First · NYSE:FCF
First — First Commonwealth Financial — Q3 2020 Earnings Presentation
20 slides from First's earnings presentation, Oct 28, 2020
Slide 1: First Commonwealth Financial NYSE: FCF
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Slide 2: 3Q 2020 Earnings Release Webcast Presentation
3Q 2020 Earnings Release Webcast Presentation October 28, 2020 2
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation 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
Slide 4: Third Quarter 2020 Highlights
3Q 2020 Earnings Release Webcast Presentation THIRD QUARTER 2020 HIGHLIGHTS Highlights Positioning for offense as we weather uncertainty $41.1 million Additional reserve build of $6.9 million resulting in a reserve coverage ratio (excl. PPP loans) of 1.38% Pre-tax pre-provision income(1) – Pro for
Slide 5: Net Interest Income and Net Interest Margin
3Q 2020 Earnings Release Webcast Presentation NET INTEREST INCOME AND NET INTEREST MARGIN Net Interest Income(1) Net interest income decreased by $0.3 million from LQ as the result of an 18 basis point (bp) decrease in the net interest margin − Approximately 17bps of NIM compression can be attribu
Slide 6: Loans
3Q 2020 Earnings Release Webcast Presentation LOANS Average Loans(1) Average Average loans increased $197 million from LQ – Includes $406 million and $572 million of PPP loans in Q2 and Q3, respectively – Excluding PPP loans, average loans grew $31 million, or 1.9% (annualized) from LQ The yield
Slide 7: Deposits
3Q 2020 Earnings Release Webcast Presentation DEPOSITS Average Deposits Average Average deposits grew $320 million from LQ and $1.7 billion YoY ($1.2 billion YoY excluding acquired balances from Santander(1)) The cost of total deposits of 0.24% decreased 7bps from LQ − The cost of interest-beari
Slide 8: Noninterest Income
3Q 2020 Earnings Release Webcast Presentation NONINTEREST INCOME Change from 3Q20 2Q20 3Q19 2Q20 3Q19 Total fee income increased $5.0 million Service charges $4.0 $3.3 $5.0 $0.7 ($1.0) from LQ and increased $4.8 million YoY Interchange Trust 6.4 5.9 5.6 0.5 0.8 − Record quarterly fee income 2.6 2.
Slide 9: Noninterest Expense
3Q 2020 Earnings Release Webcast Presentation NONINTEREST EXPENSE Change from 3Q20 2Q20 3Q19 2Q20 3Q19 Salaries and benefits $28.8 $28.8 $28.7 $0.0 $0.1 Total noninterest expenses, unadjusted for Occupancy 4.4 4.4 4.5 0.0 (0.1) expense related to branch consolidation Furniture and equipment 4.0 3.
Slide 10: COVID-19: Reserve Build Year-to-Date
3Q 2020 Earnings Release Webcast Presentation COVID-19: RESERVE BUILD YEAR-TO-DATE Allowance for Loan Losses ($ in millions) 1.38% 1.59% 0.83% of of of total loans total loans total loans (excl. PPP) (excl. PPP) (2) (1) (1) Please refer to slide 12 for additional details on portfolios impacted by CO
Slide 11: Credit Quality
3Q 2020 Earnings Release Webcast Presentation CREDIT QUALITY Provision Expense and Net Charge-offs Provision expense of $11.2 million increased $4.3 million from LQ: − $4.7 million increase in qualitative reserves (due to increased risk in the bank’s hospitality and retail portfolio) − $0.9 millio
Slide 12: COVID-19: Highest Impacted Commercial Portfolios
3Q 2020 Earnings Release Webcast Presentation COVID-19: HIGHEST IMPACTED COMMERCIAL PORTFOLIOS (2) Balance Outstanding Non-pass (% port) Nonperforming (% port) Deferrals $ in millions # loans $ bal % tot lns 1Q20 2Q20 3Q20 1Q20 2Q20 3Q20 @ 7/24 % port @ 10/23 % port (1) Commercial Portfolio Retail 5
Slide 13: COVID-19: Deferrals
3Q 2020 Earnings Release Webcast Presentation COVID-19: DEFERRALS(1) Initial deferrals were offered to all customers regardless of circumstances; additional 90 day deferrals are being assessed based on credit determination Total Loans Deferrals (@ 7/24) Deferrals (@ 10/23) $ in millions $ bal % tot
Slide 14: Capital Return
3Q 2020 Earnings Release Webcast Presentation CAPITAL RETURN Payout Ratios Strong capital levels allow us to continue to return capital to shareholders Announced a $25 million share repurchase program in 1Q19 – Completed the remaining $15.6 million of the previously authorized share repurchase p
Slide 15: COVID-19 Operational Update
3Q 2020 Earnings Release Webcast Presentation COVID-19 OPERATIONAL UPDATE The Company took early action by executing its business continuity plan to protect the health and welfare of its associates and mitigate customer disruption Employees Consumers Businesses Communities Approximately 40% of A
Slide 16: Appendix
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Slide 17: Non-GAAP Measures
3Q 2020 Earnings Release Webcast Presentation NON-GAAP MEASURES Operating Revenue 3Q20 2Q20 1Q20 4Q19 3Q19 Net Interest Income $66.3 $66.7 $67.7 $68.8 $68.5 Tax equivalent adjustment 0.4 0.4 0.4 0.4 0.4 Net Interest Income (FTE) 66.7 67.1 68.1 69.2 68.9 Noninterest Income (Reported) 26.8 21.8 19.3 2
Slide 18: Non-GAAP Measures
3Q 2020 Earnings Release Webcast Presentation NON-GAAP MEASURES Core Earnings per Share 3Q20 2Q20 1Q20 4Q19 3Q19 Net Income (GAAP) $19.2 $23.9 $4.7 $26.8 $26.6 Less: Merger and acquisition related (after tax) 0.0 0.0 0.0 (0.2) 3.0 Less: Early Retirement (after tax) 2.6 0.0 0.0 0.0 0.0 Less: Branch C
Slide 19: Non-GAAP Measures
3Q 2020 Earnings Release Webcast Presentation NON-GAAP MEASURES Return on Average Tangible Common Equity (%) 3Q20 2Q20 1Q20 4Q19 3Q19 Average Equity $1,088 $1,072 $1,071 $1,051 $1,034 Less: Average intangible assets 318 319 319 320 293 Less: Average preferred stock 0 0 0 0 0 Average Tangible Common
Slide 20: Non-GAAP Measures
3Q 2020 Earnings Release Webcast Presentation NON-GAAP MEASURES Tangible Common Equity / Tangible Assets (Tangible Common Equity Ratio) 3Q20 2Q20 1Q20 4Q19 3Q19 Total Equity $1,073 $1,076 $1,058 $1,056 $1,039 Less: Intangible assets 317 318 319 320 320 Less: Preferred stock 0 0 0 0 0 Tangible Common
First Commonwealth Financial — Q3 2020 Earnings Presentation on 6ix