Published: July 29, 2010
First Commonwealth Announces Second Quarter 2010 Improved Financial Results
INDIANA, Pa., July 29 /PRNewswire-FirstCall/ -- First Commonwealth Financial Corporation (NYSE: FCF) today reported net income of $13.5 million, or $0.15 diluted earnings per share, for the second quarter ended June 30, 2010 compared to a net loss of $18.6 million, or $0.22 per share, in the second quarter of 2009. For the six months ended June 30, 2010, net income was $0.4 million, compared to a net loss of $16.9 million or $0.20 per share in the first six months of 2009. The increase in net income was primarily the result of improved net interest income, a lower provision for credit losses, a decrease in net securities impairment losses on investments in pooled trust preferred collateralized debt obligations and a decrease in Federal Deposit Insurance Corporation ("FDIC") premiums due to the special assessment of $2.9 million recorded in the second quarter 2009.
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John J. Dolan, President and Chief Executive Officer stated, "We are very pleased to report favorable financial results for the second quarter. We have made significant progress toward the resolution of the relatively small number of troubled credits that have caused disproportionate earnings pressure over the last few quarters and have obscured very favorable trends in substantially all other areas of our community banking operations. I couldn't be more proud of how well First Commonwealth employees are performing during this unprecedented economic period as we continue to move the organization forward."
Credit Quality
The provision for credit losses was $4.0 million and $49.0 million for the second quarter and year to date periods ended June 30, 2010, respectively. The primary components of provision expense for the quarter were:
-- A $2.7 million specific reserve for a $3.7 million line of credit to a
food processing company located in Pennsylvania.
-- An additional specific reserve of $1.8 million for a $39.6 million
condominium construction project in south Florida based upon updated
appraisal values. During the second quarter of 2010 this loan was
substantially charged-off by $34.2 million and we are in the process of
exercising default remedies.
-- Resolution of three other credits that provided $3.6 million from either
recoveries on previously charged-off loans or release of previously
established specific reserves. Included in the $3.6 million is $2.7
million of proceeds from bankruptcy proceedings on two loans and $0.9
million on a troubled loan that paid off.
For the quarter ended June 30, 2010, nonperforming loans decreased $34.2 million to $133.2 million from March 31, 2010 primarily a result of the $34.2 million credit loss on the previously mentioned Florida condominium construction loan. Nonperforming loans as a percentage of total loans were 3.00%, 3.64% and 1.81% for the periods ended June 30, 2010, March 31, 2010 and June 30, 2009, respectively.
Other real estate owned ("OREO") acquired through foreclosure was $21.5 million at June 30, 2010 and $18.4 million is related to one property that is currently under a sales agreement.
During the second quarter of 2010, net credit losses were $34.7 million compared to $6.7 million in the second quarter of 2009; $34.2 million in the second quarter of 2010 was related to the aforementioned Florida condominium construction loan. For the six months ended June 30, 2010 net credit losses were $42.6 million, or 1.87% of average loans on an annualized basis, compared to $26.2 million, or 1.18%, for the same period in 2009. The allowance for credit losses as a percentage of total loans outstanding was 1.99%, 2.58% and 1.83% for June 30, 2010, March 31, 2010 and June 30, 2009, respectively.
Net Interest Income and Net Margin
During the second quarter of 2010 net interest income, on a fully taxable equivalent basis, increased $0.7 million, or 1%, compared to the second quarter of 2009. The increase was a result of a 15 basis point increase in the net interest margin, partially offset by a decline in average interest-earning assets. Net interest margin was 3.88%, 3.87% and 3.73% for the three-month periods ended June 30, 2010, March 31, 2010 and June 30, 2009, respectively. The improved net interest margin is the result of a more favorable deposit mix, improved loan pricing and reduced balance sheet leveraging. For the six months ended June 30, 2010 net interest income, on a fully taxable equivalent basis, increased $2.8 million, or 3%. The increase was due to a 16 basis point increase in the net interest margin, partially offset by a decline in average interest-earning assets. The net interest margin for the six months ended June 30, 2010 and 2009, respectively, was 3.88% and 3.72%.
Mr. Dolan added, "We have made noteworthy progress over the past twelve months to reduce the risk of our balance sheet by lowering our dependence on wholesale funding, reducing our exposure to large sized and out-of-market loans and problem credits. This will remain a major strategic focus going forward, will position us to capitalize on growth opportunities as economic conditions improve and will be more conducive to our community bank mission and philosophy."
Significant changes to First Commonwealth's balance sheet from the quarter to date average balances at June 30, 2009 to the comparable period at June 30, 2010 include:
-- A $488.7 million, or 36%, reduction in average borrowings, driven by a
$273.8 million, or 20%, decrease in average investment securities and a
$304.7 million, or 7%, growth in average deposits. The decline in
investment securities is the result of maturities and selective sales as
the risk/reward for balance sheet leveraging activities has become less
attractive in the current interest rate environment.
-- An increase of $40.5 million in average loans. The modest increase is a
result of planned decreases in residential real estate loans, more
disciplined underwriting guidelines concerning geography and size for
commercial loans and weak borrower demand, generally, in the
recessionary economic environment.
-- Continued improvement in the mix of deposits, as a $431.7 million, or
16%, growth in lower costing transaction and savings deposits has more
than offset a $127.0 million decrease in time deposits.
Non-Interest Income
Recognized net security losses, which includes net impairment losses and net securities gains, were $1.5 million, $2.3 million and $8.7 million for the three-month periods ended June 30, 2010, March 31, 2010 and June 30, 2009, respectively. These losses resulted primarily from other-than-temporary impairment charges on investments in pooled trust preferred collateralized debt obligations. Net security losses for the three month period ended June 30, 2010 include $0.6 million of realized gains from the sale and calls of municipal securities and equity securities. For the six months ended June 30, 2010 and 2009, net security losses were $3.9 million and $18.5 million, respectively.
The company's pooled trust preferred collateralized debt obligations consist of 14 securities comprised of 371 banks and other financial institutions. Two pooled securities are senior tranches and the remaining 12 are mezzanine tranches. As of June 30, 2010, the book value of pooled securities totaled $64.4 million with an estimated fair value of $28.7 million. In the second quarter of 2010, a $2.0 million other-than-temporary impairment charge was recorded for three trust preferred collateralized debt obligations that are expected to experience a principal shortfall. The amount of impairment charge recognized represents the expected credit loss on these securities.
Non-interest income, excluding net security losses, decreased $1.2 million in the second quarter of 2010 compared to the same period last year primarily due to a $2.1 million gain from a favorable legal settlement recorded in other income in the second quarter of 2009. All other categories in non-interest income improved from the year ago period.
For the six months ended June 30, 2010, non-interest income, excluding net security losses, was essentially flat at $28.0 million when compared to the same period of 2009. Trust and insurance income increased $1.0 million as a result of increased market values of assets under management and higher commissions on annuity sales, as additional producers and an enhanced calling program yielded higher sales. Card-related interchange income increased $1.0 million due to growth in usage of debit cards, increased demand deposit accounts and larger dollar transactions. Service charges on deposit accounts increased $0.5 million due to increased overdraft and account analysis fees, and the addition of new demand deposit customers. Income from bank owned life insurance increased $0.4 million as a result of higher crediting rates. Offsetting these increases was the aforementioned $2.1 million gain from a legal settlement in the second quarter of 2009.
Non-Interest Expense
Non-interest expense decreased $1.7 million, or 4%, in the second quarter of 2010 from the second quarter of 2009. For the six months ended June 30, 2010, as compared to the same period last year, non-interest expense decreased $1.8 million, or 2%. Contributing to these decreases were an expense reduction initiative in 2009, declines in FDIC insurance due to the special assessment of $2.9 million recorded in the second quarter 2009 and $0.9 million of collection and repossession expenses primarily related to two loans that were transferred to other real estate owned in the first quarter of 2009. Partially offsetting these decreases were increases in data processing, software and maintenance expense of $1.1 million due to higher investments in technology solutions and a $2.2 million write-down to current fair value for an OREO property that is currently under a sales agreement.
Full time equivalent staff was 1,605 and 1,675 for the periods ended June 30, 2010 and 2009, respectively. The efficiency ratio, calculated as total non-interest expense as a percentage of total revenue (total revenue consists of net interest income, on a fully tax-equivalent basis, plus total non-interest income, excluding net impairment losses), improved to 62% for the six months ended June 30, 2010 from 65% during the same period in 2009.
Conference Call
First Commonwealth will host its quarterly conference call to discuss its financial results for the second quarter of 2010 on Thursday, July 29, 2010 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-800-860-2442 or through our web page, http://www.fcbanking.com at our "Investor Relations" link. A replay of the call will be available one hour after the end of the conference at this web page for 30 days.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation is a $6.1 billion financial holding company headquartered in Indiana, Pennsylvania. It operates 115 retail branch offices in 15 counties in western and central Pennsylvania through First Commonwealth Bank, a Pennsylvania chartered bank and trust company. Financial services and insurance products are also provided through First Commonwealth Insurance Agency and First Commonwealth Financial Advisors, Inc.
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 our control and which may cause actual results, performance or achievements to differ materially from the results, performance or achievements contemplated by the forward-looking statements. These risks and uncertainties include, among other things, the following: continued deterioration in general business and economic conditions; changes in interest rates; deterioration in the credit quality of our loan portfolios or in the value of the collateral securing those loans; deterioration in the value of securities held in our investment securities portfolio; legal and regulatory developments; increased competition from both banks and non-banks; changes in customer behavior and preferences; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; management's ability to effectively manage credit risk, market risk, operational risk, legal risk, and regulatory and compliance risk; and other risks and uncertainties described in our reports filed with the Securities and Exchange Commission, including our 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 SELECTED FINANCIAL DATA
(dollars in thousands, except share data)
For the Quarter Ended
June 30, March 31,
2010 2010
---- ----
Interest Income
Interest and fees on loans $57,367 $57,408
Interest and dividends on
investments:
Taxable interest 9,664 10,467
Interest exempt from federal
income taxes 1,839 2,151
Dividends 19 27
Interest on bank deposits 48 25
--- ---
Total interest income 68,937 70,078
Interest Expense
Interest on deposits 13,067 13,580
Interest on short-term
borrowings 616 852
Interest on subordinated
debentures 1,390 1,375
Interest on other long-term
debt 1,268 1,173
----- -----
Total interest on long-term
debt 2,658 2,548
----- -----
Total interest expense 16,341 16,980
------ ------
Net Interest Income 52,596 53,098
Tax equivalent adjustment 2,639 2,798
----- -----
Net Interest Income (FTE) (a) 55,235 55,896
Provision for credit losses 4,010 45,020
----- ------
Net Interest Income after
provision for credit losses
(FTE) (a) 51,225 10,876
Non-Interest Income
Change in fair value on
impaired securities 190 (1,517)
Noncredit-related (gains)
losses on securities not
expected to
be sold (recognized in other
comprehensive income) (2,300) (1,233)
------ ------
Net impairment losses (2,110) (2,750)
Net securities gains 562 420
Trust income 1,398 1,494
Service charges on deposit
accounts 4,603 4,152
Insurance and retail
brokerage commissions 1,866 1,862
Income from bank owned life
insurance 1,301 1,257
Card related interchange
income 2,686 2,320
Other income 2,343 2,696
----- -----
Total non-interest income 12,649 11,451
Non-Interest Expense
Salaries and employee
benefits 21,047 22,327
Net occupancy expense 3,539 3,893
Furniture and equipment
expense 3,101 3,165
Data processing expense 1,478 1,437
Pennsylvania shares tax
expense 1,457 1,057
Intangible amortization 576 657
Collection and repossession
expense 794 923
Other professional fees 1,062 1,166
FDIC insurance 2,012 1,963
Loss on sale or write-down
of assets 2,314 83
Other expenses 6,298 6,568
----- -----
Total non-interest expense 43,678 43,239
Income (Loss) before income
taxes 20,196 (20,912)
Taxable equivalent adjustment 2,639 2,798
Income tax (benefit)
provision 4,015 (10,542)
----- -------
Net Income (Loss) $13,542 ($13,168)
======= ========
Average Shares Outstanding 85,777,550 85,029,748
Average Shares Outstanding
Assuming Dilution 85,788,566 85,029,748
Per Share Data:
Basic Earnings (Loss) Per
Share $0.15 ($0.15)
Diluted Earnings (Loss) Per
Share $0.15 ($0.15)
Cash Dividends Declared per
Common Share $0.01 $0.03
For the Quarter Ended
December September
31, 30, June 30,
2009 2009 2009
---- ---- ----
Interest Income
Interest and fees on loans $58,877 $57,085 $57,793
Interest and dividends on
investments:
Taxable interest 11,300 12,406 13,177
Interest exempt from
federal income taxes 2,351 2,540 2,660
Dividends 25 31 89
Interest on bank deposits 4 1 1
--- --- ---
Total interest income 72,557 72,063 73,720
Interest Expense
Interest on deposits 15,338 17,014 17,874
Interest on short-term
borrowings 789 947 1,133
Interest on subordinated
debentures 1,398 1,447 1,559
Interest on other long-
term debt 1,592 1,672 1,666
----- ----- -----
Total interest on long-
term debt 2,990 3,119 3,225
----- ----- -----
Total interest expense 19,117 21,080 22,232
------ ------ ------
Net Interest Income 53,440 50,983 51,488
Tax equivalent adjustment 2,975 3,052 3,091
----- ----- -----
Net Interest Income (FTE)
(a) 56,415 54,035 54,579
Provision for credit losses 21,059 23,020 48,248
------ ------ ------
Net Interest Income after
provision for credit
losses (FTE) (a) 35,356 31,015 6,331
Non-Interest Income
Change in fair value on
impaired securities (4,091) (25,473) (14,421)
Noncredit-related (gains)
losses on securities not
expected to
be sold (recognized in
other comprehensive
income) (1,564) 13,570 5,660
------ ------ -----
Net impairment losses (5,655) (11,903) (8,761)
Net securities gains 149 44 56
Trust income 1,201 1,366 1,151
Service charges on deposit
accounts 4,642 4,555 4,406
Insurance and retail
brokerage commissions 1,819 2,068 1,756
Income from bank owned life
insurance 1,192 1,078 1,034
Card related interchange
income 2,301 2,224 2,138
Other income 3,220 1,569 4,935
----- ----- -----
Total non-interest income 8,869 1,001 6,715
Non-Interest Expense
Salaries and employee
benefits 21,073 21,405 21,081
Net occupancy expense 3,262 3,263 3,528
Furniture and equipment
expense 3,012 3,121 2,977
Data processing expense 1,254 1,136 1,165
Pennsylvania shares tax
expense 1,361 1,310 1,312
Intangible amortization 656 684 743
Collection and repossession
expense 915 1,444 1,750
Other professional fees 796 723 847
FDIC insurance 2,041 2,046 4,863
Loss on sale or write-down
of assets 140 50 83
Other expenses 6,013 6,763 6,986
----- ----- -----
Total non-interest expense 40,523 41,945 45,335
Income (Loss) before income
taxes 3,702 (9,929) (32,289)
Taxable equivalent
adjustment 2,975 3,052 3,091
Income tax (benefit)
provision (2,002) (7,120) (16,761)
------ ------ -------
Net Income (Loss) $2,729 ($5,861) ($18,619)
====== ======= ========
Average Shares Outstanding 84,681,199 84,594,952 84,559,889
Average Shares Outstanding
Assuming Dilution 84,681,199 84,594,952 84,559,889
Per Share Data:
Basic Earnings (Loss) Per
Share $0.03 ($0.07) ($0.22)
Diluted Earnings (Loss) Per
Share $0.03 ($0.07) ($0.22)
Cash Dividends Declared per
Common Share $0.03 $0.03 $0.00
For the Six
Months Ended
June 30, June 30,
2010 2009
---- ----
Interest Income
Interest and fees on loans $114,775 $116,068
Interest and dividends on investments:
Taxable interest 20,131 26,885
Interest exempt from federal income taxes 3,990 5,554
Dividends 46 152
Interest on bank deposits 73 2
--- ---
Total interest income 139,015 148,661
Interest Expense
Interest on deposits 26,647 37,450
Interest on short-term borrowings 1,468 2,480
Interest on subordinated debentures 2,765 3,325
Interest on other long-term debt 2,441 3,319
----- -----
Total interest on long-term debt 5,206 6,644
----- -----
Total interest expense 33,321 46,574
------ ------
Net Interest Income 105,694 102,087
Tax equivalent adjustment 5,437 6,276
----- -----
Net Interest Income (FTE) (a) 111,131 108,363
Provision for credit losses 49,030 56,490
------ ------
Net Interest Income after provision for
credit losses (FTE) (a) 62,101 51,873
Non-Interest Income
Change in fair value on impaired
securities (1,327) (43,010)
Noncredit-related (gains) losses on
securities not expected to
be sold (recognized in other
comprehensive income) (3,533) 24,383
------ ------
Net impairment losses (4,860) (18,627)
Net securities gains 982 80
Trust income 2,892 2,238
Service charges on deposit accounts 8,755 8,243
Insurance and retail brokerage
commissions 3,728 3,372
Income from bank owned life insurance 2,558 2,172
Card related interchange income 5,006 4,034
Other income 5,039 7,943
----- -----
Total non-interest income 24,100 9,455
Non-Interest Expense
Salaries and employee benefits 43,374 43,581
Net occupancy expense 7,432 7,528
Furniture and equipment expense 6,266 5,952
Data processing expense 2,915 2,297
Pennsylvania shares tax expense 2,514 2,643
Intangible amortization 1,233 1,486
Collection and repossession expense 1,717 2,651
Other professional fees 2,228 1,910
FDIC insurance 3,975 6,384
Loss on sale or write-down of assets 2,397 112
Other expenses 12,866 14,139
------ ------
Total non-interest expense 86,917 88,683
Income (Loss) before income taxes (716) (27,355)
Taxable equivalent adjustment 5,437 6,276
Income tax (benefit) provision (6,527) (16,699)
------ -------
Net Income (Loss) $374 ($16,932)
==== ========
Average Shares Outstanding 85,405,715 84,540,684
Average Shares Outstanding Assuming
Dilution 85,412,371 84,540,684
Per Share Data:
Basic Earnings (Loss) Per Share $0.00 ($0.20)
Diluted Earnings (Loss) Per Share $0.00 ($0.20)
Cash Dividends Declared per Common Share $0.04 $0.12
(a) FTE - Fully tax equivalent net interest income is net interest
income adjusted for the effect of tax-exempt income as if it were
taxable using the 35% federal income tax statutory rate.
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
(dollars in thousands, except share data)
June 30, March 31,
2010 2010
---- ----
Assets
Cash and due from banks $86,855 $79,136
Interest-bearing bank deposits 1,503 57,073
Securities available for sale, at fair
value 996,220 1,062,713
Securities held to maturity, at
amortized cost,
(Fair value $0 at June 30, 2010 0 31,891
and $37,586 at December 31, 2009)
Other Investments 51,431 51,431
Loans:
Portfolio loans 4,434,291 4,595,409
Allowance for credit losses (88,046) (118,725)
------- --------
Net loans 4,346,245 4,476,684
Premises and equipment, net 69,203 70,357
Other real estate owned 21,548 23,191
Goodwill 159,956 159,956
Amortizing intangibles, net 6,175 6,752
Other assets 318,933 324,645
------- -------
Total assets $6,058,069 $6,343,829
========== ==========
Liabilities
Deposits (all domestic):
Noninterest-bearing $651,250 $639,184
Interest-bearing demand deposits 107,261 99,218
Savings deposits 2,360,648 2,273,714
Time deposits 1,619,479 1,640,153
Total interest-bearing 4,087,388 4,013,085
--------- ---------
Total deposits 4,738,638 4,652,269
Short-term borrowings 355,682 794,195
Subordinated debentures 105,750 105,750
Other long-term debt 155,250 119,084
------- -------
Total long-term debt 261,000 224,834
------- -------
Other liabilities 48,499 39,452
Total liabilities 5,403,819 5,710,750
Shareholders' Equity
Preferred stock, $1 par value per
share, 3,000,000 shares authorized,
none issued 0 0
Common stock, $1 par value per share,
200,000,000 shares authorized;
86,971,329 shares issued and 86,242,139
shares outstanding
at June 30, 2010;
86,600,431 shares issued and 85,151,875
shares outstanding
at December 31, 2009 86,971 86,755
Additional paid-in capital 303,961 302,841
Retained earnings 271,139 258,593
Accumulated other comprehensive income
(loss), net 5,236 (1,181)
Treasury stock (729,190 and 1,448,556
shares at June 30, 2010 and
December 31, 2009, respectively, at
cost) (8,457) (8,829)
Unearned ESOP shares (4,600) (5,100)
------ ------
Total shareholders' equity 654,250 633,079
------- -------
Total liabilities and shareholders'
equity $6,058,069 $6,343,829
========== ==========
Book value per share $7.59 $7.36
Market value per share $5.25 $6.71
December September
31, 30, June 30,
2009 2009 2009
---- ---- ----
Assets
Cash and due from banks $89,232 $79,694 $84,346
Interest-bearing bank
deposits 327 332 961
Securities available for
sale, at fair value 1,133,856 1,231,015 1,264,685
Securities held to
maturity, at amortized
cost,
(Fair value $0 at June 30,
2010 36,758 41,397 44,398
and $37,586 at December 31,
2009)
Other Investments 51,431 51,431 51,431
Loans:
Portfolio loans 4,636,501 4,649,034 4,536,771
Allowance for credit losses (81,639) (90,466) (83,056)
------- ------- -------
Net loans 4,554,862 4,558,568 4,453,715
Premises and equipment, net 70,742 72,074 72,379
Other real estate owned 24,287 24,138 25,565
Goodwill 159,956 159,956 159,956
Amortizing intangibles, net 7,407 8,063 8,747
Other assets 317,435 284,771 282,814
------- ------- -------
Total assets $6,446,293 $6,511,439 $6,448,997
========== ========== ==========
Liabilities
Deposits (all domestic):
Noninterest-bearing $641,231 $599,842 $592,219
Interest-bearing demand
deposits 107,612 93,062 99,281
Savings deposits 2,175,953 2,133,203 2,045,970
Time deposits 1,610,989 1,670,930 1,748,420
Total interest-bearing 3,894,554 3,897,195 3,893,671
--------- --------- ---------
Total deposits 4,535,785 4,497,037 4,485,890
Short-term borrowings 958,932 1,043,447 998,259
Subordinated debentures 105,750 105,750 105,750
Other long-term debt 168,697 179,784 180,922
------- ------- -------
Total long-term debt 274,447 285,534 286,672
------- ------- -------
Other liabilities 38,318 42,276 44,866
Total liabilities 5,807,482 5,868,294 5,815,687
Shareholders' Equity
Preferred stock, $1 par
value per share, 3,000,000
shares authorized, none
issued 0 0 0
Common stock, $1 par value
per share, 200,000,000
shares authorized;
86,971,329 shares issued
and 86,242,139 shares
outstanding
at June 30, 2010;
86,600,431 shares issued
and 85,151,875 shares
outstanding
at December 31, 2009 86,600 86,600 86,600
Additional paid-in capital 301,523 302,418 302,602
Retained earnings 278,887 278,695 287,092
Accumulated other
comprehensive income
(loss), net (6,045) (762) (18,618)
Treasury stock (729,190 and
1,448,556 shares at June
30, 2010 and
December 31, 2009,
respectively, at cost) (16,554) (17,706) (17,766)
Unearned ESOP shares (5,600) (6,100) (6,600)
------ ------ ------
Total shareholders' equity 638,811 643,145 633,310
------- ------- -------
Total liabilities and
shareholders' equity $6,446,293 $6,511,439 $6,448,997
========== ========== ==========
Book value per share $7.50 $7.56 $7.45
Market value per share $4.65 $5.68 $6.34
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
Quarter To Date Average Balance Sheets and Net Interest Analysis at
June 30,
(dollars in thousands)
2010
----
Income/
Average Expense Yield or
Balance (a) Rate
-------- -------- ---------
Assets
Interest-earning assets:
Interest-bearing
deposits with banks $74,996 $48 0.26%
Tax-free investment
securities 170,002 2,830 6.68%
Taxable investment
securities 907,504 9,683 4.28%
Loans, net of unearned
income (b)(c) 4,552,312 59,015 5.20%
---------
Total interest-earning
assets $5,704,814 $71,576 5.03%
========== =======
Noninterest-earning
assets:
Cash 77,141
Allowance for credit
losses (123,418)
Other assets 595,621
-------
Total noninterest-
earning assets 549,344
-------
Total Assets $6,254,158
==========
Liabilities and
Shareholders' Equity
Interest-bearing
liabilities:
Interest-bearing demand
deposits (d) $631,324 $211 0.13%
Savings deposits (d) 1,790,488 3,316 0.74%
Time deposits 1,639,045 9,540 2.33%
Short-term borrowings 661,068 616 0.37%
Long-term debt 206,634 2,658 5.16%
------- -----
Total interest-bearing
liabilities $4,928,559 $16,341 1.33%
========== =======
Noninterest-bearing
liabilities and
shareholders' equity:
Noninterest-bearing
demand deposits (d) 640,105
Other liabilities 39,797
Shareholders' equity 645,697
-------
Total noninterest-
bearing funding sources 1,325,599
---------
Total Liabilities and
Shareholders' Equity $6,254,158
==========
Net Interest Income and
Net Yield on Interest-
Earning Assets $55,235 3.88%
=======
2009
----
Income/ Yield
Average Expense or
Balance (a) Rate
-------- -------- ------
Assets
Interest-earning assets:
Interest-bearing
deposits with banks $767 $1 0.43%
Tax-free investment
securities 238,958 4,092 6.87%
Taxable investment
securities 1,112,350 13,266 4.78%
Loans, net of unearned
income (b)(c) 4,511,811 59,452 5.29%
Total interest-earning
assets $5,863,886 $76,811 5.25%
========== =======
Noninterest-earning
assets:
Cash 75,318
Allowance for credit
losses (43,039)
Other assets 555,202
-------
Total noninterest-
earning assets 587,481
-------
Total Assets $6,451,367
==========
Liabilities and
Shareholders' Equity
Interest-bearing
liabilities:
Interest-bearing demand
deposits (d) $611,384 $431 0.28%
Savings deposits (d) 1,430,613 3,883 1.09%
Time deposits 1,766,035 13,560 3.08%
Short-term borrowings 1,068,183 1,133 0.43%
Long-term debt 288,263 3,225 4.49%
------- -----
Total interest-bearing
liabilities $5,164,478 $22,232 1.73%
========== =======
Noninterest-bearing
liabilities and
shareholders' equity:
Noninterest-bearing
demand deposits (d) 588,246
Other liabilities 39,823
Shareholders' equity 658,820
-------
Total noninterest-
bearing funding sources 1,286,889
---------
Total Liabilities and
Shareholders' Equity $6,451,367
==========
Net Interest Income and
Net Yield on Interest-
Earning Assets $54,579 3.73%
=======
(a) Income on interest-earning assets is shown on a fully tax
equivalent basis using the 35% federal income tax statutory rate.
(b) Income on nonaccrual loans is accounted for on the cash basis,
and the loan balances are included in interest-earning assets.
(c) Loan income includes loan fees.
(d) Average balances do not include reallocations from noninterest-
bearing demand deposits and interest-bearing demand
deposits into savings deposits which were made for regulatory purposes.
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
Year To Date Average Balance Sheets and Net Interest Analysis at June
30,
(dollars in thousands)
2010
Income/ Yield
Average Expense or
Balance (a) Rate
------- ------- -----
Assets
Interest-earning
assets:
Interest-bearing
deposits with banks $57,005 $73 0.26%
Tax-free investment
securities 184,296 6,139 6.72%
Taxable investment
securities 942,203 20,177 4.32%
Loans, net of unearned
income (b)(c) 4,593,781 118,063 5.18%
Total interest-earning
assets 5,777,285 144,452 5.04%
--------- -------
Noninterest-earning
assets:
Cash 76,322
Allowance for credit
losses (103,920)
Other assets 591,143
-------
Total noninterest-
earning assets 563,545
-------
Total Assets $6,340,830
==========
Liabilities and
Shareholders' Equity
Interest-bearing
liabilities:
Interest-bearing
demand deposits (d) $615,618 $416 0.14%
Savings deposits (d) 1,758,365 6,870 0.79%
Time deposits 1,639,283 19,361 2.38%
Short-term borrowings 761,066 1,468 0.39%
Long-term debt 249,778 5,206 4.20%
------- -----
Total interest-bearing
liabilities 5,024,110 33,321 1.34%
--------- ------
Noninterest-bearing
liabilities and
shareholders' equity:
Noninterest-bearing
demand deposits (d) 629,202
Other liabilities 37,799
Shareholders' equity 649,719
-------
Total noninterest-
bearing funding
sources 1,316,720
---------
Total Liabilities and
Shareholders' Equity $6,340,830
==========
Net Interest Income and
Net Yield on Interest-
Earning Assets $111,131 3.88%
========
2009
Income/ Yield
Average Expense or
Balance (a) Rate
------- ------- -----
Assets
Interest-earning
assets:
Interest-bearing
deposits with banks $790 $2 0.47%
Tax-free investment
securities 248,540 8,544 6.93%
Taxable investment
securities 1,131,230 27,037 4.82%
Loans, net of unearned
income (b)(c) 4,486,216 119,354 5.37%
Total interest-earning
assets 5,866,776 154,937 5.33%
--------- -------
Noninterest-earning
assets:
Cash 74,721
Allowance for credit
losses (48,187)
Other assets 541,810
-------
Total noninterest-
earning assets 568,344
-------
Total Assets $6,435,120
==========
Liabilities and
Shareholders' Equity
Interest-bearing
liabilities:
Interest-bearing
demand deposits (d) $598,399 $980 0.33%
Savings deposits (d) 1,373,299 8,294 1.22%
Time deposits 1,796,155 28,176 3.16%
Short-term borrowings 1,100,660 2,480 0.45%
Long-term debt 289,133 6,644 4.63%
------- -----
Total interest-bearing
liabilities 5,157,646 46,574 1.82%
--------- ------
Noninterest-bearing
liabilities and
shareholders' equity:
Noninterest-bearing
demand deposits (d) 574,488
Other liabilities 42,587
Shareholders' equity 660,399
-------
Total noninterest-
bearing funding
sources 1,277,474
---------
Total Liabilities and
Shareholders' Equity $6,435,120
==========
Net Interest Income and
Net Yield on Interest-
Earning Assets $108,363 3.72%
========
(a) Yields on interest-earning assets have been computed on a tax
equivalent basis using the 35% federal income tax statutory rate.
(b) Income on nonaccrual loans is accounted for on the cash basis,
and the loan balances are included in interest-earning assets.
(c) Loan income includes loan fees.
(d) Average balances do not include reallocations from noninterest-
bearing demand deposits and interest-bearing demand
deposits into savings deposits which were made for regulatory purposes.
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
Asset Quality Data
(dollars in thousands)
June 30, March 31,
2010 2010
---- ----
Nonperforming Loans:
Loans on nonaccrual basis $132,555 $166,779
Troubled debt restructured loans 599 609
--- ---
Total nonperforming loans $133,154 $167,388
Loans past due in excess of 90 days
and still accruing $15,045 $13,371
Loans outstanding at end of period $4,434,291 $4,595,409
Average loans outstanding $4,593,781 $4,635,712
Allowance for credit losses $88,046 $118,725
Nonperforming loans as a percentage of
total loans 3.00% 3.64%
Provision for credit losses (Year To
Date) $49,030 $45,020
Net credit losses (Year To Date) $42,623 $7,934
Net credit losses as a percentage of
average loans
outstanding (annualized) 1.87% 0.69%
Allowance for credit losses as a
percentage of end-of-period
loans outstanding 1.99% 2.58%
Allowance for credit losses as a
percentage of nonperforming
loans 66.12% 70.93%
Other real estate owned $21,548 $23,191
Nonperforming Securities:
Nonaccrual securities at market value $6,483 $6,553
Asset Quality Data
(dollars in thousands)
December September
31, 30, June 30,
2009 2009 2009
---- ---- ----
Nonperforming Loans:
Loans on nonaccrual basis $147,937 $133,200 $81,285
Troubled debt restructured loans 619 627 637
--- --- ---
Total nonperforming loans $148,556 $133,827 $81,922
Loans past due in excess of 90
days and still accruing $15,154 $14,369 $14,978
Loans outstanding at end of
period $4,636,501 $4,649,034 $4,536,771
Average loans outstanding $4,557,227 $4,524,567 $4,486,216
Allowance for credit losses $81,639 $90,466 $83,056
Nonperforming loans as a
percentage of total loans 3.20% 2.88% 1.81%
Provision for credit losses
(Year To Date) $100,569 $79,510 $56,490
Net credit losses (Year To Date) $71,689 $41,803 $26,193
Net credit losses as a
percentage of average loans
outstanding (annualized) 1.57% 1.24% 1.18%
Allowance for credit losses as a
percentage of end-of-period
loans outstanding 1.76% 1.95% 1.83%
Allowance for credit losses as a
percentage of nonperforming
loans 54.96% 67.60% 101.38%
Other real estate owned $24,287 $24,138 $25,565
Nonperforming Securities:
Nonaccrual securities at market
value $3,258 $3,503 $530
Profitability Ratios
(dollars in thousands)
For the Quarter Ended
---------------------
June March December September June
30, 31, 31, 30, 30,
2010 2010 2009 2009 2009
---- ---- ---- ---- ----
Return on average
assets(a) 0.87% -0.83% 0.17% -0.36% -1.16%
Return on average
equity(a) 8.41% -8.17% 1.65% -3.58% -11.34%
Net interest
margin (b) 3.88% 3.87% 3.78% 3.62% 3.73%
Efficiency ratio
(c) 62.40% 61.68% 57.12% 62.66% 64.71%
For the Six
Months Ended
------------
June 30, June 30,
2010 2009
---- ----
Return on average
assets(a) 0.01% -0.53%
Return on average
equity(a) 0.12% -5.17%
Net interest
margin (b) 3.88% 3.72%
Efficiency ratio
(c) 62.04% 65.00%
(a) Annualized.
(b) Net interest margin has been computed on a tax equivalent basis
using the 35% federal income tax statutory rate.
(c) Efficiency ratio is "total non-interest expense" as a percentage
of total revenue.
Total revenue consists of "net interest income, on a fully tax-
equivalent basis," plus "total non-interest income," excluding "net
impairment losses."
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
Capital Ratios
(dollars in thousands)
As of June 30,
2010 Regulatory Minimum
--------------- ------------------
Capital Capital
Amount Ratio Amount Ratio
------ ----- ------ -----
Total Capital to Risk Weighted
Assets
First Commonwealth Financial
Corporation $615,778 11.6% $423,698 8.0%
First Commonwealth Bank $596,475 11.4% $418,802 8.0%
Tier I Capital to Risk
Weighted Assets
First Commonwealth Financial
Corporation $549,299 10.4% $211,849 4.0%
First Commonwealth Bank $530,751 10.1% $209,401 4.0%
Tier I Capital to Average
Assets
First Commonwealth Financial
Corporation $549,299 9.0% $243,521 4.0%
First Commonwealth Bank $530,751 8.8% $240,980 4.0%
Capital Ratios
(dollars in thousands)
Excess Over
Well
Well Capitalized Capitalized
---------------- ------------
Capital Capital
Amount Ratio Amount
------ ----- ------
Total Capital to Risk
Weighted Assets
First Commonwealth
Financial Corporation N/A N/A N/A
First Commonwealth Bank $523,502 10.0% $72,973
Tier I Capital to Risk
Weighted Assets
First Commonwealth
Financial Corporation N/A N/A N/A
First Commonwealth Bank $314,101 6.0% $216,650
Tier I Capital to
Average Assets
First Commonwealth
Financial Corporation N/A N/A N/A
First Commonwealth Bank $301,225 5.0% $229,526
SOURCE First Commonwealth Financial Corporation
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