First Commonwealth Financial (FCF)

Management Discussion

• For the three months ended March 31, 2022, First Commonwealth had net income of $27.7 million, or $0.29 diluted earnings per share, compared to net income of $39.8 million, or $0.41 diluted earnings per share, in the three months ended March 31, 2021. The decrease in net income was primarily the result of a $2.0 million provision for credit losses recognized during the three months ended March 31, 2022 compared to a negative provision of $4.4 million recognized in the same period in 2021. Additionally, noninterest income decreased $3.4 million and noninterest expense increased $3.9 million during the three months ended March 31, 2022 compared to the same period in 2021.
• For the three months ended March 31, 2022, the Company’s return on average equity was 10.15% and its return on average assets was 1.18%, compared to 14.98% and 1.77%, respectively, for the three months ended March 31, 2021.
• Net interest income, on a fully taxable equivalent basis, was $68.4 million in the first three months of 2022, compared to $69.8 million for the same period in 2021. The decrease in net interest income can be attributed to a 30 basis point decrease in the yield on interest-earning assets, partially offset by a 12 basis point decrease in the cost of interest-bearing liabilities and a $391.2 million increase in interest-earning assets. Net interest income comprises the majority of our operating revenue (net