INDIANA, PA -- (Marketwired) -- 01/28/15 -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the fourth quarter and full-year 2014.
Fourth Quarter 2014 Highlights
Franchise Growth
- Solid loan growth of $47.0 million from the prior quarter, or 4.3% on an annualized basis.
- Acquisition of a local insurance agency that expands First Commonwealth's fee-based product lines and provides access to key insurance carriers, which was completed on October 1, 2014.
Expense
- Expense reductions of $1.6 million in the fourth quarter as a result of lower technology, employment and other operational expenses following the IT systems conversion.
Net Income
- Net income for the fourth quarter was $7.7 million and was impacted by the following items:
- a $5.6 million ($0.06 diluted earnings per share) after-tax charge for a legal contingency reserve in connection with a preliminary global settlement of a previously disclosed litigation relating to a discontinued bank product known as the Market Rate Savings IRA;
- a $1.4 million ($0.02 diluted earnings per share) after-tax recovery of an external fraud loss incurred during the third quarter of 2012; and
- a $0.4 million after-tax charge from the donation of a former headquarters building to a local university.
"2014 was an unprecedented year for our organization," stated T. Michael Price, President and Chief Executive Officer. "We successfully executed a comprehensive systems conversion that has already led to process efficiencies and cost savings. Our newly launched mortgage initiative is ramping up quickly and will be an important component of revenue growth in 2015. Our acquisition of a local insurance agency expanded our carrier access. And we maintained solid loan growth for the last three consecutive quarters. So despite the unusual, non-recurring items that impacted our fourth quarter earnings, we achieved earnings per share growth of 12% in 2014, and remain on track with our strategic initiatives and growth objectives."
Financial Summary
For the Years
For the Three Months Ended Ended
------------------------------------------- ----------------
(dollars in
thousands,
except per
share data) December 31, September 30, December 31, December 31,
2014 2014 2013 2014 2013
------------- ------------- ------------- ------- -------
Net Income $ 7,729$ 12,496$ 9,259$44,453$41,482
Diluted
earnings per
share $ 0.08$ 0.13$ 0.10$ 0.48$ 0.43
Return on
average
assets 0.48% 0.78% 0.60% 0.71% 0.68%
Return on
average
equity 4.26% 6.91% 5.14% 6.18% 5.70%
Efficiency
Ratio 78.45% 66.65% 73.15% 69.23% 67.52%
Net Interest
Margin 3.22% 3.26% 3.35% 3.27% 3.39%
Financial Results Summary
For the three months ended December 31, 2014, net income was $7.7 million, or $0.08 diluted earnings per share, compared to net income of $12.5 million, or $0.13 diluted earnings per share, in the third quarter of 2014 and net income of $9.3 million, or $0.10 diluted earnings per share, in the fourth quarter of 2013. The decrease in net income compared to the third quarter of 2014 was driven by a decrease in noninterest income, excluding net securities gains, of $1.6 million and an increase in noninterest expense of $5.8 million primarily as a result of the aforementioned legal reserve, offset by a partial recovery of $2.1 million for a 2012 external fraud loss. Return on average assets and return on average equity were 0.48% and 4.26%, respectively, compared to 0.60% and 5.14% in 2013. The legal reserve charge reduced return on average assets and return on average equity by 35 basis points and 306 basis points, respectively, in the fourth quarter.
For the year ended December 31, 2014, net income was $44.5 million, or $0.48 diluted earnings per share, compared to net income of $41.5 million, or $0.43 diluted earnings per share, for 2013. The increase in net income compared to 2013 was primarily the result of a decrease in provision expense of $8.0 million, offset by a decline of $1.7 million in net interest income and an increase in noninterest expense of $2.4 million. Noninterest expense included $7.4 million of non-routine technology conversion-related expenses incurred during 2014 (as compared to $4.6 million in 2013) and the previously mentioned legal reserve incurred in the fourth quarter of 2014. Return on average assets and return on average equity were 0.71% and 6.18%, respectively, compared to 0.68% and 5.70% in 2013. The legal reserve charge reduced return on average assets and return on average equity by 9 basis points and 77 basis points, respectively, in 2014.
Net Interest Income and Net Interest Margin
Fourth quarter 2014 net interest income, on a fully taxable-equivalent basis, decreased slightly by $0.4 million to $47.0 million, as compared to $47.4 million in the third quarter of 2014. The decrease from the prior quarter was primarily the result of a four basis point decline in the net interest margin to 3.22% due to lower replacement yields, partially offset by a two basis point decline in funding costs and a $25.4 million increase in average interest-earning assets.
As compared to the fourth quarter of 2013, net interest income, on a fully taxable-equivalent basis, decreased slightly by $0.3 million. The net interest margin of 3.22% in the fourth quarter of 2014 was 13 basis points lower than in the fourth quarter of 2013 due to lower replacement loan yields, despite a $200.7 million, or 3.6%, increase in average interest-earning assets. A 20 basis point decline in the yield on interest-earning assets between the periods was partially offset by a seven basis point decline in funding costs.
For the year ended December 31, 2014, net interest income, on a fully taxable-equivalent, basis decreased $1.7 million to $187.0 million as compared to 2013. Average interest-earning assets increased $166.5 million, or 3.0%; however, lower replacement yields on interest-earning assets compressed the margin by 20 basis points compared to the prior-year period, partially offset by a seven basis point decline in funding costs. The decrease was also impacted by $1.0 million of income recognized on other-than-temporarily impaired pooled trust preferred collateralized debt obligations that received payments, which resulted in a two basis point benefit to the net interest margin in the 2013 year-to-date period. The net interest margin for the year ended December 31, 2014 was 3.27%, 12 basis points lower than the prior-year period.
Based on average balances, loan growth for the fourth quarter of 2014 was $41.9 million over the prior quarter and $152.1 million over the year-ago quarter. Average deposits decreased $28.3 million in the fourth quarter of 2014 from the prior quarter and $231.2 million from the same quarter a year ago, partially due to the intentional runoff of higher-cost deposits in favor of more cost-effective short-term borrowings. As a result, average short-term borrowings increased $71.5 million from the prior quarter and $449.6 million over the year-ago period. Average noninterest-bearing demand deposits were essentially flat as compared to the prior quarter and increased $99.9 million from the year-ago quarter.
Credit Quality
The provision for credit losses totaled $2.6 million for the three months ended December 31, 2014, an increase of $0.5 million as compared to the prior quarter and an increase of $1.4 million from the same quarter last year. For the year ending December 31, 2014, the provision for credit losses was $11.2 million, a decrease of $8.0 million as compared to the $19.2 million provision in the prior-year period.
At December 31, 2014, nonperforming loans were $55.3 million, an increase of $10.0 million from September 30, 2014 and a decrease of $4.1 million from December 31, 2013. The increase is primarily related to one commercial credit totaling $9.9 million that was placed into nonperforming status in the fourth quarter of 2014. This loan had previously been considered a potential problem loan. Nonperforming loans as a percentage of total loans were 1.24%, 1.03% and 1.39% for the periods ended December 31, 2014, September 30, 2014 and December 31, 2013, respectively.
During the fourth quarter of 2014, net charge-offs were $1.3 million, compared to $2.0 million in the prior quarter and $1.9 million in the fourth quarter of 2013. There were no significant individual charge-offs in the fourth and third quarters of 2014 and fourth quarter of 2013. For the year ended December 31, 2014, net charge-offs were $13.4 million, or 0.31% of average loans, compared to $32.2 million, or 0.76% of average loans, for the same period of 2013.
The allowance for credit losses was $52.1 million at December 31, 2014 and as a percentage of total loans outstanding was 1.17%, 1.15% and 1.27% for December 31, 2014, September 30, 2014 and December 31, 2013, respectively. General reserves as a percentage of non-impaired loans were 0.97%, 1.06% and 1.07% for December 31, 2014, September 30, 2014 and December 31, 2013, respectively.
Other real estate owned ("OREO") acquired through foreclosure was $7.2 million at December 31, 2014 as compared to $7.8 million at September 30, 2014 and $11.7 million at December 31, 2013. There were no significant additions to OREO in the fourth quarter of 2014.
Noninterest Income
Noninterest income, excluding net securities gains and losses, decreased $1.6 million, or 10.8%, in the fourth quarter of 2014 as compared to the prior quarter and decreased $1.3 million, or 8.7%, compared to the same quarter last year. The decrease from the prior quarter is primarily the result of a $0.5 million decrease in service charges on deposit accounts, a $0.3 million decrease in trust income and a $0.4 million decrease in commercial loan swap-related revenues included in other income. The decrease from the prior-year period of $1.3 million is primarily related to a decrease of $0.6 million in service charges on deposit accounts and decreases in other revenue of $0.7 million in commercial loan swap-related revenues and $0.4 million in investment management income (due to the sale of our advisory business in the first quarter of 2014), offset by a $0.4 million increase from insurance due to increased production and our recent agency acquisition.
During the fourth quarter of 2014, a gain of $0.5 million was recognized as the result of a recovery on a trust preferred security. In the fourth quarter of 2013, a loss of $1.4 million was recognized when this trust preferred security was liquidated. The $0.5 million received in the fourth quarter of 2014 represents the additional proceeds distributed as part of the final liquidation of the trust.
For the year ended December 31, 2014, noninterest income, excluding securities gains and losses, decreased $1.0 million, or 1.7%, as compared to the same period of 2013. Changes in noninterest income included decreases of $2.3 million in commercial loan swap-related revenues and $1.1 million primarily related to lower investment management income (due to the previously mentioned sale of our advisory business) as well as a decrease of $0.3 million in letter of credit fees over the year-ago period. These decreases were partially offset by increases of $2.9 million from the gain on sale of assets primarily from the sale of an OREO property and the $1.2 million gain from the sale of our registered investment advisory business during 2014, together with increases of $0.5 million in insurance revenues and $0.5 million in interchange revenue compared to the year-ago period.
Noninterest Expense
Noninterest expense increased $5.8 million, or 13.9%, in the fourth quarter of 2014 from the prior quarter and increased $2.0 million, or 4.5%, compared to the fourth quarter of 2013. The increase during the fourth quarter is primarily attributable to the aforementioned legal reserve and building donation to a local university, partially offset by the external fraud recovery and a $2.1 million reduction in IT conversion-related expenses. There was $2.2 million in IT conversion-related expense in the third quarter of 2014 as compared to $0.1 million in the fourth quarter of 2014. In addition, noninterest expense reductions of $1.6 million in the fourth quarter can be directly attributed to the successful completion of the IT conversion in the third quarter of 2014.
The increase in noninterest expense in the fourth quarter of 2014 as compared to the fourth quarter of 2013 is primarily attributable to the aforementioned legal reserve and building donation, offset by the external fraud recovery and reductions of $4.4 million in IT conversion-related expenses. There was $4.5 million in IT conversion-related expense in the fourth quarter of 2013 and $0.1 million in the fourth quarter of 2014.
Despite $2.8 million in increased non-routine technology conversion charges and accelerated depreciation in 2014, as well as the aforementioned legal reserve charge and building donation, noninterest expense increased by only $2.4 million for the year ended December 31, 2014 compared to 2013. Improvements included decreases of $1.9 million in Pennsylvania shares tax expense, $0.4 million in amortization of intangibles, $1.1 million in loan collection costs, and $0.3 million in FDIC expense. Also contributing to the year-over-year comparison of noninterest expense was the aforementioned $3.0 million partial recovery for a 2012 external fraud loss in 2014, a $1.6 million charge for the early extinguishment of debt in 2013 and a $0.8 million contingency accrual for client tax reporting in 2013.
Full time equivalent staff declined to 1,328 at December 31, 2014 from 1,362 at December 31 2013. The decrease is primarily attributable to staff reductions as a result of the completion of our IT systems conversion and reductions in our branch network, offset by the recent launch of our mortgage initiative and the acquisition of an insurance agency.
The efficiency ratio, calculated as total noninterest expense as a percentage of total revenue (which consists of net interest income on a fully taxable equivalent basis plus total noninterest income, excluding net securities gains), was 78.45% and 69.23% for the three months and year ended December 31, 2014, respectively, as compared to 73.15% and 67.52% for the three months and year ended December 31, 2013. IT conversion expenses added 0.19% and 2.98% to the efficiency ratio, respectively, for the three months and year ended December 31, 2014. The legal reserve charge increased the efficiency ratio by an additional 14.17% and 3.46% for the three months and year ended December 31, 2014.
Dividends and Capital
First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.07 per share which is payable on February 20, 2015 to shareholders of record as of February 9, 2015. This dividend represents a 3.3% projected annual yield utilizing the January 27, 2015 closing market price of $8.53.
During the third quarter of 2014, First Commonwealth completed a previously announced $25.0 million common stock repurchase program under which the corporation repurchased 2,924,066 shares at an average price of $8.58 per share. On January 27, 2015, First Commonwealth's Board of Directors authorized an additional $25.0 million common stock repurchase program.
First Commonwealth's capital ratios for Total, Tier I and Leverage at December 31, 2014 were 12.8%, 11.7% and 9.9%, respectively. Our current capital levels would meet the fully-phased in Basel III capital requirements issued by the U.S. bank regulators.
Conference Call
First Commonwealth will host a quarterly conference call to discuss its financial results for the fourth quarter and full-year 2014 on Wednesday, January 28, 2015 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-877-353-0037 or through the company's web page, http://www.fcbanking.com/InvestorRelations. A replay of the call will be available approximately two hours following the conclusion of the conference. A link to the call replay will be accessible at this web page for 30 days.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation, headquartered in Indiana, Pennsylvania, is a financial services company with $6.4 billion in total assets and 110 banking offices in 15 counties throughout western and central Pennsylvania. 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.
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 may cause actual results, performance or achievements to differ materially from the results, performance or achievements contemplated by the forward-looking statements. Global and domestic economies could fail to recover from the recent economic downturn or could experience another severe contraction, which could adversely affect our revenues, increase credit-related costs and reduce the values of our assets and liabilities. Global financial markets could experience a recurrence of significant turbulence, which could reduce the availability of funding to certain financial institutions and lead to a tightening of credit, a reduction of business activity, and increased market volatility. Continued stress in the commercial real estate markets, as well as a delay or failure of recovery in the residential real estate markets, could cause additional credit losses and deterioration in asset values. In addition, our business and financial performance is likely to be negatively impacted by effects of recently enacted and future legislation and regulation. Our results could also be adversely affected by 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; and management's ability to effectively manage credit risk, market risk, operational risk, compliance and legal risk, interest rate risk, and liquidity risk. 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 Years Ended
December 31, September 30, December 31, December 31, December 31,
2014 2014 2013 2014 2013
------------ ------------- ------------ ------------ ------------
SUMMARY RESULTS OF OPERATIONS
Net
interest
income
(FTE)(1) $ 46,978$ 47,364$ 47,303$ 187,007$ 188,732
Provision
for
credit
losses 2,575 2,073 1,216 11,196 19,227
Noninterest
income 13,887 15,050 13,264 60,859 60,163
Noninterest
expense 47,359 41,568 45,327 171,210 168,824
Net
income 7,729 12,496 9,259 44,453 41,482
Earnings
per
common
share
(diluted)$ 0.08$ 0.13$ 0.10$ 0.48$ 0.43
KEY FINANCIAL RATIOS
Return on
average
assets 0.48% 0.78% 0.60% 0.71% 0.68%
Return on
average
shareholders'
equity 4.26% 6.91% 5.14% 6.18% 5.70%
Efficiency
ratio(2) 78.45% 66.65% 73.15% 69.23% 67.52%
Net
interest
margin
(FTE)(1) 3.22% 3.26% 3.35% 3.27% 3.39%
Book
value
per
common
share $ 7.81$ 7.74$ 7.47
Tangible
book
value
per
common
share(4) 6.03 5.99 5.78
Market
value
per
common
share 9.22 8.39 8.82
Cash
dividends
declared
per
common
share 0.07 0.07 0.06 $ 0.28$ 0.23
ASSET QUALITY RATIOS
Nonperforming
loans as a
percent
of end-of-
period
loans
(5) 1.24% 1.03% 1.39%
Nonperforming
assets
as a
percent
of total
assets
(5) 0.99% 0.85% 1.15%
Net
charge-
offs as a
percent
of
average
loans
(annualized) 0.12% 0.18% 0.18%
Allowance
for
credit
losses
as a
percent
of
nonperforming
loans
(6) 94.21% 112.21% 91.31%
Allowance
for
credit
losses
as a
percent
of end-of-
period
loans
(6) 1.17% 1.15% 1.27%
CAPITAL RATIOS
Shareholders'
equity
as a
percent
of total
assets 11.26% 11.16% 11.45%
Tangible
common
equity
as a
percent
of
tangible
assets(3) 8.92% 8.87% 9.09%
Leverage
Ratio 9.85% 9.79% 10.00%
Risk
Based
Capital
- Tier I 11.73% 11.73% 12.10%
Risk
Based
Capital
- Total 12.79% 12.77% 13.26%
(5) - Includes loans held for sale
(6) - Excludes loans held for sale
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
For the Three Months Ended For the Years Ended
December September December December December
31, 30, 31, 31, 31,
2014 2014 2013 2014 2013
----------- ----------- ----------- ----------- -----------
INCOME
STATEMENT
Interest
income $ 50,420$ 51,089$ 51,308$ 202,181$ 206,358
Interest
expense 4,267 4,536 5,002 18,501 21,707
----------- ----------- ----------- ----------- -----------
Net Interest
Income 46,153 46,553 46,306 183,680 184,651
Taxable
equivalent
adjustment(1) 825 811 997 3,327 4,081
----------- ----------- ----------- ----------- -----------
Net Interest
Income (FTE) 46,978 47,364 47,303 187,007 188,732
Provision for
credit
losses 2,575 2,073 1,216 11,196 19,227
----------- ----------- ----------- ----------- -----------
Net Interest
Income after
Provision for
Credit Losses
(FTE) 44,403 45,291 46,087 175,811 169,505
Net
securities
gains
(losses) 500 48 (1,395) 550 (1,158)
Trust income 1,413 1,678 1,489 6,000 6,166
Service
charges on
deposit
accounts 3,629 4,099 4,209 15,661 15,652
Insurance and
retail
brokerage
commissions 1,779 1,709 1,382 6,483 6,005
Income from
bank owned
life
insurance 1,371 1,330 1,320 5,502 5,539
Gain on sale
of assets 508 742 97 4,996 2,153
Card related
interchange
income 3,602 3,599 3,532 14,222 13,746
Other income 1,085 1,845 2,630 7,445 12,060
----------- ----------- ----------- ----------- -----------
Total
Noninterest
Income 13,887 15,050 13,264 60,859 60,163
Salaries and
employee
benefits 22,038 22,244 21,724 87,223 86,012
Net occupancy
expense 3,150 3,180 3,477 13,119 13,607
Furniture and
equipment
expense (7) 2,762 4,471 5,255 17,812 15,118
Contributions 864 23 127 1,431 784
Data
processing
expense 1,531 1,583 1,498 6,124 6,009
Advertising
and
promotion
expense 607 861 760 2,953 3,129
Pennsylvania
shares tax
expense 994 1,033 1,415 3,776 5,638
Intangible
amortization 101 174 216 631 1,064
Collection
and
repossession
expense 813 783 974 2,754 3,836
Other
professional
fees and
services 1,209 1,050 966 3,986 3,731
FDIC
insurance 1,028 926 1,054 4,054 4,366
Litigation
and
operational
losses 7,059 187 325 6,786 1,115
Conversion
related
expenses (8) 112 783 2,523 1,788 2,588
Loss on
redemption
of
subordinated
debt - - - - 1,629
Other
operating
expenses 5,091 4,270 5,013 18,773 20,198
----------- ----------- ----------- ----------- -----------
Total
Noninterest
Expense 47,359 41,568 45,327 171,210 168,824
Income before
Income Taxes 10,931 18,773 14,024 65,460 60,844
Taxable
equivalent
adjustment(1) 825 811 997 3,327 4,081
Income tax
provision 2,377 5,466 3,768 17,680 15,281
----------- ----------- ----------- ----------- -----------
Net Income $ 7,729$ 12,496$ 9,259$ 44,453$ 41,482
=========== =========== =========== =========== ===========
Shares
Outstanding at
End of Period 91,723,028 91,722,649 95,245,215 91,723,028 95,245,215
Average Shares
Outstanding
Assuming
Dilution 91,598,411 92,578,701 95,138,836 93,114,654 97,029,832
(7) - Includes $1.4 million and $2.0 million of accelerated depreciation
expense related to the technology conversion for the three-month
periods ended September 30, 2014 and December 31, 2013, respectively.
The years ended December 31, 2014 and 2013 includes $5.6 and $2.0
million in accelerated depreciation, respectively.
(8) - Does not include accelerated depreciation expense described in note 7.
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
December 31, September 30, December 31,
2014 2014 2013
------------ ------------- ------------
BALANCE SHEET (Period End)
Assets
Cash and due from banks $ 72,276$ 78,696$ 74,427
Interest-bearing bank deposits 2,262 5,374 3,012
Securities 1,354,364 1,383,768 1,353,809
Loans held for sale 2,502 1,305 0
Loans 4,457,308 4,411,481 4,283,833
Allowance for credit losses (52,051) (50,784) (54,225)
------------ ------------- ------------
Net loans 4,405,257 4,360,697 4,229,608
Goodwill and other intangibles 163,094 160,152 161,267
Other assets 360,530 366,106 392,738
------------ ------------- ------------
Total Assets $ 6,360,285$ 6,356,098$ 6,214,861
============ ============= ============
Liabilities and Shareholders'
Equity
Noninterest-bearing demand
deposits $ 989,027$ 995,014$ 912,361
Interest-bearing demand
deposits 81,851 82,221 89,149
Savings deposits 2,402,288 2,363,464 2,506,631
Time deposits 842,345 931,689 1,095,722
------------ ------------- ------------
Total interest-bearing deposits 3,326,484 3,377,374 3,691,502
Total deposits 4,315,511 4,372,388 4,603,863
Short-term borrowings 1,105,876 1,034,967 626,615
Long-term borrowings 161,626 188,706 216,552
------------ ------------- ------------
Total borrowings 1,267,502 1,223,673 843,167
Other liabilities 61,127 50,553 56,134
Shareholders' equity 716,145 709,484 711,697
------------ ------------- ------------
Total Liabilities and
Shareholders' Equity $ 6,360,285$ 6,356,098$ 6,214,861
============ ============= ============
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
For the Three Months Ended
December September December
31, Yield/ 30, Yield/ 31, Yield/
2014 Rate 2014 Rate 2013 Rate
---------- ------ ---------- ------ ---------- ------
NET INTEREST MARGIN
(Quarterly
Averages)
Assets
Loans (FTE)(1)(5) $4,430,036 3.89% $4,388,130 3.97% $4,277,981 4.17%
Securities and
interest bearing
bank deposits
(FTE)(1) 1,367,020 2.26% 1,383,554 2.28% 1,318,332 2.21%
---------- ---------- ----------
Total Interest-
Earning Assets
(FTE)(1) 5,797,056 3.51% 5,771,684 3.57% 5,596,313 3.71%
Noninterest-
earning assets 546,385 553,384 565,809
---------- ---------- ----------
Total Assets $6,343,441$6,325,068$6,162,122
========== ========== ==========
Liabilities and
Shareholders'
Equity
Interest-bearing
demand and
savings deposits $2,475,405 0.10% $2,466,127 0.10% $2,605,992 0.10%
Time deposits 917,056 0.83% 954,474 0.98% 1,117,567 1.05%
Short-term
borrowings 1,011,612 0.33% 940,156 0.28% 561,976 0.28%
Long-term
borrowings 174,288 1.98% 199,435 1.79% 216,618 1.76%
---------- ---------- ----------
Total Interest-
Bearing
Liabilities 4,578,361 0.37% 4,560,192 0.39% 4,502,153 0.44%
Noninterest-
bearing deposits 995,508 995,690 895,652
Other liabilities 49,407 51,327 49,270
Shareholders'
equity 720,165 717,859 715,047
---------- ---------- ----------
Total
Noninterest-
Bearing
Funding
Sources 1,765,080 1,764,876 1,659,969
---------- ---------- ----------
Total Liabilities
and Shareholders'
Equity $6,343,441$6,325,068$6,162,122
========== ========== ==========
Net Interest Margin
(FTE)
(annualized)(1) 3.22% 3.26% 3.35%
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
For the Years Ended
December 31, Yield/ December 31, Yield/
2014 Rate 2013 Rate
------------ ------ ------------ ------
NET INTEREST MARGIN (Year-to-Date
Averages)
Assets
Loans (FTE)(1)(5) $ 4,356,566 4.00% $ 4,255,593 4.23%
Securities and interest bearing
bank deposits (FTE)(1) 1,369,496 2.27% 1,303,976 2.32%
------------ ------------
Total Interest-Earning Assets
(FTE)(1) 5,726,062 3.59% 5,559,569 3.79%
Noninterest-earning assets 555,051 572,413
------------ ------------
Total Assets $ 6,281,113$ 6,131,982
============ ============
Liabilities and Shareholders'
Equity
Interest-bearing demand and
savings deposits $ 2,502,488 0.10% $ 2,612,847 0.12%
Time deposits 1,028,053 0.96% 1,154,984 1.07%
Short-term borrowings 815,394 0.30% 478,388 0.26%
Long-term borrowings 200,114 1.80% 233,483 2.08%
------------ ------------
Total Interest-Bearing
Liabilities 4,546,049 0.41% 4,479,702 0.48%
Noninterest-bearing deposits 964,422 876,111
Other liabilities 51,347 48,335
Shareholders' equity 719,295 727,834
------------ ------------
Total Noninterest-Bearing
Funding Sources 1,735,064 1,652,280
------------ ------------
Total Liabilities and
Shareholders' Equity $ 6,281,113$ 6,131,982
============ ============
Net Interest Margin (FTE)
(annualized)(1) 3.27% 3.39%
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
December 31, September 30, December 31,
2014 2014 2013
------------ ------------- ------------
ASSET QUALITY DETAIL
Nonperforming Loans:
Loans on nonaccrual basis $ 25,715$ 27,310$ 28,908
Troubled debt restructured loans
on nonaccrual basis 16,952 6,783 16,980
Troubled debt restructured loans
on accrual basis 12,584 11,164 13,495
------------ ------------- ------------
Total Nonperforming Loans $ 55,251$ 45,257$ 59,383
Other real estate owned ("OREO") 7,197 7,751 11,728
Repossessions ("Repo") 432 902 322
------------ ------------- ------------
Total Nonperforming Assets $ 62,880$ 53,910$ 71,433
Loans past due in excess of 90
days and still accruing $ 2,619$ 2,374$ 2,505
Classified loans 67,756 63,724 83,237
Criticized loans 140,126 139,449 162,361
Nonperforming assets as a
percentage of total loans, plus
OREO and Repos 1.41% 1.22% 1.66%
Allowance for credit losses $ 52,051$ 50,784$ 54,225
For the Three Months Ended For the Years Ended
December 31, September 30, December 31, December 31, December 31,
2014 2014 2013 2014 2013
------------ ------------- ------------ ------------ ------------
Net
Charge-offs
(Recoveries):
Commercial,
financial,
agricultural
and
other $ 445 $ 294 $ 987$ 8,177$ 17,944
Real
estate
construction (871) (132) (361) (1,044) 272
Commercial
real
estate (141) 635 447 536 10,377
Residential
real
estate 637 454 33 2,503 550
Loans to
individuals 1,238 763 842 3,198 3,046
------------ ------------- ------------ ------------ ------------
Net
Charge-
offs $ 1,308$ 2,014$ 1,948$ 13,370$ 32,189
Net
charge-
offs as
a
percentage
of
average
loans
outstanding
(annualized) 0.12% 0.18% 0.18% 0.31% 0.76%
Provision
for
credit
losses
as a
percentage
of
net
charge-
offs 196.87% 102.93% 62.42% 83.74% 59.73%
Provision
for
credit
losses $ 2,575$ 2,073$ 1,216$ 11,196$ 19,227FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
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) Efficiency ratio is "total noninterest expense" as a percentage of total
revenue. Total revenue consists of "net interest
income, on a fully taxable equivalent basis," plus "total noninterest
income," excluding "net impairment losses" and "net
securities gains."
December 31, September 30, December 31,
2014 2014 2013
------------ ------------- ------------
Tangible Equity:
Total shareholders' equity $ 716,145$ 709,484$ 711,697
Less: intangible assets 163,094 160,152 161,267
------------ ------------- ------------
Tangible Equity 553,051 549,332 550,430
Less: preferred stock - - -
------------ ------------- ------------
Tangible Common Equity $ 553,051$ 549,332$ 550,430
Tangible Assets:
Total assets $ 6,360,285$ 6,356,098$ 6,214,861
Less: intangible assets 163,094 160,152 161,267
------------ ------------- ------------
Tangible Assets $ 6,197,191$ 6,195,946$ 6,053,594
(3)Tangible Common Equity as a
percentage of Tangible Assets 8.92% 8.87% 9.09%
Shares Outstanding at End of
Period 91,723,028 91,722,649 95,245,215
(4)Tangible Book Value Per Common
Share $ 6.03$ 5.99$ 5.78
Note: Management believes that it is a 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.
Contact:
Media/Investor Relations: Richard J. Stimel Vice President/Corporate Communications and Investor Relations 724-463-6806
RStimel@fcbanking.com
Source: First Commonwealth Financial Corporation