First Commonwealth (FCF) Q3 2026 Earnings Report

The call was generally constructive, with strong net interest margin and net interest income trends, improving loan production, substantial capital returned through buybacks, a sizable future funding pipeline, and continued technology investment. These positives were partially offset by record quarterly provision expense, higher nonperforming and classified loans concentrated in identified credits, ongoing Central Pennsylvania credit work, rising-rate pressure on demand, and higher expenses. Management remained confident in the operating trajectory and maintained fourth-quarter guidance.

For the fourth quarter, First Commonwealth maintained guidance for loan growth within its mid single digit guidance, fee income of $24 million to $25 million per quarter, and expenses of $74 million to $76 million per quarter; with no further changes in rates, it expects NIM to rise to around 4.20% in the fourth quarter and continue to rise into the mid-4.20s in 2027, with estimates give or take 5 basis points. Management is using about a 25% deposit beta and expects the loan-to-deposit ratio to remain in the low 90s, expects credit resolution over the next couple of quarters and, barring unforeseen events, to manage within typical provision going forward, while hoping provision returns to under $10 million. It expects construction loans to fund over a 12- to 18-month period on average, with more incremental benefit in about 2 quarters, and said fourth-quarter growth could remain at that pace or a little higher; the additional $25 million repurchase authorization is expected to be active next week.