This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Best Bank Stocks of 2010

8. First Commonwealth Financial

Company Profile

Shares of First Commonwealth Financial of Indiana, Pa. closed at $6.89 Wednesday, for a year-to-date total return of 50%.

The small, regional lender has worked to resolve or get rid of troubled assets within its Pennsylvania footprint. It has also transferred some funding into lower-cost deposits. CEO John Dolan said that staffing and technology efficiencies "will be a strategic focus for us going forward" as the company looks to reduce costs further.

First Commonwealth's share price has had a rocky ride, climbing from a low of $4.10 cents in January to a high above $7.50 in the spring, back below $5 in the fall, then up to $7 in recent sessions. It pays a nominal quarterly dividend of a penny a share.

Based "solely on valuation" since there was "limited upside" to his price target of $7 a share, Sterne Agee analyst Mike Shafir on Wednesday downgraded the shares to neutral. He also pointed out that the shares had risen 40% since First Commonwealth completed an $86.2 common stock offering on August 4. That offering was priced at $4.65 a share.

Income Statement

First Commonwealth reported third-quarter net income of $10.7 million, or 11 cents a share, compared to a net loss of $5.9 million, or 7 cents a share a year earlier. The main factor in the year-over-year improvement was the lowering of the provision for credit losses to $4.5 million from $23 million. First Commonwealth also reported lower impairment charges of $4.3 million during the third quarter, compared to $11.9 million in the third quarter of 2009.

The company's net interest margin during the third quarter was 3.90%, increasing from 3.62% a year earlier.

Balance Sheet

Total assets were $5.9 billion as of September 30 and the nonperforming assets ratio was 2.91%, increasing from 2.66% a year earlier. The third-quarter net charge-off ratio was 0.63% and reserves covered 1.99% of total loans as of September 30.

First Commonwealth didn't participate in TARP. The company was strongly capitalized after its August offering of common shares, with a Tier 1 leverage ratio of 11.11% and a total risk-based capital ratio of 13.74% as of September 30. The tangible common equity ratio was 10.03% according to SNL Financial.

Stock Ratios

The shares trade for 1.3 times tangible book value according to SNL and 16.4 times the consensus earnings estimate of 42 cents a share for 2011. The forward P/E drops to 13.5, based on the 2012 consensus earnings estimate of 51 cents a share.

Analyst Ratings

Out of eight analysts covering the shares, one rates First Commonwealth a buy, while the rest of the analyst recommend investors hold the shares.

4 of 11

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,079.57 -42.44 -0.25%
S&P 500 1,996.74 -3.38 -0.17%
NASDAQ 4,557.6950 -11.9260 -0.26%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs