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Jun 30, 2023
First Commonwealth Q2 2023 Earnings Report
First Commonwealth's financial performance increased in Q2 2023, with notable growth in net income and earnings per share.
Key Takeaways
First Commonwealth Financial Corporation reported a strong second quarter in 2023, with net income of $42.8 million and diluted earnings per share of $0.42. The company saw increases in core pre-tax pre-provision net revenue and total loans, driven by commercial loan growth. Deposit levels also increased, and the company's asset quality remained solid.
Net income reached $42.8 million, with diluted earnings per share at $0.42, marking increases from both the previous quarter and the second quarter of 2022.
Core pre-tax pre-provision net revenue totaled $56.3 million, showing growth from the prior quarter and the same period last year.
Total loans increased by $148.1 million, driven by commercial loan growth, including a $44.9 million rise in Equipment Finance loans.
Average deposits increased by $433.5 million, influenced by the inclusion of acquired deposit balances from the Centric acquisition.
First Commonwealth
First Commonwealth
Forward Guidance
First Commonwealth anticipates ongoing pressures on funding costs due to the higher interest rate environment, but believes its granular core deposit base will enable effective management through market uncertainty.
Positive Outlook
- Granular core deposit base positions the company well to manage through market uncertainty.
- Strategic growth initiatives are expected to continue driving company performance.
- Core efficiency ratio of 52.8% reflects operational effectiveness.
- Solid asset quality supports financial stability.
- Continued commitment to improve the financial lives of neighbors and their businesses.
Challenges Ahead
- Higher interest rate environment is expected to continue pressuring funding costs.
- Uptick in net charge-offs stemming from loans marked with the acquisition of Centric Bank.
- Potential market uncertainty could impact financial performance.
- Elevated hospitalization expenses increased noninterest expense.
- Decrease in accumulated other comprehensive income (AOCI) resulting from the impact of higher interest rates.