Exhibit 99.1
FOR IMMEDIATE RELEASE
First Commonwealth Announces First Quarter 2022 Earnings; Increases Quarterly Dividend
Indiana, PA, April 26, 2022 - First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the first quarter of 2022.
Financial Summary
| (dollars in thousands, | For the Three Months Ended | ||||||||||||||||
| except per share data) | March 31, | December 31, | March 31, | ||||||||||||||
| 2022 | 2021 | 2021 | |||||||||||||||
| Reported Results | |||||||||||||||||
| Net income | $27,726 | $34,776 | $39,770 | ||||||||||||||
| Diluted earnings per share | $0.29 | $0.37 | $0.41 | ||||||||||||||
| Return on average assets | 1.18 | % | 1.45 | % | 1.77 | % | |||||||||||
| Return on average equity | 10.15 | % | 12.36 | % | 14.98 | % | |||||||||||
Operating Results (non-GAAP)(1) | |||||||||||||||||
| Core net income | $27,814 | $34,753 | $39,855 | ||||||||||||||
| Core diluted earnings per share | $0.29 | $0.37 | $0.41 | ||||||||||||||
| Core pre-tax pre-provision net revenue | $36,537 | $40,868 | $45,046 | ||||||||||||||
| Provision expense | $1,964 | ($2,729) | ($4,390) | ||||||||||||||
| Net charge-offs | $1,134 | ($1,064) | $3,270 | ||||||||||||||
Reserve build/(release)(2) | ($1,334) | ($1,663) | ($4,546) | ||||||||||||||
| Core return on average assets (ROAA) | 1.18 | % | 1.45 | % | 1.77 | % | |||||||||||
| Core pre-tax pre-provision ROAA | 1.56 | % | 1.71 | % | 2.00 | % | |||||||||||
| Return on average tangible common equity | 14.52 | % | 17.56 | % | 21.58 | % | |||||||||||
| Core return on average tangible common equity | 14.57 | % | 17.55 | % | 21.63 | % | |||||||||||
| Core efficiency ratio | 59.47 | % | 57.06 | % | 53.18 | % | |||||||||||
| Net interest margin (FTE) | 3.19 | % | 3.23 | % | 3.40 | % | |||||||||||
(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.
First Quarter 2022 Highlights
Financial results
•Net income of $27.7 million and diluted earnings per share totaled $0.29, a decrease of $7.1 million, or $0.08 per share from the previous quarter
•Core pre-tax pre-provision net revenue (PPNR)(1) totaled $36.5 million, a decrease of $4.3 million from the previous quarter and a decrease of $8.5 million from the first quarter of 2021, primarily as a result of declines in income related to the Paycheck Protection Program (PPP) and noninterest income
◦PPNR ROAA was 1.55% in the first quarter of 2022 as compared to 1.71% in the previous quarter
•Net interest income (FTE) of $68.4 million decreased $2.1 million from the previous quarter and $1.3 million from the first quarter of 2021 as a result of a decline in PPP income
◦Total fees and interest recognized from PPP loans totaled $1.8 million in the first quarter of 2022, a decrease of $2.3 million from the previous quarter and a decrease of $6.2 million from the first quarter of 2021
◦Approximately $42.4 million of PPP loans were forgiven in the first quarter of 2022, resulting in total remaining PPP loan balances at March 31, 2022 of $28.9 million
•Noninterest income of $24.0 million decreased $2.1 million from the previous quarter due primarily to a $0.7 million decrease in gain on sale of Mortgage loans, a $0.6 million decrease in card-related interchange income, a $0.6 million decrease in the derivative mark-to-market adjustment on interest rate swaps, and a $0.4 million decrease in fee income related to new interest rate swaps
•Noninterest expense of $55.7 million increased $0.3 million from the previous quarter
•Total loans (excluding PPP loans) increased $147.2 million, or 8.8% annualized from the previous quarter
•Average deposits increased $69.9 million, or 3.6% annualized compared to the prior quarter despite $21.0 million in intentional time deposit runoff
◦End of period deposits grew by $189.3 million from the previous quarter, or 9.6% annualized
•Total shareholder’s equity decreased $41.8 million from the previous quarter due to a $59.4 million decrease in accumulated other comprehensive income (AOCI) resulting from the impact of higher interest rates on the fair value of the company’s available for sale investment portfolio and interest rate swap agreements
•First Commonwealth Bank has been recognized for the fourth consecutive year by Forbes as one of the World’s Best Banks for 2022
Profitability
•The net interest margin of 3.19% declined 4 basis points compared to the prior quarter
◦The core net interest margin(1) (adjusted for PPP income and excess cash) improved 5 basis points to 3.22%
•The core efficiency ratio(1) increased by 241 basis points to 59.47% compared to the prior quarter
•The return on average assets (ROAA) declined 27 basis points to 1.18% compared to the prior quarter
•Core pre-tax pre-provision ROAA(1) (which is not adjusted for PPP) for the quarter ended March 31, 2022 was 1.56% as compared to 1.71% in the prior quarter and 2.00% in the prior year quarter
Strong capital and liquidity positions
•On April 25, 2022, the Board of Directors authorized a 4.3% increase in the quarterly cash dividend to shareholders
•Bank-level Tier 1 Capital ratio of 11.5%, which represents $257.5 million in excess capital above the regulatory “well capitalized” requirement of 8.0%
•There were no shares repurchased during the first quarter of 2022. As previously announced on October 26, 2021, the Board of Directors authorized a $25 million share repurchase program. The remaining capacity under the current program was $20.0 million as of March 31, 2022.
Asset quality
•The provision for credit losses was $2.0 million, an increase of $4.7 million from the previous quarter
•Reserve build/(release)(2) was $(1.3) million, bringing reserves to total loans (excluding PPP) down to 1.32% from 1.37% in the previous quarter
•Nonperforming loans of $37.5 million decreased $17.7 million from the previous quarter
•Net charge-offs on loans totaled $1.1 million, an increase of $2.2 million from the previous quarter
◦Net charge-offs/(recoveries) as a percentage of average loans outstanding (annualized) was 0.07% in the first quarter of 2022, an increase from (0.06%) in the previous quarter
“We delivered a strong quarter of broad-based loan growth and solid financial results in the first quarter,” stated T. Michael Price, President and Chief Executive Officer. “Growth in commercial and consumer real estate lending along with a resilient indirect auto business produced annualized loan growth of 8.8%. While we did experience an anticipated slowdown in fee income from record levels in our Mortgage business, our asset sensitive balance sheet is well positioned for a rising interest rate environment. I am also pleased to report our de novo Equipment Finance business booked its first loans during the quarter. We expect this business to serve as another source of growth and an added benefit for our clients and shareholders for years to come.”
Earnings
Net income for the first quarter of 2022 was $27.7 million, or $0.29 per share, compared to $34.8 million, or $0.37 per share in the fourth quarter of 2021 and $39.8 million, or $0.41 per share for the first quarter of 2021.
Net Interest Income and Net Interest Margin
Net interest income (FTE) of $68.4 million decreased $2.1 million from the previous quarter and $1.3 million from the prior year quarter. The decrease from the prior quarter was primarily due to a $2.3 million decrease in fees and interest on PPP loans. Interest and fee income recognized on PPP loans totaled $1.8 million in the first quarter as compared to $4.1 million in the prior quarter.
The net interest margin for the first quarter of 2022 was 3.19%, a decrease of four basis points from the previous quarter and a decrease of 21 basis points from the first quarter of 2021. The decrease from the fourth quarter of 2021 was due primarily to the aforementioned decrease in interest and fees on PPP loans partially offset by an eight basis point increase in the yield on investment securities and a two basis point decrease in the cost of interest-bearing demand and savings deposits.
Total average deposits grew $69.9 million in the first quarter of 2022 as compared to the previous quarter. Average interest-bearing demand and savings deposits grew $98.1 million, which was partially offset by a $21.0 million decrease in average time deposits.
Asset Quality
Provision expense in the first quarter of 2022 totaled $2.0 million, an increase of $4.7 million from a negative provision of ($2.7 million) in the previous quarter.
The allowance for credit losses (ACL) as a percentage of end-of-period loans (excluding PPP loans) was 1.32% in the first quarter of 2022 as compared to 1.37% in the previous quarter.
At March 31, 2022, nonperforming loans totaled $37.5 million, a decrease of $17.7 million from the previous quarter and a decrease of $12.9 million from the previous year quarter. Nonperforming loans represented 0.54% of total loans (excluding PPP) as of March 31, 2022, down from 0.81% and 0.80% for the periods ended December 31, 2021 and March 31, 2021, respectively.
At March 31, 2022, criticized loans totaled $174.1 million, a decrease of $24.1 million from the previous quarter.
During the first quarter of 2022, net charge-offs/(recoveries) were $1.1 million, compared to ($1.1) million in the prior quarter and $3.3 million in the first quarter of 2021. Net charge-offs were 0.07%, (0.06%) and 0.20% of average loans (annualized) for the periods ended March 31, 2022, December 31, 2021 and March 31, 2021, respectively.
Noninterest Income and Noninterest Expense
Noninterest income totaled $24.0 million for the first quarter of 2022, as compared to $26.1 million for the fourth quarter of 2021 and $27.4 million for the first quarter of 2021 (excluding net securities gains). There were no material securities gains during the current or comparable quarters.
The $2.1 million decrease from the previous quarter was primarily driven by a $0.7 million decline in Mortgage gain on sale income and a $0.6 million seasonal decrease in card-related interchange income from the previous quarter, as well as a $0.6 million decrease in the derivative mark-to-market adjustment on interest rate swaps (as a result of changes in fair value due to movement in bond spreads, swap rates and counterparty credit risk) and a $0.4 million decrease in fee income related to new interest rate swaps (due to lower commercial demand). These declines were partially offset by a $0.5 million increase in the gain on sale of Small Business Administration (SBA) loans.
Noninterest expense totaled $55.7 million for the first quarter of 2022, as compared to $55.4 million for the fourth quarter of 2021 and $51.9 million for the first quarter of 2021. The $0.3 million increase from the previous quarter was primarily the result of an $0.8 million increase in net occupancy expense due, in part, to seasonally higher snow removal expense partially offset by a $0.5 million decrease in salaries and benefits due to lower hospitalization and incentive payouts.
The core efficiency ratio was 59.47% during the first quarter of 2022 as compared to 57.06% in the previous quarter and 53.18% in the first quarter of 2021.
Full time equivalent staff was 1,432 at March 31, 2022, 1,426 at December 31, 2021, and 1,387 at March 31, 2021.
Dividends and Capital
First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.12 per share, which represents a 4.3% increase from the previous quarter. The cash dividend is payable on May 20, 2022 to shareholders of record as of May 6, 2022. This dividend represents a 3.3% projected annual yield utilizing the April 25, 2022 closing market price of $14.41.
First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at March 31, 2022 were 14.7%, 12.2%, 9.8% and 11.3% 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 first quarter of 2022 on Wednesday, April 27, 2022 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-888-330-3181 conference ID # 4651379 or through the company’s web page, http://www.fcbanking.com/InvestorRelations. A replay of the call will be available approximately one hour following the conclusion of the conference by dialing 1-800-770-2030 and entering the conference ID # 4651379. A link to the webcast replay will also be accessible on the company’s web.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation (NYSE: FCF), headquartered in Indiana, Pennsylvania, is a financial services Company with 118 community banking offices in 26 counties throughout western and central Pennsylvania and throughout Ohio, as well as business banking operations in Pittsburgh, Pennsylvania, and Canton, Cleveland, Columbus and Cincinnati, Ohio. The Company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson, and Lewis Center, Ohio. First Commonwealth provides a full range of commercial banking, consumer banking, mortgage, equipment finance, wealth management and insurance products and services through its subsidiaries First Commonwealth Bank and First Commonwealth Insurance Agency. For more information about First Commonwealth or to open an account today, please visit www.fcbanking.com.
Forward-Looking Statements
Certain statements contained in this release that are not historical facts may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the Securities and Exchange Commission, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute “forward-looking statements” as well. These statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of words such as “may,” “will,” “should,” “could,” “would,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate” or words of similar meaning. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including uncertainties regarding the impact of the COVID-19 pandemic, and could be affected by many factors, including, but not limited to: (1) the effects of the COVID-19 pandemic on First Commonwealth and its customers; (2) volatility and disruption in national and international financial markets; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (4) inflation, interest rate, commodity price, securities market and monetary fluctuations; (5) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which First Commonwealth or its customers must comply; (6) the soundness of other financial institutions; (7) political instability; (8) impairment of First Commonwealth’s goodwill or other intangible assets; (9) acts of God or of war or terrorism; (10) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (11) changes in consumer spending, borrowings and savings habits; (12) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) First Commonwealth’s ability to attract and retain qualified employees; (16) changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (17) the ability to increase market share and control expenses; (18) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (19) the reliability of First Commonwealth’s vendors, internal control systems or information systems; (20) the costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals; and (21) other risks and uncertainties described in this report and in the other reports that we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. Further, statements about the potential effects of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, clients, third parties and us.
In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements in this release. We undertake no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Media Relations:
Jonathan E. Longwill
Vice President / Communications and Media Relations
Phone: 724-463-6806
E-mail: JLongwill@fcbanking.com
Investor Relations:
Ryan M. Thomas
Vice President / Finance and Investor Relations
Phone: 724-463-1690
E-mail: RThomas1@fcbanking.com
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||||||||||
| Unaudited | |||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||
| For the Three Months Ended | |||||||||||||||||
| March 31, | December 31, | March 31, | |||||||||||||||
| 2022 | 2021 | 2021 | |||||||||||||||
| SUMMARY RESULTS OF OPERATIONS | |||||||||||||||||
| Net interest income | $ | 68,172 | $ | 70,254 | $ | 69,442 | |||||||||||
| Provision for credit losses | 1,964 | (2,729) | (4,390) | ||||||||||||||
| Noninterest income | 23,976 | 26,071 | 27,355 | ||||||||||||||
| Noninterest expense | 55,724 | 55,428 | 51,859 | ||||||||||||||
| Net income | 27,726 | 34,776 | 39,770 | ||||||||||||||
Core net income (5) | 27,814 | 34,753 | 39,855 | ||||||||||||||
| Earnings per common share (diluted) | $ | 0.29 | $ | 0.37 | $ | 0.41 | |||||||||||
Core earnings per common share (diluted) (6) | $ | 0.29 | $ | 0.37 | $ | 0.41 | |||||||||||
| KEY FINANCIAL RATIOS | |||||||||||||||||
| Return on average assets | 1.18 | % | 1.45 | % | 1.77 | % | |||||||||||
Core return on average assets (7) | 1.18 | % | 1.45 | % | 1.77 | % | |||||||||||
| Return on average assets, pre-provision, pre-tax | 1.55 | % | 1.71 | % | 2.00 | % | |||||||||||
| Core return on average assets, pre-provision, pre-tax | 1.56 | % | 1.71 | % | 2.00 | % | |||||||||||
| Return on average shareholders' equity | 10.15 | % | 12.36 | % | 14.98 | % | |||||||||||
Return on average tangible common equity (8) | 14.52 | % | 17.56 | % | 21.58 | % | |||||||||||
Core return on average tangible common equity (9) | 14.57 | % | 17.55 | % | 21.63 | % | |||||||||||
Core efficiency ratio (2)(10) | 59.47 | % | 57.06 | % | 53.18 | % | |||||||||||
Net interest margin (FTE) (1) | 3.19 | % | 3.23 | % | 3.40 | % | |||||||||||
| Book value per common share | $ | 11.32 | $ | 11.77 | $ | 11.30 | |||||||||||
Tangible book value per common share (11) | 7.99 | 8.43 | 8.01 | ||||||||||||||
| Market value per common share | 15.16 | 16.09 | 14.37 | ||||||||||||||
| Cash dividends declared per common share | 0.115 | 0.115 | 0.110 | ||||||||||||||
| ASSET QUALITY RATIOS | |||||||||||||||||
Nonperforming loans as a percent of end-of-period loans and leases(3) | 0.54 | % | 0.80 | % | 0.75 | % | |||||||||||
Nonperforming loans as a percent of end-of-period loans and leases, excluding PPP loans (3) | 0.54 | % | 0.81 | % | 0.80 | % | |||||||||||
Nonperforming assets as a percent of total assets (3) | 0.40 | % | 0.59 | % | 0.55 | % | |||||||||||
Nonperforming assets as a percent of total assets, excluding PPP loans (3) | 0.40 | % | 0.59 | % | 0.58 | % | |||||||||||
Net charge-offs as a percent of average loans and leases (annualized) (4) | 0.07 | % | (0.06) | % | 0.20 | % | |||||||||||
Net charge-offs as a percent of average loans and leases,, excluding PPP loans (annualized) (4) | 0.07 | % | (0.06) | % | 0.21 | % | |||||||||||
Allowance for credit losses as a percent of nonperforming loans (4) | 243.38 | % | 167.67 | % | 192.06 | % | |||||||||||
Allowance for credit losses as a percent of end-of-period loans and leases (4) | 1.31 | % | 1.35 | % | 1.44 | % | |||||||||||
Allowance for credit losses as a percent of end-of-period loans and leases, excluding PPP loans (4) | 1.32 | % | 1.37 | % | 1.55 | % | |||||||||||
| CAPITAL RATIOS | |||||||||||||||||
| Shareholders' equity as a percent of total assets | 11.1 | % | 11.6 | % | 11.5 | % | |||||||||||
Tangible common equity as a percent of tangible assets (12) | 8.1 | % | 8.6 | % | 8.5 | % | |||||||||||
Tangible common equity as a percent of tangible assets, excluding PPP loans (12) | 8.1 | % | 8.7 | % | 8.9 | % | |||||||||||
| Leverage Ratio | 9.8 | % | 9.7 | % | 9.7 | % | |||||||||||
| Risk Based Capital - Tier I | 12.2 | % | 12.2 | % | 12.6 | % | |||||||||||
| Risk Based Capital - Total | 14.7 | % | 14.6 | % | 15.3 | % | |||||||||||
| Common Equity - Tier I | 11.3 | % | 11.3 | % | 11.6 | % | |||||||||||
| 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, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| INCOME STATEMENT | |||||||||||
| Interest income | $ | 71,244 | $ | 73,530 | $ | 74,061 | |||||
| Interest expense | 3,072 | 3,276 | 4,619 | ||||||||
| Net Interest Income | 68,172 | 70,254 | 69,442 | ||||||||
| Provision for credit losses | 1,964 | (2,729) | (4,390) | ||||||||
| Net Interest Income after Provision for Credit Losses | 66,208 | 72,983 | 73,832 | ||||||||
| Net securities gains | 2 | — | 6 | ||||||||
| Trust income | 2,713 | 2,771 | 2,516 | ||||||||
| Service charges on deposit accounts | 4,615 | 4,857 | 4,047 | ||||||||
| Insurance and retail brokerage commissions | 2,272 | 2,134 | 2,172 | ||||||||
| Income from bank owned life insurance | 1,508 | 1,487 | 1,951 | ||||||||
| Gain on sale of mortgage loans | 1,282 | 1,940 | 5,046 | ||||||||
| Gain on sale of other loans and assets | 2,319 | 1,849 | 1,690 | ||||||||
| Card-related interchange income | 6,490 | 7,069 | 6,427 | ||||||||
| Derivative mark-to-market | 347 | 973 | 1,430 | ||||||||
| Swap fee income | 453 | 828 | 146 | ||||||||
| Other income | 1,975 | 2,163 | 1,924 | ||||||||
| Total Noninterest Income | 23,976 | 26,071 | 27,355 | ||||||||
| Salaries and employee benefits | 30,932 | 31,422 | 28,671 | ||||||||
| Net occupancy | 4,787 | 3,972 | 4,773 | ||||||||
| Furniture and equipment | 3,730 | 3,776 | 3,948 | ||||||||
| Data processing | 3,188 | 2,933 | 3,052 | ||||||||
| Pennsylvania shares tax | 1,005 | 1,257 | 832 | ||||||||
| Advertising and promotion | 1,226 | 1,154 | 1,324 | ||||||||
| Intangible amortization | 862 | 900 | 866 | ||||||||
| Other professional fees and services | 1,221 | 1,351 | 751 | ||||||||
| FDIC insurance | 698 | 565 | 696 | ||||||||
| Litigation and operational losses | 600 | 700 | 479 | ||||||||
| Loss on sale or write-down of assets | 75 | 80 | 9 | ||||||||
| COVID-19 related | 17 | 92 | 74 | ||||||||
| Branch consolidation | 98 | (121) | 40 | ||||||||
| Other operating expenses | 7,285 | 7,347 | 6,344 | ||||||||
| Total Noninterest Expense | 55,724 | 55,428 | 51,859 | ||||||||
| Income before Income Taxes | 34,460 | 43,626 | 49,328 | ||||||||
| Income tax provision | 6,734 | 8,850 | 9,558 | ||||||||
| Net Income | $ | 27,726 | $ | 34,776 | $ | 39,770 | |||||
| Shares Outstanding at End of Period | 94,299,039 | 94,233,152 | 96,248,476 | ||||||||
| Average Shares Outstanding Assuming Dilution | 94,311,324 | 95,020,353 | 96,233,647 | ||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||||||||||
| Unaudited | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| March 31, | December 31, | March 31, | |||||||||||||||
| 2022 | 2021 | 2021 | |||||||||||||||
| BALANCE SHEET (Period End) | |||||||||||||||||
| Assets | |||||||||||||||||
| Cash and due from banks | $ | 120,289 | $ | 84,738 | $ | 83,989 | |||||||||||
| Interest-bearing bank deposits | 404,516 | 310,634 | 420,645 | ||||||||||||||
| Securities available for sale, at fair value | 946,346 | 1,054,218 | 1,056,703 | ||||||||||||||
| Securities held to maturity, at amortized cost | 512,911 | 541,311 | 407,833 | ||||||||||||||
| Loans held for sale | 10,506 | 18,583 | 20,604 | ||||||||||||||
| Loans and leases | 6,952,112 | 6,839,230 | 6,736,894 | ||||||||||||||
| Allowance for credit losses | (91,188) | (92,522) | (96,763) | ||||||||||||||
| Net loans and leases | 6,860,924 | 6,746,708 | 6,640,131 | ||||||||||||||
| Goodwill and other intangibles | 314,066 | 314,516 | 316,148 | ||||||||||||||
| Other assets | 472,566 | 474,385 | 470,936 | ||||||||||||||
| Total Assets | $ | 9,642,124 | $ | 9,545,093 | $ | 9,416,989 | |||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||
| Noninterest-bearing demand deposits | $ | 2,719,645 | $ | 2,658,782 | $ | 2,616,303 | |||||||||||
| Interest-bearing demand deposits | 305,623 | 291,476 | 267,571 | ||||||||||||||
| Savings deposits | 4,782,445 | 4,647,197 | 4,501,456 | ||||||||||||||
| Time deposits | 364,134 | 385,043 | 483,926 | ||||||||||||||
| Total interest-bearing deposits | 5,452,202 | 5,323,716 | 5,252,953 | ||||||||||||||
| Total deposits | 8,171,847 | 7,982,498 | 7,869,256 | ||||||||||||||
| Short-term borrowings | 95,748 | 138,315 | 110,762 | ||||||||||||||
| Long-term borrowings | 182,012 | 182,269 | 233,012 | ||||||||||||||
| Total borrowings | 277,760 | 320,584 | 343,774 | ||||||||||||||
| Other liabilities | 124,898 | 132,639 | 116,479 | ||||||||||||||
| Shareholders' equity | 1,067,619 | 1,109,372 | 1,087,480 | ||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 9,642,124 | $ | 9,545,093 | $ | 9,416,989 | |||||||||||
| 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/ | |||||||||||||||
| 2022 | Rate | 2021 | Rate | 2021 | Rate | |||||||||||||||
| NET INTEREST MARGIN | ||||||||||||||||||||
| Assets | ||||||||||||||||||||
Loans and leases, excluding PPP loans (FTE)(1)(3) | $ | 6,842,481 | 3.73 | % | $ | 6,680,346 | 3.73 | % | $ | 6,292,076 | 3.91 | % | ||||||||
| PPP Loans | 51,147 | 13.93 | % | 111,544 | 14.44 | % | 489,375 | 6.58 | % | |||||||||||
Securities and interest-bearing bank deposits (FTE) (1) | 1,809,131 | 1.54 | % | 1,878,755 | 1.46 | % | 1,530,107 | 1.54 | % | |||||||||||
Total Interest-Earning Assets (FTE) (1) | 8,702,759 | 3.33 | % | 8,670,645 | 3.38 | % | 8,311,558 | 3.63 | % | |||||||||||
| Noninterest-earning assets | 821,819 | 815,872 | 818,896 | |||||||||||||||||
| Total Assets | $ | 9,524,578 | $ | 9,486,517 | $ | 9,130,454 | ||||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||
| Interest-bearing demand and savings deposits | $ | 4,980,390 | 0.04 | % | $ | 4,882,318 | 0.06 | % | $ | 4,603,822 | 0.10 | % | ||||||||
| Time deposits | 374,484 | 0.29 | % | 395,444 | 0.31 | % | 528,265 | 0.75 | % | |||||||||||
| Short-term borrowings | 115,544 | 0.07 | % | 126,695 | 0.07 | % | 119,369 | 0.11 | % | |||||||||||
| Long-term borrowings | 182,119 | 4.98 | % | 182,371 | 4.91 | % | 233,113 | 4.41 | % | |||||||||||
| Total Interest-Bearing Liabilities | 5,652,537 | 0.22 | % | 5,586,828 | 0.23 | % | 5,484,569 | 0.34 | % | |||||||||||
| Noninterest-bearing deposits | 2,645,551 | 2,652,812 | 2,413,887 | |||||||||||||||||
| Other liabilities | 119,075 | 130,373 | 155,443 | |||||||||||||||||
| Shareholders' equity | 1,107,415 | 1,116,504 | 1,076,555 | |||||||||||||||||
| Total Noninterest-Bearing Funding Sources | 3,872,041 | 3,899,689 | 3,645,885 | |||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 9,524,578 | $ | 9,486,517 | $ | 9,130,454 | ||||||||||||||
Net Interest Margin (FTE) (annualized)(1) | 3.19 | % | 3.23 | % | 3.40 | % | ||||||||||||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | |||||||||||
| CONSOLIDATED FINANCIAL DATA | |||||||||||
| Unaudited | |||||||||||
| (dollars in thousands) | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| Loan and Lease Portfolio Detail | |||||||||||
| Commercial Loan and Lease Portfolio: | |||||||||||
| Commercial, financial, agricultural and other | $ | 1,092,311 | $ | 1,102,154 | $ | 1,077,218 | |||||
| Paycheck Protection Program | 28,874 | 71,298 | 478,453 | ||||||||
| Commercial real estate | 2,344,281 | 2,251,097 | 2,167,506 | ||||||||
| Equipment Finance loans and leases | 2,505 | — | — | ||||||||
| Real estate construction | 307,411 | 382,764 | 316,207 | ||||||||
| Total Commercial | 3,775,382 | 3,807,313 | 4,039,384 | ||||||||
| Consumer Loan Portfolio: | |||||||||||
| Closed-end mortgages | 1,467,133 | 1,368,816 | 1,178,640 | ||||||||
| Home equity lines of credit | 539,088 | 551,434 | 577,975 | ||||||||
| Real estate construction | 91,577 | 111,692 | 88,373 | ||||||||
| Total Real Estate - Consumer | 2,097,798 | 2,031,942 | 1,844,988 | ||||||||
| Auto & RV loans | 984,001 | 901,280 | 759,061 | ||||||||
| Direct installment | 37,751 | 40,937 | 32,143 | ||||||||
| Personal lines of credit | 52,614 | 52,809 | 55,719 | ||||||||
| Student loans | 4,566 | 4,949 | 5,599 | ||||||||
| Total Other Consumer | 1,078,932 | 999,975 | 852,522 | ||||||||
| Total Consumer Portfolio | 3,176,730 | 3,031,917 | 2,697,510 | ||||||||
| Total Portfolio Loans and Leases | 6,952,112 | 6,839,230 | 6,736,894 | ||||||||
| Loans held for sale | 10,506 | 18,583 | 20,604 | ||||||||
| Total Loans and Leases | $ | 6,962,618 | $ | 6,857,813 | $ | 6,757,498 | |||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| ASSET QUALITY DETAIL | |||||||||||
| Nonperforming Loans: | |||||||||||
| Loans on nonaccrual basis | $ | 20,490 | $ | 34,926 | $ | 23,056 | |||||
| Loans held for sale on a nonaccrual basis | — | — | — | ||||||||
| Troubled debt restructured loans on nonaccrual basis | 10,090 | 13,134 | 20,628 | ||||||||
| Troubled debt restructured loans on accrual basis | 6,887 | 7,120 | 6,697 | ||||||||
| Total Nonperforming Loans | $ | 37,467 | $ | 55,180 | $ | 50,381 | |||||
| Other real estate owned ("OREO") | 667 | 642 | 916 | ||||||||
| Repossessions ("Repos") | 397 | 397 | 833 | ||||||||
| Total Nonperforming Assets | $ | 38,531 | $ | 56,219 | $ | 52,130 | |||||
| Loans past due in excess of 90 days and still accruing | 1,921 | 1,606 | 1,079 | ||||||||
| Classified loans | 75,270 | 77,563 | 72,026 | ||||||||
| Criticized loans | 174,060 | 198,126 | 272,143 | ||||||||
Nonperforming assets as a percentage of total loans and leases, plus OREO and Repos (4) | 0.55 | % | 0.82 | % | 0.77 | % | |||||
| Allowance for credit losses | $ | 91,188 | $ | 92,522 | $ | 96,763 | |||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | ||
| CONSOLIDATED FINANCIAL DATA | ||
| Unaudited | ||
| (dollars in thousands) | ||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| Net Charge-offs (Recoveries): | |||||||||||
| Commercial, financial, agricultural and other | $ | 395 | $ | (1,633) | $ | 479 | |||||
| Real estate construction | — | (11) | — | ||||||||
| Commercial real estate | (14) | (5) | 1,511 | ||||||||
| Residential real estate | 110 | 20 | 68 | ||||||||
| Loans to individuals | 643 | 565 | 1,212 | ||||||||
| Net Charge-offs | $ | 1,134 | $ | (1,064) | $ | 3,270 | |||||
Net charge-offs as a percentage of average loans outstanding (annualized) (4) | 0.07 | % | (0.06) | % | 0.20 | % | |||||
Net charge-offs as a percentage of average loans outstanding, excluding PPP loans (annualized) (4) | 0.07 | % | (0.06) | % | 0.21 | % | |||||
| Provision for credit losses as a percentage of net charge-offs | 173.19 | % | 256.48 | % | (134.25) | % | |||||
| Provision for credit losses | $ | 1,964 | $ | (2,729) | $ | (4,390) | |||||
| DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES | |||||||||||
| Note: Management believes that it is standard practice in the banking industry to present these non-GAAP measures. These measures provide useful information to management and investors by allowing them to make peer comparisons. | |||||||||||
(1) Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the federal income tax statutory rate of 21%. | |||||||||||
(2) Core efficiency ratio excludes from total revenue the impact of derivative mark-to-market and excludes from "total noninterest expense" the amortization of intangibles, unfunded commitment expense and any other unusual items deemed by management to not be related to normal operations, such as merger, acquisition and severance costs. | |||||||||||
(3) Includes held for sale loans. | |||||||||||
(4) Excludes held for sale loans. | |||||||||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| Interest income | $ | 71,244 | $ | 73,530 | $ | 74,061 | |||||
Adjustment to fully taxable equivalent basis (1) | 253 | 266 | 309 | ||||||||
| Interest income adjusted to fully taxable equivalent basis (non-GAAP) | 71,497 | 73,796 | 74,370 | ||||||||
| Interest expense | 3,072 | 3,276 | 4,619 | ||||||||
Net interest income, (FTE) (1) | $ | 68,425 | $ | 70,520 | $ | 69,751 | |||||
| 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 | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| Net Income | $ | 27,726 | $ | 34,776 | $ | 39,770 | |||||
| Intangible amortization | 862 | 900 | 866 | ||||||||
| Tax benefit of amortization of intangibles | (181) | (189) | (182) | ||||||||
| Net Income, adjusted for tax affected amortization of intangibles | $ | 28,407 | $ | 35,487 | $ | 40,454 | |||||
| Average Tangible Equity: | |||||||||||
| Total shareholders' equity | $ | 1,107,415 | $ | 1,116,504 | $ | 1,076,555 | |||||
| Less: intangible assets | 314,235 | 314,860 | 316,438 | ||||||||
| Tangible Equity | 793,180 | 801,644 | 760,117 | ||||||||
| Less: preferred stock | — | — | — | ||||||||
| Tangible Common Equity | $ | 793,180 | $ | 801,644 | $ | 760,117 | |||||
(8)Return on Average Tangible Common Equity | 14.52 | % | 17.56 | % | 21.58 | % | |||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| Core Net Income: | |||||||||||
| Total Net Income | $ | 27,726 | $ | 34,776 | $ | 39,770 | |||||
| Net securities gains | (2) | — | (6) | ||||||||
| Tax benefit of net securities gains | — | — | 1 | ||||||||
| COVID-19 related | 17 | 92 | 74 | ||||||||
| Tax benefit of COVID 19 related | (4) | (19) | (16) | ||||||||
| Branch consolidation related | 98 | (121) | 40 | ||||||||
| Tax benefit of bank consolidation related expenses | (21) | 25 | (8) | ||||||||
(5) Core net income | $ | 27,814 | $ | 34,753 | $ | 39,855 | |||||
| Average Shares Outstanding Assuming Dilution | 94,311,324 | 95,020,353 | 96,233,647 | ||||||||
(6) Core Earnings per common share (diluted) | $ | 0.29 | $ | 0.37 | $ | 0.41 | |||||
| Intangible amortization | 862 | 900 | 866 | ||||||||
| Tax benefit of amortization of intangibles | (181) | (189) | (182) | ||||||||
| Core Net Income, adjusted for tax affected amortization of intangibles | $ | 28,495 | $ | 35,464 | $ | 40,539 | |||||
(9) Core Return on Average Tangible Common Equity | 14.57 | % | 17.55 | % | 21.63 | % | |||||
| 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 | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| Core Return on Average Assets: | |||||||||||
| Total Net Income | $ | 27,726 | $ | 34,776 | $ | 39,770 | |||||
| Total Average Assets | 9,524,578 | 9,486,517 | 9,130,454 | ||||||||
| Return on Average Assets | 1.18 | % | 1.45 | % | 1.77 | % | |||||
Core Net Income (5) | $ | 27,814 | $ | 34,753 | $ | 39,855 | |||||
| Total Average Assets | 9,524,578 | 9,486,517 | 9,130,454 | ||||||||
(7) Core Return on Average Assets | 1.18 | % | 1.45 | % | 1.77 | % | |||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| Core Efficiency Ratio: | |||||||||||
| Total Noninterest Expense | $ | 55,724 | $ | 55,428 | $ | 51,859 | |||||
| Adjustments to Noninterest Expense: | |||||||||||
| Intangible amortization | 862 | 900 | 866 | ||||||||
| COVID-19 related | 17 | 92 | 74 | ||||||||
| Branch consolidation related | 98 | (121) | 40 | ||||||||
| Noninterest Expense - Core | $ | 54,747 | $ | 54,557 | $ | 50,879 | |||||
| Net interest income, (FTE) | $ | 68,425 | $ | 70,520 | $ | 69,751 | |||||
| Total noninterest income | 23,976 | 26,071 | 27,355 | ||||||||
| Net securities gains | (2) | — | (6) | ||||||||
| Total Revenue | 92,399 | 96,591 | 97,100 | ||||||||
| Adjustments to Revenue: | |||||||||||
| Derivative mark-to-market | 347 | 973 | 1,430 | ||||||||
| Total Revenue - Core | $ | 92,052 | $ | 95,618 | $ | 95,670 | |||||
(10)Core Efficiency Ratio | 59.47 | % | 57.06 | % | 53.18 | % | |||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | ||
| CONSOLIDATED FINANCIAL DATA | ||
| Unaudited | ||
| (dollars in thousands) | ||
| DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| Tangible Equity: | |||||||||||
| Total shareholders' equity | $ | 1,067,619 | $ | 1,109,372 | $ | 1,087,480 | |||||
| Less: intangible assets | 314,066 | 314,516 | 316,148 | ||||||||
| Tangible Equity | 753,553 | 794,856 | 771,332 | ||||||||
| Less: preferred stock | — | — | — | ||||||||
| Tangible Common Equity | $ | 753,553 | $ | 794,856 | $ | 771,332 | |||||
| Tangible Assets: | |||||||||||
| Total assets | $ | 9,642,124 | $ | 9,545,093 | $ | 9,416,989 | |||||
| Less: intangible assets | 314,066 | 314,516 | 316,148 | ||||||||
| Tangible Assets | $ | 9,328,058 | $ | 9,230,577 | $ | 9,100,841 | |||||
| Less: PPP loans | 28,874 | 71,298 | 478,453 | ||||||||
| Tangible Assets, excluding PPP loans | $ | 9,299,184 | $ | 9,159,279 | $ | 8,622,388 | |||||
(12)Tangible Common Equity as a percentage of Tangible Assets | 8.08 | % | 8.61 | % | 8.48 | % | |||||
(12)Tangible Common Equity as a percentage of Tangible Assets, excluding PPP loans | 8.10 | % | 8.68 | % | 8.95 | % | |||||
| Shares Outstanding at End of Period | 94,299,039 | 94,233,152 | 96,248,476 | ||||||||
(11)Tangible Book Value Per Common Share | $ | 7.99 | $ | 8.43 | $ | 8.01 | |||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| Pre-tax pre-provision income: | |||||||||||
| Net interest income | $ | 68,172 | $ | 70,254 | $ | 69,442 | |||||
| Noninterest income | 23,976 | 26,071 | 27,355 | ||||||||
| Noninterest expense | 55,724 | 55,428 | 51,859 | ||||||||
| Pre-tax pre-provision income | $ | 36,424 | $ | 40,897 | $ | 44,938 | |||||
| Net securities gains | $ | (2) | $ | — | $ | (6) | |||||
| COVID-19 related | 17 | 92 | 74 | ||||||||
| Branch consolidation | 98 | (121) | 40 | ||||||||
| Core pre-tax pre-provision income | $ | 36,537 | $ | 40,868 | $ | 45,046 | |||||
| Net charge-offs | $ | 1,134 | $ | (1,064) | $ | 3,270 | |||||
| FIRST COMMONWEALTH FINANCIAL CORPORATION | ||
| CONSOLIDATED FINANCIAL DATA | ||
| Unaudited | ||
| (dollars in thousands) | ||
| DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES | |||||||||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2022 | 2021 | 2021 | |||||||||
| Core Net Interest Margin: | |||||||||||
| Net Interest Income (FTE) | $ | 68,425 | $ | 70,520 | $ | 69,751 | |||||
| Less: Income from PPP Loans | 1,757 | 4,059 | 7,943 | ||||||||
| Less: Income from Excess Cash | 108 | 100 | 74 | ||||||||
| Core Net Interest Income (FTE) | $ | 66,560 | $ | 66,361 | $ | 61,734 | |||||
| Average Interest-Earning Assets | $ | 8,702,759 | $ | 8,670,645 | $ | 8,311,558 | |||||
| Less: PPP Loans | 51,147 | 111,544 | 489,375 | ||||||||
| Less: Excess Cash | 277,570 | 241,426 | 329,142 | ||||||||
| Core Average Interest-Earning Assets | $ | 8,374,042 | $ | 8,317,675 | $ | 7,493,041 | |||||
| Core Net Interest Margin (Non-GAAP) | 3.22 | % | 3.17 | % | 3.34 | % | |||||