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First Commonwealth Financial(FCF) - 2024 Q3 - Quarterly Report
FCFFirst Commonwealth Financial(FCF)2024-11-12 21:03
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Financial Performance - Net income for the third quarter of 2024 was 106.723million,adecreasefrom106.723 million, a decrease from 112.236 million in the same period of 2023, representing a decline of approximately 5.4%[14] - Basic earnings per share for the three months ended September 30, 2024, were 0.31,downfrom0.31, down from 0.38 in the same quarter of 2023[32] - Diluted earnings per share for the three months ended September 30, 2024, were 0.31,comparedto0.31, compared to 0.38 in the same period of 2023[32] - The total other comprehensive income for the three months ended September 30, 2024, was 38,392thousand,adecreaseof38,392 thousand, a decrease of (8,062) thousand from the same period in 2023[26] - The total other comprehensive income for the nine months ended September 30, 2024, was 36,291thousand,adecreaseof36,291 thousand, a decrease of (7,621) thousand compared to the same period in 2023[25] Shareholder Equity and Dividends - Cash dividends declared were 0.385pershare,totaling0.385 per share, totaling 39.371 million, compared to 0.370pershareand0.370 per share and 38.050 million in the previous year[11] - Total shareholders' equity increased to 1.409billionasofSeptember30,2024,upfrom1.409 billion as of September 30, 2024, up from 1.314 billion at the end of 2023, reflecting a growth of approximately 7.2%[10] Credit Losses and Provisions - The provision for credit losses was 22.680millionforthethirdquarterof2024,comparedto22.680 million for the third quarter of 2024, compared to 16.678 million in the same quarter of 2023, indicating an increase of approximately 36.0%[14] - The Day 1 provision for credit losses on non-PCD loans was recorded at 10.653million,reflectingthecompany′sassessmentofcreditriskatacquisition[22]−Theallowanceforcreditlossesiscalculatedusingadiscountedcashflowmethodology,withaforecastednationalunemploymentrateaveraging4.8710.653 million, reflecting the company's assessment of credit risk at acquisition[22] - The allowance for credit losses is calculated using a discounted cash flow methodology, with a forecasted national unemployment rate averaging 4.87% during the one-year forecast period[73] - The total allowance for credit losses was determined using a loss given default and probability of default methodology, with no reserve required for unfunded commitments related to nonperforming loans[107] Loans and Leases - Total loans and leases amounted to 8,965.5 million as of September 30, 2024, slightly down from 8,968.8millionasofDecember31,2023[67]−Thecommercial,financial,agricultural,andotherloanscategoryincreasedto8,968.8 million as of December 31, 2023[67] - The commercial, financial, agricultural, and other loans category increased to 1,629.5 million from 1,543.3million[67]−Residentialrealestateloansdecreasedto1,543.3 million[67] - Residential real estate loans decreased to 2,374.4 million from 2,416.9million[67]−Totalloansandleasesdecreasedto2,416.9 million[67] - Total loans and leases decreased to 802,478 thousand in 2023 from 1,322,394thousandin2022,representingadeclineofapproximately39.21,322,394 thousand in 2022, representing a decline of approximately 39.2%[82] - The company reported a decrease in origination year loans from 122,043 in 2023 to 106,373in2024,indicatingadeclineofapproximately12.5106,373 in 2024, indicating a decline of approximately 12.5%[78] Deposits and Cash Management - The company reported a net increase in deposits of 553.269 million for the third quarter of 2024, compared to 479.307millioninthesameperiodof2023,reflectinganincreaseofapproximately15.4479.307 million in the same period of 2023, reflecting an increase of approximately 15.4%[14] - Cash and cash equivalents at September 30, 2024, were 582.309 million, a significant increase from 337.070millionatthesamedatein2023,representingagrowthofapproximately72.6337.070 million at the same date in 2023, representing a growth of approximately 72.6%[14] - The liability recorded for unused commitments and letters of credit was 4.1 million as of September 30, 2024, down from 7.3millionasofDecember31,2023[37]SecuritiesandInvestments−Theestimatedfairvalueofsecuritiesavailableforsalewas7.3 million as of December 31, 2023[37] Securities and Investments - The estimated fair value of securities available for sale was 1,140,800 thousand as of September 30, 2024, compared to 1,020,986thousandonDecember31,2023,reflectinganincreaseof11.71,020,986 thousand on December 31, 2023, reflecting an increase of 11.7%[40] - The company recorded a net loss of 5,447 thousand from sales of securities for the nine months ended September 30, 2024, compared to a loss of 103thousandin2023[45]−ThetotalgrossunrealizedlossesforallsecuritiesasofSeptember30,2024,were103 thousand in 2023[45] - The total gross unrealized losses for all securities as of September 30, 2024, were 160.6 million, with a total estimated fair value of 892.2million[61]AcquisitionDetails−FirstCommonwealthFinancialCorporationreportedatotalconsiderationpaidof892.2 million[61] Acquisition Details - First Commonwealth Financial Corporation reported a total consideration paid of 141.356 million for the acquisition, which included 9,688,478 shares issued to shareholders valued at 14.59pershare[16]−ThefairvalueoftotalassetsacquiredfromCentricwas14.59 per share[16] - The fair value of total assets acquired from Centric was 1,035.757 million, with loans accounting for 923.555millionofthistotal[16]−Thecompanyrecordedgoodwillof923.555 million of this total[16] - The company recorded goodwill of 60.387 million, representing the excess of consideration paid over the fair value of identifiable net assets acquired[17] Nonperforming Loans and Credit Quality - Nonperforming loans were assessed based on the present value of expected future cash flows, with no nonperforming loans held for sale as of September 30, 2024[99] - The company has identified potential weaknesses in certain loan categories that may require management's close attention[74] - The aging analysis of past due loans indicates a focus on loans that are 90 days or more past due but still accruing due to being well-secured[90] Interest Income and Noninterest Income - The total interest income recognized for the nine months ended September 30, 2023, was 44,667thousand,comparedto44,667 thousand, compared to 48,899 thousand for the same period in 2024, showing a decline of approximately 8.3%[103] - Total noninterest income for Q3 2024 was 24,698,000,slightlydownfrom24,698,000, slightly down from 24,826,000 in Q3 2023, a decrease of 0.5%[209] - Card-related interchange income decreased to 4,137,000inQ32024from4,137,000 in Q3 2024 from 7,221,000 in Q3 2023, a decline of 42.5%[209] Risk Management and Future Outlook - The company continues to monitor the collectability of loans and adjusts its allowance for credit losses accordingly[99] - Future outlook includes continued efforts in market expansion and potential new product offerings to enhance revenue streams[82] - The company has allocated substantial resources to manage credit risk, which is critical for maintaining earnings, capital, and liquidity[88]