• First Commonwealth Announces Second Quarter 2023 Earnings; Declares Quarterly Dividend

    المصدر: Nasdaq GlobeNewswire / 25 يوليو 2023 16:00:01   America/Chicago

    INDIANA, Pa., July 25, 2023 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the second quarter of 2023.

    Financial Summary

    (dollars in thousands,For the Three Months Ended For the Six Months Ended
    except per share data)June 30, March 31, June 30, June 30, June 30,
      2023   2023   2022   2023   2022 
    Reported Results         
    Net income$42,781  $30,224  $30,754  $73,005  $58,480 
    Diluted earnings per share$0.42  $0.30  $0.33  $0.72  $0.62 
    Return on average assets 1.54%  1.17%  1.28%  1.36%  1.23%
    Return on average equity 13.90%  10.56%  11.60%  12.29%  10.86%
              
    Operating Results (non-GAAP)(1)         
    Core net income$42,734  $45,387  $30,643  $88,121  $58,458 
    Core diluted earnings per share$0.42  $0.45  $0.33  $0.87  $0.62 
    Core pre-tax pre-provision net revenue$56,344  $54,481  $42,352  $110,825  $78,889 
    Provision for credit losses$2,790  $(2,650) $4,099  $140  $6,063 
    Provision for credit losses - acquisition day 1 non-PCD$—  $10,653  $—  $10,653  $— 
    Net charge-offs$8,665  $1,173  $1,528  $9,838  $2,662 
    Reserve build/(release)(2)$(339) $30,979  $2,415  $30,640  $1,081 
    Core return on average assets (ROAA) 1.54%  1.75%  1.28%  1.64%  1.23%
    Core pre-tax pre-provision ROAA 2.03%  2.11%  1.77%  2.06%  1.66%
    Return on average tangible common equity 20.68%  15.75%  16.81%  18.30%  15.64%
    Core return on average tangible common equity 20.66%  23.42%  16.75%  21.99%  15.63%
    Core efficiency ratio 52.80%  52.41%  55.87%  52.61%  57.61%
    Net interest margin (FTE) 3.85%  4.01%  3.38%  3.93%  3.29%

    (1) Core operating results are a non-GAAP measure used by management to measure performance in operating the business that management believes enhances investors' ability to better understand the underlying business performance and trends related to core business activities. A full reconciliation of non-GAAP financial measures can be found at the end of the financial statements which accompany this release.
    (2) Reserve build/(release) represents the net change in the Company's allowance for credit losses (ACL) from the prior period.        

    Second Quarter 2023 Highlights

    • Net income of $42.8 million and diluted earnings per share of $0.42 represented an increase of $12.6 million, or $0.12 per share, from the prior quarter and an increase of $12.0 million, or $0.09 per share, from the second quarter of 2022
      • The results from the previous quarter included $19.2 million of merger-related expenses, including $8.5 million of noninterest expense and impacts to the provision for credit losses of $10.7 million, related to the Company’s acquisition of Centric Financial Corporation (Centric) on January 31, 2023
    • Core pre-tax pre-provision net revenue (PPNR)(1) totaled $56.3 million, an increase of $1.9 million from the previous quarter and an increase of $14.0 million from the second quarter of 2022
    • Total loans increased $148.1 million, or 6.9% annualized, from the previous quarter, driven by strong commercial loan growth, including $44.9 million growth in Equipment Finance loans
      • Average loans increased $387.6 million, or 18.7% annualized, from the previous quarter, due in part to the inclusion of acquired loan balances on the Company’s balance sheet for the entirety of the second quarter, as compared to only two months of the first quarter
    • Average deposits increased $433.5 million, or 20.0% annualized, compared to the prior quarter, due in part to the inclusion of acquired deposit balances on the Company’s balance sheet for the entirety of the second quarter, as compared to only two months of the first quarter
      • Excluding deposits acquired in the Centric acquisition, average deposits increased by $221.4 million, or 10.8% annualized
      • End of period deposits decreased $88.7 million compared to the prior quarter
      • 82.0% of deposits were insured or secured as of June 30, 2023
    • The loan-to-deposit ratio increased 250 basis points to 96.4% at the end of the second quarter of 2023
      • Loans and available for sale (AFS) securities as a percentage of total deposits was 105.0% as of June 30, 2023
    • Record net interest income (FTE) of $98.1 million increased $3.5 million from the previous quarter and increased $24.2 million from the second quarter of 2022
    • Noninterest income of $24.5 million increased $1.6 million from the previous quarter due in part to higher gain on sale of mortgage loans
    • Noninterest expense (excluding merger-related expense) of $66.0 million increased $3.2 million from the previous quarter due primarily to elevated hospitalization expenses
    • Total shareholder’s equity increased $7.4 million from the previous quarter due to a $29.9 million increase in retained earnings, partially offset by a $14.0 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
      • Tangible book value per share increased $0.11, or 5.3% annualized, from the previous quarter
      • AOCI as a percentage of tangible common equity increased 157 basis points to 16.4% in the second quarter of 2023
    • First Commonwealth Bank (the Bank) has been recognized for the fifth consecutive year by Forbes as one of the World’s Best Banks for 2023

    Profitability

    • The core efficiency ratio(1) of 52.8% increased 39 basis points from the previous quarter, but improved 306 basis points from the second quarter of 2022
    • The return on average assets (ROA) improved 37 basis points to 1.54% compared to previous quarter
      • The core return on average assets(1) decreased 22 basis points to 1.54% compared to the previous quarter but improved 26 basis points from the second quarter of 2023
    • Core pre-tax pre-provision ROA(1) for the quarter ended June 30, 2023 was 2.03% as compared to 2.11% in the prior quarter and 1.77% in the second quarter of 2022
    • The net interest margin of 3.85% decreased 16 basis points compared to the prior quarter and increased 47 basis points as compared to the second quarter of 2022
      • Centric purchasing accounting marks contributed 14 basis points to the margin in the second quarter, an increase of 8 basis points from the prior quarter
      • The retention of approximately $250 million of additional cash on the Bank’s balance sheet for liquidity purposes had a negative impact on the net interest margin of 10 basis points in the second quarter

    Asset quality

    • The provision for credit losses was $2.8 million, a decrease of $5.2 million compared to the previous quarter
      • Provision expense in the prior quarter included $10.7 million related to day-1 Non-Purchase Credit Deteriorated (PCD) loans resulting from the Centric acquisition
    • The allowance for credit losses as a percentage of end-of-period loans was 1.52%, a decrease of 3 basis points from the previous quarter
    • Total criticized loans increased $17.2 million from the previous quarter, from $189.9 million, or 2.2% of total loans and leases, to $207.1 million, or 2.3% of total loans and leases
      • Total nonperforming assets of $49.3 million increased $4.1 million from the previous quarter

    Net charge-offs on loans totaled $8.7 million, an increase of $7.5 million from the previous quarter due to the resolution of $7.6 million of acquired loans, of which $7.1 million was reserved for through purchase accounting marks

    • Net charge-offs as a percentage of average loans outstanding was 0.40% in the second quarter of 2023 as compared to 0.06% in the previous quarter, 0.35% of which was attributable to the aforementioned charge off of acquired loans

    Strong capital and liquidity positions

    • Total available liquidity of $4.3 billion at June 30, 2023
      • Cash and AFS securities as a percentage of total assets increased 26 basis points to 10.9%
      • Total available liquidity represented 258% of uninsured/unsecured deposits, and combined with cash represented 285% of uninsured/unsecured deposits
    • On April 24, 2023, the Board of Directors authorized a 4.2% increase in the quarterly cash dividend to shareholders
    • Bank-level Tier 1 Capital ratio of 10.7%, which represents $245.7 million in excess capital above the regulatory “well capitalized” requirement of 8.0%
    • A total of 766,393 shares at a weighted average price of $11.92 were repurchased during the second quarter of 2023 under the Company’s previously authorized share repurchase program. The remaining repurchase capacity under the current program was $21.1 million as of June 30, 2023

    “I’m pleased with our progress this quarter, as we continue to grow the company strategically while posting a core efficiency ratio of 52.8% and a return on average assets of 1.54%,” stated T. Michael Price, President and Chief Executive Officer. “Our asset quality remains solid despite an uptick in net charge-offs stemming from loans that were marked with the acquisition of Centric Bank, which was completed in the first quarter of 2023.” Price continued, "While we expect the higher interest rate environment to continue to pressure funding costs, we believe our granular core deposit base positions us well to manage through any market uncertainty and continue to carry out our mission to improve the financial lives of our neighbors and their businesses.”

    Earnings

    Net income for the second quarter of 2023 was $42.8 million, or $0.42 per share, compared to $30.2 million, or $0.30 per share in the first quarter of 2023, and $30.8 million, or $0.33 per share for the second quarter of 2022.

    Net Interest Income and Net Interest Margin

    Net interest income (FTE) of $98.1 million increased $3.5 million from the previous quarter and increased $24.2 million from the prior year quarter. The increase from the previous quarter was primarily due to a $643.2 million increase in average interest-earning assets, which includes $604.3 million in average interest-earning assets from the Centric acquisition.

    The net interest margin for the second quarter of 2023 was 3.85%, a decrease of 16 basis points from the previous quarter and an increase of 47 basis points from the second quarter of 2022. The decrease from the previous quarter was due primarily to a 42 basis point increase in the cost of deposits partially offset by a 31 basis point increase in the yield on loans. The total cost of funds was 1.38% in the second quarter of 2023, which represents an increase of 48 basis points from the previous quarter.

    Total average deposits grew $433.5 million in the second quarter of 2023 as compared to the previous quarter, due in part to the inclusion of acquired deposit balances on the Company’s balance sheet for the entirety of the second quarter, as compared to only two months of the first quarter. Total average deposits (excluding acquired deposits) grew $221.4 million in the second quarter of 2023 as compared to the previous quarter. Average interest-bearing demand and savings deposits (excluding acquired deposits) grew $156.2 million and average time deposits (excluding acquired deposits) grew $200.5 million, which was partially offset by a $137.6 million decrease in average noninterest-bearing deposits (excluding acquired deposits).   Approximately 93% of the acquired Centric deposits at the time of acquisition have been retained through June 30, 2023, within expectations.

    Asset Quality

    Provision expense in the second quarter of 2023 totaled $2.8 million as compared to $8.0 million in the previous quarter, which included $10.7 million of day-1 Non-PCD provision expense resulting from the Centric acquisition. The increase in the provision expense for the non-acquired portfolio was primarily driven by strong loan growth and the economic forecast, which resulted in a $5.4 million increase in the quantitative portion of the allowance for credit losses (ACL). The quantitative forecast was impacted by changes in various inputs such as the unemployment rate and the Gross Domestic Product forecast.

    The allowance for credit losses in the second quarter of 2023 totaled $133.5 million as compared to $133.9 million in the previous quarter. The decrease from the previous quarter was the result of $8.7 million in net charge-offs ($7.6 million of which was related to acquired loans that had been the subject of purchase accounting marks in the first quarter as part of the Centric acquisition); a $5.1 million increase in reserves due to increases in provisional purchase accounting marks of loans acquired in the Centric acquisition; and $3.2 million in provision expense; all of which was partially offset by a negative $0.4 million provision for unfunded commitments.

    The allowance for credit losses as a percentage of end-of-period loans in the second quarter of 2023 was 1.52% as compared to 1.55% in the previous quarter.

    At June 30, 2023, nonperforming loans totaled $48.0 million, an increase of $3.8 million from the previous quarter. The increase in nonperforming loans was primarily due to the migration of $2.9 million in loans acquired in the Centric acquisition into nonaccrual status.

    Nonperforming loans represented 0.54% of total loans for the period ended June 30, 2023 as compared to 0.51% and 0.50% for the periods ended March 31, 2023 and June 30, 2022, respectively.

    During the second quarter of 2023, net charge-offs were $8.7 million as compared to $1.2 million in the previous quarter and $1.5 million in the second quarter of 2022. The increase from the prior period was primarily due to the charge off of $7.6 million in commercial loans that were acquired in the Centric acquisition, for which the allowance was created in the prior quarter through purchase accounting marks at the time of the acquisition.

    Net charge-offs as a percentage of average loans were 0.40%, 0.06% and 0.09% for the periods ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

    Noninterest Income and Noninterest Expense

    Noninterest income totaled $24.5 million for the second quarter of 2023, as compared to $23.0 million for the first quarter of 2023 and $24.5 million for the second quarter of 2022.

    The $1.5 million increase from the previous quarter was primarily due to a $0.6 million increase in gain on sale of mortgage loans, a $0.5 million increase in card-related interchange income and a $0.4 million increase in service charges on deposit accounts.

    Noninterest expense (excluding ($60) thousand of merger-related expense) totaled $66.0 million for the second quarter of 2023, as compared to $62.8 million for the first quarter of 2023 and $55.7 million for the second quarter of 2022. Expense increased in comparison with the prior quarter primarily due to a $2.5 million increase in salaries and benefits (primarily driven by a $1.7 million increase in hospitalization expense) and a $0.7 million increase in incentives due to an accrual adjustment in the first quarter for unpaid incentives from the previous year. In addition, other operating expenses increased $1.2 million partially due to $0.5 million in expense for additional deposit customer disclosures indirectly related to crossing over $10 billion in total assets.

    The core efficiency ratio was 52.8% during the second quarter of 2023 as compared to 52.4% in the previous quarter and 55.9% in the second quarter of 2022.

    Full time equivalent staff was 1,483 at June 30, 2023, 1,536 at March 31, 2023, and 1,409 at June 30, 2022.

    Dividends and Capital

    First Commonwealth declared a common stock quarterly dividend of $0.125 per share, which represents a 4.2% increase from the second quarter of 2022. The cash dividend is payable on August 18, 2023 to shareholders of record as of August 4, 2023. This dividend represents a 3.5% projected annual yield utilizing the July 24, 2023 closing market price of $14.15.

    First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at June 30, 2023 were 13.7%, 11.5%, 9.8% and 10.8%, respectively. First Commonwealth’s current capital levels exceed the fully phased-in Basel III capital requirements issued by U.S. bank regulators.

    Conference Call

    First Commonwealth will host a quarterly conference call to discuss its financial results for the second quarter of 2023 on Wednesday, July 26, 2023 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 webpage for 30 days.

    About First Commonwealth Financial Corporation

    First Commonwealth Financial Corporation (NYSE: FCF), headquartered in Indiana, Pennsylvania, is a financial services company with 126 community banking offices in 30 counties throughout western and central Pennsylvania and throughout Ohio, as well as commercial lending operations in Pittsburgh and Harrisburg, 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) volatility and disruption in national and international financial markets; (2) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (3) inflation, interest rate, commodity price, securities market and monetary fluctuations; (4) 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; (5) the soundness of other financial institutions; (6) political instability; (7) impairment of First Commonwealth’s goodwill or other intangible assets; (8) acts of God or of war or terrorism; (9) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (10) changes in consumer spending, borrowings and savings habits; (11) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (12) technological changes; (13) acquisitions and integration of acquired businesses; (14) First Commonwealth’s ability to attract and retain qualified employees; (15) changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (16) the ability to increase market share and control expenses; (17) 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; (18) the reliability of First Commonwealth’s vendors, internal control systems or information systems; (19) 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 (20) 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.

    In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements in this release. We undertake no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

    Media Relations:
    Jonathan E. Longwill
    Vice President / Communications and Media Relations
    Phone: 724-463-6806
    E-mail: JLongwill@fcbanking.com 

    Investor Relations:
    Ryan M. Thomas
    Vice President / Finance and Investor Relations
    Phone: 724-463-1690
    E-mail: RThomas1@fcbanking.com 

    FIRST COMMONWEALTH FINANCIAL CORPORATION      
    CONSOLIDATED FINANCIAL DATA         
    Unaudited         
    (dollars in thousands, except per share data)         
     For the Three Months Ended For the Six Months Ended
     June 30, March 31, June 30, June 30, June 30,
      2023   2023   2022   2023   2022 
    SUMMARY RESULTS OF OPERATIONS         
    Net interest income$97,824  $94,358  $73,662  $192,182  $141,834 
    Provision for credit losses 2,790   (2,650)  4,099   140   6,063 
    Provision for credit losses — acquisition day 1 non-PCD —   10,653   —   10,653   — 
    Noninterest income 24,523   22,963   24,509   47,486   48,485 
    Noninterest expense 65,943   71,381   55,679   137,324   111,403 
    Net income 42,781   30,224   30,754   73,005   58,480 
    Core net income(5) 42,734   45,387   30,643   88,121   58,458 
    Earnings per common share (diluted)$0.42  $0.30  $0.33  $0.72  $0.62 
    Core earnings per common share (diluted)(6)$0.42  $0.45  $0.33  $0.87  $0.62 
    KEY FINANCIAL RATIOS         
    Return on average assets 1.54%  1.17%  1.28%  1.36%  1.23%
    Core return on average assets(7) 1.54%  1.75%  1.28%  1.64%  1.23%
    Return on average assets, pre-provision, pre-tax 2.03%  1.78%  1.78%  1.91%  1.66%
    Core return on average assets, pre-provision, pre-tax 2.03%  2.11%  1.77%  2.06%  1.66%
    Return on average shareholders' equity 13.90%  10.56%  11.60%  12.29%  10.86%
    Return on average tangible common equity(8) 20.68%  15.75%  16.81%  18.30%  15.64%
    Core return on average tangible common equity(9) 20.66%  23.42%  16.75%  21.99%  15.63%
    Core efficiency ratio(2)(10) 52.80%  52.41%  55.87%  52.61%  57.61%
    Net interest margin (FTE)(1) 3.85%  4.01%  3.38%  3.93%  3.29%
              
    Book value per common share$12.03  $11.87  $11.20     
    Tangible book value per common share(11) 8.24   8.13   7.85     
    Market value per common share 12.65   12.43   13.42     
    Cash dividends declared per common share 0.125   0.120   0.120   0.245   0.235 
    ASSET QUALITY RATIOS         
    Nonperforming loans and leases as a percent of end-of-period loans and leases(3) 0.54%  0.51%  0.50%    
    Nonperforming assets as a percent of total assets(3) 0.44%  0.41%  0.38%    
    Net charge-offs as a percent of average loans and leases (annualized)(4) 0.40%  0.06%  0.09%    
    Allowance for credit losses as a percent of nonperforming loans and leases(4) 278.17%  302.67%  262.25%    
    Allowance for credit losses as a percent of end-of-period loans and leases(4) 1.52%  1.55%  1.31%    
    CAPITAL RATIOS         
    Shareholders' equity as a percent of total assets 10.9%  11.0%  11.0%    
    Tangible common equity as a percent of tangible assets(12) 7.7%  7.8%  8.0%    
    Leverage Ratio 9.8%  10.2%  9.8%    
    Risk Based Capital - Tier I 11.5%  11.5%  12.2%    
    Risk Based Capital - Total 13.7%  13.8%  14.6%    
    Common Equity - Tier I 10.8%  10.8%  11.2%    


    FIRST COMMONWEALTH FINANCIAL CORPORATION    
    CONSOLIDATED FINANCIAL DATA      
    Unaudited      
    (dollars in thousands, except per share data)      
     For the Three Months Ended For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2023  2023  2022  2023  2022
    INCOME STATEMENT      
    Interest income$131,267 $114,589 $76,728 $245,856 $147,972
    Interest expense 33,443  20,231  3,066  53,674  6,138
    Net Interest Income 97,824  94,358  73,662  192,182  141,834
    Provision for credit losses 2,790  (2,650) 4,099  140  6,063
    Provision for credit losses - acquisition day 1 non-PCD —  10,653  —  10,653  —
    Net Interest Income after Provision for Credit Losses 95,034  86,355  69,563  181,389  135,771
    Net securities gains —  —  —  —  2
    Trust income 2,532  2,486  2,573  5,018  5,286
    Service charges on deposit accounts 5,324  4,918  4,886  10,242  9,501
    Insurance and retail brokerage commissions 2,314  2,552  2,486  4,866  4,758
    Income from bank owned life insurance 1,195  1,227  1,383  2,422  2,891
    Gain on sale of mortgage loans 1,253  652  1,561  1,905  2,843
    Gain on sale of other loans and assets 1,891  2,086  1,099  3,977  3,418
    Card-related interchange income 7,372  6,829  7,137  14,201  13,627
    Derivative mark-to-market 81  (89) 42  (8) 389
    Swap fee income 332  245  1,154  577  1,607
    Other income 2,229  2,057  2,188  4,286  4,163
    Total Noninterest Income 24,523  22,963  24,509  47,486  48,485
    Salaries and employee benefits 36,735  34,264  30,949  70,999  61,881
    Net occupancy 4,784  5,018  4,170  9,802  8,957
    Furniture and equipment 4,284  4,238  3,857  8,522  7,587
    Data processing 3,763  3,404  3,470  7,167  6,658
    Pennsylvania shares tax 1,173  1,252  913  2,425  1,918
    Advertising and promotion 1,327  1,663  1,434  2,990  2,660
    Intangible amortization 1,282  1,147  862  2,429  1,724
    Other professional fees and services 1,182  1,591  1,197  2,773  2,418
    FDIC insurance 1,277  1,417  702  2,694  1,400
    Litigation and operational losses 894  743  629  1,637  1,229
    Loss on sale or write-down of assets 6  41  86  47  161
    Merger and acquisition (60) 8,541  —  8,481  —
    Other operating expenses 9,296  8,062  7,410  17,358  14,810
    Total Noninterest Expense 65,943  71,381  55,679  137,324  111,403
    Income before Income Taxes 53,614  37,937  38,393  91,551  72,853
    Income tax provision 10,833  7,713  7,639  18,546  14,373
    Net Income$42,781 $30,224 $30,754 $73,005 $58,480
           
    Shares Outstanding at End of Period 102,444,915  103,193,127  93,705,120  102,444,915  93,705,120
    Average Shares Outstanding Assuming Dilution 102,760,266  99,779,816  94,245,770  101,281,899  94,273,808
           


    FIRST COMMONWEALTH FINANCIAL CORPORATION   
    CONSOLIDATED FINANCIAL DATA     
    Unaudited     
    (dollars in thousands)     
          
     June 30, March 31, June 30,
      2023   2023   2022 
    BALANCE SHEET (Period End)     
    Assets     
    Cash and due from banks$123,095  $113,692  $120,267 
    Interest-bearing bank deposits 325,774   282,110   179,533 
    Securities available for sale, at fair value 784,503   786,813   877,287 
    Securities held to maturity, at amortized cost 439,922   451,278   492,229 
    Loans held for sale 16,300   11,050   12,876 
          
    Loans and leases 8,799,836   8,656,945   7,119,754 
    Allowance for credit losses (133,546)  (133,885)  (93,603)
    Net loans and leases 8,666,290   8,523,060   7,026,151 
          
    Goodwill and other intangibles 388,451   385,998   313,449 
    Other assets 574,269   559,751   504,635 
    Total Assets$11,318,604  $11,113,752  $9,526,427 
          
    Liabilities and Shareholders' Equity     
    Noninterest-bearing demand deposits$2,624,344  $2,698,225  $2,726,242 
          
    Interest-bearing demand deposits 611,156   547,015   273,360 
    Savings deposits 4,935,124   5,127,037   4,708,868 
    Time deposits 975,654   862,671   345,075 
    Total interest-bearing deposits 6,521,934   6,536,723   5,327,303 
          
    Total deposits 9,146,278   9,234,948   8,053,545 
          
    Short-term borrowings 542,839   278,978   88,923 
    Long-term borrowings 187,276   187,531   181,752 
    Total borrowings 730,115   466,509   270,675 
          
    Other liabilities 209,792   187,281   153,049 
    Shareholders' equity 1,232,419   1,225,014   1,049,158 
    Total Liabilities and Shareholders' Equity$11,318,604  $11,113,752  $9,526,427 


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


     For the Three Months Ended For the Six Months Ended
     June 30,Yield/March 31,Yield/June 30,Yield/ June 30,Yield/June 30,Yield/
      2023Rate 2023Rate 2022Rate  2023Rate 2022Rate
    NET INTEREST MARGIN         
                
    Assets           
    Loans and leases (FTE)(1)(3)$8,689,0215.58%$8,301,4495.27%$7,036,1763.97% $8,496,3055.43%$6,965,2963.89%
    Securities and interest-bearing bank deposits (FTE)(1) 1,535,1362.77% 1,279,4772.20% 1,734,1261.68%  1,408,0142.51% 1,771,4211.61%
    Total Interest-Earning Assets (FTE)(1) 10,224,1575.16% 9,580,9264.86% 8,770,3023.52%  9,904,3195.02% 8,736,7173.43%
    Noninterest-earning assets 932,756  907,982  830,167   920,437  826,016 
    Total Assets$11,156,913 $10,488,908 $9,600,469  $10,824,756 $9,562,733 
                
    Liabilities and Shareholders' Equity           
    Interest-bearing demand and savings deposits$5,595,3361.35%$5,312,0860.88%$5,067,6920.05% $5,454,4941.13%$5,024,2830.04%
    Time deposits 930,4473.03% 682,1442.34% 354,4030.26%  806,9812.74% 364,3880.27%
    Short-term borrowings 434,7834.79% 266,9323.65% 95,5610.08%  351,3214.36% 105,4970.07%
    Long-term borrowings 187,3795.03% 185,3675.06% 181,8594.96%  186,3785.04% 181,9884.97%
    Total Interest-Bearing Liabilities 7,147,9451.88% 6,446,5291.27% 5,699,5150.22%  6,799,1741.59% 5,676,1560.22%
    Noninterest-bearing deposits 2,580,842  2,678,849  2,711,458   2,629,575  2,678,686 
    Other liabilities 193,292  202,476  125,646   197,860  122,379 
    Shareholders' equity 1,234,834  1,161,054  1,063,850   1,198,147  1,085,512 
    Total Noninterest-Bearing Funding Sources 4,008,968  4,042,379  3,900,954   4,025,582  3,886,577 
    Total Liabilities and Shareholders' Equity$11,156,913 $10,488,908 $9,600,469  $10,824,756 $9,562,733 
                
    Net Interest Margin (FTE) (annualized)(1) 3.85% 4.01% 3.38%  3.93% 3.29%


    FIRST COMMONWEALTH FINANCIAL CORPORATION 
    CONSOLIDATED FINANCIAL DATA   
    Unaudited   
    (dollars in thousands)   
     June 30,March 31,June 30,
      2023  2023  2022 
    Loan and Lease Portfolio Detail   
    Commercial Loan and Lease Portfolio:   
    Commercial, financial, agricultural and other$1,347,842 $1,361,858 $1,149,521 
    Commercial real estate 3,004,962  2,991,930  2,319,094 
    Equipment Finance loans and leases 154,152  109,221  21,062 
    Real estate construction 474,720  422,831  292,400 
    Total Commercial 4,981,676  4,885,840  3,782,077 
        
    Consumer Loan Portfolio:   
    Closed-end mortgages 1,858,660  1,807,941  1,567,561 
    Home equity lines of credit 505,449  515,926  532,640 
    Real estate construction 100,079  119,071  100,592 
    Total Real Estate - Consumer 2,464,188  2,442,938  2,200,793 
        
    Auto & RV loans 1,272,557  1,244,874  1,047,104 
    Direct installment 28,881  30,381  35,245 
    Personal lines of credit 49,168  49,399  50,249 
    Student loans 3,366  3,513  4,286 
    Total Other Consumer 1,353,972  1,328,167  1,136,884 
    Total Consumer Portfolio 3,818,160  3,771,105  3,337,677 
    Total Portfolio Loans and Leases 8,799,836  8,656,945  7,119,754 
    Loans held for sale 16,300  11,050  12,876 
    Total Loans and Leases$8,816,136 $8,667,995 $7,132,630 
        
        
     June 30,March 31,June 30,
      2023  2023  2022 
    ASSET QUALITY DETAIL   
    Nonperforming Loans and Leases:   
    Loans and leases on nonaccrual basis *$29,322 $29,413 $29,288 
    Loans on nonaccrual basis - Centric acquisition 18,687  14,821  — 
    Troubled debt restructured loans on accrual basis * —  —  6,404 
    Total Nonperforming Loans and Leases$48,009 $44,234 $35,692 
    Other real estate owned ("OREO") 324  424  93 
    Repossessions ("Repos") 1,004  553  621 
    Total Nonperforming Assets$49,337 $45,211 $36,406 
    Loans past due in excess of 90 days and still accruing 2,474  1,440  3,155 
    Classified loans and leases 76,419  76,962  46,798 
    Criticized loans and leases 207,071  189,873  146,780 
        
    Nonperforming assets as a percentage of total loans and leases, plus OREO and Repos(4) 0.56% 0.52% 0.51%
    Allowance for credit losses$133,546 $133,885 $93,603 
    *TDR's were eliminated as of January 1, 2023 as part of implementing ASU 2022-02, Financial Instruments Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.


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


     For the Three Months Ended For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2023  2023  2022   2023  2022 
    Net Charge-offs (Recoveries):      
    Commercial, financial, agricultural and other$6,582 $504 $430  $7,086 $825 
    Real estate construction —  —  —   —  — 
    Commercial real estate 1,423  (42) 547   1,381  533 
    Residential real estate (32) 41  (26)  9  84 
    Loans to individuals 692  670  577   1,362  1,220 
    Net Charge-offs$8,665 $1,173 $1,528  $9,838 $2,662 
           
    Net charge-offs as a percentage of average loans and leases outstanding (annualized)(4) 0.40% 0.06% 0.09%  0.23% 0.08%
    Provision for credit losses as a percentage of net charge-offs 32.20%(225.92)% 268.26%  1.42% 227.76%
    Provision for credit losses$2,790 $(2,650)$4,099  $140 $6,063 


    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 and any other unusual items deemed by management to not be related to normal operations, such as merger, acquisition and severance costs.
    (3)Includes held for sale loans.  
    (4)Excludes held for sale loans.  
     For the Three Months Ended For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2023 2023 2022  2023 2022
           
    Interest income$131,267$114,589$76,728 $245,856$147,972
    Adjustment to fully taxable equivalent basis(1) 305 305 244  610 498
    Interest income adjusted to fully taxable equivalent basis (non-GAAP) 131,572 114,894 76,972  246,466 148,470
    Interest expense 33,443 20,231 3,066  53,674 6,138
    Net interest income, (FTE)(1)$98,129$94,663$73,906 $192,792$142,332


    FIRST COMMONWEALTH FINANCIAL CORPORATION
    CONSOLIDATED FINANCIAL DATA
    Unaudited
    (dollars in thousands, except per share data)


    DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES   
           
     For the Three Months Ended For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2023  2023  2022   2023  2022 
           
    Net Income$42,781 $30,224 $30,754  $73,005 $58,480 
    Intangible amortization 1,282  1,147  862   2,429  1,724 
    Tax benefit of amortization of intangibles (269) (241) (181)  (510) (362)
    Net Income, adjusted for tax affected amortization of intangibles$43,794 $31,130 $31,435  $74,924 $59,842 
           
    Average Tangible Equity:      
    Total shareholders' equity$1,234,834 $1,161,054 $1,063,850  $1,198,147 $1,085,512 
    Less: intangible assets 385,567  359,431  313,617   372,571  313,924 
    Tangible Equity 849,267  801,623  750,233   825,576  771,588 
    Less: preferred stock —  —  —   —  — 
    Tangible Common Equity$849,267 $801,623 $750,233  $825,576 $771,588 
           
    (8)Return on Average Tangible Common Equity 20.68% 15.75% 16.81%  18.30% 15.64%


     For the Three Months Ended For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2023  2023  2022   2023  2022 
           
    Core Net Income:      
    Total Net Income$42,781 $30,224 $30,754  $73,005 $58,480 
    Net securities gains —  —  —   —  (2)
    Merger and acquisition related expenses (60) 8,541  —   8,481  — 
    Tax benefit of merger and acquisition related expenses 13  (1,794) —   (1,781) — 
    COVID-19 related —  —  62   —  79 
    Tax benefit of COVID-19 related —  —  (13)  —  (17)
    Provision for credit losses - acquisition day 1 non-PCD —  10,653  —   10,653  — 
    Tax benefit of provision for credit losses - acquisition day 1 non-PCD —  (2,237) —   (2,237) — 
    Branch consolidation related —  —  (202)  —  (104)
    Tax benefit of bank consolidation related expenses —  —  42   —  22 
    (5)Core net income$42,734 $45,387 $30,643  $88,121 $58,458 
    Average Shares Outstanding Assuming Dilution 102,760,266  99,779,816  94,245,770   101,281,899  94,273,808 
    (6)Core Earnings per common share (diluted)$0.42 $0.45 $0.33  $0.87 $0.62 
           
    Intangible amortization 1,282  1,147  862   2,429  1,724 
    Tax benefit of amortization of intangibles (269) (241) (181)  (510) (362)
    Core Net Income, adjusted for tax affected amortization of intangibles$43,747 $46,293 $31,324  $90,040 $59,820 
           
    (9)Core Return on Average Tangible Common Equity 20.66% 23.42% 16.75%  21.99% 15.63%


    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 For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2023  2023  2022   2023  2022 
    Core Return on Average Assets:      
    Total Net Income$42,781 $30,224 $30,754  $73,005 $58,480 
    Total Average Assets 11,156,913  10,488,908  9,600,469   10,824,756  9,562,733 
    Return on Average Assets 1.54% 1.17% 1.28%  1.36% 1.23%
           
    Core Net Income(5)$42,734 $45,387 $30,643  $88,121 $58,458 
    Total Average Assets 11,156,913  10,488,908  9,600,469   10,824,756  9,562,733 
    (7)Core Return on Average Assets 1.54% 1.75% 1.28%  1.64% 1.23%


     For the Three Months Ended For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2023  2023  2022   2023  2022 
    Core Efficiency Ratio:      
    Total Noninterest Expense$65,943 $71,381 $55,679  $137,324 $111,403 
    Adjustments to Noninterest Expense:      
    Intangible amortization 1,282  1,147  862   2,429  1,724 
    Merger and acquisition related (60) 8,541  —   8,481  — 
    COVID-19 related —  —  62   —  79 
    Branch consolidation related —  —  (202)  —  (104)
    Noninterest Expense - Core$64,721 $61,693 $54,957  $126,414 $109,704 
           
    Net interest income, (FTE)$98,129 $94,663 $73,906  $192,792 $142,332 
    Total noninterest income 24,523  22,963  24,509   47,486  48,485 
    Net securities gains —  —  —   —  (2)
    Total Revenue 122,652  117,626  98,415   240,278  190,815 
           
    Adjustments to Revenue:      
    Derivative mark-to-market 81  (89) 42   (8) 389 
    Total Revenue - Core$122,571 $117,715 $98,373  $240,286 $190,426 
           
    (10)Core Efficiency Ratio 52.80% 52.41% 55.87%  52.61% 57.61%


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


    DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES  
        
     June 30,March 31,June 30,
      2023  2023  2022 
    Tangible Equity:   
    Total shareholders' equity$1,232,419 $1,225,014 $1,049,158 
    Less: intangible assets 388,451  385,998  313,449 
    Tangible Equity 843,968  839,016  735,709 
    Less: preferred stock —  —  — 
    Tangible Common Equity$843,968 $839,016 $735,709 
        
    Tangible Assets:   
    Total assets$11,318,604 $11,113,752 $9,526,427 
    Less: intangible assets 388,451  385,998  313,449 
    Tangible Assets$10,930,153 $10,727,754 $9,212,978 
        
    (12)Tangible Common Equity as a percentage of Tangible Assets 7.72% 7.82% 7.99%
        
    Shares Outstanding at End of Period 102,444,915  103,193,127  93,705,120 
    (11)Tangible Book Value Per Common Share$8.24 $8.13 $7.85 


     For the Three Months Ended For the Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2023  2023 2022   2023 2022 
    Pre-tax pre-provision income:      
    Net interest income$97,824 $94,358$73,662  $192,182$141,834 
    Noninterest income 24,523  22,963 24,509   47,486 48,485 
    Noninterest expense 65,943  71,381 55,679   137,324 111,403 
    Pre-tax pre-provision income$56,404 $45,940$42,492  $102,344$78,916 
           
    Net securities gains$— $—$—  $—$(2)
    Merger and acquisition related expenses (60) 8,541 —   8,481 — 
    COVID-19 related —  — 62   — 79 
    Branch consolidation —  — (202)  — (104)
    Core pre-tax pre-provision income$56,344 $54,481$42,352  $110,825$78,889 
           
    Net charge-offs$8,665 $1,173$1,528  $9,838$2,662 

     


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