INDIANA, Pa., July 23, 2019 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the second quarter of 2019.

Second Quarter 2019 Highlights

Earnings

• Second quarter net income was $27.3 million, or $0.28 diluted earnings per share, an increase of $0.03 from the prior quarter.
• Total revenue grew $4.7 million, or 5.5% from the prior quarter.
  • Noninterest income grew $3.0 million, or 16.1% from the prior quarter.
  • Net interest income (FTE) increased $1.6 million, or 2.5% from the prior quarter.
• Total noninterest expense increased $2.5 million, or 5.0% from the previous quarter, and includes $1.1 million in losses and write-downs related to the sale of two OREO properties and a write-down of a branch facility.
• Provision for credit losses totaled $2.8 million, a decrease of $1.3 million as compared to the prior quarter.

Franchise Growth

• Total loans grew $138 million, or 9.4% on an annualized basis from the prior quarter.
• Average deposits grew $137 million, or 9.1% on an annualized basis from the prior quarter.
• Tangible book value per share (non-GAAP)⁽¹⁾ grew $0.25, or 13.9% on an annualized basis from the prior quarter.
• On June 27, 2019, the company’s banking subsidiary, First Commonwealth Bank, announced it had received all necessary regulatory approvals for its acquisition of 14 Santander branches in Central Pennsylvania, which is expected to be completed in September 2019.

Profitability

• Return on average assets improved 10 basis points from the previous quarter to 1.37%.
• The return on average tangible common equity for the second quarter of 2019 was 15.47%.
• The core efficiency ratio (non-GAAP)⁽¹⁾ improved to 56.8% compared to 58.2% in the previous quarter.
• The net interest margin of 3.75% was unchanged from the previous quarter.

“We had an impressive first half of the year, as our loan and deposit growth has exceeded our expectations,” stated T. Michael Price, President and Chief Executive Officer. “Our Regional President model has been the key to our growth so far this year, enabling cross-functional teamwork to better serve our customers. I am also pleased with the production coming from recent investments in our Mortgage, SBA and Commercial Lending capabilities. These additional sources of fee income and core deposits will serve us well as we navigate the current interest rate environment.” Price continued, “We expect 2019 to be an exciting year for First Commonwealth as we further execute on our mission, expand our presence within our footprint, including Central Pennsylvania and Ohio, and introduce new initiatives to drive profitable growth and maximize shareholder value.”

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,
	2019				2019				2018				2019				2018
Reported Results
Net income	$	27,280			$	24,589			$	32,081			$	51,869			$	55,351
Diluted earnings per share	$	0.28			$	0.25			$	0.32			$	0.53			$	0.56
Return on average assets		1.37	%			1.27	%			1.71	%			1.32	%			1.51	%
Return on average equity		10.84	%			10.11	%			13.74	%			10.48	%			12.20	%
Operating Results (non-GAAP)(1)
Core net income	$	27,307			$	24,589			$	33,087			$	51,896			$	56,623
Core diluted earnings per share	$	0.28			$	0.25			$	0.33			$	0.53			$	0.57
Core return on average assets		1.37	%			1.27	%			1.76	%			1.32	%			1.54	%
Return on average tangible common equity		15.47	%			14.59	%			20.08	%			15.04	%			17.89	%
Core return on average tangible common equity		15.48	%			14.59	%			20.70	%			15.05	%			18.29	%
Core efficiency ratio		56.80	%			58.18	%			55.23	%			57.47	%			56.66	%
Net interest margin (FTE)		3.75	%			3.75	%			3.78	%			3.75	%			3.74	%

(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.

Earnings

Net income for the second quarter of 2019 was $27.3 million, as compared to $24.6 million in the previous quarter and $32.1 million for the second quarter of 2018. The increase from the previous quarter was primarily driven by strong fee income growth and a stable net interest margin. The decrease from the prior year was primarily due to a $5.3 million (pre-tax) gain from successful auction calls of the Company’s remaining pooled trust preferred securities in the year ago quarter.

Net income for the first six months of 2019 was $51.9 million, as compared to $55.4 million for the same period in 2018. The decrease from the prior year was primarily due to an $8.1 million (pre-tax) gain on the sale and successful auction calls of the Company’s remaining pooled trust preferred securities in the first six months of 2018.

Net Interest Income and Net Interest Margin

During the second quarter of 2019, net interest income (FTE) was $67.6 million, an increase of $1.6 million from the previous quarter. The increase in net interest income was the result of a $100 million increase in average interest-earning assets and a $32 million, or 8.9% (annualized), increase in average noninterest bearing deposits.

The net interest margin for the second quarter of 2019 was unchanged from the previous quarter at 3.75% and decreased three basis points compared to the second quarter of 2018. In the second quarter of 2019, strong core deposit growth, together with a favorable shift in the mix of earning assets (as strong loan growth more than offset a decrease of approximately $37.4 million in securities), combined to offset higher interest bearing deposit costs.

The decrease in the net interest margin from the prior year was due to the recognition of $1.5 million in deferred interest from the sale of one commercial loan and the successful auction call of the company’s remaining trust preferred security portfolio during the second quarter of 2018, which contributed approximately nine basis points to the net interest margin.

Total average deposits grew by $137 million in the second quarter of 2019 compared to the previous quarter. Growth was driven by a $100 million increase in average interest-bearing demand and savings deposits and a $32 million increase in average noninterest-bearing deposits.

Credit Quality

The provision for credit losses totaled $2.8 million for the quarter ended June 30, 2019, a decrease of $1.3 million compared to the prior quarter. The decrease is primarily due to a continuation of the long-term trend of improvements in credit quality.

Nonperforming loans were $35.6 million for the quarter ended June 30, 2019, an increase of $4.3 million from previous quarter and a decrease of $10.3 million from the same quarter last year. Nonperforming loans as a percentage of total loans were 0.59%, 0.53% and 0.81% for the periods ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively.

During the second quarter of 2019, net charge-offs (recoveries) were $1.4 million, compared to $2.2 million in the prior quarter and $3.6 million in the second quarter of 2018. Net charge-offs in the second quarter of 2018 included a $2.2 million charge-off of one commercial real estate credit.

For the originated loan portfolio at June 30, 2019, the general allowance for credit losses to total originated non-impaired loans was 0.88%, compared to 0.89% at March 31, 2019 and 0.88% at June 30, 2018.

Noninterest Income and Noninterest Expense

Noninterest income (excluding net security gains) totaled $21.9 million for the second quarter of 2019, as compared to $18.9 million in the previous quarter and $21.0 million for the second quarter of 2018. The increase from the previous quarter was primarily due to a $0.7 million increase in card-related interchange income, a $0.6 million increase in mortgage banking revenue, a $0.4 million gain on the sale of a commercial loan and a $0.3 million increase in gain on sale of SBA loans.

Non-interest income during the second quarter of 2018 included net securities gains of $5.3 million as a result of the successful auction call and open market sale of the company’s remaining pooled trust preferred securities during the second quarter of 2018.

Noninterest expense (excluding merger-related expenses) totaled $52.2 million for the second quarter of 2019 as compared to $49.7 million for the first quarter of 2019 and $47.9 million for the second quarter of 2018. The increase from the previous quarter was primarily driven by a $1.0 million increase in unfunded commitment reserves due to higher construction loan originations, $0.9 million in write-downs of two OREO properties, and a $0.2 million write-down of a former bank facility. In addition, Pennsylvania shares tax increased $0.3 million in comparison to the previous quarter due to educational improvement tax credits recognized in the first quarter of 2019.

Full time equivalent staff was 1,438 at June 30, 2019 and 1,417 at March 31, 2019 and was 1,438 at June 30, 2018. 

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.10 per share, which is payable on August 16, 2019 to shareholders of record as of August 2, 2019. This dividend represents a 3.1% projected annual yield utilizing the July 22, 2019 closing market price of $13.03.

First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at June 30, 2019 were 14.6%, 12.2%, 10.4% and 11.2%, respectively. First Commonwealth’s current capital levels exceed the fully phased-in Basel III capital requirements issued by U.S. bank regulators.

Conference Call

First Commonwealth will host a quarterly conference call to discuss its financial results for the second quarter 2019 on Wednesday, July 24, 2019 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 # 10133127. 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 133 community banking offices in 22 counties throughout western and central Pennsylvania and throughout 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:

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 Six Months Ended
	June 30,				March 31,				June 30,				June 30,				June 30,
	2019				2019				2018				2019				2018
SUMMARY RESULTS OF OPERATIONS
Net interest income (FTE) (1)	$	67,581			$	65,943			$	64,192			$	133,524			$	124,371
Provision for credit losses	2,835				4,095				1,168				6,930				8,071
Noninterest income	21,906				18,872				26,308				40,778				48,351
Noninterest expense	52,229				49,730				49,129				101,959				96,002
Net income	27,280				24,589				32,081				51,869				55,351
Core net income (5)	27,307				24,589				33,087				51,896				56,623
Earnings per common share (diluted)	$	0.28			$	0.25			$	0.32			$	0.53			$	0.56
Core earnings per common share (diluted) (6)	$	0.28			$	0.25			$	0.33			$	0.53			$	0.57
KEY FINANCIAL RATIOS
Return on average assets	1.37		%		1.27		%		1.71		%		1.32		%		1.51		%
Core return on average assets (7)	1.37		%		1.27		%		1.76		%		1.32		%		1.54		%
Return on average shareholders' equity	10.84		%		10.11		%		13.74		%		10.48		%		12.20		%
Return on average tangible common equity (8)	15.47		%		14.59		%		20.08		%		15.04		%		17.89		%
Core return on average tangible common equity (9)	15.48		%		14.59		%		20.70		%		15.05		%		18.29		%
Core efficiency ratio (2)(10)	56.80		%		58.18		%		55.23		%		57.47		%		56.66		%
Net interest margin (FTE) (1)	3.75		%		3.75		%		3.78		%		3.75		%		3.74		%
Book value per common share	$	10.37			$	10.12			$	9.57
Tangible book value per common share (11)	7.46				7.21				6.69
Market value per common share	13.47				12.60				15.51
Cash dividends declared per common share	0.10				0.10				0.09				$	0.20			$	0.17
ASSET QUALITY RATIOS
Nonperforming loans as a percent of end-of-period loans (3)	0.59		%		0.53		%		0.81		%
Nonperforming assets as a percent of total assets (3)	0.47		%		0.45		%		0.65		%
Net charge-offs as a percent of average loans (annualized) (4)	0.10		%		0.15		%		0.26		%
Allowance for credit losses as a percent of nonperforming loans (4)	143.62		%		158.74		%		111.89		%
Allowance for credit losses as a percent of end-of-period loans (4)	0.85		%		0.85		%		0.91		%
Allowance for credit losses (originated loans and leases) as a percent of total originated loans and leases	0.92		%		0.92		%		1.01		%
CAPITAL RATIOS
Shareholders' equity as a percent of total assets	12.7		%		12.5		%		12.6		%
Tangible common equity as a percent of tangible assets (12)	9.4		%		9.3		%		9.1		%
Leverage Ratio	10.4		%		10.3		%		10.4		%
Risk Based Capital - Tier I	12.2		%		12.2		%		12.3		%
Risk Based Capital - Total	14.6		%		14.6		%		14.8		%
Common Equity - Tier I	11.2		%		11.1		%		11.2		%

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,
	2019			2019			2018				2019			2018
INCOME STATEMENT
Interest income	$	82,057		$	79,594		$	72,940			$	161,651		$	139,439
Interest expense	14,931			14,108			9,265				29,039			16,079
Net Interest Income	67,126			65,486			63,675				132,612			123,360
Taxable equivalent adjustment (1)	455			457			517				912			1,011
Net Interest Income (FTE)	67,581			65,943			64,192				133,524			124,371
Provision for credit losses	2,835			4,095			1,168				6,930			8,071
Net Interest Income after Provision for Credit Losses (FTE)	64,746			61,848			63,024				126,594			116,300
Net securities gains	6			—			5,262				6			8,102
Trust income	1,970			1,926			1,880				3,896			3,808
Service charges on deposit accounts	4,593			4,245			4,423				8,838			8,829
Insurance and retail brokerage commissions	2,014			1,961			1,820				3,975			3,688
Income from bank owned life insurance	1,442			1,426			2,168				2,868			3,662
Gain on sale of mortgage loans	2,074			1,428			1,241				3,502			2,725
Gain on sale of other loans and assets	1,777			1,084			2,331				2,861			2,905
Card-related interchange income	5,441			4,730			5,143				10,171			9,885
Derivative mark-to-market	(17		)	(26		)	—				(43		)	789
Swap fee income	820			393			297				1,213			587
Other income	1,786			1,705			1,743				3,491			3,371
Total Noninterest Income	21,906			18,872			26,308				40,778			48,351
Salaries and employee benefits	27,311			27,220			26,154				54,531			51,027
Net occupancy	4,441			4,916			4,222				9,357			8,591
Furniture and equipment	3,824			3,668			3,647				7,492			7,187
Data processing	2,619			2,544			2,478				5,163			4,911
Pennsylvania shares tax	1,260			916			1,247				2,176			2,150
Advertising and promotion	1,231			1,240			1,176				2,471			1,985
Intangible amortization	745			754			829				1,499			1,613
Collection and repossession	460			547			607				1,007			1,430
Other professional fees and services	1,032			754			1,031				1,786			2,038
FDIC insurance	555			574			597				1,129			1,373
Litigation and operational losses	555			401			197				956			376
Loss on sale or write-down of assets	1,181			65			497				1,246			694
Merger and acquisition related	34			—			1,273				34			1,610
Other operating expenses	6,981			6,131			5,174				13,112			11,017
Total Noninterest Expense	52,229			49,730			49,129				101,959			96,002
Income before Income Taxes	34,423			30,990			40,203				65,413			68,649
Taxable equivalent adjustment (1)	455			457			517				912			1,011
Income tax provision	6,688			5,944			7,605				12,632			12,287
Net Income	$	27,280		$	24,589		$	32,081			$	51,869		$	55,351
Shares Outstanding at End of Period	98,499,937			98,625,806			100,364,567				98,499,937			100,364,567
Average Shares Outstanding Assuming Dilution	98,600,609			98,706,827			99,504,409				98,651,810			98,529,160

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
	June 30,				March 31,				June 30,
	2019				2019				2018
BALANCE SHEET (Period End)
Assets
Cash and due from banks	$	95,047			$	100,724			$	101,744
Interest-bearing bank deposits	1,233				23,168				2,237
Securities available for sale, at fair value	895,471				918,479				876,570
Securities held to maturity, at amortized cost	373,453				384,909				403,019
Loans held for sale	16,036				9,627				7,038
Loans	6,003,059				5,871,070				5,640,106
Allowance for credit losses	(51,061		)		(49,653		)		(51,314		)
Net loans	5,951,998				5,821,417				5,588,792
Goodwill and other intangibles	286,545				287,078				289,051
Other assets	451,071				427,271				380,304
Total Assets	$	8,070,854			$	7,972,673			$	7,648,755
Liabilities and Shareholders' Equity
Noninterest-bearing demand deposits	$	1,528,307			$	1,510,566			$	1,489,058
Interest-bearing demand deposits	238,406				211,548				126,296
Savings deposits	3,530,705				3,517,350				3,516,714
Time deposits	858,547				891,296				781,506
Total interest-bearing deposits	4,627,658				4,620,194				4,424,516
Total deposits	6,155,965				6,130,760				5,913,574
Short-term borrowings	555,080				565,616				545,187
Long-term borrowings	234,623				184,841				185,568
Total borrowings	789,703				750,457				730,755
Other liabilities	103,355				93,437				43,641
Shareholders' equity	1,021,831				998,019				960,785
Total Liabilities and Shareholders' Equity	$	8,070,854			$	7,972,673			$	7,648,755

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/
	2019			Rate		2019			Rate		2018			Rate			2019			Rate		2018			Rate
NET INTEREST MARGIN
Assets
Loans (FTE)(1)(3)	$	5,949,332		4.97	%	$	5,811,587		4.94	%	$	5,551,053		4.65	%		$	5,880,840		4.95	%	$	5,482,745		4.53	%
Securities and interest-bearing bank deposits (FTE) (1)	1,279,032			2.75	%	1,316,445			2.86	%	1,263,956			2.89	%		1,297,636			2.81	%	1,231,522			2.82	%
Total Interest-Earning Assets (FTE) (1)	7,228,364			4.58	%	7,128,032			4.55	%	6,815,009			4.32	%		7,178,476			4.57	%	6,714,267			4.22	%
Noninterest-earning assets	758,110					750,876					705,076						754,512					696,573
Total Assets	$	7,986,474				$	7,878,908				$	7,520,085					$	7,932,988				$	7,410,840
Liabilities and Shareholders' Equity
Interest-bearing demand and savings deposits	$	3,777,016		0.59	%	$	3,677,387		0.53	%	$	3,650,406		0.35	%		$	3,727,477		0.56	%	$	3,611,993		0.31	%
Time deposits	870,603			1.72	%	865,944			1.57	%	732,677			1.02	%		868,286			1.64	%	683,220			0.93	%
Short-term borrowings	533,716			2.27	%	615,140			2.27	%	601,633			1.66	%		574,203			2.27	%	636,689			1.52	%
Long-term borrowings	211,087			5.01	%	184,931			5.47	%	131,851			5.12	%		198,081			5.22	%	109,937			4.88	%
Total Interest-Bearing Liabilities	5,392,422			1.11	%	5,343,402			1.07	%	5,116,567			0.73	%		5,368,047			1.09	%	5,041,839			0.64	%
Noninterest-bearing deposits	1,497,199					1,464,750					1,431,007						1,481,064					1,415,698
Other liabilities	87,429					83,920					35,918						85,685					38,576
Shareholders' equity	1,009,424					986,836					936,593						998,192					914,727
Total Noninterest-Bearing Funding Sources	2,594,052					2,535,506					2,403,518						2,564,941					2,369,001
Total Liabilities and Shareholders' Equity	$	7,986,474				$	7,878,908				$	7,520,085					$	7,932,988				$	7,410,840
Net Interest Margin (FTE) (annualized)(1)				3.75	%				3.75	%				3.78	%					3.75	%				3.74	%

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
	June 30,			March 31,			June 30,
	2019			2019			2018
Loan Portfolio Detail
Commercial Loan Portfolio:
Commercial, financial, agricultural and other	$	1,236,424		$	1,180,320		$	1,130,638
Commercial real estate	2,118,582			2,138,376			2,172,615
Real estate construction	361,028			324,903			221,206
Total Commercial	3,716,034			3,643,599			3,524,459
Consumer Loan Portfolio:
Closed-end mortgages	1,060,348			1,048,097			996,324
Home equity lines of credit	519,093			517,252			522,526
Real estate construction	80,826			64,484			38,619
Total Real Estate - Consumer	1,660,267			1,629,833			1,557,469
Auto loans	515,569			491,605			459,333
Direct installment	40,568			36,625			31,915
Personal lines of credit	63,155			61,599			57,789
Student loans	7,466			7,809			9,141
Total Other Consumer	626,758			597,638			558,178
Total Consumer Portfolio	2,287,025			2,227,471			2,115,647
Total Portfolio Loans	6,003,059			5,871,070			5,640,106
Loans held for sale	16,036			9,627			7,038
Total Loans	$	6,019,095		$	5,880,697		$	5,647,144
	June 30,			March 31,			June 30,
	2019			2019			2018
ASSET QUALITY DETAIL
Nonperforming Loans:
Loans on nonaccrual basis	$	15,665		$	16,286		$	16,128
Troubled debt restructured loans on nonaccrual basis	10,914			5,874			18,573
Troubled debt restructured loans on accrual basis	8,975			9,120			11,162
Total Nonperforming Loans	$	35,554		$	31,280		$	45,863
Other real estate owned ("OREO")	1,884			3,993			3,757
Repossessions ("Repos")	319			342			298
Total Nonperforming Assets	$	37,757		$	35,615		$	49,918
Loans past due in excess of 90 days and still accruing	2,656			1,509			1,725
Classified loans	49,975			39,428			60,511
Criticized loans	117,976			120,501			142,145
Nonperforming assets as a percentage of total loans, plus OREO and Repos	0.63		%	0.61		%	0.88		%
Allowance for credit losses	$	51,061		$	49,653		$	51,314

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,
	2019			2019			2018				2019			2018
Net Charge-offs (Recoveries):
Commercial, financial, agricultural and other	$	301		$	922		$	291			$	1,223		$	318
Real estate construction	(42		)	(42		)	—				(84		)	(7		)
Commercial real estate	(38		)	258			2,225				220			2,324
Residential real estate	(15		)	76			104				61			483
Loans to individuals	1,221			992			966				2,213			1,937
Net Charge-offs	$	1,427		$	2,206		$	3,586			$	3,633		$	5,055
Net charge-offs as a percentage of average loans outstanding (annualized) (4)	0.10		%	0.15		%	0.26		%		0.12		%	0.19		%
Provision for credit losses as a percentage of net charge-offs	198.67		%	185.63		%	32.57		%		190.75		%	159.66		%
Provision for credit losses	$	2,835		$	4,095		$	1,168			$	6,930		$	8,071

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% for 2019 and 2018.
(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,
	2019			2019			2018				2019			2018
Net Income	$	27,280		$	24,589		$	32,081			$	51,869		$	55,351
Intangible amortization	745			754			829				1,499			1,613
Tax benefit of amortization of intangibles	(156		)	(158		)	(174		)		(315		)	(339		)
Net Income, adjusted for tax affected amortization of intangibles	27,869			25,185			32,736				53,053			56,625
Average Tangible Equity:
Total shareholders' equity	$	1,009,424		$	986,836		$	936,593			$	998,192		$	914,727
Less: intangible assets	286,781			286,874			282,734				286,828			276,376
Tangible Equity	722,643			699,962			653,859				711,364			638,351
Less: preferred stock	—			—			—				—			—
Tangible Common Equity	$	722,643		$	699,962		$	653,859			$	711,364		$	638,351
(8) Return on Average Tangible Common Equity	15.47		%	14.59		%	20.08		%		15.04		%	17.89		%

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 Six Months Ended
	June 30,			March 31,			June 30,				June 30,			June 30,
	2019			2019			2018				2019			2018
Core Net Income:
Total Net Income	$	27,280		$	24,589		$	32,081			$	51,869		$	55,351
Merger & acquisition related expenses	34			—			1,273				34			1,610
Tax benefit of merger & acquisition related expenses	(7		)	—			(267		)		(7		)	(338		)
(5) Core net income	27,307			24,589			33,087				51,896			56,623
Average Shares Outstanding Assuming Dilution	98,600,609			98,706,827			99,504,409				98,651,810			98,529,160
(6) Core Earnings per common share (diluted)	$	0.28		$	0.25		$	0.33			$	0.53		$	0.57
Intangible amortization	745			754			829				1,499			1,613
Tax benefit of amortization of intangibles	(156		)	(158		)	(174		)		(315		)	(339		)
Core Net Income, adjusted for tax affected amortization of intangibles	$	27,896		$	25,185		$	33,742			$	53,080		$	57,897
(9) Core Return on Average Tangible Common Equity	15.48		%	14.59		%	20.70		%		15.05		%	18.29		%
	For the Three Months Ended										For the Six Months Ended
	June 30,			March 31,			June 30,				June 30,			June 30,
	2019			2019			2018				2019			2018
Core Return on Average Assets:
Total Net Income	$	27,280		$	24,589		$	32,081			$	51,869		$	55,351
Total Average Assets	7,986,474			7,878,908			7,520,085				7,932,988			7,410,840
Return on Average Assets	1.37		%	1.27		%	1.71		%		1.32		%	1.51		%
Core Net Income (5)	$	27,307		$	24,589		$	33,087			$	51,896		$	56,623
Total Average Assets	7,986,474			7,878,908			7,520,085				7,932,988			7,410,840
(7) Core Return on Average Assets	1.37		%	1.27		%	1.76		%		1.32		%	1.54		%

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,
	2019			2019			2018				2019			2018
Core Efficiency Ratio:
Total Noninterest Expense	$	52,229		$	49,730		$	49,129			$	101,959		$	96,002
Adjustments to Noninterest Expense:
Unfunded commitment reserve	612			(381		)	(46		)		231			(41		)
Intangible amortization	745			754			829				1,499			1,613
Merger and acquisition related	34			—			1,273				34			1,610
Noninterest Expense - Core	$	50,838		$	49,357		$	47,073			$	100,195		$	92,820
Net interest income, fully tax equivalent	$	67,581		$	65,943		$	64,192			$	133,524		$	124,371
Total noninterest income	21,906			18,872			26,308				40,778			48,351
Net securities gains	(6		)	—			(5,262		)		(6		)	(8,102		)
Total Revenue	$	89,481		$	84,815		$	85,238			$	174,296		$	164,620
Adjustments to Revenue:
Derivative mark-to-market	(17		)	(26		)	—				(43		)	789
Total Revenue - Core	$	89,498		$	84,841		$	85,238			$	174,339		$	163,831
(10)Core Efficiency Ratio	56.80		%	58.18		%	55.23		%		57.47		%	56.66		%
	June 30,			March 31,			June 30,
	2019			2019			2018
Tangible Equity:
Total shareholders' equity	$	1,021,831		$	998,019		$	960,785
Less: intangible assets	286,545			287,078			289,051
Tangible Equity	735,286			710,941			671,734
Less: preferred stock	—			—			—
Tangible Common Equity	$	735,286		$	710,941		$	671,734
Tangible Assets:
Total assets	$	8,070,854		$	7,972,673		$	7,648,755
Less: intangible assets	286,545			287,078			289,051
Tangible Assets	$	7,784,309		$	7,685,595		$	7,359,704
(12)Tangible Common Equity as a percentage of Tangible Assets	9.45		%	9.25		%	9.13		%
Shares Outstanding at End of Period	98,499,937			98,625,806			100,364,567
(11)Tangible Book Value Per Common Share	$	7.46		$	7.21		$	6.69
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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