In This Article:
-
Earnings Per Share (EPS): $0.35, meeting consensus estimates.
-
Pre-tax Pre-provision ROA: 1.77% for the fourth quarter.
-
Return on Equity (ROE): 1.23% for the fourth quarter.
-
Net Interest Margin (NIM): 3.54% for the fourth quarter.
-
Core Efficiency Ratio: 56.1% for the fourth quarter.
-
Average Deposits Growth: 8.7% in the fourth quarter, with a year-over-year growth of $451.1 million or 5%.
-
Loan to Deposit Ratio: 92.5% at the end of 2024.
-
Loan Growth: $23.5 million in the fourth quarter, annualized growth rate of 1.04%.
-
Fee Income: Increased by $800,000 over the previous quarter.
-
Provision Expense: $6.5 million, down from $10.6 million in the third quarter.
-
Non-performing Loans (NPLs): Declined from 0.83% to 0.68%.
-
Charge-offs: Elevated due to $8 million in charge-offs for three non-performing loans.
-
Non-interest Expense: Improved by $1 million compared to the previous quarter.
-
Share Repurchase: 477,000 shares repurchased in the quarter.
Release Date: January 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
First Commonwealth Financial Corp (NYSE:FCF) met consensus earnings estimates with a strong profitability of $0.35 per share.
-
The company achieved a significant growth in deposits, with an 8.7% increase in the fourth quarter and a 5% increase over the year.
-
Loan growth is projected to be mid-single digits in 2025, supported by strong regional accountability and new hires in key markets.
-
Fee income improved by $800,000 over the last quarter, overcoming a $6.7 million Durbin impact on interchange income.
-
The acquisition of Centre Bank in Cincinnati is expected to create additional operating leverage and contribute positively to earnings per share starting in the third quarter of 2025.
Negative Points
-
The company faced higher credit costs throughout the year, driven by pressures in the acquired centric loan portfolio.
-
There was a decline in spread income by $1.4 million, which offset some of the improvements in fee income and expenses.
-
Non-interest expense is expected to increase in 2025 due to merit increases and the integration of the Centre Bank acquisition.
-
The company experienced elevated charge-offs in the fourth quarter, largely due to the charge-off of three nonperforming loans.
-
The net interest margin (NIM) experienced compression, with a 2 basis point decline in the fourth quarter.
Q & A Highlights
Q: Can you discuss the outlook for fee income, particularly in mortgage banking and card income, given the impact from Durbin last year? A: On card income, the Durbin impact was felt in the third and fourth quarters, but the run rate is solid. Mortgage banking had a strong year, and wealth management also performed well. Swap fee income was significant in the fourth quarter, and we expect growth in swap fee income next year. Overall, core fee income businesses like mortgage, wealth, and SBA have offset the Durbin impact.