| Loans and Allowance for Credit Losses | Loans and Leases and Allowance for Credit Losses Loans and leases are presented in the Consolidated Statements of Financial Condition net of deferred loan fees and costs, and discounts related to purchased loans. Net deferred costs were $14.7 million and $8.2 million as of December 31, 2024 and 2023, respectively, and discounts on purchased loans were $18.9 million and $25.7 million at December 31, 2024 and 2023, respectively. The following table provides outstanding balances related to each of our loan types as of December 31: 2024 2023 (dollars in thousands) Commercial, financial, agricultural and other $ 1,677,989 $ 1,543,349 Time and demand 1,133,595 1,187,300 Commercial credit cards 11,718 12,906 Equipment finance 427,320 232,944 Time and demand other 105,356 110,199 Real estate construction 483,384 597,735 Construction other 475,367 541,633 Construction residential 8,017 56,102 Residential real estate 2,341,703 2,416,876 Residential first lien 1,670,547 1,739,107 Residential junior lien/home equity 671,156 677,769 Commercial real estate 3,124,704 3,053,152 Multifamily 597,145 551,142 Non-owner occupied 1,804,950 1,772,785 Owner occupied 722,609 729,225 Loans to individuals 1,355,974 1,357,649 Automobile and recreational vehicles 1,280,645 1,277,969 Consumer credit cards 9,865 10,291 Consumer other 65,464 69,389 Total loans and leases $ 8,983,754 $ 8,968,761 First Commonwealth’s loan portfolio includes five primary loan categories. When calculating the allowance for credit losses these categories are classified into fourteen portfolio segments. The composition of loans by portfolio segment includes: Commercial, financial, agricultural and other Time & Demand - Consists primarily of commercial and industrial loans. This category consists of loans that are typically cash flow dependent and therefore have different risk and loss characteristics than other commercial loans. Loans in this category include revolving and term structures with fixed and variable interest rates. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. Commercial Credit Cards - Consists of unsecured credit cards for commercial customers. These commercial credit cards have separate characteristics outside of normal commercial non-real estate loans, as they tend to have shorter overall duration. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. Equipment Finance - Consists of loans and leases to finance the purchase of equipment for commercial customers. The risk and loss characteristics are unique for this group due to the type of collateral. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. Time & Demand Other - Consists primarily of loans to state and political subdivisions and other commercial loans that have different characteristics than loans in the Time and Demand category. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of household debt to income and economic conditions measured by GDP. Real estate construction Construction Other - Consists of construction loans to commercial builders and developers and are secured by the properties under development. Construction Residential - Consists of loans to finance the construction of residential properties during the construction period. Borrowers are typically individuals who will occupy the completed single-family property. The risk and loss characteristics of these two construction categories are different than other real estate secured categories due to the collateral being at various stages of completion. The nature of the project and type of borrower of the two construction categories provides for unique risk and loss characteristics for each category. The primary macroeconomic drivers for estimating credit losses for construction loans include forecasts of national unemployment and measures of completed construction projects. Residential real estate Residential first lien - Consists of loans with collateral of 1-4 family residencies with a senior lien position. The risk and loss characteristics are unique for this group because the collateral for these loans are the borrower’s primary residence. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and residential property values. Residential Junior Lien/Home Equity - Consists of loans with collateral of 1-4 family residencies with an open end line of credit or junior lien position. The junior lien position for the majority of these loans provides a higher risk of loss than other residential real estate loans. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and residential property values. Commercial real estate Multifamily - Consists of loans secured by commercial multifamily properties. Real estate related to rentals to consumers provide unique risk and loss characteristics. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of commercial real estate values and national unemployment. Non-owner Occupied - Consists of loans secured by commercial real estate non-owner occupied and provides different loss characteristics than other real estate categories. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. Owner Occupied - Consists of loans secured by commercial real estate owner occupied properties. The risk and loss characteristics of this category were considered different than other real estate categories because it is owner occupied and would impact the ability to conduct business. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. Loans to individuals Automobile and recreational vehicles - Consists of both direct and indirect loans with automobiles and recreational vehicles held as collateral. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and automobile retention value. Consumer Credit Cards – Consists of unsecured consumer credit cards. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and economic conditions measured by GDP. Other Consumer - Consists of lines of credit, student loans and other consumer loans, not secured by real estate or autos. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and retail sales. Calculation of the Allowance for Credit Losses 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. Our model incorporates a one-year forecast of macroeconomic factors, after which the factors revert back to the historical mean over a one-year period. The most significant macroeconomic factor used in estimating credit losses is the national unemployment rate. The forecasted value for national unemployment at the beginning of the forecast period was 4.17% and during the one-year forecast period it was projected to average 4.82%, with a peak of 5.04%. Credit Quality Information As part of the on-going monitoring of credit quality within the loan portfolio, the following credit worthiness categories are used in grading our commercial loans: Pass Acceptable levels of risk exist in the relationship. Includes all loans not classified as OAEM, substandard or doubtful. Other Assets Especially Mentioned (OAEM) Potential weaknesses that deserve management’s close attention. The potential weaknesses may result in deterioration of the repayment prospects or weaken the Bank’s credit position at some future date. The credit risk may be relatively minor, yet constitute an undesirable risk in light of the circumstances surrounding the specific credit. No loss of principal or interest is expected. Substandard Well-defined weakness or a weakness that jeopardizes the repayment of the debt. A loan may be classified as substandard as a result of deterioration of the borrower’s financial condition and repayment capacity. Loans for which repayment plans have not been met or collateral equity margins do not protect the Company may also be classified as substandard. Doubtful Loans with the characteristics of substandard loans with the added characteristic that collection or liquidation in full, on the basis of presently existing facts and conditions, is highly improbable. The Company’s internal creditworthiness grading system provides a measurement of credit risk based primarily on an evaluation of the borrower’s cash flow and collateral. Category ratings are reviewed each quarter, at which time management analyzes the results, as well as other external statistics and factors related to loan performance. The following tables represent our credit risk profile by creditworthiness category for the years ended December 31: 2024 Non-Pass Pass OAEM Substandard Doubtful Loss Total Non-Pass Total (dollars in thousands) Commercial, financial, agricultural and other $ 1,579,704 $ 65,892 $ 32,393 $ — $ — $ 98,285 $ 1,677,989 Time and demand 1,037,723 64,757 31,115 — — 95,872 1,133,595 Commercial credit cards 11,718 — — — — — 11,718 Equipment finance 424,911 1,131 1,278 — — 2,409 427,320 Time and demand other 105,352 4 — — — 4 105,356 Real estate construction 480,675 180 2,529 — — 2,709 483,384 Construction other 472,658 180 2,529 — — 2,709 475,367 Construction residential 8,017 — — — — — 8,017 Residential real estate 2,328,571 1,297 11,835 — — 13,132 2,341,703 Residential first lien 1,661,868 1,297 7,382 — — 8,679 1,670,547 Residential junior lien/home equity 666,703 — 4,453 — — 4,453 671,156 Commercial real estate 3,014,905 60,510 49,289 — — 109,799 3,124,704 Multifamily 578,725 18,346 74 — — 18,420 597,145 Non-owner occupied 1,754,255 21,869 28,826 — — 50,695 1,804,950 Owner occupied 681,925 20,295 20,389 — — 40,684 722,609 Loans to individuals 1,355,724 — 250 — — 250 1,355,974 Automobile and recreational vehicles 1,280,498 — 147 — — 147 1,280,645 Consumer credit cards 9,865 — — — — — 9,865 Consumer other 65,361 — 103 — — 103 65,464 Total $ 8,759,579 $ 127,879 $ 96,296 $ — $ — $ 224,175 $ 8,983,754 2023 Non-Pass Pass OAEM Substandard Doubtful Loss Total Non-Pass Total (dollars in thousands) Commercial, financial, agricultural and other $ 1,453,970 $ 58,325 $ 31,054 $ — $ — $ 89,379 $ 1,543,349 Time and demand 1,098,763 58,325 30,212 — — 88,537 1,187,300 Commercial credit cards 12,906 — — — — — 12,906 Equipment finance 232,102 — 842 — — 842 232,944 Time and demand other 110,199 — — — — — 110,199 Real estate construction 585,543 — 12,192 — — 12,192 597,735 Construction other 529,441 — 12,192 — — 12,192 541,633 Construction residential 56,102 — — — — — 56,102 Residential real estate 2,405,240 2,768 8,868 — — 11,636 2,416,876 Residential first lien 1,732,006 2,415 4,686 — — 7,101 1,739,107 Residential junior lien/home equity 673,234 353 4,182 — — 4,535 677,769 Commercial real estate 2,956,338 62,038 34,776 — — 96,814 3,053,152 Multifamily 538,939 12,117 86 — — 12,203 551,142 Non-owner occupied 1,722,315 31,652 18,818 — — 50,470 1,772,785 Owner occupied 695,084 18,269 15,872 — — 34,141 729,225 Loans to individuals 1,357,483 — 166 — — 166 1,357,649 Automobile and recreational vehicles 1,277,805 — 164 — — 164 1,277,969 Consumer credit cards 10,291 — — — — — 10,291 Consumer other 69,387 — 2 — — 2 69,389 Total $ 8,758,574 $ 123,131 $ 87,056 $ — $ — $ 210,187 $ 8,968,761 The following table summarizes the loan risk rating category by loan type including term loans on an amortized cost basis by origination year as of December 31: 2024 Term Loans Revolving Loans 2024 2023 2022 2021 2020 Prior Total (dollars in thousands) Time and demand $ 144,084 $ 115,113 $ 101,483 $ 80,688 $ 47,378 $ 67,103 $ 577,746 $ 1,133,595 Pass 142,872 107,764 96,068 60,244 44,645 56,393 529,737 1,037,723 OAEM 1,212 2,696 3,327 11,963 1,881 4,362 39,316 64,757 Substandard — 4,653 2,088 8,481 852 6,348 8,693 31,115 Gross Charge-offs — (17) (45) (271) (658) (4,380) (5,760) (11,131) Gross Recoveries — — 1 — 208 197 29 435 Commercial credit cards — — — — — — 11,718 11,718 Pass — — — — — — 11,718 11,718 Gross Charge-offs — — — — — — (251) (251) Gross Recoveries — — — — — — 6 6 Equipment finance 256,015 129,463 41,842 — — — — 427,320 Pass 255,572 128,560 40,779 — — — — 424,911 OAEM 443 267 421 — — — — 1,131 Substandard — 636 642 — — — — 1,278 Gross Charge-offs (59) (984) (977) — — — — (2,020) Gross Recoveries — 98 76 — — — — 174 2024 Term Loans Revolving Loans 2024 2023 2022 2021 2020 Prior Total (dollars in thousands) Time and demand other 10,746 10,813 4,561 16,526 18,435 41,261 3,014 105,356 Pass 10,746 10,813 4,561 16,526 18,435 41,261 3,010 105,352 OAEM — — — — — — 4 4 Gross Charge-offs — — — — — — (2,110) (2,110) Gross Recoveries — — — — — 10 188 198 Construction other 54,109 195,536 136,010 62,890 7,030 18,766 1,026 475,367 Pass 54,109 195,536 134,812 61,379 7,030 18,766 1,026 472,658 OAEM — — 180 — — — — 180 Substandard — — 1,018 1,511 — — — 2,529 Gross Charge-offs — — (588) (504) — — — (1,092) Gross Recoveries — — — — — 6 — 6 Construction residential 1,743 3,366 1,740 1,140 — 28 — 8,017 Pass 1,743 3,366 1,740 1,140 — 28 — 8,017 Gross Charge-offs — — — — — — — — Gross Recoveries — — — — — — — — Residential first lien 47,504 147,678 369,890 475,231 296,971 331,368 1,905 1,670,547 Pass 47,504 145,898 369,111 473,418 296,170 327,934 1,833 1,661,868 OAEM — — — 255 345 625 72 1,297 Substandard — 1,780 779 1,558 456 2,809 — 7,382 Gross Charge-offs — (108) (1) (20) (1) (61) — (191) Gross Recoveries — — — — — 168 — 168 Residential junior lien/home equity 21,770 53,985 58,662 37,644 1,163 5,406 492,526 671,156 Pass 21,770 53,974 58,587 37,644 1,163 5,207 488,358 666,703 Substandard — 11 75 — — 199 4,168 4,453 Gross Charge-offs — — (1) — — — (291) (292) Gross Recoveries — — — — — 32 170 202 Multifamily 25,006 6,978 235,374 141,970 79,271 108,059 487 597,145 Pass 25,006 6,978 222,965 136,872 78,844 107,573 487 578,725 OAEM — — 12,409 5,098 427 412 — 18,346 Substandard — — — — — 74 — 74 Gross Charge-offs — — — — — — — — Gross Recoveries — — — — — — — — Non-owner occupied 120,201 206,496 435,072 182,234 147,034 702,907 11,006 1,804,950 Pass 120,201 203,543 424,778 181,993 136,219 676,580 10,941 1,754,255 OAEM — — 10,294 241 1,641 9,693 — 21,869 Substandard — 2,953 — — 9,174 16,634 65 28,826 Gross Charge-offs — — (50) — (3,761) (3,327) — (7,138) Gross Recoveries — — — — — 59 — 59 Owner occupied 64,019 112,272 152,714 145,807 58,919 176,674 12,204 722,609 Pass 62,968 110,539 139,937 139,644 57,309 161,208 10,320 681,925 OAEM — 876 7,002 6,129 198 4,260 1,830 20,295 Substandard 1,051 857 5,775 34 1,412 11,206 54 20,389 Gross Charge-offs — — (141) (136) (1,050) (163) (50) (1,540) Gross Recoveries — — — 28 — 49 41 118 2024 Term Loans Revolving Loans 2024 2023 2022 2021 2020 Prior Total (dollars in thousands) Automobile and recreational vehicles 403,819 316,774 321,803 152,084 71,682 14,483 — 1,280,645 Pass 403,803 316,734 321,776 152,052 71,674 14,459 — 1,280,498 Substandard 16 40 27 32 8 24 — 147 Gross Charge-offs (310) (1,826) (3,223) (1,275) (525) (452) — (7,611) Gross Recoveries 36 415 844 468 296 351 — 2,410 Consumer credit cards — — — — — — 9,865 9,865 Pass — — — — — — 9,865 9,865 Gross Charge-offs — — — — — — (428) (428) Gross Recoveries — — — — — — 96 96 Consumer other 7,878 4,351 2,530 10,325 642 2,291 37,447 65,464 Pass 7,878 4,351 2,530 10,323 642 2,291 37,346 65,361 Substandard — — — 2 — — 101 103 Gross Charge-offs (17) (109) (93) (102) (20) (35) (1,248) (1,624) Gross Recoveries — — 14 21 16 111 214 376 Total $ 1,156,894 $ 1,302,825 $ 1,861,681 $ 1,306,539 $ 728,525 $ 1,468,346 $ 1,158,944 $ 8,983,754 Total charge-offs $ (386) $ (3,044) $ (5,119) $ (2,308) $ (6,015) $ (8,418) $ (10,138) $ (35,428) Total recoveries $ 36 $ 513 $ 935 $ 517 $ 520 $ 983 $ 744 $ 4,248 2023 Term Loans Revolving Loans 2023 2022 2021 2020 2019 Prior Total (dollars in thousands) Time and demand $ 170,285 $ 178,568 $ 111,288 $ 73,487 $ 42,502 $ 65,419 $ 545,751 $ 1,187,300 Pass 166,716 174,699 100,779 71,125 29,812 57,660 497,972 1,098,763 OAEM 1,707 3,129 2,948 1,530 10,873 2,553 35,585 58,325 Substandard 1,862 740 7,561 832 1,817 5,206 12,194 30,212 Gross Charge-offs (582) (4,572) (18) (2,195) (2,364) (1,283) (5,133) (16,147) Gross Recoveries — — — 119 4 128 9 260 Commercial credit cards — — — — — — 12,906 12,906 Pass — — — — — — 12,906 12,906 Gross Charge-offs — — — — — — (105) (105) Gross Recoveries — — — — — — 13 13 Equipment finance 170,630 62,314 — — — — — 232,944 Pass 170,302 61,800 — — — — — 232,102 Substandard 328 514 — — — — — 842 Gross Charge-offs (104) (433) — — — — — (537) Gross Recoveries — — — — — — — — Time and demand other 9,965 6,022 17,860 19,352 3,025 46,466 7,509 110,199 Pass 9,965 6,022 17,860 19,352 3,025 46,466 7,509 110,199 Gross Charge-offs — — — — — — (2,410) (2,410) Gross Recoveries — — — — — — 225 225 2023 Term Loans Revolving Loans 2023 2022 2021 2020 2019 Prior Total (dollars in thousands) Construction other 94,150 217,565 154,873 44,428 5,379 24,541 697 541,633 Pass 94,150 214,277 153,195 44,428 5,379 17,315 697 529,441 Substandard — 3,288 1,678 — — 7,226 — 12,192 Gross Charge-offs — — — — — — — — Gross Recoveries — — — — — — — — Construction residential 27,487 19,322 2,284 3,194 3,337 — 478 56,102 Pass 27,487 19,322 2,284 3,194 3,337 — 478 56,102 Gross Charge-offs — — — — — — — — Gross Recoveries — — — — — — — — Residential first lien 120,053 385,917 527,057 320,107 97,529 286,503 1,941 1,739,107 Pass 119,903 385,269 524,841 319,762 96,702 283,665 1,864 1,732,006 OAEM — 80 1,527 — — 731 77 2,415 Substandard 150 568 689 345 827 2,107 — 4,686 Gross Charge-offs — (98) — (31) (1) (116) — (246) Gross Recoveries — — — — — 177 — 177 Residential junior lien/home equity 62,098 70,171 44,359 2,487 2,305 4,949 491,400 677,769 Pass 62,098 70,171 44,359 2,487 2,305 4,672 487,142 673,234 OAEM — — — — — 208 145 353 Substandard — — — — — 69 4,113 4,182 Gross Charge-offs — — — — — — (315) (315) Gross Recoveries — — — — — — 70 70 Multifamily 6,839 156,393 155,067 94,284 44,121 92,585 1,853 551,142 Pass 6,839 144,728 155,067 94,284 44,121 92,047 1,853 538,939 OAEM — 11,665 — — — 452 — 12,117 Substandard — — — — — 86 — 86 Gross Charge-offs — — — — — — — — Gross Recoveries — — — — — — — — Non-owner occupied 184,562 423,543 159,593 148,716 221,551 621,678 13,142 1,772,785 Pass 181,578 415,577 159,593 148,716 211,019 592,755 13,077 1,722,315 OAEM — 7,546 — — 7,313 16,793 — 31,652 Substandard 2,984 420 — — 3,219 12,130 65 18,818 Gross Charge-offs — (232) — — — (4,473) — (4,705) Gross Recoveries — — — — — 127 — 127 Owner occupied 106,831 163,830 153,996 80,522 59,357 152,728 11,961 729,225 Pass 106,583 161,071 149,788 75,267 42,745 147,809 11,821 695,084 OAEM 112 785 3,950 4,000 5,363 4,026 33 18,269 Substandard 136 1,974 258 1,255 11,249 893 107 15,872 Gross Charge-offs — — (32) — — (1,540) — (1,572) Gross Recoveries — — — — — 24 — 24 Automobile and recreational vehicles 427,112 459,836 234,144 115,364 35,402 6,111 — 1,277,969 Pass 427,112 459,835 234,085 115,354 35,345 6,074 — 1,277,805 Substandard — 1 59 10 57 37 — 164 Gross Charge-offs (487) (2,232) (1,258) (972) (527) (111) — (5,587) Gross Recoveries 71 479 419 367 347 149 — 1,832 2023 Term Loans Revolving Loans 2023 2022 2021 2020 2019 Prior Total (dollars in thousands) Consumer credit cards — — — — — — 10,291 10,291 Pass — — — — — — 10,291 10,291 Gross Charge-offs — — — — — — (290) (290) Gross Recoveries — — — — — — 87 87 Consumer other 6,893 4,224 13,277 1,411 1,090 3,440 39,054 69,389 Pass 6,893 4,224 13,277 1,411 1,090 3,440 39,052 69,387 Substandard — — — — — — 2 2 Gross Charge-offs (21) (50) (130) (31) (157) (23) (941) (1,353) Gross Recoveries — 1 4 9 35 66 185 300 Total $ 1,386,905 $ 2,147,705 $ 1,573,798 $ 903,352 $ 515,598 $ 1,304,420 $ 1,136,983 $ 8,968,761 Gross Charge-offs $ (1,194) $ (7,617) $ (1,438) $ (3,229) $ (3,049) $ (7,546) $ (9,194) $ (33,267) Gross Recoveries $ 71 $ 480 $ 423 $ 495 $ 386 $ 671 $ 589 $ 3,115 Portfolio Risks The credit quality of our loan portfolio can potentially represent significant risk to our earnings, capital and liquidity. First Commonwealth devotes substantial resources to managing this risk primarily through our credit administration department that develops and administers policies and procedures for underwriting, maintaining, monitoring and collecting loans. Credit administration is independent of lending departments and oversight is provided by the Risk Committee of the First Commonwealth Board of Directors. Total gross charge-offs for the years ended December 31, 2024 and 2023 were $35.4 million and $33.3 million, respectively. Age Analysis of Past Due Loans by Segment The following tables delineate the aging analysis of the recorded investments in past due loans as of December 31. Also included in these tables are loans that are 90 days or more past due and still accruing because they are well-secured and in the process of collection. 2024 30 - 59 60 - 89 90 days Nonaccrual Total past Current Total (dollars in thousands) Commercial, financial, agricultural and other $ 2,379 $ 1,544 $ 26 $ 14,987 $ 18,936 $ 1,659,053 $ 1,677,989 Time and demand 649 1,126 26 14,181 15,982 1,117,613 1,133,595 Commercial credit cards 61 26 — — 87 11,631 11,718 Equipment finance 1,659 392 — 806 2,857 424,463 427,320 Time and demand other 10 — — — 10 105,346 105,356 Real estate construction — — — 2,529 2,529 480,855 483,384 Construction other — — — 2,529 2,529 472,838 475,367 Construction residential — — — — — 8,017 8,017 Residential real estate 5,677 1,659 1,588 11,587 20,511 2,321,192 2,341,703 Residential first lien 3,904 1,184 1,134 7,134 13,356 1,657,191 1,670,547 Residential junior lien/home equity 1,773 475 454 4,453 7,155 664,001 671,156 Commercial real estate 1,597 1,099 — 32,103 34,799 3,089,905 3,124,704 Multifamily 212 — — 20 232 596,913 597,145 Non-owner occupied 72 742 — 24,550 25,364 1,779,586 1,804,950 Owner occupied 1,313 357 — 7,533 9,203 713,406 722,609 2024 30 - 59 60 - 89 90 days Nonaccrual Total past Current Total Loans to individuals 5,020 1,143 450 250 6,863 1,349,111 1,355,974 Automobile and recreational vehicles 4,667 930 149 147 5,893 1,274,752 1,280,645 Consumer credit cards 24 28 — — 52 9,813 9,865 Consumer other 329 185 301 103 918 64,546 65,464 Total $ 14,673 $ 5,445 $ 2,064 $ 61,456 $ 83,638 $ 8,900,116 $ 8,983,754 2023 30 - 59 60 - 89 90 days Nonaccrual Total past Current Total (dollars in thousands) Commercial, financial, agricultural and other $ 1,206 $ 745 $ 4,187 $ 10,060 $ 16,198 $ 1,527,151 $ 1,543,349 Time and demand 565 691 4,187 9,218 14,661 1,172,639 1,187,300 Commercial credit cards 7 54 — — 61 12,845 12,906 Equipment finance 600 — — 842 1,442 231,502 232,944 Time and demand other 34 — — — 34 110,165 110,199 Real estate construction — — — 3,288 3,288 594,447 597,735 Construction other — — — 3,288 3,288 538,345 541,633 Construction residential — — — — — 56,102 56,102 Residential real estate 6,982 1,535 1,062 8,573 18,152 2,398,724 2,416,876 Residential first lien 4,130 940 171 4,443 9,684 1,729,423 1,739,107 Residential junior lien/home equity 2,852 595 891 4,130 8,468 669,301 677,769 Commercial real estate 4,157 — 3,509 17,385 25,051 3,028,101 3,053,152 Multifamily — — — 55 55 551,087 551,142 Non-owner occupied 2,303 — 3,509 14,282 20,094 1,752,691 1,772,785 Owner occupied 1,854 — — 3,048 4,902 724,323 729,225 Loans to individuals 4,613 878 678 166 6,335 1,351,314 1,357,649 Automobile and recreational vehicles 4,115 612 151 164 5,042 1,272,927 1,277,969 Consumer credit cards 39 71 — — 110 10,181 10,291 Consumer other 459 195 527 2 1,183 68,206 69,389 Total $ 16,958 $ 3,158 $ 9,436 $ 39,472 $ 69,024 $ 8,899,737 $ 8,968,761 Nonaccrual Loans The previous tables summarize nonaccrual loans by loan segment. The Company generally places loans on nonaccrual status when the full and timely collection of interest or principal becomes uncertain, when part of the principal balance has been charged off and no restructuring has occurred, or the loans reach a certain number of days past due. Generally, loans 90 days or more past due are placed on nonaccrual status, except for consumer loans which are placed in nonaccrual status at 150 days past due. Consumer loans related to automobile and recreational vehicles are either charged off or repossessed at no later than 90 days past due. When a loan is placed on nonaccrual, the accrued unpaid interest receivable is reversed against interest income and all future payments received are applied as a reduction to the loan principal. Generally, the loan is returned to accrual status when (a) all delinquent interest and principal become current under the terms of the loan agreement or (b) the loan is both well-secured and in the process of collection and collectability is no longer in doubt. Nonperforming Loans Management considers loans to be nonperforming when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. When management identifies a loan as nonperforming, the credit loss is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole source or repayment for the loan is the operation or liquidation of collateral. When the loan is collateral dependent, the appraised value less estimated cost to sell is utilized. If management determines the value of the loan is less than the recorded investment in the loan, a credit loss is recognized through an allowance estimate or a charge-off to the allowance for credit losses. When the ultimate collectability of the total principal of a nonperforming loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectability of the total principal of a nonperforming loan is not in doubt and the loan is on nonaccrual status, contractual interest is credited to interest income when received under the cash basis method. There were no nonperforming loans held for sale at December 31, 2024 and 2023. There were no gains on nonperforming loans held for sale during the years ended December 31, 2024, 2023 and 2022. The following tables include the recorded investment and unpaid principal balance for nonperforming loans with the associated allowance amount, if applicable, as of December 31, 2024 and 2023. Also presented are the average recorded investment in nonperforming loans and the related amount of interest recognized while the loan was considered nonperforming. Average balances are calculated based on month-end balances of the loans for the period reported and are included in the table below based on its period end allowance position. 2024 Recorded Unpaid Related Average Interest (dollars in thousands) With no related specific allowance recorded: Commercial, financial, agricultural and other $ 5,619 $ 21,745 $ 6,580 $ 41 Time and demand 4,813 20,939 5,481 41 Equipment finance — — — — Time and demand other 806 806 1,099 — Real estate construction 2,529 2,581 4,498 — Construction other 2,529 2,581 4,498 — Construction residential — — — — Residential real estate 8,875 10,524 8,360 133 Residential first lien 6,020 6,993 5,134 118 Residential junior lien/home equity 2,855 3,531 3,226 15 Commercial real estate 18,346 24,047 16,759 453 Multifamily 20 21 34 — Non-owner occupied 16,948 22,372 15,657 173 Owner occupied 1,378 1,654 1,068 280 Loans to individuals 250 2,237 146 7 Automobile and recreational vehicles 147 2,080 135 7 Consumer other 103 157 11 — Subtotal 35,619 61,134 36,343 634 With a specific allowance recorded: Commercial, financial, agricultural and other 9,368 10,459 $ 4,724 5,378 71 Time and demand 9,368 10,459 4,724 5,378 71 Equipment finance — — — — — Time and demand other — — — — — Real estate construction — — — — — Construction other — — — — — Construction residential — — — — — Residential real estate 2,712 2,885 369 1,486 — Residential first lien 1,114 1,113 47 205 — Residential junior lien/home equity 1,598 1,772 322 1,281 — Commercial real estate 13,757 15,058 2,872 11,092 — Multifamily — — — — — Non-owner occupied 7,602 8,686 2,093 6,634 — Owner occupied 6,155 6,372 779 4,458 — Loans to individuals — — — — — Automobile and recreational vehicles — — — — — Consumer other — — — — — Subtotal 25,837 28,402 7,965 17,956 71 Total $ 61,456 $ 89,536 $ 7,965 $ 54,299 $ 705 2023 Recorded Unpaid Related Average Interest (dollars in thousands) With no related specific allowance recorded: Commercial, financial, agricultural and other $ 4,369 $ 18,014 $ 7,895 $ 143 Time and demand 3,527 17,172 7,569 143 Equipment finance 842 842 326 — Time and demand other — — — — Real estate construction 3,288 3,288 1,096 — Construction other 3,288 3,288 1,096 — Construction residential — — — — Residential real estate 7,042 8,763 6,440 136 Residential first lien 4,161 5,151 3,760 129 Residential junior lien/home equity 2,881 3,612 2,680 7 Commercial real estate 12,402 18,219 20,715 260 Multifamily 55 58 37 — Non-owner occupied 10,971 17,092 18,454 122 Owner occupied 1,376 1,069 2,224 138 Loans to individuals 166 259 365 7 Automobile and recreational vehicles 164 257 299 7 Consumer other 2 2 66 — Subtotal 27,267 48,543 36,511 546 With a specific allowance recorded: Commercial, financial, agricultural and other 5,691 6,787 $ 4,044 6,574 (16) Time and demand 5,691 6,787 4,044 6,574 (16) Equipment finance — — — — — Time and demand other — — — — — Real estate construction — — — — — Construction other — — — — — Construction residential — — — — — Residential real estate 1,531 1,697 118 1,183 — Residential first lien 282 279 39 47 — Residential junior lien/home equity 1,249 1,418 79 1,136 — Commercial real estate 4,983 5,294 387 655 — Multifamily — — — — — Non-owner occupied 3,311 3,550 174 397 — Owner occupied 1,672 1,744 213 258 — Loans to individuals — — — — — Automobile and recreational vehicles — — — — — Consumer other — — — — — Subtotal 12,205 13,778 4,549 8,412 (16) Total $ 39,472 $ 62,321 $ 4,549 $ 44,923 $ 530 2022 Average Interest (dollars in thousands) With no related specific allowance recorded: Commercial, financial, agricultural and other $ 3,751 $ 157 Time and demand 3,751 157 Real estate construction — — Residential real estate 9,040 241 Residential first lien 5,280 172 Residential junior lien/home equity 3,760 69 Commercial real estate 22,983 172 Multifamily 172 43 Non-owner occupied 21,304 104 Owner occupied 1,507 25 Loans to individuals 455 16 Automobile and recreational vehicles 378 16 Consumer other 77 — Subtotal 36,229 586 With a specific allowance recorded: Commercial, financial, agricultural and other 261 8 Time and demand 261 8 Real estate construction — — Residential real estate — — Residential first lien — — Residential junior lien/home equity — — Commercial real estate — — Multifamily — — Non-owner occupied — — Owner occupied — — Loans to individuals — — Automobile and recreational vehicles — — Consumer other — — Subtotal 261 8 Total $ 36,490 $ 594 Unfunded commitments related to nonperforming loans were $0.3 million and $0.1 million at December 31, 2024 and 2023, respectively. After consideration of the requirements to draw and available collateral related to these commitments, it was determined that no reserve was required for these commitments at December 31, 2024 or 2023. Loan Modifications Made to Borrowers Experiencing Financial Difficulty The Company adopted ASU 2022-02 on January 1, 2023 on a prospective basis. Disclosures for years prior to adoption continue to reflect TDR | Loans and Leases and Allowance for Credit Losses Loans and leases are presented in the Consolidated Statements of Financial Condition net of deferred loan fees and costs, and discounts related to purchased loans. Net deferred costs were $14.7 million and $8.2 million as of December 31, 2024 and 2023, respectively, and discounts on purchased loans were $18.9 million and $25.7 million at December 31, 2024 and 2023, respectively. The following table provides outstanding balances related to each of our loan types as of December 31: 2024 2023 (dollars in thousands) Commercial, financial, agricultural and other $ 1,677,989 $ 1,543,349 Time and demand 1,133,595 1,187,300 Commercial credit cards 11,718 12,906 Equipment finance 427,320 232,944 Time and demand other 105,356 110,199 Real estate construction 483,384 597,735 Construction other 475,367 541,633 Construction residential 8,017 56,102 Residential real estate 2,341,703 2,416,876 Residential first lien 1,670,547 1,739,107 Residential junior lien/home equity 671,156 677,769 Commercial real estate 3,124,704 3,053,152 Multifamily 597,145 551,142 Non-owner occupied 1,804,950 1,772,785 Owner occupied 722,609 729,225 Loans to individuals 1,355,974 1,357,649 Automobile and recreational vehicles 1,280,645 1,277,969 Consumer credit cards 9,865 10,291 Consumer other 65,464 69,389 Total loans and leases $ 8,983,754 $ 8,968,761 First Commonwealth’s loan portfolio includes five primary loan categories. When calculating the allowance for credit losses these categories are classified into fourteen portfolio segments. The composition of loans by portfolio segment includes: Commercial, financial, agricultural and other Time & Demand - Consists primarily of commercial and industrial loans. This category consists of loans that are typically cash flow dependent and therefore have different risk and loss characteristics than other commercial loans. Loans in this category include revolving and term structures with fixed and variable interest rates. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. Commercial Credit Cards - Consists of unsecured credit cards for commercial customers. These commercial credit cards have separate characteristics outside of normal commercial non-real estate loans, as they tend to have shorter overall duration. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. Equipment Finance - Consists of loans and leases to finance the purchase of equipment for commercial customers. The risk and loss characteristics are unique for this group due to the type of collateral. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. Time & Demand Other - Consists primarily of loans to state and political subdivisions and other commercial loans that have different characteristics than loans in the Time and Demand category. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of household debt to income and economic conditions measured by GDP. Real estate construction Construction Other - Consists of construction loans to commercial builders and developers and are secured by the properties under development. Construction Residential - Consists of loans to finance the construction of residential properties during the construction period. Borrowers are typically individuals who will occupy the completed single-family property. The risk and loss characteristics of these two construction categories are different than other real estate secured categories due to the collateral being at various stages of completion. The nature of the project and type of borrower of the two construction categories provides for unique risk and loss characteristics for each category. The primary macroeconomic drivers for estimating credit losses for construction loans include forecasts of national unemployment and measures of completed construction projects. Residential real estate Residential first lien - Consists of loans with collateral of 1-4 family residencies with a senior lien position. The risk and loss characteristics are unique for this group because the collateral for these loans are the borrower’s primary residence. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and residential property values. Residential Junior Lien/Home Equity - Consists of loans with collateral of 1-4 family residencies with an open end line of credit or junior lien position. The junior lien position for the majority of these loans provides a higher risk of loss than other residential real estate loans. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and residential property values. Commercial real estate Multifamily - Consists of loans secured by commercial multifamily properties. Real estate related to rentals to consumers provide unique risk and loss characteristics. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of commercial real estate values and national unemployment. Non-owner Occupied - Consists of loans secured by commercial real estate non-owner occupied and provides different loss characteristics than other real estate categories. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. Owner Occupied - Consists of loans secured by commercial real estate owner occupied properties. The risk and loss characteristics of this category were considered different than other real estate categories because it is owner occupied and would impact the ability to conduct business. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. Loans to individuals Automobile and recreational vehicles - Consists of both direct and indirect loans with automobiles and recreational vehicles held as collateral. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and automobile retention value. Consumer Credit Cards – Consists of unsecured consumer credit cards. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and economic conditions measured by GDP. Other Consumer - Consists of lines of credit, student loans and other consumer loans, not secured by real estate or autos. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and retail sales. Calculation of the Allowance for Credit Losses 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. Our model incorporates a one-year forecast of macroeconomic factors, after which the factors revert back to the historical mean over a one-year period. The most significant macroeconomic factor used in estimating credit losses is the national unemployment rate. The forecasted value for national unemployment at the beginning of the forecast period was 4.17% and during the one-year forecast period it was projected to average 4.82%, with a peak of 5.04%. Credit Quality Information As part of the on-going monitoring of credit quality within the loan portfolio, the following credit worthiness categories are used in grading our commercial loans: Pass Acceptable levels of risk exist in the relationship. Includes all loans not classified as OAEM, substandard or doubtful. Other Assets Especially Mentioned (OAEM) Potential weaknesses that deserve management’s close attention. The potential weaknesses may result in deterioration of the repayment prospects or weaken the Bank’s credit position at some future date. The credit risk may be relatively minor, yet constitute an undesirable risk in light of the circumstances surrounding the specific credit. No loss of principal or interest is expected. Substandard Well-defined weakness or a weakness that jeopardizes the repayment of the debt. A loan may be classified as substandard as a result of deterioration of the borrower’s financial condition and repayment capacity. Loans for which repayment plans have not been met or collateral equity margins do not protect the Company may also be classified as substandard. Doubtful Loans with the characteristics of substandard loans with the added characteristic that collection or liquidation in full, on the basis of presently existing facts and conditions, is highly improbable. The Company’s internal creditworthiness grading system provides a measurement of credit risk based primarily on an evaluation of the borrower’s cash flow and collateral. Category ratings are reviewed each quarter, at which time management analyzes the results, as well as other external statistics and factors related to loan performance. The following tables represent our credit risk profile by creditworthiness category for the years ended December 31: 2024 Non-Pass Pass OAEM Substandard Doubtful Loss Total Non-Pass Total (dollars in thousands) Commercial, financial, agricultural and other $ 1,579,704 $ 65,892 $ 32,393 $ — $ — $ 98,285 $ 1,677,989 Time and demand 1,037,723 64,757 31,115 — — 95,872 1,133,595 Commercial credit cards 11,718 — — — — — 11,718 Equipment finance 424,911 1,131 1,278 — — 2,409 427,320 Time and demand other 105,352 4 — — — 4 105,356 Real estate construction 480,675 180 2,529 — — 2,709 483,384 Construction other 472,658 180 2,529 — — 2,709 475,367 Construction residential 8,017 — — — — — 8,017 Residential real estate 2,328,571 1,297 11,835 — — 13,132 2,341,703 Residential first lien 1,661,868 1,297 7,382 — — 8,679 1,670,547 Residential junior lien/home equity 666,703 — 4,453 — — 4,453 671,156 Commercial real estate 3,014,905 60,510 49,289 — — 109,799 3,124,704 Multifamily 578,725 18,346 74 — — 18,420 597,145 Non-owner occupied 1,754,255 21,869 28,826 — — 50,695 1,804,950 Owner occupied 681,925 20,295 20,389 — — 40,684 722,609 Loans to individuals 1,355,724 — 250 — — 250 1,355,974 Automobile and recreational vehicles 1,280,498 — 147 — — 147 1,280,645 Consumer credit cards 9,865 — — — — — 9,865 Consumer other 65,361 — 103 — — 103 65,464 Total $ 8,759,579 $ 127,879 $ 96,296 $ — $ — $ 224,175 $ 8,983,754 2023 Non-Pass Pass OAEM Substandard Doubtful Loss Total Non-Pass Total (dollars in thousands) Commercial, financial, agricultural and other $ 1,453,970 $ 58,325 $ 31,054 $ — $ — $ 89,379 $ 1,543,349 Time and demand 1,098,763 58,325 30,212 — — 88,537 1,187,300 Commercial credit cards 12,906 — — — — — 12,906 Equipment finance 232,102 — 842 — — 842 232,944 Time and demand other 110,199 — — — — — 110,199 Real estate construction 585,543 — 12,192 — — 12,192 597,735 Construction other 529,441 — 12,192 — — 12,192 541,633 Construction residential 56,102 — — — — — 56,102 Residential real estate 2,405,240 2,768 8,868 — — 11,636 2,416,876 Residential first lien 1,732,006 2,415 4,686 — — 7,101 1,739,107 Residential junior lien/home equity 673,234 353 4,182 — — 4,535 677,769 Commercial real estate 2,956,338 62,038 34,776 — — 96,814 3,053,152 Multifamily 538,939 12,117 86 — — 12,203 551,142 Non-owner occupied 1,722,315 31,652 18,818 — — 50,470 1,772,785 Owner occupied 695,084 18,269 15,872 — — 34,141 729,225 Loans to individuals 1,357,483 — 166 — — 166 1,357,649 Automobile and recreational vehicles 1,277,805 — 164 — — 164 1,277,969 Consumer credit cards 10,291 — — — — — 10,291 Consumer other 69,387 — 2 — — 2 69,389 Total $ 8,758,574 $ 123,131 $ 87,056 $ — $ — $ 210,187 $ 8,968,761 The following table summarizes the loan risk rating category by loan type including term loans on an amortized cost basis by origination year as of December 31: 2024 Term Loans Revolving Loans 2024 2023 2022 2021 2020 Prior Total (dollars in thousands) Time and demand $ 144,084 $ 115,113 $ 101,483 $ 80,688 $ 47,378 $ 67,103 $ 577,746 $ 1,133,595 Pass 142,872 107,764 96,068 60,244 44,645 56,393 529,737 1,037,723 OAEM 1,212 2,696 3,327 11,963 1,881 4,362 39,316 64,757 Substandard — 4,653 2,088 8,481 852 6,348 8,693 31,115 Gross Charge-offs — (17) (45) (271) (658) (4,380) (5,760) (11,131) Gross Recoveries — — 1 — 208 197 29 435 Commercial credit cards — — — — — — 11,718 11,718 Pass — — — — — — 11,718 11,718 Gross Charge-offs — — — — — — (251) (251) Gross Recoveries — — — — — — 6 6 Equipment finance 256,015 129,463 41,842 — — — — 427,320 Pass 255,572 128,560 40,779 — — — — 424,911 OAEM 443 267 421 — — — — 1,131 Substandard — 636 642 — — — — 1,278 Gross Charge-offs (59) (984) (977) — — — — (2,020) Gross Recoveries — 98 76 — — — — 174 2024 Term Loans Revolving Loans 2024 2023 2022 2021 2020 Prior Total (dollars in thousands) Time and demand other 10,746 10,813 4,561 16,526 18,435 41,261 3,014 105,356 Pass 10,746 10,813 4,561 16,526 18,435 41,261 3,010 105,352 OAEM — — — — — — 4 4 Gross Charge-offs — — — — — — (2,110) (2,110) Gross Recoveries — — — — — 10 188 198 Construction other 54,109 195,536 136,010 62,890 7,030 18,766 1,026 475,367 Pass 54,109 195,536 134,812 61,379 7,030 18,766 1,026 472,658 OAEM — — 180 — — — — 180 Substandard — — 1,018 1,511 — — — 2,529 Gross Charge-offs — — (588) (504) — — — (1,092) Gross Recoveries — — — — — 6 — 6 Construction residential 1,743 3,366 1,740 1,140 — 28 — 8,017 Pass 1,743 3,366 1,740 1,140 — 28 — 8,017 Gross Charge-offs — — — — — — — — Gross Recoveries — — — — — — — — Residential first lien 47,504 147,678 369,890 475,231 296,971 331,368 1,905 1,670,547 Pass 47,504 145,898 369,111 473,418 296,170 327,934 1,833 1,661,868 OAEM — — — 255 345 625 72 1,297 Substandard — 1,780 779 1,558 456 2,809 — 7,382 Gross Charge-offs — (108) (1) (20) (1) (61) — (191) Gross Recoveries — — — — — 168 — 168 Residential junior lien/home equity 21,770 53,985 58,662 37,644 1,163 5,406 492,526 671,156 Pass 21,770 53,974 58,587 37,644 1,163 5,207 488,358 666,703 Substandard — 11 75 — — 199 4,168 4,453 Gross Charge-offs — — (1) — — — (291) (292) Gross Recoveries — — — — — 32 170 202 Multifamily 25,006 6,978 235,374 141,970 79,271 108,059 487 597,145 Pass 25,006 6,978 222,965 136,872 78,844 107,573 487 578,725 OAEM — — 12,409 5,098 427 412 — 18,346 Substandard — — — — — 74 — 74 Gross Charge-offs — — — — — — — — Gross Recoveries — — — — — — — — Non-owner occupied 120,201 206,496 435,072 182,234 147,034 702,907 11,006 1,804,950 Pass 120,201 203,543 424,778 181,993 136,219 676,580 10,941 1,754,255 OAEM — — 10,294 241 1,641 9,693 — 21,869 Substandard — 2,953 — — 9,174 16,634 65 28,826 Gross Charge-offs — — (50) — (3,761) (3,327) — (7,138) Gross Recoveries — — — — — 59 — 59 Owner occupied 64,019 112,272 152,714 145,807 58,919 176,674 12,204 722,609 Pass 62,968 110,539 139,937 139,644 57,309 161,208 10,320 681,925 OAEM — 876 7,002 6,129 198 4,260 1,830 20,295 Substandard 1,051 857 5,775 34 1,412 11,206 54 20,389 Gross Charge-offs — — (141) (136) (1,050) (163) (50) (1,540) Gross Recoveries — — — 28 — 49 41 118 2024 Term Loans Revolving Loans 2024 2023 2022 2021 2020 Prior Total (dollars in thousands) Automobile and recreational vehicles 403,819 316,774 321,803 152,084 71,682 14,483 — 1,280,645 Pass 403,803 316,734 321,776 152,052 71,674 14,459 — 1,280,498 Substandard 16 40 27 32 8 24 — 147 Gross Charge-offs (310) (1,826) (3,223) (1,275) (525) (452) — (7,611) Gross Recoveries 36 415 844 468 296 351 — 2,410 Consumer credit cards — — — — — — 9,865 9,865 Pass — — — — — — 9,865 9,865 Gross Charge-offs — — — — — — (428) (428) Gross Recoveries — — — — — — 96 96 Consumer other 7,878 4,351 2,530 10,325 642 2,291 37,447 65,464 Pass 7,878 4,351 2,530 10,323 642 2,291 37,346 65,361 Substandard — — — 2 — — 101 103 Gross Charge-offs (17) (109) (93) (102) (20) (35) (1,248) (1,624) Gross Recoveries — — 14 21 16 111 214 376 Total $ 1,156,894 $ 1,302,825 $ 1,861,681 $ 1,306,539 $ 728,525 $ 1,468,346 $ 1,158,944 $ 8,983,754 Total charge-offs $ (386) $ (3,044) $ (5,119) $ (2,308) $ (6,015) $ (8,418) $ (10,138) $ (35,428) Total recoveries $ 36 $ 513 $ 935 $ 517 $ 520 $ 983 $ 744 $ 4,248 2023 Term Loans Revolving Loans 2023 2022 2021 2020 2019 Prior Total (dollars in thousands) Time and demand $ 170,285 $ 178,568 $ 111,288 $ 73,487 $ 42,502 $ 65,419 $ 545,751 $ 1,187,300 Pass 166,716 174,699 100,779 71,125 29,812 57,660 497,972 1,098,763 OAEM 1,707 3,129 2,948 1,530 10,873 2,553 35,585 58,325 Substandard 1,862 740 7,561 832 1,817 5,206 12,194 30,212 Gross Charge-offs (582) (4,572) (18) (2,195) (2,364) (1,283) (5,133) (16,147) Gross Recoveries — — — 119 4 128 9 260 Commercial credit cards — — — — — — 12,906 12,906 Pass — — — — — — 12,906 12,906 Gross Charge-offs — — — — — — (105) (105) Gross Recoveries — — — — — — 13 13 Equipment finance 170,630 62,314 — — — — — 232,944 Pass 170,302 61,800 — — — — — 232,102 Substandard 328 514 — — — — — 842 Gross Charge-offs (104) (433) — — — — — (537) Gross Recoveries — — — — — — — — Time and demand other 9,965 6,022 17,860 19,352 3,025 46,466 7,509 110,199 Pass 9,965 6,022 17,860 19,352 3,025 46,466 7,509 110,199 Gross Charge-offs — — — — — — (2,410) (2,410) Gross Recoveries — — — — — — 225 225 2023 Term Loans Revolving Loans 2023 2022 2021 2020 2019 Prior Total (dollars in thousands) Construction other 94,150 217,565 154,873 44,428 5,379 24,541 697 541,633 Pass 94,150 214,277 153,195 44,428 5,379 17,315 697 529,441 Substandard — 3,288 1,678 — — 7,226 — 12,192 Gross Charge-offs — — — — — — — — Gross Recoveries — — — — — — — — Construction residential 27,487 19,322 2,284 3,194 3,337 — 478 56,102 Pass 27,487 19,322 2,284 3,194 3,337 — 478 56,102 Gross Charge-offs — — — — — — — — Gross Recoveries — — — — — — — — Residential first lien 120,053 385,917 527,057 320,107 97,529 286,503 1,941 1,739,107 Pass 119,903 385,269 524,841 319,762 96,702 283,665 1,864 1,732,006 OAEM — 80 1,527 — — 731 77 2,415 Substandard 150 568 689 345 827 2,107 — 4,686 Gross Charge-offs — (98) — (31) (1) (116) — (246) Gross Recoveries — — — — — 177 — 177 Residential junior lien/home equity 62,098 70,171 44,359 2,487 2,305 4,949 491,400 677,769 Pass 62,098 70,171 44,359 2,487 2,305 4,672 487,142 673,234 OAEM — — — — — 208 145 353 Substandard — — — — — 69 4,113 4,182 Gross Charge-offs — — — — — — (315) (315) Gross Recoveries — — — — — — 70 70 Multifamily 6,839 156,393 155,067 94,284 44,121 92,585 1,853 551,142 Pass 6,839 144,728 155,067 94,284 44,121 92,047 1,853 538,939 OAEM — 11,665 — — — 452 — 12,117 Substandard — — — — — 86 — 86 Gross Charge-offs — — — — — — — — Gross Recoveries — — — — — — — — Non-owner occupied 184,562 423,543 159,593 148,716 221,551 621,678 13,142 1,772,785 Pass 181,578 415,577 159,593 148,716 211,019 592,755 13,077 1,722,315 OAEM — 7,546 — — 7,313 16,793 — 31,652 Substandard 2,984 420 — — 3,219 12,130 65 18,818 Gross Charge-offs — (232) — — — (4,473) — (4,705) Gross Recoveries — — — — — 127 — 127 Owner occupied 106,831 163,830 153,996 80,522 59,357 152,728 11,961 729,225 Pass 106,583 161,071 149,788 75,267 42,745 147,809 11,821 695,084 OAEM 112 785 3,950 4,000 5,363 4,026 33 18,269 Substandard 136 1,974 258 1,255 11,249 893 107 15,872 Gross Charge-offs — — (32) — — (1,540) — (1,572) Gross Recoveries — — — — — 24 — 24 Automobile and recreational vehicles 427,112 459,836 234,144 115,364 35,402 6,111 — 1,277,969 Pass 427,112 459,835 234,085 115,354 35,345 6,074 — 1,277,805 Substandard — 1 59 10 57 37 — 164 Gross Charge-offs (487) (2,232) (1,258) (972) (527) (111) — (5,587) Gross Recoveries 71 479 419 367 347 149 — 1,832 2023 Term Loans Revolving Loans 2023 2022 2021 2020 2019 Prior Total (dollars in thousands) Consumer credit cards — — — — — — 10,291 10,291 Pass — — — — — — 10,291 10,291 Gross Charge-offs — — — — — — (290) (290) Gross Recoveries — — — — — — 87 87 Consumer other 6,893 4,224 13,277 1,411 1,090 3,440 39,054 69,389 Pass 6,893 4,224 13,277 1,411 1,090 3,440 39,052 69,387 Substandard — — — — — — 2 2 Gross Charge-offs (21) (50) (130) (31) (157) (23) (941) (1,353) Gross Recoveries — 1 4 9 35 66 185 300 Total $ 1,386,905 $ 2,147,705 $ 1,573,798 $ 903,352 $ 515,598 $ 1,304,420 $ 1,136,983 $ 8,968,761 Gross Charge-offs $ (1,194) $ (7,617) $ (1,438) $ (3,229) $ (3,049) $ (7,546) $ (9,194) $ (33,267) Gross Recoveries $ 71 $ 480 $ 423 $ 495 $ 386 $ 671 $ 589 $ 3,115 Portfolio Risks The credit quality of our loan portfolio can potentially represent significant risk to our earnings, capital and liquidity. First Commonwealth devotes substantial resources to managing this risk primarily through our credit administration department that develops and administers policies and procedures for underwriting, maintaining, monitoring and collecting loans. Credit administration is independent of lending departments and oversight is provided by the Risk Committee of the First Commonwealth Board of Directors. Total gross charge-offs for the years ended December 31, 2024 and 2023 were $35.4 million and $33.3 million, respectively. Age Analysis of Past Due Loans by Segment The following tables delineate the aging analysis of the recorded investments in past due loans as of December 31. Also included in these tables are loans that are 90 days or more past due and still accruing because they are well-secured and in the process of collection. 2024 30 - 59 60 - 89 90 days Nonaccrual Total past Current Total (dollars in thousands) Commercial, financial, agricultural and other $ 2,379 $ 1,544 $ 26 $ 14,987 $ 18,936 $ 1,659,053 $ 1,677,989 Time and demand 649 1,126 26 14,181 15,982 1,117,613 1,133,595 Commercial credit cards 61 26 — — 87 11,631 11,718 Equipment finance 1,659 392 — 806 2,857 424,463 427,320 Time and demand other 10 — — — 10 105,346 105,356 Real estate construction — — — 2,529 2,529 480,855 483,384 Construction other — — — 2,529 2,529 472,838 475,367 Construction residential — — — — — 8,017 8,017 Residential real estate 5,677 1,659 1,588 11,587 20,511 2,321,192 2,341,703 Residential first lien 3,904 1,184 1,134 7,134 13,356 1,657,191 1,670,547 Residential junior lien/home equity 1,773 475 454 4,453 7,155 664,001 671,156 Commercial real estate 1,597 1,099 — 32,103 34,799 3,089,905 3,124,704 Multifamily 212 — — 20 232 596,913 597,145 Non-owner occupied 72 742 — 24,550 25,364 1,779,586 1,804,950 Owner occupied 1,313 357 — 7,533 9,203 713,406 722,609 2024 30 - 59 60 - 89 90 days Nonaccrual Total past Current Total Loans to individuals 5,020 1,143 450 250 6,863 1,349,111 1,355,974 Automobile and recreational vehicles 4,667 930 149 147 5,893 1,274,752 1,280,645 Consumer credit cards 24 28 — — 52 9,813 9,865 Consumer other 329 185 301 103 918 64,546 65,464 Total $ 14,673 $ 5,445 $ 2,064 $ 61,456 $ 83,638 $ 8,900,116 $ 8,983,754 2023 30 - 59 60 - 89 90 days Nonaccrual Total past Current Total (dollars in thousands) Commercial, financial, agricultural and other $ 1,206 $ 745 $ 4,187 $ 10,060 $ 16,198 $ 1,527,151 $ 1,543,349 Time and demand 565 691 4,187 9,218 14,661 1,172,639 1,187,300 Commercial credit cards 7 54 — — 61 12,845 12,906 Equipment finance 600 — — 842 1,442 231,502 232,944 Time and demand other 34 — — — 34 110,165 110,199 Real estate construction — — — 3,288 3,288 594,447 597,735 Construction other — — — 3,288 3,288 538,345 541,633 Construction residential — — — — — 56,102 56,102 Residential real estate 6,982 1,535 1,062 8,573 18,152 2,398,724 2,416,876 Residential first lien 4,130 940 171 4,443 9,684 1,729,423 1,739,107 Residential junior lien/home equity 2,852 595 891 4,130 8,468 669,301 677,769 Commercial real estate 4,157 — 3,509 17,385 25,051 3,028,101 3,053,152 Multifamily — — — 55 55 551,087 551,142 Non-owner occupied 2,303 — 3,509 14,282 20,094 1,752,691 1,772,785 Owner occupied 1,854 — — 3,048 4,902 724,323 729,225 Loans to individuals 4,613 878 678 166 6,335 1,351,314 1,357,649 Automobile and recreational vehicles 4,115 612 151 164 5,042 1,272,927 1,277,969 Consumer credit cards 39 71 — — 110 10,181 10,291 Consumer other 459 195 527 2 1,183 68,206 69,389 Total $ 16,958 $ 3,158 $ 9,436 $ 39,472 $ 69,024 $ 8,899,737 $ 8,968,761 Nonaccrual Loans The previous tables summarize nonaccrual loans by loan segment. The Company generally places loans on nonaccrual status when the full and timely collection of interest or principal becomes uncertain, when part of the principal balance has been charged off and no restructuring has occurred, or the loans reach a certain number of days past due. Generally, loans 90 days or more past due are placed on nonaccrual status, except for consumer loans which are placed in nonaccrual status at 150 days past due. Consumer loans related to automobile and recreational vehicles are either charged off or repossessed at no later than 90 days past due. When a loan is placed on nonaccrual, the accrued unpaid interest receivable is reversed against interest income and all future payments received are applied as a reduction to the loan principal. Generally, the loan is returned to accrual status when (a) all delinquent interest and principal become current under the terms of the loan agreement or (b) the loan is both well-secured and in the process of collection and collectability is no longer in doubt. Nonperforming Loans Management considers loans to be nonperforming when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. When management identifies a loan as nonperforming, the credit loss is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole source or repayment for the loan is the operation or liquidation of collateral. When the loan is collateral dependent, the appraised value less estimated cost to sell is utilized. If management determines the value of the loan is less than the recorded investment in the loan, a credit loss is recognized through an allowance estimate or a charge-off to the allowance for credit losses. When the ultimate collectability of the total principal of a nonperforming loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectability of the total principal of a nonperforming loan is not in doubt and the loan is on nonaccrual status, contractual interest is credited to interest income when received under the cash basis method. There were no nonperforming loans held for sale at December 31, 2024 and 2023. There were no gains on nonperforming loans held for sale during the years ended December 31, 2024, 2023 and 2022. The following tables include the recorded investment and unpaid principal balance for nonperforming loans with the associated allowance amount, if applicable, as of December 31, 2024 and 2023. Also presented are the average recorded investment in nonperforming loans and the related amount of interest recognized while the loan was considered nonperforming. Average balances are calculated based on month-end balances of the loans for the period reported and are included in the table below based on its period end allowance position. 2024 Recorded Unpaid Related Average Interest (dollars in thousands) With no related specific allowance recorded: Commercial, financial, agricultural and other $ 5,619 $ 21,745 $ 6,580 $ 41 Time and demand 4,813 20,939 5,481 41 Equipment finance — — — — Time and demand other 806 806 1,099 — Real estate construction 2,529 2,581 4,498 — Construction other 2,529 2,581 4,498 — Construction residential — — — — Residential real estate 8,875 10,524 8,360 133 Residential first lien 6,020 6,993 5,134 118 Residential junior lien/home equity 2,855 3,531 3,226 15 Commercial real estate 18,346 24,047 16,759 453 Multifamily 20 21 34 — Non-owner occupied 16,948 22,372 15,657 173 Owner occupied 1,378 1,654 1,068 280 Loans to individuals 250 2,237 146 7 Automobile and recreational vehicles 147 2,080 135 7 Consumer other 103 157 11 — Subtotal 35,619 61,134 36,343 634 With a specific allowance recorded: Commercial, financial, agricultural and other 9,368 10,459 $ 4,724 5,378 71 Time and demand 9,368 10,459 4,724 5,378 71 Equipment finance — — — — — Time and demand other — — — — — Real estate construction — — — — — Construction other — — — — — Construction residential — — — — — Residential real estate 2,712 2,885 369 1,486 — Residential first lien 1,114 1,113 47 205 — Residential junior lien/home equity 1,598 1,772 322 1,281 — Commercial real estate 13,757 15,058 2,872 11,092 — Multifamily — — — — — Non-owner occupied 7,602 8,686 2,093 6,634 — Owner occupied 6,155 6,372 779 4,458 — Loans to individuals — — — — — Automobile and recreational vehicles — — — — — Consumer other — — — — — Subtotal 25,837 28,402 7,965 17,956 71 Total $ 61,456 $ 89,536 $ 7,965 $ 54,299 $ 705 2023 Recorded Unpaid Related Average Interest (dollars in thousands) With no related specific allowance recorded: Commercial, financial, agricultural and other $ 4,369 $ 18,014 $ 7,895 $ 143 Time and demand 3,527 17,172 7,569 143 Equipment finance 842 842 326 — Time and demand other — — — — Real estate construction 3,288 3,288 1,096 — Construction other 3,288 3,288 1,096 — Construction residential — — — — Residential real estate 7,042 8,763 6,440 136 Residential first lien 4,161 5,151 3,760 129 Residential junior lien/home equity 2,881 3,612 2,680 7 Commercial real estate 12,402 18,219 20,715 260 Multifamily 55 58 37 — Non-owner occupied 10,971 17,092 18,454 122 Owner occupied 1,376 1,069 2,224 138 Loans to individuals 166 259 365 7 Automobile and recreational vehicles 164 257 299 7 Consumer other 2 2 66 — Subtotal 27,267 48,543 36,511 546 With a specific allowance recorded: Commercial, financial, agricultural and other 5,691 6,787 $ 4,044 6,574 (16) Time and demand 5,691 6,787 4,044 6,574 (16) Equipment finance — — — — — Time and demand other — — — — — Real estate construction — — — — — Construction other — — — — — Construction residential — — — — — Residential real estate 1,531 1,697 118 1,183 — Residential first lien 282 279 39 47 — Residential junior lien/home equity 1,249 1,418 79 1,136 — Commercial real estate 4,983 5,294 387 655 — Multifamily — — — — — Non-owner occupied 3,311 3,550 174 397 — Owner occupied 1,672 1,744 213 258 — Loans to individuals — — — — — Automobile and recreational vehicles — — — — — Consumer other — — — — — Subtotal 12,205 13,778 4,549 8,412 (16) Total $ 39,472 $ 62,321 $ 4,549 $ 44,923 $ 530 2022 Average Interest (dollars in thousands) With no related specific allowance recorded: Commercial, financial, agricultural and other $ 3,751 $ 157 Time and demand 3,751 157 Real estate construction — — Residential real estate 9,040 241 Residential first lien 5,280 172 Residential junior lien/home equity 3,760 69 Commercial real estate 22,983 172 Multifamily 172 43 Non-owner occupied 21,304 104 Owner occupied 1,507 25 Loans to individuals 455 16 Automobile and recreational vehicles 378 16 Consumer other 77 — Subtotal 36,229 586 With a specific allowance recorded: Commercial, financial, agricultural and other 261 8 Time and demand 261 8 Real estate construction — — Residential real estate — — Residential first lien — — Residential junior lien/home equity — — Commercial real estate — — Multifamily — — Non-owner occupied — — Owner occupied — — Loans to individuals — — Automobile and recreational vehicles — — Consumer other — — Subtotal 261 8 Total $ 36,490 $ 594 Unfunded commitments related to nonperforming loans were $0.3 million and $0.1 million at December 31, 2024 and 2023, respectively. After consideration of the requirements to draw and available collateral related to these commitments, it was determined that no reserve was required for these commitments at December 31, 2024 or 2023. Loan Modifications Made to Borrowers Experiencing Financial Difficulty The Company adopted ASU 2022-02 on January 1, 2023 on a prospective basis. Disclosures for years prior to adoption continue to reflect TDR |
