Attached files
| file | filename |
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| EX-99.2 - EXHIBIT 99.2 PRESS RELEASE - FIRST COMMONWEALTH FINANCIAL CORP /PA/ | fcfc_2016725xform8-kxex992.htm |
| EX-2.1 - EXHIBIT 2.1 AGREEMENT - FIRST COMMONWEALTH FINANCIAL CORP /PA/ | fcfc_2016725xform8-kxex21.htm |
| 8-K - FORM 8-K - FIRST COMMONWEALTH FINANCIAL CORP /PA/ | fcfc-2016725_form8xk.htm |
NYSE: FCF
NYSE: FCF
First Commonwealth
Financial Corporation
Announces Another Step in
Building its Ohio Business
July 27, 2016
NYSE: FCF
Forward‐looking Statements
This presentation contains forward‐looking statements about First Commonwealth’s future plans, strategies and financial performance that
may be considered forward‐looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward‐looking statements are intended to be covered by the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, and this statement is included for purposes of complying with these safe harbor provisions. 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." These forward‐looking statements are based on current plans and expectations, which are subject to
a number of risk factors and uncertainties that could cause future results to differ materially from historical performance or future
expectations. These differences may be the result of various factors, including, among others: (1) failure of the parties to satisfy the closing
conditions in the purchase and assumption agreement in a timely manner or at all; (2) failure to obtain governmental approvals for the
acquisition of the branches; (3) disruptions to the parties’ businesses as a result of the announcement and pendency of the branch
acquisition; (4) costs or difficulties related to the integration of the business of the acquired branches following the closing of the
transaction; (5) the risk that the anticipated benefits, cost savings and any other savings from the transaction may not be fully realized or
may take longer than expected to realize; (6) changes in general business, industry or economic conditions or competition; (7) adverse
changes or conditions in the capital and financial markets; (8) changes in interest rates; (9) the inability to realize expected cost savings or
achieve other anticipated benefits in connection with the proposed transaction; (10) changes in the quality or composition of loan and
investment portfolios; (11) adequacy of loan loss reserves and changes in loan default and charge‐off rates; (12) increased competition
and its effect on pricing and revenues; (13) deposit attrition, necessitating increased borrowings to fund loans and investments; (14)
rapidly changing technology; (15) unanticipated regulatory or judicial proceedings and liabilities and other costs; (16) changes in the cost
of funds, demand for loan products or demand for financial services; and (17) other economic, competitive, governmental or technological
factors affecting operations, markets, products, services and prices.
In addition, risk factors include but are not limited to, the risk factors described in First Commonwealth’s Annual Report on Form 10‐K for
the year ended December 31, 2015. 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.
NYSE: FCF
Successful Strategy in Ohio
3
Measured Buildout in Ohio
Leveraging significant management experience in Ohio market
Opened a business center in Cleveland in April 2014
Targeting commercial customers in northeastern OH
Acquired First Community Bank in Columbus, OH in October
2015
~$100 million in assets and ~$90 million in deposits at
time of acquisition
Cost savings fully achieved
Less than 2% deposit attrition since close
Opened two mortgage production offices in central and
northeast OH in 2016
Continue to build‐out mortgage delivery in central and
northeastern OH
Today’s announced acquisition provides important core deposit
funding to support First Commonwealth’s growth opportunities
in Ohio
With today’s announced acquisition, First Commonwealth’s Ohio
franchise is comprised of:
107 employees
$680 million loans
$827 million deposits
17 banking branches
3 loan production offices
Ohio Loan Portfolio ($MM)(1)
First Commonwealth’s presence in Ohio presents significant opportunity for growth
(1): Includes all OH based consumer loans, Commercial Real Estate loans with properties located in OH and C&I loans with borrowers headquartered in OH
$146
$177
$202
$232
$284
$332
$424
$502
$565
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
NYSE: FCF
Canton
Ashtabula
Columbus
PA
OH Pittsburgh
Altoona
Cleveland
Real Estate
Lines
52%Commercial
38%
Real Estate
Loans
8%
Auto /
Vehicle
2%
Other
Consumer
0%
Small
Business
0%
Savings
57%
Demand /
NOW
36%
CDs
4%
IRAs
3%
Another Step in Building Our Ohio Business
4
Note: Acquired loan and deposit data as of May 31, 2016.
(1): As of June 30, 2015, pro forma for announced M&A through July 26, 2016.
Acquisition of 13 FirstMerit branches in Northeast Ohio in
conjunction with Huntington’s previously announced acquisition
of FirstMerit
$56 million average deposits per branch
$735 million of deposits at an average cost of 0.22%
$115 million of loans yielding 4.05%
Top 10 pro forma deposit market share(1) in target markets
provides meaningful market presence
First Commonwealth will become the largest community
bank in the Canton market
#3 in Canton, OH MSA
#6 in Ashtabula, OH MSA
Northeast Ohio markets complement existing Cleveland loan
production office and Columbus presence
Financially compelling
4.5% deposit premium
Immediately accretive to GAAP and Cash earnings per
share
IRR significantly exceeds cost of capital
First Commonwealth Pro Forma Footprint
Acquired Deposits Acquired Loans
Total Deposits: $735MM
Cost of Deposits: 0.22%
Total Loans: $115MM
Yield on Loans: 4.05%
Acquired FirstMerit Branches First Commonwealth
First Commonwealth Commercial Loan Production Office
First Commonwealth Mortgage Loan Production Office
NYSE: FCF
Pro Forma Deposit Market Share
5
Note: Branch and deposit data as of June 30, 2015, pro forma for M&A announced through July 26, 2016, except acquired branches and deposits, which are as of May 31, 2016.
Source: SNL Financial.
Top 10 Banks in Canton, OH MSA Top Banks in Ashtabula, OH MSA
Deposit
Deposits Market
Rank Institution Branches ($MM) Share
1. Huntington / FirstMerit (ex. divestiture) 31 $2,542 39.4%
2. JPMorgan 13 815 12.6
3. First Commonwealth 11 676 10.5
4. Citizens Financial 14 601 9.3
5. KeyCorp 13 561 8.7
6. PNC Financial 12 425 6.6
7. Consumers Bancorp 9 236 3.7
8. Ohio Legacy Corp 2 188 2.9
9. Fifth Third 5 109 1.7
10. Magnolia Bancorp 3 66 1.0
Deposit
Deposits Market
Rank Institution Branches ($MM) Share
1. Huntington / FirstMerit (ex. divestiture) 9 $274 27.4%
2. Andover Bancorp 8 271 27.1
3. KeyCorp 6 182 18.1
4. U.S. Bancorp 3 85 8.4
5. Conneaut Bancorp 2 63 6.3
6. First Commonwealth 2 59 5.9
7. Northwest Bancshares 2 30 3.0
8. Middlefield Banc Corp. 1 29 2.9
9. Cortland Bancorp 1 10 1.0
NYSE: FCF
Key Transaction Terms
6
Note: Acquired branches, deposit and loan data as of May 31, 2016.
(1): Net book value as of May 31, 2016.
Purchase Price
4.5% premium on deposits
$33.1 million based on $735 million of deposits as of May 31, 2016
Premium will be calculated based on average daily balance of deposits for the 30 days prior to and inclusive
of the 5th business day prior to closing
Loans
$115 million of loans as of May 31, 2016
62% consumer
38% commercial
Branches
13 branches in Canton and Ashtabula markets
Canton: 11 branches with $676 million deposits
Ashtabula: 2 branches with $59 million deposits
Fixed Assets
Fixed assets to be acquired at net book value at close
Approximately $4.6 million in aggregate(1)
One‐Time Costs $2.7 million pre‐tax one‐time restructuring charges
EPS
Accretion
Immediately accretive to EPS
~5% GAAP EPS accretive by year 3
~8% Cash EPS accretive by year 3
Tangible Book Value
Dilution
~5.0% tangible book value dilution at close including the impact of all one‐time restructuring charges
<5 year tangible book value per share earn back period (crossover method)
Purchase Accounting
Marks
2.4% credit mark on loan portfolio ($2.8 million)
$1.4 million interest rate mark on loans
CDI equal to 2.07% of core deposits
Capital Remaining capacity under January 2016 common stock repurchase program not expected to be executed
Closing Conditions Customary regulatory approvals
Expected Closing 4Q16
NYSE: FCF
NYSE: FCF
For more information, please contact:
Ryan M. Thomas
Vice President / Finance & Investor Relations
First Commonwealth Financial Corporation
654 Philadelphia Street
Indiana, Pennsylvania 15701
(724) 463‐1690
InvestorRelations@fcbanking.com