commercial loan interest rate swaps. This mark-to-market adjustment was a positive adjustment of $0.6 million in the second quarter and a negative adjustment of $0.8 million in the third quarter. This was offset by a $0.4 million gain on the sale of a commercial loan and a $0.2 million increase in mortgage banking revenue, as well as a $0.1 million increase in trust income and a $0.2 million increase in deposit service charges. The increase from the prior-year period of $0.5 million is primarily related to an increase of $1.1 million in gain on sale of loans and a $0.5 million increase in insurance and retail brokerage commissions due to increased production and the acquisition of a local agency in the fourth quarter of 2014, offset by decreases of $0.7 million in commercial loan swap-related revenues due primarily to declines in the fair market value of commercial loan interest rate swaps.
For the nine months ended September 30, 2015, noninterest income, excluding net securities gains, decreased $1.0 million, or 2.1%, as compared to the same period of 2014, primarily due to a $2.0 million gain from the sale of an OREO property in the second quarter of 2014, a $1.2 million gain from the sale of our registered investment advisory business in the first quarter of 2014, a decrease of $0.8 million in service charges on deposit accounts and a $0.6 million reduction in commercial loan swap-related revenues due primarily to declines in the fair market value of commercial loan interest rate swaps over the same period. These negative variances were partially offset by an increase of $1.8 million in insurance and retail brokerage commissions due to increased production and our agency acquisition, as well as a $2.1 million increase in gain on sale of loans, primarily through mortgage banking.
Noninterest Expense
Noninterest expense decreased $0.4 million in the third quarter of 2015 from the prior quarter and decreased $1.3 million as compared to the third quarter of 2014. The decrease as compared to the linked quarter is primarily attributable to a $1.1 million OREO write-down for one commercial relationship and a $0.4 million loss on the write-down for a building in the second quarter of 2015, offset by $0.7 million of additional shares tax expense for the resolution of a disputed tax assessment in the third quarter of 2015 and a $0.4 million increase in salaries and employee benefits, primarily due to increased commercial loan production. The decrease from the prior year period of $1.3 million includes improvements of $2.2 million in IT conversion-related expenses that were incurred in the third quarter of 2014 and a $0.4 million decrease in net furniture and equipment expense due to less software/hardware maintenance and programing expense post conversion. These improvements in expense in the third quarter of 2015 were offset by the aforementioned $0.7 million shares tax resolution and a $0.2 million increase in salaries and employee benefits.
For the nine months ending September 30, 2015, noninterest expense decreased $3.1 million, or 2.5%, as compared to the same period of 2014, driven by $7.3 million in IT conversion-related expenses that were incurred in the first nine months of 2014 and a decrease of $1.5 million in furniture and equipment expense related to less software/hardware maintenance and programming expense post conversion. Also affecting the comparison of the periods was a $0.9 million external fraud loss recovery in the prior year period. Increases in expense compared to the year-ago period included $1.2 million in salaries and benefits due in part to the launch of our mortgage initiative and the acquisition of an insurance agency in the fourth quarter of 2014, $0.5 million in occupancy expense due to higher snow removal and utilities, a $1.0 million increase in debit card fraud losses primarily due to large merchant breaches, as well as the aforementioned $1.5 million OREO and building write-downs and a $1.0 million increase in reserves for unfunded loan commitments included in other operating expenses.
Full time equivalent staff declined to 1,263 at September 30, 2015 from 1,388 at September 30, 2014. The decrease is primarily attributable to staffing efficiencies enabled by the completion of our IT systems conversion, refinements to our branch staffing model and the closure of three branch offices in April 2015, offset by the recent launch of our mortgage initiative and the acquisition of an insurance agency.
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 63.83% and 63.99% for the three and nine months ended September 30, 2015, respectively, as compared to 66.65% and 66.25% for the three and nine months ended September 30, 2014.
Dividends and Capital
First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.07 per share, which is payable on November 20, 2015 to shareholders of record as of November 9, 2015. This dividend represents a 3.0% projected annual yield utilizing the October 27, 2015 closing market price of $9.37.
During the second quarter of 2015, First Commonwealth completed a previously announced $25.0 million common stock repurchase program, under which the corporation repurchased 2,885,020 shares at an average price of $8.70 per share. The company does not currently have an authorized share repurchase plan.
First Commonwealth's capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2015 were 12.5%, 11.5%, 10.1% and 10.2%, respectively. Our current capital levels meet 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 2015 on Wednesday, October 28, 2015 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-888-317-6016 or accessing a webcast of the call through the company's web page, www.fcbanking.com/InvestorRelations. A replay of the call will be available approximately one hour following the conclusion of the conference by dialing 1-877-344-7529 and entering the replay access code #10073878. A link to the webcast replay will be accessible at www.fcbanking.com/InvestorRelations for 30 days.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation, headquartered in Indiana, Pennsylvania, is a financial services company with $6.4 billion in total assets as of September 30, 2015 and 111 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.
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, borrowing 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 Nine Months
For the Three Months Ended Ended
--------------------------------- ----------------------
September September September September
30, June 30, 30, 30, 30,
2015 2015 2014 2015 2014
--------------------------------- ----------------------
SUMMARY RESULTS OF
OPERATIONS
Net interest income
(FTE)(1) $ 47,568 $ 47,205 $ 47,364 $ 142,763 $ 140,029
Provision for
credit losses 4,621 3,038 2,073 8,818 8,621
Noninterest income 15,505 16,347 15,050 46,043 46,972
Noninterest expense 40,257 40,634 41,568 120,745 123,851
Net income 12,414 13,447 12,496 40,082 36,724
Earnings per common
share (diluted) $ 0.14 $ 0.15 $ 0.13 $ 0.45 $ 0.39
KEY FINANCIAL
RATIOS
Return on average
assets 0.78% 0.85% 0.78% 0.84% 0.78%
Return on average
shareholders'
equity 6.86% 7.57% 6.91% 7.48% 6.83%
Return on average
tangible common
equity (9) 8.87% 9.82% 8.89% 9.68% 8.79%
Efficiency ratio(2) 63.83% 63.96% 66.65% 63.99% 66.25%
Net interest margin
(FTE)(1) 3.25% 3.26% 3.26% 3.29% 3.28%
Book value per
common share $ 8.12 $ 7.99 $ 7.74
Tangible book value
per common
share(4) 6.30 6.16 5.99
Market value per
common share 9.09 9.59 8.39
Cash dividends
declared per
common share 0.07 0.07 0.07 $ 0.21 $ 0.21
ASSET QUALITY
RATIOS
Nonperforming loans
as a percent of
end-of-period
loans (5) 0.89% 1.00% 1.03%
Nonperforming
assets as a
percent of total
assets (5) 0.81% 0.82% 0.85%
Net charge-offs as
a percent of
average loans
(annualized) 0.13% 0.39% 0.18%
Allowance for
credit losses as a
percent of
nonperforming
loans (6) 118.84% 106.26% 112.21%
Allowance for
credit losses as a
percent of end-of-
period loans (6) 1.06% 1.01% 1.15%
CAPITAL RATIOS
Shareholders'
equity as a
percent of total
assets 11.3% 11.3% 11.2%
Tangible common
equity as a
percent of
tangible assets(3) 9.0% 8.9% 8.9%
Leverage Ratio 10.1% 10.0% 9.8%
Risk Based Capital
- Tier I 11.5% 11.5% 11.7%
Risk Based Capital
- Total 12.5% 12.4% 12.8%
Common Equity -
Tier I 10.2% 10.2% 10.4%
(5) - Includes held for sale
loans.
(6) - Excludes held for sale
loans.
FIRST COMMONWEALTH FINANCIAL
CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
For the Nine Months
For the Three Months Ended Ended
------------------------------------ ------------------------
September September September September
30, June 30, 30, 30, 30,
2015 2015 2014 2015 2014
-------------------------------------------------------------
INCOME
STATEMENT
Interest
income $ 50,501 $ 50,150 $ 51,089 $ 151,736 $ 151,761
Interest
expense 3,816 3,780 4,536 11,509 14,234
-------------------------------------------------------------
Net Interest
Income 46,685 46,370 46,553 140,227 137,527
Taxable
equivalent
adjustment(1) 883 835 811 2,536 2,502
-------------------------------------------------------------
Net Interest
Income (FTE) 47,568 47,205 47,364 142,763 140,029
Provision for
credit losses 4,621 3,038 2,073 8,818 8,621
-------------------------------------------------------------
Net Interest
Income after
Provision for
Credit Losses
(FTE) 42,947 44,167 45,291 133,945 131,408
Net securities
gains 0 20 48 125 50
Trust income 1,614 1,476 1,678 4,511 4,587
Service
charges on
deposit
accounts 4,081 3,872 4,099 11,271 12,032
Insurance and
retail
brokerage
commissions 2,163 2,178 1,709 6,536 4,704
Income from
bank owned
life
insurance 1,357 1,378 1,330 4,089 4,131
Gain on sale
of loans 1,196 627 67 2,262 143
Gain on sale
of other
assets 444 354 675 1,022 4,345
Card related
interchange
income 3,637 3,729 3,599 10,784 10,620
Derivative
mark-to-
market (783) 593 (108) (420) 175
Other income 1,796 2,120 1,953 5,863 6,185
-------------------------------------------------------------
Total
Noninterest
Income 15,505 16,347 15,050 46,043 46,972
Salaries and
employee
benefits 22,446 22,001 22,244 66,339 65,185
Net occupancy
expense 3,291 3,316 3,180 10,518 9,969
Furniture and
equipment
expense (7) 2,670 2,630 4,471 7,980 15,050
Data
processing
expense 1,558 1,509 1,583 4,505 4,593
Pennsylvania
shares tax
expense 1,713 1,110 1,033 3,617 2,782
Advertising
and promotion
expense 789 637 861 1,946 2,346
Intangible
amortization 157 156 174 469 530
Collection and
repossession
expense 801 917 783 2,229 1,941
Other
professional
fees and
services 1,007 945 1,050 2,882 2,777
FDIC insurance 963 1,025 926 3,047 3,026
Operational
losses
(recoveries) 314 323 187 1,637 (273)
Loss on sale
or write-down
of assets 140 1,635 61 2,037 1,241
Conversion
related
expenses (8) 0 0 783 0 1,676
Other
operating
expenses 4,408 4,430 4,232 13,539 13,008
-------------------------------------------------------------
Total
Noninterest
Expense 40,257 40,634 41,568 120,745 123,851
Income before
Income Taxes 18,195 19,880 18,773 59,243 54,529
Taxable
equivalent
adjustment(1) 883 835 811 2,536 2,502
Income tax
provision 4,898 5,598 5,466 16,625 15,303
-------------------------------------------------------------
Net Income $ 12,414 $ 13,447 $ 12,496 $ 40,082 $ 36,724
=============================================================
Shares
Outstanding at
End of Period 88,961,268 88,960,268 91,722,649 88,961,268 91,722,649
Average Shares
Outstanding
Assuming
Dilution 88,813,746 88,939,003 92,578,701 89,531,498 93,632,783
(7) - Includes $1.4 million and $5.6 million of accelerated depreciation
expense related to the technology conversion for the three and nine month
periods ended September 30, 2014, respectively.
(8) - Does not include accelerated depreciation expense described in Note
7.
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
September 30, June 30, September 30,
2015 2015 2014
--------------------------------------------------
BALANCE SHEET (Period End)
Assets
Cash and due from banks $ 69,235 $ 64,321 $ 78,696
Interest-bearing bank
deposits 3,529 3,120 5,374
Securities available for
sale, at fair value 1,104,709 1,143,072 1,383,768
Securities held to
maturity, at amortized
cost 154,035 131,780 0
Loans held for sale 4,986 9,817 1,305
Loans 4,575,735 4,490,854 4,411,481
Allowance for credit
losses (48,518) (45,344) (50,784)
--------------- -------------- ---------------
Net loans 4,527,217 4,445,510 4,360,697
Goodwill and other
intangibles 162,625 162,781 160,152
Other assets 358,413 356,327 366,106
--------------- -------------- ---------------
Total Assets $ 6,384,749 $ 6,316,728 $ 6,356,098
=============== ============== ===============
Liabilities and
Shareholders' Equity
Noninterest-bearing
demand deposits $ 1,077,234 $ 1,068,230 $ 995,014
Interest-bearing demand
deposits 70,662 76,865 82,221
Savings deposits 2,427,326 2,441,888 2,363,464
Time deposits 586,268 623,124 931,689
--------------- -------------- ---------------
Total interest-bearing
deposits 3,084,256 3,141,877 3,377,374
Total deposits 4,161,490 4,210,107 4,372,388
Short-term borrowings 1,329,794 1,231,917 1,034,967
Long-term borrowings 111,219 111,356 188,706
--------------- -------------- ---------------
Total borrowings 1,441,013 1,343,273 1,223,673
Other liabilities 59,478 52,142 50,553
Shareholders' equity 722,768 711,206 709,484
--------------- -------------- ---------------
Total Liabilities and
Shareholders' Equity $ 6,384,749 $ 6,316,728 $ 6,356,098
=============== ============== ===============
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
For the Three Months Ended
----------------------------------------------------------
September September
30, Yield/ June 30, Yield/ 30, Yield/
2015 Rate 2015 Rate 2014 Rate
-----------------------------------------------------------
NET INTEREST MARGIN
Assets
Loans
(FTE)(1)(5) $4,550,882 3.82% $4,498,965 3.87% $4,388,130 3.97%
Securities and
interest
bearing bank
deposits
(FTE)(1) 1,248,495 2.40% 1,308,016 2.33% 1,383,554 2.28%
---------- ---------- ----------
Total
Interest-
Earning
Assets
(FTE)(1) 5,799,377 3.52% 5,806,981 3.52% 5,771,684 3.57%
Noninterest-
earning assets 543,632 554,175 553,384
---------- ---------- ----------
Total Assets $6,343,009 $6,361,156 $6,325,068
========== ========== ==========
Liabilities and
Shareholders'
Equity
Interest-
bearing demand
and savings
deposits $2,504,516 0.11% $2,526,744 0.11% $2,466,127 0.10%
Time deposits 659,445 0.63% 694,725 0.69% 954,474 0.98%
Short-term
borrowings 1,232,795 0.41% 1,204,466 0.37% 940,156 0.28%
Long-term
borrowings 111,285 2.78% 122,410 2.57% 199,435 1.79%
---------- ---------- ----------
Total
Interest-
Bearing
Liabilities 4,508,041 0.34% 4,548,345 0.33% 4,560,192 0.39%
Noninterest-
bearing
deposits 1,065,204 1,045,659 995,690
Other
liabilities 51,586 55,042 51,327
Shareholders'
equity 718,178 712,110 717,859
---------- ---------- ----------
Total
Noninterest-
Bearing
Funding
Sources 1,834,968 1,812,811 1,764,876
---------- ---------- ----------
Total
Liabilities and
Shareholders'
Equity $6,343,009 $6,361,156 $6,325,068
========== ========== ==========
Net Interest
Margin (FTE)
(annualized)(1) 3.25% 3.26% 3.26%
For the Nine Months Ended
----------------------------------------------
September 30, Yield/ September 30, Yield/
2015 Rate 2014 Rate
--------------------------------------- -------
NET INTEREST
MARGIN
Assets
Loans
(FTE)(1)(5) $ 4,509,628 3.87% $ 4,331,807 4.04%
Securities and
interest
bearing bank
deposits
(FTE)(1) 1,298,397 2.45% 1,370,331 2.28%
-------------- --------------
Total
Interest-
Earning
Assets
(FTE)(1) 5,808,025 3.55% 5,702,138 3.62%
Noninterest-
earning assets 546,103 557,971
-------------- --------------
Total Assets $ 6,354,128 $ 6,260,109
============== ==============
Liabilities and
Shareholders'
Equity
Interest-
bearing demand
and savings
deposits $ 2,510,814 0.11% $ 2,511,615 0.10%
Time deposits 714,005 0.70% 1,065,458 1.00%
Short-term
borrowings 1,193,122 0.38% 749,269 0.29%
Long-term
borrowings 126,896 2.50% 208,818 1.75%
-------------- --------------
Total
Interest-
Bearing
Liabilities 4,544,837 0.34% 4,535,160 0.42%
Noninterest-
bearing
deposits 1,038,016 953,946
Other
liabilities 55,075 52,001
Shareholders'
equity 716,200 719,002
-------------- --------------
Total
Noninterest-
Bearing
Funding
Sources 1,809,291 1,724,949
-------------- --------------
Total
Liabilities and
Shareholders'
Equity $ 6,354,128 $ 6,260,109
============== ==============
Net Interest
Margin (FTE)
(annualized)(1) 3.29% 3.28%
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
September September
30, June 30, 30,
2015 2015 2014
---------------------------------
ASSET QUALITY DETAIL
Nonperforming Loans:
Loans on nonaccrual
basis $ 20,220 $ 21,776 $ 27,310
Troubled debt
restructured loans
held for sale on
nonaccrual basis 0 2,432 0
Troubled debt
restructured loans
on nonaccrual basis 8,583 8,619 6,783
Troubled debt
restructured loans
on accrual basis 12,024 12,276 11,164
---------------------------------
Total
Nonperforming
Loans $ 40,827 $ 45,103 $ 45,257
Other real estate
owned ("OREO") 10,542 6,539 7,751
Repossessions
("Repo") 357 348 902
---------------------------------
Total
Nonperforming
Assets $ 51,726 $ 51,990 $ 53,910
Loans past due in
excess of 90 days
and still accruing $ 2,054 $ 1,592 $ 2,374
Classified loans 81,723 79,924 63,724
Criticized loans 136,919 120,506 139,449
Nonperforming assets
as a percentage of
total loans, plus
OREO and Repos 1.13% 1.16% 1.22%
Allowance for credit
losses $ 48,518 $ 45,344 $ 50,784
For the Nine Months
For the Three Months Ended Ended
--------------------------------- ----------------------
September September September September
30, June 30, 30, 30, 30,
2015 2015 2014 2015 2014
--------------------------------------------------------
Net Charge-offs
(Recoveries):
Commercial,
financial,
agricultural and
other $ 75 $ 2,702 $ 294 $ 7,657 $ 7,732
Real estate
construction 0 (84) (132) (84) (173)
Commercial real
estate 528 471 635 1,063 677
Residential real
estate 123 341 454 934 1,866
Loans to
individuals 721 961 763 2,781 1,960
--------------------------------------------------------
Net Charge-offs $ 1,447 $ 4,391 $ 2,014 $ 12,351 $ 12,062
Net charge-offs as a
percentage of
average loans
outstanding
(annualized) 0.13% 0.39% 0.18% 0.37% 0.37%
Provision for credit
losses as a
percentage of net
charge-offs 319.35% 69.19% 102.93% 71.40% 71.47%
Provision for credit
losses $ 4,621 $ 3,038 $ 2,073 $ 8,818 $ 8,621
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
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."
September September
30, June 30, 30,
2015 2015 2014
------------------------------------
Tangible Equity:
Total
shareholders'
equity $ 722,768 $ 711,206 $ 709,484
Less:
intangible
assets 162,625 162,781 160,152
------------------------------------
Tangible
Equity 560,143 548,425 549,332
Less: preferred
stock 0 0 0
------------------------------------
Tangible
Common Equity $ 560,143 $ 548,425 $ 549,332
Tangible Assets:
Total assets $ 6,384,749 $ 6,316,728 $ 6,356,098
Less:
intangible
assets 162,625 162,781 160,152
------------------------------------
Tangible
Assets $ 6,222,124 $ 6,153,947 $ 6,195,946
(3)Tangible
Common Equity
as a percentage
of Tangible
Assets 9.00% 8.91% 8.87%
Shares
Outstanding at
End of Period 88,961,268 88,960,268 91,722,649
(4)Tangible Book
Value Per
Common Share $ 6.30 $ 6.16 $ 5.99
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.
For the Nine Months
For the Three Months Ended Ended
------------------------------------ ----------------------
September September September September
30, June 30, 30, 30, 30,
2015 2015 2014 2015 2014
------------------------------------ ----------------------
Average Tangible
Equity:
Total
shareholders'
equity $ 718,178 $ 712,110 $ 717,859 $ 716,200 $ 719,002
Less:
intangible
assets 162,709 162,865 160,237 162,864 160,603
-----------------------------------------------------------
Tangible
Equity 555,469 549,245 557,622 553,336 558,399
Less: preferred
stock 0 0 0 0 0
-----------------------------------------------------------
Tangible
Common Equity $ 555,469 $ 549,245 $ 557,622 $ 553,336 $ 558,399
(9)Return on
Average
Tangible Common
Equity 8.87% 9.82% 8.89% 9.68% 8.79%
Contact:Investor Relations:Ryan M. ThomasVice President / Finance and Investor [email protected]
Source: First Commonwealth Financial Corporation
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