[PART I. Financial Information](index=2&type=section&id=PART%20I.%20Financial%20Information) [Financial Statements and Supplementary Data](index=3&type=section&id=ITEM%201.%20Financial%20Statements%20and%20Supplementary%20Data) Presents unaudited consolidated financial statements, including balance sheet, income, cash flows, and detailed notes on key policies [Consolidated Statements of Financial Condition](index=3&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets grew to **$12.24 billion** by June 30, 2025, driven by net loans, with liabilities and equity also increasing Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **12,237,147** | **11,584,936** | **+5.6%** | | Net Loans and Leases | 9,437,849 | 8,864,848 | +6.5% | | Goodwill | 378,654 | 363,715 | +4.1% | | **Total Liabilities** | **10,719,380** | **10,179,771** | **+5.3%** | | Total Deposits | 10,104,582 | 9,678,019 | +4.4% | | **Total Shareholders' Equity** | **1,517,767** | **1,405,165** | **+8.0%** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income for H1 2025 decreased to **$66.1 million** due to higher noninterest expenses and increased credit loss provisions Income Statement Summary (Unaudited, Six Months Ended June 30) | Metric | 2025 ($ thousands) | 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | 201,763 | 187,296 | +7.7% | | Provision for credit losses | 18,393 | 12,065 | +52.5% | | Total noninterest income | 47,251 | 49,198 | -3.9% | | Total noninterest expense | 147,518 | 131,371 | +12.3% | | **Net Income** | **66,098** | **74,637** | **-11.4%** | Per Share Data (Unaudited, Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Diluted Earnings per Share | $0.64 | $0.73 | | Cash Dividends Declared per Common Share | $0.265 | $0.255 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities provided **$86.3 million** cash, investing used **$300.9 million**, and financing provided **$241.4 million**, resulting in a **$26.8 million** cash increase Cash Flow Summary (Unaudited, Six Months Ended June 30) | Activity | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | 86,291 | 62,338 | | Net cash used in investing activities | (300,934) | (98,860) | | Net cash provided by financing activities | 241,400 | 77,822 | | **Net increase in cash and cash equivalents** | **26,757** | **41,300** | [Notes to the Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Consolidated%20Financial%20Statements) Detailed notes explain financial statements, highlighting the **$46.2 million** CenterGroup acquisition, **$14.9 million** goodwill, and loan portfolio growth - On April 30, 2025, the Company completed its acquisition of CenterGroup Financial, Inc. for total consideration of **$46.2 million**, paid via 3,016,009 shares of common stock. The acquisition added three full-service banking offices in the Cincinnati, Ohio market[17](index=17&type=chunk)[18](index=18&type=chunk) - The CenterGroup acquisition resulted in the recording of **$14.9 million** in goodwill, which is not amortizable or tax-deductible. Acquisition-related costs of **$4.1 million** were expensed as incurred[18](index=18&type=chunk)[33](index=33&type=chunk) - A day 1 allowance for credit losses of **$3.4 million** for non-PCD loans and **$0.4 million** for off-balance sheet commitments was recorded through the provision for credit losses related to the Center acquisition[25](index=25&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=61&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2025 financial results, noting decreased net income from merger costs and credit loss provisions, offset by net interest income growth - For the six months ended June 30, 2025, net income was **$66.1 million** (**$0.64/share**), down from **$74.6 million** (**$0.73/share**) in the prior year, primarily due to a **$16.1 million** increase in noninterest expense, including **$4.0 million** in merger costs[216](index=216&type=chunk) - Net interest margin on a fully taxable equivalent basis improved to **3.73%** for H1 2025, up from **3.55%** in H1 2024, due to lower cost of interest-bearing liabilities and higher yield on interest-earning assets[220](index=220&type=chunk) - Card-related interchange income for H1 2025 decreased by **$6.2 million** (**45%**) compared to the prior year, a direct result of the company becoming subject to the Durbin Amendment on July 1, 2024[238](index=238&type=chunk) - Nonperforming loans increased to **$99.5 million** (**1.04%** of total loans) at June 30, 2025, up from **$61.5 million** (**0.68%** of total loans) at year-end 2024, primarily due to a single **$31.9 million** dealer floor plan relationship[302](index=302&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=89&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates market risk disclosures by reference from the 'Market Risk' caption in Item 2 (MD&A) - The report refers to the 'Market Risk' section within Item 2 (MD&A) for quantitative and qualitative disclosures about market risk[332](index=332&type=chunk) [Controls and Procedures](index=89&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025 - The **CEO and CFO** concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[334](index=334&type=chunk) [PART II. Other Information](index=90&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=90&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is subject to various legal proceedings, with estimated possible losses between **$0** and **$1 million** beyond recorded liabilities - Information regarding legal proceedings is incorporated by reference from Note 6 of the financial statements[336](index=336&type=chunk) - Management estimates the range of reasonably possible aggregate losses beyond any recorded liability for pending litigation is between **$0** and **$1 million**[45](index=45&type=chunk) [Risk Factors](index=90&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to risk factors were reported since the Annual Report on Form 10-K for the year ended December 31, 2024 - **No material changes** to risk factors were reported since the last Annual Report on Form 10-K[337](index=337&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=90&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company repurchased **32,844** common shares at an average price of **$15.47** under its share repurchase program Share Repurchases in Q2 2025 | Month Ending | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 30, 2025 | — | — | | May 31, 2025 | — | — | | June 30, 2025 | 32,844 | $15.47 | [Other Information](index=90&type=section&id=ITEM%205.%20Other%20Information) The company entered a Rule 10b5-1 Issuer Repurchase Plan on June 18, 2025, to facilitate stock buybacks - On June 18, 2025, the Corporation entered into a **Rule 10b5-1 Issuer Repurchase Plan** to repurchase its common stock[339](index=339&type=chunk) [Exhibits](index=91&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and XBRL-formatted financial statements - Exhibits filed include **CEO/CFO certifications** (31.1, 31.2, 32.1, 32.2) and **XBRL data files** (101)[340](index=340&type=chunk)

Group 1 - The largest contributor during the quarter was Gannett (GCI), which increased by 24%, recovering part of its first quarter drawdown [2] - Gannett is considered significantly mispriced in the market [2]

Core Insights - Kinross Gold Corporation (KGC) achieved record free cash flow of $646.6 million in Q2, driven by strong gold prices and operational performance, marking an 87% year-over-year increase and a 74% rise from the previous quarter [1][7] - The company's free cash flow for the first half of 2025 surpassed $1 billion [1] Financial Performance - Record operating margins, supported by effective cost management, healthy production levels, and higher gold prices, contributed to the robust free cash flow generation in Q2 [2] - The Paracatu and Tasiast mines were significant contributors, accounting for over half of KGC's production and cash flow in the quarter [2][7] Strategic Development - KGC's strong free cash flow enables financing for development projects, debt reduction, and enhancement of shareholder value [3] - Key development projects include Great Bear in Ontario and Round Mountain Phase X in Nevada, which are expected to increase production and cash flow, delivering substantial value [3] Industry Comparison - Among peers, Agnico Eagle Mines Limited (AEM) reported a Q2 free cash flow of $1,305 million, more than doubling the previous year's figure [4] - Newmont Corporation (NEM) also recorded a significant free cash flow of $1.7 billion in Q2, nearly tripling year-over-year [5] Market Performance - KGC's shares have increased by 86.2% year-to-date, outperforming the Zacks Mining – Gold industry's rise of 55.6%, primarily due to the rally in gold prices [6] Earnings Estimates - The Zacks Consensus Estimate for KGC's earnings in 2025 and 2026 indicates a year-over-year increase of 100% and 3.7%, respectively, with EPS estimates trending higher over the past 60 days [9] Valuation Metrics - KGC is currently trading at a forward 12-month earnings multiple of 12.43, which is a modest 1.4% premium to the industry average of 12.26 [10]

Group 1: Stock Recommendations - New York Mortgage Trust (NYMT) is a real estate investment trust focused on residential mortgage securities and has seen a 4.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - TPG RE Finance Trust (TRTX) is a commercial real estate finance company that has experienced a 2.1% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - First Commonwealth Financial (FCF) operates two chartered banks and has witnessed a 7.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3] Group 2: Dividend Yields - New York Mortgage Trust (NYMT) has a dividend yield of 12.2%, surpassing the industry average of 11.4% [2] - TPG RE Finance Trust (TRTX) has a dividend yield of 11.1%, compared to the industry average of 0.0% [3] - First Commonwealth Financial (FCF) offers a dividend yield of 3.3%, which is higher than the industry average of 2.7% [4]

Market Overview - Stock markets are showing signs of nervousness at all-time highs, with companies experiencing significant corrections despite strong earnings reports [1] - This situation serves as a reminder for investors to exercise caution and consider deploying strategies to mitigate risks [1] Analyst Background - Gary Alexander has extensive experience covering technology companies on Wall Street and has worked in Silicon Valley, providing insights into current industry trends [1] - He has been a contributor on Seeking Alpha since 2017 and has been quoted in various web publications, with his articles reaching audiences through popular trading apps like Robinhood [1]

Core Insights - First Commonwealth Financial (FCF) reported a non-GAAP earnings per share of $0.38 for Q2 2025, exceeding analyst estimates of $0.28, representing a 35.7% improvement [1] - Non-GAAP revenue was $58.68 million, significantly below the Street estimate of $125.88 million, indicating a mixed performance despite operational strengths [1] Financial Performance - EPS (Non-GAAP) increased by 5.6% year-over-year from $0.36 in Q2 2024 [2] - Non-GAAP revenue for Q2 2025 was $131.3 million, up 9.0% from $120.5 million in Q2 2024 [2] - Net interest margin improved to 3.83%, up 0.26 percentage points from Q2 2024 [2] - Noninterest income rose to $24.7 million, although it was slightly below the previous year's figure [7] Loan and Asset Quality - Total loans increased by $183.7 million, or 8.1% annualized, with notable growth in commercial real estate and equipment finance [5] - Nonperforming loans surged to $99.5 million, representing 1.04% of total loans, up from 0.65% in the previous quarter [9] - Net charge-offs decreased to $2.8 million, or 0.12% of average loans, indicating improved credit quality despite the rise in nonperforming loans [10] Capital Position and Dividends - The total capital ratio stood at 14.4%, well above the regulatory minimum of 10% [11] - The bank's board authorized a 3.7% increase in the quarterly dividend to $0.135 per share, with an annualized yield of 3.3% [13][18] Strategic Initiatives - The bank is focusing on expansion through strategic acquisitions and organic loan growth, with the recent acquisition of CenterBank contributing positively to its capital base [4][6] - Management aims to enhance fee-based income to reduce reliance on traditional net interest income, with ongoing efforts to improve fee generation [14][15] Outlook - The company did not provide updated financial guidance for the remainder of fiscal 2025, but management anticipates a potential expansion in net interest margin by approximately 0.10 percentage points by year-end [16] - Investors are advised to monitor asset quality metrics and the integration of the CenterBank acquisition, which is expected to enhance per-share earnings from 2026 [17]

Financial Data and Key Metrics Changes - Core earnings per share increased to $0.38, surpassing consensus estimates by $0.03 and improving from $0.32 in the first quarter [6] - Core return on assets reached 1.31%, with a core pretax pre-provision ROA of 1.95% and a core efficiency ratio of 54.1% [6] - Net interest margin expanded from 3.62% in the first quarter to 3.83% in the second quarter, a 21 basis point increase [7] - Net interest income increased by $10,700,000 to $106,200,000, driven by improved loan yields and lower deposit costs [7][8] Business Line Data and Key Metrics Changes - Loan growth was 8.1% annualized, with significant contributions from Equipment Finance, small business, commercial, indirect, and branch lending [7][8] - Noninterest income increased by $2,100,000 to $24,700,000, with strong contributions from mortgage, SBA, interchange, wealth, and other service charges [8] - Total deposits grew by 9% year to date, reaching $10,100,000,000, with the Community Pennsylvania region performing exceptionally well [9] Market Data and Key Metrics Changes - The integration of Centre Bank added $295,000,000 in loans and $278,000,000 in deposits, enhancing the company's presence in Cincinnati [10] - The company experienced loan and deposit growth in four of its six geographic markets [8] Company Strategy and Development Direction - The company aims to be the leading community bank in its markets, focusing on improving financial lives of customers and communities [12] - Strategic acquisitions and a regional business model are key components of the company's growth strategy [12] - The company is exploring smaller acquisition opportunities while maintaining a disciplined approach to M&A [44][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's trajectory, citing disciplined execution and strategic acquisitions as drivers of growth [12] - The company anticipates continued loan growth and margin expansion, with a revised forecast of two Fed cuts by year-end [16][72] - Management highlighted the importance of maintaining low-cost deposits to support loan growth [121] Other Important Information - The company reported a second quarter provision expense of $12,600,000, with $3,800,000 related to the Centre Bank acquisition [11] - Nonperforming loans increased by $40,100,000 due to the Centre Bank acquisition and a single commercial loan [12] Q&A Session Summary Question: Guidance for expenses in the third quarter or back half of the year - Management indicated that expenses are on track, with consensus estimates for the third quarter at $72,800,000 and fourth quarter at $73,100,000 [23][24] Question: Appetite for stock repurchases - Management plans to resume stock repurchases after a blackout period, with a focus on buying back shares at a set price [28][30] Question: Outlook for charge-offs - Charge-offs have been low, and management expects them to normalize in the mid-20 basis point range [32] Question: Loan yield trends and guidance - Management indicated that loan yields have been consistent, with expectations for continued positive trends if the Fed does not cut rates [38][40] Question: Market share opportunities - Management believes there is significant room for growth in existing markets, particularly in Ohio and Western Pennsylvania [92][95] Question: Impact of recent investments in Pennsylvania - Management noted significant investments in the area, particularly in infrastructure and energy, which could benefit the company [100] Question: Credit quality of the portfolio - Management confirmed that the majority of the nonaccruals are from a legacy loan, with the overall portfolio performing well [106][112]

Financial Highlights - Core pre-tax pre-provision income reached $58.7 million[8] - Core PTPP ROAA was 1.95%[8] - The reserve coverage ratio stood at 1.39%[8] - Available liquidity amounted to $5.3 billion[8] - Excess capital was $364.0 million[8] - TCE ratio was 9.4%[8] Income Statement - Net interest income (FTE) was $106.6 million, up $10.7 million from the previous quarter and $11.3 million year-over-year[12] - Net interest margin increased to 3.83%, a 21 basis point increase from the previous quarter and a 26 basis point increase year-over-year[12] - Fee income increased by $2.0 million from the previous quarter but decreased $0.4 million year-over-year, totaling $24.7 million[28, 26] Balance Sheet - Total loans (excluding acquired balances) increased by $183.7 million, or 8.1% annualized, from the previous quarter[9] - Average deposits (excluding acquired balances) grew by $91.6 million, or 3.8% annualized, from the previous quarter[9] - Nonperforming loans increased by $40.1 million from the previous quarter, reaching $99.5 million[36]

Core Financial Performance - First Commonwealth Financial (FCF) reported revenue of $130.99 million for the quarter ended June 2025, marking a year-over-year increase of 9% [1] - The earnings per share (EPS) for the same period was $0.38, compared to $0.36 a year ago, indicating a positive growth trend [1] - The reported revenue exceeded the Zacks Consensus Estimate of $124.65 million by 5.09% [1] - The EPS also surpassed the consensus estimate of $0.34 by 11.76% [1] Key Metrics Analysis - The Core Efficiency Ratio was reported at 54.1%, better than the average estimate of 58.7% based on two analysts [4] - The Net Interest Margin (FTE) stood at 3.8%, slightly above the average estimate of 3.7% [4] - Total Interest-Earning Assets (FTE) amounted to $11.16 billion, exceeding the average estimate of $11.08 billion [4] - Gain on sale of mortgage loans was $1.84 million, surpassing the average estimate of $1.75 million [4] - Total Non-Interest Income reached $24.75 million, compared to the average estimate of $23 million [4] Stock Performance - Shares of First Commonwealth Financial have returned +0.5% over the past month, while the Zacks S&P 500 composite increased by +3.6% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Core Viewpoint - First Commonwealth Financial (FCF) reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, and showing an increase from $0.36 per share a year ago, indicating a positive earnings surprise of +11.76% [1][2] Financial Performance - The company achieved revenues of $130.99 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.09% and up from $120.2 million year-over-year [2] - Over the last four quarters, FCF has exceeded consensus revenue estimates three times [2] Stock Performance and Outlook - FCF shares have declined approximately 3.6% year-to-date, contrasting with the S&P 500's gain of 8.6% [3] - The company's earnings outlook is crucial for future stock performance, with current consensus EPS estimates at $0.38 for the upcoming quarter and $1.45 for the current fiscal year [4][7] Industry Context - The Zacks Industry Rank for Banks - Northeast places it in the top 16% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]