The Indiana-based bank’s holding company, First Commonwealth Financial Corporation, said Tuesday it plans to close 20 percent of its community banking offices by year’s end, across its territory in Pennsylvania and Ohio.
“In light of the rapidly changing operating environment and uncertain economic outlook, we have implemented Project THRIVE with the express goal of emerging on the other side of this crisis stronger than ever,” First Commonwealth President and CEO T. Michael Price said in announcing the company’s second-quarter results.
Project THRIVE is described as a profitability initiative aimed at growing First Commonwealth’s business, maintaining adequate capital, protecting against further net interest margin compression and reducing operating expenses.
The latter will be achieved in part by a targeted 20 percent reduction in FCB’s retail locations by the end of the year.
While specifics about that reduction won’t be announced until next week, bank officials made clear that First Commonwealth isn’t leaving Indiana and isn’t merging with another bank.
First Commonwealth now has 147 branches in 28 Pennsylvania counties as well as throughout Ohio.
First Commonwealth also has business banking operations in Pittsburgh, as well as Canton, Cleveland, Columbus and Cincinnati, Ohio, and mortgage offices in Wexford as well as Hudson, Dayton and Lewis Center, Ohio.
Staff reductions were not mentioned. A company-wide hiring freeze was implemented at the end of the first quarter of this year, around the time that pandemic-related restrictions were being imposed in Pennsylvania.
First Commonwealth reported a full-time equivalent staff of 1,465 on June 30, down from 1,510 on March 31, but up from 1,438 on June 30, 2019.
“Our performance in the second quarter is a reminder of the importance we play as a financial services organization and partner in the communities we serve,” Price said, recalling his bank’s role in the Small Business Administration’s Paycheck Protection Program.
“We assisted nearly 5,000 businesses secure over $600 million in PPP loans, which impacted approximately 80,000 jobs,” the FCF CEO said. “At the same time, we originated a record $203 million in consumer mortgages in the quarter that helped roughly 800 customers finance a home.”
Net income for the second quarter of 2020 was $23.9 million, or 24 cents per share, compared to $4.7 million, or 5 cents per share, for the first quarter of 2020, and $27.3 million, or 28 cents per share, in the second quarter of 2019.
Net income for the first six months of 2020 was $28.6 million, down from $51.9 million for the same period in 2019.
First Commonwealth Financial reported earnings of 24 cents per share, which beat Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 10 cents per share.
The financial holding company posted revenue of $96.8 million in the period. Its revenue net of interest expense was $88.5 million, also surpassing Street forecasts. Four analysts surveyed by Zacks expected $87.3 million.
Its stock has taken a hit in the first six months of this year.
Shares have dropped 47 percent since the beginning of the year. In the final minutes of trading on Tuesday, shares hit $7.63, a fall of 44 percent in the last 12 months.
“First Commonwealth has a proven track record of executing on its initiatives and I am confident that Project THRIVE will benefit all of our long-term stakeholders,” Price said.
The Associated Press contributed to this story.