![]() FIRST COMMONWEALTH FINANCIAL CORPORATION Ferris, Baker Watts, Inc. Investor Presentation August 8, 2007 Exhibit 99.1 |
![]() 2 FORWARD-LOOKING STATEMENT The matters discussed in this presentation contain forward-looking statements that describe First Commonwealth’s future plans, strategies and expectations. All forward-looking statements are based on assumptions and involve risks and uncertainties, many of which are beyond the control of First Commonwealth and which may cause actual results, performance or achievements to differ materially from the results, performance or achievements contemplated by the forward-looking statements. Such risks and uncertainties include, among other things, the following: • Competitive pressures among depository and other financial institutions nationally and in our market areas may increase significantly. • Adverse changes in the economy or business conditions, either nationally or in our market areas, could increase credit-related losses and expenses and/or limit growth. • Increases in defaults by borrowers and other delinquencies could result in increases in our provision for losses on loans and related expenses. • Fluctuations in interest rates and market prices could reduce our net interest margin and asset valuations and increase our expenses. • The consequences of continued bank acquisitions and mergers in our market areas, resulting in fewer but much larger and financially stronger competitors, could increase competition for financial services to our detriment. • Changes in legislative or regulatory requirements applicable to us and our subsidiaries could increase costs, limit certain operations and adversely affect results of operations. • Changes in tax requirements, including tax rate changes, new tax laws and revised tax law interpretations may increase our tax expense or adversely affect our customers’ businesses. • Other risks and uncertainties described in this report and the other reports that we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements discussed in this presentation. First Commonwealth undertakes no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise. |
![]() 3 Company Overview Our Challenges Our Leadership Strategic Plan – Back to Basics Household Growth and Retention Market Demographics and Opportunities Alignment Financial Presentation PRESENTATION OUTLINE |
![]() 4 Company Overview Full Service Financial Institution (with origins dating back to 1866) Total assets of $5.7 billion at June 30, 2007 111 branches serving 15 Western and Central Pennsylvania counties Fifth largest deposit market share among Pennsylvania-based banks 15 years listed on the New York Stock Exchange (FCF) Ranked as 76 th largest U.S. Bank (total assets) |
![]() 5 Our Challenges Tough Interest Rate Environment Inverted Yield Curve Stabilized Net Interest Margin Credit Quality Mature Markets |
![]() 6 Our Leadership 14 35 45 31 29 25 29 14 Senior Vice President Strategic Resources Thaddeus J. Clements 35 Senior Vice President Investments R. John Previte 45 Senior Vice President Secretary and Treasurer David R. Tomb, Jr. Esq. 13 Executive Vice President Chief Audit Executive William R. Jarrett 29 Executive Vice President Chief Information Officer Sue A. McMurdy 1 Executive Vice President and Chief Financial Officer Edward J. Lipkus III 27 President and Chief Executive Officer John J. Dolan Officer Title Industry Experience (years) Years with First Commonwealth |
![]() 7 First Commonwealth will be the financial services organization of “First Choice” for our marketplace. Strategic Plan – Back to Basics |
![]() 8 Exceptional Products + Exceptional Service delivered by Exceptional People Strategic Plan – Back to Basics FIRST CHOICE = |
![]() 9 Convenience Doing it “Right the First Time” Enhanced Web-Banking More branch and ATM locations Expanded branch hours in selected market areas 7 day-a-week availability Strategic Plan – Back to Basics |
![]() 10 Household Growth and Retention Household Retention 1 out of 7 looking for a new bank Reduced Consumer Household Attrition Rate from 14% to 9% in less than 1 year Household Growth Improvement over 2006 Household Opportunities Butler, Washington and Allegheny Counties |
![]() ![]() 11 Market Demographics and Opportunities Market Demographics - First Commonwealth Financial Corporation Corporate Headquarters: Indiana, Pennsylvania Pennsylvania (PA) County Market Rank Number of Branches Company Deposits in Market ($000) Total Deposits in Market ($000) Deposit Market Share (%) Percent of Franchise (%) Median HH Income 2006 ($) HH Income Change 2000-2006 (%) Projected HH Income Change 2006-2011 (%) Allegheny 6 33 1,089,036 43,912,742 2.48 25.37 48,435 26.41 20.93 Westmoreland 2 17 806,960 6,299,454 12.81 18.80 46,332 24.85 18.76 Indiana 2 9 569,272 1,929,082 29.51 13.26 36,589 21.04 16.29 Cambria 3 10 434,499 2,427,369 17.90 10.12 37,288 23.61 19.68 Clearfield 2 5 241,613 1,242,865 19.44 5.63 37,899 21.03 16.57 Blair 4 7 224,626 1,886,029 11.91 5.23 40,939 24.08 17.47 Lawrence 6 5 174,219 1,443,405 12.07 4.06 40,873 22.67 17.90 Somerset 3 6 161,791 1,093,182 14.80 3.77 37,259 20.70 16.32 Jefferson 2 3 127,016 777,808 16.33 2.96 38,151 20.09 16.50 Butler 9 4 115,891 2,779,161 4.17 2.70 52,300 23.23 19.13 Elk 3 3 113,900 602,008 18.92 2.65 46,546 23.43 17.65 Bedford 4 3 89,319 605,963 14.74 2.08 38,576 18.45 15.23 Armstrong 6 2 72,010 1,046,657 6.88 1.68 38,529 22.26 16.75 Washington 11 3 57,272 3,310,520 1.73 1.33 47,616 26.35 20.31 Beaver 10 1 15,990 2,103,947 0.76 0.37 46,228 24.82 17.84 PA Totals 111 4,293,414 71,460,192 6.01 100.00 Weighted Average: Pennsylvania Franchise 42,987 23.73 18.58 Aggregate: Entire State of Pennsylvania 50,132 24.99 19.99 Aggregate: National 51,546 22.25 17.77 Ownership: Current Data Courtesy of SNL Financial |
![]() 12 Market Demographics and Opportunities Allegheny, Butler and Washington Counties Number of Households 695,179 Total Market Deposits $50 Billion Median HH Income $47,616 - $52,300 Other Counties in our footprint… Number of Households 566,902 Total Market Deposits $21.5 Billion Median HH Income $36,589 - $46,546 Source: SNL Financial – Market Share Demographics AnySite – Household Information |
![]() Market Demographics and Opportunities |
![]() 14 Market Demographics and Opportunities Target Market Segments Women’s Segment Young Savers Segment Affluent & Emerging Affluent Segment Wealth Preservation & Transfer Segment |
![]() 15 Aligning Shareholders’ Interests with Compensation Alignment “I also promise a disciplined approach to aligning shareholders’ interests with compensation. Going forward, our compensation philosophy will emphasize and reward exceptional performance.” - John J. Dolan Excerpt from 2007 Annual Meeting of Shareholders April 16, 2007 |
![]() 16 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 3.00% 3.20% 3.40% 3.60% 3.80% 4.00% FCF PEER AVG Net Interest Margin Source: SNL Financial |
![]() 17 Loan Composition – as of June 30, 2007 ($ millions) Loans Real Estate - Construction 124 3% Real Estate - Residential 1,288 35% Real Estate - Commercial 900 25% Commercial, Industrial, Financial, Agricultural 867 24% Consumer 496 13% Total 3,675 100% Loan Composition 3% 35% 25% 24% 13% Real Estate - Construction Real Estate - Residential Real Estate - Commercial Commercial, Industrial, Financial, Agricultural Consumer |
![]() 18 Real Estate - Residential 28% 29% 33% 33% 36% 35% 0% 5% 10% 15% 20% 25% 30% 35% 40% 2002 2003 2004 2005 2006 Q2 07 Loans goal |
![]() 19 Investment Composition No exposure to Sub-Prime Lending MBS are AAA MBS are valued using Interactive Data, a nationally recognized pricing service Investments Treasuries/Agencies, 11% HTM MBS, 0% AFS Muni (tax free), 14% HTM Muni (tax free), 5% AFS Corporates, 8% Other, 3% AFS MBS/CMO, 59% |
![]() 20 Funding Sources December 31, 2005 3,997 73% 666 12% 800 15% June 30, 2007 4,408 86% 147 3% 576 11% Deposits Short-term Borrowings Long-term Debt ($ millions) |
![]() 21 DEPOSIT COMPOSITION – as of June 30, 2007 ($ millions) Deposits Savings/MMDA, 38% Interest DDA, 2% Non-Interest DDA, 12% Time Deposits, 48% Non-Interest DDA 530 $ 12% Interest DDA 109 $ 2% Savings/MMDA 1,652 $ 38% Time Deposits 2,117 $ 48% Total 4,408 $ �� 100% |
![]() 22 Earnings Per Share (Diluted) EPS and Net Income Net Income (dollars in thousands) |
![]() 23 Commercial Loan Relationships Commercial Lending Expansion Plans Include: Loan Production Offices in targeted markets Participations Loan Finders Maintain Lending Standards |
![]() 24 Asset Quality .27%* .42%* Source: SNL Financial *Excludes $32.4 million for two credit relationships 0.00 0.30 0.60 0.90 1.20 1.50 2004Y 2005Y 2006Y YTD NPLs / Total Loans Peer Group Average First Commonwealth 0.00 0.20 0.40 0.60 0.80 1.00 2004Y 2005Y 2006Y YTD NPAs/Assets 0.00 0.20 0.40 2004Y 2005Y 2006Y YTD NCOs/Average Loans |
![]() 25 Capital Levels Supports a strong dividend in challenging times Flexibility Expand Lending and Investment programs Pursue Merger and Acquisition opportunities Consider additional buyback programs Capital |
![]() 26 Dividends Paid $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 Dividend Growth Per Share (adjusted for stock splits) Recognized by Mergent as a “Dividend Achiever” Current Dividend Yield > 7% |
![]() 27 1. Strong Leadership/Revenue Driven Strategy 2. Consistent Dividend Growth 3. Strong Dividend Yield and Capital Base Summary |
![]() 28 APPENDIX PEER GROUP Sun Bancorp, Inc. SNBC F.N.B Corporation FNB S&T Bancorp, Inc. STBA United Bankshares, Inc. UBSI Park National Corporation PRK First Financial Bancorp FFBC WesBanco, Inc. WSBC Harleysville National Corporation HNBC National Penn Bancshares, Inc. NPBC NBT Bancorp Inc. NBTB Provident Bankshares Corporation PBKS Fulton Financial Corporation FULT Community Bank System, Inc. CBU Susquehanna Bancshares, Inc. SUSQ FirstMerit Corporation FMER |
![]() 29 Questions? On behalf of everyone at First Commonwealth. . . Thank you for your interest in our Company! |