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

    Source: Nasdaq GlobeNewswire / 24 Oct 2023 17:00:01   America/New_York

    INDIANA, Pa., Oct. 24, 2023 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the third quarter of 2023.

    Financial Summary

    (dollars in thousands,For the Three Months Ended For the Nine Months Ended
    except per share data)September 30, June 30, September 30, September 30, September 30,
      2023   2023   2022   2023   2022 
    Reported Results         
    Net income$39,231  $42,781  $33,968  $112,236  $92,448 
    Diluted earnings per share$0.38  $0.42  $0.36  $1.10  $0.98 
    Return on average assets 1.38%  1.54%  1.41%  1.37%  1.29%
    Return on average equity 12.46%  13.90%  12.67%  12.35%  11.47%
              
    Operating Results (non-GAAP)(1)         
    Core net income$39,611  $42,734  $34,353  $127,732  $92,811 
    Core diluted earnings per share$0.39  $0.42  $0.37  $1.26  $0.99 
    Core pre-tax pre-provision net revenue$55,652  $56,344  $48,860  $166,477  $127,749 
    Provision for credit losses$5,885  $2,790  $5,923  $6,025  $11,986 
    Provision for credit losses - acquisition day 1 non-PCD$—  $—  $—  $10,653  $— 
    Net charge-offs$3,976  $8,665  $2,461  $13,814  $5,123 
    Reserve build/(release)(2)$791  $(339) $2,490  $31,431  $3,571 
    Core return on average assets (ROAA) 1.39%  1.54%  1.43%  1.55%  1.30%
    Core pre-tax pre-provision ROAA 1.95%  2.03%  2.03%  2.03%  1.79%
    Return on average tangible common equity 18.55%  20.68%  18.28%  18.39%  16.51%
    Core return on average tangible common equity 18.73%  20.66%  18.48%  20.86%  16.58%
    Core efficiency ratio 53.42%  52.80%  54.06%  52.88%  56.32%
    Net interest margin (FTE) 3.76%  3.85%  3.76%  3.87%  3.45%

    (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.        

    Third Quarter 2023 Highlights

    • Net income of $39.2 million and diluted earnings per share of $0.38 represented a decrease of $3.6 million, or $0.04 per share, from the prior quarter and an increase of $5.3 million, or $0.02 per share, from the third quarter of 2022
    • Core pre-tax pre-provision net revenue (PPNR)(1) totaled $55.7 million, a decrease of $0.7 million from the previous quarter and an increase of $6.8 million from the third quarter of 2022
    • Average deposits increased $48.4 million, or 2.1% annualized, compared to the prior quarter, due to a $123.8 million increase in average time deposits partially offset by a $61.7 million decrease in average noninterest-bearing deposits
      • End of period deposits increased $94.8 million, or 4.1% annualized, compared to the prior quarter
      • 80.4% of deposits were insured or secured as of September 30, 2023
    • The loan-to-deposit ratio increased 30 basis points to 96.7% at the end of the third quarter of 2023
      • Loans and available for sale (AFS) securities as a percentage of total deposits was 106.1% as of September 30, 2023
    • Net interest income (FTE) of $98.1 million was relatively unchanged from the previous quarter and increased $15.4 million from the third quarter of 2022
    • Noninterest income (excluding security gains and losses) of $24.9 million increased $0.4 million from the previous quarter due in part to higher Trust revenue
    • Noninterest expense (excluding merger-related expense) of $67.0 million increased $1.0 million from the previous quarter due primarily to elevated operational losses and FDIC insurance expense
    • Total shareholder’s equity increased $8.1 million from the previous quarter due to a $26.4 million increase in retained earnings, partially offset by a $15.5 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 5.4% annualized, from the previous quarter
      • AOCI as a percentage of tangible common equity increased 164 basis points to 18.1% in the third quarter of 2023

    Profitability

    • The core efficiency ratio(1) of 53.42% increased 62 basis points from the previous quarter and improved 64 basis points from the third quarter of 2022
    • The return on average assets (ROA) decreased 16 basis points to 1.38% compared to the previous quarter
      • The core return on average assets(1) decreased 15 basis points to 1.39% compared to the previous quarter
    • Core pre-tax pre-provision ROA(1) for the quarter ended September 30, 2023 was 1.95% as compared to 2.03% in the prior quarter and 2.03% in the third quarter of 2022
    • The net interest margin of 3.76% decreased 9 basis points compared to the prior quarter and was unchanged as compared to the third quarter of 2022
      • Purchase accounting accretion contributed 10 basis points to the margin in the third quarter, a decrease of 4 basis points from the prior quarter
      • The retention of approximately $207.3 million of additional cash on the Bank’s balance sheet for liquidity purposes had a negative impact on the net interest margin of 8 basis points in the third quarter

    Asset quality

    • The provision for credit losses was $5.9 million, an increase of $3.1 million compared to the previous quarter
    • The allowance for credit losses as a percentage of end-of-period loans was 1.51%, a decrease of 1 basis point from the previous quarter
    • Total classified loans decreased $10.1 million from the previous quarter, from $76.4 million, or 0.87% of total loans and leases, to $66.3 million, or 0.74% of total loans and leases
      • Total nonperforming assets of $49.5 million increased $0.1 million from the previous quarter
    • Net charge-offs on loans totaled $4.0 million, a decrease of $4.7 million from the previous quarter and includes $1.2 million of acquired loans that were reserved for through purchase accounting marks
      • Net charge-offs (annualized) as a percentage of average loans outstanding was 0.18% in the third quarter of 2023 as compared to 0.40% in the previous quarter, 0.05% of which was attributable to the aforementioned charge off of acquired loans

    Strong capital and liquidity positions

    • Total available liquidity of $4.4 billion at September 30, 2023
      • Cash and AFS securities as a percentage of total assets decreased 36 basis points to 10.5%
      • Total available liquidity represented 241% of uninsured/unsecured deposits, and combined with cash represented 248% of uninsured/unsecured deposits
    • Bank-level Tier 1 Capital ratio of 10.8%, which represents $259.1 million in excess capital above the regulatory “well capitalized” requirement of 8.0%
    • A total of 259,639 shares at a weighted average price of $12.36 were repurchased during the third quarter of 2023 under the Company’s previously authorized share repurchase program.   The remaining repurchase capacity under the current program was $18.3 million as of September 30, 2023

    “Our results this quarter were strong and overcame 9 basis points of net interest margin compression.   Fortunately, the pace of increases in our funding costs continued to moderate throughout the third quarter while loan yields continue to improve,” stated T. Michael Price, President and Chief Executive Officer.   “I am also enthusiastic about where we are at as a company.   We continue to improve our businesses each and every quarter, despite a challenging macro-economic environment for banks this year.   Our asset quality, liquidity and capital also remain strong and will enable us to continue our journey of becoming the best bank for our neighbors and their businesses.”

    Earnings

    Net income for the third quarter of 2023 was $39.2 million, or $0.38 per share, compared to $42.8 million, or $0.42 per share in the second quarter of 2023, and $34.0 million, or $0.36 per share for the third quarter of 2022.

    Net Interest Income and Net Interest Margin

    Net interest income (FTE) of $98.1 million was essentially unchanged from the previous quarter and increased $15.4 million from the prior year quarter.   The increase from the prior year quarter was primarily due to a $1.6 billion increase in average interest-earning assets, which includes $1.0 billion in average interest-earning assets acquired in the Centric acquisition.

    The net interest margin for the third quarter of 2023 was 3.76%, a decrease of 9 basis points from the previous quarter and unchanged from the third quarter of 2022.   The decrease from the previous quarter was due primarily to a 28 basis point increase in the cost of deposits, partially offset by a 21 basis point increase in the yield on loans.   The total cost of funds was 1.70% in the third quarter of 2023, which represents an increase of 32 basis points from the previous quarter.

    Total average deposits grew $48.4 million in the third quarter of 2023 as compared to the previous quarter.   Average time deposits grew $123.8 million, which offset a $61.7 million decrease in average noninterest-bearing deposits and a $13.7 million decrease in average interest-bearing demand and savings deposits.  

    Total portfolio loans increased $101.9 million, or 4.6% annualized, from the previous quarter, driven by strong commercial loan growth, including $36.0 million of growth in Equipment Finance loans and a $45.1 million increase in Commercial Real Estate loans.   Total consumer Mortgage loans, including loans for construction, increased $26.7 million from the previous quarter.  

    Average interest-earning assets increased $125.6 million, or 4.9% annualized, from the previous quarter.   Average loans increased $195.7 million, or 8.9% annualized, which offset a $70.1 million decrease in average investment securities and interest-bearing bank deposits.

    Asset Quality

    Provision expense in the third quarter of 2023 totaled $5.9 million as compared to $2.8 million in the previous quarter.   The increase in the provision expense was primarily driven by loan growth and an additional $4.1 million in specific reserves for an updated appraisal on a nonaccrual commercial loan.   The increase in provision expense was partially offset by the effect of improvement in the Bank’s high risk portfolio and improved economic factors.

    The allowance for credit losses in the third quarter of 2023 totaled $134.3 million as compared to $133.5 million in the previous quarter.   The increase from the previous quarter was primarily the result of the aforementioned specific reserves, partially offset by $4.0 million in net charge-offs ($1.2 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).

    The allowance for credit losses as a percentage of end-of-period loans in the third quarter of 2023 was 1.51% as compared to 1.52% in the previous quarter.

    At September 30, 2023, nonperforming loans totaled $47.9 million, a decrease of $0.1 million from the previous quarter.  

    Nonperforming loans represented 0.54% of total loans for the period ended September 30, 2023 as compared to 0.54% and 0.48% for the periods ended June 30, 2023 and September 30, 2022, respectively.

    During the third quarter of 2023, net charge-offs were $4.0 million as compared to $8.7 million in the previous quarter and $2.5 million in the third quarter of 2022.   The decrease 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 first quarter of 2023 through purchase accounting marks at the time of the acquisition.

    Net charge-offs (annualized) as a percentage of average loans were 0.18%, 0.40% and 0.13% for the periods ended September 30, 2023, June 30, 2023 and September 30, 2022, respectively.

    Noninterest Income and Noninterest Expense

    Noninterest income (excluding security gains and losses) totaled $24.9 million for the third quarter of 2023, as compared to $24.5 million for the second quarter of 2023 and $25.9 million for the third quarter of 2022.   There were $0.1 million in net security losses during the third quarter of 2023 and no security gains or losses in the comparable periods.

    The $0.4 million increase from the previous quarter was primarily due to a $0.4 million increase in Trust revenue and a $0.3 million increase in service charges on deposit accounts, partially offset by a $0.9 million decrease in gains on the sale of Small Business Administration (SBA) loans.   

    Noninterest expense (excluding $0.4 million of merger-related expense) totaled $67.0 million for the third quarter of 2023, as compared to $66.0 million for the second quarter of 2023 and $59.5 million for the third quarter of 2022.   Expense increased in comparison with the prior quarter primarily due to a $0.7 million increase in operational losses driven by a $0.9 million recognition of identified losses as part of the implementation of a new debit card charge-off processing system, an increase of $0.6 million due to higher FDIC insurance expense due to the acquisition of Centric Financial Corporation, an increase of $0.4 million in Pennsylvania shares tax and an increase of $0.4 million in other professional fees.   These increases were partially offset by a $1.1 million decrease in salaries and benefits compared to the prior quarter due to a $1.0 million decrease in hospitalization expense.

    The core efficiency ratio was 53.4% during the third quarter of 2023 as compared to 52.8% in the previous quarter and 54.1% in the third quarter of 2022.

    Full time equivalent staff was 1,481 at September 30, 2023, 1,483 at June 30, 2023, and 1,422 at September 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 third quarter of 2022. The cash dividend is payable on November 17, 2023 to shareholders of record as of November 3, 2023. This dividend represents a 4.1% projected annual yield utilizing the October 23, 2023 closing market price of $12.06.

    First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2023 were 13.8%, 11.6%, 9.9% and 10.9%, 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 third quarter of 2023 on Wednesday, October 25, 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, 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:
    Kristine Levan
    Senior Vice President / Marketing and Communication Manager
    Phone: 724-463-4777
    E-mail: Klevan@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 Nine Months Ended
     September 30, June 30, September 30, September 30, September 30,
      2023   2023   2022   2023   2022 
    SUMMARY RESULTS OF OPERATIONS         
    Net interest income$97,757  $97,824  $82,360  $289,939  $224,194 
    Provision for credit losses 5,885   2,790   5,923   6,025   11,986 
    Provision for credit losses — acquisition day 1 non-PCD —   —   —   10,653   — 
    Noninterest income 24,826   24,523   25,914   72,312   74,399 
    Noninterest expense 67,413   65,943   59,901   204,737   171,304 
    Net income 39,231   42,781   33,968   112,236   92,448 
    Core net income(5) 39,611   42,734   34,353   127,732   92,811 
    Earnings per common share (diluted)$0.38  $0.42  $0.36  $1.10  $0.98 
    Core earnings per common share (diluted)(6)$0.39  $0.42  $0.37  $1.26  $0.99 
    KEY FINANCIAL RATIOS         
    Return on average assets 1.38%  1.54%  1.41%  1.37%  1.29%
    Core return on average assets(7) 1.39%  1.54%  1.43%  1.55%  1.30%
    Return on average assets, pre-provision, pre-tax 1.94%  2.03%  2.01%  1.92%  1.78%
    Core return on average assets, pre-provision, pre-tax 1.95%  2.03%  2.03%  2.03%  1.79%
    Return on average shareholders' equity 12.46%  13.90%  12.67%  12.35%  11.47%
    Return on average tangible common equity(8) 18.55%  20.68%  18.28%  18.39%  16.51%
    Core return on average tangible common equity(9) 18.73%  20.66%  18.48%  20.86%  16.58%
    Core efficiency ratio(2)(10) 53.42%  52.80%  54.06%  52.88%  56.32%
    Net interest margin (FTE)(1) 3.76%  3.85%  3.76%  3.87%  3.45%
              
    Book value per common share$12.14  $12.03  $10.95     
    Tangible book value per common share(11) 8.35   8.24   7.60     
    Market value per common share 12.21   12.65   12.84     
    Cash dividends declared per common share 0.125   0.125   0.120   0.370   0.355 
    ASSET QUALITY RATIOS         
    Nonperforming loans and leases as a percent of end-of-period loans and leases(3) 0.54%  0.54%  0.48%    
    Nonperforming assets as a percent of total assets(3) 0.43%  0.44%  0.38%    
    Net charge-offs as a percent of average loans and leases (annualized)(4) 0.18%  0.40%  0.13%    
    Allowance for credit losses as a percent of nonperforming loans and leases(4) 280.31%  278.17%  269.23%    
    Allowance for credit losses as a percent of end-of-period loans and leases(4) 1.51%  1.52%  1.31%    
    CAPITAL RATIOS         
    Shareholders' equity as a percent of total assets 10.9%  10.9%  10.7%    
    Tangible common equity as a percent of tangible assets(12) 7.7%  7.7%  7.7%    
    Leverage Ratio 9.9%  9.8%  10.1%    
    Risk Based Capital - Tier I 11.6%  11.5%  12.1%    
    Risk Based Capital - Total 13.8%  13.7%  14.5%    
    Common Equity - Tier I 10.9%  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 Nine Months Ended
     September 30,June 30,September 30, September 30,September 30,
      2023  2023  2022  2023  2022
    INCOME STATEMENT      
    Interest income$139,885 $131,267 $85,700 $385,741 $233,672
    Interest expense 42,128  33,443  3,340  95,802  9,478
    Net Interest Income 97,757  97,824  82,360  289,939  224,194
    Provision for credit losses 5,885  2,790  5,923  6,025  11,986
    Provision for credit losses - acquisition day 1 non-PCD —  —  —  10,653  —
    Net Interest Income after Provision for Credit Losses 91,872  95,034  76,437  273,261  212,208
    Net securities gains (103) —  —  (103) 2
    Trust income 2,949  2,532  2,777  7,967  8,063
    Service charges on deposit accounts 5,600  5,324  5,194  15,842  14,695
    Insurance and retail brokerage commissions 2,305  2,314  2,048  7,171  6,806
    Income from bank owned life insurance 1,242  1,195  1,419  3,664  4,310
    Gain on sale of mortgage loans 1,270  1,253  1,485  3,175  4,328
    Gain on sale of other loans and assets 1,027  1,891  1,093  5,004  4,511
    Card-related interchange income 7,221  7,372  6,980  21,422  20,607
    Derivative mark-to-market 35  81  6  27  395
    Swap fee income 452  332  2,326  1,029  3,933
    Other income 2,828  2,229  2,586  7,114  6,749
    Total Noninterest Income 24,826  24,523  25,914  72,312  74,399
    Salaries and employee benefits 35,640  36,735  32,486  106,639  94,367
    Net occupancy 4,782  4,784  4,629  14,584  13,586
    Furniture and equipment 4,414  4,284  4,005  12,936  11,592
    Data processing 3,857  3,763  3,721  11,024  10,379
    Pennsylvania shares tax 1,588  1,173  1,569  4,013  3,487
    Advertising and promotion 1,662  1,327  1,278  4,652  3,938
    Intangible amortization 1,344  1,282  746  3,773  2,470
    Other professional fees and services 1,603  1,182  1,204  4,376  3,622
    FDIC insurance 1,920  1,277  796  4,614  2,196
    Litigation and operational losses 1,626  894  758  3,263  1,987
    Loss on sale or write-down of assets 50  6  54  97  215
    Merger and acquisition 379  (60) 448  8,860  448
    Other operating expenses 8,548  9,296  8,207  25,906  23,017
    Total Noninterest Expense 67,413  65,943  59,901  204,737  171,304
    Income before Income Taxes 49,285  53,614  42,450  140,836  115,303
    Income tax provision 10,054  10,833  8,482  28,600  22,855
    Net Income$39,231 $42,781 $33,968 $112,236 $92,448
           
    Shares Outstanding at End of Period 102,184,652  102,444,915  93,377,064  102,184,652  93,377,064
    Average Shares Outstanding Assuming Dilution 102,442,878  102,760,266  93,450,259  101,674,970  93,994,158
           


    FIRST COMMONWEALTH FINANCIAL CORPORATION   
    CONSOLIDATED FINANCIAL DATA     
    Unaudited     
    (dollars in thousands)     
          
     September 30, June 30, September 30,
      2023   2023   2022 
    BALANCE SHEET (Period End)     
    Assets     
    Cash and due from banks$122,982  $123,095  $106,153 
    Interest-bearing bank deposits 214,088   325,774   74,619 
    Securities available for sale, at fair value 866,582   784,503   802,871 
    Securities held to maturity, at amortized cost 429,558   439,922   474,790 
    Loans held for sale 33,127   16,300   13,811 
          
    Loans and leases 8,901,725   8,799,836   7,348,917 
    Allowance for credit losses (134,337)  (133,546)  (96,093)
    Net loans and leases 8,767,388   8,666,290   7,252,824 
          
    Goodwill and other intangibles 387,328   388,451   312,950 
    Other assets 600,935   574,269   540,612 
    Total Assets$11,421,988  $11,318,604  $9,578,630 
          
    Liabilities and Shareholders' Equity     
    Noninterest-bearing demand deposits$2,535,704  $2,624,344  $2,782,654 
          
    Interest-bearing demand deposits 632,062   611,156   354,310 
    Savings deposits 4,928,607   4,935,124   4,608,762 
    Time deposits 1,144,692   975,654   331,923 
    Total interest-bearing deposits 6,705,361   6,521,934   5,294,995 
          
    Total deposits 9,241,065   9,146,278   8,077,649 
          
    Short-term borrowings 544,060   542,839   97,932 
    Long-term borrowings 187,017   187,276   181,489 
    Total borrowings 731,077   730,115   279,421 
          
    Other liabilities 209,315   209,792   198,985 
    Shareholders' equity 1,240,531   1,232,419   1,022,575 
    Total Liabilities and Shareholders' Equity$11,421,988  $11,318,604  $9,578,630 
                


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


     For the Three Months Ended For the Nine Months Ended
     September 30,Yield/June 30,Yield/September 30,Yield/ September 30,Yield/September 30,Yield/
      2023Rate 2023Rate 2022Rate  2023Rate 2022Rate
    NET INTEREST MARGIN          
                
    Assets           
    Loans and leases (FTE)(1)(3)$8,884,7315.79%$8,689,0215.58%$7,261,7904.31% $8,627,2035.56%$7,065,2134.04%
    Securities and interest-bearing bank deposits (FTE) (1) 1,465,0692.85% 1,535,1362.77% 1,446,3151.92%  1,427,2432.63% 1,661,8621.70%
    Total Interest-Earning Assets (FTE) (1) 10,349,8005.37% 10,224,1575.16% 8,708,1053.92%  10,054,4465.14% 8,727,0753.59%
    Noninterest-earning assets 957,258  932,756  825,989   932,844  826,007 
    Total Assets$11,307,058 $11,156,913 $9,534,094  $10,987,290 $9,553,082 
                
    Liabilities and Shareholders' Equity           
    Interest-bearing demand and savings deposits$5,581,6231.67%$5,595,3361.35%$4,952,2790.07% $5,497,3361.31%$5,000,0180.05%
    Time deposits 1,054,2163.48% 930,4473.03% 336,3460.24%  890,2993.03% 354,9380.26%
    Short-term borrowings 504,0255.23% 434,7834.79% 102,0730.19%  402,7824.73% 104,3430.11%
    Long-term borrowings 187,1225.94% 187,3795.03% 181,5964.94%  186,6295.35% 181,8564.96%
    Total Interest-Bearing Liabilities 7,326,9862.28% 7,147,9451.88% 5,572,2940.24%  6,977,0461.84% 5,641,1550.22%
    Noninterest-bearing deposits 2,519,184  2,580,842  2,746,258   2,592,373  2,701,458 
    Other liabilities 211,447  193,292  152,208   202,438  132,431 
    Shareholders' equity 1,249,441  1,234,834  1,063,334   1,215,433  1,078,038 
    Total Noninterest-Bearing Funding Sources 3,980,072  4,008,968  3,961,800   4,010,244  3,911,927 
    Total Liabilities and Shareholders' Equity$11,307,058 $11,156,913 $9,534,094  $10,987,290 $9,553,082 
                
    Net Interest Margin (FTE) (annualized)(1) 3.76% 3.85% 3.76%  3.87% 3.45%
                     


    FIRST COMMONWEALTH FINANCIAL CORPORATION 
    CONSOLIDATED FINANCIAL DATA   
    Unaudited   
    (dollars in thousands)   
     September 30,June 30,September 30,
      2023  2023  2022 
    Loan and Lease Portfolio Detail   
    Commercial Loan and Lease Portfolio:   
    Commercial, financial, agricultural and other$1,305,905 $1,347,842 $1,125,429 
    Commercial real estate 3,050,084  3,004,962  2,393,276 
    Equipment Finance loans and leases 190,116  154,152  43,777 
    Real estate construction  508,875   474,720  326,539 
    Total Commercial  5,054,980   4,981,676  3,889,021 
        
    Consumer Loan Portfolio:   
    Closed-end mortgages 1,915,506  1,858,660  1,631,655 
    Home equity lines of credit 499,275  505,449  522,249 
    Real estate construction  66,672   100,079  96,151 
    Total Real Estate - Consumer  2,481,453   2,464,188  2,250,055 
        
    Auto & RV loans 1,285,380  1,272,557  1,120,838 
    Direct installment 27,888  28,881  33,528 
    Personal lines of credit 48,718  49,168  51,514 
    Student loans 3,306  3,366  3,961 
    Total Other Consumer 1,365,292  1,353,972  1,209,841 
    Total Consumer Portfolio  3,846,745   3,818,160  3,459,896 
      Total Portfolio Loans and Leases 8,901,725  8,799,836  7,348,917 
    Loans held for sale 33,127  16,300  13,811 
      Total Loans and Leases$8,934,852 $8,816,136 $7,362,728 
        
        
     September 30,June 30,September 30,
      2023  2023  2022 
    ASSET QUALITY DETAIL   
    Nonperforming Loans and Leases:   
    Loans and leases on nonaccrual basis *$25,902 $29,322 $29,476 
    Loans on nonaccrual basis - Centric acquisition 22,022  18,687  — 
    Troubled debt restructured loans on accrual basis * —  —  6,216 
    Total Nonperforming Loans and Leases$47,924 $48,009 $35,692 
    Other real estate owned ("OREO") 765  324  322 
    Repossessions ("Repos") 762  1,004  600 
    Total Nonperforming Assets$49,451 $49,337 $36,614 
    Loans past due in excess of 90 days and still accruing 2,484  2,474  1,548 
    Classified loans and leases 66,272  76,419  45,656 
    Criticized loans and leases 193,192  207,071  139,258 
        
    Nonperforming assets as a percentage of total loans and leases, plus OREO and Repos(4) 0.56% 0.56% 0.50%
    Allowance for credit losses$134,337 $133,546 $96,093 
    *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 Nine Months Ended
     September 30,June 30,September 30, September 30,September 30,
      2023  2023  2022   2023  2022 
    Net Charge-offs (Recoveries):      
    Commercial, financial, agricultural and other$1,664 $6,582 $698  $8,750 $1,523 
    Real estate construction —  —  (9)  —  (9)
    Commercial real estate 166  1,423  1,003   1,547  1,536 
    Residential real estate 247  (32) 36   256  120 
    Loans to individuals 1,899  692  733   3,261  1,953 
    Net Charge-offs$3,976 $8,665 $2,461  $13,814 $5,123 
           
    Net charge-offs as a percentage of average loans and leases outstanding (annualized)(4) 0.18% 0.40% 0.13%  0.21% 0.10%
    Provision for credit losses as a percentage of net charge-offs 148.01% 32.20% 240.67%  43.62% 233.96%
    Provision for credit losses$5,885 $2,790 $5,923  $6,025 $11,986 


    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 Nine Months Ended
     September 30,June 30,September 30, September 30,September 30,
      2023 2023 2022  2023 2022
           
    Interest income$139,885$131,267$85,700 $385,741$233,672
    Adjustment to fully taxable equivalent basis (1) 313 305 261  923 759
    Interest income adjusted to fully taxable equivalent basis (non-GAAP) 140,198 131,572 85,961  386,664 234,431
    Interest expense 42,128 33,443 3,340  95,802 9,478
    Net interest income, (FTE) (1)$98,070$98,129$82,621 $290,862$224,953
                


    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 Nine Months Ended
     September 30,June 30,September 30, September 30,September 30,
      2023  2023  2022   2023  2022 
           
    Net Income$39,231 $42,781 $33,968  $112,236 $92,448 
    Intangible amortization 1,344  1,282  746   3,773  2,470 
    Tax benefit of amortization of intangibles (282) (269) (157)  (792) (519)
    Net Income, adjusted for tax affected amortization of intangibles$40,293 $43,794 $34,557  $115,217 $94,399 
           
    Average Tangible Equity:      
    Total shareholders' equity$1,249,441 $1,234,834 $1,063,334  $1,215,433 $1,078,038 
    Less: intangible assets 387,782  385,567  313,336   377,697  313,726 
    Tangible Equity 861,659  849,267  749,998   837,736  764,312 
    Less: preferred stock —  —  —   —  — 
    Tangible Common Equity$861,659 $849,267 $749,998  $837,736 $764,312 
           
    (8)Return on Average Tangible Common Equity 18.55% 20.68% 18.28%  18.39% 16.51%
                     


     For the Three Months Ended For the Nine Months Ended
     September 30,June 30,September 30, September 30,September 30,
      2023  2023  2022   2023  2022 
           
    Core Net Income:      
    Total Net Income$39,231 $42,781 $33,968  $112,236 $92,448 
    Net securities gains 103  —  —   103  (2)
    Tax benefit of net securities gains (22) —  —   (22) — 
    Merger and acquisition related expenses 379  (60) 448   8,860  448 
    Tax benefit of merger and acquisition related expenses (80) 13  (94)  (1,861) (94)
    COVID-19 related —  —  39   —  118 
    Tax benefit of COVID-19 related —  —  (8)  —  (25)
    Provision for credit losses - acquisition day 1 non-PCD —  —  —   10,653  — 
    Tax benefit of provision for credit losses - acquisition day 1 non-PCD —  —  —   (2,237) — 
    Branch consolidation related —  —  —   —  (104)
    Tax benefit of branch consolidation related expenses —  —  —   —  22 
    (5)Core net income$39,611 $42,734 $34,353  $127,732 $92,811 
    Average Shares Outstanding Assuming Dilution 102,442,878  102,760,266  93,450,259   101,674,970  93,994,158 
    (6)Core Earnings per common share (diluted)$0.39 $0.42 $0.37  $1.26 $0.99 
           
    Intangible amortization 1,344  1,282  746   3,773  2,470 
    Tax benefit of amortization of intangibles (282) (269) (157)  (792) (519)
        Core Net Income, adjusted for tax affected amortization of intangibles$40,673 $43,747 $34,942  $130,713 $94,762 
           
    (9)Core Return on Average Tangible Common Equity 18.73% 20.66% 18.48%  20.86% 16.58%
                     


    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 Nine Months Ended
     September 30,June 30,September 30, September 30,September 30,
      2023  2023  2022   2023  2022 
    Core Return on Average Assets:      
    Total Net Income$39,231 $42,781 $33,968  $112,236 $92,448 
    Total Average Assets 11,307,058  11,156,913  9,534,094   10,987,290  9,553,082 
    Return on Average Assets 1.38% 1.54% 1.41%  1.37% 1.29%
           
    Core Net Income(5)$39,611 $42,734 $34,353  $127,732 $92,811 
    Total Average Assets 11,307,058  11,156,913  9,534,094   10,987,290  9,553,082 
    (7)Core Return on Average Assets 1.39% 1.54% 1.43%  1.55% 1.30%
                     


     For the Three Months Ended For the Nine Months Ended
     September 30,June 30,September 30, September 30,September 30,
      2023  2023  2022   2023  2022 
    Core Efficiency Ratio:      
    Total Noninterest Expense$67,413 $65,943 $59,901  $204,737 $171,304 
    Adjustments to Noninterest Expense:      
    Intangible amortization 1,344  1,282  746   3,773  2,470 
    Merger and acquisition related 379  (60) 448   8,860  448 
    COVID-19 related —  —  39   —  118 
    Branch consolidation related —  —  —   —  (104)
      Noninterest Expense - Core$65,690 $64,721 $58,668  $192,104 $168,372 
           
    Net interest income, (FTE)$98,070 $98,129 $82,621  $290,862 $224,953 
    Total noninterest income 24,826  24,523  25,914   72,312  74,399 
    Net securities gains 103  —  —   103  (2)
    Total Revenue 122,999  122,652  108,535   363,277  299,350 
           
    Adjustments to Revenue:      
    Derivative mark-to-market 35  81  6   27  395 
      Total Revenue - Core$122,964 $122,571 $108,529  $363,250 $298,955 
           
    (10)Core Efficiency Ratio 53.42% 52.80% 54.06%  52.88% 56.32%
                     


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


    DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES  
        
     September 30,June 30,September 30,
      2023  2023  2022 
    Tangible Equity:   
    Total shareholders' equity$1,240,531 $1,232,419 $1,022,575 
    Less: intangible assets 387,328  388,451  312,950 
    Tangible Equity 853,203  843,968  709,625 
    Less: preferred stock —  —  — 
    Tangible Common Equity$853,203 $843,968 $709,625 
        
    Tangible Assets:   
    Total assets$11,421,988 $11,318,604 $9,578,630 
    Less: intangible assets 387,328  388,451  312,950 
    Tangible Assets$11,034,660 $10,930,153 $9,265,680 
        
    (12)Tangible Common Equity as a percentage of Tangible Assets 7.73% 7.72% 7.66%
        
    Shares Outstanding at End of Period 102,184,652  102,444,915  93,377,064 
    (11)Tangible Book Value Per Common Share$8.35 $8.24 $7.60 


     For the Three Months Ended For the Nine Months Ended
     September 30,June 30,September 30, September 30,September 30,
      2023 2023  2022  2023 2022 
    Pre-tax pre-provision income:      
    Net interest income$97,757$97,824 $82,360 $289,939$224,194 
    Noninterest income 24,826 24,523  25,914  72,312 74,399 
    Noninterest expense 67,413 65,943  59,901  204,737 171,304 
    Pre-tax pre-provision income$55,170$56,404 $48,373 $157,514$127,289 
           
    Net securities gains$103$— $— $103$(2)
    Merger and acquisition related expenses 379 (60) 448  8,860 448 
    COVID-19 related — —  39  — 118 
    Branch consolidation — —  —  — (104)
    Core pre-tax pre-provision income$55,652$56,344 $48,860 $166,477$127,749 
           
    Net charge-offs$3,976$8,665 $2,461 $13,814$5,123 

     


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