First Commonwealth Reports Fourth Quarter and Full Year 2019 Earnings; Increases Quarterly Dividend 10.0%

/EIN News/ -- INDIANA, Pa., Jan. 28, 2020 (GLOBE NEWSWIRE) -- First Commonwealth Financial Corporation (NYSE: FCF) today announced financial results for the fourth quarter and full year 2019.

Financial Summary

(dollars in thousands,	For the Three Months Ended												For the Years Ended
except per share data)	December 31,				September 30,				December 31,				December 31,				December 31,
	2019				2019				2018				2019				2018
Reported Results
Net income	$	26,820			$	26,644			$	26,998			$	105,333			$	107,498
Diluted earnings per share	$	0.27			$	0.27			$	0.27			$	1.07			$	1.08
Return on average assets		1.30	%			1.31	%			1.39	%			1.31	%			1.42	%
Return on average equity		10.13	%			10.22	%			11.06	%			10.32	%			11.41	%
Operating Results (non-GAAP)(1)
Core net income	$	26,634			$	29,597			$	27,000			$	108,126			$	108,791
Core diluted earnings per share	$	0.27			$	0.30			$	0.27			$	1.10			$	1.10
Core return on average assets		1.29	%			1.46	%			1.39	%			1.35	%			1.44	%
Return on average tangible common equity		14.99	%			14.62	%			16.09	%			14.92	%			16.67	%
Core return on average tangible common equity		14.89	%			16.20	%			16.09	%			15.30	%			16.87	%
Core efficiency ratio		57.23	%			55.73	%			57.45	%			56.97	%			57.15	%
Net interest margin (FTE)		3.73	%			3.76	%			3.70	%			3.75	%			3.71	%

^

(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.



Full Year 2019 Highlights
Franchise Growth
	•	The company successfully completed its acquisition of 14 former Santander branches located in Central Pennsylvania on September 6, 2019, which included $471 million in deposits and $100 million in loans at close.
	•	Total loans grew $419 million, or 7.2% compared to the prior year including $319 million, or 5.5% in organic loan growth (excluding loans acquired in the branch acquisition).
	•	Average deposits grew $500 million, or 8.6% compared to the prior year including $351 million, or 6.0% in organic deposit growth (excluding deposits acquired in the branch acquisition).
	•	Tangible book value per share grew 7.3% year-over-year.
Earnings
	•	For the year ended December 31, 2019, net income was $105.3 million (or $1.07 diluted earnings per share).  Core net income (non-GAAP)(1), which excludes acquisition expenses, was $108.1 million, or $1.10 diluted earnings per share.
			•	Core earnings per share (non-GAAP)(1) in 2018 totaled $1.10, but included net security gains of $0.06 per share.
	•	Total revenue (excluding net security gains) (non-GAAP)(1) grew $22.3 million, or 6.7% from the prior year.
			•	Net interest income (on a fully tax-equivalent (FTE) basis) (non-GAAP)(1) increased $17.4 million, or 6.9%, from the prior year.
			•	Noninterest income (excluding net security gains) (non-GAAP)(1) grew $4.9 million, or 6.1%, from the prior year.
	•	Total noninterest expense decreased $14.4 million, or 7.4% from the prior year.
			•	Noninterest expense (excluding acquisition expenses) (non-GAAP)(1) increased $12.5 million, or 6.5%, from the prior year.
Profitability
	•	The net interest margin improved four basis points to 3.75% compared to the prior year.
	•	The efficiency ratio improved 18 basis points to 56.97% compared to the prior year.
	•	The return on average assets (ROA) for the year ended December 31, 2019 was 1.31%.
			•	Core ROA (non-GAAP)(1) for the year ended December 31, 2019 was 1.35% as compared to 1.44% in the prior year, which included 0.08% attributable to securities gains.
Fourth Quarter 2019 Highlights
Franchise Growth
	•	Total gross loans (including loans held for sale) grew $85 million, or 5.6% (annualized), compared to the prior quarter.
	•	Average noninterest bearing deposits grew $113 million, or 28.9% (annualized) compared to the prior quarter including $49 million, or 12.7% (annualized) in organic noninterest bearing deposit growth (excluding acquired deposits).
Earnings
	•	For the quarter ended December 31, 2019, net income was $26.8 million (or $0.27 diluted earnings per share), resulting in an ROA of 1.30% and an ROE of 10.13%.
	•	Total revenue grew $5.7 million, or 6.6%, from the prior year quarter and $0.7 million, or 3.0% (annualized), from the third quarter of 2019.
			•	Net interest income (FTE) increased $3.7 million, or 5.6% from the prior year quarter and increased $0.3 million, or 2.0% (annualized), from the third quarter of 2019.
			•	Noninterest income (excluding security gains) grew $2.0 million, or 9.7% from the prior year quarter and $0.4 million, or 6.3% (annualized), from the third quarter of 2019.
	•	Total noninterest expense increased $3.1 million, or 6.2%, from the prior year quarter and decreased $1.8 million, or 3.3%, from the third quarter of 2019.
			•	Noninterest expense (excluding acquisition expenses) increased $2.1 million from the prior quarter.
	•	Provision for credit losses totaled $4.9 million, an increase of $2.2 million from the previous quarter.
			•	Nonperforming loans as a percentage of total loans decreased six basis points from the prior quarter and currently total 0.52% of loans outstanding.  This represents a 10-year low in this metric.

“2019 was another busy and productive year for our company,” stated T. Michael Price, President and Chief Executive Officer, “We expanded our footprint into the nearby Central Pennsylvania market with the acquisition of 14 former Santander branches, our fee income businesses continued to grow and expenses remained well controlled despite strategic investments in talent and technology.  Additionally, our migration to a regional leadership model produced mid-single digit organic loan growth which mirrored our deposits gathering.  We expect headwinds from the lower interest rate environment going into 2020 but I have confidence in our team’s ability to continue to produce positive long-term performance for our shareholders.”

Earnings

Net income for the fourth quarter of 2019 was $26.8 million, as compared to $26.6 million and $27.0 million in the prior quarter and fourth quarter of 2018, respectively.

Net income for the year ended December 31, 2019 was $105.3 million, as compared to $107.5 million for the year ended December 31, 2018.  Core net income, which excludes merger-related expenses of $1.6 million (pretax) in 2018 and merger-related expenses of $3.5 million (pre-tax) in 2019, was $108.1 million and $108.8 million for the years ended December 31, 2019 and 2018, respectively.  However, the results for the prior year were impacted by an $8.1 million (pre-tax) gain on the sale of the company’s remaining pooled trust preferred securities.  Excluding securities gains, adjusted core net income (non-GAAP) for the year ended December 31, 2019 was $108.1 million, an increase of $5.7 million, or 5.6%, from the previous year.

Net Interest Margin and Net Interest Income

The net interest margin for the fourth quarter of 2019 was 3.73%, a decrease of three basis points from the previous quarter and an increase of three basis points from the fourth quarter of 2018.  Loan yields decreased 17 basis points from the previous quarter due to the repricing of variable and adjustable rate loans and lower replacement yields on new loans.  Average loans increased $99 million, or 6.5% (annualized) from the previous quarter, including $25 million of average organic loan growth (excluding acquired loans).

The total cost of interest-bearing demand and savings deposits decreased six basis points from the previous quarter.  Average noninterest bearing deposits grew $113 million, or 28.9% (annualized) from the previous quarter, including $49 million of average organic noninterest bearing deposit growth (excluding acquired deposits).

The increase in the net interest margin from the prior year quarter was primarily due to a seven basis point decrease in total funding costs due to an improved funding mix, as the company was able to pay down higher cost short-term borrowings with acquired deposits.

The net interest margin for the year ended December 31, 2019 was 3.75%, an increase of four basis points from the previous year.  The increase from the prior year was due to a $399 million increase in average interest earning assets and a $115 million increase in average noninterest bearing deposits. The yield on interest-earning assets increased 21 basis points, which was partially offset by a 25 basis point increase in the cost of interest-bearing liabilities.  The yield on total loans increased by 26 basis points compared to the prior year, while the cost of deposits increased by 21 basis points.

For the year ended December 31, 2019, total average loans grew $405 million, or 7.3% and includes $373 million of average organic loan growth (excluding acquired loans) from the prior year.  For the year ended December 31, 2019, total average deposits grew $500 million, or 8.6% and includes $351 million of average organic loan growth (excluding acquired deposits) from the prior year.

Credit Quality

At December 31, 2019, nonperforming loans were $32.2 million, a decrease of $3.1 million from the prior quarter and relatively unchanged from the fourth quarter of 2018.  Nonperforming loans as a percentage of total loans were 0.52%, 0.58% and 0.55% for the periods ended December 31, 2019, September 30, 2019 and December 31, 2018, respectively.

The provision for credit losses totaled $4.9 million in the fourth quarter of 2019, an increase of $2.2 million from the previous quarter.  The increase from the prior quarter was partially due to provision expense associated with organic loan growth and the resolution and chargeoff of two commercial credits.

Total provision for credit losses totaled $14.5 million for the year ended December 31, 2019 as compared to $12.5 million in the prior year. For the year ended December 31, 2019, net charge-offs were $10.7 million, or 0.18% of average loans, compared to $13.1 million in the prior year period, a decrease of $2.4 million.

For the originated loan portfolio at December 31, 2019, the general allowance for credit losses to total originated loans was 0.86%, compared to 0.87% at September 30, 2019 and 0.87% at December 31, 2018.

Noninterest Income and Noninterest Expense

Noninterest income (excluding net security gains) totaled $22.5 million for the fourth quarter of 2019 as compared to $22.2 million for the third quarter of 2019 and $20.5 million for the fourth quarter of 2018.  Swap fee income increased $1.3 million from the prior quarter, and was partially offset by a $0.9 million decrease in the gain on sale of mortgage loans.

For the year ended December 31, 2019, noninterest income (excluding security gains) totaled $85.5 million, an increase of $4.9 million from the year ended December 31, 2018.  The increase from the prior year was due to a $2.3 million increase in gain on sale of mortgage loans, a $1.5 million increase in card related interchange income and a $1.5 million increase in swap fee income, partially offset by a $1.1 million decrease in derivative mark-to-market.

There were no material security gains during 2019; however, the company recognized an $8.1 million gain during the prior year following the successful auction call and sale of the company’s remaining pooled trust preferred securities.

Noninterest expense (excluding merger-related expenses) totaled $53.3 million for the fourth quarter of 2019, as compared to $51.2 million for the third quarter of 2019 and $50.0 million for the fourth quarter of 2018.  The $2.1 million increase from the previous quarter was primarily the result of a $0.9 million increase in other professional fees, as well as a $0.5 million increase in occupancy expense and a $0.4 million increase in salaries and benefits due to a full quarterly impact of the aforementioned branch acquisition.  This was partially offset by a $0.5 million decrease in advertising and promotion expense.

The $3.3 million increase compared to the prior year quarter was primarily due to higher operating expenses following the completion of the company’s aforementioned branch acquisition, partially offset by a $0.4 million decrease in FDIC insurance due to a quarterly assessment credit and a $0.2 million decrease in collection and repossession expense.

Full time equivalent staff was 1,484 at December 31, 2019, as compared to 1,511 at September 30, 2019 and 1,426 at December 31, 2018.  The increase from the prior year is the result of the addition of employees from acquisitions and the continued expansion of the mortgage, SBA and commercial banking businesses.

Dividends and Capital

First Commonwealth Financial Corporation declared a quarterly common stock dividend of $0.11 per share, which is payable on February 21, 2020 to shareholders of record as of February 7, 2020.  This dividend represents a 10.0% increase over the previous quarter and a 3.2% projected annual yield utilizing the January 27, 2020 closing market price of $13.82.

First Commonwealth’s capital ratios for Total, Tier I, Leverage and Common Equity Tier I at December 31, 2019 were 14.3%, 12.0%, 10.2% and 10.9%, 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 quarter and year ended December 31, 2019 on Wednesday, January 29, 2020 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 #10138059.  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 147 community banking offices in 28 counties throughout western and central Pennsylvania and throughout Ohio, as well as business banking operations in Pittsburgh, Pennsylvania, and Canton, Cleveland, Columbus and Cincinnati, Ohio. The company also operates mortgage offices in Wexford, Pennsylvania, as well as Hudson and Lewis Center, Ohio.  First Commonwealth provides a full range of commercial banking, consumer banking, mortgage, 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) the soundness of other financial institutions; (7)  political instability; (8) impairment of First Commonwealth’s goodwill or other intangible assets; (9) acts of God or of war or terrorism; (10) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (11) changes in consumer spending, borrowings and savings habits; (12) changes in the financial performance and/or condition of First Commonwealth’s borrowers; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) First Commonwealth’s ability to attract and retain qualified employees; (16) changes in the competitive environment in First Commonwealth’s markets and among banking organizations and other financial service providers; (17) the ability to increase market share and control expenses; (18) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (19) the reliability of First Commonwealth’s vendors, internal control systems or information systems; (20) the costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals; and (21) other risks and uncertainties described in the reports that First Commonwealth files with the Securities and Exchange Commission, including its most recent Annual Report on Form 10‐K. Forward-looking statements speak only as of the date on which they are made. First Commonwealth undertakes no obligation to update any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

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 Years Ended
	December 31,				September 30,				December 31,				December 31,				December 31,
	2019				2019				2018				2019				2018
SUMMARY RESULTS OF OPERATIONS
Net interest income (FTE) (1)	$	69,212			$	68,875			$	65,514			$	271,610			$	254,196
Provision for credit losses	4,895				2,708				1,499				14,533				12,531
Noninterest income	22,528				22,179				20,529				85,485				88,637
Noninterest expense	53,109				54,897				50,024				209,965				195,556
Net income	26,820				26,644				26,998				105,333				107,498
Core net income (5)	26,634				29,597				27,000				108,126				108,791
Earnings per common share (diluted)	$	0.27			$	0.27			$	0.27			$	1.07			$	1.08
Core earnings per common share (diluted) (6)	$	0.27			$	0.30			$	0.27			$	1.10			$	1.10
KEY FINANCIAL RATIOS
Return on average assets	1.30		%		1.31		%		1.39		%		1.31		%		1.42		%
Core return on average assets (7)	1.29		%		1.46		%		1.39		%		1.35		%		1.44		%
Return on average shareholders' equity	10.13		%		10.22		%		11.06		%		10.32		%		11.41		%
Return on average tangible common equity (8)	14.99		%		14.62		%		16.09		%		14.92		%		16.67		%
Core return on average tangible common equity (9)	14.89		%		16.20		%		16.09		%		15.30		%		16.87		%
Core efficiency ratio (2)(10)	57.23		%		55.73		%		57.45		%		56.97		%		57.15		%
Net interest margin (FTE) (1)	3.73		%		3.76		%		3.70		%		3.75		%		3.71		%
Book value per common share	$	10.74			$	10.57			$	9.90
Tangible book value per common share (11)	7.49				7.31				6.98
Market value per common share	14.51				13.28				12.08
Cash dividends declared per common share	0.10				0.10				0.09				$	0.40			$	0.35
ASSET QUALITY RATIOS
Nonperforming loans as a percent of end-of-period loans (3)	0.52		%		0.58		%		0.55		%
Nonperforming assets as a percent of total assets (3)	0.42		%		0.46		%		0.46		%
Net charge-offs as a percent of average loans (annualized) (4)	0.21		%		0.25		%		0.31		%
Allowance for credit losses as a percent of nonperforming loans (4)	160.28		%		141.64		%		149.14		%
Allowance for credit losses as a percent of end-of-period loans (4)	0.83		%		0.82		%		0.83		%
Allowance for credit losses (originated loans and leases) as a percent of total originated loans and leases	0.90		%		0.91		%		0.90		%
CAPITAL RATIOS
Shareholders' equity as a percent of total assets	12.7		%		12.7		%		12.5		%
Tangible common equity as a percent of tangible assets (12)	9.2		%		9.2		%		9.1		%
Leverage Ratio	10.2		%		10.1		%		10.3		%
Risk Based Capital - Tier I	12.0		%		11.8		%		12.3		%
Risk Based Capital - Total	14.3		%		14.1		%		14.7		%
Common Equity - Tier I	10.9		%		10.7		%		11.1		%

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,
	2019			2019				2018					2019				2018
INCOME STATEMENT
Interest income	$	81,038			$	82,575			$	77,945				$	325,264			$	292,257
Interest expense	12,233			14,130				12,896					55,402				40,035
Net Interest Income	68,805			68,445				65,049					269,862				252,222
Taxable equivalent adjustment (1)	407			430				465					1,748				1,974
Net Interest Income  (FTE)	69,212			68,875				65,514					271,610				254,196
Provision for credit losses	4,895			2,708				1,499					14,533				12,531
Net Interest Income after Provision for Credit Losses (FTE)	64,317			66,167				64,015					257,077				241,665
Net securities gains	7			9				—					22				8,102
Trust income	2,100			2,325				1,887					8,321				7,901
Service charges on deposit accounts	5,134			4,954				4,757					18,926				18,175
Insurance and retail brokerage commissions	1,696			1,912				1,866					7,583				7,426
Income from bank owned life insurance	1,594			1,540				1,445					6,002				6,686
Gain on sale of mortgage loans	1,664			2,599				1,169					7,765				5,436
Gain on sale of other loans and assets	962			970				1,725					4,793				5,273
Card-related interchange income	5,877			5,629				5,258					21,677				20,187
Derivative mark-to-market	(181		)	(45			)	(2			)		(269			)	787
Swap fee income	1,763			421				759					3,397				1,874
Other income	1,912			1,865				1,665					7,268				6,790
Total Noninterest Income	22,528			22,179				20,529					85,485				88,637
Salaries and employee benefits	29,032			28,674				27,535					112,237				105,115
Net occupancy	5,045			4,521				4,287					18,923				17,219
Furniture and equipment	3,764			3,904				3,636					15,160				14,247
Data processing	2,704			2,825				2,706					10,692				10,470
Pennsylvania shares tax	1,237			1,189				1,477					4,602				4,875
Advertising and promotion	639			1,140				771					4,250				3,956
Intangible amortization	980			865				787					3,344				3,217
Collection and repossession	548			649				702					2,204				2,762
Other professional fees and services	1,876			969				1,473					4,631				4,473
FDIC insurance	55			35				417					1,219				2,007
Litigation and operational losses	423			308				351					1,687				1,162
Loss on sale or write-down of assets	326			152				205					1,724				1,080
Merger and acquisition related	(236		)	3,738				3					3,536				1,637
Other operating expenses	6,716			5,928				5,674					25,756				23,336
Total Noninterest Expense	53,109			54,897				50,024					209,965				195,556
Income before Income Taxes	33,736			33,449				34,520					132,597				134,746
Taxable equivalent adjustment (1)	407			430				465					1,748				1,974
Income tax provision	6,509			6,375				7,057					25,516				25,274
Net Income	$	26,820			$	26,644			$	26,998				$	105,333			$	107,498
Shares Outstanding at End of Period		98,311,840				98,319,081				98,518,668					98,311,840				98,518,668
Average Shares Outstanding Assuming Dilution		98,508,219				98,547,898				99,358,759					98,588,164				99,223,513

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
	December 31,				September 30,				December 31,
	2019				2019				2018
BALANCE SHEET (Period End)
Assets
Cash and due from banks	$	102,346			$	112,241			$	95,934
Interest-bearing bank deposits	19,510				16,408				3,013
Securities available for sale, at fair value	919,053				823,944				941,373
Securities held to maturity, at amortized cost	337,123				357,890				393,855
Loans held for sale	15,989				20,288				11,881
Loans	6,189,148				6,099,561				5,774,139
Allowance for credit losses	(51,637		)		(50,035		)		(47,764		)
Net loans	6,137,511				6,049,526				5,726,375
Goodwill and other intangibles	319,694				320,505				287,240
Other assets	457,547				451,225				368,584
Total Assets	$	8,308,773			$	8,152,027			$	7,828,255
Liabilities and Shareholders' Equity
Noninterest-bearing demand deposits	$	1,690,247			$	1,657,507			$	1,466,213
Interest-bearing demand deposits	254,981				263,312				180,209
Savings deposits	3,896,536				3,867,034				3,401,354
Time deposits	835,851				890,143				850,216
Total interest-bearing deposits	4,987,368				5,020,489				4,431,779
Total deposits	6,677,615				6,677,996				5,897,992
Short-term borrowings	201,853				83,735				721,823
Long-term borrowings	234,182				234,404				185,056
Total borrowings	436,035				318,139				906,879
Other liabilities	139,458				116,862				47,995
Shareholders' equity	1,055,665				1,039,030				975,389
Total Liabilities and Shareholders' Equity	$	8,308,773			$	8,152,027			$	7,828,255

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
	For the Three Months Ended																For the Years Ended
	December 31,			Yield/		September 30,			Yield/		December 31,			Yield/			December 31,			Yield/		December 31,			Yield/
	2019			Rate		2019			Rate		2018			Rate			2019			Rate		2018			Rate
NET INTEREST MARGIN
Assets
Loans (FTE)(1)(3)	$	6,141,614		4.76	%	$	6,042,822		4.93	%	$	5,704,468		4.81	%		$	5,987,397		4.90	%	$	5,582,651		4.64	%
Securities and interest-bearing bank deposits (FTE) (1)	1,226,892			2.51	%	1,226,270			2.58	%	1,316,488			2.79	%		1,261,822			2.68	%	1,267,471			2.79	%
Total Interest-Earning Assets (FTE) (1)	7,368,506			4.39	%	7,269,092			4.53	%	7,020,956			4.43	%		7,249,219			4.51	%	6,850,122			4.30	%
Noninterest-earning assets	832,509					780,960					712,047						780,833					705,234
Total Assets	$	8,201,015				$	8,050,052				$	7,733,003					$	8,030,052				$	7,555,356
Liabilities and Shareholders' Equity
Interest-bearing demand and savings deposits	$	4,171,663		0.55	%	$	3,933,091		0.61	%	$	3,601,354		0.45	%		$	3,891,262		0.57	%	$	3,620,766		0.37	%
Time deposits	856,076			1.69	%	863,714			1.75	%	842,123			1.40	%		864,056			1.68	%	749,408			1.13	%
Short-term borrowings	100,698			0.88	%	323,041			1.99	%	633,363			2.10	%		391,547			2.12	%	618,957			1.74	%
Long-term borrowings	234,274			4.37	%	234,497			4.51	%	185,144			5.29	%		216,383			4.80	%	147,915			5.13	%
Total Interest-Bearing Liabilities	5,362,711			0.91	%	5,354,343			1.05	%	5,261,984			0.97	%		5,363,248			1.03	%	5,137,046			0.78	%
Noninterest-bearing deposits	1,673,188					1,560,478					1,456,983						1,549,507					1,434,233
Other liabilities	114,523					101,328					45,445						96,896					41,740
Shareholders' equity	1,050,593					1,033,903					968,591						1,020,401					942,337
Total Noninterest-Bearing Funding Sources	2,838,304					2,695,709					2,471,019						2,666,804					2,418,310
Total Liabilities and Shareholders' Equity	$	8,201,015				$	8,050,052				$	7,733,003					$	8,030,052				$	7,555,356
Net Interest Margin (FTE) (annualized)(1)				3.73	%				3.76	%				3.70	%					3.75	%				3.71	%

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
	December 31,			September 30,				December 31,
	2019			2019				2018
Loan Portfolio Detail
Commercial Loan Portfolio:
Commercial, financial, agricultural and other	$	1,241,853			$	1,210,936			$	1,138,473
Commercial real estate	2,117,519			2,124,240				2,123,544
Real estate construction	375,149			334,533				305,875
Total Commercial	3,734,521			3,669,709				3,567,892
Consumer Loan Portfolio:
Closed-end mortgages	1,094,281			1,081,170				1,037,124
Home equity lines of credit	587,081			585,050				525,281
Real estate construction	73,890			85,748				53,103
Total Real Estate - Consumer	1,755,252			1,751,968				1,615,508
Auto loans	573,699			553,617				481,954
Direct installment	47,738			46,704				37,454
Personal lines of credit	71,103			70,441				63,131
Student loans	6,835			7,122				8,200
Total Other Consumer	699,375			677,884				590,739
Total Consumer Portfolio	2,454,627			2,429,852				2,206,247
Total Portfolio Loans	6,189,148			6,099,561				5,774,139
Loans held for sale	15,989			20,288				11,881
Total Loans	$	6,205,137			$	6,119,849			$	5,786,020
	December 31,			September 30,				December 31,
	2019			2019				2018
ASSET QUALITY DETAIL
Nonperforming Loans:
Loans on nonaccrual basis	$	18,638			$	16,227			$	11,509
Troubled debt restructured loans on nonaccrual basis	6,037			11,074				11,761
Troubled debt restructured loans on accrual basis	7,542			8,024				8,757
Total Nonperforming Loans	$	32,217			$	35,325			$	32,027
Other real estate owned ("OREO")	2,228			1,622				3,935
Repossessions ("Repos")	628			486				266
Total Nonperforming Assets	$	35,073			$	37,433			$	36,228
Loans past due in excess of 90 days and still accruing	2,073			2,054				1,582
Classified loans	52,031			50,719				40,241
Criticized loans	100,607			128,691				127,235
Nonperforming assets as a percentage of total loans, plus OREO and Repos (4)	0.57		%	0.61			%	0.63			%
Allowance for credit losses	$	51,637			$	50,035			$	47,764

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
	For the Three Months Ended												For the Years Ended
	December 31,			September 30,				December 31,					December 31,				December 31,
	2019			2019				2018					2019				2018
Net Charge-offs (Recoveries):
Commercial, financial, agricultural and other	$	1,115			$	729			$	1,672				$	3,067			$	4,506
Real estate construction	—			(74			)	(42			)		(158			)	(141			)
Commercial real estate	298			1,301				1,489					1,819				3,777
Residential real estate	300			366				243					727				952
Loans to individuals	1,580			1,412				1,119					5,205				3,971
Net Charge-offs	$	3,293			$	3,734			$	4,481				$	10,660			$	13,065
Net charge-offs as a percentage of average loans outstanding (annualized) (4)	0.21		%	0.25			%	0.31			%		0.18			%	0.23			%
Provision for credit losses as a percentage of net charge-offs	148.65		%	72.52			%	33.45			%		136.33			%	95.91			%
Provision for credit losses	$	4,895			$	2,708			$	1,499				$	14,533			$	12,531

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 Years Ended
	December 31,			September 30,				December 31,					December 31,				December 31,
	2019			2019				2018					2019				2018
Net Income	$	26,820			$	26,644			$	26,998				$	105,333			$	107,498
Intangible amortization	980			865				787					3,344				3,217
Tax benefit of amortization of intangibles	(206		)	(182			)	(165			)		(702			)	(676			)
Net Income, adjusted for tax affected amortization of intangibles	27,594			27,327				27,620					107,975				110,039
Average Tangible Equity:
Total shareholders' equity	$	1,050,593			$	1,033,903			$	968,591				$	1,020,401			$	942,337
Less: intangible assets	320,077			292,529				287,610					296,645				282,281
Tangible Equity	730,516			741,374				680,981					723,756				660,056
Less: preferred stock	—			—				—					—				—
Tangible Common Equity	$	730,516			$	741,374			$	680,981				$	723,756			$	660,056
(8)Return on Average Tangible Common Equity	14.99		%	14.62			%	16.09			%		14.92			%	16.67			%

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 Years Ended
	December 31,			September 30,				December 31,					December 31,				December 31,
	2019			2019				2018					2019				2018
Core Net Income:
Total Net Income	$	26,820			$	26,644			$	26,998				$	105,333			$	107,498
Merger & acquisition related expenses	(236		)	3,738				3					3,536				1,637
Tax benefit of merger & acquisition related expenses	50			(785			)	(1			)		(743			)	(344			)
(5) Core net income	26,634			29,597				27,000					108,126				108,791
Average Shares Outstanding Assuming Dilution		98,508,219				98,547,898				99,358,759					98,588,164				99,223,513
(6) Core Earnings per common share (diluted)	$	0.27			$	0.30			$	0.27				$	1.10			$	1.10
Intangible amortization	980			865				787					3,344				3,217
Tax benefit of amortization of intangibles	(206		)	(182			)	(165			)		(702			)	(676			)
Core Net Income, adjusted for tax affected amortization of intangibles	$	27,408			$	30,280			$	27,622				$	110,768			$	111,332
(9) Core Return on Average Tangible Common Equity	14.89		%	16.20			%	16.09			%		15.30			%	16.87			%
	For the Three Months Ended												For the Years Ended
	December 31,			September 30,				December 31,					December 31,				December 31,
	2019			2019				2018					2019				2018
Core Return on Average Assets:
Total Net Income	$	26,820			$	26,644			$	26,998				$	105,333			$	107,498
Total Average Assets	8,201,015			8,050,052				7,733,003					8,030,052				7,555,356
Return on Average Assets	1.30		%	1.31			%	1.39			%		1.31			%	1.42			%
Core Net Income (5)	$	26,634			$	29,597			$	27,000				$	108,126			$	108,791
Total Average Assets	8,201,015			8,050,052				7,733,003					8,030,052				7,555,356
(7) Core Return on Average Assets	1.29		%	1.46			%	1.39			%		1.35			%	1.44			%

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 Years Ended
	December 31,			September 30,				December 31,					December 31,				December 31,
	2019			2019				2018					2019				2018
Core Efficiency Ratio:
Total Noninterest Expense	$	53,109			$	54,897			$	50,024				$	209,965			$	195,556
Adjustments to Noninterest Expense:
Unfunded commitment reserve	(240		)	(466			)	(203			)		(475			)	(162			)
Intangible amortization	980			865				787					3,344				3,217
Merger and acquisition related	(236		)	3,738				3					3,536				1,637
Noninterest Expense - Core	$	52,605			$	50,760			$	49,437				$	203,560			$	190,864
Net interest income, fully tax equivalent	$	69,212			$	68,875			$	65,514				$	271,610			$	254,196
Total noninterest income	22,528			22,179				20,529					85,485				88,637
Net securities gains	(7		)	(9			)	—					(22			)	(8,102			)
Total Revenue	$	91,733			$	91,045			$	86,043				$	357,073			$	334,731
Adjustments to Revenue:
Derivative mark-to-market	(181		)	(45			)	(2			)		(269			)	787
Total Revenue - Core	$	91,914			$	91,090			$	86,045				$	357,342			$	333,944
(10)Core Efficiency Ratio	57.23		%	55.73			%	57.45			%		56.97			%	57.15			%
	December 31,			September 30,				December 31,
	2019			2019				2018
Tangible Equity:
Total shareholders' equity	$	1,055,665			$	1,039,030			$	975,389
Less: intangible assets	319,694			320,505				287,240
Tangible Equity	735,971			718,525				688,149
Less: preferred stock	—			—				—
Tangible Common Equity	$	735,971			$	718,525			$	688,149
Tangible Assets:
Total assets	$	8,308,773			$	8,152,027			$	7,828,255
Less: intangible assets	319,694			320,505				287,240
Tangible Assets	$	7,989,079			$	7,831,522			$	7,541,015
(12)Tangible Common Equity as a percentage of Tangible Assets	9.21		%	9.17			%	9.13			%
Shares Outstanding at End of Period	98,311,840			98,319,081				98,518,668
(11)Tangible Book Value Per Common Share	$	7.49			$	7.31			$	6.98
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.