FIRST COMMONWEALTH FINANCIAL CORP /PA/ (FCF)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

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 months ended March 31, 2026 and 2025, and should be read in conjunction with the unaudited Consolidated Financial Statements and notes thereto included in this Form 10-Q.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the Securities and Exchange Commission, in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute forward-looking statements within the meaning of the Reform Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of First Commonwealth or its management or Board of Directors, including those relating to products, services or operations; (iii) statements of future economic performance or interest rates; and (iv) statements of assumptions underlying such statements. Words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may,” are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

•Local, regional, national and international economic conditions and the impact they may have on us and our customers and our assessment of that impact.

•Volatility and disruption in national and international financial markets.

•The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board and the implementation of tariffs and other protectionist trade policies.

•Government intervention in the U.S. financial system.

•Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs.

•Changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.

•Inflation, interest rate, securities market and monetary fluctuations.

•The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which we and our subsidiaries must comply.

•The soundness of other financial institutions.

•Political instability.

•Impairment of our goodwill or other intangible assets.

•Acts of God or of war or terrorism.

•The timely development and acceptance of new products and services and perceived overall value of these products and services by users.

•Changes in consumer spending, borrowings and savings habits.

•Changes in the financial performance and/or condition of our borrowers.

•Technological changes.

•The cost and effects of cyber incidents or other failures, interruption or security breaches of our systems or those of third-party providers.

•Acquisitions and integration of acquired businesses.

•Our ability to increase market share and control expenses.

•Our ability to attract and retain qualified employees.

•Changes in the competitive environment in our markets and among banking organizations and other financial service providers.

•The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.

•Changes in the reliability of our vendors, internal control systems or information systems.

•Changes in our liquidity position.

•Changes in our organization, compensation and benefit plans.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

•The costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals.

•Greater than expected costs or difficulties related to the integration of new products and lines of business.

•Our success at managing the risks involved in the foregoing items.

Forward-looking statements speak only as of the date on which such statements are made. We do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

Explanation of Use of Non-GAAP Financial Measures

In addition to the results of operations presented in accordance with generally accepted accounting principles (“GAAP”), First Commonwealth management uses, and this quarterly report contains or references, certain non-GAAP financial measures, such as net interest income on a fully taxable equivalent basis. We believe these non-GAAP financial measures provide information that is useful to investors in understanding our underlying operational performance and our business and performance trends as they facilitate comparison with the performance of others in the financial services industry. Although we believe that these non-GAAP financial measures enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.

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 57 for the three months ended March 31, 2026 and 2025.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

Selected Financial Data

The following selected financial data should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations, which follows, and with the unaudited Consolidated Financial Statements and related notes.

(1) Includes loans held for sale.

Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Net Income

For the three months ended March 31, 2026, First Commonwealth had net income of $37.5 million, or $0.37 diluted earnings per share, compared to net income of $32.7 million, or $0.32 diluted earnings per share, in the three months ended March 31, 2025. The increase in net income was primarily the result of a $13.5 million increase in net interest income and $2.1 million increase in noninterest income, offset by a $5.0 million increase in the provision for credit losses and a $4.3 million increase in noninterest expense.

For the three months ended March 31, 2026, the Company’s return on average equity was 9.75% and its return on average assets was 1.25%, compared to 9.28% and 1.14%, respectively, for the three months ended March 31, 2025.

Net Interest Income

Net interest income, on a fully taxable equivalent basis, was $109.3 million in the first three months of 2026, compared to $95.9 million for the same period in 2025. The increase in net interest income can be attributed to a 29 basis point decrease in the cost of interest-bearing liabilities and an 8 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 81.6% and 80.9% for the three months ended March 31, 2026 and 2025, respectively.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES

The net interest margin on a fully taxable equivalent basis was 3.92% for the three months ended March 31, 2026 and 3.62% for the three months ended March 31, 2025. 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.

The taxable equivalent yield on interest-earning assets was 5.65% for the three months ended March 31, 2026, an increase of eight basis points compared to the 5.57% yield for the same period in 2025. The yield on interest-earning assets benefited as the yield on adjustable and fixed rate commercial loans increased 18 basis points and 55 basis points, respectively. Additionally, the yield on fixed rate consumer loans increased by 33 basis points. For the three months ended March 31, 2026, four basis points of the yield on interest-earning assets can be attributed to the recognition of $1.3 million in accretion of purchase accounting marks. For the three months ended March 31, 2025, accretion of purchase accounting marks contributed $1.2 million, or five basis points, to the yield on interest-earning assets.

The investment portfolio yield decreased 3 basis points in comparison to the prior year primarily due to a decline in market rates. Additionally, the average balance of investments decreased $70.3 million as compared to the three months ended March 31, 2025. Lower interest rates in the three months ended March 31, 2026 compared to the prior year resulted in a 88 basis point decrease in the yield on interest-bearing deposits with bank

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ITEM 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis represents an overview of the financial condition and the results of operations of First Commonwealth and its subsidiaries, as of and for the years ended December 31, 2025, and 2024. The purpose of this discussion is to focus on information concerning our financial condition and results of operations that is not readily apparent from the Consolidated Financial Statements. In order to obtain a more thorough understanding of this discussion, you should refer to the Consolidated Financial Statements, the notes thereto and to other financial information presented in this Annual Report. Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K filed with the SEC on March 2, 2026 for a discussion and analysis of the factors that affected periods prior to 2025.

Company Overview

First Commonwealth provides a diversified array of consumer and commercial banking services through our bank subsidiary, FCB. We also provide trust and wealth management services through FCB and insurance products through FCIA. At December 31, 2025, FCB operated 126 community banking offices throughout Pennsylvania and Ohio, as well as Business Centers in Canfield, Canton, Hudson, Independence and Lewis Center, Ohio and Pittsburgh and Berwyn, Pennsylvania.

Our consumer services include internet, mobile and telephone banking, an automated teller machine network, personal checking accounts, interest-earning checking accounts, savings accounts, health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection and IRA accounts. Commercial banking services include commercial lending and leasing, small and high-volume business checking accounts, on-line account management services, ACH origination, payroll direct deposit, commercial cash management services and repurchase agreements. We also provide trust and asset management services and a full complement of auto, home and business insurance as well as term life insurance. We offer annuities, mutual funds and stock and bond brokerage services through an arrangement with a broker-dealer and insurance brokers. Most of our commercial customers are small and mid-sized businesses in Pennsylvania and Ohio.

As a financial institution with a focus on traditional banking activities, we earn the majority of our revenue through net interest income, which is the difference between interest earned on loans and investments and interest paid on deposits and borrowings. Growth in net interest income is dependent upon balance sheet growth and maintaining or increasing our net interest margin, which is net interest income (on a fully taxable-equivalent basis) as a percentage of our average interest-earning assets. We also generate revenue through fees earned on various services and products that we offer to our customers and through sales of assets, such as loans, investments or properties. These revenue sources are offset by provisions for credit losses on loans, operating expenses and income taxes.

General economic conditions also affect our business by impacting our customers’ need for financing, thus affecting loan growth, as well as impacting the credit strength of existing and potential borrowers.

Critical Accounting Policies and Significant Accounting Estimates

First Commonwealth’s accounting and reporting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and predominant practice in the banking industry. The preparation of financial statements in accordance with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements and accompanying notes. Over time, these estimates, assumptions and judgments may prove to be inaccurate or vary from actual results and may significantly affect our reported results and financial position for the period presented or in future periods. We currently view the determination of the allowance for credit losses and business combinations to be critical because they are highly dependent on subjective or complex judgments, assumptions and estimates made by management.

Allowance for Credit Losses

We account for the credit risk associated with our lending activities through the allowance and provision for credit losses. The allowance represents management’s best estimate of expected losses in our existing loan and lease portfolio as of the balance sheet date. The provision is a periodic charge to earnings in an amount necessary to maintain the allowance at a level that is appropriate based on management’s assessment of expected losses. Management determines and reviews with the Board of Directors the appropriateness of the allowance on a quarterly basis in accordance with the methodology described below.

•Loans are segmented into groups with similar characteristics and risks and an allowance for credit losses is calculated for each segment based on the estimate of credit losses.

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•The allowance for credit losses is calculated by pooling loans of similar credit risk characteristics and applying a discounted cash flow methodology after incorporating probability of default and loss given default estimates. Probability of default represents an estimate of the likelihood of default and loss given default measures the expected loss upon default. Inputs impacting the expected losses include a forecast of macroeconomic factors, using a weighted forecast from a nationally recognized firm.

•Loans that do not have the same risks and characteristics of the loan pools are individually reviewed. These are generally large balance commercial loans and commercial mortgages that are rated less than “satisfactory” based on our internal credit-rating process.

•We assess whether the loans identified for review are “nonperforming”. This means it is expected that all amounts will not be collected according to the contractual terms of the loan agreement, which generally represents loans that management has placed on nonaccrual status.

•For individually analyzed loans we calculate the estimated fair value of the loans that are selected for review based on observable market prices, discounted cash flows or the value of the underlying collateral and record an allowance if needed.

•We then review the results to determine the appropriate balance of the allowance for credit losses. This review includes consideration of additional factors, such as the mix of loans in the portfolio, the balance of the allowance relative to total loans and nonperforming assets, trends in the overall risk profile in the portfolio, trends in delinquencies and nonaccrual loans, and local and national economic information and industry data, including trends in the industries we believe are higher risk.

There are many factors affecting the allowance for credit losses; some are quantitative, while others require qualitative judgment. These factors require the use of estimates related to the amount and timing of expected future cash flows, appraised values on nonperforming loans, estimated losses for each loan category based on historical loss experience, forecasts of economic trends and conditions, all of which may be susceptible to significant judgment and change. To the extent that actual outcomes differ from estimates, additional provisions for credit losses could be required that could adversely affect our earnings or financial position in future periods.

As noted above, the allowance for credit losses is estimated using a number of inputs and assumptions. Management's sensitivity analysis of the allowance identified that the model has the highest degree of sensitivity around values used in the economic forecast, specifically national unemployment, gross domestic product and business bankruptcies. Additionally, there is also a high degree of sensitivity related to estimated prepayment speeds, as it is a major driver for the life of loan expectations. The sensitivity of estimated prepayment speeds had the largest impact on the residential first lien loan pool.

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Selected Financial Information

The following table provides selected financial information for the periods ended December 31,

Results of Operations—2025 Compared to 2024

Net Income

Net income for 2025 was $152.3 million, or $1.47 per diluted share, as compared to net income of $142.6 million, or $1.39 per diluted share in 2024. Contributing to the increase in net income was a $47.2 million increase in net interest income, offset by a $7.6 million increase in provision for credit losses. Provision for credit losses in 2025 included $3.8 million related to the day 1 adjustment on non-PCD loans acquired in the Center acquisition. Additionally, the increase in net interest income was offset by

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a $24.1 million increase in noninterest expense in 2025 compared to 2024, with $4.0 million of the 2025 increase attributable to the Center acquisition. Noninterest income decreased $2.4 million in 2025 compared to 2024 resulting from a decline of $6.3 million in card-related interchange income as a result of the Company being subject to the Durbin Amendment to the Dodd-Frank Act for the full year of 2025 compared to six-months in 2024.

Our return on average equity was 10.1% and our return on average assets was 1.26% for 2025, compared to 10.4% and 1.22%, respectively, for 2024.

Average diluted shares for the year 2025 were 1.3% more than the comparable period in 2024 primarily due to $45.9 million in common shares issued in relation to the Center acquisition offset by $36.5 million of common stock buybacks completed during 2025.

Net Interest Income

Net interest income, which is our primary source of revenue, is the difference between interest income from earning assets (loans and securities) and interest expense paid on liabilities (deposits, short-term borrowings and long-term debt). The net interest margin is expressed as the percentage of net interest income, on a fully taxable equivalent basis, to average interest-earning assets. To compare the tax exempt asset yields to taxable yields, amounts are adjusted to the pretax equivalent amounts based on the marginal corporate federal income tax rate of 21%. The taxable equivalent adjustment to net interest income for 2025 was $1.4 million compared to $1.3 million in 2024. Net interest income comprises a majority of our revenue (net interest income before provision expense plus noninterest income) at 81% and 79% for the years ended December 31, 2025 and 2024, respectively.

Net interest income, on a fully taxable equivalent basis, was $427.5 million for the year-ended December 31, 2025, a $47.2 million, or 12%, increase compared to $380.2 million for the same period in 2024. The net interest margin, on a fully taxable equivalent basis, increased 29 basis points to 3.84% in 2025 from 3.55% in 2024. Net interest income and the net interest margin are affected by both changes in the level of interest rates and the amount and composition of interest-earning assets and interest-bearing liabilities.

Growth in interest-earning assets as well as higher reinvestment rates for the investment and loan portfolios had a positive impact on interest income for the year ended December 31, 2025. Average earning assets for the year ended December 31, 2025 increased $0.4 billion, or 4%, compared to the year ended December 31, 2024 and interest income increased $32.3 million, or 5.4%. The primary interest earning asset attributable to the Center acquisition was their loan portfolio, which averaged $195.9 million for the year ended December 31, 2025. Interest-sensitive assets totaling $5.7 billion will either reprice or mature over the next twelve months.

The taxable equivalent yield on interest-earning assets was 5.70% for the year ended December 31, 2025, an increase of 8 basis points from the 5.62% yield for the same period in 2024. The yield on interest-earning assets benefited from higher reinvestment rates related to the investment and loan portfolios. The tax-equivalent yield for the investment portfolio increased by 32 basis points and the loan and lease portfolio increased by 4 basis points when compared to the year ended December 31, 2025. The increase in the loan and lease portfolio yield is primarily the result of higher reinvestment rates on our fixed loans, including our fixed rate commercial loan portfolio, indirect automobile loan portfolio and direct consumer installment loan portfolio, which increased by 37 basis points, 35 basis points and 29 basis points, respectively. Additionally, for the year ended December 31, 2025, seven basis points of the yield on interest-earning assets can be attributed to the recognition of $7.4 million in accretion of purchase accounting marks, primarily from the Centric and Center acquisitions. For the year ended December 31, 2024, $7.5 million in accretion of purchase accounting marks benefited the yield on interest-earning assets by seven basis points.

As of December 31, 2025, 49% of our loan portfolio had variable or adjustable interest rates and 51% had fixed interest rates. After incorporating the impact of our cash flow hedges that convert the interest rate on $175.0 million of our 1-month Secured Overnight Financing Rate ("SOFR") based loans to fixed rates, the variable and adjustable interest rates would account for 47% of our loan portfolio. Loans with variable or adjustable interest rates include approximately 26% tied to the prime interest rate, 51% tied to SOFR, 12% tied to Treasury rates and 9% tied to Federal Home Loan Bank rates.

Also contributing to the increase in yield on interest-earning assets was the yield on the investment portfolio, which increased by 32 basis points compared to the prior year, primarily as new volume rates were higher than the portfolio yield. The average investment portfolio balance increased $60.4 million as growth in average deposits exceeded the funding needs for loan growth. The yield on interest-bearing deposits with banks decreased 79 basis points compared to the prior year as a result of lower interest rates, while the average balance decreased $108.2 million.

The cost of interest-bearing liabilities decreased to 2.55% for the year ended December 31, 2025, compared to 2.83% for the same period in 2024. The decrease of 20 basis points in the cost of interest-bearing deposits can be attributed to declines in

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market interest rates, which influenced the mix of deposits with growth in both money market accounts and time deposits. Average time deposits increased $213.3 million, or 13.8%, while the cost of these deposits decreased 52 basis points. Contributing to the average growth in time deposits was an average of $60.6 million acquired as part of the Center acquisition. Other interest-bearing deposits increased an average of $336.2 million, or 6.0%, while the cost of deposits decreased 14 basis points. Average growth in other-interest bearing deposits attributable to the Center acquisition totaled $98.1 million.

The cost of short-term borrowings decreased 93 basis points in comparison to the same period in the prior year. Average short-term borrowings decreased by $349.1 million for the year ended December 31, 2025 compared to the same period in 2024 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. Average long-term debt increased $75.8 million as a result of a $127.0 million FHLB borrowing entered into in the fourth quarter of 2024, while the cost of long-term debt decreased by 44 basis points.

Comparing the year ended December 31, 2025 with the same period in 2024, changes in rates positively impacted net interest income by $28.9 million. The higher yield on interest-earning assets increased net interest income by $8.5 million, while the change in the cost of interest-bearing liabilities positively impacted net interest income by $20.4 million.

Changes in the volume of interest-earning assets and interest-bearing liabilities positively increased net interest income by $18.3 million in the year ended December 31, 2025 compared to the same period in 2024. Higher levels of interest-earning assets resulted in an increase of $23.8 million in interest income, and changes in the volume and mix of interest-bearing liabilities increased interest expense by $5.4 million, primarily due to growth in time and savings deposits.

Net interest income was positively impacted by a decrease of $136.8 million in average net free funds at December 31, 2025 as compared to December 31, 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 higher level of net free funds was primarily the result of growth in noninterest-bearing demand deposits as well as higher average shareholders' equity due to retained earnings and stock issued for the Center acquisition.

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 periods presented:

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The following table provides information regarding the average balances and yields or rates on interest-earning assets and interest-bearing liabilities for the periods ended December 31:

(a)Income on interest-earning assets has been computed on a fully taxable equivalent basis using the federal income tax statutory rate of 21%.

(b)Income on nonaccrual loans is accounted for on the cash basis, and the loan balances are included in interest-earning assets.

(c)Loan income includes loan fees.

(d)Includes held for sale loans.

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The following table sets forth certain information regarding changes in net interest income attributable to changes in the volume of interest-earning assets and interest-bearing liabilities and changes in the rates for the periods indicated:

(a)Changes in interest income or expense not arising solely as a result of volume or rate variances are allocated to rate variances.

(b)Changes in interest income have been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate.

Provision for Credit Losses

The provision for credit losses is determined based on management’s estimates of the appropriate level of the allowance for credit losses needed to provide for expected losses inherent in the loan and lease portfolio and off-balance sheet commitments. The provision for credit losses is an amount added to the allowance against which credit losses are charged.

The provision is a result of management's estimate of credit losses over the contractual life of the loan and lease portfolio. The change in the allowance for credit losses is impacted by estimated expected losses in the portfolio determined by a discounted cash flow analysis considering inputs such as contractual payment schedules, prepayment estimates, historical loss experience, calculated probability of default and loss given default estimates and forecasts for certain macroeconomic variables, such as unemployment, gross domestic product and the housing price index as well as other macroeconomic variables.

The provision for credit losses in 2025 totaled $36.7 million, reflecting an increase of $7.6 million compared to the $29.2 million provision recognized in 2024. Included in the provision expense for 2025 was $3.4 million in day 1 non-PCD expense and $0.3 million in expense related to off-balance sheet commitments related to the Center acquisition. Provision expense related to outstanding loans and leases, excluding the impact of the day 1 non-PCD expense in 2025, increased $3.1 million in 2025. The provision for off-balance sheet commitments increased $7.2 million in 2025 compared to 2024 as a result of higher off-balance sheet commitments related to commercial and residential construction loan 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 level of provision expense in 2025 was primarily related to two loan categories: the commercial, financial, agricultural and other category and commercial real estate. These two categories accounted for $26.4 million of the $32.7 million total provision expense for loans and leases. Provision expense for the commercial, financial, agricultural and other category was $21.9 million in 2025 and included $8.5 million for a dealer floor plan relationship that was moved to noanccrual during the second quarter of 2025 as a result of being out of trust on sold vehicles. Also impacting this category was $8.0 million recognized related to the equipment finance portfolio as a result of $265.9 million, or 62%, loan growth in that category. Provision expense for the commercial real estate category was primarily a result of $4.7 million for the non-owner occupied real estate portfolio. Included in provision expense for the non-owner occupied portfolio was a $1.7 million specific reserve for a loan that was moved to nonaccrual in the fourth quarter of 2025. Additionally, the negative provision for the residential real estate category can be attributed to a slight increase of $18.6 million in outstanding loan balances offset by the impact of lower loss rates. The level of provision expense for loans to individuals is related to net charge-offs in that category, which totaled $5.5 million for

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the year ended December 31, 2025, including $4.0 million for indirect auto loans and $1.2 million related to other consumer loans.

The table below provides a breakout of the provision for credit losses by loan category for the years ended December 31:

The allowance for credit losses was $125.8 million, or 1.32%, of total loans and leases outstanding at December 31, 2025, compared to $118.9 million, or 1.32%, at December 31, 2024. Nonperforming loans as a percentage of total loans increased to 0.97% at December 31, 2025 from 0.68% at December 31, 2024. The allowance to nonperforming loan ratio was 137.1% as of December 31, 2025 and 193.5% at December 31, 2024. Net charge-offs were $29.4 million for the year ended December 31, 2025 compared to $31.2 million for the same period in 2024, a decrease of $1.8 million. During 2025, $7.6 million in charge-offs were recognized as a result of the previously mentioned dealer floor plan loan and $5.6 million in charge-offs were recorded when certain commercial loans were moved to held for sale during the year.

Management believes that the allowance for credit losses is at a level deemed appropriate to absorb expected losses inherent in the loan portfolio at December 31, 2025.

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A detailed analysis of our credit loss experience for the previous five years is shown below:

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Noninterest Income

The components of noninterest income for each year in the three-year period ended December 31 are as follows:

Total noninterest income (excluding net securities losses, gain on VISA exchange, gain on sale of mortgage loans, gain on sale of other loans and assets and the derivatives mark to market), decreased $2.2 million, or 3%, in 2025. This decrease can be attributed 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.

Insurance and retail brokerage commissions increased by $1.1 million, or 10%, in 2025, primarily due to higher annuity sales, while Trust income increased $1.1 million, or 9%, due to revenue for assets under management. Swap fee income increased $0.7 million, compared to the prior period, as a result of a growth in new interest rate swaps entered into by our commercial loan customers.

Total noninterest income decreased $2.4 million, or 2%, in comparison to the year ended December 31, 2024. Gain on sale of mortgages increased $1.5 million as a result of changes in volume and spread received on mortgage loans sold, and gain on sale of other loans and assets decreased $2.2 million as a result of a decline in the volume and spread on the sale of SBA loans.

The most significant changes, other than the changes noted above, include gains on VISA exchange of $5.1 million and $5.7 million for the years ended December 31, 2025 and 2024, respectively, related to the conversion and sale of Visa shares. Offsetting these gains are $4.3 million and $5.4 million in losses recognized on the sale available for sale securities for 2025 and 2024, respectively, which were sold in order to reinvest into higher yielding investments.

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Noninterest Expense

The components of noninterest expense for each year in the three-year period ended December 31 are as follows:

Total noninterest expense increased $24.1 million compared to the year ended December 31, 2024. Salaries and employee benefits increased $14.7 million. Contributing to the higher salary expense in 2025 was a $7.7 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 performance levels and sales volumes in 2025. Also impacting salary and benefit expense is a $1.9 million increase in 401(k) expense, a $1.1 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 1,512 at December 31, 2024, increasing to 1,567 at December 31, 2025.

Net occupancy expense increased $0.9 million due to additional properties acquired as part of the Center acquisition as well as increased snow removal expense.

Pennsylvania shares tax decreased $0.9 million compared to the year ended December 31, 2024 primarily due to higher income generated outside of Pennsylvania resulting from continued growth in our SBA and equipment finance loan portfolios.

Other operating expense increased $2.9 million compared to the prior period primarily due to loan-related appraisals, credit reporting and OREO expense. The increase in other professional fees and services is a result of services and advisors for several areas, none of which were individually material. 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.

Income Tax

The provision for income taxes of $39.1 million in 2025 reflects an increase of $3.4 million compared to the provision for income taxes in 2024 as a result of a $13.2 million increase in the level of income before taxes.

The effective tax rate was 20.4% and 20.0% for tax expense in 2025 and 2024, respectively. We ordinarily generate an annual effective tax rate that is less than the statutory rate 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.

Financial Condition

First Commonwealth’s total assets increased $758.1 million as of December 31, 2025 compared to December 31, 2024. Loans and leases, including loans held for sale, increased $743.7 million. Contributing to the loan growth in 2025, including loans

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held for sale, were increases of $265.9 million in equipment finance loans, $231.3 million in commercial real estate loans and $107.0 million in automobile and recreational vehicle loans. Investment securities decreased $19.6 million, or 1%, and cash and interest-bearing balances with banks increased $47.0 million, or 35%.

First Commonwealth’s total liabilities increased $608.9 million in 2025. Deposits increased $573.0 million and long-term borrowings decreased $0.8 million. Short-term borrowings increased $67.8 million, or 85%.

Total shareholders' equity increased $149.2 million in 2025. The growth in shareholders' equity was the result of net income of $152.3 million, common stock issued for the Center acquisition of $45.9 million and a $37.9 million increase in accumulated other comprehensive income resulting from changes in the fair value of available for sale investments, offset by $55.5 million in dividends declared and $36.5 million in stock repurchases.

Loan and Lease Portfolio

Following is a summary of our loan and lease portfolio as of December 31:

The loan and lease portfolio, excluding loans held for sale, totaled $9.5 billion as of December 31, 2025, reflecting growth of $524.3 million compared to December 31, 2024. The Center acquisition contributed $292.6 million of this loan growth while the movement of a portfolio of loans to held for sale in the fourth quarter of 2025 negatively impacted the growth by $225.4 million. Commercial, financial, agricultural and other loans increased $367.0 million, or 22%, $265.9 million of which is a result of growth in the equipment finance portfolio and $92.5 million of which was the result of growth in time and demand loans. Residential real estate loans increased $18.6 million, or 1%, as $82.9 million growth from the Center acquisition was offset by runoff in the portfolio due to a higher percentage of new loans being originated for sale. Commercial real estate loans increased $57.4 million, or 2%, primarily due to growth in owner- and non-owner occupied properties. Growth in commercial real estate loans was impacted by the addition of $114.6 million acquired as part of the Center acquisition, offset by $173.9 million of loans moved to held for sale in the fourth quarter of 2025. Loans to individuals increased $101.9 million primarily due to growth in indirect auto and recreational vehicle loans.

Loans secured by 1-4 family residential properties in the process of foreclosure totaled $14.1 million at December 31, 2025 and $12.1 million at December 31, 2024.

The level of the loan portfolio in 2025 was impacted by the Center acquisition as well as the movement of a select portfolio of loans to held for sale. To better understand the changes to loan portfolio in 2025, the following table shows a breakdown of our loan portfolio between loans acquired through the Center acquisition and the portfolio moved to held for sale as of December 31, 2025:

(1) Includes April 30, 2025 balance of loans acquired as part of the Center acquisition plus day 1 gross up of PCD loans.

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The majority of our loan and lease portfolio is with borrowers located in the states of Pennsylvania and Ohio. As of December 31, 2025 and 2024, there were no concentrations of loans relating to any industry in excess of 10% of total loans.

Final loan maturities and rate sensitivities of the loan portfolio excluding consumer installment and mortgage loans at December 31, 2025 were as follows:

(a)The maturities of real estate construction loans include term commitments that follow the construction period. Loans with these term commitments will be moved to the commercial real estate category when the construction phase of the project is completed.

First Commonwealth has a legal lending limit of $204.4 million to any one borrower or closely related group of borrowers, but has established lower thresholds for credit risk management.

Commercial real estate comprises 33% of our total loan portfolio. Commercial real estate loans are collateralized by real estate properties including, but not limited to, multifamily properties, office, retail, hotels and student housing. The following table summarizes the commercial real estate portfolio by type of property securing the credit as of December 31:

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The following table represents our commercial real estate portfolio by type of property securing the credit as of December 31, 2025. Total non-pass commercial real estate loans increased by $17.7 million to $127.5 million when compared to December 31, 2024.

The office portfolio comprises 14.8% of total commercial real estate loans and 25.0% of total commercial real estate non-pass loans. The average loan commitment size for the office portfolio is $0.9 million and the average outstanding balance as of December 31, 2025 is $0.9 million. Within the office portfolio, exposures over $1.0 million have an average debt service coverage ratio of 1.54x, which exceeds our internal guidelines of 1.25x to 1.50x, depending on property class. Additionally, for loans with exposure over $1.0 million, the office portfolio has a weighted average loan to value of 54% compared to internal guidelines of 60-75% depending on property class. Our current measure is based off of the most recent appraisal on file, the majority of which are from origination.

Portfolio segment limits are approved by our Board of Directors' Risk Committee. These segment limits incorporate loan commitments and are based off of total Tier 1 capital plus the allowable allowance for credit losses. In the second quarter of 2024, after considering the current environment and potential risks related to the office portfolio, the segment limit for the office portfolio was decreased from 65% to 50%, with the actual segment concentration at 32.4% as of December 31, 2025.

The following table summarizes commercial real estate loans by the location of the properties by which they are collateralized as of December 31, 2025. Some loans are collateralized by multiple properties spread over various states. In those instances the loan is included below based on the location of the primary property collateralizing the loan.

When calculating the allowance for credit losses the commercial real estate portfolio is segmented into three portfolio segments: multifamily, non-owner occupied and owner occupied. For additional information related to these segments, including credit quality, see Note 9 "Loans and Leases and Allowance for Credit Losses" of the Consolidated Financial Statements.

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Nonperforming Loans

Nonperforming loans include nonaccrual loans and restructured loans. Nonaccrual loans represent loans on which interest accruals have been discontinued. Restructured loans are those loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest as a result of the deteriorating financial position of the borrower under terms not available in the market.

We discontinue interest accruals on a loan when, based on current information and events, it is probable that we will be unable to fully collect principal or interest due according to the contractual terms of the loan. Consumer loans are placed in nonaccrual status at 150 days past due.  Other types of loans are typically placed in nonaccrual status when there is evidence of a significantly weakened financial condition or principal and interest is 90 days or more delinquent. Interest received on a nonaccrual loan is normally applied as a reduction to loan principal rather than interest income utilizing the cost recovery methodology of revenue recognition.

Nonperforming loans are closely monitored on an ongoing basis as part of our loan review and work-out process. The estimated credit loss on these loans is evaluated by comparing the loan balance to the fair value of any underlying collateral and the present value of projected future cash flows. Losses are recognized when a loss is expected and the amount is reasonably estimable.

The following is a comparison of nonperforming assets and the effects on interest due to nonaccrual loans for the period ended December 31:

(a)End of period loans and nonperforming loans exclude loans held for sale.

(b)Does not include provision for credit losses on loans and leases - acquisition day 1 non-PCD.

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Nonperforming loans increased $30.3 million to $91.8 million at December 31, 2025, compared to $61.5 million at December 31, 2024. During 2025, $94.1 million in loans were moved to nonaccrual, offset by $30.3 million in paydowns and payoffs, $5.8 million in sales, and $27.0 million in charge-offs. During 2025, two dealer floor plan relationships with balances of $13.8 million at December 31, 2025 were placed in nonaccrual status. The relationships totaled $41.4 million when placed in nonaccrual and subsequently the balances were reduced by $20.0 million in payments from the liquidation and sale of collateral and by $7.6 million in chargeoffs. In addition, $8.5 million in the new nonaccrual loans were the result of the Center acquisition. Nonperforming loans as a percentage of total loans increased to 0.97% from 0.68% at December 31, 2025 compared to December 31, 2024, respectively.

Net charge-offs were $29.4 million in 2025 compared to $31.2 million for the year 2024. The most significant credit losses recognized during the year include a $7.6 million charge-off recognized on a dealer floor plan relationship, $2.8 million recognized on nonperforming loans acquired from the Center acquisition, $7.0 million recognized on automobile and recreational vehicles and $1.8 million recognized on a non-owner occupied relationship loan. Included in the above charge-off detail is $7.4 million in charge-offs related to loans that were moved to held for sale during 2025. Additional detail on credit risk is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Provision for Credit Losses,” “Allowance for Credit Losses" and "Credit Risk.”

Provision for credit losses on loans and leases as a percentage of net charge-offs decreased to 99.7% for the year ended December 31, 2025 from 103.8% for the year ended December 31, 2024. This change was primarily driven by the $29.4 million in net charge-offs.

Allowance for Credit Losses

Following is a summary of the allocation of the allowance for credit losses at December 31:

(a)Represents the ratio of loans in each category to total loans.

The allowance for credit losses increased $6.9 million from December 31, 2024 to December 31, 2025. The allowance for credit losses as a percentage of end-of-period loans and leases outstanding was 1.32% at both December 31, 2025 and 2024, respectively. The allowance for credit losses includes both a general reserve for performing loans and reserves for individually analyzed loans. Comparing December 31, 2025 to December 31, 2024, the general reserve for performing loans is 1.22% and 1.24%, respectively, of total performing loans for both periods. Reserves for individually analyzed loans decreased from 13.0% of nonperforming loans at December 31, 2024 to 10.7% of nonperforming loans at December 31, 2025. The allowance for credit losses as a percentage of nonperforming loans was 137.1% and 193.5% at December 31, 2025 and 2024, respectively.

The allowance for credit losses represents management’s estimate of expected losses in the loan portfolio at a specific point in time. This estimate includes losses associated with specifically identified loans, as well as estimated credit losses inherent in the remainder of the loan portfolio. Additions are made to the allowance through both periodic provisions charged to income and recoveries of losses previously incurred. Reductions to the allowance occur as loans are charged off. Management evaluates the appropriateness of the allowance at least quarterly, and in doing so relies on various factors including, but not limited to, assessment of historical loss experience, contractual payment schedules, prepayment estimates, calculated probability of default and loss given default estimates and forecasts of certain macroeconomic variables, such as unemployment, gross domestic product, housing price index, business bankruptcies as well as other macroeconomic variables. This evaluation is subjective and requires material estimates that may change over time. For a description of the methodology used to calculate the allowance for credit losses, please refer to “Critical Accounting Policies and Significant Accounting Estimates—Allowance for Credit Losses.”

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Investment Portfolio

Marketable securities that we hold in our investment portfolio, which are classified as “securities available for sale,” act as a source of liquidity. However, we do not anticipate liquidating the investments prior to maturity.

Following is a detailed schedule of the amortized cost of securities available for sale as of December 31:

As of December 31, 2025, securities available for sale had a fair value of $1.0 billion. Gross unrealized gains were $5.7 million and gross unrealized losses were $87.7 million. The level of gross unrealized losses is directly related to the increase in market interest rates.

The securities available for sale portfolio decreased $133.4 million, or 12%, as of December 31, 2025 compared to December 31, 2024, as deposit growth provided additional liquidity which exceeded funding needs of the loan portfolio. Most of the run off in this portfolio is related to the sales, paydown and maturity of mortgage-backed securities. These securities provide ongoing liquidity through regular principal paydowns and additionally can be pledged for borrowings or to secure public deposits.

The following is a schedule of the contractual maturity distribution of securities available for sale at December 31, 2025.