First Commonwealth Q2 Profit Down; To Acquire Canton & Ashtabula Branches

(RTTNews) - First Commonwealth Financial Corp. (FCF) Wednesday announced a decline in second quarter net income to $12.00 million from $13.45 million in the prior year. Earnings per share declined to $0.14 from $0.15 a year ago.

The results were impacted by provision for credit losses of $10.4 million, up $3.8 million from the prior year, primarily due to a $7.5 million specific reserve set aside against an energy-related credit.

Net interest income increased to $50.03 million from $47. 21 million in the previous year. Non-interest income was$15.56 million, down from $16.35 million in the previous year.

In a separate announcement, First Commonwealth Financial announced that its banking subsidiary, First Commonwealth Bank has signed a definitive agreement to acquire 13 branches in Canton and Ashtabula, Ohio from FirstMerit Bank, NA. The branches have $735 million of deposits and $115 million of retail and business loans as of May 31. The acquisition is expected to be immediately accretive to First Commonwealth's earnings per share.

The divestitures have been approved by the United States Department of Justice following a customary anti-trust review. The acquisition provides First Commonwealth with the opportunity to expand its Ohio footprint by adding approximately 34,000 retail and small business households.

First Commonwealth will pay a 4.5 percent premium on deposits acquired at close. First Commonwealth was advised by the investment banking firm of Deutsche Bank Securities and the law firm Squire Patton Boggs.