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First Commonwealth Announces Strong Second Quarter 2017 Earnings and the Completion of its Acquisition of DCB Financial Corp.; Declares Quarterly Dividend

/EINPresswire.com/ -- INDIANA, PA--(Marketwired - July 26, 2017) - First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the second quarter of 2017.

Second Quarter 2017 Highlights

Franchise Growth

  • Total assets grew $574 million compared to the prior quarter following the completion of the acquisition of DCB Financial Corp. in Lewis Center, Ohio on April 3, 2017.
    • Total loans grew $467 million, including $384 million acquired from DCB Financial Corp.
    • Total deposits grew $563 million, including $484 million acquired from DCB Financial Corp.

Earnings

  • Second quarter net income was $14.0 million, or $0.14 diluted earnings per share. Core net income (adjusted for acquisition expenses) was $20.4 million, or $0.21 diluted earnings per share.
    • Core earnings per share increased $0.03 from the previous quarter and $0.07 from the prior year quarter; an increase of 16.7% and 50.0%, respectively.
  • Total revenue grew $8.8 million, or 12.7% from the prior quarter.
    • Net interest income (FTE) increased $6.1 million, or 11.5% from the prior quarter.
    • Noninterest income grew $2.7 million, or 16.4% from the prior quarter.
  • Total noninterest expense increased $15.5 million from the previous quarter and includes $9.9 million of one-time merger-related expenses resulting from the acquisition of DCB Financial Corp.
  • Provision for credit losses totaled ($1.6) million, a decrease of $4.8 million as compared to the prior quarter, in part due to the recognition of $3.1 million in recoveries on two loans that had been charged-off in prior periods.
  • The annualized return on average tangible common equity for the second quarter of 2017 was 9.74% and the core return on average tangible common equity (excluding merger-related expenses) was 14.03%.

Profitability

  • The net interest margin improved four basis points to 3.54% compared to the prior quarter.
  • Core return on average assets (adjusted for acquisition expenses) improved 13 basis points to 1.11% compared to the prior quarter.
  • The core efficiency ratio improved to 60.19%, driven by revenue growth and well-controlled operational expenses.

"Our results in the second quarter and the first six months of 2017 reflect continued progress towards achieving our strategic objectives of growing revenue, controlling expenses and thoughtfully deploying capital," stated T. Michael Price, President and Chief Executive Officer. "And with the closing and integration of DCB Financial Corp. this past quarter, we add another quality building block to our Ohio presence," Price continued. "This new addition not only provides us with deeper penetration into the robust Columbus market, but it also gives us a group of very talented professionals that care about their communities and can help our loyal customers reach their financial goals."

 
Financial Summary
(dollars in thousands, For the Three Months Ended   For the Six Months Ended
except per share data) June 30, March 31, June 30,   June 30, June 30,
  2017 2017 2016   2017 2016
Reported Results            
Net income $14,013 $15,888 $12,007   $29,901 $24,480
Diluted earnings per share $0.14 $0.18 $0.14   $0.32 $0.28
Return on average assets 0.76 % 0.96 % 0.72 %   0.86 % 0.74 %
Return on average equity 6.44 % 8.51 % 6.53 %   7.40 % 6.70 %
             
Core Operating Results (non-GAAP)(1)            
Core net income $20,428 $16,285 $12,163   $36,714 $24,636
Core diluted earnings per share $0.21 $0.18 $0.14   $0.39 $0.28
Core return on average assets 1.11 % 0.98 % 0.73 %   1.05 % 0.74 %
Return on average tangible common equity 9.74 % 11.80 % 8.47 %   10.73 % 8.70 %
Core return on average tangible common equity 14.03 % 12.08 % 8.57 %   13.10 % 8.76 %
Core efficiency ratio 60.19 % 60.49 % 56.88 %   60.33 % 58.19 %
Net interest margin (FTE) 3.54 % 3.50 % 3.27 %   3.52 % 3.28 %
                       
                       
  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 second quarter of 2017 was $14.0 million, as compared to $12.0 million for the second quarter of 2016. Excluding merger-related expenses of $6.4 million after tax, net income for the second quarter of 2017 was $20.4 million.

Net income for the first six months of 2017 was $29.9 million, as compared to $24.5 million for the same period in 2016. Excluding merger-related expenses of $6.8 million after tax, net income for the first six months of 2017 was $36.7 million.

Net Interest Margin and Net Interest Income

The net interest margin for the second quarter of 2017 was 3.54%, an increase of 4 basis points from the previous quarter and an increase of 27 basis points from the second quarter of 2016. The yield on interest-earning assets increased by 8 basis points and funding costs increased by 4 basis points from the prior quarter. The increase from the previous year is primarily due to improved yields on variable and adjustable loan portfolios following the Federal Reserve's decision to increase short-term rates in December of 2016, March of 2017 and June of 2017, along with the ability to pay down higher cost short-term borrowings following our recent acquisitions. The yield on interest-earning assets increased by 28 basis points and funding costs increased 2 basis points from the year-ago quarter.

Total average earning assets increased $542 million, or 8.8%, from the previous quarter mostly due to the benefit of acquired DCB Financial Corp. balances, as well as average organic loan growth of $58 million and a $101 million increase in the securities portfolio.

Total deposits grew by $563 million in the second quarter of 2017 compared to the previous quarter, which includes $484 million in deposits acquired at the closing of the DCB Financial Corp. acquisition. Total deposits increased by $1.1 billion from the prior year quarter, which includes the addition of $605 million in deposits acquired at the closing of the northern Ohio branch acquisition, as well as the aforementioned acquisition of DCB Financial Corp.

Credit Quality

The provision for credit losses totaled ($1.6) million for the quarter ended June 30, 2017, a decrease of $4.8 million as compared to the prior quarter and a decrease of $12.0 million from the same quarter last year. The decrease from the prior quarter is primarily due to the recognition of $3.1 million of recoveries on two large commercial loans that had been charged-off in prior periods. The decrease from the previous year was due to the aforementioned recoveries and the recognition of a $7.5 million specific reserve for an individual commercial credit in the prior year quarter.

At June 30, 2017, nonperforming loans were $40.2 million, a decrease of $9.7 million from March 31, 2017 and a decrease of $24.2 million from June 30, 2016. The decrease from the first quarter of 2017 was related to the resolution of two commercial manufacturing credits that were placed into nonperforming status in 2016. Nonperforming loans as a percentage of total loans were 0.75%, 1.01% and 1.33% for the periods ended June 30, 2017, March 31, 2017 and June 30, 2016, respectively.

During the second quarter of 2017, net charge-offs (recoveries) were ($1.0) million, compared to $4.7 million in the prior quarter and $5.8 million in the second quarter of 2016. Net charge-offs (recoveries) in the second quarter of 2017 included recoveries for two large commercial credits totaling $3.1 million, which were previously charged-off.

For the originated loan portfolio at June 30, 2017, the allowance for credit losses to total originated loans was 0.98%, compared to 1.01% at March 31, 2017 and 1.24% at June 30, 2016.

Noninterest Income and Noninterest Expense

Noninterest income (excluding net security gains) totaled $19.0 million for the second quarter of 2017 as compared to $16.3 million for the first quarter of 2017 and $15.5 million for the second quarter of 2016. Service charges and card-related interchange income increased $1.0 million and $1.9 million from the prior quarter and the year-ago quarter, respectively, primarily due to acquired customer relationships. Financial advisory and insurance commissions increased $0.7 million and $0.8 million from the prior quarter and year-ago quarter, respectively, due to the aforementioned acquisitions and an expanded sales staff.

Noninterest expense (excluding merger-related expenses) totaled $48.4 million for the second quarter of 2017 as compared to $42.2 million for the first quarter of 2017 and $37.2 million for the second quarter of 2016. The increase from the previous periods was primarily driven by higher operating expenses following the Company's recent acquisitions and $1.1 million in write-downs on OREO properties previously acquired from three commercial customers.

Full time equivalent staff was 1,426 at June 30, 2017 and 1,271 at March 31, 2017 and was 1,168 at June 30, 2016. The increase from the previous periods is the result of the addition of employees from acquisitions and the recent expansion of the mortgage and commercial banking businesses in Ohio.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.08 per share, which is payable on August 18, 2017 to shareholders of record as of August 7, 2017. This dividend represents a 2.4% projected annual yield utilizing the July 25, 2017 closing market price of $13.18.

First Commonwealth's capital ratios for Total, Tier I, Leverage and Common Equity Tier I at June 30, 2017 were 12.2%, 11.3%, 9.6% and 10.2%, 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 second quarter 2017 on Wednesday, July 26, 2017 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 #10110414. 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 135 banking offices in 20 counties throughout western and central Pennsylvania and central and northeastern Ohio, as well as a Corporate Banking Center in northeast Ohio and mortgage offices in Stow 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) with which First Commonwealth 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 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.

         
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
    For the Three Months Ended     For the Six Months Ended
    June 30,   March 31,   June 30,     June 30,   June 30,
    2017   2017   2016     2017   2016
SUMMARY RESULTS OF OPERATIONS                      
Net interest income (FTE) (1) $ 58,896   $ 52,818   $ 50,034     $ 111,714   $ 99,783  
Provision for credit losses   (1,609 )   3,229     10,372       1,620     16,898  
Noninterest income   18,904     16,932     15,558       35,836     29,273  
Noninterest expense   58,263     42,765     37,410       101,028     75,554  
Net income   14,013     15,888     12,007       29,901     24,480  
Core net income (5)   20,428     16,285     12,163       36,714     24,636  
                       
Earnings per common share (diluted) $ 0.14   $ 0.18   $ 0.14     $ 0.32   $ 0.28  
Core earnings per common share (diluted) (6) $ 0.21   $ 0.18   $ 0.14     $ 0.39   $ 0.28  
                       
KEY FINANCIAL RATIOS                      
                       
Return on average assets   0.76 %   0.96 %   0.72 %     0.86 %   0.74 %
Core return on average assets (7)   1.11 %   0.98 %   0.73 %     1.05 %   0.74 %
Return on average shareholders' equity   6.44 %   8.51 %   6.53 %     7.40 %   6.70 %
Return on average tangible common equity (8)   9.74 %   11.80 %   8.47 %     10.73 %   8.70 %
Core return on average tangible common equity (9)   14.03 %   12.08 %   8.57 %     13.10 %   8.76 %
Core efficiency ratio (2)(10)   60.19 %   60.49 %   56.88 %     60.33 %   58.19 %
Net interest margin (FTE) (1)   3.54 %   3.50 %   3.27 %     3.52 %   3.28 %
                       
Book value per common share $ 9.02   $ 8.54   $ 8.34            
Tangible book value per common share (11)   6.23     6.32     6.48            
Market value per common share   12.68     13.26     9.20            
Cash dividends declared per common share   0.08     0.08     0.07     $ 0.16   $ 0.14  
                       
ASSET QUALITY RATIOS                      
Nonperforming loans as a percent of end-of-period loans (3)   0.75 %   1.01 %   1.33 %          
Nonperforming assets as a percent of total assets (3)   0.63 %   0.84 %   1.09 %          
Net charge-offs as a percent of average loans (annualized)   (0.07 )%   0.39 %   0.48 %          
Allowance for credit losses as a percent of nonperforming loans (4)   119.61 %   105.20 %   92.88 %          
Allowance for credit losses as a percent of end-of-period loans (4)   0.89 %   0.99 %   1.24 %          
Allowance for credit losses (originated loans and leases) as a percent of originated loans and leases   0.98 %   1.01 %   1.24 %          
                       
CAPITAL RATIOS                      
Shareholders' equity as a percent of total assets   11.9 %   11.2 %   11.0 %          
Tangible common equity as a percent of tangible assets (12)   8.5 %   8.5 %   8.8 %          
Leverage Ratio   9.6 %   9.9 %   9.8 %          
Risk Based Capital - Tier I   11.3 %   11.3 %   11.1 %          
Risk Based Capital - Total   12.2 %   12.3 %   12.2 %          
Common Equity - Tier I   10.2 %   10.1 %   9.9 %          
                             
                             
FIRST COMMONWEALTH FINANCIAL CORPORATION   
CONSOLIDATED FINANCIAL DATA     
Unaudited     
(dollars in thousands, except per share data)     
    For the Three Months Ended     For the Six Months Ended
    June 30,   March 31,   June 30,     June 30,   June 30,
    2017   2017   2016     2017   2016
INCOME STATEMENT                      
  Interest income $ 63,120   $ 56,179   $ 53,850     $ 119,299   $ 107,203  
  Interest expense   5,303     4,349     4,759       9,652     9,305  
Net Interest Income   57,817     51,830     49,091       109,647     97,898  
  Taxable equivalent adjustment (1)   1,079     988     943       2,067     1,885  
Net Interest Income (FTE)   58,896     52,818     50,034       111,714     99,783  
  Provision for credit losses   (1,609 )   3,229     10,372       1,620     16,898  
Net Interest Income after Provision for Credit Losses (FTE)   60,505     49,589     39,662       110,094     82,885  
                       
  Net securities (losses) gains   (49 )   652     28       603     28  
  Trust income   1,711     1,417     1,320       3,128     2,575  
  Service charges on deposit accounts   4,736     4,319     3,845       9,055     7,553  
  Insurance and retail brokerage commissions   2,442     2,082     1,985       4,524     3,944  
  Income from bank owned life insurance   1,449     1,292     1,311       2,741     2,607  
  Gain on sale of mortgage loans   1,315     977     932       2,292     1,615  
  Gain on sale of other loans and assets   457     307     466       764     661  
  Card-related interchange income   4,842     4,251     3,784       9,093     7,341  
  Derivative mark-to-market   (37 )   2     (531 )     (35 )   (1,545 )
  Swap fee income   314     (73 )   800       241     1,260  
  Other income   1,724     1,706     1,618       3,430     3,234  
Total Noninterest Income   18,904     16,932     15,558       35,836     29,273  
                       
  Salaries and employee benefits   25,298     23,466     19,888       48,764     41,565  
  Net occupancy   4,121     3,761     3,186       7,882     6,667  
  Furniture and equipment   3,323     3,088     2,882       6,411     5,749  
  Data processing   2,345     2,085     1,788       4,430     3,547  
  Pennsylvania shares tax   1,161     816     1,092       1,977     1,850  
  Advertising and promotion   988     806     664       1,794     1,190  
  Intangible amortization   846     572     114       1,418     251  
  Collection and repossession   443     497     474       940     1,043  
  Other professional fees and services   1,096     959     873       2,055     1,664  
  FDIC insurance   977     793     1,062       1,770     2,100  
  Litigation and operational losses   277     232     635       509     879  
  Loss on sale or write-down of assets   1,220     99     345       1,319     441  
  Merger and acquisition related   9,870     611     240       10,481     240  
  Other operating expenses   6,298     4,980     4,167       11,278     8,368  
Total Noninterest Expense   58,263     42,765     37,410       101,028     75,554  
                       
Income before Income Taxes   21,146     23,756     17,810       44,902     36,604  
  Taxable equivalent adjustment (1)   1,079     988     943       2,067     1,885  
  Income tax provision   6,054     6,880     4,860       12,934     10,239  
Net Income $ 14,013   $ 15,888   $ 12,007     $ 29,901   $ 24,480  
                       
Shares Outstanding at End of Period   97,483,067   89,113,083   88,949,995     97,483,067   88,949,995
Average Shares Outstanding Assuming Dilution   97,232,288   88,987,671   88,838,614     93,125,939   88,840,683
                       
                       
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
           
    June 30,     March 31,     June 30,
    2017     2017     2016
BALANCE SHEET (Period End)                
Assets                
  Cash and due from banks $ 103,602     $ 75,160     $ 68,163  
  Interest-bearing bank deposits   12,310       47,944       30,457  
  Securities available for sale, at fair value   820,586       871,423       913,420  
  Securities held to maturity, at amortized cost   450,886       386,954       405,976  
  Loans held for sale   9,785       9,588       11,613  
                 
    Loans   5,374,782       4,907,961       4,843,776  
    Allowance for credit losses   (48,067 )     (48,676 )     (59,821 )
  Net loans   5,326,715       4,859,285       4,783,955  
                 
  Goodwill and other intangibles   272,030       197,924       165,481  
  Other assets   387,472       360,699       370,756  
Total Assets $ 7,383,386     $ 6,808,977     $ 6,749,821  
                 
Liabilities and Shareholders' Equity                
  Noninterest-bearing demand deposits $ 1,404,081     $ 1,270,136     $ 1,136,629  
                 
    Interest-bearing demand deposits   237,801       114,526       88,777  
    Savings deposits   3,330,351       3,030,156       2,582,709  
    Time deposits   560,902       554,911       586,405  
  Total interest-bearing deposits   4,129,054       3,699,593       3,257,891  
                 
  Total deposits   5,533,135       4,969,729       4,394,520  
                 
    Short-term borrowings   846,137       961,601       1,464,687  
    Long-term borrowings   88,389       80,771       81,201  
  Total borrowings   934,526       1,042,372       1,545,888  
                 
  Other liabilities   36,260       35,881       67,627  
  Shareholders' equity   879,465       760,995       741,786  
Total Liabilities and Shareholders' Equity $ 7,383,386     $ 6,808,977     $ 6,749,821  
                       
                       
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in   thousands)
    For the Three Months Ended     For the Six Months Ended
    June 30, Yield/   March 31, Yield/   June 30, Yield/     June 30, Yield/   June 30, Yield/
    2017 Rate   2017 Rate   2016 Rate     2017 Rate   2016 Rate
NET INTEREST MARGIN                          
                                 
Assets                                
  Loans (FTE)(1)(3) $ 5,358,089 4.18 % $ 4,916,759 4.05 % $ 4,833,360 3.86 %   $ 5,138,643 4.11 % $ 4,789,306 3.87 %
  Securities and interest bearing bank deposits (FTE) (1)   1,312,814 2.57 %   1,212,025 2.71 %   1,321,018 2.54 %     1,262,698 2.64 %   1,326,125 2.56 %
  Total Interest-Earning Assets (FTE) (1)   6,670,903 3.86 %   6,128,784 3.78 %   6,154,378 3.58 %     6,401,341 3.82 %   6,115,431 3.59 %
  Noninterest-earning assets   710,913     580,033     552,754       645,835     546,932  
Total Assets $ 7,381,816   $ 6,708,817   $ 6,707,132     $ 7,047,176   $ 6,662,363  
                                 
Liabilities and Shareholders' Equity                                
  Interest-bearing demand and savings deposits $ 3,513,479 0.15 % $ 3,100,208 0.12 % $ 2,660,934 0.16 %   $ 3,307,985 0.14 % $ 2,607,415 0.13 %
  Time deposits   580,874 0.60 %   572,750 0.62 %   578,518 0.62 %     576,834 0.61 %   586,723 0.62 %
  Short-term borrowings   902,547 0.98 %   930,998 0.76 %   1,447,452 0.58 %     916,694 0.87 %   1,475,233 0.59 %
  Long-term borrowings   88,351 4.08 %   80,840 3.95 %   81,268 3.62 %     84,616 4.02 %   81,339 3.59 %
  Total Interest-Bearing Liabilities   5,085,251 0.42 %   4,684,796 0.38 %   4,768,172 0.40 %     4,886,129 0.40 %   4,750,710 0.39 %
  Noninterest-bearing deposits   1,386,240     1,230,939     1,137,626       1,309,019     1,117,159  
Other liabilities   38,092     36,005     61,821       37,055     59,561  
Shareholders' equity   872,233     757,077     739,513       814,973     734,933  
  Total Noninterest-Bearing Funding Sources   2,296,565     2,024,021     1,938,960       2,161,047     1,911,653  
Total Liabilities and Shareholders' Equity $ 7,381,816   $ 6,708,817   $ 6,707,132     $ 7,047,176   $ 6,662,363  
                                 
Net Interest Margin (FTE) (annualized)(1)     3.54 %     3.50 %     3.27 %       3.52 %     3.28 %
                                           
                                           
FIRST COMMONWEALTH FINANCIAL CORPORATION 
CONSOLIDATED FINANCIAL DATA   
Unaudited   
(dollars in thousands)   
    June 30,   March 31,   June 30,
    2017   2017   2016
Loan Portfolio Detail            
  Commercial Loan Portfolio:            
  Commercial, financial, agricultural and other $ 1,199,800   $ 1,148,460   $ 1,185,062  
  Commercial real estate   1,963,001     1,761,101     1,648,222  
  Real estate construction   249,255     240,122     242,132  
    Total Commercial   3,412,056     3,149,683     3,075,416  
               
  Consumer Loan Portfolio:            
  Closed-end mortgages   886,335     709,122     732,394  
  Home equity lines of credit   530,591     508,276     466,611  
    Total Real Estate - Consumer   1,416,926     1,217,398     1,199,005  
               
  Auto loans   450,561     453,076     481,887  
  Direct installment   24,501     24,017     25,160  
  Personal lines of credit   59,450     51,948     48,358  
  Student loans   11,288     11,839     13,950  
    Total Other Consumer   545,800     540,880     569,355  
    Total Consumer Portfolio   1,962,726     1,758,278     1,768,360  
      Total Portfolio Loans   5,374,782     4,907,961     4,843,776  
  Loans held for sale   9,785     9,588     11,613  
      Total Loans $ 5,384,567   $ 4,917,549   $ 4,855,389  
             
             
    June 30,   March 31,   June 30,
    2017   2017   2016
ASSET QUALITY DETAIL            
Nonperforming Loans:            
Loans on nonaccrual basis $ 15,553   $ 21,797   $ 38,404  
Loans held for sale on a nonaccrual basis   -     3,613     -  
Troubled debt restructured loans on nonaccrual basis   11,868     10,482     9,672  
Troubled debt restructured loans on accrual basis   12,764     13,990     16,332  
    Total Nonperforming Loans $ 40,185   $ 49,882   $ 64,408  
Other real estate owned ("OREO")   5,964     6,910     8,604  
Repossessions ("Repos")   208     223     291  
    Total Nonperforming Assets $ 46,357   $ 57,015   $ 73,303  
Loans past due in excess of 90 days and still accruing   1,898     2,109     1,384  
Classified loans   69,748     89,427     101,998  
Criticized loans   160,220     129,978     128,280  
             
Nonperforming assets as a percentage of total loans, plus OREO and Repos   0.86 %   1.16 %   1.51 %
Allowance for credit losses $ 48,067   $ 48,676   $ 59,821  
             
             
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
    For the Three Months Ended     For the Six Months Ended
    June 30,   March 31,   June 30,     June 30,   June 30,
    2017   2017   2016     2017   2016
Net Charge-offs (Recoveries):                      
  Commercial, financial, agricultural and other $ (1,816 ) $ 3,457   $ 4,689     $ 1,641   $ 5,947  
  Real estate construction   (43 )   (54 )   (4 )     (97 )   (227 )
  Commercial real estate   (4 )   (86 )   116       (90 )   (375 )
  Residential real estate   55     345     78       400     342  
  Loans to individuals   808     1,076     894       1,884     2,202  
Net Charge-offs $ (1,000 ) $ 4,738   $ 5,773     $ 3,738   $ 7,889  
                       
Net charge-offs as a percentage of average loans outstanding (annualized)   (0.07 )%   0.39 %   0.48 %     0.15 %   0.33 %
Provision for credit losses as a percentage of net charge-offs   160.90 %   68.15 %   179.66 %     43.34 %   214.20 %
Provision for credit losses $ (1,609 ) $ 3,229   $ 10,372     $ 1,620   $ 16,898  
                                 
                                 

DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES

(1) Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the 35% 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 Six Months Ended
    June 30,   March 31,   June 30,     June 30,   June 30,
    2017   2017   2016     2017   2016
                       
Net Income $ 14,013   $ 15,888   $ 12,007     $ 29,901   $ 24,480  
  Intangible amortization   846     572     114       1,418     251  
  Tax benefit of amortization of intangibles   (296 )   (200 )   (40 )     (496 )   (88 )
    Net Income, adjusted for tax affected amortization of intangibles   14,563     16,260     12,081       30,823     24,643  
                       
Average Tangible Equity:                      
  Total shareholders' equity $ 872,233   $ 757,077   $ 739,513     $ 814,973   $ 734,933  
  Less: intangible assets   272,488     198,070     165,527       235,484     165,597  
    Tangible Equity   599,745     559,007     573,986       579,489     569,336  
  Less: preferred stock   -     -     -       -     -  
    Tangible Common Equity $ 599,745   $ 559,007   $ 573,986     $ 579,489   $ 569,336  
                       
(8)Return on Average Tangible Common Equity   9.74 %   11.80 %   8.47 %     10.73 %   8.70 %
                       
                       
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 Six Months Ended
    June 30,   March 31,   June 30,     June 30,   June 30,
    2017   2017   2016     2017   2016
                       
Core Net Income:                      
  Total Net Income $ 14,013   $ 15,888   $ 12,007     $ 29,901   $ 24,480  
    Merger & Acquisition related expenses   9,870     611     240       10,481     240  
    Tax benefit of merger & acquisition related expenses   (3,455 )   (214 )   (84 )     (3,668 )   (84 )
  (5)Core net income   20,428     16,285     12,163       36,714     24,636  
    Average Shares Outstanding Assuming Dilution   97,232,288   88,987,671   88,838,614     93,125,939   88,840,683
    (6) Core Earnings per common share (diluted) $ 0.21   $ 0.18   $ 0.14     $ 0.39   $ 0.28  
                       
      Intangible amortization   846     572     114       1,418     251  
      Tax benefit of amortization of intangibles   (296 )   (200 )   (40 )     (496 )   (88 )
        Core Net Income, adjusted for tax affected amortization of intangibles $ 20,978   $ 16,657   $ 12,237     $ 37,636   $ 24,799  
                       
(9) Core Return on Average Tangible Common Equity   14.03 %   12.08 %   8.57 %     13.10 %   8.76 %
                       
                       
    For the Three Months Ended     For the Six Months Ended
    June 30,   March 31,   June 30,     June 30,   June 30,
    2017   2017   2016     2017   2016
Core Return on Average Assets:                      
  Total Net Income $ 14,013   $ 15,888   $ 12,007     $ 29,901   $ 24,480  
  Total Average Assets   7,381,816     6,708,817     6,707,132       7,047,176     6,662,363  
    Return on Average Assets   0.76 %   0.96 %   0.72 %     0.86 %   0.74 %
                       
  Core Net Income (5) $ 20,428   $ 16,285   $ 12,163     $ 36,714   $ 24,636  
  Total Average Assets   7,381,816     6,708,817     6,707,132       7,047,176     6,662,363  
    (7)Core Return on Average Assets   1.11 %   0.98 %   0.73 %     1.05 %   0.74 %
                                 
                                 
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 Six Months Ended
    June 30,   March 31,   June 30,     June 30,   June 30,
    2017   2017   2016     2017   2016
Core Efficiency Ratio:                      
  Total Noninterest Expense $ 58,263   $ 42,765   $ 37,410     $ 101,028   $ 75,554  
    Adjustments to Noninterest Expense:                      
      Unfunded commitment reserve   664     (212 )   (540 )     452     (915 )
      Intangible amortization   846     572     114       1,418     251  
      Merger and acquisition related   9,870     611     240       10,481     240  
        Noninterest Expense - Core $ 46,883   $ 41,794   $ 37,596     $ 88,677   $ 75,978  
                         
    Net interest income, fully tax equivalent $ 58,896   $ 52,818   $ 50,034     $ 111,714   $ 99,783  
    Total noninterest income   18,904     16,932     15,558       35,836     29,273  
    Net securities gains   49     (652 )   (28 )     (603 )   (28 )
      Total Revenue $ 77,849   $ 69,098   $ 65,564     $ 146,947   $ 129,028  
                         
    Adjustments to Revenue:                      
      Derivative mark-to-market   (37 )   2     (531 )     (35 )   (1,545 )
        Total Revenue - Core $ 77,886   $ 69,096   $ 66,095     $ 146,982   $ 130,573  
                       
(10)Core Efficiency Ratio   60.19 %   60.49 %   56.88 %     60.33 %   58.19 %
                       
                       
    June 30,   March 31,   June 30,          
    2017   2017   2016          
Tangible Equity:                      
  Total shareholders' equity $ 879,465   $ 760,995   $ 741,786            
  Less: intangible assets   272,030     197,924     165,481            
    Tangible Equity   607,435     563,071     576,305            
  Less: preferred stock   -     -     -            
    Tangible Common Equity $ 607,435   $ 563,071   $ 576,305            
                       
Tangible Assets:                      
  Total assets $ 7,383,386   $ 6,808,977   $ 6,749,821            
  Less: intangible assets   272,030     197,924     165,481            
    Tangible Assets $ 7,111,356   $ 6,611,053   $ 6,584,340            
                       
(12)Tangible Common Equity as a percentage of Tangible Assets   8.54 %   8.52 %   8.75 %          
                       
Shares Outstanding at End of Period   97,483,067     89,113,083     88,949,995            
(11)Tangible Book Value Per Common Share $ 6.23   $ 6.32   $ 6.48            
                       
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.

Media Relations:
Amy Jeffords
Assistant Vice President / Communications and Community Relations
Phone: 724-463-6806
E-mail: AJeffords@fcbanking.com

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