FIRST COMMONWEALTH FINANCIAL CORP /PA/ - FORM 8-K - EX-99.1 - EX-99.1 PRESS RELEASE - July 27, 2021

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8-K - FORM 8-K - FIRST COMMONWEALTH FINANCIAL CORP /PA/fcf-20210727.htm
                                                
Exhibit 99.1

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FOR IMMEDIATE RELEASE

First Commonwealth Announces Second Quarter 2021 Earnings; Declares Quarterly Dividend

Indiana, PA, July 27, 2021 - First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the second quarter of 2021.
Financial Summary
(dollars in thousands,For the Three Months EndedFor the Six Months Ended
except per share data)June 30,March 31,June 30,June 30,June 30,
20212021202020212020
Reported Results
Net income $29,619$39,770$23,851$69,389$28,578
Diluted earnings per share$0.31$0.41$0.24$0.72$0.29
Return on average assets1.26 %1.77 %1.06 %1.51 %0.66 %
Return on average equity10.82 %14.98 %8.95 %12.87 %5.36 %
Operating Results (non-GAAP)(1)
Core net income$29,777$39,855$24,176$69,632$28,906
Core diluted earnings per share$0.31$0.41$0.25$0.72$0.29
Core pre-tax pre-provision net revenue$42,943$45,046$36,153$87,989$72,883
Provision expense$5,413($4,390)$6,859$1,023$37,826
Net charge-offs$3,927$3,270$4,493$7,197$8,022
Reserve build/(release)(2)
$275($4,546)$2,366($4,271)$29,804
Core return on average assets (ROAA)1.26 %1.77 %1.08 %1.51 %0.67 %
Core pre-tax pre-provision ROAA1.82 %2.00 %1.61 %1.91 %1.69 %
Return on average tangible common equity15.54 %21.58 %13.13 %18.50 %8.03 %
Core return on average tangible common equity15.62 %21.63 %13.30 %18.56 %8.12 %
Core efficiency ratio53.21 %53.18 %56.73 %53.20 %57.46 %
Net interest margin (FTE)3.17 %3.40 %3.29 %3.29 %3.46 %
(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 2021 Highlights
•Net income of $29.6 million and diluted earnings per share totaled $0.31, an increase of $5.8 million, or $0.07 per share from the second quarter of 2020
•Core pre-tax pre-provision net revenue (PPNR)(1) totaled $42.9 million, a decrease of $2.1 million from the previous quarter and an increase of $6.8 million from the second quarter of 2020

                                                
•The Company achieved positive operating leverage during the first six months of 2021
◦Core revenue(1) grew $12.3 million, or 6.9%, from the prior year
◦Core noninterest expense(1) decreased $1.0 million, or 1.0%, from the prior year
•Portfolio loans (excluding Paycheck Protection Program (PPP) loans) increased $189.7 million, or 12.1% annualized from the previous quarter, driven by strong commercial production and continued consumer loan growth
◦Year-to-date annualized portfolio loan growth (excluding PPP loans) was 5.3%
◦Average loans (excluding PPP loans) increased $49.7 million, or 3.2% annualized, from the previous quarter
•Net interest income (FTE) of $68.5 million decreased $1.3 million from the previous quarter due to lower interest and fees recognized on PPP loans, but increased $1.4 million from the second quarter of 2020
•Noninterest income of $26.1 million (excluding net security gains) decreased $1.2 million from the previous quarter but increased $4.3 million from the second quarter of 2020
•Noninterest expense of $51.5 million decreased $0.3 million from the previous quarter and decreased $1.2 million from the second quarter of 2020
•Total PPP loans decreased $186.1 million from the previous quarter resulting in the total PPP loan balance at June 30, 2021 of $292.4 million
•Average deposits increased $375.9 million, or 19.9% annualized compared to the prior quarter, despite $69.6 million in intentional time deposit runoff
◦End of period deposits grew $15.8 million from the previous quarter
◦Average noninterest-bearing deposits grew $190.8 million, or 31.6% annualized, compared to the prior quarter
•Tangible book value per share grew 10.4% annualized compared to the prior quarter and 6.5% year-over-year
•First Commonwealth Bank (the Bank) has been recognized for the third consecutive year by Forbes as one of the World’s Best Banks for 2021
•On June 14, 2021, the Bank announced it will enter the equipment leasing and finance business with the addition of Rob Boyer to its executive team as President of First Commonwealth Equipment Finance Group
Profitability
•The core efficiency ratio(1) of 53.21% improved 352 basis points from the second quarter of 2020 and was relatively unchanged from the previous quarter
•The return on average assets (ROA) improved 20 basis points to 1.26% compared to the second quarter of 2020
•Core pre-tax pre-provision ROA(1) for the quarter ended June 30, 2021 was 1.82% as compared to 2.00% in the prior quarter and 1.61% in the second quarter of 2020
•The net interest margin of 3.17% decreased 23 basis points compared to the prior quarter and decreased 12 basis points as compared to the prior year quarter

                                                
Strong capital and liquidity positions
•On April 26, 2021, the Board of Directors authorized a 4.5% increase in the quarterly cash dividend to shareholders
•Bank-level Tier 1 Capital ratio of 11.9%, which represents $273.0 million in excess capital above the regulatory “well capitalized” requirement of 8.0%
•Total available liquidity of $4.7 billion
•A total of 72,724 shares at a weighted average price of $13.95 were purchased during the second quarter of 2021 under the company’s previously authorized share repurchase program. The remaining repurchase capacity under the current program was $23.6 million as of June 30, 2021
Asset quality
•The provision for credit losses was $5.4 million, an increase of $9.8 million compared to the previous quarter when the provision for credit losses was ($4.4) million
•The allowance for credit losses as a percentage of end-of-period loans (excluding PPP loans) was 1.50% compared to 1.55% in the previous quarter
•Total criticized loans decreased $21.7 million from the previous quarter
◦Total nonperforming assets increased $1.4 million from the previous quarter
•Net charge-offs on loans totaled $3.9 million, an increase of $0.7 million from the previous quarter
◦Net charge-offs as a percentage of average loans outstanding (excluding PPP loans, annualized) was 0.25% in the second quarter of 2021 as compared to 0.21% in the previous quarter
“I am pleased with our results in the second quarter. As expected, our loan growth accelerated in multiple categories during the second quarter, bringing our year-to-date annualized loan growth to 5.3% excluding PPP, well within our mid-single-digit long-term target,” stated T. Michael Price, President and Chief Executive Officer. “We remain committed to achieving positive operating leverage despite revenue headwinds from net interest margin compression. Our track record of controlling expenses continued in the second quarter even while we continued to make investments to drive future growth. In June, we announced our entry into the equipment finance business through the hiring of Rob Boyer. Through Rob’s leadership, this new vertical will further diversify our earnings stream, and will benefit both our commercial customers and our shareholders in the long-run.”
Earnings
Net income for the second quarter of 2021 was $29.6 million, or $0.31 per share, compared to $39.8 million, or $0.41 per share in the first quarter of 2021 and $23.9 million, or $0.24 per share for the second quarter of 2020.
Net Interest Income and Net Interest Margin
Net interest income (FTE) of $68.5 million decreased $1.3 million from the previous quarter and increased $1.4 million from the prior year quarter. The decrease from the previous quarter was primarily due to a $2.4 million decrease in fees and interest on PPP loans, partially offset by the effects of a $356.1 million increase in average investment securities and a $69.6 million decrease in higher-cost time deposits. Interest and fee income recognized on PPP loans totaled $5.5 million in the second quarter of 2021 as compared to $7.9 million in the prior quarter.
The net interest margin for the second quarter of 2021 was 3.17%, a decrease of 23 basis points from the previous quarter and a decrease of 12 basis points from the second quarter of 2020. The decrease from the previous quarter was due primarily to an 11 basis point decrease in the yield on loans (excluding PPP loans) and a 147 basis point

                                                
decrease in the yield on PPP loans (inclusive of loan forgiveness), partially offset by a seven basis point decrease in the cost of interest-bearing liabilities.
Total average deposits grew $375.9 million in the second quarter of 2021 as compared to the previous quarter. Average noninterest bearing deposits grew $190.8 million and offset a $69.6 million decrease in average time deposits.
Total end-of-period deposits grew $15.8 million from the previous quarter.
Asset Quality
The Company adopted CECL on December 31, 2020, effective January 1, 2020.
Provision expense in the second quarter of 2021 totaled $5.4 million as compared to ($4.4) million in the previous quarter. The provision expense during the quarter was a reflection of an improved economic forecast offset by strong end-of-period loan growth and a $1.2 million increase in unfunded commitment reserves.
At June 30, 2021, nonperforming loans totaled $52.8 million, an increase of $2.4 million from the previous quarter and a decrease of $3.2 million from the second quarter of 2020. Nonperforming loans represented 0.82% of total loans (excluding PPP loans) as compared to 0.80% and 0.88% for the periods ended March 31, 2021 and June 30, 2020, respectively.
At June 30, 2021, criticized loans totaled $250.4 million, a decrease of $21.7 million from the previous quarter.
During the second quarter of 2021, net charge-offs were $3.9 million as compared to $3.3 million in the previous quarter and $4.5 million in the second quarter of 2020. Net charge-offs in the second quarter of 2021 were negatively impacted by a $3.6 million charge-off related to an individual commercial borrower.
Net charge-offs as a percentage of average loans (excluding PPP, annualized) were 0.25%, 0.21% and 0.28% for the periods ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.
Noninterest Income and Noninterest Expense
Noninterest income (excluding net security gains) totaled $26.1 million for the second quarter of 2021, as compared to $27.3 million for the first quarter of 2021 and $21.8 million for the second quarter of 2020.
The $1.2 million decrease from the previous quarter was primarily due to a $2.0 million decrease in gain on sale of mortgage loans due to an increase in new mortgage originations being retained in the Bank's loan portfolio and a $1.7 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, which negatively impacted noninterest income. These decreases were partially offset by a $1.1 million increase in fee income related to new interest rate swaps due to increased commercial demand and a $1.0 million increase in card-related interchange income.
Noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses) totaled $51.3 million for the second quarter of 2021, as compared to $51.7 million for the first quarter of 2021 and $52.3 million for the second quarter of 2020. The $0.4 million decrease from the previous quarter was primarily the result of a $0.9 million decrease in occupancy expense due to seasonally higher snow removal in the previous quarter and a $0.5 million decrease in contributions, partially offset by a $0.7 million increase in hospitalization expense and a $0.4 million increase in Pennsylvania shares tax.
The core efficiency ratio was 53.21% during the second quarter of 2021 as compared to 53.18% in the previous quarter and 56.73% in the second quarter of 2020.
Full time equivalent staff was 1,392 at June 30, 2021, 1,387 at March 31, 2021, and 1,465 at June 30, 2020. The decrease from the prior year quarter is the result of a company-wide hiring freeze implemented at the end of the first quarter of 2020 and the consolidation of 20% of the Bank’s branch facilities in the fourth quarter of 2020.

                                                
Dividends and Capital
First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.115 per share, which represents a 4.5% increase from the second quarter of 2020. The cash dividend is payable on August 20, 2021 to shareholders of record as of August 6, 2021. This dividend represents a 3.4% projected annual yield utilizing the July 26, 2021 closing market price of $13.41.
First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at June 30, 2021 were 15.2%, 12.6%, 9.6% and 11.6% 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 2021 on Wednesday, July 28, 2021 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-833-302-1887 conference ID # 2497028 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 1-800-585-8367 and entering the conference ID # 2497028. A link to the webcast replay will also be accessible on the company’s webpage for 30 days.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation (NYSE: FCF), headquartered in Indiana, Pennsylvania, is a financial services Company with 119 community banking offices in 26 counties throughout western and central Pennsylvania and throughout Ohio, as well as business banking operations in Pittsburgh, Pennsylvania, and Canton, Cleveland, Columbus and Cincinnati, Ohio. The Company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson, and Lewis Center, Ohio. First Commonwealth provides a full range of commercial banking, consumer banking, mortgage, 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 EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
20212021202020212020
SUMMARY RESULTS OF OPERATIONS
Net interest income$68,199 $69,442 $66,686 $137,641 $134,410 
Provision for credit losses5,413 (4,390)6,859 1,023 37,826 
Noninterest income26,086 27,355 21,812 53,441 41,085 
Noninterest expense51,542 51,859 52,756 103,401 103,027 
Net income 29,619 39,770 23,851 69,389 28,578 
Core net income (5)
29,777 39,855 24,176 69,632 28,906 
Earnings per common share (diluted)$0.31 $0.41 $0.24 $0.72 $0.29 
Core earnings per common share (diluted) (6)
$0.31 $0.41 $0.25 $0.72 $0.29 
KEY FINANCIAL RATIOS
Return on average assets1.26 %1.77 %1.06 %1.51 %0.66 %
Core return on average assets (7)
1.26 %1.77 %1.08 %1.51 %0.67 %
Return on average assets, pre-provision, pre-tax1.81 %2.00 %1.59 %1.90 %1.68 %
Core return on average assets, pre-provision, pre-tax1.82 %2.00 %1.61 %1.91 %1.69 %
Return on average shareholders' equity10.82 %14.98 %8.95 %12.87 %5.36 %
Return on average tangible common equity (8)
15.54 %21.58 %13.13 %18.50 %8.03 %
Core return on average tangible common equity (9)
15.62 %21.63 %13.30 %18.56 %8.12 %
Core efficiency ratio (2)(10)
53.21 %53.18 %56.73 %53.20 %57.46 %
Net interest margin (FTE) (1)
3.17 %3.40 %3.29 %3.29 %3.46 %
Book value per common share$11.50 $11.30 $10.96 
Tangible book value per common share (11)
8.22 8.01 7.72 
Market value per common share14.07 14.37 8.28 
Cash dividends declared per common share0.115 0.110 0.110 0.225 0.220 
ASSET QUALITY RATIOS
Nonperforming loans as a percent of end-of-period loans (3)
0.78 %0.75 %0.81 %
Nonperforming loans as a percent of end-of-period loans, excluding PPP loans (3)
0.82 %0.80 %0.88 %
Nonperforming assets as a percent of total assets (3)
0.57 %0.55 %0.62 %
Nonperforming assets as a percent of total assets, excluding PPP loans (3)
0.59 %0.58 %0.66 %
Net charge-offs as a percent of average loans (annualized) (4)
0.23 %0.20 %0.27 %
Net charge-offs as a percent of average loans, excluding PPP loans (annualized) (4)
0.25 %0.21 %0.28 %
Allowance for credit losses as a percent of nonperforming loans (4)
183.81 %192.06 %145.37 %
Allowance for credit losses as a percent of end-of-period loans (4)
1.44 %1.44 %1.18 %
Allowance for credit losses as a percent of end-of-period loans, excluding PPP loans (4)
1.50 %1.55 %1.28 %
CAPITAL RATIOS
Shareholders' equity as a percent of total assets11.8 %11.5 %11.5 %
Tangible common equity as a percent of tangible assets (12)
8.7 %8.5 %8.4 %
Tangible common equity as a percent of tangible assets, excluding PPP loans (12)
9.0 %8.9 %8.9 %
Leverage Ratio9.6 %9.7 %9.3 %
Risk Based Capital - Tier I12.6 %12.6 %11.8 %
Risk Based Capital - Total15.2 %15.3 %14.4 %
Common Equity - Tier I11.6 %11.6 %10.7 %


                                                
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
20212021202020212020
INCOME STATEMENT
   Interest income$72,051 $74,061 $74,981 $146,112 $154,310 
   Interest expense3,852 4,619 8,295 8,471 19,900 
Net Interest Income68,199 69,442 66,686 137,641 134,410 
   Provision for credit losses5,413 (4,390)6,859 1,023 37,826 
Net Interest Income after Provision for Credit Losses62,786 73,832 59,827 136,618 96,584 
   Net securities gains10 6 8 16 27 
   Trust income2,706 2,516 2,109 5,222 4,220 
   Service charges on deposit accounts4,310 4,047 3,286 8,357 8,031 
   Insurance and retail brokerage commissions1,978 2,172 1,831 4,150 3,826 
   Income from bank owned life insurance1,509 1,951 1,800 3,460 3,416 
   Gain on sale of mortgage loans3,084 5,046 4,243 8,130 6,789 
   Gain on sale of other loans and assets2,111 1,690 581 3,801 1,280 
   Card-related interchange income7,406 6,427 5,886 13,833 11,148 
Derivative mark-to-market(277)1,430 (221)1,153 (1,962)
Swap fee income1,252 146 609 1,398 823 
   Other income1,997 1,924 1,680 3,921 3,487 
Total Noninterest Income26,086 27,355 21,812 53,441 41,085 
   Salaries and employee benefits28,347 28,671 28,773 57,018 58,750 
   Net occupancy3,881 4,773 4,397 8,654 9,370 
   Furniture and equipment 3,866 3,948 3,657 7,814 7,435 
   Data processing3,192 3,052 2,596 6,244 5,063 
   Pennsylvania shares tax1,258 832 1,254 2,090 1,992 
   Advertising and promotion 1,355 1,324 1,535 2,679 2,685 
   Intangible amortization863 866 919 1,729 1,853 
   Other professional fees and services1,091 751 920 1,842 1,818 
   FDIC insurance438 696 733 1,134 761 
   Litigation and operational losses556 479 319 1,035 709 
   Loss on sale or write-down of assets43 9 140 52 353 
   COVID-19 related232 74 419 306 442 
   Branch consolidation(22)40 — 18 — 
   Other operating expenses6,442 6,344 7,094 12,786 11,796 
Total Noninterest Expense51,542 51,859 52,756 103,401 103,027 
Income before Income Taxes37,330 49,328 28,883 86,658 34,642 
   Income tax provision 7,711 9,558 5,032 17,269 6,064 
Net Income$29,619 $39,770 $23,851 $69,389 $28,578 
Shares Outstanding at End of Period96,201,62896,248,47698,132,69796,201,62898,132,697
Average Shares Outstanding Assuming Dilution96,282,42596,233,64798,146,85496,255,47598,254,429


                                                
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
June 30,March 31,June 30,
202120212020
BALANCE SHEET (Period End)
Assets
   Cash and due from banks$89,505 $83,989 $108,970 
   Interest-bearing bank deposits194,948 420,645 348,763 
   Securities available for sale, at fair value1,102,057 1,056,703 914,412 
   Securities held to maturity, at amortized cost554,225 407,833 297,986 
   Loans held for sale19,530 20,604 30,409 
     Loans6,740,535 6,736,894 6,922,075 
     Allowance for credit losses(97,038)(96,763)(81,441)
   Net loans6,643,497 6,640,131 6,840,634 
   Goodwill and other intangibles315,497 316,148 318,072 
   Other assets483,143 470,936 505,409 
Total Assets$9,402,402 $9,416,989 $9,364,655 
Liabilities and Shareholders' Equity
   Noninterest-bearing demand deposits$2,617,651 $2,616,303 $2,288,299 
     Interest-bearing demand deposits269,451 267,571 327,691 
     Savings deposits4,566,815 4,501,456 4,431,919 
     Time deposits431,102 483,926 734,292 
   Total interest-bearing deposits5,267,368 5,252,953 5,493,902 
   Total deposits7,885,019 7,869,256 7,782,201 
     Short-term borrowings107,372 110,762 108,484 
     Long-term borrowings182,767 233,012 233,723 
   Total borrowings290,139 343,774 342,207 
   Other liabilities120,825 116,479 164,542 
   Shareholders' equity1,106,419 1,087,480 1,075,705 
Total Liabilities and Shareholders' Equity$9,402,402 $9,416,989 $9,364,655 



                                                
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
For the Three Months EndedFor the Six Months Ended
June 30,Yield/March 31,Yield/June 30,Yield/June 30,Yield/June 30,Yield/
2021Rate2021Rate2020Rate2021Rate2020Rate
NET INTEREST MARGIN
Assets
Loans, excluding PPP loans (FTE)(1)(3)
$6,341,805 3.80 %$6,292,076 3.91 %$6,372,145 4.14 %$6,317,078 3.86 %$6,313,985 4.38 %
PPP Loans429,917 5.11 %489,375 6.58 %405,738 2.73 %459,482 5.89 %202,869 2.73 %
Securities and interest-bearing bank deposits (FTE) (1)
1,886,184 1.43 %1,530,107 1.54 %1,412,275 1.99 %1,709,129 1.48 %1,333,987 2.21 %
Total Interest-Earning Assets (FTE) (1)
8,657,906 3.35 %8,311,558 3.63 %8,190,158 3.70 %8,485,689 3.49 %7,850,841 3.97 %
Noninterest-earning assets793,777 818,896 853,396 806,267 839,596 
Total Assets$9,451,683 $9,130,454 $9,043,554 $9,291,956 $8,690,437 
Liabilities and Shareholders' Equity
Interest-bearing demand and savings deposits$4,858,531 0.07 %$4,603,822 0.10 %$4,568,202 0.24 %$4,731,880 0.08 %$4,391,763 0.36 %
Time deposits458,638 0.47 %528,265 0.75 %776,892 1.51 %493,259 0.62 %801,429 1.58 %
Short-term borrowings114,966 0.09 %119,369 0.11 %112,063 0.17 %117,155 0.10 %157,188 0.81 %
Long-term borrowings206,495 4.65 %233,113 4.41 %233,819 4.41 %219,731 4.52 %233,934 4.41 %
Total Interest-Bearing Liabilities5,638,630 0.27 %5,484,569 0.34 %5,690,976 0.59 %5,562,025 0.31 %5,584,314 0.72 %
Noninterest-bearing deposits2,604,695 2,413,887 2,130,775 2,509,818 1,903,568 
Other liabilities110,264 155,443 150,254 132,729 131,122 
Shareholders' equity1,098,094 1,076,555 1,071,549 1,087,384 1,071,433 
Total Noninterest-Bearing Funding Sources3,813,053 3,645,885 3,352,578 3,729,931 3,106,123 
Total Liabilities and Shareholders' Equity$9,451,683 $9,130,454 $9,043,554 $9,291,956 $8,690,437 
Net Interest Margin (FTE) (annualized)(1)
3.17 %3.40 %3.29 %3.29 %3.46 %


                                                
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
June 30,March 31,June 30,
202120212020
Loan Portfolio Detail
Commercial Loan Portfolio:
Commercial, financial, agricultural and other$1,081,822 $1,077,218 $1,202,212 
Paycheck Protection Program292,355 478,453 570,887 
Commercial real estate2,205,758 2,167,506 2,224,710 
Real estate construction317,496 316,207 339,603 
Total Commercial3,897,431 4,039,384 4,337,412 
Consumer Loan Portfolio:
Closed-end mortgages1,259,798 1,178,640 1,140,101 
Home equity lines of credit568,985 577,975 583,187 
Real estate construction97,320 88,373 76,726 
Total Real Estate - Consumer1,926,103 1,844,988 1,800,014 
Auto loans829,150 759,061 671,202 
Direct installment28,805 32,143 43,629 
Personal lines of credit53,720 55,719 63,600 
Student loans5,326 5,599 6,218 
Total Other Consumer917,001 852,522 784,649 
Total Consumer Portfolio2,843,104 2,697,510 2,584,663 
Total Portfolio Loans6,740,535 6,736,894 6,922,075 
Loans held for sale19,530 20,604 30,409 
Total Loans$6,760,065 $6,757,498 $6,952,484 
June 30,March 31,June 30,
202120212020
ASSET QUALITY DETAIL
Nonperforming Loans:
Loans on nonaccrual basis$22,219 $23,056 $44,968 
Loans held for sale on a nonaccrual basis— — — 
Troubled debt restructured loans on nonaccrual basis23,981 20,628 3,600 
Troubled debt restructured loans on accrual basis6,593 6,697 7,455 
       Total Nonperforming Loans$52,793 $50,381 $56,023 
Other real estate owned ("OREO")394 916 1,634 
Repossessions ("Repos")440 833 537 
       Total Nonperforming Assets$53,627 $52,130 $58,194 
Loans past due in excess of 90 days and still accruing903 1,079 1,421 
Classified loans55,957 72,026 76,917 
Criticized loans250,427 272,143 125,432 
Nonperforming assets as a percentage of total loans, plus OREO and Repos (4)
0.80 %0.77 %0.84 %
Allowance for credit losses$97,038 $96,763 $81,441 

                                                
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
20212021202020212020
Net Charge-offs (Recoveries):
       Commercial, financial, agricultural and other$3,784 $479 $1,234 $4,263 $1,639 
       Real estate construction(135)— (26)(135)(26)
       Commercial real estate6 1,511 2,151 1,517 2,373 
       Residential real estate(160)68 2 (92)504 
       Loans to individuals432 1,212 1,132 1,644 3,532 
Net Charge-offs$3,927 $3,270 $4,493 $7,197 $8,022 
Net charge-offs as a percentage of average loans outstanding (annualized) (4)
0.23 %0.20 %0.27 %0.21 %0.25 %
Net charge-offs as a percentage of average loans outstanding, excluding PPP loans (annualized) (4)
0.25 %0.21 %0.28 %0.23 %0.26 %
Provision for credit losses as a percentage of net charge-offs137.84 %(134.25)%152.66 %14.21 %471.53 %
Provision for credit losses$5,413 $(4,390)$6,859 $1,023 $37,826 
DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES
(1) Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the federal income tax statutory rate of 21%.
(2) Core efficiency ratio excludes from total revenue the impact of derivative mark-to-market and excludes from "total noninterest expense" the amortization of intangibles, unfunded commitment expense and any other unusual items deemed by management to not be related to normal operations, such as merger, acquisition and severance costs.
(3) Includes held for sale loans.
(4) Excludes held for sale loans.
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
20212021202020212020
Interest income$72,051 $74,061 $74,981 $146,112 $154,310 
Adjustment to fully taxable equivalent basis (1)
290 309 359 598 755 
Interest income adjusted to fully taxable equivalent basis (non-GAAP)72,341 74,370 75,340 146,710 155,065 
Interest expense3,852 4,619 8,295 8,471 19,900 
Net interest income, (FTE) (1)
$68,489 $69,751 $67,045 $138,239 $135,165 


                                                
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 EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
20212021202020212020
Net Income$29,619 $39,770 $23,851 $69,389 $28,578 
Intangible amortization863 866 919 1,729 1,853 
Tax benefit of amortization of intangibles(181)(182)(193)(363)(389)
Net Income, adjusted for tax affected amortization of intangibles$30,301 $40,454 $24,577 $70,755 $30,042 
Average Tangible Equity:
   Total shareholders' equity$1,098,094 $1,076,555 $1,071,549 $1,087,384 $1,071,433 
   Less: intangible assets315,776 316,438 318,486 316,105 318,877 
       Tangible Equity782,318 760,117 753,063 771,279 752,556 
   Less: preferred stock— — — — — 
       Tangible Common Equity$782,318 $760,117 $753,063 $771,279 $752,556 
(8)Return on Average Tangible Common Equity
15.54 %21.58 %13.13 %18.50 %8.03 %
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
20212021202020212020
Core Net Income:
Total Net Income$29,619 $39,770 $23,851 $69,389 $28,578 
Net securities gains(10)(6)(8)(16)(27)
Tax benefit of net securities gains2 1 2 3 6 
   COVID-19 related232 74 419 306 442 
Tax benefit of COVID 19 related(49)(16)(88)(64)(93)
Branch consolidation related(22)40 — 18 — 
Tax benefit of bank consolidation related expenses5 (8)— (4)— 
(5) Core net income
$29,777 $39,855 $24,176 $69,632 $28,906 
Average Shares Outstanding Assuming Dilution96,282,42596,233,64798,146,85496,255,47598,254,429
(6) Core Earnings per common share (diluted)
$0.31 $0.41 $0.25 $0.72 $0.29 
Intangible amortization863 866 919 1,729 1,853 
Tax benefit of amortization of intangibles(181)(182)(193)(363)(389)
Core Net Income, adjusted for tax affected amortization of intangibles$30,459 $40,539 $24,902 $70,998 $30,370 
(9) Core Return on Average Tangible Common Equity
15.62 %21.63 %13.30 %18.56 %8.12 %


                                                
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 EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
20212021202020212020
Core Return on Average Assets:
Total Net Income$29,619 $39,770 $23,851 $69,389 $28,578 
Total Average Assets9,451,683 9,130,454 9,043,554 9,291,956 8,690,437 
Return on Average Assets1.26 %1.77 %1.06 %1.51 %0.66 %
Core Net Income (5)
$29,777 $39,855 $24,176 $69,632 $28,906 
Total Average Assets9,451,683 9,130,454 9,043,554 9,291,956 8,690,437 
(7) Core Return on Average Assets
1.26 %1.77 %1.08 %1.51 %0.67 %
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
20212021202020212020
Core Efficiency Ratio:
Total Noninterest Expense$51,542 $51,859 $52,756 $103,401 $103,027 
Adjustments to Noninterest Expense:
Unfunded commitment reserve— — 887 — (1,652)
Intangible amortization863 866 919 1,729 1,853 
   COVID-19 related232 74 419 306 442 
Branch consolidation related(22)40 — 18 — 
Noninterest Expense - Core$50,469 $50,879 $50,531 $101,348 $102,384 
Net interest income, (FTE)$68,489 $69,751 $67,045 $138,239 $135,165 
Total noninterest income26,086 27,355 21,812 53,441 41,085 
Net securities gains(10)(6)(8)(16)(27)
Total Revenue94,565 97,100 88,849 191,664 176,223 
Adjustments to Revenue:
Derivative mark-to-market(277)1,430 (221)1,153 (1,962)
Total Revenue - Core$94,842 $95,670 $89,070 $190,511 $178,185 
(10)Core Efficiency Ratio
53.21 %53.18 %56.73 %53.20 %57.46 %


                                                
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES
June 30,March 31,June 30,
202120212020
Tangible Equity:
   Total shareholders' equity$1,106,419 $1,087,480 $1,075,705 
   Less: intangible assets315,497 316,148 318,072 
       Tangible Equity790,922 771,332 757,633 
   Less: preferred stock— — — 
       Tangible Common Equity$790,922 $771,332 $757,633 
Tangible Assets:
   Total assets $9,402,402 $9,416,989 $9,364,655 
   Less: intangible assets315,497 316,148 318,072 
       Tangible Assets$9,086,905 $9,100,841 $9,046,583 
Less: PPP loans292,355 478,453 570,887 
       Tangible Assets, excluding PPP loans$8,794,550 $8,622,388 $8,475,696 
(12)Tangible Common Equity as a percentage of Tangible Assets
8.70 %8.48 %8.37 %
(12)Tangible Common Equity as a percentage of Tangible Assets, excluding PPP loans
8.99 %8.95 %8.94 %
   Shares Outstanding at End of Period96,201,628 96,248,476 98,132,697 
(11)Tangible Book Value Per Common Share
$8.22 $8.01 $7.72 
Note: Management believes that it is standard practice in the banking industry to present these non-GAAP measures. These measures provide useful information to management and investors by allowing them to make peer comparisons.
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
20212021202020212020
Pre-tax pre-provision income:
Net interest income$68,199$69,442$66,686$137,641$134,410
Noninterest income26,08627,35521,81253,44141,085
Noninterest expense51,54251,85952,756103,401103,027
Pre-tax pre-provision income$42,743$44,938$35,742$87,681$72,468
   Net securities gains($10)($6)($8)($16)($27)
   COVID-19 related23274419306442
   Branch consolidation(22)40—18—
Core pre-tax pre-provision income$42,943$45,046$36,153$87,989$72,883
Net charge-offs$3,927$3,270$4,493$7,197$8,022


FIRST COMMONWEALTH FINANCIAL CORP /PA/ Reports