• First Commonwealth Announces Fourth Quarter and Full Year 2021 Earnings; Declares Quarterly Dividend

    Источник: Nasdaq GlobeNewswire / 25 янв 2022 17:00:01   America/New_York

    INDIANA, Pa., Jan. 25, 2022 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the fourth quarter and full year of 2021.

    Financial Summary

    (dollars in thousands,For the Three Months Ended For the Year Ended
    except per share data)December 31, September 30, December 31, December 31, December 31,
      2021   2021   2020   2021   2020 
    Reported Results         
    Net income$34,776  $34,092  $25,683  $138,257  $73,447 
    Diluted earnings per share$0.37  $0.36  $0.27  $1.44  $0.75 
    Return on average assets 1.45%  1.42%  1.12%  1.47%  0.82%
    Return on average equity 12.36%  12.14%  9.48%  12.55%  6.82%
              
    Operating Results (non-GAAP)(1)         
    Core net income$34,753  $34,131  $26,102  $138,518  $78,896 
    Core diluted earnings per share$0.37  $0.36  $0.27  $1.45  $0.81 
    Core pre-tax pre-provision net revenue$40,868  $42,913  $40,092  $171,771  $153,819 
    Provision expense($2,729) $330  $7,680   ($1,376) $56,718 
    Net charge-offs ($1,064) $2,277  $4,825  $8,410  $17,193 
    Reserve build/(release)(2)($1,663) ($2,853) $13,002  ($8,787) $49,672 
    Core return on average assets (ROAA) 1.45%  1.43%  1.14%  1.47%  0.88%
    Core pre-tax pre-provision ROAA 1.71%  1.79%  1.75%  1.83%  1.71%
    Return on average tangible common equity 17.56%  17.28%  13.80%  17.95%  10.06%
    Core return on average tangible common equity 17.55%  17.30%  14.02%  17.98%  10.78%
    Core efficiency ratio 57.06%  55.27%  56.00%  54.69%  56.28%
    Net interest margin (FTE) 3.23%  3.23%  3.26%  3.26%  3.32%

    (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 2021 Highlights

    • Net income of $34.8 million and diluted earnings per share totaled $0.37, an increase of $0.7 million, or $0.01 per share from the previous quarter and an increase of $9.1 million, or $0.10 per share from the fourth quarter of 2021
    • Core pre-tax pre-provision net revenue (PPNR)(1) totaled $40.9 million, an increase of $0.8 million from the fourth quarter of 2020 and a decrease of $2.0 million from the previous quarter reflecting a decline of $1.7 million in Paycheck Protection Program (PPP) income from the prior quarter
    • Total loans (excluding PPP loans) increased $186.1 million, or 11.2% annualized from the previous quarter, driven by both commercial and consumer categories
      • Average loans (excluding PPP loans) increased $141.9 million, or 8.6% annualized, from the previous quarter
    • Total PPP loans decreased $80.8 million from the previous quarter resulting in a total PPP loan balance at December 31, 2021 of $71.3 million
    • Net interest income (FTE) of $70.5 million decreased $0.4 million from the previous quarter due primarily to a $1.7 million decrease in income recognized on PPP loans
    • Noninterest income of $26.1 million (excluding net security gains, which were immaterial) decreased $1.2 million from the previous quarter due primarily to a $1.7 million decrease in gain on sale of Mortgage loans
    • Noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses, which were immaterial) of $55.5 million increased $0.5 million from the previous quarter
    • Average deposits decreased $33.1 million, or 1.6% annualized compared to the prior quarter, including $21.8 million of intentional time deposit runoff
      • End of period deposits grew $46.0 million, or 2.3% annualized, from the previous quarter
      • Average noninterest-bearing deposits grew $5.7 million, or 0.9% annualized, compared to the prior quarter
    • Tangible book value per share grew 2.4% annualized compared to the prior quarter
    • The Bank was named the #1 Small Business Association (SBA) lender in the SBA’s designated Pittsburgh District for the fiscal year ending September 30, 2021

    Profitability

    • Core return on average assets (ROAA) improved two basis points to 1.45% compared to the previous quarter and increased 31 basis points compared to the fourth quarter of 2020
    • Core pre-tax pre-provision ROAA(1) for the quarter ended December 31, 2021 was 1.71% as compared to 1.79% in the prior quarter and 1.75% in the fourth quarter of 2020
    • The net interest margin of 3.23% was unchanged from the prior quarter and decreased three basis points as compared to fourth quarter of 2020
    • The core efficiency ratio(1) of 57.06% increased 179 basis points from the previous quarter

    Strong capital and liquidity positions

    • Bank-level Tier 1 Capital ratio of 11.8%, which represents $279.9 million in excess capital above the regulatory “well capitalized” requirement of 8.0%
    • A total of 1,447,209 shares were purchased during the fourth quarter at a weighted average price of $14.62 under the company’s previously authorized share repurchase programs  
    • As previously announced on October 26, 2021, the Board of Directors authorized an additional $25 million share repurchase program.   The remaining repurchase capacity under the current program was $20.0 million as of December 31, 2021

    Asset quality

    • The provision for credit losses was ($2.7) million, a decrease of $3.1 million compared to the previous quarter and a decrease of $10.4 million from the fourth quarter of 2020
    • The allowance for credit losses as a percentage of end-of-period loans (excluding PPP loans) was 1.37% compared to 1.43% in the previous quarter
    • Total criticized loans increased $2.3 million from the previous quarter
      • Total nonperforming assets increased $17.2 million from the previous quarter
    • Net charge-offs on loans totaled ($1.1) million, a decrease of $3.3 million from the previous quarter
      • Net charge-offs as a percentage of average loans outstanding (excluding PPP loans, annualized) was (0.06%) in the fourth quarter of 2021 as compared to 0.14% in the previous quarter

    Full Year 2021 Highlights

    Franchise Growth

    • Total loans grew $470.8 million, or 7.5% compared to the prior year (excluding PPP loans)
    • Average deposits grew $461.6 million, or 6.3% compared to the prior year, including $479.0 million, or 22.8%, in average noninterest-bearing deposits
    • Tangible book value per share grew 7.8% year-over-year

    Earnings

    • For the year ended December 31, 2021, net income was $138.3 million, or $1.44 diluted earnings per share
      • Core net income(1) was $138.5 million, or $1.45 diluted earnings per share, compared to $78.9 million, or $0.81 diluted earnings per share in the prior year
    • Core pre-tax pre-provision income(1) grew $18.0 million, or 11.7% from the prior year
    • Positive operating leverage for the year ending December 31, 2021
      • Core revenue(1) grew $17.4 million, or 4.7%, from the prior year
      • Core noninterest expense(1) increased $3.7 million, or 1.8%, from the prior year

    Profitability

    • The core efficiency ratio(1) improved 159 basis points to 54.69% compared to the prior year
    • The return on average assets (ROAA) for the year ended December 31, 2021 was 1.47%
      • Core ROAA(1) for the year ended December 31, 2021 was 1.47% as compared to 0.88% in the prior year
      • Core pre-tax pre-provision ROAA(1) for the year ended December 31, 2021 was 1.83% as compared to 1.71% in the prior year

    “Our results for the quarter and full year were strong, reflecting solid operating performance,” stated T. Michael Price, President and Chief Executive Officer.   “Excluding PPP forgiveness, loans grew by 11.2% annualized since September with strong production in nearly all of our commercial and consumer portfolios.”   Price continued, “As we look to the year ahead, we are genuinely excited about the core organic growth prospects of our company.   The buildout of our Equipment Finance business is on pace and in line with our expectations. Our ongoing investments in talent, technology and our regional business model continue to position us well – all to the benefit of our clients, employees, communities and stockholders."

    Earnings

    Net income for the fourth quarter of 2021 was $34.8 million, or $0.37 per share, compared to $34.1 million, or $0.36 per share in the third quarter of 2021 and $25.7 million, or $0.27 per share for the fourth quarter of 2020.

    Net income for the year ended December 31, 2021 was $138.3 million, or $1.44 per share, compared to $73.4 million, or $0.75 per share, for the same period in 2020.

    Net Interest Income and Net Interest Margin

    Net interest income (FTE) of $70.5 million decreased $0.4 million from the previous quarter and increased $2.7 million from the prior year quarter.   The decrease from the previous quarter was primarily due to a $1.7 million decrease in fees recognized on PPP loans, partially offset by a $141.9 million increase in average loans (excluding PPP loans).   Interest and fee income recognized on PPP loans totaled $4.0 million in the fourth quarter of 2021 as compared to $5.7 million in the prior quarter.  

    The net interest margin for the fourth quarter of 2021 was 3.23%, unchanged from the previous quarter and a decrease of three basis points from the fourth quarter of 2020.   Loan yields (excluding PPP) decreased two basis points from the previous quarter due to the runoff of higher yielding loans offset by an $83.2 million increase in average interest earning assets (excluding PPP) and a three basis point increase in the yield on securities.

    Total average deposits decreased $33.1 million in the fourth quarter of 2021 as compared to the previous quarter.   Average noninterest bearing deposits grew $5.7 million and partially offset a $21.8 million decrease in average time deposits and a $17.0 million decrease in interest-bearing demand and savings deposits.  

    Total end-of-period deposits grew $46.0 million, or 2.3% annualized from the previous quarter.  

    Asset Quality

    The Company adopted CECL on December 31, 2020, effective January 1, 2020.  

    Provision expense in the fourth quarter of 2021 totaled ($2.7) million as compared to $0.3 million in the previous quarter.   The provision expense during the quarter reflected a $1.2 million decrease in qualitative reserves due to improved charge off history and a $0.6 million decrease in individually analyzed reserves, partially offset by a $0.3 million increase in quantitative reserves primarily due to strong quarterly loan growth.  

    Nonperforming loans totaled $55.2 million, an increase of $17.1 million from the previous quarter and an increase of $1.1 million the fourth quarter of 2020.   The increase from the previous quarter was primarily due to a single commercial real estate relationship with two loans totaling $28.4 million which were downgraded to nonaccrual status during the quarter.   At December 31, 2021, the relationship had sufficient collateral and did not require an associated individually assessed reserve.

    Nonperforming loans represented 0.81% of total loans (excluding PPP loans) as compared to 0.58% and 0.86% for the periods ended September 30, 2021 and December 31, 2020, respectively.

    At December 31, 2021, criticized loans totaled $198.1 million, an increase of $2.3 million from the previous quarter.  

    During the fourth quarter of 2021, net charge-offs were ($1.1) million due to recoveries on a previously charged off commercial loan relationship, as compared to net charge-offs of $2.2 million in the previous quarter and $4.8 million in the fourth quarter of 2020.  

    Net charge-offs as a percentage of average loans (excluding PPP, annualized) were (0.06%), 0.14% and 0.30% for the periods ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

    Noninterest Income and Noninterest Expense

    Noninterest income (excluding net security gains) totaled $26.1 million for the fourth quarter of 2021, as compared to $27.2 million for the third quarter of 2021 and $26.6 million for the fourth quarter of 2020.   The $1.1 million decrease from the previous quarter was primarily due to a $1.7 million decrease in gain on sale of Mortgage loans and a $0.7 million decrease in gain on sale of SBA loans, partially offset by an $0.8 million increase in swap derivative mark-to-market and a $0.5 million increase in swap fee income.  

    For the year ended December 31, 2021, noninterest income (excluding security gains) totaled $106.7 million, an increase of $12.3 million from the prior year.   The increase from the prior year was due to an $4.9 million increase in swap derivative mark-to-market, a $4.0 million increase in card related interchange income, a $3.1 million increase in gain on sale of SBA loans, a $2.0 million increase in Trust income and a $1.6 million increase in service charges on deposit accounts, partially offset by a $5.3 million decrease in gain on sale of Mortgage loans.

    There were no material security gains during 2021 or 2020.

    Noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses) totaled $55.5 million for the fourth quarter of 2021, as compared to $55.0 million for the third quarter of 2021 and $54.3 million for the fourth quarter of 2020.   The $0.5 million increase from the previous quarter was primarily the result of a $0.4 million increase in salaries and employee benefits and a $0.3 million increase in contributions, partially offset by a $0.3 million decrease in FDIC insurance expense.

    The core efficiency ratio was 57.06% during the fourth quarter of 2021 as compared to 55.27% in the previous quarter and 56.00% in the fourth quarter of 2020.

    For the year ended December 31, 2021, noninterest expense (excluding branch consolidation, early retirement and COVID-19 related expenses) totaled $213.5 million, as compared to $208.9 million in the prior year.   The $4.6 million increase from the prior year was primarily driven by a $1.8 million increase in incentives, a $1.8 million increase in data processing and a $1.2 million unfunded commitment reserve credit in the prior year, partially offset by a $1.1 million decrease in occupancy expense.

    The core efficiency ratio was 54.69% for the year ended December 31, 2021 as compared to 56.28% in the previous year.

    Full time equivalent staff was 1,426 at December 31, 2021, 1,409 at September 30, 2021, and 1,398 at December 31, 2020.   The increase from the previous quarter was partially the result of new hires related to the company’s previously announced entry into the equipment finance business.

    Dividends and Capital

    First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.115 per share, which represents a 4.5% increase from the fourth quarter of 2020.   The cash dividend is payable on February 18, 2022 to shareholders of record as of February 4, 2022.   This dividend represents a 2.8% projected annual yield utilizing the January 24, 2021 closing market price of $16.60.

    First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at December 31, 2021 were 14.6%, 12.2%, 9.7% and 11.3%, 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 2021 on Wednesday, January 26, 2022 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 118 community banking offices in 26 counties throughout western and central Pennsylvania and throughout Ohio, as well as business banking operations in Pittsburgh, Pennsylvania, and Canton, Cleveland, Columbus and Cincinnati, Ohio. The Company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson, and Lewis Center, Ohio.   First Commonwealth provides a full range of commercial banking, consumer banking, mortgage, equipment finance, wealth management and insurance products and services through its subsidiaries First Commonwealth Bank and First Commonwealth Insurance Agency.   For more information about First Commonwealth or to open an account today, please visit www.fcbanking.com.

    Forward-Looking Statements

    Certain statements contained in this release that are not historical facts may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the Securities and Exchange Commission, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute “forward-looking statements” as well. These statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of words such as “may,” “will,” “should,” “could,” “would,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate” or words of similar meaning. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including uncertainties regarding the impact of the COVID-19 pandemic, and could be affected by many factors, including, but not limited to: (1) the effects of   the COVID-19 pandemic on First Commonwealth and its customers; (2) volatility and disruption in national and international financial markets; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (4) inflation, interest rate, commodity price, securities market and monetary fluctuations; (5) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which First Commonwealth or its customers must comply; (6) the soundness of other financial institutions; (7) political instability; (8) impairment of First Commonwealth’s goodwill or other intangible assets; (9) acts of God or of war or terrorism; (10) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (11) changes in consumer spending, borrowings and savings habits; (12) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) First Commonwealth’s ability to attract and retain qualified employees; (16) changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (17) the ability to increase market share and control expenses; (18) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (19) the reliability of First Commonwealth’s vendors, internal control systems or information systems; (20) the costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals; and (21) other risks and uncertainties described in this report and in the other reports that we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K.   Further, statements about the potential effects of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, clients, third parties and us.  

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

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

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

    FIRST COMMONWEALTH FINANCIAL CORPORATION      
    CONSOLIDATED FINANCIAL DATA         
    Unaudited         
    (dollars in thousands, except per share data)         
     For the Three Months Ended For the Year Ended
     December 31, September 30, December 31, December 31, December 31,
      2021   2021   2020   2021   2020 
    SUMMARY RESULTS OF OPERATIONS         
    Net interest income$70,254  $70,645  $67,492  $278,541  $268,271 
    Provision for credit losses (2,729)  330   7,680   (1,376)  56,718 
    Noninterest income 26,071   27,245   26,622   106,757   94,476 
    Noninterest expense 55,428   55,027   54,552   213,857   215,826 
    Net income 34,776   34,092   25,683   138,257   73,447 
    Core net income (5) 34,753   34,131   26,102   138,518   78,896 
    Earnings per common share (diluted)$0.37  $0.36  $0.27  $1.44  $0.75 
    Core earnings per common share (diluted) (6)$0.37  $0.36  $0.27  $1.45  $0.81 
    KEY FINANCIAL RATIOS         
    Return on average assets 1.45%  1.42%  1.12%  1.47%  0.82%
    Core return on average assets (7) 1.45%  1.43%  1.14%  1.47%  0.88%
    Return on average assets, pre-provision, pre-tax 1.71%  1.79%  1.73%  1.82%  1.64%
    Core return on average assets, pre-provision, pre-tax 1.71%  1.79%  1.75%  1.83%  1.71%
    Return on average shareholders' equity 12.36%  12.14%  9.48%  12.55%  6.82%
    Return on average tangible common equity (8) 17.56%  17.28%  13.80%  17.95%  10.06%
    Core return on average tangible common equity (9) 17.55%  17.30%  14.02%  17.98%  10.78%
    Core efficiency ratio (2)(10) 57.06%  55.27%  56.00%  54.69%  56.28%
    Net interest margin (FTE) (1) 3.23%  3.23%  3.26%  3.26%  3.32%
              
    Book value per common share$11.77  $11.69  $11.12     
    Tangible book value per common share (11) 8.43   8.38   7.82     
    Market value per common share 16.09   13.63   10.94     
    Cash dividends declared per common share 0.115   0.115   0.110   0.455   0.440 
    ASSET QUALITY RATIOS         
    Nonperforming loans as a percent of end-of-period loans (3) 0.80%  0.56%  0.80%    
    Nonperforming loans as a percent of end-of-period loans, excluding PPP loans (3) 0.81%  0.58%  0.86%    
    Nonperforming assets as a percent of total assets (3) 0.59%  0.41%  0.62%    
    Nonperforming assets as a percent of total assets, excluding PPP loans (3) 0.59%  0.42%  0.65%    
    Net charge-offs as a percent of average loans (annualized) (4)    (0.06)%  0.13%  0.28%    
    Net charge-offs as a percent of average loans, excluding PPP loans (annualized) (4)    (0.06)%  0.14%  0.30%    
    Allowance for credit losses as a percent of nonperforming loans (4) 167.67%  247.30%  187.43%    
    Allowance for credit losses as a percent of end-of-period loans (4) 1.35%  1.40%  1.50%    
    Allowance for credit losses as a percent of end-of-period loans, excluding PPP loans (4) 1.37%  1.43%  1.61%    
    CAPITAL RATIOS         
    Shareholders' equity as a percent of total assets 11.6%  11.7%  11.8%    
    Tangible common equity as a percent of tangible assets (12) 8.6%  8.7%  8.6%    
    Tangible common equity as a percent of tangible assets, excluding PPP loans (12) 8.7%  8.9%  9.1%    
    Leverage Ratio 9.7%  9.6%  9.4%    
    Risk Based Capital - Tier I 12.2%  12.4%  12.2%    
    Risk Based Capital - Total 14.6%  15.0%  14.9%    
    Common Equity - Tier I 11.3%  11.5%  11.2%    


    FIRST COMMONWEALTH FINANCIAL CORPORATION    
    CONSOLIDATED FINANCIAL DATA      
    Unaudited      
    (dollars in thousands, except per share data)      
     For the Three Months Ended For the Year Ended
     December 31,September 30,December 31, December 31,December 31,
      2021  2021 2020   2021  2020 
    INCOME STATEMENT      
    Interest income$73,530 $74,196$73,306  $293,838 $301,209 
    Interest expense 3,276  3,551 5,814   15,297  32,938 
    Net Interest Income 70,254  70,645 67,492   278,541  268,271 
    Provision for credit losses (2,729) 330 7,680   (1,376) 56,718 
    Net Interest Income after Provision for Credit Losses 72,983  70,315 59,812   279,917  211,553 
    Net securities gains —  — 23   16  70 
    Trust income 2,771  3,118 2,327   11,111  9,101 
    Service charges on deposit accounts 4,857  4,770 4,321   17,984  16,387 
    Insurance and retail brokerage commissions 2,134  2,218 1,868   8,502  7,850 
    Income from bank owned life insurance 1,487  1,486 1,589   6,433  6,552 
    Gain on sale of mortgage loans 1,940  3,485 5,538   13,555  18,764 
    Gain on sale of other loans and assets 1,849  2,480 1,676   8,130  4,827 
    Card-related interchange income 7,069  7,052 6,377   27,954  23,966 
    Derivative mark-to-market 973  218 (399)  2,344  (2,521)
    Swap fee income 828  317 724   2,543  1,588 
    Other income 2,163  2,101 2,578   8,185  7,892 
    Total Noninterest Income 26,071  27,245 26,622   106,757  94,476 
    Salaries and employee benefits 31,422  31,066 31,388   119,506  118,961 
    Net occupancy 3,972  3,960 3,668   16,586  17,647 
    Furniture and equipment 3,776  4,052 3,925   15,642  15,393 
    Data processing 2,933  3,196 2,739   12,373  10,543 
    Pennsylvania shares tax 1,257  1,257 1,254   4,604  4,500 
    Advertising and promotion 1,154  1,150 879   4,983  4,679 
    Intangible amortization 900  868 897   3,497  3,689 
    Other professional fees and services 1,351  1,308 1,131   4,501  3,886 
    FDIC insurance 565  830 1,062   2,529  2,699 
    Litigation and operational losses 700  589 373   2,324  1,411 
    Loss on sale or write-down of assets 80  171 264   303  680 
    COVID-19 related 92  50 307   449  874 
    Voluntary early retirement —  — 118   —  3,422 
    Branch consolidation (121) — 128   (103) 2,672 
    Other operating expenses 7,347  6,530 6,419   26,663  24,770 
    Total Noninterest Expense 55,428  55,027 54,552   213,857  215,826 
    Income before Income Taxes 43,626  42,533 31,882   172,817  90,203 
    Income tax provision 8,850  8,441 6,199   34,560  16,756 
    Net Income$34,776 $34,092$25,683  $138,257 $73,447 
           
    Shares Outstanding at End of Period 94,233,152  95,209,685 96,130,751   94,233,152  96,130,751 
    Average Shares Outstanding Assuming Dilution 95,020,353  95,892,304 96,344,398   95,840,285  97,758,965 
           


    FIRST COMMONWEALTH FINANCIAL CORPORATION   
    CONSOLIDATED FINANCIAL DATA     
    Unaudited     
    (dollars in thousands)     
          
     December 31, September 30, December 31,
      2021   2021   2020 
    BALANCE SHEET (Period End)     
    Assets     
    Cash and due from banks$84,738  $94,579  $100,009 
    Interest-bearing bank deposits 310,634   240,095   256,572 
    Securities available for sale, at fair value 1,054,218   1,137,675   843,450 
    Securities held to maturity, at amortized cost 541,311   548,057   361,844 
    Loans held for sale 18,583   19,925   33,436 
          
    Loans 6,839,230   6,732,580   6,761,183 
    Allowance for credit losses (92,522)  (94,185)  (101,309)
    Net loans 6,746,708   6,638,395   6,659,874 
          
    Goodwill and other intangibles 314,516   315,092   316,820 
    Other assets 474,385   484,036   496,099 
    Total Assets$9,545,093  $9,477,854  $9,068,104 
          
    Liabilities and Shareholders' Equity     
    Noninterest-bearing demand deposits$2,658,782  $2,656,229  $2,319,958 
          
    Interest-bearing demand deposits 291,476   265,782   250,353 
    Savings deposits 4,647,197   4,609,393   4,305,391 
    Time deposits 385,043   405,081   562,964 
    Total interest-bearing deposits 5,323,716   5,280,256   5,118,708 
          
    Total deposits 7,982,498   7,936,485   7,438,666 
          
    Short-term borrowings 138,315   117,754   117,373 
    Long-term borrowings 182,269   182,519   233,255 
    Total borrowings 320,584   300,273   350,628 
          
    Other liabilities 132,639   128,241   210,193 
    Shareholders' equity 1,109,372   1,112,855   1,068,617 
    Total Liabilities and Shareholders' Equity$9,545,093  $9,477,854  $9,068,104 


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


     For the Three Months Ended For the Year Ended
     December 31,Yield/September 30,Yield/December 31,Yield/ December 31,Yield/December 31,Yield/
      2021Rate 2021Rate 2020Rate  2021Rate 2020Rate
    NET INTEREST MARGIN          
                
    Assets           
    Loans, excluding PPP loans (FTE)(1)(3)$6,680,3463.73%$6,538,4773.75%$6,387,1743.90% $6,464,4463.80%$6,354,7494.16%
    PPP Loans 111,54414.44% 225,26210.05% 548,2794.00%  312,7467.41% 382,5903.16%
    Securities and interest-bearing bank deposits (FTE) (1) 1,878,7551.46% 1,937,3851.43% 1,340,7561.62%  1,809,4171.46% 1,390,8041.89%
    Total Interest-Earning Assets (FTE) (1) 8,670,6453.38% 8,701,1243.39% 8,276,2093.54%  8,586,6093.43% 8,128,1433.72%
    Noninterest-earning assets 815,872  801,377  845,094   807,455  846,437 
    Total Assets$9,486,517 $9,502,501 $9,121,303  $9,394,064 $8,974,580 
                
    Liabilities and Shareholders' Equity           
    Interest-bearing demand and savings deposits$4,882,3180.06%$4,899,3280.07%$4,603,2550.14% $4,812,0040.07%$4,552,2110.26%
    Time deposits 395,4440.31% 417,2740.36% 609,3501.05%  449,4520.49% 726,7021.40%
    Short-term borrowings 126,6950.07% 118,1120.06% 131,8060.10%  119,8010.08% 142,6340.49%
    Long-term borrowings 182,3714.91% 182,6234.92% 233,3524.37%  200,9614.70% 233,7014.39%
    Total Interest-Bearing Liabilities 5,586,8280.23% 5,617,3370.25% 5,577,7630.41%  5,582,2180.27% 5,655,2480.58%
    Noninterest-bearing deposits 2,652,812  2,647,089  2,313,009   2,580,460  2,101,412 
    Other liabilities 130,373  124,286  152,396   130,007  140,612 
    Shareholders' equity 1,116,504  1,113,789  1,078,135   1,101,379  1,077,308 
    Total Noninterest-Bearing Funding Sources 3,899,689  3,885,164  3,543,540   3,811,846  3,319,332 
    Total Liabilities and Shareholders' Equity$9,486,517 $9,502,501 $9,121,303  $9,394,064 $8,974,580 
                
    Net Interest Margin (FTE) (annualized)(1) 3.23% 3.23% 3.26%  3.26% 3.32%


    FIRST COMMONWEALTH FINANCIAL CORPORATION 
    CONSOLIDATED FINANCIAL DATA   
    Unaudited   
    (dollars in thousands)   
     December 31,September 30,December 31,
      2021  2021  2020 
    Loan Portfolio Detail   
    Commercial Loan Portfolio:   
    Commercial, financial, agricultural and other$1,102,154 $1,072,489 $1,077,132 
    Paycheck Protection Program 71,298  152,102  478,854 
    Commercial real estate 2,251,097  2,231,890  2,211,569 
    Real estate construction 382,764  318,120  340,850 
    Total Commercial 3,807,313  3,774,601  4,108,405 
        
    Consumer Loan Portfolio:   
    Closed-end mortgages 1,368,816  1,311,052  1,165,951 
    Home equity lines of credit 551,434  564,323  584,641 
    Real estate construction 111,692  105,896  86,371 
    Total Real Estate - Consumer 2,031,942  1,981,271  1,836,963 
        
    Auto loans 901,280  886,367  712,800 
    Direct installment 40,937  32,509  36,165 
    Personal lines of credit 52,809  52,667  61,072 
    Student loans 4,949  5,165  5,778 
    Total Other Consumer 999,975  976,708  815,815 
    Total Consumer Portfolio 3,031,917  2,957,979  2,652,778 
    Total Portfolio Loans 6,839,230  6,732,580  6,761,183 
    Loans held for sale 18,583  19,925  33,436 
    Total Loans$6,857,813 $6,752,505 $6,794,619 
        
        
     December 31,September 30,December 31,
      2021  2021  2020 
    ASSET QUALITY DETAIL   
    Nonperforming Loans:   
    Loans on nonaccrual basis$34,926 $14,466 $30,801 
    Loans held for sale on a nonaccrual basis —  —  13 
    Troubled debt restructured loans on nonaccrual basis 13,134  16,210  14,740 
    Troubled debt restructured loans on accrual basis 7,120  7,410  8,512 
    Total Nonperforming Loans$55,180 $38,086 $54,066 
    Other real estate owned ("OREO") 642  502  1,215 
    Repossessions ("Repos") 397  453  613 
    Total Nonperforming Assets$56,219 $39,041 $55,894 
    Loans past due in excess of 90 days and still accruing 1,606  1,135  1,523 
    Classified loans 77,563  58,780  76,179 
    Criticized loans 198,126  195,791  302,813 
        
    Nonperforming assets as a percentage of total loans, plus OREO and Repos (4) 0.82% 0.58% 0.83%
    Allowance for credit losses$92,522 $94,185 $101,309 
        


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


     For the Three Months Ended For the Year Ended
     December 31,September 30,December 31, December 31,December 31,
      2021  2021  2020   2021  2020 
    Net Charge-offs (Recoveries):      
    Commercial, financial, agricultural and other$(1,633)$1,960 $1,027  $4,590 $6,004 
    Real estate construction (11) —  —   (146) (26)
    Commercial real estate (5) 12  2,364   1,524  4,627 
    Residential real estate 20  (87) 5   (159) 626 
    Loans to individuals 565  392  1,429   2,601  5,962 
    Net Charge-offs$(1,064)$2,277 $4,825  $8,410 $17,193 
           
    Net charge-offs as a percentage of average loans outstanding (annualized) (4) (0.06)% 0.13% 0.28%  0.12% 0.26%
    Net charge-offs as a percentage of average loans outstanding, excluding PPP loans (annualized) (4) (0.06)% 0.14% 0.30%  0.13% 0.27%
    Provision for credit losses as a percentage of net charge-offs 256.48% 14.49% 159.17%  (16.36)% 329.89%
    Provision for credit losses$(2,729)$330 $7,680  $(1,376)$56,718 


    DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES   
           
    (1) Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the federal income tax statutory rate of 21%.
    (2) Core efficiency ratio excludes from total revenue the impact of derivative mark-to-market and excludes from "total noninterest expense" the amortization of intangibles, unfunded commitment expense and any other unusual items deemed by management to not be related to normal operations, such as merger, acquisition and severance costs.
    (3) Includes held for sale loans.  
    (4) Excludes held for sale loans.  
     For the Three Months Ended For the Year Ended
     December 31,September 30,December 31, December 31,December 31,
      2021 2021 2020  2021 2020
           
    Interest income$73,530$74,196$73,306 $293,838$301,209
    Adjustment to fully taxable equivalent basis (1) 266 235 333  1,100 1,462
    Interest income adjusted to fully taxable equivalent basis (non-GAAP) 73,796 74,431 73,639  294,938 302,671
    Interest expense 3,276 3,551 5,814  15,297 32,938
    Net interest income, (FTE) (1)$70,520$70,880$67,825 $279,641$269,733


    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 Year Ended
     December 31,September 30,December 31, December 31,December 31,
      2021  2021  2020   2021  2020 
           
    Net Income$34,776 $34,092 $25,683  $138,257 $73,447 
    Intangible amortization 900  868  897   3,497  3,689 
    Tax benefit of amortization of intangibles (189) (182) (188)  (734) (775)
    Net Income, adjusted for tax affected amortization of intangibles$35,487 $34,778 $26,392  $141,020 $76,361 
           
    Average Tangible Equity:      
    Total shareholders' equity$1,116,504 $1,113,789 $1,078,135  $1,101,379 $1,077,308 
    Less: intangible assets 314,860  315,303  317,178   315,589  318,155 
    Tangible Equity 801,644  798,486  760,957   785,790  759,153 
    Less: preferred stock —  —  —   —  — 
    Tangible Common Equity$801,644 $798,486 $760,957  $785,790 $759,153 
           
    (8)Return on Average Tangible Common Equity 17.56% 17.28% 13.80%  17.95% 10.06%
           


     For the Three Months Ended For the Year Ended
     December 31,September 30,December 31, December 31,December 31,
      2021  2021  2020   2021  2020 
           
    Core Net Income:      
    Total Net Income$34,776 $34,092 $25,683  $138,257 $73,447 
    Net securities gains —  —  (23)  (16) (70)
    Tax benefit of net securities gains —  —  5   3  15 
    COVID-19 related 92  50  307   449  874 
    Tax benefit of COVID 19 related (19) (11) (64)  (94) (184)
    Early retirement related —  —  118   —  3,422 
    Tax benefit of early retirement related expenses —  —  (25)  —  (719)
    Branch consolidation related (121) —  128   (103) 2,672 
    Tax benefit of bank consolidation related expenses 25  —  (27)  22  (561)
    (5) Core net income$34,753 $34,131 $26,102  $138,518 $78,896 
    Average Shares Outstanding Assuming Dilution 95,020,353  95,892,304  96,344,398   95,840,285  97,758,965 
    (6) Core Earnings per common share (diluted)$0.37 $0.36 $0.27  $1.45 $0.81 
           
    Intangible amortization 900  868  897   3,497  3,689 
    Tax benefit of amortization of intangibles (189) (182) (188)  (734) (775)
    Core Net Income, adjusted for tax affected amortization of intangibles$35,464 $34,817 $26,811  $141,281 $81,810 
           
    (9) Core Return on Average Tangible Common Equity 17.55% 17.30% 14.02%  17.98% 10.78%


    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 Year Ended
     December 31,September 30,December 31, December 31,December 31,
      2021  2021  2020   2021  2020 
    Core Return on Average Assets:      
    Total Net Income$34,776 $34,092 $25,683  $138,257 $73,447 
    Total Average Assets 9,486,517  9,502,501  9,121,303   9,394,064  8,974,580 
    Return on Average Assets 1.45% 1.42% 1.12%  1.47% 0.82%
           
    Core Net Income (5)$34,753 $34,131 $26,102  $138,518 $78,896 
    Total Average Assets 9,486,517  9,502,501  9,121,303   9,394,064  8,974,580 
    (7) Core Return on Average Assets 1.45% 1.43% 1.14%  1.47% 0.88%


     For the Three Months Ended For the Year Ended
     December 31,September 30,December 31, December 31,December 31,
      2021  2021  2020   2021  2020 
    Core Efficiency Ratio:      
    Total Noninterest Expense$55,428 $55,027 $54,552  $213,857 $215,826 
    Adjustments to Noninterest Expense:      
    Unfunded commitment reserve —  —  —   —  (1,181)
    Intangible amortization 900  868  897   3,497  3,689 
    COVID-19 related 92  50  307   449  874 
    Early retirement related —  —  118   —  3,422 
    Branch consolidation related (121) —  128   (103) 2,672 
    Noninterest Expense - Core$54,557 $54,109 $53,102  $210,014 $206,350 
           
    Net interest income, (FTE)$70,520 $70,880 $67,825  $279,641 $269,733 
    Total noninterest income 26,071  27,245  26,622   106,757  94,476 
    Net securities gains —  —  (23)  (16) (70)
    Total Revenue 96,591  98,125  94,424   386,382  364,139 
           
    Adjustments to Revenue:      
    Derivative mark-to-market 973  218  (399)  2,344  (2,521)
    Total Revenue - Core$95,618 $97,907 $94,823  $384,038 $366,660 
           
    (10)Core Efficiency Ratio 57.06% 55.27% 56.00%  54.69% 56.28%


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


    DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES  
        
     December 31,September 30,December 31,
      2021  2021  2020 
    Tangible Equity:   
    Total shareholders' equity$1,109,372 $1,112,855 $1,068,617 
    Less: intangible assets 314,516  315,092  316,820 
    Tangible Equity 794,856  797,763  751,797 
    Less: preferred stock —  —  — 
    Tangible Common Equity$794,856 $797,763 $751,797 
        
    Tangible Assets:   
    Total assets$9,545,093 $9,477,854 $9,068,104 
    Less: intangible assets 314,516  315,092  316,820 
    Tangible Assets$9,230,577 $9,162,762 $8,751,284 
    Less: PPP loans 71,298  152,102  478,854 
    Tangible Assets, excluding PPP loans$9,159,279 $9,010,660 $8,272,430 
        
    (12)Tangible Common Equity as a percentage of Tangible Assets 8.61% 8.71% 8.59%
    (12)Tangible Common Equity as a percentage of Tangible Assets, excluding PPP loans 8.68% 8.85% 9.09%
        
    Shares Outstanding at End of Period 94,233,152  95,209,685  96,130,751 
    (11)Tangible Book Value Per Common Share$8.43 $8.38 $7.82 
        
    Note: Management believes that it is standard practice in the banking industry to present these non-GAAP measures. These measures provide useful information to management and investors by allowing them to make peer comparisons.


     For the Three Months Ended For the Year Ended
     December 31,September 30,December 31, December 31,December 31,
      2021  2021 2020   2021  2020 
    Pre-tax pre-provision income:      
    Net interest income$70,254 $70,645$67,492  $278,541 $268,271 
    Noninterest income 26,071  27,245 26,622   106,757  94,476 
    Noninterest expense 55,428  55,027 54,552   213,857  215,826 
    Pre-tax pre-provision income$40,897 $42,863$39,562  $171,441 $146,921 
           
    Net securities gains $—  $—($23) ($16)($70)
    COVID-19 related 92  50 307   449  874 
    Voluntary early retirement —  — 118   —  3,422 
    Branch consolidation (121) — 128   (103) 2,672 
    Core pre-tax pre-provision income$40,868 $42,913$40,092  $171,771 $153,819 
           
    Net charge-offs($1,064)$2,277$4,825  $8,410 $17,193 

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