KBRA Affirms Ratings for First Commonwealth Financial Corporation

KBRA affirms the senior unsecured debt rating of BBB+, the subordinated debt rating of BBB, and the short-term debt rating of K2 for Indiana, PA-based First Commonwealth Financial Corporation (NYSE: FCF) (“the company”). In addition, KBRA affirms the deposit and senior unsecured debt ratings of A-, the subordinated debt rating of BBB+, and the short-term deposit and debt ratings of K2 for its subsidiary, First Commonwealth Bank. The Outlook for all long-term ratings is Stable.

Key Credit Considerations

FCF’s ratings are supported by its solid level of earnings power as reflected by a consistent and durable average ROA of 1.33% over the last five years, which is supported by a healthy NIM through different interest rate cycles, that benefits from the branch-based granular deposit franchise with a solid footprint in rural and urban markets with lower relative interest rate sensitivity. The core deposit base accounts for 93% of total funding and estimated uninsured deposits at 4Q25 were only 29% of total deposits with 1.95x coverage from total liquidity sources. The company’s NIB deposit base (23% of total deposits) also contributed to the company’s lower deposit funding costs through the cycle with 4Q25 cost of deposits of 1.90% for 2025, 9 bps below the peer average. The company’s revenue base also benefits from a diversified revenue stream of noninterest income to total revenue (17%), comprised mostly of stable, durable sources that include deposit account fees, wealth and trust fees and interchange fees. Regarding capital, the company has rebuilt capital following the Centric Financial and CenterGroup acquisitions with core capital reflected by CET1 (12.0%) more consistent with peer average. KBRA considers the company’s loss absorption capacity derived from the LLR of 1.32%, in combination with its solid capital position, to be suitable for its risk profile. The company’s credit management practices appear robust as it has maintained solid credit performance throughout the current economic cycle. KBRA views FCF’s loan portfolio to be well diversified with sufficient concentration limits established with a geographic focus in parts of Western PA and OH. The last three years of normalization of NPAs and NCOs has been primarily driven by the acquired PCD loans which currently accounts for 10% of the nonaccrual loans at 4Q25, which had a 3.3% credit mark at acquisition.

Rating Sensitivities

A rating upgrade is not expected in the medium term; however, continued geographic expansion, growth in durable noninterest income, and sustained strong asset quality and capital levels could support an upgrade over time. With a Stable Outlook, negative rating action is unlikely in the near term, though a significant deterioration in credit quality leading to higher credit costs, weaker earnings, or capital erosion could result in an Outlook revision or downgrade over the medium term.

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