FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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(X) |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended September 30, 2003 |
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( ) |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
Commission File Number 0-11242
First Commonwealth Financial
Corporation
(Exact name of registrant as specified in its charter)
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Pennsylvania |
25-1428528 |
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(State or other jurisdiction of |
(I.R.S. Employer |
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incorporation or organization) |
Identification No.) |
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22 North Sixth Street |
Indiana, PA 15701 |
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(Address of principal executive offices) |
(Zip Code) |
724-349-7220
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate a check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No .
Number of shares outstanding of issuer's common stock, $1.00 Par Value as of
October 31, 2003, was 59,377,083.
FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIES
PART I - FINANCIAL INFORMATION
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ITEM 1. |
FINANCIAL STATEMENTS |
PAGE |
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Included in Part I of this report: |
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First Commonwealth Financial Corporation and |
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Subsidiaries Consolidated Balance Sheets.................. |
3 |
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Consolidated Statements of Income......................... |
4 |
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Consolidated Statements of Changes in |
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Shareholders' Equity.................................... |
5 |
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Consolidated Statements of Cash Flows..................... |
7 |
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Notes to Consolidated Financial Statements................ |
8 |
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ITEM 2. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS................................... |
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ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.. |
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ITEM 4. |
CONTROLS AND PROCEDURES..................................... |
37 |
PART II - OTHER INFORMATION
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Other Information...................................................... |
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Signatures............................................................. |
39 |
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Exhibits and Reports on Form 8K |
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FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
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September
30, |
December
31, |
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ASSETS |
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Cash and due from banks on demand........................ |
$ |
76,584 |
$ |
81,114 |
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Interest-bearing bank deposits........................... |
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800 |
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1,973 |
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Securities available for sale, at market................. |
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1,875,994 |
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1,482,771 |
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Securities held
to maturity, at cost,(Market value $120,157 in |
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Loans.................................................... |
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2,597,958 |
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2,609,440 |
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Unearned income........................................ |
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(515) |
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(806) |
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Allowance for credit losses............................ |
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(36,183) |
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(34,496) |
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Net loans.......................................... |
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2,561,260 |
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2,574,138 |
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Premises and equipment................................... |
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43,508 |
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45,730 |
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Other real estate owned.................................. |
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1,698 |
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1,651 |
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Goodwill................................................. |
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8,131 |
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8,131 |
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Amortizing intangibles, net.............................. |
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13 |
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29 |
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Other assets............................................. |
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137,935 |
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131,368 |
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Total assets......................................... |
$ |
4,820,190 |
$ |
4,524,743 |
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LIABILITIES |
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Deposits (all domestic): |
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Noninterest-bearing.................................... |
$ |
393,070 |
$ |
377,466 |
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Interest-bearing....................................... |
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2,757,720 |
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2,666,658 |
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Total deposits....................................... |
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3,150,790 |
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3,044,124 |
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Short-term borrowings.................................... |
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655,357 |
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469,065 |
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Other liabilities........................................ |
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26,472 |
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30,230 |
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Company obligated
mandatorily redeemable capital securities of |
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Other long-term debt..................................... |
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542,578 |
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544,934 |
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Total long-term debt................................. |
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577,578 |
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579,934 |
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Total liabilities.................................... |
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4,410,197 |
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4,123,353 |
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SHAREHOLDERS' EQUITY |
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Preferred
stock, $1 par value per share, 3,000,000 shares |
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Common stock $1
par value per share, 100,000,000 shares authorized, |
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Additional paid-in capital............................... |
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63,927 |
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64,885 |
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Retained earnings........................................ |
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309,241 |
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296,165 |
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Accumulated other comprehensive income................... |
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17,391 |
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25,851 |
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Treasury stock
(3,234,833 shares at September 30, 2003 and 3,562,869 at |
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Unearned ESOP shares..................................... |
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(2,251) |
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(3,055) |
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Total shareholders' equity........................... |
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409,993 |
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401,390 |
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Total liabilities and shareholders' equity........... |
$ |
4,820,190 |
$ |
4,524,743 |
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The
accompanying notes are an integral part of these consolidated financial
statements.
3
FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands)
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For
the Quarter |
For
the 9 Months |
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2003 |
2002 |
2003 |
2002 |
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Interest Income |
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Interest and fees on loans...... |
$ |
40,089 |
$ |
44,943 |
$ |
123,641 |
$ |
135,490 |
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Interest and dividends on investments: |
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Taxable interest ............. |
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16,335 |
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21,005 |
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49,940 |
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65,034 |
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Interest
exempt from Federal |
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2,690 |
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2,363 |
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7,900 |
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7,172 |
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Dividends..................... |
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489 |
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464 |
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1,614 |
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1,457 |
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Interest on Federal funds sold.. |
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1 |
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2 |
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3 |
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6 |
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Interest on bank deposits....... |
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1 |
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7 |
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10 |
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26 |
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Total interest income......... |
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59,605 |
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68,784 |
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183,108 |
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209,185 |
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Interest Expense |
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Interest on deposits............ |
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14,659 |
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19,409 |
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46,417 |
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61,512 |
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Interest on short-term borrowings.................................. |
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1,708 |
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1,305 |
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4,858 |
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4,572 |
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Interest
on company obligated |
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Interest on other long-term debt |
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7,417 |
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8,911 |
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22,063 |
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26,305 |
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Total interest on long-term debt.............................. |
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8,249 |
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9,743 |
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24,557 |
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28,799 |
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Total interest expense........ |
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24,616 |
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30,457 |
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75,832 |
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94,883 |
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Net Interest Income........... |
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34,989 |
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38,327 |
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107,276 |
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114,302 |
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Provision for credit losses..... |
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3,495 |
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3,103 |
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10,420 |
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9,028 |
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Net interest income after
provision for |
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Other Income |
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Securities gains................ |
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166 |
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26 |
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5,621 |
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641 |
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Trust income.................... |
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1,342 |
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1,227 |
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3,811 |
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3,782 |
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Service
charges on deposit |
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3,447 |
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3,010 |
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9,551 |
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8,449 |
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Gain on sale of branches........ |
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3,062 |
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-0- |
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3,062 |
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-0- |
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Insurance commissions........... |
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910 |
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1,055 |
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2,555 |
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2,862 |
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Income
from bank owned life |
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1,136 |
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1,186 |
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3,234 |
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3,428 |
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Other income.................... |
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3,794 |
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2,897 |
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10,292 |
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8,565 |
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Total other income............ |
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13,857 |
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9,401 |
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38,126 |
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27,727 |
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Other Expenses |
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Salaries and employee benefits.. |
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15,163 |
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14,505 |
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45,644 |
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43,915 |
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Net occupancy expense........... |
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2,023 |
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1,668 |
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5,768 |
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4,967 |
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Furniture and equipment expense. |
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2,522 |
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2,391 |
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7,618 |
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7,357 |
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Data processing expense......... |
|
688 |
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558 |
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1,836 |
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1,484 |
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Pennsylvania shares tax expense. |
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1,075 |
|
969 |
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3,216 |
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2,960 |
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Intangible amortization......... |
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3 |
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8 |
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16 |
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196 |
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Litigation settlement (recovery) |
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-0- |
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-0- |
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(610) |
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8,000 |
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Restructuring charges........... |
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-0- |
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2,473 |
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-0- |
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5,589 |
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Other operating expenses........ |
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6,531 |
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6,919 |
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20,671 |
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22,081 |
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Total other expenses.......... |
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28,005 |
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29,491 |
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84,159 |
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96,549 |
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Income before income taxes.... |
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17,346 |
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15,134 |
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50,823 |
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36,452 |
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Applicable income taxes......... |
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3,511 |
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2,947 |
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10,257 |
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5,670 |
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Net income.................... |
$ |
13,835 |
$ |
12,187 |
$ |
40,566 |
$ |
30,782 |
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Average Shares Outstanding........ |
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58,950,258 |
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58,521,562 |
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58,808,464 |
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58,342,470 |
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Average Shares Outstanding Assuming Dilution |
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59,376,716 |
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58,862,215 |
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59,139,101 |
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58,734,144 |
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Per Share Data: |
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Basic earnings per share........ |
$ |
0.23 |
$ |
0.21 |
$ |
0.69 |
$ |
0.53 |
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Diluted earnings per share...... |
$ |
0.23 |
$ |
0.21 |
$ |
0.69 |
$ |
0.52 |
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Cash dividends per share........ |
$ |
0.155 |
$ |
0.150 |
$ |
0.465 |
$ |
0.450 |
The accompanying notes are an integral part of these
consolidated financial statements.
4
FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(Dollars in thousands)
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Accumulated |
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Balance December 31, 2001.......... |
$ |
62,525 |
$ |
66,176 |
$ |
288,219 |
$ |
8,703 |
$ |
(51,431) |
$ |
(4,126) |
$ |
370,066 |
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Comprehensive income |
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Net income....................... |
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-0- |
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-0- |
|
30,782 |
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-0- |
|
-0- |
|
-0- |
|
30,782 |
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Other comprehensive income, net of tax: |
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Unrealized
holding gains on securities |
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Less: reclassification adjustment for |
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Total other comprehensive income. |
|
-0- |
|
-0- |
|
-0- |
|
20,094 |
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-0- |
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-0- |
|
20,094 |
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|
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|
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Total comprehensive income......... |
|
-0- |
|
-0- |
|
30,782 |
|
20,094 |
|
-0- |
|
-0- |
|
50,876 |
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Cash dividends declared............ |
|
-0- |
|
-0- |
|
(26,441) |
|
-0- |
|
-0- |
|
-0- |
|
(26,441) |
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Decrease in unearned ESOP shares... |
|
-0- |
|
-0- |
|
-0- |
|
-0- |
|
-0- |
|
804 |
|
804 |
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Discount on dividend reinvestment plan purchases |
|
-0- |
|
(476) |
|
-0- |
|
-0- |
|
-0- |
|
-0- |
|
(476) |
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Treasury stock reissued............ |
|
-0- |
|
(771) |
|
-0- |
|
-0- |
|
5,002 |
|
-0- |
|
4,231 |
|
|
|
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|
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|
|
|
|
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Balance at September 30, 2002...... |
$ |
62,525 |
$ |
64,929 |
$ |
292,560 |
$ |
28,797 |
$ |
(46,429) |
$ |
(3,322) |
$ |
399,060 |
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5
FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(Dollars in thousands)
|
|
|
Common |
|
Additional |
|
Retained |
|
Accumulated |
|
Treasury |
|
Unearned |
|
Total |
|
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|
|
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|
|
|
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|
Balance December 31, 2002.......... |
$ |
62,525 |
$ |
64,885 |
$ |
296,165 |
$ |
25,851 |
$ |
(44,981) |
$ |
(3,055) |
$ |
401,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income....................... |
|
-0- |
|
-0- |
|
40,566 |
|
-0- |
|
-0- |
|
-0- |
|
40,566 |
|
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
holding gains (losses) on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: reclassification adjustment for |
|
-0- |
|
-0- |
|
-0- |
|
(3,595) |
|
-0- |
|
-0- |
|
(3,595) |
|
Unrealized
holding gains (losses) on |
|
|
|
|
|
|
|
106 |
|
|
|
|
|
106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income. |
|
-0- |
|
-0- |
|
-0- |
|
(8,460) |
|
-0- |
|