Core Viewpoint - Amazon is expected to spend approximately $200 billion on capital expenditures (capex) in 2026, which may impact its attractiveness as a long-term investment [1] Group 1: Investment Insights - The long-term return on a stock is closely tied to the underlying business's performance, with a business earning 6% on capital over 40 years yielding similar returns for investors [1] - A business that earns 18% on capital over 20 to 30 years can still provide good returns even if purchased at a high price [1] - The impact of taxes on investment returns is significant, with different tax payment structures leading to varying effective returns over long holding periods [1]

Core Insights - ams OSRAM reported Q4 results that exceeded the mid-point of guidance, indicating strong performance in the semiconductor sector [1] - The company achieved EUR 144 million in free cash flow (FCF) for FY25, showcasing effective cash management and operational efficiency [1] - A new EUR 200 million 'Simplify' transformation and savings program has been launched, aimed at enhancing operational effectiveness and profitability [1] Financial Performance - The 'Re-establish-the Base' program was completed one year ahead of schedule, contributing to improved profitability despite challenging market conditions [1] - The semiconductor core business grew in alignment with overall semiconductor market growth, reflecting the company's competitive positioning [1]

Core Viewpoint - The recommendation for United Airlines (UAL) is a buy rating, indicating a positive outlook for the company's future performance [1] Group 1: Business Cycle and Revenue Mix - United Airlines is believed to have entered a new phase of its business cycle, which is expected to result in a structurally improved revenue mix and enhanced earnings [1] Group 2: Investment Approach - The investment strategy focuses on long-term investments while also considering short-term opportunities to uncover alpha [1] - The analysis is based on a bottom-up approach, emphasizing the fundamental strengths and weaknesses of individual companies [1] - The investment horizon is medium to long-term, targeting companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Company Performance - Big Yellow Group Plc, a leader in the British self-storage market, is performing solidly [1] - The growth opportunities in the U.K. self-storage industry may be receding as the market becomes more developed [1]

Financial Data and Key Metrics Changes - Core EPS for Q4 2025 was $0.43 per share, exceeding consensus estimates, with a net interest margin (NIM) of 3.98% and a core return on assets (ROA) of 1.45% [4] - Average deposits grew by 2.8% and total loans increased by 1.2% in Q4, while net interest income rose by $47.2 million year-over-year to $427.5 million [4][8] - The provision for credit losses decreased by $4.3 million to $7 million, with non-performing loans (NPLs) increasing by four basis points to 94 basis points [6][8] Business Line Data and Key Metrics Changes - Fee income remained flat at 18% of total revenue, with gains in SBA offset by declines in wealth and mortgage services [6] - Core non-interest income for Q4 was $24.3 million, down $200,000 from the previous quarter, with an increase in SBA gain on sale income [15] - Core non-interest expense rose by $1.7 million to $74.3 million, primarily due to increased salaries and benefits [16] Market Data and Key Metrics Changes - Average deposit growth for the year was 6.1%, with significant contributions from money market accounts and CDs [9] - The company reported a total of $98 million in non-performing loans, including $39.2 million in total SBA loans [7] Company Strategy and Development Direction - The company aims to grow fee income through its regional banking model and maintain a focus on low-cost deposit growth [10][96] - A portfolio of approximately $225 million in commercial loans was designated as held for sale, with plans to reinvest proceeds into lower-yielding securities [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining loan growth in 2026, despite elevated payoffs in the previous year [28] - The company anticipates a near-term dip in NIM due to rate cuts, followed by gradual improvement, projecting an end-of-year NIM of around 4% for 2026 [12][61] Other Important Information - The company repurchased $23.1 million of its stock in Q4 2025, totaling 2.1 million shares for the year [7] - Management highlighted the retirement of Jane Grebenc, a key figure in the company's strategic transformations [10] Q&A Session Summary Question: Credit side impact and net charge-offs for 2026 - Management provided guidance of 25-30 basis points for charge-offs, with $1.5 million left to resolve on the dealer floor plan loan [20][21] Question: Loan growth expectations for 2026 - Management expects loan growth to continue at around 5-7%, with a strong pipeline in business banking and mortgage [28][29] Question: Buyback strategy and stock price sensitivity - The company will continue to repurchase shares using excess capital, with a sensitivity to stock price affecting the pace of buybacks [30][31] Question: NIM sustainability and deposit costs - Management indicated that NIM is projected to hover around 4% in 2026, with potential for further reductions in deposit costs [54][61]

Financial Data and Key Metrics Changes - Core EPS for Q4 2025 was $0.43 per share, exceeding consensus estimates, with a net interest margin (NIM) of 3.98% and a core return on assets (ROA) of 1.45% [4] - Average deposits grew by 2.8% and total loans increased by 1.2% in Q4, with net interest income rising due to an expanded margin [4][15] - For the year 2025, core EPS was $1.53, up from the consensus estimate of $1.40, and net interest income reached $427.5 million, an increase of $47.2 million year-over-year [8][10] Business Line Data and Key Metrics Changes - Fee income constituted 18% of total revenue, with a focus on growing this through a regional banking model, although it remained flat due to seasonal declines in wealth and mortgage services [6][9] - The provision for credit losses decreased by $4.3 million to $7 million, with non-performing loans (NPLs) increasing slightly to 94 basis points [6][7] - Core non-interest income for Q4 was $24.3 million, down $200,000 from the previous quarter, with SBA gain on sale income increasing but offset by declines in other areas [15] Market Data and Key Metrics Changes - Average deposit growth for the year was 6.1%, with significant contributions from money market accounts and CDs, while non-interest-bearing deposits also increased [9] - The company reported a loan growth of 8.2% annualized for the year, with commercial banking and equipment finance leading the growth [8][9] Company Strategy and Development Direction - The company aims to maintain a focus on low-cost deposit growth and diversify its lending businesses, with a strategic exit from certain markets to concentrate resources elsewhere [10][13] - The acquisition of CenterBank was completed, contributing to overall deposit growth and positioning the company for future expansion [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a strong NIM, projecting it to drift upward to around 4% by the end of 2026, despite anticipated short-term dips due to rate cuts [12][38] - The company is focused on managing credit costs and maintaining strong reserve levels, with expectations for stability in provisions and charge-offs [21][22] Other Important Information - The company repurchased $23.1 million of its stock in Q4, with a total of 2.1 million shares repurchased in 2025 [7][16] - Management indicated that operational expenses are expected to increase by approximately 3% year-over-year, with a focus on maintaining operating leverage [16][40] Q&A Session Summary Question: Credit side impact and loan issues - Management provided guidance on charge-offs at 25-30 basis points and noted that the dealer floor plan loan issue is nearing resolution with a remaining balance of $2.5 million [20][21] Question: Loan growth expectations - Management expects loan growth to continue at a rate of 5-7%, despite elevated payoffs in the previous year [28][29] Question: Buyback strategy - The company will be cautious with buybacks, sensitive to stock price movements, and intends to utilize its capital effectively [30][31] Question: NIM sustainability - Management discussed the potential for NIM to hover around 4% in 2027, with expectations for deposit costs to decrease further [55][56] Question: Securities yields outlook - The securities portfolio is expected to yield around 4.5% to 4.75%, with opportunities for reinvestment as the portfolio rolls over [76][79]

Financial Data and Key Metrics Changes - Core EPS for Q4 2025 was $0.43 per share, exceeding consensus estimates, with a net interest margin (NIM) of 3.98%, core ROA of 1.45%, and core efficiency ratio of 52.8% [4] - Average deposits and total loans grew by 2.8% and 1.2% respectively, while net interest income increased by $47.2 million year-over-year to $427.5 million [4][7] - The provision for credit losses decreased by $4.3 million to $7 million, with non-performing loans (NPLs) rising four basis points to 94 basis points [5][6] Business Line Data and Key Metrics Changes - Fee income remained flat at 18% of total revenue, with gains in SBA offset by declines in wealth and mortgage [5] - Core non-interest income for Q4 was $24.3 million, down $200,000 from the previous quarter, with SBA gain on sale income increasing by $800,000 [14] - Core non-interest expense increased by $1.7 million to $74.3 million, primarily due to increased salaries and benefits [15] Market Data and Key Metrics Changes - Average deposit growth for the year was 6.1%, with significant contributions from money market accounts and CDs [9] - The company reported $98 million in non-performing loans, including $39.2 million in total SBA loans [6] Company Strategy and Development Direction - The company aims to grow fee income through its regional banking model and maintain a focus on low-cost deposit growth [5][10] - A portfolio of approximately $225 million in commercial loans was designated as held for sale to improve liquidity and capital ratios [12][13] - The company plans to limit operating cost increases to approximately 3% year-over-year [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining loan growth despite seasonal headwinds and elevated payoffs, projecting continued growth in business banking and mortgage segments [28] - The guidance for NIM is expected to remain around 4% by the end of 2026, with a near-term dip anticipated due to rate cuts [12][40] - Management highlighted the importance of maintaining a balance between loan growth and capital generation, emphasizing disciplined capital deployment [31][32] Other Important Information - The company repurchased $23.1 million of its stock in Q4 2025, totaling 2.1 million shares for the year [6] - Jane Grebenc, Bank President and Chief Revenue Officer, will retire at the end of March 2026, marking a significant leadership transition [10] Q&A Session Summary Question: What are the expectations for net charge-offs and provisions in 2026? - Management expects charge-off guidance to be 25-30 basis points, with $1.5 million left to resolve on the dealer floor plan loan [19][20] Question: Can we expect additional loans to be moved off the balance sheet in 2026? - Management indicated that the loan sale is more of a one-off situation, focusing resources on other markets [23][24] Question: What are the expectations for loan growth in 2026? - The company anticipates loan growth to continue at a similar pace as 2025, despite elevated payoffs [28][30] Question: How should we think about the stock buyback strategy? - The buyback strategy is sensitive to stock price, with intentions to utilize the authority aggressively while maintaining capital ratios [31][57] Question: What is the outlook for NIM and deposit costs? - Management expects a dip in NIM in Q1 2026, with a gradual recovery to around 4% by year-end [60][61]

NYSE: FCF Forward-looking statements speak only as of the date on which they are made. First Commonwealth undertakes no obligation to update any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. 3 4Q 2025 Earnings Release Webcast Presentation January 28, 2026 2 FORWARD-LOOKING STATEMENTS Certain statements contained in this release that are not historical facts may constitute "forward-looking statements" within the meaning of Sec ...

Financial Performance - Net income for Q4 2025 was $44.9 million, or $0.43 per share, an increase of $3.5 million, or $0.04 per share from Q3 2025, and an increase of $9.0 million, or $0.08 per share from Q4 2024[4] - Net income for the year ended December 31, 2025, was $152.3 million, compared to $142.6 million in 2024, marking a 6.0% increase[32] - Net income for the quarter was $44,876, up from $41,328 in the prior quarter and $35,849 in the same quarter last year, reflecting a year-over-year growth of 25.3%[40] - Total net income for Q4 2025 reached $44,876,000, up from $41,328,000 in Q3 2025, representing a 6.2% increase[41] Revenue and Income Sources - Core pre-tax pre-provision net revenue (PPNR) for Q4 2025 totaled $63.2 million, an increase of $0.2 million from Q3 2025 and an increase of $11.8 million from Q4 2024[4] - Net interest income (FTE) for Q4 2025 was $113.6 million, an increase of $2.1 million from Q3 2025 and an increase of $18.1 million from Q4 2024[13] - Interest income for Q4 2025 reached $163,925,000, up 9.2% from $149,996,000 in Q4 2024[33] - Total noninterest income for the year ended December 31, 2025, was $96,824,000, down 2.9% from $99,231,000 in 2024[33] Asset and Loan Growth - Average deposits increased by $72.0 million, or 2.8% annualized, compared to the prior quarter, while total loans increased by $28.6 million, or 1.2% annualized[8] - Total loans for the year ended December 31, 2025, grew by $743.7 million, or 8.2% compared to the prior year[14] - Total loans and leases amounted to $9,779,491, an increase from $9,750,854 in the previous quarter and $9,035,745 year-over-year[36] - Total assets as of December 31, 2025, were $12,343,036,000, a 6.5% increase from $11,584,936,000 a year earlier[34] Efficiency and Ratios - The core efficiency ratio for Q4 2025 was 52.84%, an increase of 54 basis points from Q3 2025 and a decrease of 323 basis points from Q4 2024[22] - The core efficiency ratio improved to 54.42% for the year ended December 31, 2025, compared to 55.36% in the previous year[24] - The return on average assets (ROAA) for Q4 2025 was 1.46%, compared to 1.34% in Q3 2025 and 1.23% in Q4 2024[8] - The return on average tangible common equity was 15.90%, an increase from 14.96% in the previous quarter and 14.40% year-over-year[40] Credit Quality - The provision for credit losses in Q4 2025 was $7.0 million, a decrease of $4.3 million compared to Q3 2025[16] - Nonperforming loans totaled $91.8 million, an increase of $3.1 million from the previous quarter, representing 0.94% of total loans[17] - Nonperforming loans as a percentage of end-of-period loans and leases was 0.94% at December 31, 2025, compared to 0.91% in the previous quarter[32] - Net charge-offs for the quarter were $11,272, a decrease from $12,247 in the previous quarter and $13,691 year-over-year, indicating improved asset quality[37] Expenses - For the year ended December 31, 2025, noninterest expense totaled $290.4 million, an increase of $20.5 million from the prior year, primarily due to a $14.7 million rise in salaries and benefits[23] - The company reported a total noninterest expense of $294,828,000 for the year ended December 31, 2025, an increase of 8.8% from $270,745,000 in 2024[33] Capital and Dividends - Capital ratios at December 31, 2025, included Total Capital at 14.5%, Tier I at 12.7%, Leverage at 10.9%, and Common Equity Tier I at 12.1%, exceeding Basel III requirements[26] - First Commonwealth Financial Corporation declared a quarterly dividend of $0.135 per share, reflecting a 3.9% increase from the fourth quarter of 2024[25] Future Outlook - The company will host a quarterly conference call on January 28, 2026, to discuss its financial results for the fourth quarter and full year 2025[27] - The company operates 126 community banking offices across 30 counties in Pennsylvania and Ohio, providing a full range of financial services[28]

Core Financial Performance - First Commonwealth Financial (FCF) reported revenue of $137.92 million for the quarter ended December 2025, marking a year-over-year increase of 14.5% [1] - Earnings per share (EPS) for the same period was $0.43, up from $0.35 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $135.26 million by 1.96% [1] - The EPS also surpassed the consensus estimate of $0.41 by 4.04% [1] Key Metrics Analysis - Core Efficiency Ratio stood at 52.8%, better than the average estimate of 53.7% based on two analysts [4] - Net interest margin (FTE) was reported at 4%, compared to the average estimate of 3.9% [4] - Total Interest-Earning Assets (FTE) amounted to $11.31 billion, slightly below the average estimate of $11.43 billion [4] - Gain on sale of mortgage loans was $1.94 million, compared to the average estimate of $2.05 million [4] - Total Non-Interest Income reached $24.72 million, exceeding the average estimate of $24 million [4] Stock Performance - Shares of First Commonwealth Financial have returned +2.7% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]