First Commonwealth misses Q3 profit estimates on higher costs, credit loss provisions
FCF•First Commonwealth Financial’s Q3 adjusted EPS was $0.45, below the $0.46 estimate, and adjusted net income of $45.44 million missed the $45.92 million estimate. Net interest income and margin increased, while credit loss provisions and noninterest expenses rose; the company authorized an additional $25 million share repurchase program.
1. Quarterly results
First Commonwealth Financial reported Q3 adjusted EPS of $0.45, versus the $0.46 analyst estimate, and adjusted net income of $45.44 million, compared with the $45.92 million estimate. Net income was $44.94 million.
2. Costs and credit provisions
Net interest margin rose due to lower deposit costs, higher loan yields and upward repricing of fixed-rate loans. Provision for credit losses increased with a reserve build for unfunded commitments and three commercial credits, two of which were transferred to nonaccrual status. Noninterest expense also rose, driven by salaries and benefits, asset write-downs, equipment costs and FDIC insurance.
3. Repurchase authorization
The company authorized an additional $25 million share repurchase program. It did not provide specific financial guidance for future periods.
