Bay Street News

First Commonwealth Announces Fourth Quarter and Full Year 2023 Earnings; Declares Quarterly Dividend

INDIANA, Pa., Jan. 30, 2024 (GLOBE NEWSWIRE) — First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the fourth quarter and full year of 2023.

Financial Summary

(dollars in thousands, For the Three Months Ended   For the Years Ended
except per share data) December 31,   September 30,   December 31,   December 31,   December 31,
    2023       2023       2022       2023       2022  
Reported Results                  
Net income $ 44,827     $ 39,231     $ 35,733     $ 157,063     $ 128,181  
Diluted earnings per share $ 0.44     $ 0.38     $ 0.38     $ 1.54     $ 1.37  
Return on average assets   1.56 %     1.38 %     1.47 %     1.42 %     1.34 %
Return on average equity   14.11 %     12.46 %     13.61 %     12.80 %     11.99 %
                   
Operating Results (non-GAAP)(1)                  
Core net income $ 44,964     $ 39,611     $ 36,750     $ 172,697     $ 129,561  
Core diluted earnings per share $ 0.44     $ 0.39     $ 0.39     $ 1.70     $ 1.38  
Core pre-tax pre-provision net revenue $ 55,028     $ 55,652     $ 55,289     $ 221,505     $ 183,038  
Provision expense $ (1,865 )   $ 5,885     $ 9,120     $ 14,813     $ 21,106  
Net charge-offs $ 16,338     $ 3,976     $ 2,014     $ 30,152     $ 7,137  
Reserve build/(release)(2) $ (16,619 )   $ 791     $ 6,813     $ 14,812     $ 10,384  
Core return on average assets (ROAA)   1.56 %     1.39 %     1.51 %     1.56 %     1.35 %
Core pre-tax pre-provision ROAA   1.91 %     1.95 %     2.28 %     2.00 %     1.91 %
Return on average tangible common equity   20.78 %     18.55 %     19.77 %     19.01 %     17.30 %
Core return on average tangible common equity   20.85 %     18.73 %     20.32 %     20.86 %     17.49 %
Core efficiency ratio   53.00 %     53.42 %     50.00 %     52.91 %     54.59 %
Net interest margin (FTE)   3.65 %     3.76 %     3.99 %     3.81 %     3.58 %

(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.        

Fourth Quarter 2023 Highlights

Profitability

Strong capital position

Asset quality

Full Year 2023 Highlights

Franchise Growth

Earnings

Profitability

“I am proud of the progress we made as a company in 2023. We overcame a very challenging deposit gathering environment, expanded our retail franchise in Central PA and grew within our existing geographies to produce record core earnings per share of $1.70 with a core pre-tax, pre-provision ROAA of 2.00%,” stated T. Michael Price, President and CEO. “While the economic outlook remains uncertain going into 2024, we will remain focused on building on this positive momentum and continuing to live out our mission to improve the financial lives of our neighbors and their businesses.”

Earnings

Net income for the fourth quarter of 2023 was $44.8 million, or $0.44 per share, compared to $39.2 million, or $0.38 per share in the third quarter of 2023 and $35.7 million, or $0.38 per share for the fourth quarter of 2022.

Net income for the year ended December 31, 2023 was $157.1 million, or $1.54 per share, compared to $128.2 million, or $1.37 per share for the same period in 2022.

Net Interest Income and Net Interest Margin

Net interest income (FTE) of $96.1 million decreased $2.0 million from the previous quarter and increased $7.7 million from the prior year quarter. The increase from the previous quarter was primarily due to an 11 basis point decrease in the net interest margin, partially offset by a $90.8 million increase in average interest-earning assets.

The net interest margin for the fourth quarter of 2023 was 3.65%, a decrease of 11 basis points from the previous quarter and a decrease of 34 basis points from the fourth quarter of 2022. The total cost of deposits increased 23 basis points due to a $285.8 million increase in higher cost money market and time deposits and a decrease of $248.6 million in demand deposit and savings accounts, partially offset by a 10 basis point increase in loan yields due to higher replacement yields on new loan volume and a $89.9 million increase in average loans.

Total average deposits increased $37.3 million, or 1.6% annualized in the fourth quarter of 2023 as compared to the previous quarter. Total end-of-period deposits decreased $48.8 million, or 2.1% annualized, from the previous quarter primarily due to a seasonal decline in public funds.

Asset Quality

Provision for credit losses totaled ($1.9) million in the fourth quarter of 2023 as compared to $5.9 million in the previous quarter. The decrease in provision expense during the quarter was primarily driven by lower unfunded commitments and improved qualitative factors, including in the company’s high risk portfolio.

Nonperforming loans totaled $39.5 million, a decrease of $8.5 million from the previous quarter and an increase of $4.0 million from the fourth quarter of 2022. Nonperforming loans represented 0.44% of total loans as compared to 0.54% and 0.46% for the periods ended September 30, 2023 and December 31, 2022, respectively.

At December 31, 2023, criticized loans totaled $210.2 million, an increase of $17.0 million from the previous quarter.

During the fourth quarter of 2023, net charge-offs were $16.3 million as compared to net charge-offs of $4.0 million in the previous quarter and $2.0 million in the fourth quarter of 2022. The increase from the prior quarter was driven by $8.2 million acquired loans with a combined specific reserve of $6.0 million and $4.3 million for a commercial real estate credit which was reserved for in prior periods.

Net charge-offs (annualized) as a percentage of average loans were 0.72%, 0.18% and 0.11% for the periods ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

Noninterest Income and Noninterest Expense

Noninterest income (excluding gains and losses on investment securities) totaled $24.3 million for the fourth quarter of 2023, as compared to $24.9 million for the third quarter of 2023 and $24.3 million for the fourth quarter of 2022. The $0.6 million decrease from the previous quarter was primarily due to a $0.5 million decrease in gain on sale of Mortgage loans and a $0.4 million decrease in Trust income, partially offset by a $0.6 million increase in gain on sale of Small Business Administration (SBA) loans.

For the year ended December 31, 2023, noninterest income (excluding gains and losses on investment securities) totaled $96.7 million, a decrease of $2.0 million from the prior year. The decrease from the prior year was primarily due to a $3.2 million decrease in commercial swap fee income and a $1.3 million decrease in gain on sale of mortgage loans, partially offset by a $1.8 million increase in service charges on deposit accounts and a $1.0 million increase in card related interchange income.

There were $0.1 million of net security losses in 2023 and no material gains or losses in the prior year.

Noninterest expense (excluding merger related expenses) totaled $65.0 million for the fourth quarter of 2023, as compared to $67.0 million for the third quarter of 2023 and $57.1 million for the fourth quarter of 2022. The $2.0 million decrease from the previous quarter was primarily the result of a $1.2 million decrease in accrued Pennsylvania shares tax obligations and a $0.6 million decrease in advertising and promotion expenses, partially offset by a $0.6 million increase in salaries and benefits.

The core efficiency ratio was 53.00% during the fourth quarter of 2023 as compared to 53.42% in the previous quarter and 50.00% in the fourth quarter of 2022.

For the year ended December 31, 2023, noninterest expense (excluding merger related expenses) totaled $260.9 million, as compared to $227.9 million in the prior year. The $32.9 million increase from the prior year was primarily driven by higher operating expenses following the company’s acquisition of Centric on January 31, 2023.

The core efficiency ratio was 52.91% for the year ended December 31, 2023 as compared to 54.59% in the previous year.

Full time equivalent staff was 1,475 at December 31, 2023, 1,481 at September 30, 2023, and 1,424 at December 31, 2022.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.125 per share, which represents a 4.2% increase from the fourth quarter of 2022. The cash dividend is payable on February 23, 2024 to shareholders of record as of February 9, 2024. This dividend represents a 3.3% projected annual yield utilizing the January 29, 2024 closing market price of $15.05.

First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at December 31, 2023 were 13.9%, 11.9%, 10.0% and 11.2%, 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 fourth quarter and full year 2023 on Wednesday, January 31, 2024 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:
Ron Wahl
Communications and Media Relations
Phone: 724-463-6806
E-mail: RWahl@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 Years Ended
  December 31,   September 30,   December 31,   December 31,   December 31,
    2023       2023       2022       2023       2022  
SUMMARY RESULTS OF OPERATIONS                  
Net interest income $ 95,737     $ 97,757     $ 88,027     $ 385,676     $ 312,221  
Provision for credit losses   (1,865 )     5,885       9,120       4,160       21,106  
Provision for credit losses — acquisition day 1 non-PCD                     10,653        
Noninterest income   24,297       24,826       24,309       96,609       98,708  
Noninterest expense   65,180       67,413       58,334       269,917       229,638  
Net income   44,827       39,231       35,733       157,063       128,181  
Core net income(5)   44,964       39,611       36,750       172,697       129,561  
Earnings per common share (diluted) $ 0.44     $ 0.38     $ 0.38     $ 1.54     $ 1.37  
Core earnings per common share (diluted)(6) $ 0.44     $ 0.39     $ 0.39     $ 1.70     $ 1.38  
KEY FINANCIAL RATIOS                  
Return on average assets   1.56 %     1.38 %     1.47 %     1.42 %     1.34 %
Core return on average assets(7)   1.56 %     1.39 %     1.51 %     1.56 %     1.35 %
Return on average assets, pre-provision, pre-tax   1.91 %     1.94 %     2.22 %     1.91 %     1.89 %
Core return on average assets, pre-provision, pre-tax   1.91 %     1.95 %     2.28 %     2.00 %     1.91 %
Return on average shareholders’ equity   14.11 %     12.46 %     13.61 %     12.80 %     11.99 %
Return on average tangible common equity(8)   20.78 %     18.55 %     19.77 %     19.01 %     17.30 %
Core return on average tangible common equity(9)   20.85 %     18.73 %     20.32 %     20.86 %     17.49 %
Core efficiency ratio(2)(10)   53.00 %     53.42 %     50.00 %     52.91 %     54.59 %
Net interest margin (FTE)(1)   3.65 %     3.76 %     3.99 %     3.81 %     3.58 %
                   
Book value per common share $ 12.87     $ 12.14     $ 11.27          
Tangible book value per common share(11)   9.09       8.35       7.92          
Market value per common share   15.44       12.21       13.97          
Cash dividends declared per common share   0.125       0.125       0.120       0.495       0.475  
ASSET QUALITY RATIOS                  
Nonperforming loans and leases as a percent of end-of-period loans and leases(3)   0.44 %     0.54 %     0.46 %        
Nonperforming assets as a percent of total assets(3)   0.36 %     0.43 %     0.37 %        
Net charge-offs as a percent of average loans and leases (annualized)(4)   0.72 %     0.18 %     0.11 %        
Allowance for credit losses as a percent of nonperforming loans and leases(4)   298.23 %     280.31 %     289.98 %        
Allowance for credit losses as a percent of end-of-period loans and leases(4)   1.31 %     1.51 %     1.35 %        
CAPITAL RATIOS                  
Shareholders’ equity as a percent of total assets   11.5 %     10.9 %     10.7 %        
Tangible common equity as a percent of tangible assets(12)   8.4 %     7.7 %     7.8 %        
Leverage Ratio   10.0 %     9.9 %     10.2 %        
Risk Based Capital – Tier I   11.9 %     11.6 %     12.0 %        
Risk Based Capital – Total   13.9 %     13.8 %     14.4 %        
Common Equity – Tier I   11.2 %     10.9 %     11.1 %        
FIRST COMMONWEALTH FINANCIAL CORPORATION        
CONSOLIDATED FINANCIAL DATA            
Unaudited            
(dollars in thousands, except per share data)            
  For the Three Months Ended   For the Years Ended
  December 31, September 30, December 31,   December 31, December 31,
    2023     2023     2022       2023     2022
INCOME STATEMENT            
Interest income $ 144,257   $ 139,885   $ 96,281     $ 529,998   $ 329,953
Interest expense   48,520     42,128     8,254       144,322     17,732
Net Interest Income   95,737     97,757     88,027       385,676     312,221
Provision for credit losses   (1,865 )   5,885     9,120       4,160     21,106
Provision for credit losses – acquisition day 1 non-PCD                 10,653    
Net Interest Income after Provision for Credit Losses   97,602     91,872     78,907       370,863     291,115
Net securities gains       (103 )         (103 )   2
Trust income   2,549     2,949     2,455       10,516     10,518
Service charges on deposit accounts   5,595     5,600     4,946       21,437     19,641
Insurance and retail brokerage commissions   2,457     2,305     2,051       9,628     8,857
Income from bank owned life insurance   1,211     1,242     1,149       4,875     5,459
Gain on sale of mortgage loans   776     1,270     948       3,951     5,276
Gain on sale of other loans and assets   1,740     1,027     1,525       6,744     6,036
Card-related interchange income   7,218     7,221     6,996       28,640     27,603
Derivative mark-to-market   (13 )   35     (27 )     14     368
Swap fee income   490     452     752       1,519     4,685
Other income   2,274     2,828     3,514       9,388     10,263
Total Noninterest Income   24,297     24,826     24,309       96,609     98,708
Salaries and employee benefits   36,232     35,640     31,664       142,871     126,031
Net occupancy   4,637     4,782     4,451       19,221     18,037
Furniture and equipment   4,372     4,414     3,990       17,308     15,582
Data processing   3,986     3,857     3,543       15,010     13,922
Pennsylvania shares tax   351     1,588     960       4,364     4,447
Advertising and promotion   1,061     1,662     1,093       5,713     5,031
Intangible amortization   1,210     1,344     726       4,983     3,196
Other professional fees and services   1,543     1,603     1,272       5,919     4,894
FDIC insurance   1,646     1,920     675       6,260     2,871
Litigation and operational losses   1,378     1,626     847       4,641     2,834
Loss on sale or write-down of assets   107     50     128       204     343
Merger and acquisition   174     379     1,254       9,034     1,702
Other operating expenses   8,483     8,548     7,731       34,389     30,748
Total Noninterest Expense   65,180     67,413     58,334       269,917     229,638
Income before Income Taxes   56,719     49,285     44,882       197,555     160,185
Income tax provision   11,892     10,054     9,149       40,492     32,004
Net Income $ 44,827   $ 39,231   $ 35,733     $ 157,063   $ 128,181
             
Shares Outstanding at End of Period   102,114,664     102,184,652     93,376,314       102,114,664     93,376,314
Average Shares Outstanding Assuming Dilution   102,264,768     102,442,878     93,489,398       101,822,201     93,887,447
             
FIRST COMMONWEALTH FINANCIAL CORPORATION      
CONSOLIDATED FINANCIAL DATA          
Unaudited          
(dollars in thousands)          
           
  December 31,   September 30,   December 31,
    2023       2023       2022  
BALANCE SHEET (Period End)          
Assets          
Cash and due from banks $ 125,436     $ 122,982     $ 124,254  
Interest-bearing bank deposits   21,557       214,088       29,990  
Securities available for sale, at fair value   1,071,857       866,582       789,075  
Securities held to maturity, at amortized cost   419,009       429,558       461,162  
Loans held for sale   29,820       33,127       11,869  
           
Loans and leases   8,968,761       8,901,725       7,642,143  
Allowance for credit losses   (117,718 )     (134,337 )     (102,906 )
Net loans and leases   8,851,043       8,767,388       7,539,237  
           
Goodwill and other intangibles   386,535       387,328       312,533  
Other assets   554,231       600,935       537,546  
Total Assets $ 11,459,488     $ 11,421,988     $ 9,805,666  
           
Liabilities and Shareholders’ Equity          
Noninterest-bearing demand deposits $ 2,388,533     $ 2,535,704     $ 2,670,508  
           
Interest-bearing demand deposits   629,138       632,062       357,769  
Savings deposits   4,886,781       4,928,607       4,572,183  
Time deposits   1,287,857       1,144,692       405,009  
Total interest-bearing deposits   6,803,776       6,705,361       5,334,961  
           
Total deposits   9,192,309       9,241,065       8,005,469  
           
Short-term borrowings   597,835       544,060       372,694  
Long-term borrowings   186,757       187,017       181,224  
Total borrowings   784,592       731,077       553,918  
           
Other liabilities   168,313       209,315       194,205  
Shareholders’ equity   1,314,274       1,240,531       1,052,074  
Total Liabilities and Shareholders’ Equity $ 11,459,488     $ 11,421,988     $ 9,805,666  
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
  For the Three Months Ended   For the Years Ended
  December 31, Yield/ September 30, Yield/ December 31, Yield/   December 31, Yield/ December 31, Yield/
  2023 Rate 2023 Rate 2022 Rate   2023 Rate 2022 Rate
NET INTEREST MARGIN                  
                       
Assets                      
Loans and leases (FTE)(1)(3) $ 8,974,613 5.89 % $ 8,884,731 5.79 % $ 7,491,352 4.76 %   $ 8,714,770 5.64 % $ 7,172,624 4.23 %
Securities and interest-bearing bank deposits (FTE)(1)   1,465,962 3.06 %   1,465,069 2.85 %   1,286,561 2.08 %     1,437,000 2.74 %   1,567,266 1.78 %
Total Interest-Earning Assets (FTE)(1)   10,440,575 5.49 %   10,349,800 5.37 %   8,777,913 4.36 %     10,151,770 5.23 %   8,739,890 3.79 %
Noninterest-earning assets   961,555     957,258     863,049       940,083     835,343  
Total Assets $ 11,402,130   $ 11,307,058   $ 9,640,962     $ 11,091,853   $ 9,575,233  
                       
Liabilities and Shareholders’ Equity                      
Interest-bearing demand and savings deposits $ 5,540,364 1.90 % $ 5,581,623 1.67 % $ 4,884,236 0.29 %   $ 5,508,182 1.46 % $ 4,970,835 0.11 %
Time deposits   1,217,356 3.81 %   1,054,216 3.48 %   345,749 0.57 %     972,735 3.28 %   352,622 0.34 %
Short-term borrowings   548,680 5.43 %   504,025 5.23 %   264,987 2.86 %     439,556 4.95 %   144,834 1.38 %
Long-term borrowings   186,860 5.75 %   187,122 5.94 %   181,333 4.96 %     186,687 5.45 %   181,724 4.96 %
Total Interest-Bearing Liabilities   7,493,260 2.57 %   7,326,986 2.28 %   5,676,305 0.58 %     7,107,160 2.03 %   5,650,015 0.31 %
Noninterest-bearing deposits   2,434,560     2,519,184     2,729,716       2,552,596     2,708,580  
Other liabilities   213,492     211,447     193,685       205,224     147,871  
Shareholders’ equity   1,260,818     1,249,441     1,041,256       1,226,873     1,068,767  
Total Noninterest-Bearing Funding Sources   3,908,870     3,980,072     3,964,657       3,984,693     3,925,218  
Total Liabilities and Shareholders’ Equity $ 11,402,130   $ 11,307,058   $ 9,640,962     $ 11,091,853   $ 9,575,233  
                       
Net Interest Margin (FTE) (annualized)(1)   3.65 %   3.76 %   3.99 %     3.81 %   3.58 %
FIRST COMMONWEALTH FINANCIAL CORPORATION  
CONSOLIDATED FINANCIAL DATA      
Unaudited      
(dollars in thousands)      
  December 31, September 30, December 31,
    2023     2023     2022  
Loan and Lease Portfolio Detail      
Commercial Loan and Lease Portfolio:      
Commercial, financial, agricultural and other $ 1,310,405   $ 1,305,905   $ 1,132,032  
Commercial real estate   3,053,152     3,050,084     2,425,012  
Equipment Finance loans and leases   232,944     190,116     79,674  
Real estate construction   541,633     508,875     395,439  
Total Commercial   5,138,134     5,054,980     4,032,157  
       
Consumer Loan Portfolio:      
Closed-end mortgages   1,926,254     1,915,506     1,682,092  
Home equity lines of credit   490,622     499,275     512,577  
Real estate construction   56,102     66,672     117,662  
Total Real Estate – Consumer   2,472,978     2,481,453     2,312,331  
       
Auto & RV loans   1,277,969     1,285,380     1,210,451  
Direct installment   27,167     27,888     31,938  
Personal lines of credit   49,355     48,718     51,514  
Student loans   3,158     3,306     3,752  
Total Other Consumer   1,357,649     1,365,292     1,297,655  
Total Consumer Portfolio   3,830,627     3,846,745     3,609,986  
Total Portfolio Loans and Leases   8,968,761     8,901,725     7,642,143  
Loans held for sale   29,820     33,127     11,869  
Total Loans and Leases $ 8,998,581   $ 8,934,852   $ 7,654,012  
       
       
  December 31, September 30, December 31,
    2023     2023     2022  
ASSET QUALITY DETAIL      
Nonperforming Loans and Leases:      
Loans and leases on nonaccrual basis * $ 24,997   $ 25,902   $ 29,045  
Loans on nonaccrual basis – Centric acquisition   14,475     22,022      
Troubled debt restructured loans on accrual basis *           6,442  
Total Nonperforming Loans and Leases $ 39,472   $ 47,924   $ 35,487  
Other real estate owned (“OREO”)   422     765     534  
Repossessions (“Repos”)   1,024     762     454  
Total Nonperforming Assets $ 40,918   $ 49,451   $ 36,475  
Loans past due in excess of 90 days and still accruing   9,436     2,484     1,991  
Classified loans and leases   87,056     66,272     44,447  
Criticized loans and leases   210,187     193,192     132,863  
       
Nonperforming assets as a percentage of total loans and leases, plus OREO and Repos(4)   0.46 %   0.56 %   0.48 %
Allowance for credit losses $ 117,718   $ 134,337   $ 102,906  
*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 Years Ended
  December 31, September 30, December 31,   December 31, December 31,
    2023     2023     2022       2023     2022  
Net Charge-offs (Recoveries):            
Commercial, financial, agricultural and other $ 9,951   $ 1,664   $ 444     $ 18,701   $ 1,967  
Real estate construction                     (9 )
Commercial real estate   4,579     166     182       6,126     1,718  
Residential real estate   58     247     32       314     152  
Loans to individuals   1,750     1,899     1,356       5,011     3,309  
Net Charge-offs $ 16,338   $ 3,976   $ 2,014     $ 30,152   $ 7,137  
             
Net charge-offs as a percentage of average loans and leases outstanding (annualized)(4)   0.72 %   0.18 %   0.11 %     0.35 %   0.10 %
Provision for credit losses as a percentage of net charge-offs (11.42 )%   148.01 %   452.83 %     13.80 %   295.73 %
Provision for credit losses $ (1,865 ) $ 5,885   $ 9,120     $ 4,160   $ 21,106  
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 Years Ended
  December 31, September 30, December 31,   December 31, December 31,
  2023 2023 2022   2023 2022
             
Interest income $ 144,257 $ 139,885 $ 96,281   $ 529,998 $ 329,953
Adjustment to fully taxable equivalent basis(1)   314   313   290     1,237   1,049
Interest income adjusted to fully taxable equivalent basis (non-GAAP)   144,571   140,198   96,571     531,235   331,002
Interest expense   48,520   42,128   8,254     144,322   17,732
Net interest income, (FTE)(1) $ 96,051 $ 98,070 $ 88,317   $ 386,913 $ 313,270
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 Years Ended
  December 31, September 30, December 31,   December 31, December 31,
    2023     2023     2022       2023     2022  
             
Net Income $ 44,827   $ 39,231   $ 35,733     $ 157,063   $ 128,181  
Intangible amortization   1,210     1,344     726       4,983     3,196  
Tax benefit of amortization of intangibles   (254 )   (282 )   (152 )     (1,046 )   (671 )
Net Income, adjusted for tax affected amortization of intangibles $ 45,783   $ 40,293   $ 36,307     $ 161,000   $ 130,706  
             
Average Tangible Equity:            
Total shareholders’ equity $ 1,260,818   $ 1,249,441   $ 1,041,256     $ 1,226,873   $ 1,068,767  
Less: intangible assets   386,896     387,782     312,634       380,016     313,451  
Tangible Equity   873,922     861,659     728,622       846,857     755,316  
Less: preferred stock                      
Tangible Common Equity $ 873,922   $ 861,659   $ 728,622     $ 846,857   $ 755,316  
             
(8)Return on Average Tangible Common Equity   20.78 %   18.55 %   19.77 %     19.01 %   17.30 %
  For the Three Months Ended   For the Years Ended
  December 31, September 30, December 31,   December 31, December 31,
    2023     2023     2022       2023     2022  
             
Core Net Income:            
Total Net Income $ 44,827   $ 39,231   $ 35,733     $ 157,063   $ 128,181  
Net securities gains       103           103     (2 )
Tax benefit of net securities gains       (22 )         (22 )    
Merger and acquisition related expenses   174     379     1,254       9,034     1,702  
Tax benefit of merger and acquisition related expenses   (37 )   (80 )   (263 )     (1,897 )   (357 )
COVID-19 related           33           151  
Tax benefit of COVID-19 related           (7 )         (32 )
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 $ 44,964   $ 39,611   $ 36,750     $ 172,697   $ 129,561  
Average Shares Outstanding Assuming Dilution   102,264,768     102,442,878     93,489,398       101,822,201     93,887,447  
(6)Core Earnings per common share (diluted) $ 0.44   $ 0.39   $ 0.39     $ 1.70   $ 1.38  
             
Intangible amortization   1,210     1,344     726       4,983     3,196  
Tax benefit of amortization of intangibles   (254 )   (282 )   (152 )     (1,046 )   (671 )
Core Net Income, adjusted for tax affected amortization of intangibles $ 45,920   $ 40,673   $ 37,324     $ 176,634   $ 132,086  
             
(9)Core Return on Average Tangible Common Equity   20.85 %   18.73 %   20.32 %     20.86 %   17.49 %
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 Years Ended
  December 31, September 30, December 31,   December 31, December 31,
    2023     2023     2022       2023     2022  
Core Return on Average Assets:            
Total Net Income $ 44,827   $ 39,231   $ 35,733     $ 157,063   $ 128,181  
Total Average Assets   11,402,130     11,307,058     9,640,962       11,091,853     9,575,233  
Return on Average Assets   1.56 %   1.38 %   1.47 %     1.42 %   1.34 %
             
Core Net Income(5) $ 44,964   $ 39,611   $ 36,750     $ 172,697   $ 129,561  
Total Average Assets   11,402,130     11,307,058     9,640,962       11,091,853     9,575,233  
(7)Core Return on Average Assets   1.56 %   1.39 %   1.51 %     1.56 %   1.35 %
  For the Three Months Ended   For the Years Ended
  December 31, September 30, December 31,   December 31, December 31,
    2023     2023     2022       2023     2022  
Core Efficiency Ratio:            
Total Noninterest Expense $ 65,180   $ 67,413   $ 58,334     $ 269,917   $ 229,638  
Adjustments to Noninterest Expense:            
Intangible amortization   1,210     1,344     726       4,983     3,196  
Merger and acquisition related   174     379     1,254       9,034     1,702  
COVID-19 related           33           151  
Branch consolidation related                     (104 )
Noninterest Expense – Core $ 63,796   $ 65,690   $ 56,321     $ 255,900   $ 224,693  
             
Net interest income, (FTE) $ 96,051   $ 98,070   $ 88,317     $ 386,913   $ 313,270  
Total noninterest income   24,297     24,826     24,309       96,609     98,708  
Net securities gains       103           103     (2 )
Total Revenue   120,348     122,999     112,626       483,625     411,976  
             
Adjustments to Revenue:            
Derivative mark-to-market   (13 )   35     (27 )     14     368  
Total Revenue – Core $ 120,361   $ 122,964   $ 112,653     $ 483,611   $ 411,608  
             
(10)Core Efficiency Ratio   53.00 %   53.42 %   50.00 %     52.91 %   54.59 %
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
   
     
DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES    
       
  December 31, September 30, December 31,
    2023     2023     2022  
Tangible Equity:      
Total shareholders’ equity $ 1,314,274   $ 1,240,531   $ 1,052,074  
Less: intangible assets   386,535     387,328     312,533  
Tangible Equity   927,739     853,203     739,541  
Less: preferred stock            
Tangible Common Equity $ 927,739   $ 853,203   $ 739,541  
       
Tangible Assets:      
Total assets $ 11,459,488   $ 11,421,988   $ 9,805,666  
Less: intangible assets   386,535     387,328     312,533  
Tangible Assets $ 11,072,953   $ 11,034,660   $ 9,493,133  
       
(12)Tangible Common Equity as a percentage of Tangible Assets   8.38 %   7.73 %   7.79 %
       
Shares Outstanding at End of Period   102,114,664     102,184,652     93,376,314  
(11)Tangible Book Value Per Common Share $ 9.09   $ 8.35   $ 7.92  
  For the Three Months Ended   For the Years Ended
  December 31, September 30, December 31,   December 31, December 31,
   2023  2023  2022    2023   2022  
Pre-tax pre-provision income:            
Net interest income $ 95,737 $ 97,757 $ 88,027   $ 385,676 $ 312,221  
Noninterest income   24,297   24,826   24,309     96,609   98,708  
Noninterest expense   65,180   67,413   58,334     269,917   229,638  
Pre-tax pre-provision income $ 54,854 $ 55,170 $ 54,002   $ 212,368 $ 181,291  
             
Net securities gains $ $ 103 $   $ 103 $ (2 )
Merger and acquisition related expenses   174   379   1,254     9,034   1,702  
COVID-19 related       33       151  
Branch consolidation             (104 )
Core pre-tax pre-provision income $ 55,028 $ 55,652 $ 55,289   $ 221,505 $ 183,038  
             
Net charge-offs $ 16,338 $ 3,976 $ 2,014   $ 30,152 $ 7,137  


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