Exhibit 99.1
*** NEWS RELEASE ***
TO: | All Area News Agencies | For More Information Contact: | ||
Edward J. Lipkus III, | ||||
FROM: | First Commonwealth | Executive Vice President and Chief Financial Officer | ||
Financial Corporation | First Commonwealth Financial Corporation | |||
(724) 349-7220 | ||||
DATE: | January 23, 2008 |
First Commonwealth Announces Fourth Quarter and Year End 2007 Financial Results
Commercial Loans and Non-Interest Income Increase
Indiana, PA., January 23, 2008 - First Commonwealth Financial Corporation (NYSE: FCF), the holding company for First Commonwealth Bank, announced today the financial results for the fourth quarter and year ended December 31, 2007.
Fourth Quarter Results
First Commonwealth reported fourth quarter 2007 net income of $11.6 million or $0.16 per diluted share compared to $12.4 million or $0.17 per diluted share in the same period last year. The decrease of $750 thousand in net income was due to lower net interest income and higher income taxes, partly offset by a lower provision for credit losses and higher non-interest income. The return on average equity and average assets was 8.08% and 0.80%, respectively, compared to 8.50% and 0.81% for the prior year period.
Significant developments during the fourth quarter include:
• | Net interest margin improved year over year. |
• | Mike Price joined First Commonwealth as President of First Commonwealth Bank to oversee all banking operations. |
• | A new location was opened in the Pittsburgh market (Cranberry Township), making this the 112th office for First Commonwealth’s retail banking division. |
Year to Date Results
First Commonwealth reported 2007 net income of $46.3 million or $0.63 per diluted share compared to $53.0 million or $0.74 per diluted share in 2006. The decrease in net income was due to a decline in net interest income and higher non-interest expense partly offset by an increase in non-interest income, a lower provision for credit losses and lower income taxes. The return on average equity and average assets was 8.08% and 0.80%, respectively, compared to 9.76% and 0.89% for the prior year period.
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“I am excited about the significant changes First Commonwealth experienced this quarter,” said John J. Dolan, President and CEO. “I am confident that the addition of a new bank president, Mike Price, to our team will facilitate our client-centric focus of becoming ‘First Choice’ in our market place. With the hiring of three additional qualified lenders and the opening of a Loan Production Office in State College earlier in the year, we are beginning to see strong improvements to our commercial loan balances. We have also seen an increase in the quality and size of our commercial loan pipeline.
“Our increase in non-accrual loans is due to a few large credit relationships and is not a result of substandard lending. We have been working aggressively with these borrowers to develop a winning resolution.”
Net Interest Income and Margin
Net interest income for the fourth quarter of 2007 decreased $1.7 million, or 4.3%, to $40.2 million from $41.9 million in the fourth quarter of 2006 due primarily to a lower level of interest-earning assets.The decrease in interest-earning assets accompanied by First Commonwealth’s reduction in higher cost wholesale borrowings resulted in a more stable margin.
Net interest margin on a tax equivalent basis for the fourth quarter 2007 increased four basis points or 0.04% to 3.32%, compared with 3.28% in the corresponding period last year. The ratio of noninterest-bearing funding sources as a percent of interest-earning assets increased over the prior period contributing to the increase in net interest margin. Average investment securities decreased $152.0 million, or 8.9%, and average borrowings declined $339.9 million, or 31.1%, in the fourth quarter of 2007 compared to the same period in 2006.
Net interest margin increased three basis points or 0.03% for the year ended December 31, 2007 compared to the prior year period primarily due to the reasons noted above.
Non-Interest Income
Non-interest income for the fourth quarter of 2007 increased $782 thousand, or 6.5%, from the fourth quarter of 2006. During the fourth quarter of 2007, service charges on deposit accounts increased $97 thousand or 2.1% and card related interchange income increased $295 thousand or 19.7% due to a larger customer base, higher volume and changes in fee structures. Insurance commissions increased $220 thousand or 31.9% due to higher sales.
For the year 2007, non-interest income increased $4.6 million or 10.4% mainly due to the reasons noted above for the three month period ended December 31, 2007 and the inclusion of a $550 thousand gain from the sale of First Commonwealth’s municipal bond servicing business during the second quarter of 2007. This business generated annual trust income of approximately $100 thousand, net of expenses.
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Non-Interest Expense
Non-interest expense for the fourth quarter of 2007 decreased $104 thousand compared to the corresponding quarter last year. The fourth quarter of 2006 included a $1.1 million loss on the extinguishment of debt. Net occupancy expense increased $439 thousand or 14.4% due to branch expansion and depreciation. Advertising expense increased $316 thousand due to increased branding efforts.
For the year 2007, non-interest expense increased $10.3 million or 7.5% compared to 2006. Salaries and employee benefits increased $3.1 million or 4.3% due to the acquisition of Laurel Savings Bank in August 2006, merit salary increases, and $1.0 million of expenses recorded in connection with separation agreements with former executives of First Commonwealth. Net occupancy expense increased $1.6 million or 13.5% due to branch expansion and building repairs and maintenance. Advertising expense increased $1.1 million due to increased branding efforts. Intangible amortization increased $821 thousand or 31.5% due to the acquisition of Laurel Savings Bank. Other expenses increased $2.2 million or 7.8% primarily due to costs associated with strategic marketing initiatives, other professional fees, contributions and public relations.
Income Tax
Income tax expense increased $797 thousand for the fourth quarter of 2007 compared to the same period in 2006. First Commonwealth’s effective tax rate was 15.4% in the fourth quarter of 2007 compared to 9.6% in the same period in 2006. Income tax expense increased $336 thousand in the fourth quarter of 2007 to record the tax effect of purchase accounting adjustments related to prior acquisitions. Also, income tax expense for the fourth quarter of 2006 included a tax benefit of $379 thousand recognized during management’s reassessment of required tax accruals.
For the year 2007, income tax expense decreased $3.1 million compared to 2006, primarily due to a decrease of $9.8 million in pretax income. The effective tax rate was 11.4% for 2007 compared to 14.6% for 2006, as items excluded from taxable income remained consistent but represented a larger portion of pretax earnings.
Credit Quality and Provision for Credit Losses
First Commonwealth is not a participant or underwriter in the sub-prime mortgage loan or collateralized debt marketplace and therefore does not have any exposure to risks associated with these activities. All mortgage backed securities in First Commonwealth’s investment portfolio are AAA rated and backed by U.S. Government agencies.
Non-accrual loans increased $42.1 million to $54.1 million at December 31, 2007 compared to $12.0 million at December 31, 2006, mainly due to two large credits. A $30.0 million commercial credit relationship was placed on non-accrual during the second quarter of 2007. This credit relationship had been monitored since the second quarter of 2006 when management disclosed that this credit had experienced deterioration. A $4.3 million commercial credit relationship was placed on non-accrual in the fourth quarter of 2007. These credits are collateralized by real estate or equipment and a reserve has been allocated, primarily during 2006, to cover the expected losses.
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As previously disclosed, First Commonwealth purchased $7.0 million in loans from Equipment Finance LLC (“EFI”), a division of Sterling Financial Corporation of Lancaster, Pennsylvania (“Sterling”), during 2006. Sterling subsequently disclosed an investigation, which is still ongoing, into financial irregularities related to certain financing contracts at EFI. Loans in this portfolio are collateralized by equipment and reserves were allocated in the second quarter of 2007 to cover the expected losses. At December 31, 2007, the remaining balance in this portfolio was $4.4 million, of which $3.2 million was classified as non-accrual. Loans in this portfolio totaling $202 thousand were classified by First Commonwealth as non-accrual during the fourth quarter of 2007.
Loans past due in excess of 90 days and still accruing decreased $198 thousand or 1.5% to $12.9 million compared to December 31, 2006. The provision for credit losses for the fourth quarter of 2007 decreased $948 thousand compared to the fourth quarter of 2006. For the year 2007, the provision for credit losses decreased $1.5 million compared to the same period in 2006. In 2006, management increased the provision for credit losses to reflect the deterioration in the $30.0 million credit described above. Furthermore, during the fourth quarter of 2007, First Commonwealth experienced pay-offs on loans that carried specific allocated reserves, which resulted in an improvement in the credit quality of the loan portfolio and a decline in the provision for credit losses.
Management believes that the allowance for credit losses is at a level deemed sufficient to absorb losses inherent in the loan portfolio at December 31, 2007.
About First Commonwealth Financial Corporation
First Commonwealth Financial Corporation is a $5.9 billion bank holding company headquartered in Indiana, Pennsylvania. It operates 112 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” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the adequacy of First Commonwealth’s allowance for credit losses, improvements in commercial loan balances and quality and the impact of recent organizational changes and strategic initiatives on future results. Forward-looking statements describe First Commonwealth’s future plans, strategies and expectations and 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. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or words of similar meaning, or
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future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Forward-looking statements speak only as of the date they are made. Such risks and uncertainties include among other things:
• | adverse changes in the economy or business conditions, either nationally or in First Commonwealth’s market areas, which could increase credit-related losses and expenses and/or limit growth; |
• | increases in defaults by borrowers and other delinquencies, which could result in an increased provision for credit losses on loans and related expenses; |
• | fluctuations in interest rates and market prices, which could reduce net interest margin and asset valuations and increase expenses; |
• | changes in legislative or regulatory requirements applicable to First Commonwealth and its subsidiaries, which could increase costs, limit certain operations and adversely affect results of operations; |
• | the inability to successfully execute First Commonwealth’s strategic growth initiatives, which could limit future revenue and earnings growth; and |
• | other risks and uncertainties described in First Commonwealth’s reports filed with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K. |
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FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
(dollars in thousands, except share data)
For the Quarter Ended | For the Quarter Ended | For the Year Ended December 31, | |||||||||||||||||||||||||||||||
March 31, 2007 | June 30, 2007 | September 30, 2007 | December 31, 2007 | March 31, 2006 | June 30, 2006 | September 30, 2006 | December 31, 2006 | ||||||||||||||||||||||||||
2007 | 2006 | ||||||||||||||||||||||||||||||||
Interest Income | |||||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 63,913 | $ | 62,813 | $ | 63,737 | $ | 63,488 | $ | 58,314 | $ | 60,487 | $ | 64,575 | $ | 65,362 | $ | 253,951 | $ | 248,738 | |||||||||||||
Interest and dividends on investments: | |||||||||||||||||||||||||||||||||
Taxable interest | 16,145 | 14,889 | 14,259 | 14,967 | 17,585 | 17,166 | 16,826 | 16,680 | 60,260 | 68,257 | |||||||||||||||||||||||
Interest exempt from Federal income taxes | 3,371 | 3,427 | 3,424 | 3,510 | 3,219 | 3,230 | 3,215 | 3,212 | 13,732 | 12,876 | |||||||||||||||||||||||
Dividends | 733 | 720 | 753 | 752 | 603 | 787 | 776 | 792 | 2,958 | 2,958 | |||||||||||||||||||||||
Interest on Federal funds sold | 24 | 2 | 57 | 74 | 46 | 13 | 17 | 66 | 157 | 142 | |||||||||||||||||||||||
Interest on bank deposits | 11 | 10 | 8 | 8 | 14 | 10 | 48 | 27 | 37 | 99 | |||||||||||||||||||||||
Total interest income | 84,197 | 81,861 | 82,238 | 82,799 | 79,781 | 81,693 | 85,457 | 86,139 | 331,095 | 333,070 | |||||||||||||||||||||||
Interest Expense | |||||||||||||||||||||||||||||||||
Interest on deposits | 31,585 | 32,872 | 33,786 | 34,527 | 23,384 | 25,182 | 28,254 | 31,634 | 132,770 | 108,454 | |||||||||||||||||||||||
Interest on short-term borrowings | 4,946 | 2,700 | 1,977 | 1,819 | 6,364 | 6,622 | 7,338 | 5,124 | 11,442 | 25,448 | |||||||||||||||||||||||
Interest on subordinated debentures | 2,117 | 2,123 | 2,130 | 2,156 | 2,054 | 2,097 | 2,134 | 2,134 | 8,526 | 8,419 | |||||||||||||||||||||||
Interest on other long-term debt | 4,298 | 4,327 | 4,211 | 4,139 | 6,532 | 6,499 | 5,453 | 5,302 | 16,975 | 23,786 | |||||||||||||||||||||||
Total interest on long-term debt | 6,415 | 6,450 | 6,341 | 6,295 | 8,586 | 8,596 | 7,587 | 7,436 | 25,501 | 32,205 | |||||||||||||||||||||||
Total interest expense | 42,946 | 42,022 | 42,104 | 42,641 | 38,334 | 40,400 | 43,179 | 44,194 | 169,713 | 166,107 | |||||||||||||||||||||||
Net Interest Income | 41,251 | 39,839 | 40,134 | 40,158 | 41,447 | 41,293 | 42,278 | 41,945 | 161,382 | 166,963 | |||||||||||||||||||||||
Provision for credit losses | 2,979 | 2,415 | 2,296 | 2,352 | 908 | 4,298 | 3,038 | 3,300 | 10,042 | 11,544 | |||||||||||||||||||||||
Net Interest Income after provision for credit losses | 38,272 | 37,424 | 37,838 | 37,806 | 40,539 | 36,995 | 39,240 | 38,645 | 151,340 | 155,419 | |||||||||||||||||||||||
Non-Interest Income | |||||||||||||||||||||||||||||||||
Net securities gains | 605 | 150 | 16 | 403 | 63 | 19 | 5 | 610 | 1,174 | 697 | |||||||||||||||||||||||
Trust income | 1,418 | 1,518 | 1,517 | 1,428 | 1,394 | 1,481 | 1,482 | 1,444 | 5,881 | 5,801 | |||||||||||||||||||||||
Service charges on deposit accounts | 4,165 | 4,517 | 4,609 | 4,690 | 3,869 | 4,144 | 4,361 | 4,593 | 17,981 | 16,967 | |||||||||||||||||||||||
Insurance commissions | 730 | 857 | 1,064 | 909 | 719 | 595 | 801 | 689 | 3,560 | 2,804 | |||||||||||||||||||||||
Income from bank owned life insurance | 1,490 | 1,520 | 1,534 | 1,557 | 1,375 | 1,414 | 1,451 | 1,502 | 6,101 | 5,742 | |||||||||||||||||||||||
Card related interchange income | 1,485 | 1,634 | 1,654 | 1,791 | 1,298 | 1,391 | 1,398 | 1,496 | 6,564 | 5,583 | |||||||||||||||||||||||
Other income | 1,533 | 2,205 | 1,819 | 2,052 | 1,578 | 1,752 | 1,609 | 1,714 | 7,609 | 6,653 | |||||||||||||||||||||||
Total non-interest income | 11,426 | 12,401 | 12,213 | 12,830 | 10,296 | 10,796 | 11,107 | 12,048 | 48,870 | 44,247 | |||||||||||||||||||||||
Non-Interest Expense | |||||||||||||||||||||||||||||||||
Salaries and employee benefits | 20,284 | 18,588 | 18,401 | 18,859 | 19,357 | 17,235 | 17,690 | 18,706 | 76,132 | 72,988 | |||||||||||||||||||||||
Net occupancy expense | 3,353 | 3,398 | 3,475 | 3,484 | 3,402 | 2,785 | 2,845 | 3,045 | 13,710 | 12,077 | |||||||||||||||||||||||
Furniture and equipment expense | 2,717 | 2,914 | 3,243 | 3,126 | 2,767 | 2,915 | 2,998 | 3,023 | 12,000 | 11,703 | |||||||||||||||||||||||
Advertising expense | 1,095 | 340 | 475 | 957 | 343 | 349 | 417 | 641 | 2,867 | 1,750 | |||||||||||||||||||||||
Data processing expense | 954 | 925 | 942 | 987 | 795 | 820 | 903 | 938 | 3,808 | 3,456 | |||||||||||||||||||||||
Pennsylvania shares tax expense | 1,469 | 1,415 | 1,439 | 1,446 | 1,350 | 1,358 | 1,349 | 1,363 | 5,769 | 5,420 | |||||||||||||||||||||||
Intangible amortization | 870 | 870 | 857 | 831 | 565 | 566 | 658 | 818 | 3,428 | 2,607 | |||||||||||||||||||||||
Loss (Gain) on extinguishment of debt | 0 | 0 | 0 | 0 | 0 | (270 | ) | (1,283 | ) | 1,143 | 0 | (410 | ) | ||||||||||||||||||||
Other expenses | 7,027 | 8,433 | 7,648 | 7,185 | 7,014 | 7,194 | 6,582 | 7,302 | 30,293 | 28,092 | |||||||||||||||||||||||
Total non-interest expense | 37,769 | 36,883 | 36,480 | 36,875 | 35,593 | 32,952 | 32,159 | 36,979 | 148,007 | 137,683 | |||||||||||||||||||||||
Income before income taxes | 11,929 | 12,942 | 13,571 | 13,761 | 15,242 | 14,839 | 18,188 | 13,714 | 52,203 | 61,983 | |||||||||||||||||||||||
Applicable income taxes | 1,034 | 1,454 | 1,352 | 2,113 | 2,304 | 2,613 | 2,796 | 1,316 | 5,953 | 9,029 | |||||||||||||||||||||||
Net Income | $ | 10,895 | $ | 11,488 | $ | 12,219 | $ | 11,648 | $ | 12,938 | $ | 12,226 | $ | 15,392 | $ | 12,398 | $ | 46,250 | $ | 52,954 | |||||||||||||
Average Shares Outstanding | 73,113,823 | 73,180,532 | 72,589,329 | 72,391,577 | 69,469,709 | 69,653,432 | 70,875,018 | 73,026,948 | 72,816,208 | 70,766,348 | |||||||||||||||||||||||
Average Shares Outstanding Assuming Dilution | 73,370,678 | 73,314,997 | 72,705,753 | 72,513,962 | 69,918,151 | 70,037,609 | 71,177,930 | 73,362,224 | 72,973,259 | 71,133,562 | |||||||||||||||||||||||
Per Share Data: | |||||||||||||||||||||||||||||||||
Basic Earnings Per Share | $ | 0.15 | $ | 0.16 | $ | 0.17 | $ | 0.16 | $ | 0.19 | $ | 0.18 | $ | 0.22 | $ | 0.17 | $ | 0.64 | $ | 0.75 | |||||||||||||
Diluted Earnings Per Share | $ | 0.15 | $ | 0.16 | $ | 0.17 | $ | 0.16 | $ | 0.19 | $ | 0.17 | $ | 0.22 | $ | 0.17 | $ | 0.63 | $ | 0.74 | |||||||||||||
Cash Dividends Declared per Common Share | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.68 | $ | 0.68 |
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
(dollars in thousands, except share data)
March 31, 2007 | June 30, 2007 | September 30, 2007 | December 31, 2007 | March 31, 2006 | June 30, 2006 | September 30, 2006 | December 31, 2006 | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and due from banks | $ | 84,137 | $ | 92,407 | $ | 86,499 | $ | 100,791 | $ | 84,627 | $ | 89,688 | $ | 95,151 | $ | 95,134 | ||||||||||||||||
Interest-bearing bank deposits | 463 | 1,310 | 1,060 | 1,719 | 391 | 905 | 7,986 | 985 | ||||||||||||||||||||||||
Securities available for sale, at market value | 1,557,247 | 1,451,019 | 1,460,909 | 1,574,217 | 1,737,899 | 1,681,139 | 1,649,506 | 1,644,690 | ||||||||||||||||||||||||
Securities held to maturity, at amortized cost, (Market value $72,928 at December 31, 2007 and $80,156 at December 31, 2006) | 78,092 | 76,366 | 73,024 | 71,497 | 85,673 | 82,720 | 79,841 | 78,501 | ||||||||||||||||||||||||
Loans held for sale | 0 | 0 | 0 | 0 | 553 | 4,436 | 0 | 0 | ||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||
Portfolio loans | 3,703,545 | 3,674,725 | 3,660,153 | 3,697,843 | 3,651,632 | 3,680,070 | 3,818,846 | 3,783,874 | ||||||||||||||||||||||||
Unearned income | (47 | ) | (37 | ) | (30 | ) | (24 | ) | (98 | ) | (83 | ) | (70 | ) | (57 | ) | ||||||||||||||||
Allowance for credit losses | (43,379 | ) | (43,968 | ) | (43,210 | ) | (42,396 | ) | (38,017 | ) | (39,020 | ) | (42,085 | ) | (42,648 | ) | ||||||||||||||||
Net loans | 3,660,119 | 3,630,720 | 3,616,913 | 3,655,423 | 3,613,517 | 3,640,967 | 3,776,691 | 3,741,169 | ||||||||||||||||||||||||
Premises and equipment, net | 70,916 | 70,567 | 70,133 | 69,487 | 61,230 | 63,832 | 68,518 | 68,901 | ||||||||||||||||||||||||
Other real estate owned | 1,663 | 1,241 | 1,803 | 2,172 | 1,499 | 1,930 | 1,911 | 1,507 | ||||||||||||||||||||||||
Goodwill | 160,759 | 160,755 | 159,956 | 159,956 | 122,702 | 122,702 | 159,889 | 160,366 | ||||||||||||||||||||||||
Amortizing intangibles, net | 15,999 | 15,129 | 14,272 | 13,441 | 14,686 | 14,120 | 18,262 | 16,869 | ||||||||||||||||||||||||
Other assets | 231,817 | 235,674 | 237,527 | 234,915 | 221,733 | 222,947 | 234,784 | 235,794 | ||||||||||||||||||||||||
Total assets | $ | 5,861,212 | $ | 5,735,188 | $ | 5,722,096 | $ | 5,883,618 | $ | 5,944,510 | $ | 5,925,386 | $ | 6,092,539 | $ | 6,043,916 | ||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Deposits (all domestic): | ||||||||||||||||||||||||||||||||
Noninterest-bearing | $ | 525,387 | $ | 530,063 | $ | 522,810 | $ | 523,203 | $ | 499,161 | $ | 507,021 | $ | 538,986 | $ | 522,451 | ||||||||||||||||
Interest-bearing | 3,830,000 | 3,877,708 | 3,811,133 | 3,824,016 | 3,496,577 | 3,491,784 | 3,779,956 | 3,803,989 | ||||||||||||||||||||||||
Total deposits | 4,355,387 | 4,407,771 | 4,333,943 | 4,347,219 | 3,995,738 | 3,998,805 | 4,318,942 | 4,326,440 | ||||||||||||||||||||||||
Short-term borrowings | 309,895 | 147,346 | 237,734 | 354,201 | 601,426 | 654,315 | 494,877 | 500,014 | ||||||||||||||||||||||||
Other liabilities | 45,318 | 43,807 | 44,156 | 65,464 | 37,952 | 38,662 | 45,308 | 52,681 | ||||||||||||||||||||||||
Subordinated debentures | 108,250 | 108,250 | 108,250 | 105,750 | 108,250 | 108,250 | 108,250 | 108,250 | ||||||||||||||||||||||||
Other long-term debt | 470,032 | 467,856 | 435,781 | 442,196 | 685,395 | 613,991 | 556,194 | 485,170 | ||||||||||||||||||||||||
Total long-term debt | 578,282 | 576,106 | 544,031 | 547,946 | 793,645 | 722,241 | 664,444 | 593,420 | ||||||||||||||||||||||||
Total liabilities | 5,288,882 | 5,175,030 | 5,159,864 | 5,314,830 | 5,428,761 | 5,414,023 | 5,523,571 | 5,472,555 | ||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||
Preferred stock, $1 par value per share, 3,000,000 shares authorized, none issued | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Common stock, $1 par value per share, 100,000,000 shares authorized; 75,100,431 shares issued and 73,128,612 shares outstanding at December 31, 2007; 75,100,431 shares issued and 73,916,377 shares outstanding at December 31, 2006 | 75,100 | 75,100 | 75,100 | 75,100 | 71,978 | 71,978 | 75,100 | 75,100 | ||||||||||||||||||||||||
Additional paid-in capital | 207,958 | 207,553 | 207,310 | 206,889 | 173,369 | 172,707 | 208,621 | 208,313 | ||||||||||||||||||||||||
Retained earnings | 320,734 | 319,677 | 319,472 | 319,246 | 319,523 | 319,740 | 322,583 | 322,415 | ||||||||||||||||||||||||
Accumulated other comprehensive loss, net | (6,224 | ) | (15,417 | ) | (6,736 | ) | (147 | ) | (17,349 | ) | (23,515 | ) | (9,065 | ) | (7,914 | ) | ||||||||||||||||
Treasury stock (1,971,819 and 1,184,054 shares at December 31, 2007 and December 31, 2006, respectively, at cost) | (14,138 | ) | (16,155 | ) | (22,814 | ) | (22,700 | ) | (18,672 | ) | (16,947 | ) | (16,171 | ) | (14,953 | ) | ||||||||||||||||
Unearned ESOP shares | (11,100 | ) | (10,600 | ) | (10,100 | ) | (9,600 | ) | (13,100 | ) | (12,600 | ) | (12,100 | ) | (11,600 | ) | ||||||||||||||||
Total shareholders’ equity | 572,330 | 560,158 | 562,232 | 568,788 | 515,749 | 511,363 | 568,968 | 571,361 | ||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 5,861,212 | $ | 5,735,188 | $ | 5,722,096 | $ | 5,883,618 | $ | 5,944,510 | $ | 5,925,386 | $ | 6,092,539 | $ | 6,043,916 | ||||||||||||||||
Book value per share | $ | 7.74 | $ | 7.59 | $ | 7.69 | $ | 7.78 | $ | 7.32 | $ | 7.24 | $ | 7.71 | $ | 7.73 | ||||||||||||||||
Market value per share | $ | 11.75 | $ | 10.92 | $ | 11.06 | $ | 10.65 | $ | 14.66 | $ | 12.70 | $ | 13.03 | $ | 13.43 |
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
| Loans by Categories (dollars in thousands) |
| ||||||||||||||||||
December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2006 | ||||||||||||||||
Commercial, financial, agricultural and other | $ | 926,904 | $ | 901,679 | $ | 866,590 | $ | 854,843 | $ | 861,427 | ||||||||||
Real estate - construction | 207,708 | 143,680 | 123,844 | 101,719 | 92,192 | |||||||||||||||
Real estate - residential | 1,237,986 | 1,268,313 | 1,288,089 | 1,312,389 | 1,346,503 | |||||||||||||||
Real estate - commercial | 861,077 | 865,389 | 899,669 | 914,389 | 935,635 | |||||||||||||||
Loans to individuals | 464,106 | 480,956 | 496,228 | 519,711 | 547,253 | |||||||||||||||
Leases, net of unearned income | 62 | 136 | 305 | 494 | 864 | |||||||||||||||
Gross loans and leases | 3,697,843 | 3,660,153 | 3,674,725 | 3,703,545 | 3,783,874 | |||||||||||||||
Unearned income | (24 | ) | (30 | ) | (37 | ) | (47 | ) | (57 | ) | ||||||||||
Total loans and leases net of unearned income | $ | 3,697,819 | $ | 3,660,123 | $ | 3,674,688 | $ | 3,703,498 | $ | 3,783,817 | ||||||||||
FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED SELECTED FINANCIAL DATA
| Quarter To Date Average Balance Sheets and Net Interest Analysis at December 31, (dollars in thousands) |
| ||||||||||||||||||
2007 | 2006 | |||||||||||||||||||
Average Balance | Income/Expense | Yield or Rate (a) | Average Balance | Income/Expense | Yield or Rate (a) | |||||||||||||||
Assets | ||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Interest-bearing deposits with banks | $ | 848 | $ | 8 | 4.11 | % | $ | 1,944 | $ | 27 | 5.59 | % | ||||||||
Tax-free investment securities | 313,165 | 3,510 | 6.84 | % | 283,970 | 3,212 | 6.90 | % | ||||||||||||
Taxable investment securities | 1,246,973 | 15,719 | 5.00 | % | 1,428,155 | 17,472 | 4.85 | % | ||||||||||||
Federal funds sold | 6,398 | 74 | 4.56 | % | 4,923 | 66 | 5.31 | % | ||||||||||||
Loans, net of unearned income (b)(c) | 3,666,006 | 63,488 | 7.06 | % | 3,795,900 | 65,362 | 7.04 | % | ||||||||||||
Total interest-earning assets | 5,233,390 | 82,799 | 6.55 | % | 5,514,892 | 86,139 | 6.46 | % | ||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||
Cash | 75,184 | 83,224 | ||||||||||||||||||
Allowance for credit losses | (43,600 | ) | (42,611 | ) | ||||||||||||||||
Other assets | 487,765 | 490,184 | ||||||||||||||||||
Total noninterest-earning assets | 519,349 | 530,797 | ||||||||||||||||||
Total Assets | $ | 5,752,739 | $ | 6,045,689 | ||||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest-bearing demand deposits (d) | $ | 595,956 | $ | 2,557 | 1.70 | % | $ | 602,999 | $ | 2,930 | 1.93 | % | ||||||||
Savings deposits (d) | 1,067,639 | 5,995 | 2.23 | % | 1,125,970 | 5,823 | 2.05 | % | ||||||||||||
Time deposits | 2,214,463 | 25,975 | 4.65 | % | 2,101,559 | 22,881 | 4.32 | % | ||||||||||||
Short-term borrowings | 209,726 | 1,819 | 3.44 | % | 444,028 | 5,124 | 4.58 | % | ||||||||||||
Long-term debt | 544,569 | 6,295 | 4.59 | % | 650,187 | 7,436 | 4.54 | % | ||||||||||||
Total interest-bearing liabilities | 4,632,353 | 42,641 | 3.65 | % | 4,924,743 | 44,194 | 3.56 | % | ||||||||||||
Noninterest-bearing liabilities and capital: | ||||||||||||||||||||
Noninterest-bearing demand deposits (d) | 514,299 | 507,352 | ||||||||||||||||||
Other liabilities | 34,163 | 35,004 | ||||||||||||||||||
Shareholders’ equity | 571,924 | 578,590 | ||||||||||||||||||
Total noninterest-bearing funding sources | 1,120,386 | 1,120,946 | ||||||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 5,752,739 | $ | 6,045,689 | ||||||||||||||||
Net Interest Income and Net Yield on Interest-Earning Assets | $ | 40,158 | 3.32 | % | $ | 41,945 | 3.28 | % | ||||||||||||
(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
| Year To Date Average Balance Sheets and Net Interest Analysis at December 31, (dollars in thousands) |
| ||||||||||||||||||
2007 | 2006 | |||||||||||||||||||
Average Balance | Income/Expense | Yield or Rate (a) | Average Balance | Income/Expense | Yield or Rate (a) | |||||||||||||||
Assets | ||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Interest-bearing deposits with banks | $ | 639 | $ | 37 | 5.82 | % | $ | 1,878 | $ | 99 | 5.27 | % | ||||||||
Tax-free investment securities | 304,842 | 13,732 | 6.93 | % | 281,823 | 12,876 | 7.03 | % | ||||||||||||
Taxable investment securities | 1,278,469 | 63,218 | 4.94 | % | 1,487,267 | 71,215 | 4.79 | % | ||||||||||||
Federal funds sold | 3,204 | 157 | 4.89 | % | 2,854 | 142 | 4.99 | % | ||||||||||||
Loans, net of unearned income (b)(c)(d) | 3,687,037 | 253,951 | 7.09 | % | 3,707,233 | 248,738 | 6.92 | % | ||||||||||||
Total interest-earning assets | 5,274,191 | 331,095 | 6.56 | % | 5,481,055 | 333,070 | 6.34 | % | ||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||
Cash | 80,453 | 79,509 | ||||||||||||||||||
Allowance for credit losses | (43,811 | ) | (40,510 | ) | ||||||||||||||||
Other assets | 489,502 | 452,915 | ||||||||||||||||||
Total noninterest-earning assets | 526,144 | 491,914 | ||||||||||||||||||
Total Assets | $ | 5,800,335 | $ | 5,972,969 | ||||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest-bearing demand deposits (e) | $ | 595,055 | $ | 10,538 | 1.77 | % | $ | 584,717 | $ | 10,251 | 1.75 | % | ||||||||
Savings deposits (e) | 1,104,789 | 25,008 | 2.26 | % | 1,138,579 | 21,496 | 1.89 | % | ||||||||||||
Time deposits | 2,138,296 | 97,224 | 4.55 | % | 1,889,731 | 76,707 | 4.06 | % | ||||||||||||
Short-term borrowings | 279,045 | 11,442 | 4.10 | % | 568,327 | 25,448 | 4.48 | % | ||||||||||||
Long-term debt | 563,919 | 25,501 | 4.52 | % | 724,846 | 32,205 | 4.44 | % | ||||||||||||
Total interest-bearing liabilities | 4,681,104 | 169,713 | 3.63 | % | 4,906,200 | 166,107 | 3.39 | % | ||||||||||||
Noninterest-bearing liabilities and capital: | ||||||||||||||||||||
Noninterest-bearing demand deposits (e) | 514,256 | 493,790 | ||||||||||||||||||
Other liabilities | 32,335 | 30,526 | ||||||||||||||||||
Shareholders’ equity | 572,640 | 542,453 | ||||||||||||||||||
Total noninterest-bearing funding sources | 1,119,231 | 1,066,769 | ||||||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 5,800,335 | $ | 5,972,969 | ||||||||||||||||
Net Interest Income and Net Yield on Interest-Earning Assets | $ | 161,382 | 3.34 | % | $ | 166,963 | 3.31 | % | ||||||||||||
(a) | Yields on interest-earning assets have been computed on a tax equivalent basis using the 35% Federal income tax statutory rate. |
(b) | Average balance includes loans held for sale in 2006. |
(c) | Income on nonaccrual loans is accounted for on the cash basis, and the loan balances are included in interest-earning assets. |
(d) | Loan income includes loan fees. |
(e) | 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) |
| ||||||
For the Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
Loans on non-accrual basis | $ | 54,119 | $ | 12,043 | ||||
Troubled debt restructured loans | 147 | 160 | ||||||
Total nonperforming loans | $ | 54,266 | $ | 12,203 | ||||
Loans past due in excess of 90 days and still accruing | $ | 12,853 | $ | 13,051 | ||||
Loans outstanding at end of period | $ | 3,697,819 | $ | 3,783,817 | ||||
Average loans outstanding (a) | $ | 3,687,037 | $ | 3,707,233 | ||||
Allowance for credit losses | $ | 42,396 | $ | 42,648 | ||||
Nonperforming loans as a percentage of total loans | 1.47 | % | 0.32 | % | ||||
Net charge offs | $ | 10,294 | $ | 8,980 | ||||
Reduction in allowance for credit losses due to transfer of credit to held for sale | $ | 0 | $ | 1,387 | ||||
Net credit losses | $ | 10,294 | $ | 10,367 | ||||
Net credit losses as a percentage of average loans outstanding | 0.28 | % | 0.28 | % | ||||
Allowance for credit losses as a percentage of average loans outstanding | 1.15 | % | 1.15 | % | ||||
Allowance for credit losses as a percentage of nonperforming loans | 78.13 | % | 349.49 | % | ||||
Other real estate owned | $ | 2,172 | $ | 1,507 |
(a) | Includes average loans held for sale in 2006. |
| Profitability Ratios (dollars in thousands) |
| ||||||||||||||||||||||||||||||||||||||
For the Quarter Ended | For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||||||||||||||
March 31, 2007 | June 30, 2007 | September 30, 2007 | December 31, 2007 | March 31, 2006 | June 30, 2006 | September 30, 2006 | December 31, 2006 | December 31, | ||||||||||||||||||||||||||||||||
2007 | 2006 | |||||||||||||||||||||||||||||||||||||||
Return on average assets | 0.74 | % | 0.79 | % | 0.85 | % | 0.80 | % | 0.88 | % | 0.83 | % | 1.02 | % | 0.81 | % | 0.80 | % | 0.89 | % | ||||||||||||||||||||
Return on average equity | 7.64 | % | 8.00 | % | 8.59 | % | 8.08 | % | 9.95 | % | 9.39 | % | 11.29 | % | 8.50 | % | 8.08 | % | 9.76 | % | ||||||||||||||||||||
Net interest margin | 3.36 | % | 3.31 | % | 3.36 | % | 3.32 | % | 3.31 | % | 3.31 | % | 3.34 | % | 3.28 | % | 3.34 | % | 3.31 | % | ||||||||||||||||||||
Efficiency ratio (b) | 66.98 | % | 65.88 | % | 65.17 | % | 65.15 | % | 64.35 | % | 59.16 | % | 56.31 | % | 64.08 | % | 65.79 | % | 60.97 | % | ||||||||||||||||||||
Fully tax equivalent adjustment | $ | 3,715 | $ | 3,745 | $ | 3,633 | $ | 3,614 | $ | 3,570 | $ | 3,608 | $ | 3,724 | $ | 3,711 | $ | 14,707 | $ | 14,613 |
(b) | 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.”