First Commonwealth Financial Q4 Earnings Call Highlights

Core Insights - First Commonwealth Financial reported a core EPS of $0.43 for Q4 2025, exceeding consensus estimates, with a net interest margin (NIM) of 3.98% and a core return on assets (ROA) of 1.45% [4][7] - The company anticipates a short-term dip in NIM of 5 to 10 basis points in Q1 2026, followed by gradual improvement to around 4% by the end of 2026 [1][7] Financial Performance - Spread income increased by $2.1 million from the prior quarter, primarily due to a 6 basis point rise in NIM, with earning-asset yields up 3 basis points and funding costs down 3 basis points [2] - Average deposits rose by 2.8% and total loans increased by 1.2% during the quarter, attributed to seasonal factors and larger commercial loan payoffs [3] Loan and Deposit Metrics - The bank designated approximately $225 million in commercial loans as held for sale, primarily from the Philadelphia market, with plans to reinvest proceeds into lower-yielding securities [9][10] - Deposit costs fell by 1 basis point to 1.83%, supporting the expansion of net interest income [3] Credit Quality - Non-performing loans (NPLs) rose to 94 basis points, totaling approximately $98 million, with reserves at 1.32% [6][13] - The provision for credit losses decreased to $7 million, down $4.3 million from the prior quarter, as the dealer floor plan credit issue neared resolution [12][14] Capital Management - The company repurchased $23.1 million of stock in Q4 2025, with an additional $25 million authorized for buybacks, funded by excess capital generation [17] - Core non-interest expenses increased by $1.7 million to $74.3 million, primarily due to salaries and benefits [16] Leadership Changes - Bank President and Chief Revenue Officer Jane Grebenc will retire at the end of March, marking a significant leadership transition [18]