~~10-Qfalse2021-03-312021Q1FIRST COMMONWEALTH FINANCIAL CORP /PA/00007125371570112/3196,209,541FalseFalseFalseYesFalseTrue10.002.002.0050.0050.0010.001.461.4836.0036.007365,14900000.10.10.1P3YP30Y~~0000712537us-gaap:SeniorLienMemberfcf:TermLoanReceivableOriginatedInOneYearPriorMemberus-gaap:SpecialMentionMember2021-12-31

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


ý			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Pennsylvania		25-1428528
(State or other jurisdiction of		~~(I.R.S. Employer~~
incorporation or organization)		(I.R.S. Employer Identification No.)

601 Philadelphia Street
Indiana	PA	15701
(Address of principal executive offices)		(Zip Code)

Indicate by 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 ¨.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ¨ Smaller reporting company ☐ Emerging growth company ☐

Non-accelerated filer ¨ (Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of shares outstanding of issuer’s common stock, $1.00 par value, as of May 6, ~~2021,~~2022, was ~~96,209,541.~~94,316,777.

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)

Premises and equipment, net~~(1)~~

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

For the Three Months Ended
March 31,
2021 2020
(dollars in thousands, except share data)
Interest Income
Interest and fees on loans $ 68,313 $ 71,740
Interest and dividends on investments:
Taxable interest 5,364 6,973
Interest exempt from federal income taxes 164 315
Dividends 143 264
Interest on bank deposits 77 37
Total interest income 74,061 79,329
Interest Expense
Interest on deposits 2,052 8,449
Interest on short-term borrowings 31 588
Interest on subordinated debentures 2,128 2,146
Interest on other long-term debt 346 355
Interest on lease obligations 62 67
Total interest expense 4,619 11,605
Net Interest Income 69,442 67,724
Provision for credit losses (4,390) 30,967
Net Interest Income after Provision for Credit Losses 73,832 36,757
Noninterest Income
Net securities gains 6 19
Trust income 2,516 2,111
Service charges on deposit accounts 4,047 4,745
Insurance and retail brokerage commissions 2,172 1,995
Income from bank owned life insurance 1,951 1,616
Gain on sale of mortgage loans 5,046 2,546
Gain on sale of other loans and assets 1,690 699
Card-related interchange income 6,427 5,262
Derivatives mark to market 1,430 (1,741)
Swap fee income 146 214
Other income 1,924 1,807
Total noninterest income 27,355 19,273
Noninterest Expense
Salaries and employee benefits 28,671 29,977
Net occupancy 4,773 4,973
Furniture and equipment 3,948 3,778
Data processing 3,052 2,467
Advertising and promotion 1,324 1,150
Contributions 731 472
Pennsylvania shares tax 832 738
Intangible amortization 866 934
Other professional fees and services 751 898
FDIC insurance 696 28
Loss on sale or write-down of assets 9 213
Litigation and operational losses 479 390
COVID-19 related 74 23
Branch consolidation 40 0
Other operating 5,613 4,230
Total noninterest expense 51,859 50,271
Income Before Income Taxes 49,328 5,759
Income tax provision 9,558 1,032
Net Income $ 39,770 $ 4,727
Average Shares Outstanding 96,026,866 98,123,627
Average Shares Outstanding Assuming Dilution 96,233,647 98,361,494
Per Share Data: Basic Earnings per Share
$ 0.41 $ 0.05
Diluted Earnings per Share $ 0.41 $ 0.05
Cash Dividends Declared per Common Share $ 0.11 $ 0.11


	For the Three Months Ended
	March 31,
		2022		2021
		(dollars in thousands, except share data)
Interest Income
Interest and fees on loans and leases		$	64,394	$	68,313
Interest and dividends on investments:
Taxable interest		6,478		5,364
Interest exempt from federal income taxes		126		164
Dividends		135		143
Interest on bank deposits		111		77
Total interest income		71,244		74,061
Interest Expense
Interest on deposits		813		2,052
Interest on short-term borrowings		21		31
Interest on subordinated debentures		2,129		2,128
Interest on other long-term debt		52		346
Interest on lease obligations		57		62

Total interest expense		3,072		4,619
Net Interest Income		68,172		69,442
Provision for credit losses		1,964		(4,390)
Net Interest Income after Provision for Credit Losses		66,208		73,832
Noninterest Income



Net securities gains		2		6
Trust income		2,713		2,516
Service charges on deposit accounts		4,615		4,047
Insurance and retail brokerage commissions		2,272		2,172
Income from bank owned life insurance		1,508		1,951
Gain on sale of mortgage loans		1,282		5,046
Gain on sale of other loans and assets		2,319		1,690
Card-related interchange income		6,490		6,427
Derivatives mark to market		347		1,430

Swap fee income		453		146
Other income		1,975		1,924
Total noninterest income		23,976		27,355
Noninterest Expense
Salaries and employee benefits		30,932		28,671
Net occupancy		4,787		4,773
Furniture and equipment		3,730		3,948
Data processing		3,188		3,052
Advertising and promotion		1,226		1,324

Pennsylvania shares tax		1,005		832
Intangible amortization		862		866

Other professional fees and services		1,221		751
FDIC insurance		698		696
Loss on sale or write-down of assets		75		9

Litigation and operational losses		600		479


COVID-19 related		17		74

Branch consolidation		98		40
Other operating		7,285		6,344
Total noninterest expense		55,724		51,859
Income Before Income Taxes		34,460		49,328
Income tax provision		6,734		9,558
Net Income		$	27,726	$	39,770
Average Shares Outstanding		94,078,699		96,026,866

The accompanying notes are an integral part of these unaudited consolidated financial statements.

~~FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)~~

For the Three Months Ended
March 31,
2021 2020
(dollars in thousands)
Net Income $ 39,770 $ 4,727
Other comprehensive (loss) income, before tax benefit (expense):
Unrealized holding (losses) gains on securities arising during the period (15,804) 19,503
Less: reclassification adjustment for gains on securities included in net income (6) (19)
Unrealized holding gains (losses) on derivatives arising during the period 1,842 (4,581)
Total other comprehensive (loss) income, before tax benefit (expense) (13,968) 14,903
Income tax benefit (expense) related to items of other comprehensive (loss) income 2,933 (3,130)
Total other comprehensive (loss) income (11,035) 11,773
Comprehensive Income $ 28,735 $ 16,500


Average Shares Outstanding Assuming Dilution	94,311,324		96,233,647

Per Share Data: Basic Earnings per Share	$	0.29	$	0.41
Diluted Earnings per Share	$	0.29	$	0.41
Cash Dividends Declared per Common Share	$	0.115	$	0.110

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~CHANGES IN SHAREHOLDERS’ EQUITY~~COMPREHENSIVE INCOME (Unaudited)

Shares
Outstanding Common
Stock Additional
Paid-in-
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss),
net Treasury
Stock Total
Shareholders’
Equity
(dollars in thousands, except share and per share data)
Balance at December 31, 2020 96,130,751 $ 113,915 $ 494,683 $ 596,614 $ 17,233 $ (153,828) $ 1,068,617
Net income 39,770 39,770
Other comprehensive loss (11,035) (11,035)
Cash dividends declared ($0.11 per share) (10,578) (10,578)
Treasury stock acquired (123,395) (1,643) (1,643)
Treasury stock reissued 158,531 681 0 1,360 2,041
Restricted stock 82,589 0 356 0 (48) 308
Balance at March 31, 2021 96,248,476 $ 113,915 $ 495,720 $ 625,806 $ 6,198 $ (154,159) $ 1,087,480

Shares
Outstanding Common
Stock Additional
Paid-in-
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss),
net Treasury
Stock Total
Shareholders’
Equity
(dollars in thousands, except share and per share data)
Balance at December 31, 2019 98,311,840 $ 113,915 $ 493,737 $ 577,348 $ 5,579 $ (134,914) $ 1,055,665
Net income 4,727 4,727
Other comprehensive income 11,773 11,773
Cash dividends declared ($0.11 per share) (10,819) (10,819)
Treasury stock acquired (430,896) (5,220) (5,220)
Treasury stock reissued 134,452 444 0 1,150 1,594
Restricted stock 0 0 0 0 204 204
Balance at March 31, 2020 98,015,396 $ 113,915 $ 494,181 $ 571,256 $ 17,352 $ (138,780) $ 1,057,924

~~ITEM 1.~~ ~~Financial Statements and Supplementary Data(Continued)~~

~~FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)~~


	For the Three Months Ended
	March 31,
		2022		2021
		(dollars in thousands)
Net Income		$	27,726	$	39,770
Other comprehensive loss, before tax benefit:
Unrealized holding losses on securities arising during the period		(57,251)		(15,804)

Less: reclassification adjustment for gains on securities included in net income		(2)		(6)
Unrealized holding (losses) gains on derivatives arising during the period		(17,926)		1,842

Total other comprehensive loss, before tax benefit		(75,179)		(13,968)
Income tax benefit related to items of other comprehensive loss		15,787		2,933
Total other comprehensive loss		(59,392)		(11,035)
Comprehensive (Loss) Income		$	(31,666)	$	28,735

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 Basis of Presentation

The accounting and reporting policies of First Commonwealth Financial Corporation and its subsidiaries (“First Commonwealth” or the “Company”) conform with generally accepted accounting principles in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements and accompanying notes. Actual realized amounts could differ from those estimates. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of First Commonwealth’s financial position, results of operations, comprehensive income, cash flows and changes in shareholders’ equity as of and for the periods presented. Certain information and Note disclosures normally included in Consolidated Financial Statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC.

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, federal funds sold and interest-bearing bank deposits. Generally, federal funds are sold for one-day periods.

The results of operations for the three months ended March 31, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the full year of ~~2021.~~2022. These interim financial statements should be read in conjunction with First Commonwealth’s ~~2020~~2021 Annual Report on Form 10-K.

Note 2 Supplemental Comprehensive Income Disclosures

The following table identifies the related tax effects allocated to each component of other comprehensive income (“OCI”) in the unaudited Consolidated Statements of Comprehensive Income. Reclassification adjustments related to securities available for sale are included in the "Net securities gains" line ~~and reclassification adjustments related to losses on derivatives are included in the "Other operating" line~~ in the unaudited Consolidated Statements of Income.

For the Three Months Ended March 31,
2021 2020
Pretax Amount Tax (Expense) Benefit Net of Tax Amount Pretax Amount Tax (Expense) Benefit Net of Tax Amount
(dollars in thousands)
Unrealized (losses) gains on securities:
Unrealized holding (losses) gains on securities arising during the period $ (15,804) $ 3,319 $ (12,485) $ 19,503 $ (4,096) $ 15,407
Reclassification adjustment for gains on securities included in net income (6) 1 (5) (19) 4 (15)
Total unrealized (losses) gains on securities (15,810) 3,320 (12,490) 19,484 (4,092) 15,392
Unrealized gains (losses) on derivatives:
Unrealized holding gains (losses) on derivatives arising during the period 1,842 (387) 1,455 (4,581) 962 (3,619)
Reclassification adjustment for losses on derivatives included in net income 0 0 0 0 0 0
Total unrealized gains (losses) on derivatives 1,842 (387) 1,455 (4,581) 962 (3,619)
Total other comprehensive (loss) income $ (13,968) $ 2,933 $ (11,035) $ 14,903 $ (3,130) $ 11,773


	For the Three Months Ended March 31,
	2022						2021
	Pretax Amount		Tax (Expense) Benefit		Net of Tax Amount		Pretax Amount		Tax (Expense) Benefit		Net of Tax Amount
	(dollars in thousands)
Unrealized losses on securities:
Unrealized holding losses on securities arising during the period	$	(57,251)	$	12,023	$	(45,228)	$	(15,804)	$	3,319	$	(12,485)

Reclassification adjustment for gains on securities included in net income	(2)		—		(2)		(6)		1		(5)
Total unrealized losses on securities	(57,253)		12,023		(45,230)		(15,810)		3,320		(12,490)
Unrealized (losses) gains on derivatives:
Unrealized holding (losses) gains on derivatives arising during the period	(17,926)		3,764		(14,162)		1,842		(387)		1,455

Total unrealized (losses) gains on derivatives	(17,926)		3,764		(14,162)		1,842		(387)		1,455




Total other comprehensive loss	$	(75,179)	$	15,787	$	(59,392)	$	(13,968)	$	2,933	$	(11,035)

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3 Supplemental Cash Flow Disclosures

The following table presents information related to cash paid during the period for interest and income taxes, as well as detail on non-cash investing and financing activities for the three months ended March 31:

2021 2020
(dollars in thousands)
Cash paid during the period for:
Interest $ 3,483 $ 10,551
Income taxes 32 80
Non-cash investing and financing activities:
Loans transferred to other real estate owned and repossessed assets 944 1,961
Loans transferred from held to maturity to held for sale 17,749 10,858
Loans transferred from available for sale to held to maturity 0 385
Gross (decrease) increase in market value adjustment to securities available for sale (15,810) 19,484
Gross increase (decrease) in market value adjustment to derivatives 1,842 (4,581)
Noncash treasury stock reissuance 2,041 1,594
Proceeds from death benefit on bank owned life insurance not received (384) (356)


	2022		2021
	(dollars in thousands)
Cash paid during the period for:
Interest	$	1,755	$	3,483
Income taxes	9,020		32
Non-cash investing and financing activities:

Loans transferred to other real estate owned and repossessed assets	647		944
Loans transferred from held to maturity to held for sale	18,627		17,749


Gross decrease in market value adjustment to securities available for sale	(57,254)		(15,810)
Gross (decrease) increase in market value adjustment to derivatives	(17,926)		1,842


Noncash treasury stock reissuance	1,947		2,041


Proceeds from death benefit on bank owned life insurance not received	397		(384)

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 4 Earnings per Share

The following table summarizes the composition of the weighted-average common shares (denominator) used in the basic and diluted earnings per share computations:


	For the Three Months Ended March 31,
		2022		2021
Weighted average common shares issued		113,914,902		113,914,902
Average treasury stock shares		(19,654,309)		(17,718,410)
Average deferred compensation shares		(55,684)		(55,544)
Average unearned nonvested shares		(126,210)		(114,082)
Weighted average common shares and common stock equivalents used to calculate basic earnings per share		94,078,699		96,026,866
Additional common stock equivalents (nonvested stock) used to calculate diluted earnings per share		176,913		151,200
Additional common stock equivalents (deferred compensation) used to calculate diluted earnings per share		55,712		55,581

Weighted average common shares and common stock equivalents used to calculate diluted earnings per share		94,311,324		96,233,647
Basic Earnings per Share		$	0.29	$	0.41
Diluted Earnings per Share		$	0.29	$	0.41

For the Three Months Ended March 31,
2021 2020
Weighted average common shares issued 113,914,902 113,914,902
Average treasury stock shares (17,718,410) (15,672,850)
Average deferred compensation shares (55,544) (38,453)
Average unearned nonvested shares (114,082) (79,972)
Weighted average common shares and common stock equivalents used to calculate basic earnings per share 96,026,866 98,123,627
Additional common stock equivalents (nonvested stock) used to calculate diluted earnings per share 151,200 196,441
Additional common stock equivalents (deferred compensation) used to calculate diluted earnings per share 55,581 41,426
Weighted average common shares and common stock equivalents used to calculate diluted earnings per share 96,233,647 98,361,494
Basic Earnings per Share $ 0.41 $ 0.05
Diluted Earnings per Share $ 0.41 $ 0.05

The following table shows the number of shares and the price per share related to common stock equivalents that were not included in the computation of diluted earnings per share for the three months ended March 31 because to do so would have been antidilutive.

2021 2020
Price Range Price Range
Shares From To Shares From To
Restricted Stock 79,497 $ 13.72 $ 14.22 75,208 $ 13.82 $ 15.44
Restricted Stock Units 16,730 $ 16.41 $ 16.41 42,509 $ 13.72 $ 15.37


	2022					2021
		Price Range					Price Range
	Shares	From		To		Shares	From		To

Restricted Stock	23,621	$	15.81	$	16.25	79,497	$	13.72	$	14.22
Restricted Stock Units	12,793	$	21.08	$	21.08	16,730	$	16.41	$	16.41

Note 5 Commitments and Contingent Liabilities

Commitments and Letters of Credit

Standby letters of credit and commercial letters of credit are conditional commitments issued by First Commonwealth to guarantee the performance of a customer to a third party. The contract or notional amount of these instruments reflects the maximum amount of future payments that First Commonwealth could be required to pay under the guarantees if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or from collateral held or pledged. In addition, many of these commitments are expected to expire without being drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements.

The following table identifies the notional amount of those instruments at:

March 31, 2021 December 31, 2020
(dollars in thousands)
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit $ 2,136,708 $ 2,097,628
Financial standby letters of credit 16,331 15,988
Performance standby letters of credit 17,393 16,864
Commercial letters of credit 766 783


	March 31, 2022		December 31, 2021
	(dollars in thousands)
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	2,376,865	$	2,353,991
Financial standby letters of credit	17,985		18,824
Performance standby letters of credit	17,584		10,663
Commercial letters of credit	975		975

The notional amounts outstanding as of March 31, ~~2021~~2022 include amounts issued in ~~2021~~2022 of ~~$0.2~~$7.0 million in performance standby letters of ~~credit and $0.1 million in~~credit. There were no financial standby letters of ~~credit. There were 0~~credit or commercial letters of credit issued in ~~2021.~~2022, however there was a change in terms for one letter of credit which increased its commitment amount. A liability of $0.1 million has been ~~recorded as of both March 31, 2021 and December 31, 2020, which represents the estimated~~

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recorded as of both March 31, 2022 and December 31, 2021, which represents the estimated fair value of letters of credit issued. The fair value of letters of credit is estimated based on the unrecognized portion of fees received at the time the commitment was issued.

Unused commitments and letters of credit provide exposure to future credit loss in the event of nonperformance by the borrower or guaranteed parties. Management’s evaluation of the credit risk related to these commitments resulted in the recording of a liability of ~~$4.3~~$8.6 million and ~~$7.4~~$6.4 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. This liability is reflected in "Other liabilities" in the unaudited Consolidated Statements of Financial Condition. The credit risk evaluation incorporates the expected loss percentage calculated for comparable loan categories as part of the allowance for credit losses for loans as well as estimated utilization for each loan category.

First Commonwealth and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings in which claims for monetary damages are asserted. As of March 31, ~~2021,~~2022, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of litigation pending or threatened against First Commonwealth or its subsidiaries will be material to First Commonwealth’s consolidated financial position. On at least a quarterly basis, First Commonwealth assesses its liabilities and contingencies in connection with such legal proceedings. For those matters where it is probable that First Commonwealth will incur losses and the amounts of the losses can be reasonably estimated, First Commonwealth records an expense and corresponding liability in its consolidated financial statements. To the extent the pending or threatened litigation could result in exposure in excess of that liability, the amount of such excess is not currently estimable. Although not considered probable, the range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability (if any), is between $0 and $1 million. Although First Commonwealth does not believe that the outcome of pending litigation will be material to First Commonwealth’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations and cash flows for a particular reporting period in the future.

First Commonwealth Bank was named a defendant in an action that commenced on October 14, 2020 in the Court of Common Pleas of Allegheny County, Pennsylvania. The plaintiffs allege that the Bank violated the Pennsylvania Commercial Code by failing to provide accurate and complete notices of repossession and post-sale notices to certain Pennsylvania customers whose motor vehicles were repossessed and later sold at public sales. Plaintiffs seek to pursue the action as a statewide class action on behalf of themselves and other allegedly similarly situated defaulting borrowers who had their motor vehicles repossessed and seeks to recover statutory damages. The Bank intends to vigorously defend against the plaintiffs’ claims and any request for class certification. The plaintiffs have not made any formal or specific financial demand and due to the preliminary status of this case any possible loss cannot be reasonably estimated at this time and is not included in the range set forth in the preceding paragraph. The Bank filed preliminary objections seeking the dismissal of the action. On May 4, 2021, the Court issued an order sustaining the Bank’s preliminary objections and dismissing the plaintiffs’ complaint with prejudice. This order remains subject to appeal by the plaintiffs.

~~ITEM 1.~~ ~~Financial Statements and Supplementary Data~~

~~FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

Note 6 Investment Securities

Securities Available for Sale

Below is an analysis of the amortized cost and estimated fair values of securities available for sale at:

March 31, 2021 December 31, 2020
Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Estimated
Fair Value Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Estimated
Fair Value
(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities – Residential $ 6,067 $ 623 $ 0 $ 6,690 $ 6,492 $ 738 $ 0 $ 7,230
Mortgage-Backed Securities – Commercial 268,890 4,597 (586) 272,901 182,823 8,357 0 191,180
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential 724,611 11,082 (7,025) 728,668 481,109 14,924 0 496,033
Other Government-Sponsored Enterprises 1,000 0 (25) 975 100,996 2 0 100,998
Obligations of States and Political Subdivisions 9,647 132 (214) 9,565 11,154 243 0 11,397
Corporate Securities 23,146 1,388 (75) 24,459 22,941 1,444 0 24,385
Total Securities Available for Sale $ 1,033,361 $ 17,822 $ (7,925) $ 1,043,258 $ 805,515 $ 25,708 $ 0 $ 831,223


	March 31, 2022								December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities – Residential	$	4,884	$	198	$	(16)	$	5,066	$	5,242	$	420	$	—	$	5,662
Mortgage-Backed Securities – Commercial	350,918		25		(21,715)		329,228		365,024		1,725		(4,459)		362,290
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	596,272		504		(39,517)		557,259		632,687		6,308		(9,021)		629,974

Other Government-Sponsored Enterprises	1,000		—		(65)		935		1,000		—		(19)		981
Obligations of States and Political Subdivisions	9,515		21		(614)		8,922		9,538		89		(103)		9,524
Corporate Securities	32,068		488		(762)		31,794		32,088		973		(112)		32,949



Total Securities Available for Sale	$	994,657	$	1,236	$	(62,689)	$	933,204	$	1,045,579	$	9,515	$	(13,714)	$	1,041,380

Mortgage-backed securities include mortgage-backed obligations of U.S. Government agencies and obligations of U.S. Government-sponsored enterprises. These obligations have contractual maturities ranging from less than one year to approximately 30 years with lower anticipated lives to maturity due to prepayments. All mortgage-backed securities contain a certain amount of risk related to the uncertainty of prepayments of the underlying mortgages. Interest rate changes have a direct impact upon prepayment speeds; therefore, First Commonwealth uses computer simulation models to test the average life and yield volatility of all mortgage-backed securities under various interest rate scenarios to monitor the potential impact on earnings and interest rate risk positions.

Expected maturities will differ from contractual maturities because issuers may have the right to call or repay obligations with or without call or prepayment penalties. Other fixed income securities within the portfolio also contain prepayment risk.

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Mortgage-backed securities include mortgage-backed obligations of U.S. Government agencies and obligations of U.S. Government-sponsored enterprises. These obligations have contractual maturities ranging from less than one year to approximately 30 years, with lower anticipated lives to maturity due to prepayments. All mortgage-backed securities contain a certain amount of risk related to the uncertainty of prepayments of the underlying mortgages. Interest rate changes have a direct impact upon prepayment speeds; therefore, First Commonwealth uses computer simulation models to test the average life and yield volatility of all mortgage-backed securities under various interest rate scenarios to monitor the potential impact on earnings and interest rate risk positions.

The amortized cost and estimated fair value of debt securities available for sale at March 31, ~~2021,~~2022, by contractual maturity, are shown below.

Amortized
Cost Estimated
Fair Value
(dollars in thousands)
Due within 1 year $ 5,000 $ 5,086
Due after 1 but within 5 years 12,870 13,670
Due after 5 but within 10 years 15,923 16,243
Due after 10 years 0 0
33,793 34,999
Mortgage-Backed Securities (a) 999,568 1,008,259
Total Debt Securities $ 1,033,361 $ 1,043,258


	Amortized Cost		Estimated Fair Value
	(dollars in thousands)
Due within 1 year	$	4,998	$	5,053
Due after 1 but within 5 years	8,878		8,915
Due after 5 but within 10 years	28,707		27,683
Due after 10 years	—		—
	42,583		41,651
Mortgage-Backed Securities (a)	952,074		891,553
Total Debt Securities	$	994,657	$	933,204

(a)Mortgage-backed and collateralized mortgage securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds. Mortgage-Backed Securities include an amortized cost of ~~$275.0~~$355.8 million and a fair value of ~~$279.6~~$334.3 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of ~~$724.6~~$596.3 million and a fair value of ~~$728.7~~$557.3 million for Obligations of U.S. Government-sponsored enterprises issued by Fannie Mae and Freddie Mac.

Proceeds from sales, gross gains (losses) realized on sales ~~maturities~~ and ~~other-than-temporary impairment charges~~maturities related to securities held to maturity and securities available for sale were as follows for the three months ended March 31:

2021 2020
(dollars in thousands)
Proceeds from sales $ 0 $ 0
Gross gains (losses) realized:
Sales transactions:
Gross gains $ 0 $ 0
Gross losses 0 0
0 0
Maturities
Gross gains 6 19
Gross losses 0 0
6 19
Net gains and impairment $ 6 $ 19


	2022		2021
	(dollars in thousands)
Proceeds from sales	$	—	$	—
Gross gains (losses) realized:
Sales transactions:
Gross gains	$	—	$	—
Gross losses	—		—
	—		—
Maturities
Gross gains	2		6
Gross losses	—		—

	2		6
Net gains	$	2	$	6

Securities available for sale with an estimated fair value of ~~$621.9~~$675.5 million and ~~$792.1~~$759.1 million were pledged as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, to secure public deposits and for other purposes required or permitted by law.

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Securities Held to Maturity

Below is an analysis of the amortized cost and fair values of debt securities held to maturity at:


	March 31, 2022								December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities – Residential	$	2,305	$	—	$	(41)	$	2,264	$	2,409	$	101	$	—	$	2,510
Mortgage-Backed Securities- Commercial	86,281		—		(6,284)		79,997		91,439		305		(1,939)		89,805
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	366,380		76		(26,251)		340,205		387,848		2,800		(5,758)		384,890
Mortgage-Backed Securities – Commercial	6,672		8		—		6,680		7,309		148		—		7,457
Other Government-Sponsored Enterprises	21,983		—		(2,124)		19,859		21,904		—		(625)		21,279
Obligations of States and Political Subdivisions	28,290		76		(1,272)		27,094		29,402		414		(103)		29,713
Debt Securities Issued by Foreign Governments	1,000		—		(11)		989		1,000		—		(3)		997




Total Securities Held to Maturity	$	512,911	$	160	$	(35,983)	$	477,088	$	541,311	$	3,768	$	(8,428)	$	536,651

March 31, 2021 December 31, 2020
Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Estimated
Fair Value Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Estimated
Fair Value
(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities – Residential $ 2,679 $ 123 $ 0 $ 2,802 $ 2,766 $ 138 $ 0 $ 2,904
Mortgage-Backed Securities- Commercial 58,484 992 (512) 58,964 36,799 1,441 0 38,240
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential 279,970 4,134 (3,763) 280,341 277,351 5,389 (10) 282,730
Mortgage-Backed Securities – Commercial 9,121 316 0 9,437 9,737 344 0 10,081
Obligations of States and Political Subdivisions 35,109 484 (264) 35,329 34,391 705 0 35,096
Debt Securities Issued by Foreign Governments 800 0 0 800 800 0 0 800
Total Securities Held to Maturity $ 407,833 $ 6,049 $ (5,764) $ 408,118 $ 361,844 $ 8,017 $ (10) $ 369,851

The amortized cost and estimated fair value of debt securities held to maturity at March 31, ~~2021,~~2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or prepayment penalties.

Amortized
Cost Estimated
Fair Value
(dollars in thousands)
Due within 1 year $ 2,887 $ 2,904
Due after 1 but within 5 years 5,117 5,179
Due after 5 but within 10 years 45,774 44,717
Due after 10 years 3,801 3,774
57,579 56,574
Mortgage-Backed Securities (a) 350,254 351,544
Total Debt Securities $ 407,833 $ 408,118


	Amortized Cost		Estimated Fair Value
	(dollars in thousands)
Due within 1 year	$	706	$	709
Due after 1 but within 5 years	7,007		6,997
Due after 5 but within 10 years	42,998		39,752
Due after 10 years	562		484
	51,273		47,942
Mortgage-Backed Securities (a)	461,638		429,146
Total Debt Securities	$	512,911	$	477,088

(a)Mortgage-backed and collateralized mortgage securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds. Mortgage-Backed Securities include an amortized cost of ~~$61.2~~$88.6 million and a fair value of ~~$61.8~~$82.3 million for Obligations of U.S. Government agencies issued by Ginnie Mae and an amortized cost of ~~$289.1~~$373.0 million and a fair value of ~~$289.8~~$346.9 million for Obligations of U.S. Government-sponsored enterprises issued by Fannie Mae and Freddie Mac.

Securities held to maturity with an amortized cost of ~~$305.8~~$347.6 million and ~~$228.1~~$313.9 million were pledged as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, to secure public deposits and for other purposes required or permitted by law.

Other Investments

As a member of the Federal Home Loan Bank ("FHLB"), First Commonwealth is required to purchase and hold stock in the FHLB to satisfy membership and borrowing requirements. The level of stock required to be held is dependent on the amount of First Commonwealth's mortgage-related assets and outstanding borrowings with the FHLB. This stock is restricted in that it can ~~only be sold to the FHLB or to another member institution, and all sales of FHLB stock must be at par. As a result of these~~

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

only be sold to the FHLB or to another member institution, and all sales of FHLB stock must be at par. As a result of these restrictions, FHLB stock is unlike other investment securities insofar as there is no trading market for FHLB stock and the transfer price is determined by FHLB membership rules and not by market participants. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, our FHLB stock totaled ~~$11.8~~$12.0 million and ~~$10.6~~$11.7 million, respectively, and is included in “Other investments” on the unaudited Consolidated Statements of Financial Condition.

FHLB stock is held as a long-term investment and its value is determined based on the ultimate recoverability of the par value. First Commonwealth evaluates impairment quarterly and has concluded that the par value of its investment in FHLB stock will be recovered. Accordingly, no impairment charge was recorded on these securities during the three months ended March 31, ~~2021.~~2022.

As of both March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, "Other investments" also includes ~~$1.7~~$1.2 million in equity securities. These securities do not have a readily determinable fair value and are carried at cost. During the three-months ended March 31, ~~2021~~2022 and ~~2020,~~2021, there were 0no gains or losses recognized through earnings on equity securities. On a quarterly basis, management evaluates equity securities by reviewing the severity and duration of decline in estimated fair value, research reports, analysts’ recommendations, credit rating changes, news stories, annual reports, regulatory filings, impact of interest rate changes and other relevant information.

Impairment of Investment Securities

We review our investment portfolio on a quarterly basis for indications of impairment. For available for sale securities, the

review includes analyzing the financial condition and near-term prospects of the issuer, including any specific events which

may influence the operations of the issuer and whether we are more likely than not to sell the security. We evaluate whether we

are more likely than not to sell debt securities based upon our investment strategy for the particular type of security and our

cash flow needs, liquidity position, capital adequacy, tax position and interest rate risk position. Held-to-maturity securities are

evaluated for impairment on a quarterly basis using historical probability of default and loss given default information specific

to the investment category. If this evaluation determines that credit losses exist an allowance for credit loss is recorded and

included in earnings as a component of credit loss expense.

First Commonwealth utilizes the specific identification method to determine the net gain or loss on debt securities and the average cost method to determine the net gain or loss on equity securities.

The following table presents the gross unrealized losses and estimated fair values at March 31, ~~2021~~2022 for both available for sale and held to maturity securities by investment category and time frame for which securities have been in a continuous unrealized loss position:

Less Than 12 Months 12 Months or More Total
Estimated
Fair Value Gross
Unrealized
Losses Estimated
Fair Value Gross
Unrealized
Losses Estimated
Fair Value Gross
Unrealized
Losses
(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities – Commercial $ 91,266 $ (1,098) $ 0 $ 0 $ 91,266 $ (1,098)
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential 481,498 (10,788) 0 0 481,498 (10,788)
Other Government-Sponsored Enterprises 21,421 (1,250) 0 0 21,421 (1,250)
Obligations of States and Political Subdivisions 16,919 (478) 0 0 16,919 (478)
Corporate Securities 5,125 (75) 0 0 5,125 (75)
Total Securities $ 616,229 $ (13,689) $ 0 $ 0 $ 616,229 $ (13,689)


	Less Than 12 Months				12 Months or More				Total
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities – Residential	$	4,672	$	(57)	$	—	$	—	$	4,672	$	(57)
Mortgage-Backed Securities – Commercial	355,202		(24,189)		42,690		(3,810)		397,892		(27,999)
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	622,340		(36,828)		254,048		(28,940)		876,388		(65,768)

Other Government-Sponsored Enterprises	—		—		20,794		(2,189)		20,794		(2,189)
Obligations of States and Political Subdivisions	21,606		(1,618)		2,637		(268)		24,243		(1,886)
Debt Securities Issued by Foreign Governments	589		(11)		—		—		589		(11)
Corporate Securities	13,311		(688)		5,027		(74)		18,338		(762)



Total Securities	$	1,017,720	$	(63,391)	$	325,196	$	(35,281)	$	1,342,916	$	(98,672)

At March 31, ~~2021,~~2022, fixed income securities issued by the U.S. Government and U.S. Government-sponsored enterprises comprised ~~88%~~97% of total unrealized losses. All unrealized losses ~~due to~~are the result of changes in market interest rates. At March 31, ~~2021,~~2022, there are 49165 debt securities in an unrealized loss position.

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents the gross unrealized losses and estimated fair values at December 31, ~~2020~~2021 by investment category and time frame for which securities have been in a continuous unrealized loss position:


	Less Than 12 Months				12 Months or More				Total
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(dollars in thousands)
Obligations of U.S. Government Agencies:

Mortgage-Backed Securities - Commercial	$	320,414	$	(6,398)	$	—	$	—	$	320,414	$	(6,398)
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities – Residential	658,965		(14,779)		—		—		658,965		(14,779)

Other Government-Sponsored Enterprises	22,261		(644)		—		—		22,261		(644)
Obligation of States and Political Subdivisions	11,213		(206)		—		—		11,213		(206)
Debt Securities Issued by Foreign Governments	997		(3)		—		—		997		(3)
Corporate Securities	19,013		(112)		—		—		19,013		(112)

Total Securities	$	1,032,863	$	(22,142)	$	—	$	—	$	1,032,863	$	(22,142)

As of March 31, ~~2021,~~2022, our corporate securities had an amortized cost and an estimated fair value of ~~$23.1~~$32.1 million and ~~$24.5~~$31.8 million, respectively. As of December 31, ~~2020,~~2021, our corporate securities had an amortized cost and estimated fair value of ~~$22.9~~$32.1 million and ~~$24.4~~$32.9 million, respectively. Corporate securities are comprised of debt issued by large regional banks. There ~~was 1~~were 4 corporate ~~security~~securities in an unrealized loss position as of March 31, ~~2021~~2022 and ~~NaN as of~~ December 31, ~~2020.~~2021. When unrealized losses exist, management reviews each of the issuer’s asset quality, earnings trends and capital position to determine whether the unrealized loss position is a result of credit losses. All interest payments on the corporate securities are being made as contractually required.

There was 0no expected credit related impairment recognized on investment securities during the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 7 Loans and Leases and Allowance for Credit Losses

Loans and leases are presented in the Consolidated Statements of Financial Condition net of deferred fees and costs, and discounts related to purchased loans. Net deferred fees were ~~$8.3~~$2.9 million and ~~$6.0~~$0.8 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, and discounts on purchased loans were ~~$6.8 million and $7.0~~$6.0 million at both March 31, ~~2021~~2022 and December 31, ~~2020, respectively.~~2021. The following table provides outstanding balances related to each of our loan types:

March 31, 2021 December 31, 2020
(dollars in thousands)
Commercial, financial, agricultural and other $ 1,555,671 $ 1,555,986
Time and demand 1,541,280 1,541,382
Commercial credit cards 14,391 14,604
Real estate construction 404,580 427,221
Residential real estate 1,756,615 1,750,592
Residential first lien 1,152,314 1,144,323
Residential junior lien/home equity 604,301 606,269
Commercial real estate 2,167,506 2,211,569
Multifamily 363,604 371,239
Nonowner occupied 1,393,968 1,421,151
Owner occupied 409,934 419,179
Loans to individuals 852,522 815,815
Automobile 759,061 712,800
Consumer credit cards 10,901 12,360
Consumer other 82,560 90,655
Total loans $ 6,736,894 $ 6,761,183


	March 31, 2022		December 31, 2021

	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,123,690	$	1,173,452
Time and demand	992,477		1,159,524

Commercial credit cards	13,675		13,928
Equipment finance	2,505
Time and demand other	115,033
Real estate construction	398,988		494,456
Construction other	307,411
Construction residential	91,577
Residential real estate	2,006,221		1,920,250
Residential first lien	1,381,742		1,299,534
Residential junior lien/home equity	624,479		620,716
Commercial real estate	2,344,281		2,251,097
Multifamily	401,581		385,432
Nonowner occupied	1,516,518		1,465,247
Owner occupied	426,182		400,418
Loans to individuals	1,078,932		999,975
Automobile and recreational vehicles	984,001		901,280
Consumer credit cards	10,675		11,151
Consumer other	84,256		87,544
Total loans and leases	$	6,952,112	$	6,839,230

In the table above, Commercial, financial, agricultural and other loans at March 31, ~~2021~~2022 and December 31, ~~2020~~2021 includes ~~$478.5~~$28.9 million and ~~$478.9~~$71.3 million, respectively, in Paycheck Protection Program ("PPP") loans for small businesses who meet the necessary eligibility requirements. PPP loans are 100% guaranteed by the Small Business Administration ("SBA") under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and are forgivable, in whole or in part, if the proceeds are used for payroll and other permitted purposes in accordance with the PPP requirements. Because PPP loans are fully guaranteed by the SBA, there is no allowance for credit losses recognized for these loans. Although the Company believes that the majority of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program, there could be risks and liability to the Company associated with participation in the program.

First Commonwealth’s loan portfolio includes five primary loan categories. When calculating the allowance for credit losses these categories are classified into fourteen portfolio segments. The composition of loans by portfolio segment includes:

Commercial, financial, agricultural and other

Time & Demand - Consists primarily of commercial and industrial loans. This category consists of loans that are typically cash flow dependent and therefore have different risk and loss characteristics than other commercial loans. Loans in this category include revolving and term structures with fixed and variable interest rates. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Commercial Credit Cards - Consists of unsecured credit cards for commercial customers. These commercial credit cards have separate characteristics outside of normal commercial non-real estate loans, as they tend to have shorter overall duration. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

1617

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the majority of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program, there could be risks and liability to the Company associated with participation in the program.

On March 27, 2020, the CARES Act was signed into law, providing banking organizations with optional, temporary relief from complying with CECL. The Company elected to defer its adoption of CECL until the fourth quarter 2020. At the end of the deferral period, CECL was adopted effective January 1, 2020. The allowance for credit losses for the interim period ending March 31, 2020, was calculated in accordance with previously applicable GAAP.

First Commonwealth’s loan portfolio includes five primary loan categories. When calculating the allowance for credit losses these categories are classified into eleven portfolio segments. The composition of loans by portfolio segment includes:

~~Commercial, financial, agricultural and other~~

~~Time & Demand~~Equipment Finance - Consists ~~primarily of commercial and industrial loans. This category consists~~ of loans ~~that are typically cash flow dependent~~ and ~~therefore have different~~leases to finance the purchase of equipment for commercial customers. The risk and loss characteristics ~~than other commercial loans. Loans in~~are unique for this ~~category include revolving and term structures with fixed and variable interest rates.~~group due to the type of collateral. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. There were no equipment finance loans or leases in the portfolio prior to the first quarter of 2022.

~~Commercial Credit Cards~~Time & Demand Other - Consists primarily of ~~unsecured credit cards for~~loans to state and political subdivisions and other commercial ~~customers. These commercial credit cards~~loans that have ~~separate~~different characteristics ~~outside of normal commercial non-real estate~~than loans ~~as they tend to have shorter overall duration.~~in the Time and Demand category. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of ~~national unemployment~~household debt to income and economic conditions measured by GDP. Prior to the first quarter of 2022, these loans were included in the Time and Demand category. The breakout into a separate category is the result of an annual review of the peer group loss history and loss drivers used in the Allowance for Credit Losses model.

Real estate construction

~~Includes both 1-4~~Construction Other - Consists of construction loans to commercial builders and developers and are secured by the properties under development.

Construction Residential - Consists of loans to finance the construction of residential properties during the construction period. Borrowers are typically individuals who will occupy the completed single family ~~and commercial construction loans.~~ property.

The risk and loss characteristics of ~~the~~these two construction ~~category~~categories are different than other real estate secured categories due to the collateral being at various stages of completion. The nature of the project and type of borrower of the two construction categories provides for unique risk and loss characteristics for each category. The primary macroeconomic drivers for estimating credit losses for ~~this category~~construction loans include forecasts of national unemployment and measures of completed construction projects. Prior to the first quarter of 2022, all construction loans were included in one loan category. The breakout into separate construction categories is the result of an annual review of the peer group loss history and loss drivers used in the Allowance for Credit Losses model.

Residential real estate

Residential first lien - Consists of loans with collateral of 1-4 family residencies with a senior lien position. The risk and loss characteristics are unique for this group because the collateral for these loans are the borrower’s primary residence. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and residential property values.

Residential Junior Lien/Home Equity - Consists of loans with collateral of 1-4 family residencies with an open end line of credit or junior lien position. The junior lien position for the majority of these loans provides a higher risk of loss than other residential real estate loans. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and residential property values.

Commercial real estate

Multifamily - Consists of loans secured by commercial multifamily properties. Real estate related to rentals to consumers ~~could~~ provide unique risk and loss characteristics. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of commercial real estate values and national unemployment. In the first quarter of 2022, as a result of an annual review of peer group loss history and loss drivers, national unemployment replaced rental ~~vacancy.~~vacancy as one of the primary macroeconomic drivers in this category.

Nonowner Occupied - Consists of loans secured by commercial real estate non-owner occupied and provides different loss characteristics than other real estate categories. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Owner Occupied - Consists of loans secured by commercial real estate owner occupied properties. The risk and loss characteristics of this category were considered different than other real estate categories because it is owner occupied and would impact the ability to conduct business. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Loans to individuals

Automobile and Recreational Vehicles- Consists of both direct and indirect loans with automobiles and recreational vehicles held as collateral. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and automobile retention value.

1718

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Consumer Credit Cards – Consists of unsecured consumer credit ~~cards~~cards. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and economic conditions measured by GDP.

Other Consumer - Consists of lines of credit, student loans and other consumer loans, not secured by real estate or autos. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and retail sales. In the ~~level~~first quarter of 2022, as a result of an annual review of peer group loss history and loss drivers, retail sales replaced household ~~debt.~~debt as one of the primary macroeconomic factors for this category.

The allowance for credit losses is calculated by pooling loans of similar credit risk characteristics and applying a discounted cash flow methodology after incorporating probability of default and loss given default estimates. Probability of default represents an estimate of the likelihood of default and loss given default measures the expected loss upon default. Inputs impacting the expected losses include a forecast of macroeconomic factors, using a weighted forecast from a nationally recognized firm. Our model incorporates a one-year forecast of macroeconomic factors, after which the factors revert back to the historical mean over a one-year period. The most significant macroeconomic factor used in estimating credit losses is the national unemployment rate. The forecasted value for national unemployment at ~~March 31, 2021~~the beginning of the forecast period was ~~6.24%~~3.87% and during the one-year forecast period it was projected to average ~~5.54%~~4.36%, with a peak of ~~6.02%~~4.58%. Current forecast assumptions consider the impact of rising interest rates, global oil prices and supply chain disruption, COVID-19, Russia's invasion of Ukraine and the potential effects of these on the US economy.

Credit Quality Information

As part of the on-going monitoring of credit quality within the loan portfolio, the following credit worthiness categories are used in grading our loans:


Pass						Acceptable levels of risk exist in the relationship. Includes all loans not classified as OAEM, substandard or doubtful.

Other Assets Especially Mentioned (OAEM)						Potential weaknesses that deserve management’s close attention. The potential weaknesses may result in deterioration of the repayment prospects or weaken the Company’s credit position at some future date. The credit risk may be relatively minor, yet constitute an undesirable risk in light of the circumstances surrounding the specific credit. No loss of principal or interest is expected.

Substandard						Well-defined weakness or a weakness that jeopardizes the repayment of the debt. A loan may be classified as substandard as a result of deterioration of the borrower’s financial condition and repayment capacity. Loans for which repayment plans have not been met or collateral equity margins do not protect the Company may also be classified as substandard.

Doubtful						Loans with the characteristics of substandard loans with the added characteristic that collection or liquidation in full, on the basis of presently existing facts and conditions, is highly improbable.

The Company’s internal creditworthiness grading system provides a measurement of credit risk based primarily on an evaluation of the borrower’s cash flow and collateral. Category ratings are reviewed each quarter, at which time management analyzes the results, as well as other external statistics and factors related to loan performance.

~~ITEM 1.~~ ~~Financial Statements and Supplementary Data~~

~~FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

The following tables represent our credit risk profile by creditworthiness:

March 31, 2021
Non-Pass
Pass OAEM Substandard Doubtful Loss Total Non-Pass Total
(dollars in thousands)
Commercial, financial, agricultural and other $ 1,499,180 $ 36,188 $ 20,303 $ 0 $ 0 $ 56,491 $ 1,555,671
Time and demand 1,484,789 36,188 20,303 0 0 56,491 1,541,280
Commercial credit cards 14,391 0 0 0 0 0 14,391
Real estate construction 404,044 482 54 0 0 536 404,580
Residential real estate 1,747,310 1,678 7,627 0 0 9,305 1,756,615
Residential first lien 1,146,787 1,562 3,965 0 0 5,527 1,152,314
Residential junior lien/home equity 600,523 116 3,662 0 0 3,778 604,301
Commercial real estate 1,962,008 161,769 43,729 0 0 205,498 2,167,506
Multifamily 362,937 128 539 0 0 667 363,604
Nonowner occupied 1,206,587 150,850 36,531 0 0 187,381 1,393,968
Owner occupied 392,484 10,791 6,659 0 0 17,450 409,934
Loans to individuals 852,209 0 313 0 0 313 852,522
Automobile 758,824 0 237 0 0 237 759,061
Consumer credit cards 10,901 0 0 0 0 0 10,901
Consumer other 82,484 0 76 0 0 76 82,560
Total loans $ 6,464,751 $ 200,117 $ 72,026 $ 0 $ 0 $ 272,143 $ 6,736,894

December 31, 2020
Non-Pass
Pass OAEM Substandard Doubtful Loss Total Non-Pass Total
(dollars in thousands)
Commercial, financial, agricultural and other $ 1,491,916 $ 48,233 $ 15,837 $ 0 $ 0 $ 64,070 $ 1,555,986
Time and demand 1,477,312 48,233 15,837 0 0 64,070 1,541,382
Commercial credit cards 14,604 0 0 0 0 0 14,604
Real estate construction 426,663 504 54 0 0 558 427,221
Residential real estate 1,740,992 1,902 7,698 0 0 9,600 1,750,592
Residential first lien 1,138,409 1,780 4,134 0 0 5,914 1,144,323
Residential junior lien/home equity 602,583 122 3,564 0 0 3,686 606,269
Commercial real estate 1,983,258 175,995 52,316 0 0 228,311 2,211,569
Multifamily 369,883 131 1,225 0 0 1,356 371,239
Nonowner occupied 1,216,252 161,336 43,563 0 0 204,899 1,421,151
Owner occupied 397,123 14,528 7,528 0 0 22,056 419,179
Loans to individuals 815,541 0 274 0 0 274 815,815
Automobile 712,539 0 261 0 0 261 712,800
Consumer credit cards 12,360 0 0 0 0 0 12,360
Consumer other 90,642 0 13 0 0 13 90,655
Total loans $ 6,458,370 $ 226,634 $ 76,179 $ 0 $ 0 $ 302,813 $ 6,761,183

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~The following table summarizes the loan risk rating category by loan type including term loans on an amortized cost basis by origination year:~~

March 31, 2021
Term Loans Revolving Loans
2021 2020 2019 2018 2017 Prior Total
(dollars in thousands)
Time and demand $ 257,058 $ 396,576 $ 189,596 $ 122,119 $ 66,911 $ 144,948 $ 364,072 $ 1,541,280
Pass 257,058 396,448 186,044 121,121 58,332 122,354 343,432 1,484,789
OAEM 0 92 3,182 407 2,208 14,292 16,007 36,188
Substandard 0 36 370 591 6,371 8,302 4,633 20,303
Commercial credit cards 0 0 0 0 0 0 14,391 14,391
Pass 0 0 0 0 0 0 14,391 14,391
Real estate construction 9,316 180,780 126,114 70,292 14,708 1,726 1,644 404,580
Pass 9,316 180,780 126,114 70,292 14,708 1,442 1,392 404,044
OAEM 0 0 0 0 0 230 252 482
Substandard 0 0 0 0 0 54 0 54
Residential first lien 83,849 331,249 165,945 122,959 99,601 346,732 1,979 1,152,314
Pass 83,849 331,226 165,945 122,578 99,536 341,751 1,902 1,146,787
OAEM 0 0 0 79 0 1,406 77 1,562
Substandard 0 23 0 302 65 3,575 0 3,965
Residential junior lien/home equity 6,749 2,922 5,294 4,154 1,801 7,763 575,618 604,301
Pass 6,749 2,922 5,211 4,154 1,801 7,522 572,164 600,523
OAEM 0 0 0 0 0 106 10 116
Substandard 0 0 83 0 0 135 3,444 3,662
Multifamily 7,020 76,288 16,794 70,837 79,170 112,089 1,406 363,604
Pass 7,020 76,288 16,794 70,837 79,170 111,422 1,406 362,937
OAEM 0 0 0 0 0 128 0 128
Substandard 0 0 0 0 0 539 0 539
Nonowner occupied 19,627 99,280 202,069 166,231 206,739 693,120 6,902 1,393,968
Pass 19,627 99,280 196,474 156,236 164,325 564,024 6,621 1,206,587
OAEM 0 0 5,595 9,995 35,497 99,636 127 150,850
Substandard 0 0 0 0 6,917 29,460 154 36,531
Owner occupied 13,323 57,587 66,580 55,783 39,600 172,403 4,658 409,934
Pass 13,323 55,839 65,010 53,992 38,257 161,623 4,440 392,484
OAEM 0 1,748 672 986 1,319 6,033 33 10,791
Substandard 0 0 898 805 24 4,747 185 6,659
Automobile 116,255 329,579 181,901 82,762 36,407 12,157 0 759,061
Pass 116,255 329,579 181,809 82,745 36,378 12,058 0 758,824
Substandard 0 0 92 17 29 99 0 237
Consumer credit cards 0 0 0 0 0 0 10,901 10,901
Pass 0 0 0 0 0 0 10,901 10,901
Consumer other 1,087 6,882 12,760 9,023 1,523 6,600 44,685 82,560
Pass 1,087 6,882 12,760 9,023 1,523 6,554 44,655 82,484
Substandard 0 0 0 0 0 46 30 76
Total $ 514,284 $ 1,481,143 $ 967,053 $ 704,160 $ 546,460 $ 1,497,538 $ 1,026,256 $ 6,736,894


	March 31, 2022
			Non-Pass
	Pass		OAEM		Substandard		Doubtful		Loss		Total Non-Pass		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,090,034	$	15,396	$	18,260	$	—	$	—	$	33,656	$	1,123,690
Time and demand	959,190		15,396		17,891		—		—		33,287		992,477
Commercial credit cards	13,675		—		—		—		—		—		13,675
Equipment finance	2,505		—		—		—		—		—		2,505
Time and demand other	114,664		—		369		—		—		369		115,033
Real estate construction	398,233		281		474		—		—		755		398,988
Construction other	306,937		—		474		—		—		474		307,411
Construction residential	91,296		281		—		—		—		281		91,577
Residential real estate	1,999,616		523		6,082		—		—		6,605		2,006,221
Residential first lien	1,378,124		455		3,163		—		—		3,618		1,381,742
Residential junior lien/home equity	621,492		68		2,919		—		—		2,987		624,479
Commercial real estate	2,211,496		82,590		50,195		—		—		132,785		2,344,281
Multifamily	361,021		25,588		14,972		—		—		40,560		401,581
Nonowner occupied	1,434,603		52,231		29,684		—		—		81,915		1,516,518
Owner occupied	415,872		4,771		5,539		—		—		10,310		426,182
Loans to individuals	1,078,673		—		259		—		—		259		1,078,932
Automobile and recreational vehicles	983,838		—		163		—		—		163		984,001
Consumer credit cards	10,675		—		—		—		—		—		10,675
Consumer other	84,160		—		96		—		—		96		84,256
Total loans and leases	$	6,778,052	$	98,790	$	75,270	$	—	$	—	$	174,060	$	6,952,112

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2020
Term Loans Revolving Loans
2020 2019 2018 2017 2016 Prior Total
(dollars in thousands)
Time and demand $ 598,053 $ 193,601 $ 142,224 $ 72,277 $ 74,228 $ 83,313 $ 377,686 $ 1,541,382
Pass 597,405 189,834 140,473 63,137 68,007 65,418 353,038 1,477,312
OAEM 93 3,373 972 8,820 6,182 8,043 20,750 48,233
Substandard 555 394 779 320 39 9,852 3,898 15,837
Commercial credit cards 0 0 0 0 0 0 14,604 14,604
Pass 0 0 0 0 0 0 14,604 14,604
Real estate construction 150,493 133,195 104,167 34,803 389 1,009 3,165 427,221
Pass 150,493 133,195 104,167 34,803 389 709 2,907 426,663
OAEM 0 0 0 0 0 246 258 504
Substandard 0 0 0 0 0 54 0 54
Residential first lien 316,052 184,550 142,823 110,365 91,495 297,057 1,981 1,144,323
Pass 316,028 184,533 142,467 110,260 91,059 292,158 1,904 1,138,409
OAEM 0 0 83 0 100 1,520 77 1,780
Substandard 24 17 273 105 336 3,379 0 4,134
Residential junior lien/home equity 3,055 5,783 4,545 2,005 1,303 7,127 582,451 606,269
Pass 3,055 5,698 4,545 2,005 1,303 6,909 579,068 602,583
OAEM 0 0 0 0 0 112 10 122
Substandard 0 85 0 0 0 106 3,373 3,564
Multifamily 76,249 16,287 69,439 66,963 34,383 106,328 1,590 371,239
Pass 76,249 16,287 69,439 66,963 34,383 104,972 1,590 369,883
OAEM 0 0 0 0 0 131 0 131
Substandard 0 0 0 0 0 1,225 0 1,225
Nonowner occupied 105,861 199,280 161,018 214,915 217,883 518,052 4,142 1,421,151
Pass 105,861 190,301 139,643 181,659 175,148 419,900 3,740 1,216,252
OAEM 0 8,979 21,375 26,339 37,762 66,752 129 161,336
Substandard 0 0 0 6,917 4,973 31,400 273 43,563
Owner occupied 59,519 72,313 61,079 40,796 27,415 152,555 5,502 419,179
Pass 58,551 70,726 55,478 39,351 26,359 141,376 5,282 397,123
OAEM 968 684 4,736 1,421 114 6,572 33 14,528
Substandard 0 903 865 24 942 4,607 187 7,528
Automobile 350,293 202,923 96,355 45,218 14,285 3,726 0 712,800
Pass 350,293 202,827 96,336 45,187 14,255 3,641 0 712,539
Substandard 0 96 19 31 30 85 0 261
Consumer credit cards 0 0 0 0 0 0 12,360 12,360
Pass 0 0 0 0 0 0 12,360 12,360
Consumer other 7,814 14,464 10,752 1,965 711 6,383 48,566 90,655
Pass 7,814 14,464 10,752 1,965 711 6,373 48,563 90,642
Substandard 0 0 0 0 0 10 3 13
Total $ 1,667,389 $ 1,022,396 $ 792,402 $ 589,307 $ 462,092 $ 1,175,550 $ 1,052,047 $ 6,761,183


	December 31, 2021
			Non-Pass
	Pass		OAEM		Substandard		Doubtful		Loss		Total Non-Pass		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,121,234	$	33,765	$	18,453	$	—	$	—	$	52,218	$	1,173,452
Time and demand	1,107,306		33,765		18,453		—		—		52,218		1,159,524
Commercial credit cards	13,928		—		—		—		—		—		13,928
Real estate construction	493,913		498		45		—		—		543		494,456
Residential real estate	1,913,064		976		6,210		—		—		7,186		1,920,250
Residential first lien	1,295,524		905		3,105		—		—		4,010		1,299,534
Residential junior lien/home equity	617,540		71		3,105		—		—		3,176		620,716
Commercial real estate	2,113,123		85,324		52,650		—		—		137,974		2,251,097
Multifamily	355,702		14,565		15,165		—		—		29,730		385,432
Nonowner occupied	1,368,922		63,783		32,542		—		—		96,325		1,465,247
Owner occupied	388,499		6,976		4,943		—		—		11,919		400,418
Loans to individuals	999,770		—		205		—		—		205		999,975
Automobile and recreational vehicles	901,132		—		148		—		—		148		901,280
Consumer credit cards	11,151		—		—		—		—		—		11,151
Consumer other	87,487		—		57		—		—		57		87,544
Total loans and leases	$	6,641,104	$	120,563	$	77,563	$	—	$	—	$	198,126	$	6,839,230

The following table summarizes the loan risk rating category by loan type including term loans on an amortized cost basis by origination year:

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	March 31, 2022
	Term Loans												Revolving Loans
	2022		2021		2020		2019		2018		Prior				Total
	(dollars in thousands)
Time and demand	$	24,040	$	210,288	$	87,599	$	126,639	$	73,613	$	73,454	$	396,844	$	992,477
Pass	24,040		209,897		85,098		110,803		73,326		64,994		391,032		959,190
OAEM	—		391		2,048		2,338		178		7,186		3,255		15,396
Substandard	—		—		453		13,498		109		1,274		2,557		17,891
Commercial credit cards	—		—		—		—		—		—		13,675		13,675
Pass	—		—		—		—		—		—		13,675		13,675


Equipment finance	2,505		—		—		—		—		—		—		2,505
Pass	2,505		—		—		—		—		—		—		2,505


Time and demand other	6,058		20,678		29,228		5,673		3,318		47,566		2,512		115,033
Pass	6,058		20,678		29,228		5,673		3,318		47,397		2,312		114,664

Substandard	—		—		—		—		—		169		200		369
Construction other	5,311		91,272		84,577		100,754		23,806		1,250		441		307,411
Pass	5,311		91,272		84,103		100,754		23,806		1,250		441		306,937

Substandard	—		—		474		—		—		—		—		474
Construction residential	3,265		85,129		2,430		735		18		—		—		91,577
Pass	3,265		85,129		2,149		735		18		—		—		91,296
OAEM	—		—		281		—		—		—		—		281

Residential first lien	80,916		427,539		364,873		117,741		79,385		309,316		1,972		1,381,742
Pass	80,916		427,528		364,854		117,473		78,931		306,527		1,895		1,378,124
OAEM	—		—		—		—		63		315		77		455
Substandard	—		11		19		268		391		2,474		—		3,163
Residential junior lien/home equity	18,665		55,709		1,926		2,922		2,426		5,884		536,947		624,479
Pass	18,665		55,709		1,926		2,848		2,426		5,736		534,182		621,492
OAEM	—		—		—		—		—		58		10		68
Substandard	—		—		—		74		—		90		2,755		2,919
Multifamily	19,494		89,609		78,400		27,474		35,535		149,698		1,371		401,581
Pass	19,494		89,609		78,400		27,474		21,035		123,638		1,371		361,021
OAEM	—		—		—		—		—		25,588		—		25,588
Substandard	—		—		—		—		14,500		472		—		14,972
Nonowner occupied	46,087		194,623		121,039		200,683		185,938		764,263		3,885		1,516,518
Pass	46,087		194,623		121,039		200,683		156,700		712,831		2,640		1,434,603
OAEM	—		—		—		—		15,240		35,903		1,088		52,231
Substandard	—		—		—		—		13,998		15,529		157		29,684
Owner occupied	31,902		85,107		62,071		51,792		32,035		158,206		5,069		426,182
Pass	31,902		85,083		60,575		49,894		31,552		151,909		4,957		415,872
OAEM	—		—		498		845		483		2,912		33		4,771
Substandard	—		24		998		1,053		—		3,385		79		5,539
Automobile and recreational vehicles	173,055		422,172		228,508		106,348		39,116		14,802		—		984,001
Pass	173,055		422,168		228,508		106,278		39,067		14,762		—		983,838

Substandard	—		4		—		70		49		40		—		163
Consumer credit cards	—		—		—		—		—		—		10,675		10,675
Pass	—		—		—		—		—		—		10,675		10,675


Consumer other	1,667		20,590		3,947		6,792		4,065		5,394		41,801		84,256
Pass	1,667		20,590		3,947		6,783		4,065		5,352		41,756		84,160

Substandard	—		—		—		9		—		42		45		96
Total	$	412,965	$	1,702,716	$	1,064,598	$	747,553	$	479,255	$	1,529,833	$	1,015,192	$	6,952,112

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	December 31, 2021
	Term Loans												Revolving Loans
	2021		2020		2019		2018		2017		Prior				Total
	(dollars in thousands)
Time and demand	$	281,244	$	126,403	$	143,030	$	91,118	$	45,442	$	111,127	$	361,160	$	1,159,524
Pass	280,854		125,728		128,080		83,204		31,472		102,399		355,569		1,107,306
OAEM	390		596		1,125		7,780		13,945		7,126		2,803		33,765
Substandard	—		79		13,825		134		25		1,602		2,788		18,453
Commercial credit cards	—		—		—		—		—		—		13,928		13,928
Pass	—		—		—		—		—		—		13,928		13,928


Real estate construction	202,016		129,298		123,153		38,267		441		841		440		494,456
Pass	201,992		128,824		123,153		38,267		441		796		440		493,913
OAEM	24		474		—		—		—		—		—		498
Substandard	—		—		—		—		—		45		—		45
Residential first lien	376,106		375,904		126,788		84,484		74,268		260,010		1,974		1,299,534
Pass	376,095		375,885		126,618		84,079		74,135		256,815		1,897		1,295,524
OAEM	—		—		—		67		—		761		77		905
Substandard	11		19		170		338		133		2,434		—		3,105
Residential junior lien/home equity	56,861		1,999		3,322		2,684		1,009		5,348		549,493		620,716
Pass	56,861		1,999		3,246		2,684		1,009		5,195		546,546		617,540
OAEM	—		—		—		—		—		61		10		71
Substandard	—		—		76		—		—		92		2,937		3,105
Multifamily	90,062		73,068		16,782		36,523		63,872		103,774		1,351		385,432
Pass	90,062		73,068		16,782		21,846		49,832		102,761		1,351		355,702
OAEM	—		—		—		—		14,040		525		—		14,565
Substandard	—		—		—		14,677		—		488		—		15,165
Nonowner occupied	194,137		98,840		202,236		173,053		177,295		615,943		3,743		1,465,247
Pass	194,137		98,840		202,236		155,293		152,174		563,743		2,499		1,368,922
OAEM	—		—		—		3,723		19,235		39,737		1,088		63,783
Substandard	—		—		—		14,037		5,886		12,463		156		32,542
Owner occupied	77,710		62,380		53,954		34,115		32,989		134,713		4,557		400,418
Pass	77,710		59,973		51,513		33,623		31,644		129,593		4,443		388,499
OAEM	—		2,194		1,220		492		1,321		1,716		33		6,976
Substandard	—		213		1,221		—		24		3,404		81		4,943
Automobile and recreational vehicles	456,730		252,518		122,943		48,375		17,230		3,484		—		901,280
Pass	456,730		252,518		122,867		48,361		17,224		3,432		—		901,132

Substandard	—		—		76		14		6		52		—		148
Consumer credit cards	—		—		—		—		—		—		11,151		11,151
Pass	—		—		—		—		—		—		11,151		11,151


Consumer other	22,156		4,655		8,030		5,084		542		5,503		41,574		87,544
Pass	22,156		4,655		8,030		5,084		542		5,460		41,560		87,487

Substandard	—		—		—		—		—		43		14		57
Total	$	1,757,022	$	1,125,065	$	800,238	$	513,703	$	413,088	$	1,240,743	$	989,371	$	6,839,230

Portfolio Risks

The credit quality of our loan portfolio can potentially represent significant risk to our earnings, capital and liquidity. First Commonwealth devotes substantial resources to managing this risk primarily through our credit administration department that develops and administers policies and procedures for underwriting, maintaining, monitoring and collecting loans. Credit administration is independent of lending departments and oversight is provided by the Credit Committee of the First Commonwealth Board of Directors.

Total ~~gross~~net charge-offs for the three months ended March 31, 2022 and 2021 were $1.1 million and ~~2020 were~~ $3.3 million, ~~and $3.5 million,~~ respectively.

~~Age Analysis of Past Due Loans by Segment~~

The following tables delineate the aging analysis of the recorded investments in past due loans as of March 31, 2021 and December 31, 2020. Also included in these tables are loans that are 90 days or more past due and still accruing because they are well-secured and in the process of collection.

March 31, 2021
30 - 59 days past due 60 - 89 days past due 90 days or greater and still accruing Nonaccrual Total past due and nonaccrual Current Total
(dollars in thousands)
Commercial, financial, agricultural and other $ 155 $ 31 $ 6 $ 8,729 $ 8,921 $ 1,546,750 $ 1,555,671
Time and demand 78 19 0 8,729 8,826 1,532,454 1,541,280
Commercial credit cards 77 1 12 6 0 95 14,296 14,391
Real estate construction 0 0 0 54 54 404,526 404,580
Residential real estate 3,407 681 482 6,806 11,376 1,745,239 1,756,615
Residential first lien 1,703 378 228 3,367 5,676 1,146,638 1,152,314
Residential junior lien/home equity 1,704 303 254 3,439 5,700 598,601 604,301
Commercial real estate 671 154 0 27,782 28,607 2,138,899 2,167,506
Multifamily 0 0 0 459 459 363,145 363,604
Nonowner occupied 154 102 0 25,018 25,274 1,368,694 1,393,968
Owner occupied 517 52 0 2,305 2,874 407,060 409,934
Loans to individuals 1,198 540 591 313 2,642 849,880 852,522
Automobile 775 1 266 87 237 1,365 757,696 759,061
Consumer credit cards 58 56 42 0 156 10,745 10,901
Consumer other 365 218 462 76 1,121 81,439 82,560
Total loans $ 5,431 $ 1,406 $ 1,079 $ 43,684 $ 51,600 $ 6,685,294 $ 6,736,894

2223

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2020
30 - 59 days past due 60 - 89 days past due 90 days or greater and still accruing Nonaccrual Total past due and nonaccrual Current Total
(dollars in thousands)
Commercial, financial, agricultural and other $ 146 $ 62 $ 112 $ 3,317 $ 3,637 $ 1,552,349 $ 1,555,986
Time and demand 97 28 23 3,317 3,465 1,537,917 1,541,382
Commercial credit cards 49 1 34 89 0 172 14,432 14,604
Real estate construction 936 0 0 54 990 426,231 427,221
Residential real estate 3,883 1,492 769 6,824 12,968 1,737,624 1,750,592
Residential first lien 1,775 660 267 3,489 6,191 1,138,132 1,144,323
Residential junior lien/home equity 2,108 832 502 3,335 6,777 599,492 606,269
Commercial real estate 237 160 3 35,072 35,472 2,176,097 2,211,569
Multifamily 0 0 0 460 460 370,779 371,239
Nonowner occupied 18 104 0 31,822 31,944 1,389,207 1,421,151
Owner occupied 219 56 3 2,790 3,068 416,111 419,179
Loans to individuals 2,870 852 639 274 4,635 811,180 815,815
Automobile 2,090 1 417 94 261 2,862 709,938 712,800
Consumer credit cards 52 39 123 0 214 12,146 12,360
Consumer other 728 396 422 13 1,559 89,096 90,655
Total loans $ 8,072 $ 2,566 $ 1,523 $ 45,541 $ 57,702 $ 6,703,481 $ 6,761,183
Age Analysis of Past Due Loans by Segment

The following tables delineate the aging analysis of the recorded investments in past due loans as of March 31, 2022 and December 31, 2021. Also included in these tables are loans that are 90 days or more past due and still accruing because they are well-secured and in the process of collection.

In the March 31, 2022 table below, $14.5 million in multifamily commercial real estate loans are reflected as 30-59 days past due. This balance relates to one commercial borrower and subsequent to March 31, 2022, the loan was paid off in full.


	March 31, 2022
	30 - 59 days past due		60 - 89 days past due		90 days or greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	160	$	86	$	998	$	2,037	$	3,281	$	1,120,409	$	1,123,690
Time and demand	110		30		989		2,037		3,166		989,311		992,477
Commercial credit cards	48		56		9		—		113		13,562		13,675
Equipment finance	—		—		—		—		—		2,505		2,505
Time and demand other	2		—		—		—		2		115,031		115,033
Real estate construction	418		474		—		—		892		398,096		398,988
Construction other	—		474		—		—		474		306,937		307,411
Construction residential	418		—		—		—		418		91,159		91,577
Residential real estate	3,764		568		306		5,500		10,138		1,996,083		2,006,221
Residential first lien	2,268		156		104		2,777		5,305		1,376,437		1,381,742
Residential junior lien/home equity	1,496		412		202		2,723		4,833		619,646		624,479
Commercial real estate	15,140		108		—		22,784		38,032		2,306,249		2,344,281
Multifamily	14,500		—		—		409		14,909		386,672		401,581
Nonowner occupied	511		71		—		21,160		21,742		1,494,776		1,516,518
Owner occupied	129		37		—		1,215		1,381		424,801		426,182
Loans to individuals	1,334		640		617		259		2,850		1,076,082		1,078,932
Automobile and recreational vehicles	803		299		122		163		1,387		982,614		984,001
Consumer credit cards	70		57		68		—		195		10,480		10,675
Consumer other	461		284		427		96		1,268		82,988		84,256
Total loans and leases	$	20,816	$	1,876	$	1,921	$	30,580	$	55,193	$	6,896,919	$	6,952,112

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	December 31, 2021
	30 - 59 days past due		60 - 89 days past due		90 days or greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	633	$	987	$	155	$	2,006	$	3,781	$	1,169,671	$	1,173,452
Time and demand	605		972		144		2,006		3,727		1,155,797		1,159,524
Commercial credit cards	28		15		11		—		54		13,874		13,928
Real estate construction	813		—		448		45		1,306		493,150		494,456
Residential real estate	3,393		983		218		5,608		10,202		1,910,048		1,920,250
Residential first lien	1,934		354		51		2,706		5,045		1,294,489		1,299,534
Residential junior lien/home equity	1,459		629		167		2,902		5,157		615,559		620,716
Commercial real estate	—		74		—		40,195		40,269		2,210,828		2,251,097
Multifamily	—		—		—		15,097		15,097		370,335		385,432
Nonowner occupied	—		—		—		23,930		23,930		1,441,317		1,465,247
Owner occupied	—		74		—		1,168		1,242		399,176		400,418
Loans to individuals	1,611		417		785		206		3,019		996,956		999,975
Automobile and recreational vehicles	1,228		175		199		148		1,750		899,530		901,280
Consumer credit cards	36		44		63		—		143		11,008		11,151
Consumer other	347		198		523		58		1,126		86,418		87,544
Total loans and leases	$	6,450	$	2,461	$	1,606	$	48,060	$	58,577	$	6,780,653	$	6,839,230

Nonaccrual Loans

The previous tables summarize nonaccrual loans by loan segment. The Company generally places loans on nonaccrual status when the full and timely collection of interest or principal becomes uncertain, when part of the principal balance has been charged off and no restructuring has occurred, or the loans reach a certain number of days past due. Generally, loans 90 days or more past due are placed on nonaccrual status, except for consumer loans, which are placed on nonaccrual status at 150 days past due.

When a loan is placed on nonaccrual, the accrued unpaid interest receivable is reversed against interest income and all future payments received are applied as a reduction to the loan principal. Generally, the loan is returned to accrual status when (a) all delinquent interest and principal becomes current under the terms of the loan agreement or (b) the loan is both well-secured and in the process of collection and collectability is no longer in doubt.

Nonperforming Loans

Management considers loans to be nonperforming when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Nonperforming loans include nonaccrual loans and all troubled debt restructured loans. When management identifies a loan as nonperforming, the credit loss is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole source for repayment of the loan is the operation or liquidation of collateral. When the loan is collateral dependent, the appraised value less estimated cost to sell is utilized. If management determines that the value of the loan is less than the recorded investment in the loan, a credit loss is recognized through an allowance estimate or a charge-off to the allowance for credit losses.

When the ultimate collectability of the total principal of a nonperforming loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectability of the total principal of a nonperforming loan is not in doubt and the loan is on nonaccrual status, contractual interest is credited to interest income when received under the cash basis method.

At March 31, 2022 and December 31, 2021, there were 0no nonperforming loans held for sale. ~~At December 31, 2020, there was one nonperforming loan totaling $13 thousand.~~ During the three months ended March 31, 2022 and 2021, ~~a $5.0 million~~there were no gains recognized on the sale of nonperforming ~~relationship was~~loans.

2325

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~transferred to held for sale and sold resulting in a $0.4 million gain. During the three months ended March 31, 2020, there were 0 gains recognized on the sale of nonperforming loans.~~

The following tables include the recorded investment and unpaid principal balance for nonperforming loans with the associated allowance amount, if applicable, as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021. Also presented are the average recorded investment in nonperforming loans and the related amount of interest recognized while the loan was considered nonperforming. ~~Average balances are calculated using month-end balances of the loans for the period reported and are included in the table below based on their period-end allowance position.~~

March 31, 2021 December 31, 2020
Recorded
investment Unpaid
principal
balance Related
allowance Recorded
investment Unpaid
principal
balance Related
allowance
(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other $ 1,780 $ 7,659 $ 2,025 $ 2,725
Time and demand 1,780 7,659 2,025 2,725
Real estate construction 54 53 54 53
Residential real estate 10,814 13,199 10,939 13,258
Residential first lien 5,856 7,402 6,062 7,575
Residential junior lien/home equity 4,958 5,797 4,877 5,683
Commercial real estate 20,653 22,754 20,650 23,641
Multifamily 0 0 1 82
Nonowner occupied 18,125 19,933 16,786 19,459
Owner occupied 2,528 2,821 3,863 4,100
Loans to individuals 505 546 418 447
Automobile 429 465 405 430
Consumer other 76 81 13 17
Subtotal 33,806 44,211 34,086 40,124
With an allowance recorded:
Commercial, financial, agricultural and other 8,957 9,038 2,506 4,210 9,377 1,268
Time and demand 8,957 9,038 2,506 4,210 9,377 1,268
Real estate construction 0 0 0 0 0 0
Residential real estate 0 0 0 0 0 0
Residential first lien 0 0 0 0 0 0
Residential junior lien/home equity 0 0 0 0 0 0
Commercial real estate 7,618 7,693 601 15,757 15,830 3,638
Multifamily 459 473 115 459 470 116
Nonowner occupied 6,917 6,979 459 15,060 15,122 3,508
Owner occupied 242 241 27 238 238 14
Loans to individuals 0 0 0 0 0 0
Automobile 0 0 0 0 0 0
Consumer other 0 0 0 0 0 0
Subtotal 16,575 16,731 3,107 19,967 25,207 4,906
Total $ 50,381 $ 60,942 $ 3,107 $ 54,053 $ 65,331 $ 4,906

2426

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Average balances are calculated using month-end balances of the loans for the period reported and are included in the table below based on their period-end allowance position.


	March 31, 2022						December 31, 2021
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	3,505	$	9,719			$	3,720	$	10,303
Time and demand	3,505		9,719				3,720		10,303

Equipment finance	—		—
Time and demand other	—		—
Real estate construction	—		—				45		53
Construction other	—		—
Construction residential	—		—
Residential real estate	9,161		11,035				9,365		11,294
Residential first lien	5,245		6,327				5,200		6,337
Residential junior lien/home equity	3,916		4,708				4,165		4,957
Commercial real estate	23,425		24,395				40,591		41,525
Multifamily	—		—				14,677		14,677
Nonowner occupied	21,791		22,558				24,581		25,310
Owner occupied	1,634		1,837				1,333		1,538
Loans to individuals	423		542				446		485
Automobile and recreational vehicles	327		441				388		422

Consumer other	96		101				58		63
Subtotal	36,514		45,691				54,167		63,660
With an allowance recorded:
Commercial, financial, agricultural and other	544		572		$	272	327		349		$	307
Time and demand	544		572		272		327		349		307

Equipment finance	—		—		—
Time and demand other	—		—		—
Real estate construction	—		—		—		—		—		—
Construction other	—		—		—
Construction residential	—		—		—
Residential real estate	—		—		—		—		—		—
Residential first lien	—		—		—		—		—		—
Residential junior lien/home equity	—		—		—		—		—		—
Commercial real estate	409		441		79		686		711		88
Multifamily	409		441		79		421		446		88
Nonowner occupied	—		—		—		—		—		—
Owner occupied	—		—		—		265		265		—
Loans to individuals	—		—		—		—		—		—
Automobile and recreational vehicles	—		—		—		—		—		—

Consumer other	—		—		—		—		—		—
Subtotal	953		1,013		351		1,013		1,060		395
Total	$	37,467	$	46,704	$	351	$	55,180	$	64,720	$	395

For the Three Months Ended March 31,
2021 2020
Total Loans Originated Loans Acquired Loans
Average
recorded
investment Interest
income
recognized Average
recorded
investment Interest
income
recognized Average
recorded
investment Interest
income
recognized
(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other $ 2,280 $ 11 $ 925 $ 4 $ 74 $ 0
Time and demand 2,280 11
Real estate construction 54 0 0 0 0 0
Residential real estate 10,892 63 10,529 78 2,090 2
Residential first lien 5,982 45
Residential junior lien/home equity 4,910 18
Commercial real estate 25,739 22 4,086 22 229 0
Multifamily 0 0
Nonowner occupied 22,593 7
Owner occupied 3,146 15
Loans to individuals 479 2 445 3 12 0
Automobile 437 2
Consumer other 42 0
Subtotal 39,444 98 15,985 107 2,405 2
With an allowance recorded:
Commercial, financial, agricultural and other 4,895 18 7,838 18 0 0
Time and demand 4,895 18
Real estate construction 0 0 0 0 0 0
Residential real estate 0 0 325 0 0 0
Residential first lien 0 0
Residential junior lien/home equity 0 0
Commercial real estate 7,462 0 13,114 1 616 0
Multifamily 464 0
Nonowner occupied 6,917 0
Owner occupied 81 0
Loans to individuals 0 0 0 0 0 0
Automobile 0 0
Consumer other 0 0
Subtotal 12,357 18 21,277 19 616 0
Total $ 51,801 $ 116 $ 37,262 $ 126 $ 3,021 $ 2

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	For the Three Months Ended March 31,
	2022				2021

	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	3,561	$	29	$	2,280	$	11
Time and demand	3,561		29		2,280		11

Equipment finance	—		—
Time and demand other	—		—
Real estate construction	—		—		54		—
Construction other	—		—
Construction residential	—		—
Residential real estate	9,201		84		10,892		63
Residential first lien	5,197		62		5,982		45
Residential junior lien/home equity	4,004		22		4,910		18
Commercial real estate	24,312		13		25,739		22
Multifamily	—		—		—		—
Nonowner occupied	22,714		9		22,593		7
Owner occupied	1,598		4		3,146		15
Loans to individuals	435		4		479		2
Automobile and recreational vehicles	350		4		437		2

Consumer other	85		—		42		—
Subtotal	37,509		130		39,444		98
With an allowance recorded:
Commercial, financial, agricultural and other	384		6		4,895		18
Time and demand	384		6		4,895		18

Equipment finance	—		—
Time and demand other	—		—
Real estate construction	—		—		—		—
Construction other	—		—
Construction residential	—		—
Residential real estate	—		—		—		—
Residential first lien	—		—		—		—
Residential junior lien/home equity	—		—		—		—
Commercial real estate	416		—		7,462		—
Multifamily	416		—		464		—
Nonowner occupied	—		—		6,917		—
Owner occupied	—		—		81		—
Loans to individuals	—		—		—		—
Automobile and recreational vehicles	—		—		—		—

Consumer other	—		—		—		—
Subtotal	800		6		12,357		18
Total	$	38,309	$	136	$	51,801	$	116

Unfunded commitments related to nonperforming loans were $0.2 million at both March 31, ~~2021~~2022 and December 31, ~~2020.~~2021. After consideration of the requirements to draw and available collateral related to these commitments, ait was determined that no reserve ~~of $6 thousand and $26 thousand~~ was ~~established for these off balance sheet exposures~~required at March 31, ~~2021~~2022 and December 31, ~~2020, respectively.~~2021.

2528

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Troubled debt restructured loans are those loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest as a result of the financial difficulties experienced by the borrower, who could not obtain comparable terms from alternative financing sources. Troubled debt restructured loans are considered to be nonperforming loans.

In March 2020, the Company began offering short-term loan modifications to assist borrowers during the COVID-19 national emergency. These modifications typically provide for the deferral of both principal and interest for 90 days. The CARES Act, along with a joint agency statement issued by banking regulators, provides that short-term modifications, meeting certain criteria and in response to COVID-19, do not need to be accounted for as a troubled debt restructured loans. Additionally, short-term loan modifications that are not accounted for as a troubled debt restructured loan, in accordance with the CARES Act, would remain classified as current during the deferral period and therefore are not reflected in the past due loan tables provided on the prior page. As of March 31, 2021, loans with an aggregate principal balance of $136.6 million were in a forbearance period granted under the CARES Act.

The following table provides detail as to the total troubled debt restructured loans and total commitments outstanding on troubled debt restructured loans:


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(dollars in thousands)					(dollars in thousands)
Troubled debt restructured loans	Troubled debt restructured loans					Troubled debt restructured loans
Accrual status	Accrual status	$	6,697	$	8,512	Accrual status	$	6,887	$	7,120
Nonaccrual status	Nonaccrual status	20,628		14,740		Nonaccrual status	10,090		13,134
Total	Total	$	27,325��	$	23,252	Total	$	16,977	$	20,254
Commitments	Commitments					Commitments
Letters of credit	Letters of credit	$	60	$	60	Letters of credit	$	60	$	60
Unused lines of credit	Unused lines of credit	12		11		Unused lines of credit	18		16
Total	Total	$	72	$	71	Total	$	78	$	76

The following tables provide detail, including specific reserves and reasons for modification, related to loans identified as troubled debt restructurings:

For the Three Months Ended March 31, 2021
Type of Modification
Number
of
Contracts Extend
Maturity Modify
Rate Modify
Payments Total
Pre-Modification
Outstanding
Recorded
Investment Post-
Modification
Outstanding
Recorded
Investment Specific
Reserve
(dollars in thousands)
Commercial, financial, agricultural and other 2 $ 6,373 $ 0 $ 0 $ 6,373 $ 6,339 $ 1,190
Time and demand 2 6,373 0 0 6,373 6,339 1,190
Residential real estate 3 0 105 14 119 119 0
Residential first lien 2 0 105 0 105 106 0
Residential junior lien/home equity 1 0 0 14 14 13 0
Loans to individuals 2 0 64 0 64 61 0
Automobile 2 0 64 0 64 61 0
Total 7 $ 6,373 $ 169 $ 14 $ 6,556 $ 6,519 $ 1,190


	For the Three Months Ended March 31, 2022
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)




Residential real estate	2	$	—	$	10	$	59	$	69	$	69	$	—
Residential first lien	2	—		10		59		69		69		—









Total	2	$	—	$	10	$	59	$	69	$	69	$	—


	For the Three Months Ended March 31, 2021
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	2	$	6,373	$	—	$	—	$	6,373	$	6,339	$	1,190
Time and demand	2	6,373		—		—		6,373		6,339		1,190


Residential real estate	3	—		105		14		119		119		—
Residential first lien	2	—		105		—		105		106		—
Residential junior lien/home equity	1	—		—		14		14		13		—




Loans to individuals	2	—		64		—		64		61		—
Automobile and recreational vehicles	2	—		64		—		64		61		—


Total	7	$	6,373	$	169	$	14	$	6,556	$	6,519	$	1,190

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Three Months Ended March 31, 2020
Type of Modification
Number
of
Contracts Extend
Maturity Modify
Rate Modify
Payments Total
Pre-Modification
Outstanding
Recorded
Investment Post-
Modification
Outstanding
Recorded
Investment Specific
Reserve
(dollars in thousands)
Residential real estate 2 0 0 118 118 117 0
Commercial real estate 2 0 0 12 12 12 0
Loans to individuals 8 0 18 129 147 144 0
Total 12 $ 0 $ 18 $ 259 $ 277 $ 273 $ 0

The troubled debt restructurings included in the above tables are also included in the nonperforming loan tables provided earlier in this note. Loans defined as modified due to a change in rate may include loans that were modified for a change in rate as well as a re-amortization of the principal and an extension of the maturity. For the three months ended March 31, 2022 and 2021, ~~and 2020, $169~~$10 thousand and ~~$18~~$169 thousand, respectively, of total rate modifications represent loans with modifications to the rate as well as payment as a result of re-amortization. For both ~~2021~~2022 and ~~2020~~2021, the changes in loan balances between the pre-modification balance and the post-modification balance are due to customer payments.

A troubled debt restructuring is considered to be in default when a restructured loan is 90 days or more past due. The following table provides information related to loans that were restructured within the past twelve months and that were considered to be in default during the three months ended March 31:



	2022			2021
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(dollars in thousands)




Residential real estate	1	$	17	—	$	—
Residential first lien	1	17		—	—









Total	1	$	17	—	$	—

2021 2020
Number of
Contracts Recorded
Investment Number of
Contracts Recorded
Investment
(dollars in thousands)
Residential real estate 0 $ 0 1 $ 71
Total 0 $ 0 1 $ 71

The following tables provide detail related to the allowance for credit losses:


	For the Three Months Ended March 31, 2022
	Beginning balance		Charge-offs		Recoveries		Provision (credit)a		Ending balance
	(dollars in thousands)
Commercial, financial, agricultural and other	$	18,093	$	(475)	$	80	$	3,023	$	20,721
Time and demand	15,283		(144)		53		3,715		18,907
Commercial credit cards	247		(19)		1		113		342
Equipment finance	—		—		—		31		31
Time and demand other	2,563		(312)		26		(836)		1,441
Real estate construction	4,220		—		—		710		4,930
Construction other	3,278		—		—		(103)		3,175
Construction residential	942		—		—		813		1,755
Residential real estate	12,625		(139)		29		4,213		16,728
Residential first lien	7,459		(40)		23		3,683		11,125
Residential junior lien/home equity	5,166		(99)		6		530		5,603
Commercial real estate	33,376		—		14		314		33,704
Multifamily	3,561		—		—		49		3,610
Nonowner occupied	24,838		—		5		(1,576)		23,267
Owner occupied	4,977		—		9		1,841		6,827
Loans to individuals	24,208		(1,009)		366		(8,460)		15,105
Automobile and recreational vehicles	21,392		(552)		255		(8,460)		12,635
Consumer credit cards	496		(109)		24		(29)		382
Consumer other	2,320		(348)		87		29		2,088
Total loans and leases	$	92,522	$	(1,623)	$	489	$	(200)	$	91,188

a) The provision expense(credit) shown here excludes the provision for off-balance sheet credit exposure included in the income statement.

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~The following tables provide detail related to the allowance for credit losses:~~

For the Three Months Ended March 31, 2021
Beginning balance Charge-offs Recoveries
Provision (credit)a
Ending balance
(dollars in thousands)
Commercial, financial, agricultural and other $ 17,187 $ (569) $ 90 $ 5,093 $ 21,801
Time and demand 16,838 (460) 89 4,960 21,427
Commercial credit cards 349 (109) 1 133 374
Real estate construction 7,966 0 0 (3,945) 4,021
Residential real estate 14,358 — (105) 37 (1,461) 12,829
Residential first lien 7,919 (23) 23 (692) 7,227
Residential junior lien/home equity 6,439 (82) 14 (769) 5,602
Commercial real estate 41,953 (1,550) 39 (2,774) 37,668
Multifamily 6,240 (1) 0 (1,988) 4,251
Nonowner occupied 28,414 (1,549) 39 985 27,889
Owner occupied 7,299 — 0 0 (1,771) 5,528
Loans to individuals 19,845 (1,541) 329 1,811 20,444
Automobile 16,133 (680) 181 1,254 16,888
Consumer credit cards 635 (168) 17 205 689
Consumer other 3,077 (693) 131 352 2,867
Total loans $ 101,309 $ (3,765) $ 495 $ (1,276) $ 96,763

~~a) The provision expense(credit) shown here excludes the provision for off-balance sheet credit exposure included in the income statement.~~


	For the Three Months Ended March 31, 2022
							Loans
	Ending balance		Ending balance: individually evaluated for credit losses		Ending balance: collectively evaluated for credit losses		Ending balance		Ending balance: individually evaluated for credit losses		Ending balance: collectively evaluated for credit losses
	(dollars in thousands)
Commercial, financial, agricultural and other	$	20,721	$	272	$	20,449	$	1,123,690	$	3,179	$	1,120,511
Time and demand	18,907		272		18,635		992,477		3,179		989,298
Commercial credit cards	342		—		342		13,675		—		13,675
Equipment finance	31		—		31		2,505		—		2,505
Time and demand other	1,441		—		1,441		115,033		—		115,033
Real estate construction	4,930		—		4,930		398,988		—		398,988
Construction other	3,175		—		3,175		307,411		—		307,411
Construction residential	1,755		—		1,755		91,577		—		91,577
Residential real estate	16,728		—		16,728		2,006,221		253		2,005,968
Residential first lien	11,125		—		11,125		1,381,742		—		1,381,742
Residential junior lien/home equity	5,603		—		5,603		624,479		253		624,226
Commercial real estate	33,704		79		33,625		2,344,281		37,263		2,307,018
Multifamily	3,610		79		3,531		401,581		14,909		386,672
Nonowner occupied	23,267		—		23,267		1,516,518		21,425		1,495,093
Owner occupied	6,827		—		6,827		426,182		929		425,253
Loans to individuals	15,105		—		15,105		1,078,932		—		1,078,932
Automobile and recreational vehicles	12,635		—		12,635		984,001		—		984,001
Consumer credit cards	382		—		382		10,675		—		10,675
Consumer other	2,088		—		2,088		84,256		—		84,256
Total loans and leases	$	91,188	$	351	$	90,837	$	6,952,112	$	40,695	$	6,911,417

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	For the Three Months Ended March 31, 2021
	Beginning balance		Charge-offs		Recoveries		Provision (credit)a		Ending balance
	(dollars in thousands)
Commercial, financial, agricultural and other	$	17,187	$	(569)	$	90	$	5,093	$	21,801
Time and demand	16,838		(460)		89		4,960		21,427
Commercial credit cards	349		(109)		1		133		374
Real estate construction	7,966		—		—		(3,945)		4,021
Residential real estate	14,358		(105)		37		(1,461)		12,829
Residential first lien	7,919		(23)		23		(692)		7,227
Residential junior lien/home equity	6,439		(82)		14		(769)		5,602
Commercial real estate	41,953		(1,550)		39		(2,774)		37,668
Multifamily	6,240		(1)		—		(1,988)		4,251
Nonowner occupied	28,414		(1,549)		39		985		27,889
Owner occupied	7,299		—		—		(1,771)		5,528
Loans to individuals	19,845		(1,541)		329		1,811		20,444
Automobile and recreational vehicles	16,133		(680)		181		1,254		16,888
Consumer credit cards	635		(168)		17		205		689
Consumer other	3,077		(693)		131		352		2,867
Total loans and leases	$	101,309	$	(3,765)	$	495	$	(1,276)	$	96,763

For the Three Months Ended March 31, 2021
Loans
Ending balance Ending balance: individually evaluated for credit losses Ending balance: collectively evaluated for credit losses Ending balance Ending balance: individually evaluated for credit losses Ending balance: collectively evaluated for credit losses
(dollars in thousands)
Commercial, financial, agricultural and other $ 21,801 $ 2,506 $ 19,295 $ 1,555,671 $ 9,991 $ 1,545,680
Time and demand 21,427 2,506 18,921 1,541,280 9,991 1,531,289
Commercial credit cards 374 0 374 14,391 0 14,391
Real estate construction 4,021 0 4,021 404,580 0 404,580
Residential real estate 12,829 0 12,829 1,756,615 1,055 1,755,560
Residential first lien 7,227 0 7,227 1,152,314 512 1,151,802
Residential junior lien/home equity 5,602 0 5,602 604,301 543 603,758
Commercial real estate 37,668 601 37,067 2,167,506 27,413 2,140,093
Multifamily 4,251 115 4,136 363,604 459 363,145
Nonowner occupied 27,889 459 27,430 1,393,968 24,883 1,369,085
Owner occupied 5,528 27 5,501 409,934 2,071 407,863
Loans to individuals 20,444 0 20,444 852,522 0 852,522
Automobile 16,888 0 16,888 759,061 0 759,061
Consumer credit cards 689 0 689 10,901 0 10,901
Consumer other 2,867 0 2,867 82,560 0 82,560
Total loans $ 96,763 $ 3,107 $ 93,656 $ 6,736,894 $ 38,459 $ 6,698,435
a) The provision expense(credit) shown here excludes the provision for off-balance sheet credit exposure included in the income statement.

~~ITEM 1.~~ ~~Financial Statements and Supplementary Data~~

~~FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

For the Three Months Ended March 31, 2020
Commercial,
financial,
agricultural
and other Real estate
construction Residential
real estate Commercial
real estate Loans to
individuals Total
(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance $ 20,221 $ 2,558 $ 4,091 $ 19,731 $ 4,984 $ 51,585
Charge-offs (486) 0 (552) (265) (2,483) (3,786)
Recoveries 68 0 62 44 212 386
Provision (credit) 7,575 294 4,123 11,755 5,555 29,302
Ending balance 27,378 2,852 7,724 31,265 8,268 77,487
Acquired loans:
Beginning balance 13 0 2 37 0 52
Charge-offs 0 0 (25) (1) (136) (162)
Recoveries 13 0 13 0 7 33
Provision (credit) 324 0 10 1,202 129 1,665
Ending balance 350 0 0 1,238 0 1,588
Total ending balance $ 27,728 $ 2,852 $ 7,724 $ 32,503 $ 8,268 $ 79,075
Ending balance: individually evaluated for impairment $ 2,727 $ 0 $ 0 $ 7,072 $ 0 $ 9,799
Ending balance: collectively evaluated for impairment 25,001 2,852 7,724 25,431 8,268 69,276
Loans:
Ending balance 1,272,240 413,458 1,691,140 2,190,098 747,008 6,313,944
Ending balance: individually evaluated for impairment 7,544 0 1,506 36,513 0 45,563
Ending balance: collectively evaluated for impairment 1,264,696 413,458 1,689,634 2,153,585 747,008 6,268,381

First Commonwealth has elected to apply certain practical expedients provided under ASU 2016-02 "Leases" (Topic 842) including (i) to not apply the requirements in the new standard to short-term leases (ii) to not reassess the lease classification for

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

any expired or existing lease (iii) to account for lease and non-lease components separately (iv) to not reassess initial direct costs for any existing leases. The impact of this standard primarily relates to operating leases of certain real estate properties, including certain branch and ATM locations and office space. First Commonwealth has no material leasing arrangements for which it is the lessor of property or equipment.

~~ITEM 1.~~ ~~Financial Statements and Supplementary Data~~

~~FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

The following table represents the unaudited Consolidated Statements of Condition classification of the Company’s ~~ROU~~right of use ("ROU") assets and lease liabilities, lease costs and other lease information.

March 31, 2021 December 31, 2020
Balance sheet:
Operating lease asset classified as premises and equipment $ 41,073 $ 42,617
Operating lease liability classified as other liabilities 45,284 46,819
For the Three Months Ended
March 31, 2021 March 31, 2020
Income statement:
Operating lease cost classified as occupancy and equipment expense $ 1,208 $ 1,368
Weighted average lease term, in years 14.72 15.11
Weighted average discount rate 3.41 % 3.42 %
Operating cash flows $ 1,201 $ 1,312


		March 31, 2022			December 31, 2021
Balance sheet:
Operating lease asset classified as premises and equipment		$	40,920		$	40,550
Operating lease liability classified as other liabilities		45,222			44,801
	For the Three Months Ended
		March 31, 2022			March 31, 2021
Income statement:
Operating lease cost classified as occupancy and equipment expense		$	1,216		$	1,208

Weighted average lease term, in years		13.72			14.72
Weighted average discount rate		3.19		%	3.41		%
Operating cash flows		$	1,164		$	1,201

The ROU assets and lease liabilities are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. First Commonwealth's lease agreements often include one or more options to renew at the Company's discretion. If we consider the renewal option to be reasonably certain, we include the extended term in the calculation of the ROU asset and lease liability.

First Commonwealth uses incremental borrowing rates when calculating the lease liability because the rate implicit in the lease is not readily determinable. The incremental borrowing rate used by First Commonwealth is an amortizing loan rate obtained from the Federal Home Loan Bank ("FHLB") of Pittsburgh. This rate is consistent with a collateralized borrowing rate and is available for terms similar to the lease payment schedules.

Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, ~~2021~~2022 were as follows (dollars in thousands):


For the twelve months ended:
March 31, ~~2022~~2023	$	~~4,720~~
~~March 31, 2023~~	~~4,556~~4,854
March 31, 2024	~~4,406~~4,822
March 31, 2025	~~4,289~~4,714
March 31, 2026	~~3,952~~4,390
March 31, 2027	4,039
Thereafter	~~36,832~~34,356
Total future minimum lease payments	~~58,755~~57,175
Less remaining imputed interest	~~13,471~~11,953
Operating lease liability	$	~~45,284~~45,222

In accordance with FASB ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes,” at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, First Commonwealth had 0no material unrecognized tax benefits or accrued interest and penalties. If applicable, First Commonwealth will record interest and penalties as a component of noninterest expense.

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

First Commonwealth is subject to routine audits of our tax returns by the Internal Revenue Service (“IRS”) as well as all states in which we conduct business. Generally, tax years prior to the year ended December 31, ~~2017~~2018 are no longer open to examination by federal and state taxing authorities.

Note 10 Fair Values of Assets and Liabilities

FASB ASC Topic 820, “Fair Value Measurements and ~~Disclosures,”~~Disclosures” ("Topic 820"), requires disclosures for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). All non-financial assets are included either as a separate line item on the unaudited Consolidated Statements of Financial Condition or in the “Other assets” category of the unaudited Consolidated Statements of Financial Condition. Currently, First Commonwealth does not have any non-financial liabilities to disclose.

FASB ASC Topic 825, “Financial Instruments” (Topic 825"), permits entities to irrevocably elect to measure select financial instruments and certain other items at fair value. The unrealized gains and losses are required to be included in earnings each reporting period for the items that fair value measurement is elected. First Commonwealth has elected not to measure any existing financial instruments at fair value under Topic 825; however, in the future we may elect to adopt this guidance for select financial instruments.

In accordance with Topic 820, First Commonwealth groups financial assets and financial liabilities measured at fair value in three levels based on the principal markets in which the assets and liabilities are transacted and the observability of the data points used to determine fair value. These levels are:

•Level 1 – Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange (“NYSE”). Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

•Level 2 – Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained for observable inputs for identical or comparable assets or liabilities from alternative pricing sources with reasonable levels of price transparency. Level 2 includes Obligations of U.S. Government securities issued by Agencies and Sponsored Enterprises, Obligations of States and Political Subdivisions, corporate securities, FHLB stock, loans held for sale, premise held for sale, interest rate derivatives (including interest rate caps, interest rate collars, interest rate swaps and risk participation agreements), certain other real estate owned and certain nonperforming loans.

Level 2 investment securities are valued by a recognized third party pricing service using observable inputs. The model used by the pricing service varies by asset class and incorporates available market, trade and bid information as well as cash flow information when applicable. Because many fixed-income investment securities do not trade on a daily basis, the model uses available information such as benchmark yield curves, benchmarking of like investment securities, sector groupings and matrix pricing. The model will also use processes such as an option adjusted spread to assess the impact of interest rates and to develop prepayment estimates. Market inputs normally used in the pricing model include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

Management validates the market values provided by the third party service by having another source price 100% of the securities on a monthly basis, monthly monitoring of variances from prior period pricing and, on a monthly basis, evaluating pricing changes compared to expectations based on changes in the financial markets.

Other investments recorded in the unaudited Consolidated Statements of Financial Condition are primarily comprised of FHLB stock whose estimated fair value is based on its par value. Additional information on FHLB stock is provided in Note 6, “Investment Securities.”

Loans held for sale include residential mortgage loans originated for sale in the secondary mortgage market. The estimated fair value for these loans was determined on the basis of rates obtained in the respective secondary market. Loans held for sale also include the Small Business Administration guaranteed portion of small business loans. The estimated fair value of these loans is based on the contract with the third party investor. Also included in loans held for sale are commercial loans for which fair value is determined using an executed trade or market bid obtained from potential buyers.

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(at least annually). All non-financial assets are included either as a separate line item on the unaudited Consolidated Statements of Financial Condition or in the “Other assets” category of the unaudited Consolidated Statements of Financial Condition. Currently, First Commonwealth does not have any non-financial liabilities to disclose.

FASB ASC Topic 825, “Financial Instruments,” permits entities to irrevocably elect to measure select financial instruments and certain other items at fair value. The unrealized gains and losses are required to be included in earnings each reporting period for the items that fair value measurement is elected. First Commonwealth has elected not to measure any existing financial instruments at fair value under FASB ASC Topic 825; however, in the future we may elect to adopt this guidance for select financial instruments.

During the third quarter of 2020, the company announced the consolidation of 29 branch locations into nearby offices. As a result, at March 31, 2021, eight owned locations are held for sale and are being carried at the lower of cost or fair value. Two of these locations are carried at fair value, determined by an independent market-based appraisal less estimated costs to sell, and are classified as Level 2.

Interest rate derivatives are reported at an estimated fair value utilizing Level 2 inputs and are included in other assets and other liabilities, and consist of interest rate swaps where there is no significant deterioration in the counterparties' and/or loan customers' credit risk since origination of the interest rate swap as well as interest rate caps, interest rate collars and risk participation agreements. First Commonwealth values its interest rate swap and cap positions using a yield curve by taking market prices/rates for an appropriate set of instruments. The set of instruments currently used to determine the U.S. Dollar yield curve includes cash LIBOR rates from overnight to one year, Eurodollar futures contracts and swap rates from one year to

~~ITEM 1.~~ ~~Financial Statements and Supplementary Data~~

~~FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

thirty years. These yield curves determine the valuations of interest rate swaps. Interest rate derivatives are further described in Note 11, “Derivatives.”

For purposes of potential valuation adjustments to our derivative positions, First Commonwealth evaluates the credit risk of its counterparties as well as our own credit risk. Accordingly, we have considered factors such as the likelihood of default, expected loss given default, net exposures and remaining contractual life, among other things, in determining if any estimated fair value adjustments related to credit risk are required. We review our counterparty exposure quarterly, and when necessary, appropriate adjustments are made to reflect the exposure.

Interest rate derivatives also include interest rate forwards entered into to hedge residential mortgage loans held for sale and the related interest-rate lock commitments. This includes forward commitments to sell mortgage loans. The fair value of these derivative financial instruments are based on derivative market data inputs as of the valuation date and the underlying value of mortgage loans for rate lock commitments.

In addition, the Company hedges foreign currency risk through the use of foreign exchange forward contracts. The fair value of foreign exchange forward contracts is based on the differential between the contract price and the market-based forward rate.

The estimated fair value for other real estate owned included in Level 2 is determined by either an independent market-based appraisal less estimated costs to sell or an executed sales agreement.

•Level 3 – Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer or broker traded transactions. If the inputs used to provide the valuation are unobservable and/or there is very little, if any, market activity for the security or similar securities, the securities would be considered Level 3 securities. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. The assets included in Level 3 are non-marketable equity investments, certain interest rate derivatives, certain other real estate owned and certain nonperforming loans.

The estimated fair value of other investments included in Level 3 is based on carrying value as these securities do not have a readily determinable fair value.

The estimated fair value of limited partnership investments included in Level 3 is based on par value.

For interest rate derivatives included in Level 3, the fair value incorporates credit risk by considering such factors as likelihood of default and expected loss given default based on the credit quality of the underlying counterparties (loan customers).

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In accordance with ASU No. 2011-4, the following table provides information related to quantitative inputs and assumptions used in Level 3 fair value measurements.

Fair Value (dollars
in thousands) Valuation
Technique Unobservable Inputs Range /
(weighted average)
March 31, 2021
Other Investments $ 1,670 CarryingValue N/A N/A
Nonperforming Loans 736 (a) Gas Reserve Study Discount rate 10.00%
Gas per MMBTU $2.00 - $2.00 (b)
Oil per BBL/d $50.00 - $50.00 (b)
5,149 (a) Discounted Cash Flow Discount Rate 6.50%
Limited Partnership Investments 7,010 Par Value N/A N/A
December 31, 2020
Other Investments $ 1,670 CarryingValue N/A N/A
Nonperforming Loans 798 (a) Gas Reserve Study Discount rate 10.00%
Gas per MMBTU $1.46 - $1.48 (b)
Oil per BBL/d $36 - $36 (b)
Limited Partnership Investments 6,619 Par Value N/A N/A

Fair Value (dollars
in thousands)

Valuation
Technique

Unobservable Inputs

Range /
(weighted average)

March 31, 2022

Other Investments

1,170

Carrying Value

N/A

Nonperforming Loans

538

(a)

Gas Reserve Study

Discount rate

10.00%

Gas per MMBTU

$3.00 - $3.00 (b)

Oil per BBL/d

$80.00 - $80.00 (b)

Limited Partnership Investments

15,999

Par Value

N/A

December 31, 2021

Other Investments

1,170

Carrying Value

N/A

Nonperforming Loans

598

(a)

Gas Reserve Study

Discount rate

10.00%

Gas per MMBTU

$2.00 - $2.00 (b)

Oil per BBL/d

$50.00 - $50.00 (b)

Limited Partnership Investments

14,981

Par Value

N/A

(a)The remainder of nonperforming loans valued using Level 3 inputs are not included in this disclosure as the values of those loans are based on bankruptcy agreement documentation.

(b)Unobservable inputs are defined as follows: MMBTU - one million British thermal units; BBL/d - barrels per day.

The discount rate is the significant unobservable input used in the fair value measurement of nonperforming loans. Significant increases in this rate would result in a decrease in the estimated fair value of the loans, while a decrease in this rate would result in a higher fair value measurement. Other unobservable inputs in the fair value measurement of nonperforming loans relate to gas, oil and natural gas prices. Increases in these prices would result in an increase in the estimated fair value of the loans, while a decrease in these prices would result in a lower fair value measurement.

The tables below present the balances of assets and liabilities measured at fair value on a recurring basis:

March 31, 2021
Level 1 Level 2 Level 3 Total
(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities - Residential $ 0 $ 6,690 $ 0 $ 6,690
Mortgage-Backed Securities - Commercial 0 272,901 0 272,901
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities - Residential 0 728,668 0 728,668
Other Government-Sponsored Enterprises 0 975 0 975
Obligations of States and Political Subdivisions 0 9,565 0 9,565
Corporate Securities 0 24,459 0 24,459
Total Securities Available for Sale 0 1,043,258 0 1,043,258
Other Investments 0 11,775 1,670 13,445
Loans Held for Sale 0 20,604 0 20,604
Premises and Equipment, net 0 291 0 291
Other Assets(a)
0 33,555 7,010 40,565
Total Assets $ 0 $ 1,109,483 $ 8,680 $ 1,118,163
Other Liabilities(a)
$ 0 $ 36,171 $ 0 $ 36,171
Total Liabilities $ 0 $ 36,171 $ 0 $ 36,171


	March 31, 2022
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Obligations of U.S. Government Agencies:
Mortgage-Backed Securities - Residential	$	—	$	5,066	$	—	$	5,066
Mortgage-Backed Securities - Commercial	—		329,228		—		329,228
Obligations of U.S. Government-Sponsored Enterprises:
Mortgage-Backed Securities - Residential	—		557,259		—		557,259

Other Government-Sponsored Enterprises	—		935		—		935
Obligations of States and Political Subdivisions	—		8,922		—		8,922
Corporate Securities	—		31,794		—		31,794



Total Securities Available for Sale	—		933,204		—		933,204
Other Investments	—		11,972		1,170		13,142
Loans Held for Sale	—		10,506		—		10,506

Other Assets(a)	—		10,326		15,999		26,325
Total Assets	$	—	$	966,008	$	17,169	$	983,177
Other Liabilities(a)	$	—	$	34,496	$	—	$	34,496
Total Liabilities	$	—	$	34,496	$	—	$	34,496

(a)Hedging and non-hedging interest rate derivatives and limited partnership investments

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other Liabilities(a)

(a)Hedging and non-hedging interest rate derivatives and limited partnership investments

2021
Other Investments Other
Assets Total
(dollars in thousands)
Balance, beginning of period $ 1,670 $ 6,620 $ 8,290
Total gains or losses
Included in earnings 0 0 0
Included in other comprehensive income 0 0 0
Purchases, issuances, sales and settlements
Purchases 0 390 390
Issuances 0 0 0
Sales 0 0 0
Settlements 0 0 0
Transfers from Level 3 0 0 0
Transfers into Level 3 0 0 0
Balance, end of period $ 1,670 $ 7,010 $ 8,680


	2022
	Other Investments		Other Assets		Total
	(dollars in thousands)
Balance, beginning of period	$	1,170	$	14,981	$	16,151
Total gains or losses
Included in earnings	—		—		—
Included in other comprehensive income	—		—		—
Purchases, issuances, sales and settlements
Purchases	—		1,043		1,043
Issuances	—		—		—
Sales	—		(25)		(25)
Settlements	—		—		—
Transfers from Level 3	—		—		—
Transfers into Level 3	—		—		—
Balance, end of period	$	1,170	$	15,999	$	17,169

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2020
Other Investments Other
Assets Total
(dollars in thousands)
Balance, beginning of period $ 1,670 $ 5,795 $ 7,465
Total gains or losses
Included in earnings 0 0 0
Included in other comprehensive income 0 0 0
Purchases, issuances, sales and settlements
Purchases 0 428 428
Issuances 0 0 0
Sales 0 0 0
Settlements 0 0 0
Transfers from Level 3 0 0 0
Transfers into Level 3 0 0 0
Balance, end of period $ 1,670 $ 6,223 $ 7,893


	2021
	Other Investments		Other Assets		Total
	(dollars in thousands)
Balance, beginning of period	$	1,670	$	6,620	$	8,290
Total gains or losses
Included in earnings	—		—		—
Included in other comprehensive income	—		—		—
Purchases, issuances, sales and settlements
Purchases	—		390		390
Issuances	—		—		—
Sales	—		—		—
Settlements	—		—		—
Transfers from Level 3	—		—		—
Transfers into Level 3	—		—		—
Balance, end of period	$	1,670	$	7,010	$	8,680

During the three months ended March 31, 2022 and 2021, there were no transfers between fair value Levels 1, 2 or 3. There were no gains or losses included in earnings for the periods presented that are attributable to the change in realized gains (losses) relating to assets held at March 31, 2022 and 2021.

The tables below present the balances of assets measured at fair value on a nonrecurring basis at:

The following losses were realized on the assets measured on a nonrecurring basis:

Nonperforming loans over $250 thousand are individually reviewed to determine the amount of each loan considered to be at risk of non-collection. The fair value for nonperforming loans that are collateral-based is determined by reviewing real property

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

appraisals, equipment valuations, accounts receivable listings and other financial information. A discounted cash flow analysis is performed to determine fair value for nonperforming loans when an observable market price or a current appraisal is not available. For real estate secured loans, First Commonwealth’s loan policy requires updated appraisals be obtained at least every twelve months on all nonperforming loans with balances of $250 thousand and over. For real estate secured loans with balances under $250 thousand, we rely on broker price opinions. For non-real estate secured assets, the Company normally relies on third party valuations specific to the collateral type.

~~ITEM 1.~~ ~~Financial Statements and Supplementary Data~~

~~FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

The fair value for other real estate owned, determined by either an independent market-based appraisal less estimated costs to sell or an executed sales agreement, is classified as Level 2. The fair value for other real estate owned, determined using an internal valuation, is classified as Level 3. Other real estate owned has a current carrying value of ~~$0.9~~$0.7 million as of March 31, ~~2021~~2022 and consists primarily of residential and commercial real estate properties in ~~Pennsylvania.~~Pennsylvania and Ohio. We review whether events and circumstances subsequent to a transfer to other real estate owned have occurred that indicate the balance of those assets may not be recoverable. If events and circumstances indicate further impairment we will record a charge to the extent that the carrying value of the assets exceed their fair values, less estimated cost to sell, as determined by valuation techniques appropriate in the circumstances.

Certain other assets and liabilities, including goodwill, core deposit intangibles and customer list intangibles are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. Additional information related to goodwill is provided in Note 12, “Goodwill.” There were no other assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, ~~2021.~~2022.

FASB ASC 825-10, “Transition Related to FSP FAS 107-1” and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or nonrecurring basis are as discussed above. The methodologies for other financial assets and financial liabilities are discussed below.

Cash and due from banks and interest-bearing bank deposits: The carrying amounts for cash and due from banks and interest-bearing bank deposits approximate the estimated fair values of such assets.

Securities: Fair values for securities available for sale and held to maturity are based on quoted market prices, if available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments. The carrying value of other investments, which includes FHLB stock and other equity investments, is considered a reasonable estimate of fair value.

Loans: The fair values of all loans are estimated by discounting the estimated future cash flows using interest rates currently offered for loans with similar terms to borrowers of similar credit quality adjusted for past due and nonperforming loans.

Loans held for sale: The estimated fair value of loans held for sale is based on market bids obtained from potential buyers.

Off-balance sheet instruments: Many of First Commonwealth’s off-balance sheet instruments, primarily loan commitments and standby letters of credit, are expected to expire without being drawn upon; therefore, the commitment amounts do not necessarily represent future cash requirements. FASB ASC Topic 460, “Guarantees” clarified that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The carrying amount and estimated fair value for standby letters of credit was $0.1 million at both March 31, ~~2021~~2022 and December 31, ~~2020.~~2021. See Note 5, “Commitments and Contingent Liabilities,” for additional information.

Deposit liabilities: The estimated fair value of demand deposits, savings accounts and money market deposits is the amount payable on demand at the reporting date because of the customers’ ability to withdraw funds immediately. The carrying value of variable rate time deposit accounts and certificates of deposit approximate their fair values at the report date. Also, fair values of fixed rate time deposits for both periods are estimated by discounting the future cash flows using interest rates currently being offered and a schedule of aggregated expected maturities.

Short-term borrowings: The fair values of borrowings from the FHLB were estimated based on the estimated incremental borrowing rate for similar type borrowings. The carrying amounts of other short-term borrowings, such as federal funds

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

purchased and securities sold under agreement to repurchase, were used to approximate fair value due to the short-term nature of the borrowings.

Subordinated debt and long-term debt: The fair value is estimated by discounting the future cash flows using First Commonwealth’s estimate of the current market rate for similar types of borrowing arrangements.

~~ITEM 1.~~ ~~Financial Statements and Supplementary Data~~

~~FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

The following table presents carrying amounts and fair values of First Commonwealth’s financial instruments:


	March 31, 2022
			Fair Value Measurements Using:
	Carrying Amount		Total		Level 1		Level 2		Level 3
	(dollars in thousands)
Financial assets
Cash and due from banks	$	120,289	$	120,289	$	120,289	$	—	$	—
Interest-bearing deposits	404,516		404,516		404,516		—		—
Securities available for sale	933,204		933,204		—		933,204		—
Securities held to maturity	512,911		477,088		—		477,088		—
Other investments	13,142		13,142		—		11,972		1,170
Loans held for sale	10,506		10,506		—		10,506		—
Loans	6,952,112		7,154,726		—		25,306		7,129,420
Financial liabilities
Deposits	8,171,847		8,164,467		—		8,164,467		—
Short-term borrowings	95,748		93,203		—		93,203		—
Subordinated debt	170,815		168,231		—		—		168,231
Long-term debt	5,398		5,587		—		5,587		—
Capital lease obligation	5,799		5,799		—		5,799		—

December 31, 2020
Fair Value Measurements Using:
Carrying
Amount Total Level 1 Level 2 Level 3
(dollars in thousands)
Financial assets
Cash and due from banks $ 100,009 $ 100,009 $ 100,009 $ 0 $ 0
Interest-bearing deposits 256,572 256,572 256,572 0 0
Securities available for sale 831,223 831,223 0 831,223 0
Securities held to maturity 361,844 369,851 0 369,851 0
Other investments 12,227 12,227 0 10,557 1,670
Loans held for sale 33,436 33,436 0 33,436 0
Loans 6,761,183 7,202,763 0 35,543 7,167,220
Financial liabilities
Deposits 7,438,666 7,440,906 0 7,440,906 0
Short-term borrowings 117,373 117,037 0 117,037 0
Subordinated debt 170,612 165,665 0 0 165,665
Long-term debt 56,258 57,881 0 57,881 0
Capital lease obligation 6,385 6,385 0 6,385 0


	December 31, 2021
			Fair Value Measurements Using:
	Carrying Amount		Total		Level 1		Level 2		Level 3
	(dollars in thousands)
Financial assets
Cash and due from banks	$	84,738	$	84,738	$	84,738	$	—	$	—
Interest-bearing deposits	310,634		310,634		310,634		—		—
Securities available for sale	1,041,380		1,041,380		—		1,041,380		—
Securities held to maturity	541,311		536,651		—		536,651		—
Other investments	12,838		12,838		—		11,668		1,170
Loans held for sale	18,583		18,583		—		18,583		—
Loans	6,839,230		7,169,768		—		42,538		7,127,230
Financial liabilities
Deposits	7,982,498		7,980,101		—		7,980,101		—
Short-term borrowings	138,315		136,473		—		136,473		—
Subordinated debt	170,775		175,040		—		—		175,040
Long-term debt	5,573		6,065		—		6,065		—
Capital lease obligation	5,921		5,921		—		5,921		—

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Derivatives Not Designated as Hedging Instruments

First Commonwealth is a party to interest rate derivatives that are not designated as hedging instruments. These derivatives relate to interest rate swaps that First Commonwealth enters into with customers to allow customers to convert variable rate loans to a fixed rate. First Commonwealth pays interest to the customer at a floating rate on the notional amount and receives interest from the customer at a fixed rate for the same notional amount. At the same time the interest rate swap is entered into with the customer, an offsetting interest rate swap is entered into with another financial institution. First Commonwealth pays the other financial institution interest at the same fixed rate on the same notional amount as the swap entered into with the customer, and receives interest from the financial institution for the same floating rate on the same notional amount.

The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties.

We have 3639 risk participation agreements with financial institution counterparties for interest rate swaps related to loans in which we are a participant. The risk participation agreements provide credit protection to the financial institution should the borrower fail to perform on its interest rate derivative contract with the financial institution. We have 1517 risk participation agreements with financial institution counterparties for interest rate swaps related to loans in which we are the lead bank. The risk participation agreement provides credit protection to us should the borrower fail to perform on its interest rate derivative contract with us.

First Commonwealth is also party to interest rate caps and collars that are not designated as hedging instruments. The interest rate caps relate to contracts that First Commonwealth enters into with loan customers that provide a maximum interest rate on their variable rate loan. At the same time the interest rate cap is entered into with the customer, First Commonwealth enters into an offsetting interest rate cap with another financial institution. The notional amount and maximum interest rate on both interest cap contracts are identical. The interest rate collars relate to contracts that First Commonwealth enters into with loan customers that provides both a maximum and minimum interest rate on their variable rate loan. At the same time the interest rate collar is entered into with the customer, First Commonwealth enters into an offsetting interest rate collar with another financial institution. The notional amount and the maximum and minimum interest rates on both interest collar contracts are identical.

The fee received, less the estimate of the loss for the credit exposure, was recognized in earnings at the time of the transaction.

Derivatives Designated as Hedging Instruments

In August 2019, the Company entered into two interest rate swap contracts that are designated as cash flow hedges. These contracts mature on August 15, 2024 and August 15, 2026 and have notional amounts of $30.0 million and $40.0 million, respectively. The Company's risk management objective for these hedges is to reduce its exposure to variability in expected future cash flows related to interest payments made on subordinated debentures benchmarked to the 3-month LIBOR rate. Therefore, the interest rate swaps convert the interest rate benchmark on the first $70.0 million of 3-month LIBOR based subordinated debentures to a fixed rate.

~~Effective May 1,~~During 2021, the Company entered into ~~two~~eight interest rate swap contracts that were designated as cash flow hedges. The interest rate swaps have a total notional amount of ~~$300.0 million; $150.0~~$500.0 million: $75.0 million with an original maturity of three years, $250.0 million with an original maturity of four years and ~~$150.0~~$175.0 million with an original maturity of five years. The Company's risk management objective for these hedges is to reduce its exposure to variability in expected future cash flows related to interest payments on commercial loans benchmarked to the 1-month LIBOR rate. Therefore, the interest rate swaps convert the interest payments on the first ~~$300.0~~$500.0 million of 1-month LIBOR based commercial loans into fixed rate payments.

The periodic net settlement of these interest rate swaps are recorded as an adjustment to "Interest on subordinated debentures" or "Interest and fees on loans" in the unaudited Consolidated Statements of Income. For the three months ended March 31, ~~2021~~2022, there was a ~~negative~~positive impact of ~~$226 thousand~~$0.5 million on net interest income as a result of these interest rate swaps. Changes in the fair value of the cash flow hedges are reported on the balance sheet and in OCI. When the cash flows associated with the hedged item are realized, the gain or loss included in OCI is recognized in "Interest on subordinated debentures," or "Interest and fees on loans", the same line ~~item~~items in the unaudited Consolidated Statements of Income as the income on the hedged items. The cash flow hedges were highly effective at March 31, ~~2021,~~2022, and changes in the fair value attributed to hedge ineffectiveness were not material.

ITEM 1. Financial Statements and Supplementary Data

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company also enters into interest rate lock commitments in conjunction with its mortgage origination business. These are commitments to originate loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The Company locks the rate in with an investor and commits to deliver the loan if settlement

~~ITEM 1.~~ ~~Financial Statements and Supplementary Data~~

~~FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

occurs (“best efforts”) or commits to deliver the locked loan in a binding (“mandatory”) delivery program with an investor. Loans under mandatory rate lock commitments are covered under forward sales contracts of mortgage-backed securities (“MBS”). Forward sales contracts of MBS are recorded at fair value with changes in fair value recorded in "Noninterest income" in the unaudited Consolidated Statements of Income. The impact to noninterest income for the three months ended March 31, ~~2021~~2022 was a decrease ~~$1.1~~of $1.2 million.

Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. We determine the fair value of rate lock commitments and delivery contracts by measuring the fair value of the underlying asset, which is impacted by current interest rates and taking into consideration the probability that the rate lock commitments will close or will be funded. At March 31, ~~2021,~~2022, the underlying funded mortgage loan commitments had a carrying value of ~~$12.2~~$6.9 million and a fair value of ~~$13.6~~$6.3 million, while the underlying unfunded mortgage loan commitments had a notional amount of ~~$41.6~~$38.6 million. At December 31, ~~2020,~~2021, the underlying funded mortgage loan commitments had a carrying value of ~~$25.0~~$11.0 million and a fair value of ~~$28.4~~$11.9 million, while the underlying unfunded mortgage loan commitments had a notional amount of ~~$47.9~~$29.7 million. The interest rate lock commitments ~~increased~~decreased other noninterest income by ~~$1.0~~$0.9 million for the three months ended March 31, ~~2021.~~2022.

In addition, a small amount of interest income on loans is exposed to changes in foreign exchange rates. Several commercial borrowers have a portion of their operations outside of the United States and borrow funds on a short-term basis to fund those operations. In order to reduce the risk related to the translation of foreign denominated transactions into U.S. dollars, the Company enters into foreign exchange forward contracts. These contracts relate principally to the Euro and the Canadian dollar. The contracts are recorded at fair value with changes in fair value recorded in "Other operating expense" in the unaudited Consolidated Statements of Income. The increase in other noninterest expense for the three months ended March 31, ~~2021~~2022 totaled ~~$2 thousand, respectively.~~$1 thousand. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the underlying loans had a carrying value of ~~$2.0~~$1.4 million and ~~$2.1~~$2.0 million, respectively, and a fair value of ~~$2.0~~$1.4 million and ~~$2.1~~$2.0 million, respectively.


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	FCF	New York Stock Exchange


		PAGE

PART I.	Financial Information

ITEM 1.	Financial Statements and Supplementary Data

	Included in Part I of this report:

	First Commonwealth Financial Corporation and Subsidiaries

	Consolidated Statements of Financial Condition (Unaudited)	3
	Consolidated Statements of Income (Unaudited)	4
	Consolidated Statements of Comprehensive Income (Unaudited)	56
	Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)	67
	Consolidated Statements of Cash Flows (Unaudited)	78
	Notes to the Unaudited Consolidated Financial Statements	89

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4547

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	6366

ITEM 4.	Controls and Procedures	6366

PART II.	Other Information

ITEM 1.	Legal Proceedings	6467

ITEM 1A.	Risk Factors	6467

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6467

ITEM 3.	Defaults Upon Senior Securities	6467

ITEM 4.	Mine Safety Disclosures	6467

ITEM 5.	Other Information	6467

ITEM 6.	Exhibits	6568

	Signatures	6669


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(Unaudited)
		(dollars in thousands, except share data)					(dollars in thousands, except share data)
Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	83,989	$	100,009	Cash and due from banks	$	120,289	$	84,738
Interest-bearing bank deposits	Interest-bearing bank deposits	420,645		256,572		Interest-bearing bank deposits	404,516		310,634
Securities available for sale, at fair value	Securities available for sale, at fair value	1,043,258		831,223		Securities available for sale, at fair value	933,204		1,041,380
Securities held to maturity, at amortized cost (Fair value of $408,118 and $369,851 at March 31, 2021 and December 31, 2020, respectively)		407,833		361,844
Securities held to maturity, at amortized cost (Fair value of $477,088 and $536,651 at March 31, 2022 and December 31, 2021, respectively)						Securities held to maturity, at amortized cost (Fair value of $477,088 and $536,651 at March 31, 2022 and December 31, 2021, respectively)	512,911		541,311
Other investments	Other investments	13,445		12,227		Other investments	13,142		12,838
Loans held for sale	Loans held for sale	20,604		33,436		Loans held for sale	10,506		18,583
Loans:
Portfolio loans		6,736,894		6,761,183
Loans and leases:						Loans and leases:
Portfolio loans and leases						Portfolio loans and leases	6,952,112		6,839,230
Allowance for credit losses	Allowance for credit losses	(96,763)		(101,309)		Allowance for credit losses	(91,188)		(92,522)
Net loans		6,640,131		6,659,874
Net loans and leases						Net loans and leases	6,860,924		6,746,708
Premises and equipment, net~~(1)~~	Premises and equipment, net~~(1)~~	122,326		125,517		Premises and equipment, net~~(1)~~	121,470		120,775
Other real estate owned	Other real estate owned	916		1,215		Other real estate owned	667		642
Goodwill	Goodwill	303,328		303,328		Goodwill	303,328		303,328
Amortizing intangibles, net	Amortizing intangibles, net	12,820		13,492		Amortizing intangibles, net	10,738		11,188
Bank owned life insurance	Bank owned life insurance	225,027		225,952		Bank owned life insurance	225,811		224,700
Other assets	Other assets	122,667		143,415		Other assets	124,618		128,268
Total assets	Total assets	$	9,416,989	$	9,068,104	Total assets	$	9,642,124	$	9,545,093
Liabilities	Liabilities					Liabilities
Deposits (all domestic):	Deposits (all domestic):					Deposits (all domestic):
Noninterest-bearing	Noninterest-bearing	$	2,616,303	$	2,319,958	Noninterest-bearing	$	2,719,645	$	2,658,782
Interest-bearing	Interest-bearing	5,252,953		5,118,708		Interest-bearing	5,452,202		5,323,716
Total deposits	Total deposits	7,869,256		7,438,666		Total deposits	8,171,847		7,982,498
Short-term borrowings	Short-term borrowings	110,762		117,373		Short-term borrowings	95,748		138,315
Subordinated debentures	Subordinated debentures	170,653		170,612		Subordinated debentures	170,815		170,775
Other long-term debt	Other long-term debt	56,089		56,258		Other long-term debt	5,398		5,573
Capital lease obligation	Capital lease obligation	6,270		6,385		Capital lease obligation	5,799		5,921
Total long-term debt	Total long-term debt	233,012		233,255		Total long-term debt	182,012		182,269
Other liabilities	Other liabilities	116,479		210,193		Other liabilities	124,898		132,639
Total liabilities	Total liabilities	8,329,509		7,999,487		Total liabilities	8,574,505		8,435,721
Shareholders’ Equity	Shareholders’ Equity					Shareholders’ Equity
Preferred stock, $1 par value per share, 3,000,000 shares authorized, NaN issued		0		0
Common stock, $1 par value per share, 200,000,000 shares authorized; 113,914,902 shares issued at March 31, 2021 and December 31, 2020, and 96,248,476 and 96,130,751 shares outstanding at March 31, 2021 and December 31, 2020, respectively		113,915		113,915
Preferred stock, $1 par value per share, 3,000,000 shares authorized, none issued						Preferred stock, $1 par value per share, 3,000,000 shares authorized, none issued	—		—
Common stock, $1 par value per share, 200,000,000 shares authorized; 113,914,902 shares issued at March 31, 2022 and December 31, 2021, and 94,299,039 and 94,233,152 shares outstanding at March 31, 2022 and December 31, 2021, respectively						Common stock, $1 par value per share, 200,000,000 shares authorized; 113,914,902 shares issued at March 31, 2022 and December 31, 2021, and 94,299,039 and 94,233,152 shares outstanding at March 31, 2022 and December 31, 2021, respectively	113,915		113,915
Additional paid-in capital	Additional paid-in capital	495,720		494,683		Additional paid-in capital	496,627		496,121
Retained earnings	Retained earnings	625,806		596,614		Retained earnings	708,149		691,260
Accumulated other comprehensive income, net		6,198		17,233
Treasury stock (17,666,426 and 17,784,151 shares at March 31, 2021 and December 31, 2020, respectively)		(154,159)		(153,828)
Accumulated other comprehensive loss, net						Accumulated other comprehensive loss, net	(68,160)		(8,768)
Treasury stock (19,615,863 and 19,681,750 shares at March 31, 2022 and December 31, 2021, respectively)						Treasury stock (19,615,863 and 19,681,750 shares at March 31, 2022 and December 31, 2021, respectively)	(182,912)		(183,156)

Total shareholders’ equity	Total shareholders’ equity	1,087,480		1,068,617		Total shareholders’ equity	1,067,619		1,109,372
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	9,416,989	$	9,068,104	Total liabilities and shareholders’ equity	$	9,642,124	$	9,545,093


	For the Three Months Ended
	March 31,
	2021		2020
Operating Activities	(dollars in thousands)
Net income	$	39,770	$	4,727
Adjustment to reconcile net income to net cash provided by operating activities:
Provision for credit losses	(4,390)		30,967
Deferred tax expense (benefit)	3,859		(3,551)
Depreciation and amortization	3,003		2,926
Net gains on securities and other assets	(8,452)		(1,645)
Net amortization of premiums and discounts on securities	1,268		1,310

Income from increase in cash surrender value of bank owned life insurance	(1,621)		(1,610)
Decrease (increase) in interest receivable	1,899		(761)
Mortgage loans originated for sale	(121,280)		(65,236)
Proceeds from sale of mortgage loans	140,780		61,777
Increase in interest payable	1,128		1,122
Increase in income taxes payable	5,626		4,528

Other-net	(10,360)		(1,438)
Net cash provided by operating activities	51,230		33,116
Investing Activities
Transactions with securities held to maturity:
Proceeds from maturities and redemptions	28,936		18,504
Purchases	(135,130)		0
Transactions with securities available for sale:

Proceeds from maturities and redemptions	206,993		50,107
Purchases	(435,563)		(127,368)
Purchases of FHLB stock	(1,558)		(18,682)
Proceeds from the redemption of FHLB stock	340		16,028
Proceeds from bank owned life insurance	2,931		557
Proceeds from sale of loans	15,483		7,960
Proceeds from sale of other assets	2,226		1,361


Net decrease (increase) in loans	2,970		(140,013)

Purchases of premises and equipment and other assets	(2,322)		(3,654)
Net cash used in investing activities	(314,694)		(195,200)
Financing Activities
Net increase in federal funds purchased	0		27,000
Net decrease in other short-term borrowings	(6,611)		(81,882)
Net increase in deposits	430,633		245,591
Repayments of other long-term debt	(169)		(162)
Repayments of capital lease obligation	(115)		(105)



Dividends paid	(10,578)		(10,819)

Purchase of treasury stock	(1,643)		(5,220)

Net cash provided by financing activities	411,517		174,403
Net increase in cash and cash equivalents	148,053		12,319
Cash and cash equivalents at January 1	356,581		121,856
Cash and cash equivalents at March 31	$	504,634	$	134,175


	For the Three Months Ended
	March 31,
	2022		2021
Operating Activities	(dollars in thousands)
Net income	$	27,726	$	39,770
Adjustment to reconcile net income to net cash provided by operating activities:
Provision for credit losses	1,964		(4,390)
Deferred tax expense	1,807		3,859
Depreciation and amortization	2,560		3,003
Net gains on securities and other assets	(3,908)		(8,452)
Net amortization of premiums and discounts on securities	635		1,268

Income from increase in cash surrender value of bank owned life insurance	(1,508)		(1,621)
Decrease in interest receivable	45		1,899
Mortgage loans originated for sale	(51,833)		(121,280)
Proceeds from sale of mortgage loans	58,198		140,780
Increase in interest payable	1,282		1,128
(Decrease) increase in income taxes payable	(4,137)		5,626

Other-net	(1,632)		(10,360)
Net cash provided by operating activities	31,199		51,230
Investing Activities
Transactions with securities held to maturity:
Proceeds from maturities and redemptions	28,369		28,936
Purchases	(200)		(135,130)
Transactions with securities available for sale:

Proceeds from maturities and redemptions	50,521		206,993
Purchases	—		(435,563)
Purchases of FHLB stock	(505)		(1,558)
Proceeds from the redemption of FHLB stock	201		340
Proceeds from bank owned life insurance	—		2,931
Proceeds from sale of loans	21,767		15,483
Proceeds from sale of other assets	1,461		2,226


Net (increase) decrease in loans and leases	(133,137)		2,970

Purchases of premises and equipment and other assets	(4,419)		(2,322)
Net cash used in investing activities	(35,942)		(314,694)
Financing Activities

Net decrease in other short-term borrowings	(42,566)		(6,611)
Net increase in deposits	189,364		430,633
Repayments of other long-term debt	(175)		(169)
Repayments of capital lease obligation	(122)		(115)



Dividends paid	(10,837)		(10,578)

Purchase of treasury stock	(1,488)		(1,643)

Net cash provided by financing activities	134,176		411,517
Net increase in cash and cash equivalents	129,433		148,053
Cash and cash equivalents at January 1	395,372		356,581
Cash and cash equivalents at March 31	$	524,805	$	504,634


	Shares Outstanding	Common Stock		Additional Paid-in- Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss), net		Treasury Stock		Total Shareholders’ Equity
	(dollars in thousands, except share and per share data)
Balance at December 31, 2020	96,130,751	$	113,915	$	494,683	$	596,614	$	17,233	$	(153,828)	$	1,068,617


Net income						39,770						39,770
Other comprehensive loss								(11,035)				(11,035)
Cash dividends declared ($0.11 per share)						(10,578)						(10,578)




Treasury stock acquired	(123,395)									(1,643)		(1,643)
Treasury stock reissued	158,531			681		0				1,360		2,041
Restricted stock	82,589	0		356		0				(48)		308

Balance at March 31, 2021	96,248,476	$	113,915	$	495,720	$	625,806	$	6,198	$	(154,159)	$	1,087,480


	For the Three Months Ended March 31, 2020
	Commercial, financial, agricultural and other		Real estate construction		Residential real estate		Commercial real estate		Loans to individuals		Total
	(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance	$	20,221	$	2,558	$	4,091	$	19,731	$	4,984	$	51,585
Charge-offs	(486)		0		(552)		(265)		(2,483)		(3,786)
Recoveries	68		0		62		44		212		386
Provision (credit)	7,575		294		4,123		11,755		5,555		29,302
Ending balance	27,378		2,852		7,724		31,265		8,268		77,487
Acquired loans:
Beginning balance	13		0		2		37		0		52
Charge-offs	0		0		(25)		(1)		(136)		(162)
Recoveries	13		0		13		0		7		33
Provision (credit)	324		0		10		1,202		129		1,665
Ending balance	350		0		0		1,238		0		1,588
Total ending balance	$	27,728	$	2,852	$	7,724	$	32,503	$	8,268	$	79,075
Ending balance: individually evaluated for impairment	$	2,727	$	0	$	0	$	7,072	$	0	$	9,799
Ending balance: collectively evaluated for impairment	25,001		2,852		7,724		25,431		8,268		69,276
Loans:
Ending balance	1,272,240		413,458		1,691,140		2,190,098		747,008		6,313,944
Ending balance: individually evaluated for impairment	7,544		0		1,506		36,513		0		45,563
Ending balance: collectively evaluated for impairment	1,264,696		413,458		1,689,634		2,153,585		747,008		6,268,381


		March 31, 2021			December 31, 2020
	Due	Amount		Rate	Amount		Rate
		(dollars in thousands)
Owed to:

First Commonwealth Bank	2028	$	49,337	4.875% until June 1, 2023, then LIBOR + 1.845%	$	49,314	4.875% until June 1, 2023, then LIBOR + 1.845%
First Commonwealth Bank	2033	49,149		5.50% until June 1, 2028, then LIBOR + 2.37%	49,131		5.50% until June 1, 2028, then LIBOR + 2.37%
First Commonwealth Capital Trust II	2034	30,929		LIBOR + 2.85%	30,929		LIBOR + 2.85%
First Commonwealth Capital Trust III	2034	41,238		LIBOR + 2.85%	41,238		LIBOR + 2.85%
Total		$	170,653		$	170,612


	2021						2020
	Average Balance		Income / Expense (a)		Yield or Rate		Average Balance		Income / Expense (a)		Yield or Rate
	(dollars in thousands)
Assets
Interest-earning assets:
Interest-bearing deposits with banks	$	340,800	$	77	0.09	%	$	7,327	$	37	2.03	%
Tax-free investment securities	29,695		208		2.84		51,729		399		3.10
Taxable investment securities	1,159,612		5,507		1.93		1,196,643		7,237		2.43
Loans, net of unearned income (b)(c)(d)	6,781,451		68,578		4.10		6,255,825		72,053		4.63
Total interest-earning assets	8,311,558		74,370		3.63		7,511,524		79,726		4.27
Noninterest-earning assets:
Cash	90,844						100,034
Allowance for credit losses	(106,197)						(52,693)
Other assets	834,249						778,456
Total noninterest-earning assets	818,896						825,797
Total Assets	$	9,130,454					$	8,337,321
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	1,445,653	$	108	0.03	%	$	1,358,206	$	1,215	0.36	%
Savings deposits	3,158,169		971		0.12		2,857,117		3,847		0.54
Time deposits	528,265		973		0.75		825,966		3,387		1.65
Short-term borrowings	119,369		31		0.11		202,314		588		1.17
Long-term debt	233,113		2,536		4.41		234,050		2,568		4.41
Total interest-bearing liabilities	5,484,569		4,619		0.34		5,477,653		11,605		0.85
Noninterest-bearing liabilities and shareholders’ equity:
Noninterest-bearing demand deposits	2,413,887						1,676,362
Other liabilities	155,443						111,988
Shareholders’ equity	1,076,555						1,071,318
Total Noninterest-Bearing Funding Sources	3,645,885						2,859,668
Total Liabilities and Shareholders’ Equity	$	9,130,454					$	8,337,321
Net Interest Income and Net Yield on Interest-Earning Assets			$	69,751	3.40	%			$	68,121	3.65	%


	Analysis of Year-to-Year Changes in Net Interest Income
	Total Change		Change Due To Volume		Change Due To Rate (a)
	(dollars in thousands)
Interest-earning assets:
Interest-bearing deposits with banks	$	40	$	1,683	$	(1,643)
Tax-free investment securities	(191)		(170)		(21)
Taxable investment securities	(1,730)		(224)		(1,506)
Loans	(3,475)		6,051		(9,526)
Total interest income (b)	(5,356)		7,340		(12,696)
Interest-bearing liabilities:
Interest-bearing demand deposits	(1,107)		78		(1,185)
Savings deposits	(2,876)		404		(3,280)
Time deposits	(2,414)		(1,221)		(1,193)
Short-term borrowings	(557)		(241)		(316)
Long-term debt	(32)		(10)		(22)
Total interest expense	(6,986)		(990)		(5,996)
Net interest income	$	1,630	$	8,330	$	(6,700)


	March 31, 2021			March 31, 2020			December 31, 2020
	(dollars in thousands)
Balance, beginning of period	$	101,309		$	51,637		$	51,637
Adoption of accounting standard - ASU 2016-13(1)	—			—			13,393
Loans charged off:
Commercial, financial, agricultural and other	569			486			6,318
Real estate construction	—			—			—
Residential real estate	105			577			1,040
Commercial real estate	1,550			266			4,939
Loans to individuals	1,541			2,619			6,953
Total loans charged off	3,765			3,948			19,250
Recoveries of loans previously charged off:
Commercial, financial, agricultural and other	90			81			314
Real estate construction	—			—			26
Residential real estate	37			75			414
Commercial real estate	39			44			312
Loans to individuals	329			219			991
Total recoveries	495			419			2,057
Net charge-offs	3,270			3,529			17,193
Provision for credit losses on loans charged to expense	(1,276)			30,967			53,472
Balance, end of period	$	96,763		$	79,075		$	101,309
Net charge-offs as a percentage of average loans outstanding (annualized)	0.20		%	0.23		%	0.26		%
Allowance for credit losses as a percentage of end-of-period loans outstanding	1.44		%	1.25		%	1.50		%
Allowance for credit losses as a percentage of end-of-period loans outstanding, excluding PPP loans	1.55		%	1.25		%	1.61		%


	2021		2020		$ Change		% Change
	(dollars in thousands)
Noninterest Income:
Trust income	$	2,516	$	2,111	$	405	19	%
Service charges on deposit accounts	4,047		4,745		(698)		(15)
Insurance and retail brokerage commissions	2,172		1,995		177		9
Income from bank owned life insurance	1,951		1,616		335		21
Card-related interchange income	6,427		5,262		1,165		22
Swap fee income	146		214		(68)		(32)
Other income	1,924		1,807		117		6
Subtotal	19,183		17,750		1,433		8
Net securities gains	6		19		(13)		(68)
Gain on sale of mortgage loans	5,046		2,546		2,500		98
Gain on sale of other loans and assets	1,690		699		991		142
Derivatives mark to market	1,430		(1,741)		3,171		(182)

Total noninterest income	$	27,355	$	19,273	$	8,082	42	%


	March 31, 2021
	0-90 Days			91-180 Days			181-365 Days			Cumulative 0-365 Days			Over 1 Year Through 5 Years			Over 5 Years
	(dollars in thousands)
Loans	$	570,814		$	455,463		$	950,072		$	1,976,349		$	3,736,936		$	971,342
Investments	90,621			66,604			132,044			289,269			633,644			482,407
Other interest-earning assets	420,645			—			—			420,645			—			—
Total interest-sensitive assets (ISA)	1,082,080			522,067			1,082,116			2,686,263			4,370,580			1,453,749
Certificates of deposit	142,329			87,277			122,419			352,025			129,795			1,998
Other deposits	4,769,027			—			—			4,769,027			—			—
Borrowings	233,034			105			210			233,349			1,682			103,986
Total interest-sensitive liabilities (ISL)	5,144,390			87,382			122,629			5,354,401			131,477			105,984
Gap	$	(4,062,310)		$	434,685		$	959,487		$	(2,668,138)		$	4,239,103		$	1,347,765
ISA/ISL	0.21			5.97			8.82			0.50			33.24			13.72
Gap/Total assets	43.14		%	4.62		%	10.19		%	28.33		%	45.02		%	14.31		%


	Net interest income change (12 months) for basis point movements of:
	-200			-100			+100			+200
	(dollars in thousands)
March 31, 2022 ($)	$	(8,703)		$	(4,632)		$	5,772		$	9,861
March 31, 2022 (%)	(2.97)		%	(1.58)		%	1.97		%	3.36		%

December 31, 2021 ($)	$	(9,008)		$	(4,976)		$	5,956		$	10,224
December 31, 2021 (%)	(3.25)		%	(1.79)		%	2.15		%	3.69		%


	For the Three Months Ended March 31, 2021						As of March 31, 2021
	Net Charge- offs		% of Total Net Charge-offs		Net Charge- offs as a % of Average Loans (annualized)		Nonperforming Loans		% of Total Nonperforming Loans		Nonperforming Loans as a % of Total Loans
	(dollars in thousands)
Commercial, financial, agricultural and other	$	479	14.65	%	0.03	%	$	10,737	21.31	%	0.16	%
Real estate construction	—		—		—		54		0.11		—
Residential real estate	68		2.08		0.01		10,814		21.46		0.16
Commercial real estate	1,511		46.21		0.09		28,271		56.12		0.42
Loans to individuals	1,212		37.06		0.07		505		1.00		0.01
Total loans, net of unearned income	$	3,270	100.00	%	0.20	%	$	50,381	100.00	%	0.75	%


	For the Three Months Ended March 31, 2022						As of March 31, 2022
	Net Charge- offs		% of Total Net Charge-offs		Net Charge- offs as a % of Average Loans (annualized)		Nonperforming Loans		% of Total Nonperforming Loans		Nonperforming Loans as a % of Total Loans
	(dollars in thousands)
Commercial, financial, agricultural and other	$	395	34.83	%	0.02	%	$	4,049	10.81	%	0.06	%
Real estate construction	—		—		—		—		—		—
Residential real estate	110		9.70		0.01		9,161		24.45		0.13
Commercial real estate	(14)		(1.23)		—		23,834		63.61		0.34
Loans to individuals	643		56.70		0.04		423		1.13		0.01
Total loans and leases, net of unearned income	$	1,134	100.00	%	0.07	%	$	37,467	100.00	%	0.54	%


	Actual				Minimum Capital Required			Required to be Considered Well Capitalized
	Capital Amount		Ratio			Capital Amount		Ratio		Capital Amount		Ratio
	(dollars in thousands)
Total Capital to Risk Weighted Assets
First Commonwealth Financial Corporation	$	1,035,304	15.27	%		$	711,846	10.50	%	$	677,948	10.00	%
First Commonwealth Bank	990,442		14.64			710,385		10.50		676,557		10.00
Tier I Capital to Risk Weighted Assets
First Commonwealth Financial Corporation	$	857,066	12.64	%		$	576,256	8.50	%	$	542,359	8.00	%
First Commonwealth Bank	812,204		12.00			575,073		8.50		541,246		8.00
Tier I Capital to Average Assets
First Commonwealth Financial Corporation	$	857,066	9.72	%		$	352,539	4.00	%	$	440,674	5.00	%
First Commonwealth Bank	812,204		9.23			351,904		4.00		439,880		5.00
Common Equity Tier I to Risk Weighted Assets
First Commonwealth Financial Corporation	$	787,066	11.61	%		$	474,564	7.00	%	$	440,666	6.50	%
First Commonwealth Bank	812,204		12.00			473,590		7.00		439,762		6.50


Month Ending:	Total Number of Shares Purchased	Average Price Paid per Share (or Unit)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs*
January 31, 2021	—	—		—	2,131,287
February 28, 2021	—	—		—	1,864,280
March 31, 2021	28,012	13.99		28,012	1,712,460

Total	28,012	$	13.99	28,012

* Remaining number of shares approved under the Plan is based on the market value of the Company's common stock of $11.73 at January 31, 2021, $13.41 at February 28, 2021 and $14.37 at March 31, 2021.


DATED: May ~~7, 2021~~9, 2022						/s/ T. Michael Price
						T. Michael Price President and Chief Executive Officer

DATED: May ~~7, 2021~~9, 2022						/s/ James R. Reske
						James R. Reske Executive Vice President, Chief Financial Officer and Treasurer