FCF First Commonwealth Financial Dashboard

Management Discussion

• For the three months ended March 31, 2021, First Commonwealth had net income of $39.8 million, or $0.41 diluted earnings per share, compared to net income of $4.7 million, or $0.05 diluted earnings per share, in the three months ended March 31, 2020. The increase in net income was primarily the result of a $4.4 million negative provision for credit losses recognized in the first quarter compared to an expense of $31.0 million in provision for credit losses recognized in the same period in 2020. This was partially offset by a $8.5 million increase in the income tax provision due to higher income before income taxes.
• For the three months ended March 31, 2021, the Company’s return on average equity was 14.98% and its return on average assets was 1.77%, compared to 1.77% and 0.23%, respectively, for the three months ended March 31, 2020.
• Net interest income, on a fully taxable equivalent basis, was $69.8 million in the first three months of 2021, compared to $68.1 million for the same period in 2020. The increase in net interest income can be attributed to a 51 basis point decrease in the cost of interest-bearing liabilities offset by a 64 basis point decrease in the yield on interest-earning assets. Net interest income comprises the majority of our operating revenue (net interest income before provision expense plus noninterest income), at 71.7% and 77.8% for the three months ended March 31, 2021 and 2020, respectively.