First Commonwealth Announces Second Quarter 2016 Financial Results; Declares Quarterly Dividend

INDIANA, PA --(Marketwired - July 27, 2016) - First Commonwealth Financial Corporation (FCF) today announced financial results for the second quarter of 2016.

Second Quarter 2016 Highlights

Profitability

• The efficiency ratio improved to 57.1%, driven by lower operational expenses and higher revenue;

• Loans experienced solid growth from the prior quarter of 4.2% on an annualized basis;

• Deposits grew from the prior quarter at an annualized rate of 8.6%;

• The net interest margin remained relatively stable at 3.27%; and

• Noninterest income grew by 13.2% from the prior quarter.

Net Income

• Second quarter net income was $12.0 million, or $0.14 diluted earnings per share. Net income was impacted by the following items:

  • Net interest income increased by $0.3 million to $50.0 million as compared to the prior quarter, primarily as a result of strong commercial loan growth;

  • Noninterest income increased by $1.8 million, driven by mortgage gain on sale income and commercial swap income;

  • Noninterest expense of $37.4 million decreased $0.7 million from the previous quarter and is now at the lowest level since the fourth quarter of 2007; and

  • Provision for credit losses totaled $10.4 million, an increase of $3.8 million from the previous quarter, primarily due to a $7.5 million specific reserve set aside against an energy-related credit.

"While the additional credit expense due to the ongoing downturn in the energy sector is disappointing, we are pleased with the progression in our second quarter results, as evidenced by growth in loans and deposits and an efficiency ratio below 60%," stated T. Michael Price, President and Chief Executive Officer. "The acquisition of 13 branches in Ohio that we are announcing today is also encouraging, and should improve our financial performance. We must, however, continue to keep our shoulder to the wheel to organically grow revenue while at the same time improving credit costs and keeping operating expenses under control."

Financial Summary
(dollars in thousands,		For the Three Months Ended						For the Six Months Ended
except per share data)		June 30,		March 31,		June 30,		June 30,		June 30,
		2016		2016		2015		2016		2015
Net income		$12,007		$12,473		$13,447		$24,480		$27,668
Diluted earnings per share		$0.14		$0.14		$0.15		$0.28		$0.31
Return on average assets		0.72%		0.76%		0.85%		0.74%		0.88%
Return on average common equity		6.53%		6.87%		7.57%		6.70%		7.80%
Efficiency ratio (1)		57.06%		60.10%		63.96%		58.56%		64.08%
Core efficiency ratio (1)		57.24%		59.53%		63.25%		58.37%		63.04%
Net interest margin (FTE)		3.27%		3.29%		3.26%		3.28%		3.30%

(1) See Supplemental Information - Definitions and reconciliation of non-GAAP financial measures

Financial Results Summary

For the three months ended June 30, 2016, net income was $12.0 million, or $0.14 diluted earnings per share, compared to net income of $12.5 million, or $0.14 diluted earnings per share, in the first quarter of 2016 and net income of $13.4 million, or $0.15 diluted earnings per share, in the second quarter of 2015. The decrease in net income compared to the first quarter of 2016 was driven by a $3.8 million increase in provision for credit losses, offset by a $1.8 million increase in noninterest income and a decrease of $0.7 million in noninterest expense from the first quarter of 2016. The decrease in net income compared to the second quarter of 2015 was primarily driven by an increase of $7.3 million in the provision for credit losses and a decrease in noninterest income of $0.8 million, offset by an increase of $2.8 million in net interest income and a decrease of $3.2 million in noninterest expense.

For the six months ended June 30, 2016, net income was $24.5 million, or $0.28 diluted earnings per share, compared to net income of $27.7 million, or $0.31 diluted earnings per share, for the comparable period in 2015. The decrease in net income compared to 2015 was primarily the result of a $12.7 million increase in the provision for credit losses and a decrease in noninterest income, excluding net securities gains, of $1.2 million, offset by an increase of $4.6 million in net interest income and a decrease in noninterest expense of $4.9 million.

For the six months ended June 30, 2016, return on average assets and return on average equity were 0.74% and 6.70%, respectively, as compared to 0.88% and 7.80% in the first half of 2015. Return on average tangible common equity was 8.7% in the first half of 2016, as compared to 10.1% for the first half of 2015.

Net Interest Income and Net Interest Margin

Second quarter 2016 net interest income, on a fully taxable-equivalent basis, increased by $0.3 million to $50.0 million compared to the first quarter of 2016. The increase from the prior quarter was primarily the result of strong commercial loan growth. The yield on interest-earning assets and funding costs remained relatively stable during the quarter. A $77.9 million increase in average interest-earning assets contributed to the improvement in net interest income.

As compared to the second quarter of 2015, net interest income, on a fully taxable-equivalent basis, increased by $2.8 million, driven largely by a $347.4 million, or 6.0%, increase in average interest-earning assets. The net interest margin of 3.27% in the second quarter of 2016 was one basis point higher than in the second quarter of 2015. The increase came despite a seven basis point increase in funding costs that more than offset a six basis point increase in the yield on interest-earning assets between the periods, and benefited from an increase of $92.0 million in average non-interest bearing deposits.

For the six months ended June 30, 2016, net interest income, on a fully taxable-equivalent basis, increased $4.6 million to $99.8 million as compared to the same period of 2015. The increase in net interest income was a result of a $303.0 million increase in average interest-earning assets and a two basis point increase in the yield on interest-earning assets, offset by a five basis point increase in funding costs.

Total deposits grew by $92.9 million in the second quarter of 2016, or 8.6% annualized. Average deposits increased $131.6 million in the second quarter of 2016 from the prior quarter. Average deposits increased $110.0 million from the year-ago quarter, which includes the addition of $89.9 million in deposits acquired as part of the First Community acquisition. The year over year comparison is driven by decreases of $46.5 million in time deposits and $69.7 million in brokered deposits, offset by $134.2 million of core deposit growth in savings deposits and $92.0 million of core deposit growth in noninterest-bearing deposits.

Average short-term borrowings decreased $55.6 million from the prior quarter as deposit growth outpaced loan growth in the second quarter, but increased $243.0 million over the year-ago period, partly due to the aforementioned runoff in time and brokered deposits compared to a year ago. Average noninterest-bearing demand deposits increased $40.9 million as compared to the prior quarter and increased $92.0 million from the year-ago quarter, due in part to the addition of $11.6 million related to the First Community acquisition.

Noninterest-bearing demand deposits currently comprise 25.9% of total deposits. Average interest-bearing demand and savings deposits increased $107.0 million from the prior quarter and $134.2 million from the year-ago period, which includes the addition of $36.1 million related to the First Community acquisition.

Credit Quality

The provision for credit losses totaled $10.4 million for the quarter ended June 30, 2016, an increase of $3.8 million as compared to the prior quarter and an increase of $7.3 million from the same quarter last year. The second quarter 2016 provision for credit losses included a $7.5 million specific reserve for a credit related to the manufacturing of safety products for the mining industry.

At June 30, 2016, nonperforming loans were $64.4 million, an increase of $2.6 million from March 31, 2016 and an increase of $19.3 million from June 30, 2015. The increase from the first quarter of 2016 was related to the aforementioned commercial credit placed into nonperforming status in the second quarter of 2016. Nonperforming loans as a percentage of total loans were 1.33%, 1.29% and 1.00% for the periods ended June 30, 2016, March 31, 2016 and June 30, 2015, respectively.

During the second quarter of 2016, net charge-offs were $5.8 million, compared to $2.1 million in the prior quarter and $4.4 million in the second quarter of 2015. Of the $5.8 million in net charge-offs in the second quarter, $3.3 million represented charge-offs of previously established reserves.

The allowance for credit losses was $59.8 million at June 30, 2016, and as a percentage of total loans outstanding was 1.24%, 1.15% and 1.01% for June 30, 2016, March 31, 2016 and June 30, 2015, respectively. General reserves as a percentage of non-impaired loans were 0.93%, 0.88% and 0.98% for June 30, 2016, March 31, 2016 and June 30, 2015, respectively.

Other real estate owned (OREO) acquired through foreclosure was $8.6 million at June 30, 2016 and March 31, 2016 and $6.5 million at June 30, 2015. There were no significant additions to OREO in the second quarter of 2016.

Noninterest Income

Noninterest income, excluding net securities gains, increased $1.8 million in the second quarter of 2016 as compared to the prior quarter and decreased $0.8 million compared to the same quarter last year. The increase from the prior quarter is primarily the result of a $0.5 million positive variance from prior quarter in the adjustment for the fair market value of commercial loan interest rate swaps, as well as a $0.3 million increase in swap income, an increase of $0.2 million in card-related interchange income and an increase of $0.2 million from the gain on sale of mortgage loans.

The decrease in noninterest income from the prior-year period of $0.8 million is primarily related to a negative variance of $1.1 million in the adjustment for the fair market value of commercial loan interest rate swaps and a decline of $0.4 million in trust, insurance and retail brokerage commissions, offset by a $0.5 million increase in swap income and a $0.3 million increase in gain on the sale of mortgage loans.

For the six months ended June 30, 2016, noninterest income, excluding net securities gains, decreased $1.2 million, or 3.8%, as compared to the same period of 2015, primarily attributable to a negative variance of $1.9 million in the adjustment for the fair market value of commercial loan interest rate swaps and a decline of $0.8 million in trust, insurance and retail brokerage commissions, offset by a $0.6 million increase in swap income, an increase of $0.6 million from the gain on sale of mortgage loans, an increase of $0.4 million in service charges on deposit accounts, and an increase of $0.2 million in card-related interchange income.

Noninterest Expense

Noninterest expense decreased $0.7 million to $37.4 million in the second quarter of 2016 as compared to the prior quarter and decreased $3.2 million as compared to the second quarter of 2015. Salaries and benefits decreased $1.8 million as compared to the prior quarter primarily due to the realignment of the staffing and capabilities of our consumer banking businesses and from relatively low benefits costs. Also impacting noninterest expense was lower occupancy costs from the prior quarter, offset by higher operational losses, Pennsylvania shares tax expense and the write-down of three OREO properties in the second quarter of 2016.

Noninterest expense decreased $3.2 million in the second quarter of 2016 as compared to the second quarter of 2015, primarily attributable to decreases in salaries and benefits of $2.1 million as compared to the prior year due to the aforementioned realignment of our consumer banking businesses and relatively low benefits costs, decreased collection and repossession expenses, lower write-downs on assets of $1.3 million (primarily due to write-downs of three OREO properties and a loss on the write-down of a building in the second quarter of 2015) and a decline of $0.8 million in the reserve for unfunded loan commitments, included in other operating expenses. These items were offset by higher data processing costs and operational losses during the second quarter of 2016.

For the six months ending June 30, 2016, noninterest expense decreased $4.9 million, or 6.1%, as compared to the same period of 2015, driven by a decline in salaries and benefits of $2.3 million due to the previously mentioned realignment of our consumer businesses and relatively low benefits costs, and a decline of $1.7 million in provision expense associated with the reserve for unfunded loan commitments, included in other operating expenses. The aforementioned lower write-downs on assets of $1.5 million, $0.4 million of decreased collection and repossession expenses and $0.4 million of lower operational losses also contributed to the positive variance. These decreases were offset by higher data processing expense of $0.6 million due to the issuance of chip debit cards during the first six months of 2016.

Full time equivalent staff declined to 1,168 at June 30, 2016 from 1,216 and 1,289 at March 31, 2016 and June 30, 2015, respectively. The decrease is primarily attributable to staff reductions as a result of the realignment of our consumer banking businesses, offset by the recent expansion of mortgage and commercial banking businesses in our Ohio market.

The efficiency ratio, calculated as total noninterest expense as a percentage of total revenue (which consists of net interest income on a fully taxable equivalent basis plus total noninterest income, excluding net securities gains), was 57.06% and 58.56% for the three and six months ended June 30, 2016 as compared to 63.96% and 64.08% for the three and six months ended June 30, 2015. The core efficiency ratio, which excludes securities gains and losses, amortization of intangible assets and other nonrecurring items, was 57.24% and 58.37% for the three and six months ended June 30, 2016 as compared to 63.25% and 63.04% for the three and six months ended June 30, 2015. The Consolidated Financial Highlights accompanying this news release include additional information regarding reconciliations of non-GAAP financial measures to reported amounts, including a reconciliation of the core efficiency ratio.

Dividends and Capital

First Commonwealth Financial Corporation declared a common stock quarterly dividend of $0.07 per share, which is payable on August 19, 2016 to shareholders of record as of August 8, 2016. This dividend represents a 3.0% projected annual yield utilizing the July 26, 2016 closing market price of $9.49.

On January 27, 2016, First Commonwealth's Board of Directors authorized an additional $25.0 million common stock repurchase program, under which the corporation repurchased 45,612 shares at an average price of $8.44 per share in the first six months of 2016, totaling $0.4 million. This repurchase program was suspended in July as a result of the acquisition of 13 branches in Ohio which management believes represents a better use of capital for shareholders.

First Commonwealth's capital ratios for Total, Tier I, Leverage and Common Equity Tier I at June 30, 2016 were 12.2%, 11.1%, 9.8% and 9.9%, respectively. Our current capital levels meet the fully-phased in Basel III capital requirements issued by the U.S. bank regulators.

Conference Call

First Commonwealth will host a quarterly conference call to discuss its financial results for the second quarter 2016 on Wednesday, July 27, 2016 at 2:00 PM (ET). The call can be accessed by dialing (toll free) 1-844-792-3645 or through the company's web page, http://www.fcbanking.com/InvestorRelations. A replay of the call will be available approximately one hour following the conclusion of the conference. A link to the call replay will be accessible at this web page for 30 days.

About First Commonwealth Financial Corporation

First Commonwealth Financial Corporation (FCF), headquartered in Indiana, Pennsylvania, is a financial services company with $6.7 billion in total assets and 109 banking offices in 17 counties throughout western and central Pennsylvania and central Ohio, as well as a Corporate Banking Center in northeast Ohio and mortgage offices in Stow and Dublin, Ohio. First Commonwealth provides a full range of commercial banking, consumer banking, mortgage, wealth management and insurance products and services through its subsidiaries First Commonwealth Bank and First Commonwealth Insurance Agency. For more information about First Commonwealth or to open an account today, please visit www.fcbanking.com.

Forward-Looking Statements

This release 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 as "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may." Such statements are based on assumptions and involve risks and uncertainties, many of which are beyond our control. Factors that could cause actual results, performance or achievements to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national and international economic conditions and the impact they may have on First Commonwealth and its customers; (2) volatility and disruption in national and international financial markets; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (4) inflation, interest rate, commodity price, securities market and monetary fluctuations; (5) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which First Commonwealth must comply; (6) the soundness of other financial institutions; (7) political instability; (8) impairment of First Commonwealth's goodwill or other intangible assets; (9) acts of God or of war or terrorism; (10) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (11) changes in consumer spending, borrowings and savings habits; (12) changes in the financial performance and/or condition of First Commonwealth's borrowers; (13) technological changes; (14) acquisitions and integration of acquired businesses; (15) First Commonwealth's ability to attract and retain qualified employees; (16) changes in the competitive environment in First Commonwealth's markets and among banking organizations and other financial service providers; (17) the ability to increase market share and control expenses; (18) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (19) the reliability of First Commonwealth's vendors, internal control systems or information systems; (20) the costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals; and (21) other risks and uncertainties described in the reports that First Commonwealth files with the Securities and Exchange Commission, including its most recent Annual Report on Form 10‐K. Forward-looking statements speak only as of the date on which they are made. First Commonwealth undertakes no obligation to update any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
		For the Three Months Ended												For the Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2016				2016				2015				2016				2015
SUMMARY RESULTS OF OPERATIONS
Net interest income (FTE) (1)		$	50,034			$	49,749			$	47,205			$	99,783			$	95,195
Provision for credit losses			10,372				6,526				3,038				16,898				4,197
Noninterest income			15,558				13,715				16,347				29,273				30,538
Noninterest expense			37,410				38,144				40,634				75,554				80,488
Net income			12,007				12,473				13,447				24,480				27,668
Earnings per common share (diluted)		$	0.14			$	0.14			$	0.15			$	0.28			$	0.31
KEY FINANCIAL RATIOS
Return on average assets			0.72	%			0.76	%			0.85	%			0.74	%			0.88	%
Return on average shareholders' equity			6.53	%			6.87	%			7.57	%			6.70	%			7.80	%
Return on average tangible common equity (8)			8.41	%			8.88	%			9.82	%			8.65	%			10.10	%
Efficiency ratio (2)			57.06	%			60.10	%			63.96	%			58.56	%			64.08	%
Core efficiency ratio (3)			57.24	%			59.53	%			63.25	%			58.37	%			63.04	%
Net interest margin (FTE) (1)			3.27	%			3.29	%			3.26	%			3.28	%			3.30	%
Book value per common share		$	8.34			$	8.24			$	7.99
Tangible book value per common share (7)			6.48				6.38				6.16
Market value per common share			9.20				8.86				9.59
Cash dividends declared per common share			0.07				0.07				0.07			$	0.14			$	0.14
ASSET QUALITY RATIOS
Nonperforming loans as a percent of end-of-period loans (4)			1.33	%			1.29	%			1.00	%
Nonperforming assets as a percent of total assets (4)			1.09	%			1.06	%			0.82	%
Net charge-offs as a percent of average loans (annualized)			0.48	%			0.18	%			0.39	%
Allowance for credit losses as a percent of nonperforming loans (5)			92.88	%			89.33	%			106.26	%
Allowance for credit losses as a percent of end-of-period loans (5)			1.24	%			1.15	%			1.01	%
CAPITAL RATIOS
Shareholders' equity as a percent of total assets			11.0	%			10.9	%			11.3	%
Tangible common equity as a percent of tangible assets (6)			8.8	%			8.7	%			8.9	%
Leverage Ratio			9.8	%			9.8	%			10.0	%
Risk Based Capital - Tier I			11.1	%			11.1	%			11.5	%
Risk Based Capital - Total			12.2	%			12.1	%			12.4	%
Common Equity - Tier I			9.9	%			9.9	%			10.2	%

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands, except per share data)
			For the Three Months Ended											For the Six Months Ended
			June 30,				March 31,				June 30,			June 30,				June 30,
			2016				2016				2015			2016				2015
INCOME STATEMENT
	Interest income		$	53,850			$	53,353			$	50,150		$	107,203			$	101,235
	Interest expense			4,759				4,546				3,780			9,305				7,693
Net Interest Income				49,091				48,807				46,370			97,898				93,542
	Taxable equivalent adjustment (1)			943				942				835			1,885				1,653
Net Interest Income (FTE)				50,034				49,749				47,205			99,783				95,195
	Provision for credit losses			10,372				6,526				3,038			16,898				4,197
Net Interest Income after Provision for Credit Losses (FTE)				39,662				43,223				44,167			82,885				90,998
	Net securities (losses) gains			28				-				20			28				125
	Trust income			1,320				1,255				1,476			2,575				2,897
	Service charges on deposit accounts			3,845				3,708				3,872			7,553				7,190
	Insurance and retail brokerage commissions			1,985				1,959				2,178			3,944				4,373
	Income from bank owned life insurance			1,311				1,296				1,378			2,607				2,732
	Gain on sale of mortgage loans			932				683				585			1,615				1,024
	Gain on sale of other loans and assets			466				195				396			661				620
	Card-related interchange income			3,784				3,557				3,729			7,341				7,147
	Derivative mark-to-market			(531	)			(1,014	)			593			(1,545	)			363
	Swap fee income			800				460				283			1,260				643
	Other income			1,618				1,616				1,837			3,234				3,424
Total Noninterest Income				15,558				13,715				16,347			29,273				30,538
	Salaries and employee benefits			19,888				21,677				22,001			41,565				43,893
	Net occupancy			3,186				3,481				3,316			6,667				7,227
	Furniture and equipment			2,882				2,867				2,630			5,749				5,310
	Data processing			1,788				1,759				1,509			3,547				2,947
	Pennsylvania shares tax			1,092				758				1,110			1,850				1,904
	Intangible amortization			114				137				156			251				312
	Collection and repossession			474				569				917			1,043				1,428
	Other professional fees and services			913				791				945			1,704				1,875
	FDIC insurance			1,062				1,038				1,025			2,100				2,084
	Litigation and operational losses			635				244				323			879				1,323
	Loss on sale or write-down of assets			345				96				1,635			441				1,897
	Other operating expenses			5,031				4,727				5,067			9,758				10,288
Total Noninterest Expense				37,410				38,144				40,634			75,554				80,488
Income before Income Taxes				17,810				18,794				19,880			36,604				41,048
	Taxable equivalent adjustment (1)			943				942				835			1,885				1,653
	Income tax provision			4,860				5,379				5,598			10,239				11,727
Net Income			$	12,007			$	12,473			$	13,447		$	24,480			$	27,668
Shares Outstanding at End of Period				88,949,995				88,959,315				88,960,268			88,949,995				88,960,268
Average Shares Outstanding Assuming Dilution				88,838,614				88,845,201				88,939,003			88,840,683				89,903,550

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
				June 30,				March 31,				June 30,
				2016				2016				2015
BALANCE SHEET (Period End)
Assets
	Cash and due from banks			$	68,163			$	62,141			$	64,321
	Interest-bearing bank deposits				30,457				11,024				3,120
	Securities available for sale, at fair value				913,420				950,795				1,143,072
	Securities held to maturity, at amortized cost				405,976				396,444				131,780
	Loans held for sale				11,613				5,849				9,817
		Loans			4,843,776				4,798,755				4,490,854
		Allowance for credit losses			(59,821	)			(55,222	)			(45,344	)
	Net loans				4,783,955				4,743,533				4,445,510
	Goodwill and other intangibles				165,481				165,594				162,781
	Other assets				370,756				363,774				356,327
Total Assets				$	6,749,821			$	6,699,154			$	6,316,728
Liabilities and Shareholders' Equity
	Noninterest-bearing demand deposits			$	1,136,629			$	1,155,795			$	1,068,230
		Interest-bearing demand deposits			88,777				92,125				76,865
		Savings deposits			2,582,709				2,467,978				2,441,888
		Time deposits			586,405				585,757				623,124
	Total interest-bearing deposits				3,257,891				3,145,860				3,141,877
	Total deposits				4,394,520				4,301,655				4,210,107
		Short-term borrowings			1,464,687				1,518,742				1,231,917
		Long-term borrowings			81,201				81,342				111,356
	Total borrowings				1,545,888				1,600,084				1,343,273
	Other liabilities				67,627				64,101				52,142
	Shareholders' equity				741,786				733,314				711,206
Total Liabilities and Shareholders' Equity				$	6,749,821			$	6,699,154			$	6,316,728

FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

				For the Three Months Ended																		For the Six Months Ended
				June 30,			Yield/			March 31,			Yield/			June 30,			Yield/			June 30,			Yield/			June 30,			Yield/
				2016			Rate			2016			Rate			2015			Rate			2016			Rate			2015			Rate
NET INTEREST MARGIN
Assets
	Loans (FTE)(1)(4)			$	4,833,360		3.86	%		$	4,745,252		3.88	%		$	4,498,965		3.87	%		$	4,789,306		3.87	%		$	4,488,660		3.89	%
	Securities and interest bearing bank deposits (FTE) (1)				1,321,018		2.54	%			1,331,233		2.57	%			1,308,016		2.33	%			1,326,125		2.56	%			1,323,762		2.47	%
		Total Interest-Earning Assets (FTE) (1)			6,154,378		3.58	%			6,076,485		3.59	%			5,806,981		3.52	%			6,115,431		3.59	%			5,812,422		3.57	%
	Noninterest-earning assets				552,754						541,109						554,175						546,932						547,359
Total Assets				$	6,707,132					$	6,617,594					$	6,361,156					$	6,662,363					$	6,359,781
Liabilities and Shareholders' Equity
	Interest-bearing demand and savings deposits			$	2,660,934		0.16	%		$	2,553,896		0.11	%		$	2,526,744		0.11	%		$	2,607,415		0.13	%		$	2,514,015		0.11	%
	Time deposits				578,518		0.62	%			594,929		0.62	%			694,725		0.69	%			586,723		0.62	%			741,738		0.73	%
	Short-term borrowings				1,447,452		0.58	%			1,503,013		0.60	%			1,204,466		0.37	%			1,475,233		0.59	%			1,172,957		0.36	%
	Long-term borrowings				81,268		3.62	%			81,409		3.57	%			122,410		2.57	%			81,339		3.59	%			134,831		2.38	%
		Total Interest-Bearing Liabilities			4,768,172		0.40	%			4,733,247		0.39	%			4,548,345		0.33	%			4,750,710		0.39	%			4,563,541		0.34	%
	Noninterest-bearing deposits				1,137,626						1,096,692						1,045,659						1,117,159						1,024,197
	Other liabilities				61,821						57,301						55,042						59,561						56,848
	Shareholders' equity				739,513						730,354						712,110						734,933						715,195
		Total Noninterest-Bearing Funding Sources			1,938,960						1,884,347						1,812,811						1,911,653						1,796,240
Total Liabilities and Shareholders' Equity				$	6,707,132					$	6,617,594					$	6,361,156					$	6,662,363					$	6,359,781
Net Interest Margin (FTE) (annualized)(1)							3.27	%					3.29	%					3.26	%					3.28	%					3.30	%

FIRST COMMONWEALTH FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL DATA
Unaudited
(dollars in thousands)
						June 30,				March 31,				June 30,
						2016				2016				2015
Loan Portfolio Detail
	Commercial Loan Portfolio:
		Commercial, financial, agricultural and other				$	1,185,062			$	1,190,384			$	1,098,019
		Commercial real estate					1,648,222				1,552,904				1,416,841
		Real estate construction					242,132				256,856				125,010
			Total Commercial				3,075,416				3,000,144				2,639,870
	Consumer Loan Portfolio:
		Closed-end mortgages					732,394				745,924				746,554
		Home equity lines of credit					466,611				467,038				457,945
			Total Real Estate - Consumer				1,199,005				1,212,962				1,204,499
		Auto loans					481,887				499,897				559,438
		Direct installment					25,160				25,126				26,095
		Personal lines of credit					48,358				45,905				43,877
		Student loans					13,950				14,721				17,075
			Total Other Consumer				569,355				585,649				646,485
			Total Consumer Portfolio				1,768,360				1,798,611				1,850,984
				Total Portfolio Loans			4,843,776				4,798,755				4,490,854
			Loans held for sale				11,613				5,849				9,817
				Total Loans		$	4,855,389			$	4,804,604			$	4,500,671
						June 30,				March 31,				June 30,
						2016				2016				2015
ASSET QUALITY DETAIL
Nonperforming Loans:
Loans on nonaccrual basis						$	38,404			$	33,470			$	21,776
Troubled debt restructured loans held for sale on nonaccrual basis							-				-				2,432
Troubled debt restructured loans on nonaccrual basis							9,672				13,366				8,619
Troubled debt restructured loans on accrual basis							16,332				14,979				12,276
			Total Nonperforming Loans			$	64,408			$	61,815			$	45,103
Other real estate owned ("OREO")							8,604				8,636				6,539
Repossessions ("Repos")							291				345				348
			Total Nonperforming Assets			$	73,303			$	70,796			$	51,990
Loans past due in excess of 90 days and still accruing							1,384				1,330				1,592
Classified loans							101,998				110,816				79,924
Criticized loans							128,280				142,625				120,506
Nonperforming assets as a percentage of total loans, plus OREO and Repos							1.51	%			1.47	%			1.16	%
Allowance for credit losses						$	59,821			$	55,222			$	45,344

FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands)

			For the Three Months Ended												For the Six Months Ended
			June 30,				March 31,				June 30,				June 30,			June 30,
			2016				2016				2015				2016			2015
Net Charge-offs (Recoveries):
	Commercial, financial, agricultural and other		$	4,689			$	1,258			$	2,702		$	5,947		$	7,582
	Real estate construction			(4	)			(223	)			(84	)		(227	)		(84	)
	Commercial real estate			116				(491	)			471			(375	)		535
	Residential real estate			78				264				341			342			811
	Loans to individuals			894				1,308				961			2,202			2,060
Net Charge-offs			$	5,773			$	2,116			$	4,391		$	7,889		$	10,904
Net charge-offs as a percentage of average loans outstanding (annualized)				0.48	%			0.18	%			0.39	%		0.33	%		0.49	%
Provision for credit losses as a percentage of net charge-offs				179.66	%			308.41	%			69.19	%		214.20	%		38.49	%
Provision for credit losses			$	10,372			$	6,526			$	3,038		$	16,898		$	4,197

DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES

(1) Net interest income has been computed on a fully taxable equivalent basis ("FTE") using the 35% federal income tax statutory rate.

(2) Efficiency ratio is "total noninterest expense" as a percentage of total revenue. Total revenue consists of "net interest income, on a fully taxable equivalent basis," plus "total noninterest income," excluding "net impairment losses" and "net securities gains."

(3) Core efficiency ratio excludes from total revenue the impact of derivative mark-to-market and excludes from "total noninterest expense" the amortization of intangibles, unfunded commitment expense and any other unusual items deemed by management to not be related to normal operations, such as merger, acquisition and severance costs.

(4) Includes held for sale loans.

(5) Excludes held for sale loans.

						For the Three Months Ended												For the Six Months Ended
						June 30,				March 31,				June 30,				June 30,				June 30,
						2016				2016				2015				2016				2015
Core Efficiency Ratio:
	Total Noninterest Expense					$	37,410			$	38,144			$	40,634			$	75,554			$	80,488
		Adjustments to Noninterest Expense:
			Unfunded commitment reserve				(540	)			(375	)			235				(915	)			741
			Intangible amortization				114				137				156				251				312
			Severance				-				-				-				-				-
			Merger and acquisition related				-				-				-				-				-
			Loss on sale or writedown of assets				-				-				436				-				486
				Noninterest Expense - Core		$	37,836			$	38,382			$	39,807			$	76,218			$	78,949
		Net interest income, fully tax equivalent				$	50,034			$	49,749			$	47,205			$	99,783			$	95,195
		Total noninterest income					15,558				13,715				16,347				29,273				30,538
		Net securities (losses) gains					28				-				20				28				125
			Total Revenue			$	65,564			$	63,464			$	63,532			$	129,028			$	125,608
		Adjustments to Revenue:
			Derivative mark-to-market				(531	)			(1,014	)			593				(1,545	)			363
				Total Revenue - Core		$	66,095			$	64,478			$	62,939			$	130,573			$	125,245
(3)Core Efficiency Ratio							57.24	%			59.53	%			63.25	%			58.37	%			63.04	%

FIRST COMMONWEALTH FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)

DEFINITIONS AND RECONCILIATION OF NON-GAAP MEASURES
				June 30,				March 31,				June 30,
				2016				2016				2015
Tangible Equity:
	Total shareholders' equity			$	741,786			$	733,314			$	711,206
	Less: intangible assets				165,481				165,594				162,781
		Tangible Equity			576,305				567,720				548,425
	Less: preferred stock				-				-				-
		Tangible Common Equity		$	576,305			$	567,720			$	548,425
Tangible Assets:
	Total assets			$	6,749,821			$	6,699,154			$	6,316,728
	Less: intangible assets				165,481				165,594				162,781
		Tangible Assets		$	6,584,340			$	6,533,560			$	6,153,947
(6)Tangible Common Equity as a percentage of Tangible Assets					8.75	%			8.69	%			8.91	%
	Shares Outstanding at End of Period				88,949,995				88,959,315				88,960,268
(7)Tangible Book Value Per Common Share				$	6.48			$	6.38			$	6.16
				For the Three Months Ended												For the Six Months Ended
				June 30,				March 31,				June 30,				June 30,				June 30,
				2016				2016				2015				2016				2015
Average Tangible Equity:
	Total shareholders' equity			$	739,513			$	730,354			$	712,110			$	734,933			$	715,195
	Less: intangible assets				165,527				165,666				162,865				165,597				162,942
		Tangible Equity			573,986				564,688				549,245				569,336				552,253
	Less: preferred stock				-				-				-				-				-
		Tangible Common Equity		$	573,986			$	564,688			$	549,245			$	569,336			$	552,253
(8)Return on Average Tangible Common Equity					8.41	%			8.88	%			9.82	%			8.65	%			10.10	%

Note: Management believes that it is a standard practice in the banking industry to present these non-GAAP measures. These measures provide useful information to management and investors by allowing them to make peer comparisons.