First Commonwealth Financial(FCF) - 2025 Q2 - Quarterly Report

PART I. Financial Information Financial Statements and Supplementary Data Presents unaudited consolidated financial statements, including balance sheet, income, cash flows, and detailed notes on key policies Consolidated Statements of Financial Condition 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 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 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 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][18] - 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][33] - 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] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) 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] - 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] - 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] - 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] Quantitative and Qualitative Disclosures About Market Risk 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] Controls and Procedures 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] PART II. Other Information Legal Proceedings 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] - Management estimates the range of reasonably possible aggregate losses beyond any recorded liability for pending litigation is between $0 and $1 million[45] Risk Factors 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] Unregistered Sales of Equity Securities and Use of Proceeds 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 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] Exhibits 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]