Exhibit 99.1

fcfca01.jpg                    
FOR IMMEDIATE RELEASE

First Commonwealth Announces Third Quarter 2018 Earnings; Declares Quarterly Dividend and Announces $25 Million Share Repurchase Program

Indiana, PA, October 23, 2018 - First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the third quarter of 2018.
Third Quarter 2018 Highlights
Earnings
Third quarter net income was $25.1 million, or $0.25 diluted earnings per share, as compared to $21.3 million, or $0.22 diluted earnings per share in the third quarter of 2017 and $32.1 million, or $0.32 diluted earnings per share in the second quarter of 2018.
Core net income (adjusted only for acquisition expenses) was $25.2 million, or $0.25 diluted earnings per share, an increase of $0.03 from the third quarter of 2017.
Total revenue decreased $6.4 million, or 7.1% from the prior quarter.
Net interest income (FTE) increased $0.1 million from the prior quarter, despite the recognition of $1.5 million in unusual items in the prior quarter.
Noninterest income decreased $6.6 million from the prior quarter primarily due to $5.3 million in net security gains recognized during the second quarter of 2018 as the result of the successful auction call and open market sale of the company’s remaining pooled trust preferred securities, a $1.2 million gain on the sale of a restructured commercial credit recognized in the second quarter, and a $0.6 million decrease in bank owned life insurance income due to higher death claim benefits recorded during the previous quarter.
Total noninterest expense increased $0.4 million, or 0.8% from the previous quarter.



                                                

Provision for credit losses totaled $3.0 million, an increase of $1.8 million as compared to the prior quarter.
Margin
The total cost of interest-bearing demand and savings deposits increased five basis points from the previous quarter, compared to a 25 basis point increase in the Federal Funds Target Rate in the quarter. This equates to an effective deposit beta of 20%, down from 40% in the previous quarter.
Average deposits grew by $78.2 million, or 5.4% (annualized) as compared to the prior quarter, or 2.2% (annualized) excluding deposits acquired with the acquisition of Foundation Bank.
Loan yields increased one basis point from the previous quarter; however, loan yields adjusted for the recognition of previously unrecognized interest income in the second quarter improved by 10 basis points during the quarter.
End of period loans grew $23.9 million, or 1.7% (annualized) as compared to the prior quarter.
The net interest margin was 3.67% in the third quarter of 2018, as compared to 3.61% in the third quarter of 2017 and 3.78% in the prior quarter.
During the second quarter of 2018, the company recognized a total of $1.5 million of previously unrecognized interest from the successful resolution of assets that had previously been impaired. This resulted in a benefit of nine basis points to the net interest margin during the second quarter of 2018.
Also during the second quarter of 2018, the company issued $100 million in subordinated debt. Approximately half of the proceeds were reinvested in securities and the remaining portion was used to pay down short term borrowings, the net effect of which was a 3 basis point negative impact on the net interest margin in the second quarter and a 6 basis point negative impact in the third quarter.
In addition, the net interest margin decreased by one basis point from the previous quarter due to reduced purchase accounting accretion.
Profitability
Return on average assets improved 16 basis points to 1.30% as compared to the third quarter of 2017, and was 1.44% for the nine months ended September 30, 2018.
Core return on average assets (excluding only merger-related expenses) was 1.46% for the nine months ending September 30, 2018, as compared to 1.08% in the prior year period.



                                                

The annualized return on average tangible common equity for the third quarter of 2018 was 15.01%, and was 16.88% for the nine months ended September 30, 2018.
Core return on average tangible common equity (excluding only merger-related expenses) was 17.14% for the nine months ending September 30, 2018, as compared to 13.42% in the prior year period.
The core efficiency ratio was 57.82% in the third quarter of 2018, as compared to 55.23% and 57.96% in the second quarter of 2018 and third quarter of 2017, respectively.

“We continue to position ourselves for long-term success and I am pleased with the outcome this quarter,” stated T. Michael Price, President and Chief Executive Officer. “Although somewhat muted by large pay downs, our new loan production this quarter was running at its highest level in several years and our locally sourced core deposit base continues to prove to be a stable source of low-cost funding. We also remained disciplined in managing our operating expenses while investing in our new geographies and business lines, including our digital delivery platform.” Price continued, “And as a community bank, we are also committed to our communities. I am proud of the many ways our employees display this commitment, day in and day out, by helping to improve the lives of our neighbors and their businesses.”



                                                

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,
 
2018
 
2018
 
2017
 
2018
 
2017
Reported Results
 
 
 
 
 
 
 
 
 
Net income
$25,149
 
$32,081
 
$21,283
 
$80,500
 
$51,184
Diluted earnings per share
$0.25
 
$0.32
 
$0.22
 
$0.81
 
$0.54
Return on average assets
1.30
%
 
1.71
%
 
1.14
%
 
1.44
%
 
0.96
%
Return on average equity
10.28
%
 
13.74
%
 
9.50
%
 
11.53
%
 
8.15
%
 
 
 
 
 
 
 
 
 
 
Operating Results (non-GAAP)(1)
 
 
 
 
 
 
 
 
 
Core net income
$25,168
 
$33,087
 
$21,238
 
$81,791
 
$57,952
Core diluted earnings per share
$0.25
 
$0.33
 
$0.22
 
$0.82
 
$0.61
Core return on average assets
1.30
%
 
1.76
%
 
1.14
%
 
1.46
%
 
1.08
%
Return on average tangible common equity
15.01
%
 
20.08
%
 
14.04
%
 
16.88
%
 
11.89
%
Core return on average tangible common equity
15.02
%
 
20.70
%
 
14.01
%
 
17.14
%
 
13.42
%
Core efficiency ratio
57.82
%
 
55.23
%
 
57.96
%
 
57.05
%
 
59.49
%
Net interest margin (FTE)
3.67
%
 
3.78
%
 
3.61
%
 
3.71
%
 
3.55
%
(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. See supplemental information included with the release for "non-GAAP Financial Measures and Key Performance Indicators" and additional information.
    
Earnings
Net income for the third quarter of 2018 was $25.1 million, as compared to $32.1 million in the previous quarter and $21.3 million for the third quarter of 2017.
Excluding merger-related expenses, core net income for the third quarter of 2018 was $25.2 million, as compared to $33.1 million in the previous quarter and $21.2 million for the third quarter of 2017, representing a $7.9 million decrease and $3.9 million increase, respectively. Core net income in the second quarter of 2018 included net security gains of $5.3 million. The company did not recognize any security gains in the third quarter of 2018.
Net income for the first nine months of 2018 was $80.5 million, as compared to $51.2 million for the same period in 2017.  Excluding merger-related expenses of $1.3 million after tax, core net income for the first nine months of 2018 was $81.8 million.
Net Interest Income and Net Interest Margin
The total cost of interest-bearing demand and savings deposits increased five basis points from the previous quarter, compared to a 25 basis point increase in the Federal Funds Target Rate in the quarter. This equates to an effective deposit beta of 20%, down from 40% in the previous quarter.



                                                

The increased cost of interest-bearing deposits was partially offset by $16.9 million growth in average noninterest-bearing deposits. Loan yields increased one basis point from the previous quarter; however, loan yields, as adjusted for the recognition of previously unrecognized interest income in the second quarter from the successful resolution of assets that had been previously impaired, improved by 10 basis points during the quarter.
During the third quarter of 2018, net interest income (FTE) was $64.3 million, an increase of $0.1 million from the previous quarter.  The increase in net interest income was the result of a $132 million increase in average interest-earning assets due, in part, to the acquisition of Foundation Bank on May 1, 2018, and the aforementioned increase in loan yields, largely offset by $1.5 million in interest income recognized in the prior quarter as the result of the sale of one commercial credit and the sale of the company’s remaining pooled trust preferred securities.
The net interest margin for the third quarter of 2018 was 3.67%, a decrease of 11 basis points from the previous quarter and an increase of six basis points from the third quarter of 2017. The recognition of $1.5 million in interest in the prior quarter related to the sale of one commercial loan and the sale of the trust preferred portfolio accounted for approximately nine basis points of this decline.
The net effect of the subordinated debt on the net interest margin was a three basis point negative impact on the net interest margin in the second quarter and six basis points in the third quarter. Purchase accounting accretion’s impact on the net interest margin totaled five basis points in the third quarter as compared to six basis points in the second quarter of 2018.
Average short-term borrowings decreased $32.0 million from the previous quarter and $260.3 million from the third quarter of 2017. Average short-term borrowings represented 8.6% of total funds during the third quarter of 2018 as compared to 12.9% during the prior year quarter.
Average deposits grew $78.2 million from the previous quarter, primarily driven by a $54.2 million increase in retail time deposits and a $16.9 million increase in noninterest bearing deposits.
Credit Quality
The provision for credit losses totaled $3.0 million for the quarter ended September 30, 2018, an increase of $1.8 million from the prior and same quarter last year. The increase from the prior quarter is primarily due to two



                                                

commercial real estate credits totaling $5.0 million which were downgraded to nonperforming status during the quarter.
At September 30, 2018, nonperforming loans were $39.8 million, a decrease of $6.0 million from June 30, 2018. The decrease from the previous quarter was primarily related to a $4.3 million pay down from one commercial and industrial (C&I) borrower and the charge-off and subsequent sale of a $3.8 million C&I credit, partially offset by the aforementioned downgrade of two commercial real estate credits to nonperforming status. Nonperforming loans as a percentage of total loans were 0.70%, 0.81% and 0.72% for the periods ended September 30, 2018, June 30, 2018 and September 30, 2017, respectively.
During the third quarter of 2018, net charge-offs were $3.5 million, or 0.25% of average loans outstanding, as compared to $3.6 million in the prior quarter and $1.1 million in the third quarter of 2017. Net charge-offs in the third quarter of 2018 included a $2.2 million charge-off on the aforementioned C&I credit.
For the originated loan portfolio at September 30, 2018, the allowance for credit losses to total originated loans was 0.98%, compared to 1.01% at June 30, 2018 and 0.97% at September 30, 2017.
Noninterest Income and Noninterest Expense
Noninterest income (excluding net security gains) totaled $19.8 million for the third quarter of 2018 as compared to $21.0 million for the second quarter of 2018 and $19.7 million for the third quarter of 2017. The decrease from the prior quarter was primarily due to a $1.2 million gain on the sale of a restructured commercial credit in the second quarter of 2018. Additionally, bank owned life insurance income decreased $0.6 million from the previous quarter due to higher death claim benefits recorded during the previous quarter.
The company did not recognize any net security gains during the third quarter, as compared to $5.3 million during the second quarter of 2018 and $0.1 million during the third quarter of 2017. The decrease from the previous quarter was the result of the successful auction call and open market sale of the company’s remaining pooled trust preferred securities during the prior quarter.
Noninterest expense (excluding merger-related expenses) totaled $49.5 million in the third quarter of 2018, as compared to $47.9 million for the second quarter of 2018 and $47.4 million for the third quarter of 2017. The increase from the previous quarter was primarily driven by a $1.1 million increase in mortgage banking and related



                                                

hedging expense, partially offset by a $0.4 million decrease in FDIC insurance expense as a result of a decrease in the Bank’s assessment rate.
The increase from the prior year quarter was primarily due to a $0.3 million increase in the aforementioned mortgage banking expense and higher salaries, occupancy, data processing and advertising expenses resulting from the company’s aforementioned acquisition of Foundation Bank in the second quarter of 2018 and continued expansion efforts. The increase from the third quarter of 2017 was partially offset by a $0.5 million decrease in FDIC insurance expense.
Full time equivalent staff was 1,417 at September 30, 2018, as compared to 1,438 at June 30, 2018 and 1,366 at September 30, 2017. The increase from the prior year period is the result of the addition of employees from the aforementioned acquisition and the company’s ongoing expansion in its mortgage, commercial banking, wealth management, and SBA businesses.
Dividends and Capital
First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.09 per share, which is payable on November 16, 2018 to shareholders of record as of November 2, 2018. This dividend represents a 2.5% projected annual yield utilizing the October 22, 2018 closing market price of $14.40.
The company also announced today that its Board of Directors has authorized a new $25 million share repurchase program of the company's common stock.  Under this program, management is authorized to repurchase shares through Rule 10b5-1 plans, open market purchases, privately negotiated transactions, block purchases or otherwise in a manner that is intended to comply with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934.  First Commonwealth may suspend or discontinue the program at any time.
First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at September 30, 2018 were 15.1%, 12.6%, 10.5%, and 11.4%, 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 2018 on Wednesday, October 24, 2018 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-844-792-3645 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 1-877-344-7529 and entering the access code # 10124779. A link to the webcast replay will also be accessible on the company’s web page for 30 days.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation (NYSE:FCF), headquartered in Indiana, Pennsylvania, is a financial services company with 140 banking offices in 22 counties throughout western and central Pennsylvania and Ohio, as well as Corporate Banking Centers in Pittsburgh, Pennsylvania and Cleveland and Columbus, Ohio. The company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson and Dublin, 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
This release contains forward-looking statements about First Commonwealth’s future plans, strategies and financial performance. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may." Such statements are based on assumptions and involve risks and uncertainties, many of which are beyond First Commonwealth’s control. Factors that could cause actual results, performance or achievements to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national and international economic conditions and the impact they may have 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); (6) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (7) changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (8) political instability; (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) First Commonwealth’s ability to attract and retain qualified employees; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) the reliability of First Commonwealth’s vendors, internal control systems or information systems; (16) the ability to increase market share and control expenses; (17) impairment of First Commonwealth’s goodwill or other intangible assets; (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 soundness of other financial institutions; (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 the reports that First Commonwealth files with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K. Forward-looking statements speak only as of the date on which they are made. First Commonwealth undertakes no obligation to update any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
Media Relations
Kristine N. Levan
Vice President / Marketing and Communications 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,
 
2018
 
2018
 
2017
 
2018
 
2017
SUMMARY RESULTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
Net interest income (FTE) (1)
$
64,311

 
$
64,192

 
$
60,667

 
$
188,682

 
$
172,381

Provision for credit losses
2,961

 
1,168

 
1,214

 
11,032

 
2,834

Noninterest income
19,757

 
26,308

 
19,790

 
68,108

 
55,626

Noninterest expense
49,530

 
49,129

 
47,361

 
145,532

 
148,389

Net income
25,149

 
32,081

 
21,283

 
80,500

 
51,184

Core net income (5)
25,168

 
33,087

 
21,238

 
81,791

 
57,952

 
 
 
 
 
 
 
 
 
 
Earnings per common share (diluted)
$
0.25

 
$
0.32

 
$
0.22

 
$
0.81

 
$
0.54

Core earnings per common share (diluted) (6)
$
0.25

 
$
0.33

 
$
0.22

 
$
0.82

 
$
0.61

 
 
 
 
 
 
 
 
 
 
KEY FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.30
%
 
1.71
%
 
1.14
%
 
1.44
%
 
0.96
%
Core return on average assets (7)
1.30
%
 
1.76
%
 
1.14
%
 
1.46
%
 
1.08
%
Return on average shareholders' equity
10.28
%
 
13.74
%
 
9.50
%
 
11.53
%
 
8.15
%
Return on average tangible common equity (8)
15.01
%
 
20.08
%
 
14.04
%
 
16.88
%
 
11.89
%
Core return on average tangible common equity (9)
15.02
%
 
20.70
%
 
14.01
%
 
17.14
%
 
13.42
%
Core efficiency ratio (2)(10)
57.82
%
 
55.23
%
 
57.96
%
 
57.05
%
 
59.49
%
Net interest margin (FTE) (1)
3.67
%
 
3.78
%
 
3.61
%
 
3.71
%
 
3.55
%
 
 
 
 
 
 
 
 
 
 
Book value per common share
$
9.69

 
$
9.57

 
$
9.17

 
 
 
 
Tangible book value per common share (11)
6.82

 
6.69

 
6.39

 
 
 
 
Market value per common share
16.14

 
15.51

 
14.13

 
 
 
 
Cash dividends declared per common share
0.09

 
0.09

 
0.08

 
$
0.26

 
$
0.24

 
 
 
 
 
 
 
 
 
 
ASSET QUALITY RATIOS
 
 
 
 
 
 
 
 
 
Nonperforming loans as a percent of end-of-period loans (3)
0.70
%
 
0.81
%
 
0.72
%
 
 
 
 
Nonperforming assets as a percent of total assets (3)
0.57
%
 
0.65
%
 
0.61
%
 
 
 
 
Net charge-offs as a percent of average loans (annualized) (4)
0.25
%
 
0.26
%
 
0.08
%
 
 
 
 
Allowance for credit losses as a percent of nonperforming loans (4)
127.35
%
 
111.89
%
 
124.16
%
 
 
 
 
Allowance for credit losses as a percent of end-of-period loans (4)
0.90
%
 
0.91
%
 
0.90
%
 
 
 
 
Allowance for credit losses (originated loans and leases) as a percent of originated loans and leases
0.98
%
 
1.01
%
 
0.97
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CAPITAL RATIOS
 
 
 
 
 
 
 
 
 
Shareholders' equity as a percent of total assets
12.7
%
 
12.6
%
 
12.1
%
 
 
 
 
Tangible common equity as a percent of tangible assets (12)
9.3
%
 
9.1
%
 
8.8
%
 
 
 
 
Leverage Ratio
10.5
%
 
10.4
%
 
9.7
%
 
 
 
 
Risk Based Capital - Tier I
12.6
%
 
12.3
%
 
11.5
%
 
 
 
 
Risk Based Capital - Total
15.1
%
 
14.8
%
 
12.3
%
 
 
 
 
Common Equity - Tier I
11.4
%
 
11.2
%
 
10.3
%
 
 
 
 



                                                

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,
 
2018
2018
2017
 
2018
2017
INCOME STATEMENT
 
 
 
 
 
 
   Interest income
$
74,873

$
72,940

$
65,411

 
$
214,312

$
184,710

   Interest expense
11,060

9,265

5,848

 
27,139

15,500

Net Interest Income
63,813

63,675

59,563

 
187,173

169,210

   Taxable equivalent adjustment (1)
498

517

1,104

 
1,509

3,171

Net Interest Income (FTE)
64,311

64,192

60,667

 
188,682

172,381

   Provision for credit losses
2,961

1,168

1,214

 
11,032

2,834

Net Interest Income after Provision for Credit Losses (FTE)
61,350

63,024

59,453

 
177,650

169,547

 
 
 
 
 
 
 
   Net securities gains (losses)

5,262

92

 
8,102

695

   Trust income
2,206

1,880

2,147

 
6,014

5,275

   Service charges on deposit accounts
4,589

4,423

4,803

 
13,418

13,858

   Insurance and retail brokerage commissions
1,872

1,820

2,128

 
5,560

6,652

   Income from bank owned life insurance
1,579

2,168

1,472

 
5,241

4,213

   Gain on sale of mortgage loans
1,542

1,241

1,418

 
4,267

3,710

   Gain on sale of other loans and assets
643

2,331

503

 
3,548

1,267

   Card-related interchange income
5,044

5,143

4,780

 
14,929

13,873

Derivative mark-to-market


(14
)
 
789

(49
)
Swap fee income
528

297

217

 
1,115

458

   Other income
1,754

1,743

2,244

 
5,125

5,674

Total Noninterest Income
19,757

26,308

19,790

 
68,108

55,626

 
 
 
 
 
 
 
   Salaries and employee benefits
26,553

26,154

26,169

 
77,580

74,933

   Net occupancy
4,341

4,222

3,715

 
12,932

11,597

   Furniture and equipment
3,424

3,647

3,342

 
10,611

9,753

   Data processing
2,853

2,478

2,229

 
7,764

6,659

   Pennsylvania shares tax
1,248

1,247

1,093

 
3,398

3,070

   Advertising and promotion
1,200

1,176

941

 
3,185

2,735

   Intangible amortization
817

829

844

 
2,430

2,262

   Collection and repossession
630

607

402

 
2,060

1,342

   Other professional fees and services
962

1,031

1,300

 
3,000

3,355

   FDIC insurance
217

597

696

 
1,590

2,466

   Litigation and operational losses
435

197

598

 
811

1,107

   Loss on sale or write-down of assets
181

497

167

 
875

1,486

   Merger and acquisition related
24

1,273

(69
)
 
1,634

10,412

   Other operating expenses
6,645

5,174

5,934

 
17,662

17,212

Total Noninterest Expense
49,530

49,129

47,361

 
145,532

148,389

 
 
 
 
 
 
 
Income before Income Taxes
31,577

40,203

31,882

 
100,226

76,784

   Taxable equivalent adjustment (1)
498

517

1,104

 
1,509

3,171

   Income tax provision
5,930

7,605

9,495

 
18,217

22,429

Net Income
$
25,149

$
32,081

$
21,283

 
$
80,500

$
51,184

 
 
 
 
 
 
 
Shares Outstanding at End of Period
100,361,434

100,364,567

97,475,575

 
100,361,434

97,475,575

Average Shares Outstanding Assuming Dilution
100,490,812

99,504,409

97,457,470

 
99,197,568

94,578,490

 
 
 
 
 
 
 



                                                

FIRST COMMONWEALTH FINANCIAL CORPORATION
 
 
 
CONSOLIDATED FINANCIAL DATA
 
 
 
 
 
Unaudited
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
September 30,
 
June 30,
 
September 30,
 
2018
 
2018
 
2017
BALANCE SHEET (Period End)
 
 
 
 
 
Assets
 
 
 
 
 
   Cash and due from banks
$
93,162

 
$
101,744

 
$
98,319

   Interest-bearing bank deposits
3,022

 
2,237

 
29,709

   Securities available for sale, at fair value
914,085

 
876,570

 
810,946

   Securities held to maturity, at amortized cost
389,621

 
403,019

 
436,081

   Loans held for sale
8,287

 
7,038

 
17,100

 
 
 
 
 
 
     Loans
5,662,782

 
5,640,106

 
5,375,847

     Allowance for credit losses
(50,746
)
 
(51,314
)
 
(48,176
)
   Net loans
5,612,036

 
5,588,792

 
5,327,671

 
 
 
 
 
 
   Goodwill and other intangibles
288,028

 
289,051

 
271,347

   Other assets
378,104

 
380,304

 
393,166

Total Assets
$
7,686,345

 
$
7,648,755

 
$
7,384,339

 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
   Noninterest-bearing demand deposits
$
1,451,284

 
$
1,489,058

 
$
1,416,814

 
 
 
 
 
 
     Interest-bearing demand deposits
181,504

 
126,296

 
264,731

     Savings deposits
3,453,461

 
3,516,714

 
3,290,978

     Time deposits
808,894

 
781,506

 
582,534

   Total interest-bearing deposits
4,443,859

 
4,424,516

 
4,138,243

 
 
 
 
 
 
   Total deposits
5,895,143

 
5,913,574

 
5,555,057

 
 
 
 
 
 
     Short-term borrowings
587,806

 
545,187

 
805,825

     Long-term borrowings
185,266

 
185,568

 
88,155

   Total borrowings
773,072

 
730,755

 
893,980

 
 
 
 
 
 
   Other liabilities
45,199

 
43,641

 
41,001

   Shareholders' equity
972,931

 
960,785

 
894,301

Total Liabilities and Shareholders' Equity
$
7,686,345

 
$
7,648,755

 
$
7,384,339






                                                

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/
 
2018
Rate
2018
Rate
2017
Rate
 
2018
Rate
2017
Rate
NET INTEREST MARGIN
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Loans (FTE)(1)(3)
$
5,657,390

4.66
%
$
5,551,053

4.65
%
$
5,398,815

4.28
%
 
$
5,541,600

4.58
%
$
5,226,320

4.17
%
Securities and interest bearing bank deposits (FTE) (1)
1,289,178

2.73
%
1,263,956

2.89
%
1,265,416

2.60
%
 
1,250,952

2.79
%
1,263,614

2.63
%
Total Interest-Earning Assets (FTE) (1)
6,946,568

4.30
%
6,815,009

4.32
%
6,664,231

3.96
%
 
6,792,552

4.25
%
6,489,934

3.87
%
Noninterest-earning assets
715,461

 
705,076

 
713,142

 
 
702,938

 
668,517

 
Total Assets
$
7,662,029

 
$
7,520,085

 
$
7,377,373

 
 
$
7,495,490

 
$
7,158,451

 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand and savings deposits
$
3,657,439

0.40
%
$
3,650,406

0.35
%
$
3,576,365

0.18
%
 
$
3,627,308

0.34
%
$
3,398,428

0.15
%
Time deposits
786,912

1.18
%
732,677

1.02
%
562,868

0.64
%
 
718,164

1.03
%
572,128

0.62
%
Short-term borrowings
569,666

1.81
%
601,633

1.66
%
829,954

1.16
%
 
614,103

1.61
%
887,463

0.96
%
Long-term borrowings
185,401

5.24
%
131,851

5.12
%
88,256

4.18
%
 
135,368

5.05
%
85,843

4.07
%
Total Interest-Bearing Liabilities
5,199,418

0.84
%
5,116,567

0.73
%
5,057,443

0.46
%
 
5,094,943

0.71
%
4,943,862

0.42
%
Noninterest-bearing deposits
1,447,948

 
1,431,007

 
1,393,024

 
 
1,426,566

 
1,337,328

 
Other liabilities
44,261

 
35,918

 
38,125

 
 
40,492

 
37,415

 
Shareholders' equity
970,402

 
936,593

 
888,781

 
 
933,489

 
839,846

 
Total Noninterest-Bearing Funding Sources
2,462,611

 
2,403,518

 
2,319,930

 
 
2,400,547

 
2,214,589

 
Total Liabilities and Shareholders' Equity
$
7,662,029

 
$
7,520,085

 
$
7,377,373

 
 
$
7,495,490

 
$
7,158,451

 
 
 
 
 
 
 
 
 
 
 
 
 
Net Interest Margin (FTE) (annualized)(1)
 
3.67
%
 
3.78
%
 
3.61
%
 
 
3.71
%
 
3.55
%




                                                

FIRST COMMONWEALTH FINANCIAL CORPORATION
 
CONSOLIDATED FINANCIAL DATA
 
 
 
Unaudited
 
 
 
(dollars in thousands)
 
 
 
 
September 30,
June 30,
September 30,
 
2018
2018
2017
Loan Portfolio Detail
 
 
 
Commercial Loan Portfolio:
 
 
 
Commercial, financial, agricultural and other
$
1,116,204

$
1,130,638

$
1,154,225

Commercial real estate
2,136,431

2,172,615

1,990,264

Real estate construction
298,395

259,825

259,129

Total Commercial
3,551,030

3,563,078

3,403,618

 
 
 
 
Consumer Loan Portfolio:
 
 
 
Closed-end mortgages
1,008,411

996,324

893,809

Home equity lines of credit
524,927

522,526

529,613

Total Real Estate - Consumer
1,533,338

1,518,850

1,423,422

 
 
 
 
Auto loans
476,536

459,333

454,320

Direct installment
33,415

31,915

24,995

Personal lines of credit
59,927

57,789

58,880

Student loans
8,536

9,141

10,612

Total Other Consumer
578,414

558,178

548,807

Total Consumer Portfolio
2,111,752

2,077,028

1,972,229

Total Portfolio Loans
5,662,782

5,640,106

5,375,847

Loans held for sale
8,287

7,038

17,100

Total Loans
$
5,671,069

$
5,647,144

$
5,392,947

 
 
 
 
 
 
 
 
 
September 30,
June 30,
September 30,
 
2018
2018
2017
ASSET QUALITY DETAIL
 
 
 
Nonperforming Loans:
 
 
 
Loans on nonaccrual basis
$
17,921

$
16,128

$
14,943

Troubled debt restructured loans on nonaccrual basis
13,876

18,573

11,408

Troubled debt restructured loans on accrual basis
8,052

11,162

12,451

       Total Nonperforming Loans
$
39,849

$
45,863

$
38,802

Other real estate owned ("OREO")
3,874

3,757

5,701

Repossessions ("Repos")
135

298

200

       Total Nonperforming Assets
$
43,858

$
49,918

$
44,703

Loans past due in excess of 90 days and still accruing
1,647

1,725

1,332

Classified loans
50,079

60,511

65,948

Criticized loans
141,591

142,145

125,034

 
 
 
 
Nonperforming assets as a percentage of total loans, plus OREO and Repos
0.77
%
0.88
%
0.83
%
Allowance for credit losses
$
50,746

$
51,314

$
48,176

 
 
 
 




                                                

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,
 
2018
2018
2017
 
2018
2017
Net Charge-offs (Recoveries):
 
 
 
 
 
 
       Commercial, financial, agricultural and other
$
2,516

$
291

$
315

 
$
2,834

$
1,956

       Real estate construction
(92
)

(373
)
 
(99
)
(470
)
       Commercial real estate
(36
)
2,225

(25
)
 
2,288

(115
)
       Residential real estate
226

104

276

 
709

676

       Loans to individuals
915

966

912

 
2,852

2,796

Net Charge-offs
$
3,529

$
3,586

$
1,105

 
$
8,584

$
4,843

 
 
 
 
 
 
 
Net charge-offs as a percentage of average loans outstanding (annualized) (4)
0.25
%
0.26
%
0.08
%
 
0.21
%
0.12
%
Provision for credit losses as a percentage of net charge-offs
83.90
%
32.57
%
109.86
%
 
128.52
%
58.52
%
Provision for credit losses
$
2,961

$
1,168

$
1,214

 
$
11,032

$
2,834

DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES
 
 
 
 
 
 
 
 
 
 
(1) Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the 21% federal income tax statutory rate.
(2) Core efficiency ratio excludes from total revenue the impact of derivative mark-to-market and excludes from "total noninterest expense" the amortization of intangibles, unfunded commitment expense and any other unusual items deemed by management to not be related to normal operations, such as merger, acquisition and severance costs.
(3) Includes held for sale loans.
(4) Excludes held for sale loans.
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Nine Months Ended
 
September 30,
June 30,
September 30,
 
September 30,
September 30,
 
2018
2018
2017
 
2018
2017
 
 
 
 
 
 
 
Net Income
$
25,149

$
32,081

$
21,283

 
$
80,500

$
51,184

Intangible amortization
817

829

844

 
2,430

2,262

Tax benefit of amortization of intangibles
(172
)
(174
)
(295
)
 
(510
)
(792
)
Net Income, adjusted for tax affected amortization of intangibles
25,794

32,736

21,832

 
82,420

52,654

 
 
 
 
 
 
 
Average Tangible Equity:
 
 
 
 
 
 
   Total shareholders' equity
$
970,402

$
936,593

$
888,781

 
$
933,489

$
839,846

   Less: intangible assets
288,570

282,734

271,670

 
280,485

247,679

       Tangible Equity
681,832

653,859

617,111

 
653,004

592,167

   Less: preferred stock



 


       Tangible Common Equity
$
681,832

$
653,859

$
617,111

 
$
653,004

$
592,167

 
 
 
 
 
 
 
(8)Return on Average Tangible Common Equity
15.01
%
20.08
%
14.04
%
 
16.88
%
11.89
%
 
 
 
 
 
 
 



                                                

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,
 
2018
2018
2017
 
2018
2017
 
 
 
 
 
 
 
Core Net Income:
 
 
 
 
 
 
Total Net Income
$
25,149

$
32,081

$
21,283

 
$
80,500

$
51,184

Merger & Acquisition related expenses
24

1,273

(69
)
 
1,634

10,412

Tax benefit of merger & acquisition related expenses
(5
)
(267
)
24

 
(343
)
(3,644
)
(5) Core net income
25,168

33,087

21,238

 
81,791

57,952

Average Shares Outstanding Assuming Dilution
100,490,812

99,504,409

97,457,470

 
99,197,568

94,578,490

(6) Core Earnings per common share (diluted)
$
0.25

$
0.33

$
0.22

 
$
0.82

$
0.61

 
 
 
 
 
 
 
Intangible amortization
817

829

844

 
2,430

2,262

Tax benefit of amortization of intangibles
(172
)
(174
)
(295
)
 
(510
)
(792
)
Core Net Income, adjusted for tax affected amortization of intangibles
$
25,813

$
33,742

$
21,787

 
$
83,711

$
59,422

 
 
 
 
 
 
 
(9) Core Return on Average Tangible Common Equity
15.02
%
20.70
%
14.01
%
 
17.14
%
13.42
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Nine Months Ended
 
September 30,
June 30,
September 30,
 
September 30,
September 30,
 
2018
2018
2017
 
2018
2017
Core Return on Average Assets:
 
 
 
 
 
 
Total Net Income
$
25,149

$
32,081

$
21,283

 
$
80,500

$
51,184

Total Average Assets
7,662,029

7,520,085

7,377,373

 
7,495,490

7,158,451

Return on Average Assets
1.30
%
1.71
%
1.14
%
 
1.44
%
0.96
%
 
 
 
 
 
 
 
Core Net Income (5)
$
25,168

$
33,087

$
21,238

 
$
81,791

$
57,952

Total Average Assets
7,662,029

7,520,085

7,377,373

 
7,495,490

7,158,451

(7) Core Return on Average Assets
1.30
%
1.76
%
1.14
%
 
1.46
%
1.08
%



                                                

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
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,
 
2018
2018
2017
 
2018
2017
Core Efficiency Ratio:
 
 
 
 
 
 
Total Noninterest Expense
$
49,530

$
49,129

$
47,361

 
$
145,532

$
148,389

Adjustments to Noninterest Expense:
 
 
 
 
 
 
Unfunded commitment reserve
82

(46
)
(1
)
 
41

451

Intangible amortization
817

829

844

 
2,430

2,262

Merger and acquisition related
24

1,273

(69
)
 
1,634

10,412

Noninterest Expense - Core
$
48,607

$
47,073

$
46,587

 
$
141,427

$
135,264

 
 
 
 
 
 
 
Net interest income, fully tax equivalent
$
64,311

$
64,192

$
60,667

 
$
188,682

$
172,381

Total noninterest income
19,757

26,308

19,790

 
68,108

55,626

Net securities gains

(5,262
)
(92
)
 
(8,102
)
(695
)
Total Revenue
$
84,068

$
85,238

$
80,365

 
$
248,688

$
227,312

 
 
 
 
 
 
 
Adjustments to Revenue:
 
 
 
 
 
 
Derivative mark-to-market


(14
)
 
789

(49
)
Total Revenue - Core
$
84,068

$
85,238

$
80,379

 
$
247,899

$
227,361

 
 
 
 
 
 
 
(10)Core Efficiency Ratio
57.82
%
55.23
%
57.96
%
 
57.05
%
59.49
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30,
June 30,
September 30,
 
 
 
 
2018
2018
2017
 
 
 
Tangible Equity:
 
 
 
 
 
 
   Total shareholders' equity
$
972,931

$
960,785

$
894,301

 
 
 
   Less: intangible assets
288,028

289,051

271,347

 
 
 
       Tangible Equity
684,903

671,734

622,954

 
 
 
   Less: preferred stock



 
 
 
       Tangible Common Equity
$
684,903

$
671,734

$
622,954

 
 
 
 
 
 
 
 
 
 
Tangible Assets:
 
 
 
 
 
 
   Total assets
$
7,686,345

$
7,648,755

$
7,384,339

 
 
 
   Less: intangible assets
288,028

289,051

271,347

 
 
 
       Tangible Assets
$
7,398,317

$
7,359,704

$
7,112,992

 
 
 
 
 
 
 
 
 
 
(12)Tangible Common Equity as a percentage of Tangible Assets
9.26
%
9.13
%
8.76
%
 
 
 
 
 
 
 
 
 
 
   Shares Outstanding at End of Period
100,361,434

100,364,567

97,475,575

 
 
 
(11)Tangible Book Value Per Common Share
$
6.82

$
6.69

$
6.39

 
 
 
 
 
 
 
 
 
 
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.



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