Financial Data and Key Metrics Changes - The company reported net income of $23.8 million or $1.46 per diluted share for Q3 2025, compared to $19.6 million or $1.22 per diluted share for Q3 2024, reflecting a strong performance [8] - Net income for the first nine months of 2025 totaled $65.9 million or $4.06 per diluted share, up from $60 million or $3.72 per diluted share in the prior year [8] - The return on average assets was 1.5% and return on average equity was 14.7% for Q3 2025, with a 20% quarter-over-quarter earnings per share growth [7][8] Business Line Data and Key Metrics Changes - Annualized deposit growth was 9% for Q3 2025, with a compounded annual growth rate of 11.8% over the last six year-end periods [5] - Loan growth contracted an annualized 7% in Q3 2025, attributed to anticipated paydowns, but commitments to make loans totaled $307 million, an all-time high [5][6] - Mortgage banking income grew by 12% during the first nine months of 2025 compared to the same period in 2024 [6] Market Data and Key Metrics Changes - Average loans totaled $4.6 billion in Q3 2025, an increase of $201 million or over 4% from Q3 2024 [9] - Average deposits increased to $4.83 billion in Q3 2025, up $489 million or over 11% from the prior year [11] - The loan-to-deposit ratio improved to 96% from 102% a year earlier, indicating better liquidity management [4] Company Strategy and Development Direction - The company is focused on maintaining a strong and stable net interest margin, which stood at 3.5% despite a decline in the SOFR rate [3][4] - The planned acquisition of Eastern Michigan Financial Corporation is expected to positively impact various financial metrics, including earnings accretion and tangible book value [7] - The company aims to manage its balance sheet to minimize the impact of changing interest rate environments on its net interest margin [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges faced by financial institutions, highlighting strong asset quality and a robust pipeline for loan growth [22] - The company anticipates loan growth in the range of 5% to 7% annualized for Q4 2025, with expectations for continued strong performance in non-interest income [21][41] - Management noted that the effective tax rate for Q3 2025 was 13%, with projections for a similar rate in the future, depending on the acquisition of transferable energy tax credits [19][51] Other Important Information - The company recorded a provision expense of $0.2 million for Q3 2025, reflecting strong credit quality and net recoveries [16] - Non-interest expenses increased by $2.4 million in Q3 2025, primarily due to higher salary and benefit costs [18] - The total risk-based capital ratio was 14.3% as of September 30, 2025, indicating a well-capitalized position [20] Q&A Session Summary Question: Inquiry about credit quality and normalized charge-off ratio - Management noted a conservative approach to charge-offs and typically budgets between 5% and 10% in net charge-offs [26][27] Question: Discussion on net interest margin and future expectations - Management indicated that the acquisition will benefit the net interest margin, despite potential headwinds from rate cuts [28][30] Question: Clarification on loan paydowns and growth guidance - Management explained that paydowns recognized in Q3 were anticipated, and they expect continued mid-single-digit loan growth [39][41] Question: Inquiry about expense expectations and acquisition costs - Management confirmed that the guidance for Q4 includes about $1 million in acquisition costs, with no income statement impact from Eastern until the merger is finalized [44][70] Question: Discussion on fee income growth and expectations - Management highlighted strong growth in the commercial card program, attributing it to increased volume and customer engagement [71]

Financial Data and Key Metrics Changes - First Commonwealth reported core earnings per share of $0.32 for Q1 2025, with a return on assets of 1.14%, down from 1.23% in Q4 2024 due to rising expenses and falling fee income [6][10] - Loans grew at an annualized rate of 4.4%, totaling $99 million, with commercial loans accounting for $63 million or 64% of the increase [6][7] - Net interest margin (NIM) increased by eight basis points to 3.62%, while deposit costs fell to 1.99% [7][8] - The efficiency ratio rose to 59.08%, up from 56.07% in the previous quarter, with total expenses increasing by $2.1 million to $71.1 million [10][21] Business Line Data and Key Metrics Changes - Equipment finance and indirect auto lending contributed significantly to loan growth, with strong application volume continuing into April [6][7] - Fee income decreased by $1.5 million in Q1 2025, attributed to a $3.5 million hit from the Durbin Amendment and a decline in SBA gain on sale income [10][20] - The company anticipates fee income to improve in Q2 2025, projecting $23 million to $24 million, with a seasonal decline expected in Q4 [20] Market Data and Key Metrics Changes - The company noted that consumer financial health remains stable, comprising about 68% to 70% of U.S. GDP and 40% of its lending business [9] - The impact of tariffs and inflation on clients has been monitored, with many businesses adapting their supply chains effectively [12][13] Company Strategy and Development Direction - The company is focused on improving liquidity, with a loan-to-deposit ratio decreasing from 97% to 92% over the past two years [8] - The acquisition of Centre Bank is expected to enhance efficiency and margin, with the integration of new talent seen as a strategic fit for growth [11][128] - The company aims to increase fee income as a percentage of overall revenue, leveraging its regional model and local relationships [137] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth despite potential headwinds from tariffs, with strong pipelines in various markets [14][9] - The company is cautious about the economic environment, particularly regarding inflation and its potential impact on consumers and businesses [10][12] - Future NIM guidance anticipates expansion due to macro swaps and potential Fed rate cuts, with expectations of reaching the high 370s by year-end [18][42] Other Important Information - The Board of Directors approved a dividend increase of $0.01 per share, maintaining a dividend yield of approximately 3.54% [12] - The company has $6.7 million remaining under its buyback program, with no buyback activity in Q1 2025 due to the timing of the Centre Bank acquisition [22][49] Q&A Session Summary Question: Loan growth guidance and equipment finance portfolio momentum - Management noted healthy application volume in equipment finance and attributed growth to increased demand amid tariff anticipation [26][27] Question: Borrower sentiment and commercial real estate activity - Management indicated improved activity in commercial real estate and a strong pipeline, with a focus on growing the commercial and industrial book [28][29] Question: Deposit growth and rates - Management acknowledged that deposit growth was driven by savings, with a strategy to maintain liquidity despite lower rates [34][35] Question: NIM guidance and deposit costs - Management clarified that NIM guidance assumes stable deposit costs, with potential for upside if deposit rates can be lowered further [41][42] Question: SBA gain on sale outlook - Management expects SBA gain on sale income to improve as the year progresses, with a healthy pipeline of deals [75][78] Question: Center Bank acquisition impact - Management expressed excitement about the talent acquired from Centre Bank and its potential to enhance growth in the Cincinnati market [128][129]