FIRST COMMONWEALTH FINANCIAL CORP /PA/
For the period ended Sep 30, 2025. Filed Nov 10, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 10, 2025
FCF$20.91-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0000712537-25-000107
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0000712537-25-000129
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 187 previous paragraphs and 187 current paragraphs.
113 unchanged; 62 reworded; 9 added; 10 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 28 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Current report
Total provision expense for the nine months ended September 30, 2025, increased $7.0 million compared to the nine months ended September 30, 2024. This increase is partially due to a $3.4 million provision recognized in the second quarter of 2025 as the day-1 non-PCD provision expense resulting from the Center acquisition. Included in the provision for credit losses for the nine months ended September 30, 2025 is $8.6 million related to a dealer floor plan relationship moved to nonaccrual in the second quarter of 2025 as a result of being out of trust on sold vehicles. Provision expense for the period was also impacted by a $1.8 million chargeoff for a commercial loan that was moved to held for sale and $5.2 million related to the increase in the allowance for credit losses as a result of the mix and growth of the loan portfolio.
Current report
The provision expense for the nine months ended September 30, 2024 can be attributed to $17.5 million in net charge-offs as well as an increase of $9.2 million in specific reserves. The specific reserves can be attributed to $6.2 million for three non-owner occupied relationships and $2.8 million for a time and demand relationship, all of which were moved to nonaccrual during the nine months ended September 30, 2024.
Current report
The following table presents the components of noninterest income for the nine months ended September 30:
Current report
The provision for credit losses on loans and leases for the three months ended September 30, 2025 decreased in comparison to the three months ended September 30, 2024 by $1.8 million. Included in the provision for credit losses for the three months ended September 30, 2025 is $4.4 million related to a dealer floor plan relationship moved to nonaccrual in the second quarter of 2025 as a result of being out of trust on sold vehicles. Provision expense for the period was also impacted by a $1.8 million chargeoff for a commercial loan that was moved to held for sale and $1.3 million in provision expense related to the increase in the allowance for credit losses as a result of mix and growth of the loan portfolio. The level of provision expense in the third quarter of 2024 was impacted by $5.5 million in specific reserves for two commercial loans as well as $1.6 million in provision expense related to chargeoffs for two commercial borrowers.
Current report
Total noninterest income for the three months ended September 30, 2025 increased $0.2 million compared to the three months ended September 30, 2024. The most significant change includes a $1.0 million increase in the gain on mortgage loans due to the volume of loans sold offset by a $1.5 million decrease in gain on sale of loans and other assets due to the volume and spread of SBA loans sold. In addition, swap fee income increased $0.2 million due to new swaps entered into by our commercial loan borrowers, $0.4 million increase in insurance and retail brokerage commissions primarily due to higher annuity sales and a $0.2 million increase in trust income due to an increase in assets under management.
Current report
The increase in net security gains is primarily due to a gain related to the call of a corporate investment security recognized in the third quarter of 2025. Income from bank owned life insurance decreased compared to the prior period as a result of a decline of $0.9 million in death claims received.
Current report
Offsetting these increases was a decrease of $1.6 million in litigation and operational losses due to the recognition of $1.1 million in unusual fraud expense during the three months ended September 30, 2024.
Current report
(a)For the nine-month period ended.
Removed paragraphs (10)
Previous report
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Previous report
The following table presents the components of noninterest income for the six months ended June 30:
Previous report
Total noninterest income decreased $1.9 million, or 4%, compared to the same period in the prior year. For the six months ended June 30, 2025, $0.1 million in non-interest income can be attributed to the Center acquisition.
Previous report
Additionally, the yield on interest earning assets for the three months ended June 30, 2025, was impacted by the maturity of $150.0 million notional amount of interest rate swap contracts on May 1, 2025. The impact of the swap maturities was to increase the yield on interest earning assets by three basis points for the three months ended June 30, 2025.
Previous report
The level of provision expense in the second quarter of 2024 was primarily the result of an increase in loan balances and an additional $5.8 million in specific reserves. Net charge-offs for the three months ended June 30, 2024 were $4.4 million.
Previous report
Total noninterest income for the three months ended June 30, 2025 decreased $0.5 million compared to the three months ended June 30, 2024. The most significant change includes a $3.1 million decrease in card-related interchange income primarily due to the Durbin Amendment, which impacted the Company beginning July 1, 2024.
Previous report
Offsetting this decrease is a $0.4 million increase in swap fee income as a result of new swaps entered into by our commercial customers and a $0.6 million increase in income from bank owned life insurance primarily due to the restructuring of a stable value wrap in the first quarter of 2025. Contributing to the increase in Other Income was a $0.2 million increase in limited partnership income.
Previous report
Gain on sale of other loans and assets increased $0.8 million due to the volume and spread related to the sale of SBA loans.
Previous report
The most significant changes, other than the changes noted above, are a result of securities transactions in the three months ended June 30, 2024 with no similar activity in the comparable period of 2025. This includes a $5.6 million gain related to the conversion of Visa class B shares and $5.5 million in losses recognized on the sale of $75.1 million in available for sale securities, which were sold in order to reinvest into higher yielding investments.
Previous report
(a)For the six-month period ended.
Reworded paragraphs (62)
Previous wording
This discussion and the related financial data are presented to assist in the understanding and evaluation of the consolidated financial condition and the results of operations of First Commonwealth Financial Corporation including its subsidiaries (“First Commonwealth”) for the three and six months ended June 30, 2025 and 2024, and should be read in conjunction with the unaudited Consolidated Financial Statements and notes thereto included in this Form 10-Q.
Current wording
This discussion and the related financial data are presented to assist in the understanding and evaluation of the consolidated financial condition and the results of operations of First Commonwealth Financial Corporation including its subsidiaries (“First Commonwealth”) for the three and nine months ended September 30, 2025 and 2024, and should be read in conjunction with the unaudited Consolidated Financial Statements and notes thereto included in this Form 10-Q.
Previous wording
We believe the presentation of net interest income on a fully taxable equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice. Interest income per the unaudited Consolidated Statements of Income is reconciled to net interest income adjusted to a fully taxable equivalent basis on pages 55 and 72 for the six and three months ended June 30, 2025 and 2024, respectively.
Current wording
We believe the presentation of net interest income on a fully taxable equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice. Interest income per the unaudited Consolidated Statements of Income is reconciled to net interest income adjusted to a fully taxable equivalent basis on pages 65 and 73 for the nine and three months ended September 30, 2025 and 2024, respectively.
Previous wording
For the six months ended June 30, 2025, First Commonwealth had net income of $66.1 million, or $0.64 diluted earnings per share, compared to net income of $74.6 million, or $0.73 diluted earnings per share, in the six months ended June 30, 2024. The decrease in net income was primarily the result of a $16.1 million increase in noninterest expense, including $4.0 million in merger-related expenses associated with the Center acquisition. Other items impacting results include a decrease in non-interest income of $1.9 million and an increase in the provision for credit losses of $6.3 million, including the $3.8 million in provision expense related to the day 1 CECL adjustment on non-PCD loans acquired in the Center acquisition. Partially offsetting these changes was a $14.5 million increase in net interest income.
Current wording
For the nine months ended September 30, 2025, First Commonwealth had net income of $107.4 million, or $1.04 diluted earnings per share, compared to net income of $106.7 million, or $1.04 diluted earnings per share, in the nine months ended September 30, 2024. The increase in net income was primarily the result of a $29.1 million increase in net interest income offset by an $18.9 million increase in noninterest expense, including $4.2 million in merger-related expenses associated with the Center acquisition. Other items impacting results include an increase in the provision for credit losses of $7.0 million, including the $3.8 million in provision expense related to the day 1 CECL adjustment on non-PCD loans acquired in the Center acquisition.
Previous wording
For the six months ended June 30, 2025, the Company’s return on average equity was 9.12% and its return on average assets was 1.12%, compared to 11.24% and 1.29%, respectively, for the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, the Company’s return on average equity was 9.67% and its return on average assets was 1.20%, compared to 10.54% and 1.22%, respectively, for the nine months ended September 30, 2024.
Previous wording
Net interest income, on a fully taxable equivalent basis, was $202.4 million in the first six months of 2025, compared to $187.9 million for the same period in 2024. The increase in net interest income can be attributedtoan 18 basis point decrease in the cost of interest-bearing liabilities and a 5 basis point increase in the yield on interest-earning assets. Net interest income comprises the majority of our operating revenue (net interest income before provision expense plus noninterest income), at 81.0% and 79.2% for the six months ended June 30, 2025 and 2024, respectively.
Current wording
Net interest income, on a fully taxable equivalent basis, was $313.9 million in the first nine months of 2025, compared to $284.8 million for the same period in 2024. The increase in net interest income can be attributedtoa 26 basis point decrease in the cost of interest-bearing liabilities and a 5 basis point increase in the yield on interest-earning assets. Net interest income comprises the majority of our operating revenue (net interest income before provision expense plus noninterest income), at 81.3% and 79.3% for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
The net interest margin on a fully taxable equivalent basis was 3.73% for the six months ended June 30, 2025 and 3.55% for the six months ended June 30, 2024. The net interest margin is affected by changes in the level of interest rates and the amount and composition of interest-earning assets and interest-bearing liabilities.
Current wording
The net interest margin on a fully taxable equivalent basis was 3.79% for the nine months ended September 30, 2025 and 3.55% for the nine months ended September 30, 2024. The net interest margin is affected by changes in the level of interest rates and the amount and composition of interest-earning assets and interest-bearing liabilities.
Previous wording
The taxable equivalent yield on interest-earning assets was 5.65% for the six months ended June 30, 2025, an increase of five basis points compared to the 5.60% yield for the same period in 2024. The yield on interest-earning assets benefited from higher reinvestment rates related to the investment portfolio, resulting in the investment portfolio yield increasing by 49 basis points when compared to the six months ended June 30, 2024. For the six months ended June 30, 2025, seven basis points of the yield on interest-earning assets can be attributed to the recognition of $3.9 million in accretion of purchase accounting marks, of which two basis points can be attributed to the Center acquisition. For thesix months ended June 30, 2024, accretion of purchase accounting marks contributed$4.1 million, oreight basis points, to the yield on interest-earning assets.
Current wording
The taxable equivalent yield on interest-earning assets was 5.68% for the nine months ended September 30, 2025, an increase of five basis points compared to the 5.63% yield for the same period in 2024. The yield on interest-earning assets benefited from higher reinvestment rates related to the investment portfolio, resulting in the investment portfolio yield increasing by 41 basis points when compared to the nine months ended September 30, 2024. For the nine months ended September 30, 2025, seven basis points of the yield on interest-earning assets can be attributed to the recognition of $5.7 million in accretion of purchase accounting marks. For thenine months ended September 30, 2024, accretion of purchase accounting marks contributed$6.1 million, oreight basis points, to the yield on interest-earning assets.
Previous wording
The investment portfolio yield increased 49 basis points in comparison to the prior year as new volume rates were higher than the portfolio yield. The average investment portfolio for the six months ended June 30, 2025 increased $142.4 million as compared to the six months ended June 30, 2024 as a result of excess liquidity from growth in interest-bearing liabilities. Lower interest rates in the six months ended June 30, 2025 compared to the prior year resulted in an 82 basis point decrease in the yield on interest-bearing deposits with bank, while the average balance decreased from $160.4 million in 2024 to $68.2 million in 2025.
Current wording
The investment portfolio yield increased 41 basis points in comparison to the prior year as new volume rates were higher than the portfolio yield. The average investment portfolio for the nine months ended September 30, 2025 increased $112.9 million as compared to the nine months ended September 30, 2024 as a result of excess liquidity from growth in interest-bearing liabilities. Lower interest rates in the nine months ended September 30, 2025 compared to the prior year resulted in a 76 basis point decrease in the yield on interest-bearing deposits with banks, while the average balance decreased from $199.9 million in 2024 to $58.7 million in 2025.
Previous wording
The cost of interest-bearing liabilities decreased to 2.63% for the six months ended June 30, 2025, from 2.81% for the same period in 2024. The cost of interest-bearing deposits decreased 6 basis points and short-term borrowings decreased 81 basis points in comparison to the same period last year. The cost of interest-bearing deposits was impacted by declines in market interest rates as well as changes in the mix of deposits, as customers moved funds to take advantage of higher rates offered in money market and time deposit accounts. Comparing the six months ended June 30, 2025 with the comparable period in 2024, average time deposits increased $309.9 million, or 21.4%, with a decrease in the cost of these deposits of 34 basis points. Contributing to the average growth in time deposits was an average of $25.2 million acquired as part of the Center acquisition. Other interest-bearing deposits increased on average $292.9 million, or 5.2%, compared to the six months ended June 30, 2024 and the cost of these deposits decreased 4 basis points. Average growth in other-interest bearing deposits attributable to the Center acquisition totaled $48.9 million. Compared to the prior period, short-term borrowings decreased an average of$471.8 million primarily due to the payoff of $516.0 million in short-term borrowings related to the Federal Reserve Term Funding program in the fourth quarter of 2024.
Current wording
The cost of interest-bearing liabilities decreased to 2.58% for the nine months ended September 30, 2025, from 2.84% for the same period in 2024. The cost of interest-bearing deposits decreased 16 basis points and short-term borrowings decreased 78 basis points in comparison to the same period last year. The cost of interest-bearing deposits was impacted by declines in market interest rates as well as changes in the mix of deposits due to growth in money market and time deposits. Comparing the nine months ended September 30, 2025 with the comparable period in 2024, average time deposits increased $259.1 million, or 17.4%, with a decrease in the cost of these deposits of 48 basis points. Contributing to the average growth in time deposits was an average of $50.6 million acquired as part of the Center acquisition. Other interest-bearing deposits increased on average $331.3 million, or 5.9%, compared to the nine months ended September 30, 2024 and the cost of these deposits decreased 11 basis points. Average growth in other-interest bearing deposits attributable to the Center acquisition totaled $81.9 million. Compared to the prior period, short-term borrowings decreased an average of$451.9 million primarily due to the payoff of $516.0 million in short-term borrowings related to the Federal Reserve Term Funding program in the fourth quarter of 2024. Long-term debt increased an average of $98.0 million compared to the prior period as a result of a $127.0 million FHLB borrowing entered into in the fourth quarter of 2024.
Previous wording
For the six months ended June 30, 2025, changes in rates positively impacted net interest income by $9.1 million when compared to the same period in 2024. The yield on interest-earning assets positively impacted net interest income by $3.0 million and the decrease in the cost of interest-bearing liabilities positively impacted net interest income by $6.1 million.
Current wording
For the nine months ended September 30, 2025, changes in rates positively impacted net interest income by $17.9 million when compared to the same period in 2024. The yield on interest-earning assets positively impacted net interest income by $4.3 million and the decrease in the cost of interest-bearing liabilities positively impacted net interest income by $13.6 million.
Previous wording
Changes in the volume of interest-earning assets and interest-bearing liabilities positively impacted net interest income by $5.4 million for the six months ended June 30, 2025, as compared to the same period in 2024. Higher levels of interest-earning assets resulted in an increase of $6.9 million in interest income, while changes in the volume and mix of interest-bearing liabilities increased interest expense by $1.6 million. Average interest-earning assets for the six months ended June 30, 2025 increased $292.8 million, or 2.7%, compared to the same period in 2024. Average loans for the comparable period increased $242.6 million, or 2.7%, and average investments increased $142.4 million, or 9.5%. Average loans attributable to the Center acquisition for the six month period ended June 30, 2025 totaled $66.8 million.
Current wording
Changes in the volume of interest-earning assets and interest-bearing liabilities positively impacted net interest income by $11.2 million for the nine months ended September 30, 2025, as compared to the same period in 2024. Higher levels of interest-earning assets resulted in an increase of $14.0 million in interest income, while changes in the volume and mix of interest-bearing liabilities increased interest expense by $2.8 million. Average interest-earning assets for the nine months ended September 30, 2025 increased $351.0 million, or 3.3%, compared to the same period in 2024. Average loans for the comparable period increased $379.3 million, or 4.2%, and average investments increased $112.9 million, or 7.5%. Average loans attributable to the Center acquisition for the nine month period ended September 30, 2025 totaled $164.0 million.
Previous wording
Net interest income was positively impacted by a $77.9 million increase in average net free funds for the six months ended June 30, 2025 as compared to the corresponding period in 2024. Average net free funds are the excess of noninterest-bearing demand deposits, other noninterest-bearing liabilities and shareholders’ equity over noninterest-earning assets. The level of net free funds was impacted by a lower level of noninterest-bearing demand deposits as customers became more rate sensitive and moved their funds into interest-bearing deposits, as well as higher average shareholders' equity due to retained earnings and stock issued for the Center acquisition. Average noninterest-bearing demand deposits for thesix months ended June 30, 2025 decreased$21.3 million, or 0.9%, compared to the same period in 2024 despite the addition of $14.1 million related to the Center acquisition.
Current wording
Net interest income was positively impacted by a $114.4 million increase in average net free funds for the nine months ended September 30, 2025 as compared to the corresponding period in 2024. Average net free funds are the excess of noninterest-bearing demand deposits, other noninterest-bearing liabilities and shareholders’ equity over noninterest-earning assets. The level of net free funds was impacted by growth in average noninterest-bearing demand deposits, as well as higher average shareholders' equity due to retained earnings and stock issued for the Center acquisition. Average noninterest-bearing demand deposits for thenine months ended September 30, 2025 increased$12.8 million, or 0.6%, compared to the same period in 2024.
Previous wording
The following table reconciles interest income in the Consolidated Statements of Income to net interest income adjusted to a fully taxable equivalent basis for the six months ended June 30:
Current wording
The following table reconciles interest income in the Consolidated Statements of Income to net interest income adjusted to a fully taxable equivalent basis for the nine months ended September 30:
Previous wording
The following is an analysis of the average balance sheet and net interest income on a fully taxable equivalent basis for the six months ended June 30:
Current wording
The following is an analysis of the average balance sheet and net interest income on a fully taxable equivalent basis for the nine months ended September 30:
Previous wording
(a)Income on interest-earning assets has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate for the six months ended June 30, 2025 and 2024.
Current wording
(a)Income on interest-earning assets has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate for the nine months ended September 30, 2025 and 2024.
Previous wording
The following table shows the effect of changes in volumes and rates on interest income and interest expense for the six months ended June 30, 2025 compared with June 30, 2024:
Current wording
The following table shows the effect of changes in volumes and rates on interest income and interest expense for the nine months ended September 30, 2025 compared with September 30, 2024:
Previous wording
The table below provides a breakout of the provision for credit losses by loan category for the six months ended June 30:
Current wording
The table below provides a breakout of the provision for credit losses by loan category for the nine months ended September 30:
Previous wording
Total provision expense for the six months ended June 30, 2025, increased $6.3 million compared to the six months ended June 30, 2024. This increase is primarily due to a $3.4 million provision recognized in the second quarter of 2025 as the day-1 non-PCD provision expense resulting from the Center acquisition. Also impacting provision expense in the six months ended June 30, 2025 was $2.6 million related to the reserve for off-balance sheet commitments, primarily due to $0.4 million related to the Center acquisition as well as increased commercial construction commitments. The negative provision for off-balance sheet commitments in 2024 is primarily attributed to lower commitments for commercial construction loans.
Current wording
Also impacting provision expense in the nine months ended September 30, 2025 was $4.5 million related to the reserve for off-balance sheet credit exposures. The level of provision for off-balance sheet exposure in 2025 is primarily due to increased commercial and residential construction commitments as well as the impact of periodic updates, completed in the third quarter of 2025, related to the expected loss rates for these loan categories. The negative provision for off-balance sheet credit exposure in 2024 is primarily attributed to lower commitments for commercial and residential construction loans.
Previous wording
The allowance for credit losses was $133.0 million, or 1.39%, of total loans and leases outstanding at June 30, 2025, compared to $118.9 million, or 1.32%, at December 31, 2024 and $123.7 million, or 1.37%, at June 30, 2024. Nonperforming loans as a percentage of total loans and leases increased to 1.04% at June 30, 2025 from 0.63% as of June 30, 2024 and 0.68% at December 31, 2024. The allowance to nonperforming loan ratio was 133.62%, 193.48% and 216.48% as of June 30, 2025, December 31, 2024 and June 30, 2024, respectively.
Current wording
The allowance for credit losses was $129.6 million, or 1.34%, of total loans and leases outstanding at September 30, 2025, compared to $118.9 million, or 1.32%, at December 31, 2024 and $126.1 million, or 1.41%, at September 30, 2024. Nonperforming loans as a percentage of total loans and leases increased to 0.91% at September 30, 2025 from 0.83% as of
Previous wording
Below is an analysis of the consolidated allowance for credit losses for the six months ended June 30, 2025 and 2024 and the year-ended December 31, 2024:
Current wording
Below is an analysis of the consolidated allowance for credit losses for the nine months ended September 30, 2025 and 2024 and the year-ended December 31, 2024:
Previous wording
Total noninterest income (excluding net securities losses, gain on VISA sale, gain on sale of mortgage loans, gain on sale of other loans and assets and the derivatives mark to market) for the six months ended June 30, 2025 decreased $2.1 million, or 5%, compared to the six months ended June 30, 2024. This decrease is primarily due to a $6.2 million decline in card-related interchange income resulting from the Company being subject to the Durbin Amendment to the Dodd-Frank Act beginning July 1, 2024. The Durbin Amendment is now applicable to the Company because its total assets exceeded $10.0 billion as of December 31, 2023 and its curtailment of card-related interchange income went into effect on July 1, 2024.
Current wording
Total noninterest income (excluding net securities losses, gain on VISA sale, gain on sale of mortgage loans, gain on sale of other loans and assets and the derivatives mark to market) for the nine months ended September 30, 2025 decreased $1.8 million, or 3%, compared to the nine months ended September 30, 2024. This decrease is primarily due to a $6.3 million decline in card-related interchange income resulting from the Company being subject to the Durbin Amendment to the Dodd-Frank Act beginning July 1, 2024. The Durbin Amendment is now applicable to the Company because its total assets exceeded $10.0 billion as of December 31, 2023. As a result, its curtailment of card-related interchange income went into effect on July 1, 2024.
Previous wording
Swap fee income increased $1.3 million compared to the prior period as a result of new interest rate swaps entered into by our commercial loan customers. Other income increased $0.9 million largely due to a $0.5 million increase in limited partnership income while income from bank owned life insurance increased $0.8 million primarily due to a stable value wrap restructure completed in the first quarter of 2025.
Current wording
Swap fee income increased $1.4 million compared to the prior period as a result of new interest rate swaps entered into by our commercial loan customers. Other income increased $1.1 million largely due to a $0.4 million increase in limited partnership income. Trust income increased $0.7 million due to revenue for assets under management. Insurance and brokerage commissions increased $0.9 million primarily due to higher annuity sales.
Previous wording
Other items impacting noninterest income include gains on the sale of VISA shares of $5.1 million and $5.6 million, as of June 30, 2025 and 2024, respectively. Offsetting these gains were net security losses of $5.1 million and $5.5 million, as of June 30, 2025 and 2024, respectively, resulting from the sale of available for sale securities that were sold in order to reinvest into higher yielding investments.
Current wording
Other items impacting noninterest income include gains on the sale of VISA shares of $5.1 million and $5.7 million, as of September 30, 2025 and 2024, respectively. Offsetting these gains were net security losses of $4.8 million and $5.4 million, as of September 30, 2025 and 2024, respectively, resulting from the sale of available for sale securities that were sold in order to reinvest into higher yielding investments.
Previous wording
The following table presents the components of noninterest expense for the six months ended June 30:
Current wording
The following table presents the components of noninterest expense for the nine months ended September 30:
Previous wording
Noninterest expense increased $16.1 million, or 12%, for the six months ended June 30, 2025 compared to the same period in 2024. This increase is primarily the result of an $8.4 million increase in salaries and benefits expense. Contributing to the higher salary expense in 2025 was a $4.0 million increase in incentive expense, of which $1.5 million can be attributed to finalizing payments related to prior year volumes and performance, with the remaining increase due to higher volumes in 2025. Also impacting the increase in salary and benefit expense is a $0.3 million increase in hospitalization expense and a higher number of full time equivalent employees, partially due to the Center acquisition. The number of full time equivalent employees totaled 1,472 at June 30, 2024 and 1,562 at June 30, 2025.
Current wording
Noninterest expense increased $18.9 million, or 9%, for the nine months ended September 30, 2025 compared to the same period in 2024. This increase is primarily the result of an $10.5 million increase in salaries and benefits expense. Contributing to the higher salary expense in 2025 was a $5.7 million increase in incentive expense, of which $1.5 million can be attributed to finalizing payments related to prior year volumes and performance, with the remaining increase due to higher sales volumes in 2025. Also impacting the increase in salary and benefit expense is a $1.4 million increase in 401(k) expense, a $0.9 million increase in FICA taxes and a higher number of full time equivalent employees, partially due to the Center acquisition. The number of full time equivalent employees totaled 1,500 at September 30, 2024 and 1,548 at September 30, 2025.
Previous wording
Other operating expense increased $1.7 million compared to the prior period primarily due to loan related appraisal and credit reporting expenses. The increase in other professional fees and services is a result of services and advisors in several areas, none of which were individually material.
Current wording
Other operating expense increased $2.2 million compared to the prior period primarily due to loan related appraisal, credit reporting and OREO expenses. The increase in other professional fees and services is a result of services and advisors for several areas, none of which were individually material.
Previous wording
Merger and acquisition related expenses increased $4.0 million compared to the prior period as a result of the Center acquisition which occurred in the second quarter of 2025.
Current wording
Merger and acquisition related expenses increased $4.1 million compared to the prior period as a result of the Center acquisition which occurred in the second quarter of 2025.
Previous wording
The provision for income taxes decreased $1.4 million for the six months ended June 30, 2025, compared to the corresponding period in 2024, primarily due to the lower level of income before tax.
Current wording
The provision for income taxes increased $0.6 million for the nine months ended September 30, 2025, compared to the corresponding period in 2024, primarily due to the higher level of income before tax.
Previous wording
We applied the “annual effective tax rate approach” to determine the provision for income taxes, which applies an annual forecast of tax expense as a percentage of expected full year income, for the six months ended June 30, 2025 and 2024.
Current wording
We applied the “annual effective tax rate approach” to determine the provision for income taxes, which applies an annual forecast of tax expense as a percentage of expected full year income, for the nine months ended September 30, 2025 and 2024.
Previous wording
We generate an annual effective tax rate that is less than the statutory rate of 21% due to benefits resulting from tax-exempt interest, income from bank-owned life insurance and tax benefits associated with low income housing tax credits, all of which are relatively consistent regardless of the level of pretax income. These provided for an effective tax rate of 20.5% and 19.8% for the six months ended June 30, 2025 and 2024, respectively.
Current wording
We generate an annual effective tax rate that is less than the statutory rate of 21% due to benefits resulting from tax-exempt interest, income from bank-owned life insurance and tax benefits associated with low income housing tax credits, all of which are relatively consistent regardless of the level of pretax income. These provided for an effective tax rate of 20.4% and 20.1% for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
As of June 30, 2025, our deferred tax assets totaled $51.7 million. Based on our evaluation, we determined that it is more likely than not that all of these assets will be realized. As a result, a valuation allowance against these assets was not recorded. In evaluating the need for a valuation allowance, we estimate future taxable income based on management approved forecasts, evaluation of historical earnings levels and consideration of potential tax strategies. If future events differ from our current forecasts, we may need to establish a valuation allowance, which could have a material impact on our financial condition and results of operations.
Current wording
As of September 30, 2025, our deferred tax assets totaled $49.5 million. Based on our evaluation, we determined that it is more likely than not that all of these assets will be realized. As a result, a valuation allowance against these assets was not recorded. In evaluating the need for a valuation allowance, we estimate future taxable income based on management approved forecasts, evaluation of historical earnings levels and consideration of potential tax strategies. If future events differ from our current forecasts, we may need to establish a valuation allowance, which could have a material impact on our financial condition and results of operations.
Previous wording
For the three months ended June 30, 2025, First Commonwealth recognized net income of $33.4 million, or $0.32 diluted earnings per share, compared to net income of $37.1 million, or $0.36 diluted earnings per share, in the three months ended June 30, 2024. The decline in net income between the two periods is largely attributable to costs associated with the acquisition of Center in the three months ended June 30, 2025. Other items impacting results include a $10.5 million increase in noninterest expense, including $4.0 million in merger related expenses associated with the Center acquisition and a $1.1 million increase in provision for credit losses, excluding the $3.8 million in provision expense related to the day 1 CECL adjustment on non-PCD loans acquired in the Center acquisition. Partially offsetting these changes was an increase of $11.2 million in net interest income.
Current wording
For the three months ended September 30, 2025, First Commonwealth recognized net income of $41.3 million, or $0.39 diluted earnings per share, compared to net income of $32.1 million, or $0.31 diluted earnings per share, in the three months ended September 30, 2024. The increase in net income between the two periods is largely attributable to an increase of $14.6 million in net interest income. Offsetting this increase is a $2.8 million increase in noninterest expense, a $0.7 million increase in the provision for credit losses and a $2.0 million increase in income tax expense.
Previous wording
For the three months ended June 30, 2025, the Company’s return on average equity was 8.97% and its return on average assets was 1.11%, compared to 11.10% and 1.28%, respectively, for the three months ended June 30, 2024.
Current wording
For the three months ended September 30, 2025, the Company’s return on average equity was 10.71% and its return on average assets was 1.34%, compared to 9.19% and 1.08%, respectively, for the three months ended September 30, 2024.
Previous wording
Net interest income, on a fully taxable equivalent basis, was $106.6 million in the second quarter of 2025, compared to $95.3 million for the same period in 2024. The increase in net interest income can be attributedtoa 26 basis point decrease in the cost of interest-bearing liabilities, partially offset by a 7 basis point increase in the yield on interest-earning assets. Net interest income comprises the majority of our operating revenue (i.e., net interest income before provision expense plus noninterest income), at 81.1% and 79.0% for the three months ended June 30, 2025 and 2024, respectively.
Current wording
Net interest income, on a fully taxable equivalent basis, was $111.5 million in the third quarter of 2025, compared to $96.9 million for the same period in 2024. The increase in net interest income can be attributedtoa 41 basis point decrease in the cost of interest-bearing liabilities, partially offset by a 5 basis point increase in the yield on interest-earning assets. Net interest income comprises the majority of our operating revenue (i.e., net interest income before provision expense plus noninterest income), at 81.7% and 79.6% for the three months ended September 30, 2025 and 2024, respectively.
Previous wording
The net interest margin, on a fully taxable equivalent basis, was 3.83% and 3.57% for the three months ended June 30, 2025 and 2024, respectively.
Current wording
The net interest margin, on a fully taxable equivalent basis, was 3.92% and 3.56% for the three months ended September 30, 2025 and 2024, respectively.
Previous wording
The taxable equivalent yield on interest-earning assets was 5.73% for the three months ended June 30, 2025, an increase of seven basis points compared to the 5.66% yield for the same period in 2024. This is largely due to a 44 basis points increase in the investment portfolio yield in comparison to the prior year as new volume rates were higher than the portfolio yield. The average investment portfolio balance increased $156.6 million as a result of excess liquidity from growth in interest-bearing liabilities. The average balance of interest-bearing deposits with banks decreased from $208.4 million in 2024 to $59.6 million in 2025, with a yield decrease of 73 basis points.
Current wording
The taxable equivalent yield on interest-earning assets was 5.73% for the three months ended September 30, 2025, an increase of five basis points compared to the 5.68% yield for the same period in 2024. This is largely due to a 26 basis points increase in the investment portfolio yield in comparison to the prior year as new volume rates were higher than the portfolio yield. The average investment portfolio balance increased $54.6 million as a result of excess liquidity from growth in interest-bearing liabilities. The average balance of interest-bearing deposits with banks decreased from $278.0 million in 2024 to $40.2 million in 2025, with a yield decrease of 64 basis points.
Previous wording
The loan portfolio yield when compared to the three months ended June 30, 2024, increased by 3 basis points. Accretion of purchase accounting marks contributed $2.6 million or 10 basis points to the yield on interest-earnings assets in the three months ended June 30, 2025, of which four basis points can be attributed to the Center acquisition. Included in the impact of the Center acquisition was two basis points due to accelerated recognition of purchase accounting marks from early loan payoffs. For the three months ended June 30, 2024, accretion of purchase accounting marks contributed$2.1 million, oreight basis points, to the yield on interest-earning assets.
Current wording
The loan portfolio yield when compared to the three months ended September 30, 2024, decreased by 1 basis point. Accretion of purchase accounting marks contributed $1.8 million or 6 basis points to the yield on interest-earnings assets in the three months ended September 30, 2025. For the three months ended September 30, 2024, accretion of purchase accounting marks contributed$2.0 million, orseven basis points, to the yield on interest-earning assets.
Previous wording
The cost of interest-bearing liabilities decreased to 2.59% for the three months ended June 30, 2025, from 2.85% for the same period in 2024, primarily due to decreases in the cost of time and interest-bearing deposits. Comparing the three months ended June 30, 2025 with the comparable period in 2024, average time deposits increased $243.3 million, or 16.2%, with a decrease in the cost of these deposits of 53 basis points. Over this period, interest-bearing demand and savings deposits increased on average $369.3 million, or 6.6%, compared to the three months ended June 30, 2024 and the cost of those deposits decreased 11 basis points. The cost of short-term borrowings decreased 55 basis points in comparison to the same period last year. For the three months ended June 30, 2025, the Center acquisition contributed $97.2 million in average interest-bearing demand deposits and $50.3 million in average time deposits.
Current wording
The cost of interest-bearing liabilities decreased to 2.50% for the three months ended September 30, 2025, from 2.91% for the same period in 2024, primarily due to decreases in the cost of time and interest-bearing deposits. Comparing the three months ended September 30, 2025 with the comparable period in 2024, average time deposits increased $158.8 million, or 10.1%, with a decrease in the cost of these deposits of 74 basis points. Over this period, interest-bearing demand and savings deposits increased on average $406.7 million, or 7.2%, compared to the three months ended September 30, 2024 and the cost of those deposits decreased 24 basis points. The cost of short-term borrowings decreased 73 basis points in comparison to the same period last year. For the three months ended September 30, 2025, the Center acquisition contributed $146.2 million in average interest-bearing demand deposits and $90.3 million in average time deposits.
Previous wording
For the three months ended June 30, 2025, changes in interest rates positively impacted net interest income by $7.3 million when compared with the same period in 2024. The higher yield on loans contributed to interest-earning assets, positively impacting net interest income by $2.8 million, while a decrease in the cost of interest-bearing liabilities positively impacted net interest income by $4.5 million.
Current wording
For the three months ended September 30, 2025, changes in interest rates positively impacted net interest income by $8.7 million when compared with the same period in 2024. The higher yield on loans contributed to interest-earning assets, positively impacting net interest income by $1.3 million, while a decrease in the cost of interest-bearing liabilities positively impacted net interest income by $7.4 million.
Previous wording
Changes in the volume of interest-earning assets and interest-bearing liabilities positively impacted net interest income by $4.0 million during the three months ended June 30, 2025, as compared to the same period in 2024. The growth and mix of interest-earning assets resulted in an increase of $5.4 million in interest income, while changes in the volume and mix of interest-bearing liabilities increased interest expense by $1.4 million. Average interest-earning assets for the three months ended June 30, 2025 increased $420.8 million, or 3.9%, compared to the same period in 2024. Average loans for the comparable period increased $413.0 million, or 4.6%. Average time deposits for the three months ended June 30, 2025 increased by $243.3 million compared to the comparable period in 2024, increasing interest expense by $2.6 million. The Center acquisition resulted in the addition of $146.6 million in average interest-earning assets, including $132.6 million in average loans.
Current wording
Changes in the volume of interest-earning assets and interest-bearing liabilities positively impacted net interest income by $5.9 million during the three months ended September 30, 2025, as compared to the same period in 2024. The growth and mix of interest-earning assets resulted in an increase of $7.1 million in interest income, while changes in the volume and mix of interest-bearing liabilities increased interest expense by $1.2 million. Average interest-earning assets for the three months ended September 30, 2025 increased $465.0 million, or 4.3%, compared to the same period in 2024. Average loans for the comparable period increased $648.3 million, or 7.2%. Average time deposits for the three months ended September 30, 2025 increased by
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
September 30, 2024 and 0.68% at December 31, 2024. The allowance to nonperforming loan ratio was 148.04%, 193.48% and 168.77% as of September 30, 2025, December 31, 2024 and September 30, 2024, respectively.
Current report — wording carried from elsewhere
$158.8 million compared to the comparable period in 2024, increasing interest expense by $1.8 million. The Center acquisition resulted in the addition of $316.3 million in average interest-earning assets, including $291.9 million in average loans.
Current report — wording carried from elsewhere
Originated commercial, financial, agricultural and other loans increased $269.8 million, or 16.1%, of which $207.0 million can be attributed to growth in the equipment finance portfolio. Originated real estate construction loans decreased $71.5 million, or
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Trust income increased $0.5 million due to revenue for assets under management. Insurance and brokerage commissions increased $0.5 million primarily due to higher annuity sales.
Previous report — wording carried elsewhere
Other operating expense increased $1.3 million primarily due to loan related appraisal and credit reporting expenses.