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First — First Commonwealth Financial — KBW Regional Bank Conference (March 2009)
29 slides from First's conference presentation, Mar 4, 2009
Slide 1: KBW Regional Bank Conference Investor Presentation
KBW Regional Bank Conference Investor Presentation John J. Dolan President and CEO Edward J. Lipkus, III Executive V.P. and CFO T. Michael Price Bank President Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation will contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and often includ
Slide 3: Today's Agenda
Today’s Agenda Who is First Commonwealth? Winning Through Execution and Accountability Financials Conclusion
Slide 4: Branch Franchise Overview
Branch Franchise Overview th Company Overview Pennsylvania’s 6 Largest Bank Headquartered in Indiana, PA 114 Branches Assets: $6,426 million Net Loans: $4,366 million Deposits: $4,280 million Tangible Equity: $483 million Market Cap: ~ $700 million (as of 02/27/2009) Information as of December 31, 2
Slide 5: Tangible Common Equity Ratio
Tangible Common Equity Ratio What Differentiates First Commonwealth? Strong Capital Position successful common equity capital raise in 4Q08 chose not to participate in the TARP ability to focus on market opportunities 6.9% 6.8% 6.2% 6.0% 7.7% Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Source: SNL Finan
Slide 6: What Differentiates First Commonwealth?
What Differentiates First Commonwealth? Improving Fundamentals - foundation for sustainable growth Historical Legacy of Conservative Lending Practices - relationship driven lender - no sub-prime - stable footprint - conservative investment portfolio Market Opportunities - PNC / NCC acquisition - sma
Slide 7: Market Opportunities
Rank Institution Branches Deposits ($M) (2) Market Share (%) Allegheny, Butler and Washington Counties (1) Market Opportunities (1) Pro-forma market share, except PNC – NCC (2) Excludes all branches with deposits greater than $500 million Branch data as of June 30, 2008 National City Corp. (OH) 6,93
Slide 8: Focus on Optimizing Each Area of Business
Focus on Optimizing Each Area of Business Accountability at every level of the organization Aligned scorecards with shareholder value Weekly accountability around activities and performance Building brand awareness Measuring and tracking brand recognition Disciplined approach to direct mail De novo
Slide 9: Strong Loan Growth
$1,796 $1,889 $1,996 $2,707 $1,740 $1,828 $1,895 $1,702 $1,711 $1,775 Total Loans ($ millions) $0 $800 $1,600 $2,400 $3,200 $4,000 $4,800 Commercial Consumer Strong Loan Growth $3,515 $3,624 $3,784 $3,698 $4,418 loan portfolio increase of $720 million (19.5 percent) with the same conservative lendin
Slide 10: Credit Quality Has Remained Stable
NPAs / Loans + OREO Reserves / Loans NCOs / Average Loans Credit Quality Has Remained Stable Increase in Nonperforming Assets during 2007 primarily due to a single commercial relationship 0.36% 0.36% 0.36% 1.53% 1.34% 0.00% 1.00% 2.00% 3.00% 4.00% 0.29% 0.28% 0.24% 0.28% 0.31% 0.00% 0.40% 0.80% 1.20
Slide 11: Strong Market Essentials
U.S. Employment Growth (Y/Y) Home Price Appreciation (Y/Y) (1) U.S. Strong Market Essentials Western Pennsylvania has remained free of the “boom” and “bust” cycles of other markets The local economy and housing markets continue to exhibit slow – but stable – growth Moody’s ranks Pittsburgh’s CRE mar
Slide 12: Commercial Lending Momentum
Commercial Loans ($ millions) Commercial Lending Momentum $1,911 $2,707 $2,411 $2,204 $1,996 $2,465 $1,500 $1,775 $2,050 $2,325 $2,600 $2,875 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 $711 mm growth Note: Commercial loans include small business loans, which as of December 31, 2008 totaled $386
Slide 13: Improving Deposit Mix
Deposit Mix ($ millions) Transaction and Savings Deposit Growth ($ millions) Jumbo CD's 827 Jumbo CD's 583 Retail CD's 1,353 Retail CD's 1,259 Interest-bearing DDA & Savings 1,644 Interest-bearing DDA & Savings 1,871 Non Interest-bearing 523 Non Interest-bearing 567 + $271 mm in one year % of total
Slide 14: Growing Fee Income Businesses
Total Noninterest Income ($ millions) (1) % of Oper. Revenue 20.7% 22.4% Growing Fee Income Businesses First Commonwealth’s Wealth Management business has experienced a 13.2% Y / Y increase in fee income Along with increased interchange and insurance commissions, noninterest income has grown to repr
Slide 15: Avoided Certain Industry Pitfalls
Loan Portfolio Securities Portfolio 4% 2% 7% 18% 5% 64% 11% 23% 9% 29% 28% Avoided Certain Industry Pitfalls Same conservative lending standards during entire credit cycle Residential mortgage portfolio free of Subprime, Alt-A and other troubled categories Over 85% of commercial loan portfolio is in
Slide 16: First Commonwealth
First (4) Commonwealth
Slide 17: Improving Profitability
Return on Assets Return on Equity (1) (1) 0.97% 0.95% 0.87% 0.78% 0.83% 0.60% 0.70% 0.80% 0.90% 1.00% 11.44% 11.04% 9.63% 7.94% 8.88% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Improving Profitability (1) ROA and ROE are based on core earnings result
Slide 18: Expanding Net Interest Margin
Net Interest Margin Expanding Net Interest Margin The recent shifts in loan and deposit mix has helped meaningfully expand net interest margin Have always fundamentally relied on margin to drive earnings 3.30% 3.28% 3.31% 3.34% 3.57% 3.0% 3.1% 3.2% 3.3% 3.4% 3.5% 3.6% 2004Y 2005Y 2006Y 2007Y 2008Y
Slide 19: Revenue Growth
Operating Revenue ($ millions) Revenue Growth $210.9 $219.5 $210.5 $209.1 $242.9 $190 $200 $210 $220 $230 $240 $250
Slide 20: Conclusion
Conclusion Capitalizing on opportunities in the current operating environment Disruptions in our footprint create numerous opportunities Execution is beginning to produce tangible results Strong momentum in “the basics” of consumer banking and commercial lending Free from many of the handcuffs plagu
Slide 21: First Commonwealth Financial Corporation
First Commonwealth Financial Corporation Member NYSE: FCF Old Courthouse Square 22 North Sixth Street Indiana, Pennsylvania 15701 For More Information Contact: Edward J. Lipkus III, Executive Vice President and Chief Financial Officer First Commonwealth Financial Corporation (724) 349-7220
Slide 22: First Commonwealth
First (4) Commonwealth
Slide 23: Peer Comparisons
Peer Comparisons 23.3% -51.7% 3.9% 1 Year Total Return First Commonwealth TARP Participants Regional Peers As of December 31, 200 8 Source: SNL Financial
Slide 24: Peer Comparisons (1/2)
Peer Comparisons (1/2) Source: SNL Financia l 40.8% 43.8% 48.6% 50.1% 43.0% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% First Commonwealth Financial Corp. Peer Average Percentile (25th) Pecentile (75th) Time Deposits / Total Deposits
Slide 25: Peer Comparisons (2/2)
Peer Comparisons (2/2) Source: SNL Financial DDA & Savings / Total Deposits 59.2% 56.3% 51.5% 49.9% 57.0% 40% 45% 50% 55% 60% 65% 70% First Commonwealth Financial Corp. Peer Average Percentile (25th) Pecentile (75th)
Slide 26: Peer Comparisons: Regional Bank Peer Group
Peer Comparisons Regional Bank Peer Group Community Bank System, Inc. CBU F.N.B. Corporation FNB First Financial Bancorp. FFBC FirstMerit Corporation FMER Fulton Financial Corporation FULT Harleysville National Corporation HNBC National Penn Bancshares, Inc. NPBC NBT Bancorp Inc. NBTB Park National
Slide 27: Shared National Credits (SNC)
Shared National Credits (SNC) Shared National Credits Note: These balances include $104.5 million of loans that were granted to SNC clients since the last SNC examination report as of May 5, 2008. Balance Non- Performing Specific Loan Loss Reserve Pennsylvania Real Estate-Commercial $ $ $ Real Estat
Slide 28: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP GAAP non-interest income Less: net securities (losses) gains Less: gain on sale of branches Core non-interest income GAAP net income Less: net securities (losses) gains (after tax) Less: gain on sale of branches (after tax) Add: merger and related expenses (after t
Slide 29: it | -EIRST
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First Commonwealth Financial — KBW Regional Bank Conference (March 2009) on 6ix