First Commonwealth Financial Corporation (NYSE:FCF) Q1 2023 Earnings Call Transcript

Jim Reske: Yeah, we’re still asset sensitive. So we are considering, but have not executed on derivative strategies that would either — swap either assets or liabilities to reduce that asset sensitivity. Some of the natural things we’re doing will blunt the asset sensitivity a little bit. For example, when we — I talked about stockpiling cash at the end of the quarter we borrowed that with overnight money. As we deploy them to securities with some kind of term usually four to five years as we typically have bought in the past that will produce a little bit of liability sensitive — liability — it will produce a liability-sensitive layer that will blunt our asset sensitivity a little bit. And then, as we grow businesses especially like Equipment Finance which is — has very few prepayments and really has an average life closer to the stated life. That gives us a little bit more duration too and that helps a little bit organically to blunt against the lower rates.

Mike Price: And that has been our strategy organically. We’ve used hedges in the past, but we’ve been very intentional about being 50% variable and 50% fixed. And we’ve become aware when we veer off of that and then organically we try to get back there. We just think it’s straight pool.

Manuel Navas: Thank you. Thank you for the comment.

Operator: And we will take our next question from Dan Cardenas with Janney Montgomery Scott. Your line is open.

Dan Cardenas: Thanks. Good afternoon, guys. Just — most of my questions have been asked and answered. Just a couple quick questions on the deposit front. I mean I’ve noticed a number of larger financial institutions kind of tapped the broker deposit market this quarter. Wondering if there’s any brokered CDs in your book at quarter end? And then also maybe some color as to your desire if any to use the bank term funding program?

Mike Price: I think on Page 13 — we have your answer. I do think we’ve got some broker deposits from Centric, but I don’t think we’ve had on that.

Jim Reske: Yeah. No, Dan, I’m so glad you asked because we have not had any broker deposits, but now we are showing $18.7 million. They are all acquired from Centric. So we really have not had any appetite or desire to use broker deposits wholesale funding in the past. But we inherited those in the acquisition.

Dan Cardenas: Okay.

Jim Reske: And what was your other question? Sorry.

Dan Cardenas: Any desire to maybe use the bank term funding program?