FCF's Net Income Jumps 28.8% on Strong Loan Growth, Strategic Acquisition

Ticker: FCF · Form: 10-Q · Filed: Nov 10, 2025 · CIK: 712537

First Commonwealth Financial CORP /Pa/ 10-Q Filing Summary
FieldDetail
CompanyFirst Commonwealth Financial CORP /Pa/ (FCF)
Form Type10-Q
Filed DateNov 10, 2025
Risk Levelmedium
Pages15
Reading Time18 min
Key Dollar Amounts$1.00, $0.6 million, $0.4 million
Sentimentbullish

Sentiment: bullish

Topics: Regional Banking, Earnings Growth, Acquisition, Loan Growth, Net Interest Income, Shareholder Equity, Financial Performance

Related Tickers: FCF, PNC, KEY, RF

TL;DR

**FCF is crushing it with a 28.8% net income surge and smart M&A, making it a solid buy in regional banking.**

AI Summary

FIRST COMMONWEALTH FINANCIAL CORP /PA/ (FCF) reported a robust financial performance for the three months ended September 30, 2025, with net income increasing by 28.8% to $41.3 million, up from $32.1 million in the prior year. Diluted earnings per share also rose to $0.39 from $0.31. Net interest income saw a significant jump of 15.1% to $111.1 million, compared to $96.5 million in the same period last year. Total assets grew to $12.31 billion as of September 30, 2025, from $11.58 billion at December 31, 2024, driven by a substantial increase in portfolio loans and leases to $9.69 billion from $8.98 billion. The company completed the acquisition of CenterGroup Financial, Inc. on April 30, 2025, adding $336.2 million in assets and $304.5 million in liabilities, including $278.0 million in deposits. This acquisition resulted in $14.5 million in goodwill. Total deposits increased to $10.23 billion from $9.68 billion, while total liabilities rose to $10.77 billion from $10.18 billion. Shareholders' equity improved to $1.54 billion from $1.41 billion, partly due to a reduction in accumulated other comprehensive loss from $(102.5) million to $(69.2) million.

Why It Matters

This strong performance, particularly the 28.8% increase in net income and significant loan growth, signals FCF's effective strategy in a competitive banking landscape. The CenterGroup Financial acquisition expands FCF's footprint in the Cincinnati, Ohio market, potentially increasing market share and customer base, which is crucial for long-term investor value. For employees, this growth could mean more opportunities, while customers benefit from an expanded branch network. The reduction in accumulated other comprehensive loss also indicates improved balance sheet health, making FCF a more attractive investment compared to peers facing higher interest rate sensitivity.

Risk Assessment

Risk Level: medium — While FCF shows strong growth, the provision for credit losses increased to $11.3 million for the three months ended September 30, 2025, up from $10.6 million in the prior year, indicating potential credit quality concerns. Additionally, the goodwill of $14.5 million from the CenterGroup acquisition, while not amortizable, represents an intangible asset that could be subject to impairment if the acquired business underperforms, posing a risk to future earnings.

Analyst Insight

Investors should consider FCF's strong net income growth and strategic acquisition as positive indicators. Monitor the provision for credit losses and the integration of CenterGroup Financial for any signs of asset quality deterioration or integration challenges. The increased cash dividends per common share from $0.130 to $0.135 also suggests management confidence and provides a steady return.

Financial Highlights

debt To Equity
0.17
revenue
$111.1M
operating Margin
N/A
total Assets
$12.31B
total Debt
$0.26B
net Income
$41.3M
eps
$0.39
gross Margin
N/A
cash Position
$161.4M
revenue Growth
+15.1%

Revenue Breakdown

SegmentRevenueGrowth
Interest and fees on loans and leases$147.7M+7.4%
Interest and dividends on investments$13.6M+10.0%
Trust income$3.5M+7.6%
Service charges on deposit accounts$5.9M+1.2%
Insurance and retail brokerage commissions$3.5M+13.3%
Gain on sale of mortgage loans$2.1M+85.2%

Key Numbers

Key Players & Entities

FAQ

What were FIRST COMMONWEALTH FINANCIAL CORP /PA/'s key financial highlights for Q3 2025?

FIRST COMMONWEALTH FINANCIAL CORP /PA/ reported net income of $41.3 million for Q3 2025, a 28.8% increase from $32.1 million in Q3 2024. Net interest income grew by 15.1% to $111.1 million, and diluted earnings per share rose to $0.39 from $0.31.

How did the CenterGroup Financial acquisition impact FCF's balance sheet?

The acquisition of CenterGroup Financial, Inc. on April 30, 2025, added $336.2 million in assets and $304.5 million in liabilities to FCF's balance sheet. This included $278.0 million in deposits and resulted in $14.5 million in goodwill.

What was the trend in FCF's loan portfolio and deposits?

FCF's portfolio loans and leases increased significantly to $9.69 billion as of September 30, 2025, from $8.98 billion at December 31, 2024. Total deposits also grew to $10.23 billion from $9.68 billion over the same period.

What is the current dividend policy for FCF shareholders?

For the three months ended September 30, 2025, FCF declared cash dividends of $0.135 per common share, an increase from $0.130 per common share declared in the same period of 2024.

What are the primary risks identified in FCF's 10-Q filing?

The filing indicates an increase in the provision for credit losses to $11.3 million in Q3 2025 from $10.6 million in Q3 2024, suggesting potential credit quality risks. Additionally, the $14.5 million in goodwill from the CenterGroup acquisition carries the risk of impairment if the acquired assets do not perform as expected.

How did FCF's total assets change from year-end 2024 to Q3 2025?

FCF's total assets increased from $11.58 billion at December 31, 2024, to $12.31 billion at September 30, 2025. This growth was primarily driven by an increase in portfolio loans and leases and the CenterGroup acquisition.

What was the impact of interest expense on FCF's net interest income?

Total interest expense decreased to $51.6 million for the three months ended September 30, 2025, from $57.8 million in the prior year. This reduction, combined with increased interest income, contributed to the 15.1% rise in net interest income.

What is the significance of the reduction in FCF's accumulated other comprehensive loss?

FCF's accumulated other comprehensive loss improved from $(102.5) million at December 31, 2024, to $(69.2) million at September 30, 2025. This reduction, driven by unrealized holding gains on securities and derivatives, indicates an improvement in the fair value of certain balance sheet items and strengthens shareholders' equity.

What was the total consideration paid for the CenterGroup Financial acquisition?

The total consideration paid for the CenterGroup Financial acquisition was $46.2 million, consisting of $1 thousand in cash for fractional shares and $46.2 million for 3,016,009 shares of FCF's common stock, valued at $15.32 per share on April 30, 2025.

How does FCF classify acquired loans and what are the accounting implications?

FCF classifies acquired loans into Purchased Credit-Deteriorated (PCD) and non-PCD loans. For non-PCD loans, an allowance for credit losses is established on the acquisition date and recognized as an expense. For PCD loans, an allowance is recognized by adding it to the fair value of the loan, with no provision for credit loss expense recognized on day one.

Risk Factors

Industry Context

First Commonwealth Financial Corp operates within the highly competitive U.S. banking industry, characterized by increasing consolidation and a growing emphasis on digital services. The industry is navigating a complex interest rate environment and evolving regulatory landscape. Banks are focusing on expanding their loan portfolios, managing credit risk, and enhancing non-interest income streams through wealth management, insurance, and other fee-based services.

Regulatory Implications

As a financial institution, FCF is subject to stringent regulations from bodies like the Federal Reserve and the FDIC. Compliance with capital requirements, consumer protection laws, and anti-money laundering regulations is paramount. Any changes in these regulations, or instances of non-compliance, could lead to increased operational costs, penalties, or restrictions on business activities.

What Investors Should Do

  1. Monitor loan growth and credit quality trends.
  2. Assess the impact of the CenterGroup acquisition.
  3. Evaluate the trend in net interest income and margins.
  4. Review noninterest income diversification.
  5. Observe capital adequacy and shareholder returns.

Key Dates

Glossary

Net Interest Income
The difference between the interest income generated by a bank and the interest it pays out to its depositors and lenders. (A key measure of a bank's profitability from its core lending and borrowing activities. FCF reported $111.1M for Q3 2025.)
Provision for Credit Losses
An expense set aside by a financial institution to cover potential losses from loans that may not be repaid. (Indicates management's assessment of future loan portfolio risk. FCF's provision was $11.3M for Q3 2025.)
Goodwill
An intangible asset that arises when a company acquires another company for a price greater than the fair value of its identifiable net assets. (Represents the premium paid for the acquired company's brand, customer base, or other unquantifiable assets. FCF recorded $14.5M from the CenterGroup acquisition.)
Accumulated Other Comprehensive Income (Loss)
A component of shareholders' equity that includes unrealized gains and losses on certain investments and foreign currency translations that have not yet been realized into net income. (Reflects changes in the value of certain assets and liabilities not yet recognized in the income statement. FCF's loss decreased to $(69.2)M from $(102.5)M.)
Diluted Earnings Per Share (EPS)
A measure of a company's profitability that accounts for all potential dilutive common shares, such as stock options and convertible securities. (Provides a more conservative view of per-share earnings. FCF's diluted EPS was $0.39 for Q3 2025.)
Portfolio Loans and Leases
The total value of loans and leases held by the company for investment purposes, excluding those held for sale. (Represents the core lending business of the bank. FCF's portfolio grew to $9.69B.)
Noninterest Income
Revenue generated by a bank from sources other than net interest income, such as fees, commissions, and trading gains. (Diversifies revenue streams and can indicate the strength of fee-based services. FCF's total noninterest income was $24.9M for Q3 2025.)
Noninterest Expense
Operating expenses of a bank that are not related to interest payments, such as salaries, rent, and technology costs. (Measures the efficiency of a bank's operations. FCF's total noninterest expense was $72.8M for Q3 2025.)

Year-Over-Year Comparison

Compared to the prior year's comparable period (nine months ended September 30, 2024), First Commonwealth Financial Corp has demonstrated significant growth. Net income for the nine months rose slightly to $107.4M from $106.7M, while net interest income saw a robust increase of 10.2% to $312.9M from $283.8M. Total assets grew by $725.4M to $12.31B, driven by a substantial increase in portfolio loans and leases. The company also managed to reduce its accumulated other comprehensive loss by $19.4M, contributing to a stronger equity position. However, total noninterest expense increased by 9.4% to $220.4M, indicating rising operational costs.

Filing Stats: 4,572 words · 18 min read · ~15 pages · Grade level 18.9 · Accepted 2025-11-10 16:02:36

Key Financial Figures

Filing Documents

Financial Information

PART I. Financial Information

Financial Statements and Supplementary Data

ITEM 1. Financial Statements and Supplementary Data Included in Part I of this report: First Commonwealth Financial Corporation and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) 3 Consolidated Statements of Income (Unaudited) 4 Consolidated Statements of Comprehensive Income (Unaudited) 5 Consolidated Statements of Changes in Shareholders' Equity (Unaudited) 6 Consolidated Statements of Cash Flows (Unaudited) 8 Notes to the Unaudited Consolidated Financial Statements 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 60

Quantitative and Qualitative Disclosures About Market Risk

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 88

Controls and Procedures

ITEM 4. Controls and Procedures 88

Other Information

PART II. Other Information

Legal Proceedings

ITEM 1. Legal Proceedings 89

Risk Factors

ITEM 1A. Risk Factors 89

Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 89

Defaults Upon Senior Securities

ITEM 3. Defaults Upon Senior Securities 89

Mine Safety Disclosures

ITEM 4. Mine Safety Disclosures 89

Other Information

ITEM 5. Other Information 89

Exhibits

ITEM 6. Exhibits 90

Signatures

Signatures 91 2 Table of Contents

Financial Statements and Supplementary Data

ITEM 1. Financial Statements and Supplementary Data FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) September 30, 2025 December 31, 2024 (dollars in thousands, except share data) Assets Cash and due from banks $ 117,241 $ 105,051 Interest-bearing bank deposits 44,170 28,358 Securities available for sale, at fair value 1,058,979 1,147,623 Securities held to maturity, at amortized cost (Fair value of $ 428,162 and $ 336,719 at September 30, 2025 and December 31, 2024, respectively) 479,915 405,639 Other investments 41,458 30,954 Loans held for sale (Includes fair value of $ 38,600 and $ 50,110 at September 30, 2025 and December 31, 2024, respectively) 62,566 51,991 Loans and leases: Portfolio loans and leases 9,688,288 8,983,754 Allowance for credit losses ( 129,605 ) ( 118,906 ) Net loans and leases 9,558,683 8,864,848 Premises and equipment, net 116,531 116,108 Other real estate owned 853 895 Goodwill 378,214 363,715 Amortizing intangibles, net 22,637 19,637 Bank owned life insurance 231,505 229,581 Other assets 197,624 220,536 Total assets $ 12,310,376 $ 11,584,936 Liabilities Deposits (all domestic): Noninterest-bearing $ 2,420,235 $ 2,249,615 Interest-bearing 7,811,105 7,428,404 Total deposits 10,231,340 9,678,019 Short-term borrowings 149,557 80,139 Subordinated debentures 128,425 128,305 Other long-term debt 129,757 130,353 Capital lease obligation 3,875 4,327 Total long-term debt 262,057 262,985 Other liabilities 125,585 158,628 Total liabilities 10,768,539 10,179,771 Shareholders' Equity Preferred stock, $ 1 par value per share, 3,000,000 shares authorized, none issued — — Common stock, $ 1 par value per share, 200,000,000 shares authorized; 126,599,991 and 123,603,380 shares issued at September 30, 2025 and December 31, 2024, respectively, and 104,293,298 and 101,758,450 shares outstanding at September 30, 2025 and December 31, 2024, respectively

Financial Statements and Supplementary Data (Continued)

ITEM 1. Financial Statements and Supplementary Data (Continued) FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (dollars in thousands, except share data) Interest Income Interest and fees on loans and leases $ 147,728 $ 137,555 $ 422,834 $ 405,989 Interest and dividends on investments: Taxable interest 13,614 12,381 41,530 34,356 Interest exempt from federal income taxes 90 105 276 320 Dividends 786 444 2,017 1,498 Interest on bank deposits 491 3,838 2,106 8,304 Total interest income 162,709 154,323 468,763 450,467 Interest Expense Interest on deposits 47,038 49,663 142,961 140,387 Interest on short-term borrowings 1,262 6,279 3,128 19,383 Interest on subordinated debentures 1,858 1,786 5,534 6,637 Interest on other long-term debt 1,389 35 4,132 109 Interest on lease obligations 39 45 122 140 Total interest expense 51,586 57,808 155,877 166,656 Net Interest Income 111,123 96,515 312,886 283,811 Provision for credit losses 11,327 10,615 25,961 22,680 Provision for credit losses - acquisition day 1 non-PCD — — 3,759 — Net Interest Income after Provision for Credit Losses 99,796 85,900 283,166 261,131 Noninterest Income Net securities gains (losses) 369 88 ( 4,773 ) ( 5,447 ) Gain on sale of VISA — 106 5,146 5,664 Trust income 3,477 3,242 9,528 8,790 Service charges on deposit accounts 5,913 5,840 16,946 16,769 Insurance and retail brokerage commissions 3,499 3,087 9,766 8,892 Income from bank owned life insurance 1,712 2,278 5,152 4,943 Gain on sale of mortgage loans 2,132 1,151 5,355 4,150 Gain on sale of other loans and assets 1,085 2,576 4,690 6,035 Card-related interchange income 3,985 4,137 11,637 17,964 Derivatives mark to market 2 ( 153 ) ( 151 ) ( 141 ) Swap fee income 243 88 1,517 88 Other income 2,440 2,258 7,295 6,189 Total noninterest income 24,857 24,698 72,10

Financial Statements and Supplementary Data (Continued)

ITEM 1. Financial Statements and Supplementary Data (Continued) FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (dollars in thousands) Net Income $ 41,328 $ 32,086 $ 107,426 $ 106,723 Other comprehensive income, before tax expense: Unrealized holding gains on securities arising during the period 7,138 30,372 28,700 18,578 Reclassifcation adjustment for losses (gains) included in net income ( 369 ) ( 88 ) 4,773 5,447 Unrealized holding gains on derivatives arising during the period 2,006 8,108 8,674 12,266 Total other comprehensive income, before tax expense 8,775 38,392 42,147 36,291 Income tax expense related to items of other comprehensive income ( 1,842 ) ( 8,062 ) ( 8,850 ) ( 7,621 ) Total other comprehensive income 6,933 30,330 33,297 28,670 Comprehensive Income $ 48,261 $ 62,416 $ 140,723 $ 135,393 The accompanying notes are an integral part of these unaudited consolidated financial statements. 5 Table of Contents

Financial Statements and Supplementary Data (Continued)

ITEM 1. Financial Statements and Supplementary Data (Continued) FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) Shares Outstanding Common Stock Additional Paid-in- Capital Retained Earnings Accumulated Other Comprehensive Income (Loss), net Treasury Stock Total Shareholders' Equity (dollars in thousands, except share and per share data) Balance at December 31, 2024 101,758,450 $ 123,603 $ 631,367 $ 971,082 $ ( 102,514 ) $ ( 218,373 ) $ 1,405,165 Net income 107,426 107,426 Other comprehensive income 33,297 33,297 Cash dividends declared ($ 0.400 per share) ( 41,486 ) ( 41,486 ) Treasury stock acquired ( 774,325 ) ( 12,945 ) ( 12,945 ) Treasury stock reissued 190,547 993 — 1,879 2,872 Restricted stock 122,015 — 806 — 794 1,600 Common stock issued 2,996,611 2,997 42,911 45,908 Balance at September 30, 2025 104,293,298 $ 126,600 $ 676,077 $ 1,037,022 $ ( 69,217 ) $ ( 228,645 ) $ 1,541,837 Shares Outstanding Common Stock Additional Paid-in- Capital Retained Earnings Accumulated Other Comprehensive Income (Loss), net Treasury Stock Total Shareholders' Equity (dollars in thousands, except share and per share data) Balance at December 31, 2023 102,114,664 $ 123,603 $ 630,154 $ 881,112 $ ( 111,756 ) $ ( 208,839 ) $ 1,314,274 Net income 106,723 106,723 Other comprehensive income 28,670 28,670 Cash dividends declared ($ 0.385 per share) ( 39,371 ) ( 39,371 ) Treasury stock acquired ( 303,471 ) ( 4,554 ) ( 4,554 ) Treasury stock reissued 230,051 313 — 2,216 2,529 Restricted stock 196,697 — 941 — 404 1,345 Balance at September 30, 2024 102,237,941 $ 123,603 $ 631,408 $ 948,464 $ ( 83,086 ) $ ( 210,773 ) $ 1,409,616 The accompanying notes are an integral part of these unaudited consolidated financial statements. 6 Table of Contents

Financial Statements and Supplementary Data (Continued)

ITEM 1. Financial Statements and Supplementary Data (Continued) FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) Shares Outstanding Common Stock Additional Paid-in- Capital Retained Earnings Accumulated Other Comprehensive Income (Loss), net Treasury Stock Total Shareholders' Equity (dollars in thousands, except share and per share data) Balance at June 30, 2025 104,925,587 $ 126,600 $ 676,077 $ 1,009,790 $ ( 76,150 ) $ ( 218,550 ) $ 1,517,767 Net income 41,328 41,328 Other comprehensive income 6,933 6,933 Cash dividends declared ($ 0.135 per share) ( 14,096 ) ( 14,096 ) Treasury stock acquired ( 632,289 ) ( 10,630 ) ( 10,630 ) Treasury stock reissued — — — — — Restricted stock — — — — 535 535 Common stock issued — — — — Balance at September 30, 2025 104,293,298 $ 126,600 $ 676,077 $ 1,037,022 $ ( 69,217 ) $ ( 228,645 ) $ 1,541,837 Shares Outstanding Common Stock Additional Paid-in- Capital Retained Earnings Accumulated Other Comprehensive Income (Loss), net Treasury Stock Total Shareholders' Equity (dollars in thousands, except share and per share data) Balance at June 30, 2024 102,297,847 $ 123,603 $ 630,910 $ 929,686 $ ( 113,416 ) $ ( 208,278 ) $ 1,362,505 Net income 32,086 32,086 Other comprehensive income 30,330 30,330 Cash dividends declared ($ 0.130 per share) ( 13,308 ) ( 13,308 ) Treasury stock acquired ( 147,531 ) ( 2,482 ) ( 2,482 ) Treasury stock reissued — — — — — Restricted stock 87,625 — 498 — ( 13 ) 485 Balance at September 30, 2024 102,237,941 $ 123,603 $ 631,408 $ 948,464 $ ( 83,086 ) $ ( 210,773 ) $ 1,409,616 The accompanying notes are an integral part of these unaudited consolidated financial statements. 7 Table of Contents

Financial Statements and Supplementary Data (Continued)

ITEM 1. Financial Statements and Supplementary Data (Continued) FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Nine Months Ended September 30, 2025 2024 Operating Activities (dollars in thousands) Net income $ 107,426 $ 106,723 Adjustment to reconcile net income to net cash provided by operating activities: Provision for credit losses 29,720 22,680 Deferred tax expense 758 1,888 Depreciation and amortization 4,825 3,629 Net gains on securities and other assets ( 9,625 ) ( 9,714 ) Net amortization of premiums and discounts on securities 33 635 Loss on early redemption of subordinated debentures — 369 Income from increase in cash surrender value of bank owned life insurance ( 5,006 ) ( 3,935 ) (Increase) decrease in interest receivable ( 998 ) 2,771 Mortgage loans originated for sale ( 202,036 ) ( 185,514 ) Proceeds from sale of mortgage loans 211,595 162,210 (Decrease) increase in interest payable ( 747 ) 17,601 Increase in income taxes payable 1,500 1,461 Other, net ( 1,657 ) ( 4,858 ) Net cash provided by operating activities 135,788 115,946 Investing Activities Transactions with securities held to maturity: Proceeds from maturities and redemptions 53,187 43,400 Purchases ( 127,860 ) ( 55,276 ) Transactions with securities available for sale: Proceeds from sales 69,862 69,598 Proceeds from maturities and redemptions 180,754 140,079 Purchases ( 111,514 ) ( 311,088 ) Proceeds from sale of equity securities 5,146 5,664 Purchases of FHLB stock ( 51,501 ) ( 26,117 ) Proceeds from the redemption of FHLB stock 44,141 51,946 Proceeds from the redemption of other investments — 450 Proceeds from bank owned life insurance 3,313 3,813 Proceeds from sale of loans 56,453 73,756 Proceeds from sale of other assets 4,785 4,986 Net cash received from business acquisition 4,672 — Net increase in loans and leases ( 492,080 ) ( 69,614 ) Purchases of premises and equipment and

Financial Statements and Supplementary Data

ITEM 1. Financial Statements and Supplementary Data FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Note 1 Basis of Presentation The accounting and reporting policies of First Commonwealth Financial Corporation and subsidiaries ("First Commonwealth" or the "Company") conform with generally accepted accounting principles in the United States of America ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements and accompanying notes. Actual realized amounts could differ from those estimates. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of First Commonwealth's financial position, results of operations, comprehensive income, cash flows and changes in shareholders' equity as of and for the periods presented. Certain information and Note disclosures normally included in Consolidated Financial Statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, federal funds sold and interest-bearing bank deposits. Generally, federal funds are sold for one-day periods. The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the full year of 2025. These interim financial statements should be read in conjunction with First Commonwealth's 2024 Annual Report on Form 10-K. Note 2 Acquisition On April 30, 2025, the Company completed its acquisition of CenterGroup Financial, Inc. ("Center") and its banking subsidiary, CenterBank, for consideration of 3,016,009 shares of t

Financial Statements and Supplementary Data

ITEM 1. Financial Statements and Supplementary Data FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) The table below summarizes the net assets acquired (at fair value) and consideration transferred in connection with the Center acquisition (dollars in thousands): Consideration paid Cash paid to shareholders - fractional shares $ 1 Shares issued to shareholders ( 3,016,009 shares) 46,205 Total consideration paid $ 46,206 Fair value of assets acquired Cash and due from banks 4,672 Investment securities 21,396 FHLB stock 3,144 Loans, including loans held for sale 291,852 Premises and equipment 4,276 Core deposit intangible 5,355 Bank owned life insurance 430 Other assets 5,039 Total assets acquired 336,164 Fair value of liabilities assumed Deposits 277,980 Borrowings 22,785 Other liabilities 3,692 Total liabilities assumed 304,457 Total fair value of identifiable net assets $ 31,707 Goodwill $ 14,499 The Company determined that this acquisition constitutes a business combination and therefore was accounted for using the acquisition method of accounting. Accordingly, as of the date of the acquisition, the Company recorded the assets acquired, liabilities assumed and consideration paid at fair value. The $ 14.5 million excess of the consideration paid over the fair value of assets acquired was recorded as goodwill and is not amortizable or deductible for tax purposes. The amount of goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company with Center. The fair value of the 3,016,009 common shares issued was determined based on the $ 15.32 closing market price of the Company's common shares on the acquisition date, April 30, 2025. While the valuation of the acquired assets and liabilities is substantially complete, fair value estimates are subject to adjustment during the

Financial Statements and Supplementary Data

ITEM 1. Financial Statements and Supplementary Data FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) Loans - The estimated fair value of loans was based on a discounted cash flow methodology applied on a pooled basis for non- purchased credit-deteriorated ("non-PCD") loans and on an individual basis for purchased credit-deteriorated ("PCD") loans. The valuation considered underlying characteristics including loan type, term, rate, payment schedule and credit rating. Other factors included assumptions related to prepayments, the probability of default and loss given default. The discount rates applied were based on a build-up approach considering the funding mix, servicing costs, liquidity premium and factors related to performance risk. Acquired loans are classified into two categories: PCD loans and non-PCD loans. PCD loans are defined as a loan or group of loans that have experienced more than insignificant credit deterioration since origination. Non-PCD loans will have an allowance established on acquisition date, which is recognized as an expense through provision for credit losses. For PCD loans, an allowance is recognized on day 1 by adding it to the fair value of the loan, which is the "Day 1 amortized cost". There is no provision for credit loss expense recognized on PCD loans because the initial allowance is established by grossing-up the amortized cost of the PCD loan. A day 1 allowance for credit losses of $ 3.4 million related to non-PCD loans and $0.4 million related to the off-balance sheet commitment liability was recorded through the provision for credit losses within the Consolidated Statements of Income. At the date of acquisition, of the $ 303.7 million of portfolio loans acquired from Center, $ 29.2 million, or 9.6%, of Center's loan portfolio, was accounted for as PCD loans as of May 1, 2025. Premise and equipment - The estimated fair value of land and buildings

Financial Statements and Supplementary Data

ITEM 1. Financial Statements and Supplementary Data FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table provides details related to the fair value of acquired PCD loans as of April 30, 2025. Unpaid Principal Balance PCD Allowance for Credit Loss at Acquisition (Discount) Premium on Acquired Loans Fair Value of PCD Loans at Acquisition (dollars in thousands) Commercial, financial, agricultural and other $ 13,302 $ ( 1,616 ) $ ( 487 ) $ 11,199 Time and demand 13,302 ( 1,616 ) ( 487 ) 11,199 Time and demand other — — — — Real estate construction 2,442 ( 810 ) ( 54 ) 1,578 Construction other 557 ( 182 ) ( 17 ) 358 Construction residential 1,885 ( 628 ) ( 37 ) 1,220 Residential real estate 3,845 ( 45 ) ( 138 ) 3,662 Residential first lien 3,372 ( 38 ) ( 137 ) 3,197 Residential junior lien/home equity 473 ( 7 ) ( 1 ) 465 Commercial real estate 9,604 ( 1,087 ) ( 330 ) 8,187 Multifamily 1,210 ( 120 ) ( 78 ) 1,012 Non-owner occupied 5,330 ( 943 ) ( 184 ) 4,203 Loans to individuals 30 ( 2 ) — 28 Automobile and recreational vehicles 14 ( 1 ) — 13 Consumer other 16 ( 1 ) — 15 Total loans and leases $ 29,223 $ ( 3,560 ) $ ( 1,009 ) $ 24,654 12

Financial Statements and Supplementary Data

ITEM 1. Financial Statements and Supplementary Data FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table provides details related to the fair value and Day 1 provision related to the acquired non-PCD loans as of April 30, 2025. Unpaid Principal Balance (Discount) Premium on Acquired Loans Fair Value of Non-PCD Loans at Acquisition Day 1 Provision for Credit Losses - Non-PCD Loans (dollars in thousands) Commercial, financial, agricultural and other $ 50,555 $ ( 2,137 ) $ 48,418 $ 630 Time and demand 50,535 ( 2,137 ) 48,398 630 Time and demand other 20 — 20 — Real estate construction 32,074 ( 941 ) 31,133 691 Construction other 18,829 ( 472 ) 18,357 445 Construction residential 13,245 ( 469 ) 12,776 246 Residential real estate 82,609 ( 3,396 ) 79,213 665 Residential first lien 67,906 ( 3,145 ) 64,761 556 Residential junior lien/home equity 14,703 ( 251 ) 14,452 109 Commercial real estate 108,843 ( 3,550 ) 105,293 1,389 Multifamily 17,405 ( 481 ) 16,924 180 Non-owner occupied 43,927 ( 1,763 ) 42,164 512 Loans to individuals 357 ( 10 ) 347 4 Automobile and recreational vehicles 337 ( 9 ) 328 4 Consumer other 20 ( 1 ) 19 — Total loans and leases $ 274,438 $ ( 10,034 ) $ 264,404 $ 3,379 The following table presents the change in goodwill during the period (dollars in thousands): For the Nine Months Ended September 30, 2025 Goodwill at December 31, 2024 $ 363,715 Goodwill from Center acquisition 14,499 Goodwill at September 30, 2025 $ 378,214 Costs related to the acquisition totaled $ 4.2 million. These amounts were expensed as incurred and are recorded as a merger and acquisition related expense in the Consolidated Statements of Income. As a result of the full integration of the operations of Center, it is not practicable to determine revenue or net income included in the Company's operating results re

Financial Statements and Supplementary Data

ITEM 1. Financial Statements and Supplementary Data FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 3 Supplemental Comprehensive Income Disclosures The following table identifies the related tax effects allocated to each component of other comprehensive income ("OCI") in the unaudited Consolidated State

View Full Filing

View this 10-Q filing on SEC EDGAR

View on Read The Filing