First Commonwealth Financial (FCF) Q4 2024 earnings summary

Executive summary

• Fourth quarter core EPS was $0.35, up $0.04 from last quarter, with net income of $35.8M, driven by lower provision expense and improved credit metrics.

• Pre-tax, pre-provision ROA was 1.77%, ROE 1.23%, NIM 3.54%, and core efficiency ratio 56.1%.

• Average deposits grew 8.7% in Q4, with full-year average deposits up $451.1M or 5%.

• Margin stabilized, expenses managed, and selective loan growth pursued despite deposit pricing pressure and higher credit costs.

• Ended 2024 with improved capital and liquidity, key hires for C&I growth, and announced the CenterBank acquisition.

Financial highlights

• Net interest income (FTE) was $95.4M in Q4, down $1.4M sequentially; net interest margin was 3.54%, down 2bps sequentially and 11bps year-over-year.

• Fee income totaled $25.2M–$25.3M, up $0.5M sequentially, overcoming a $6.7M Durbin impact.

• Noninterest expense was $69.0M–$69.3M, down $0.8M–$1.0M sequentially, reflecting lower operational losses and salaries.

• Provision expense was $6.5M, down $4.1M from Q3; net charge-offs were $13.7M (0.61% of average loans).

• Loan-to-deposit ratio improved to 92.5% at year-end.

Outlook and guidance

• Management targets mid-single-digit loan growth in 2025, with growth balanced between CRE and C&I.

• NIM forecasted to expand by 10–20bps in 2025, with macro swap maturities expected to add 5–6bps by year-end.

• Fee income guidance of $22M–$23M per quarter in early 2025, growing gradually.

• Noninterest expense expected at $68M–$69M in Q1 2025, rising with merit increases and CenterBank integration.

• CenterBank acquisition to add ~$0.01/share EPS per quarter starting Q3 2025.