INDIANA, Pa. - First Commonwealth (NYSE:FCF) Financial Corporation (NYSE:FCF) disclosed its financial results for the second quarter of 2024, revealing a mixed picture of growth and challenges. The company reported a slight decrease in net income and diluted earnings per share compared to both the prior quarter and the same period in 2023.
Specifically, net income for Q2 stood at $37.1 million, down from $37.5 million in Q1 and $42.8 million in Q2 of the previous year. Diluted earnings per share followed suit, coming in at $0.36, a cent lower than Q1 and six cents down from the previous year's second quarter.
Despite these declines, the company saw core pre-tax pre-provision net revenue (PPNR) rise to $54.4 million from the previous quarter, although it was a decrease from Q2 2023. Net interest income (FTE) increased quarter-over-quarter but showed a year-on-year decline. The loan-to-deposit ratio ticked up slightly to 96.1% at the end of Q2 2024, and total shareholder’s equity saw a rise due to retained earnings and improvements in accumulated other comprehensive income (AOCI).
The bank also reported an increase in average deposits compared to the prior quarter and an uptick in total loans, driven by growth in equipment finance loans. Notably, First Commonwealth Bank was recognized by Forbes as one of the World’s Best Banks for the sixth consecutive year.
Asset quality, however, raised some concerns. The provision for credit losses was $7.8 million, an increase from the previous quarter. Nonperforming loans also increased, including $11.1 million of acquired loans that were transferred to nonaccrual status. Net charge-offs on loans saw a slight increase from the previous quarter.
On the capital front, the Bank retired $50 million of variable rate subordinate corporate debentures, which is expected to improve the net interest margin in the upcoming quarter. Additionally, the Bank sold investment securities for a loss and reinvested the proceeds at a higher yield, a move also anticipated to benefit the net interest margin.
The Board of Directors authorized a 4.0% increase in the quarterly cash dividend to shareholders, reflecting confidence in the Bank’s financial stability. Furthermore, the company repurchased shares during the quarter, with remaining capacity under the current program standing at $17.1 million as of June 30, 2024.
The press release statement indicates that First Commonwealth's second quarter results demonstrate the core earnings power of their community-focused regional banking model. T. Michael Price, President and CEO, expressed optimism about the bank's ability to adapt to the evolving needs of their customers and the positive developments in loan demand and core deposit growth.
The financial information is based on a press release statement from First Commonwealth Financial Corporation.
In other recent news, First Commonwealth Financial Corporation has reported its first-quarter financial results for 2024, surpassing earnings estimates with $0.37 per share, despite facing higher depository costs. The bank's net interest income declined by $3.4 million due to increased interest expenses, even though interest income saw a rise of $1.2 million. Notably, the bank improved its balance sheet liquidity and set multiple earnings records in 2023.
The company also announced a dividend increase and redemption of $50 million in subordinated debentures. In terms of future expectations, First Commonwealth forecasts stability in net interest margin and mid-single-digit loan growth, particularly focused on commercial lending. The bank has also shown a strong performance in SBA business and mortgage sales.
Despite a slight increase in non-interest expense compared to the last quarter, the bank's commercial business is showing improvement with growing pipelines and customer spending. The company remains committed to improving loan pricing and growing its commercial and industrial lending while adopting a digital approach in all its operations. These are the recent developments for First Commonwealth Financial Corporation.
InvestingPro Insights
First Commonwealth Financial Corporation (NYSE:FCF) has shown resilience in its recent financial performance, despite some challenges in net income and earnings per share as reported for Q2 2024. To provide additional context to investors, here are some key insights based on real-time data and analysis from InvestingPro:
InvestingPro Data indicates that First Commonwealth is currently trading at a P/E ratio of 10.52, which is relatively low when considering near-term earnings growth. Furthermore, the company's P/E ratio has adjusted slightly to 10.14 over the last twelve months as of Q1 2024. The bank's revenue growth remains positive, with a 14.99% increase over the last twelve months as of Q1 2024, which aligns with the growth in average deposits and total loans mentioned in the article.
One of the InvestingPro Tips highlights that the company has raised its dividend for 7 consecutive years, demonstrating a commitment to rewarding shareholders. This is in line with the article's mention of the Board of Directors authorizing a 4.0% increase in the quarterly cash dividend. Additionally, another tip points out that the stock is trading near its 52-week high, with the price reaching 98.88% of this peak, reflecting investor confidence and aligning with the recent strong returns over the last month and three months.
For investors seeking a deeper analysis and more tips, InvestingPro offers additional insights on First Commonwealth Financial Corporation. There are more InvestingPro Tips available, which can be found at https://www.investing.com/pro/FCF. To enrich your investing strategy, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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