First Commonwealth Financial (FCF)
We aren’t fans of First Commonwealth Financial. Its sluggish sales growth shows demand is soft, a worrisome sign for investors in high-quality stocks.― StockStory Analyst Team
1. News
2. Summary
Why First Commonwealth Financial Is Not Exciting
Tracing its roots back to the Great Depression era of 1934, First Commonwealth Financial (NYSE:FCF) is a financial holding company that provides consumer and commercial banking, wealth management, and insurance services across Pennsylvania and Ohio.
- Sales trends were unexciting over the last five years as its 7.4% annual growth was below the typical banking company
- Estimated tangible book value per share growth of 11.1% for the next 12 months is soft and implies weaker profitability
- On the plus side, its performance over the past five years shows its incremental sales were more profitable, as its annual earnings per share growth of 13.7% outpaced its revenue gains
First Commonwealth Financial falls below our quality standards. There are superior stocks for sale in the market.
Why There Are Better Opportunities Than First Commonwealth Financial
At $17.72 per share, First Commonwealth Financial trades at 1.1x forward P/B. First Commonwealth Financial’s valuation may seem like a bargain, especially when stacked up against other banking companies. We remind you that you often get what you pay for, though.
Cheap stocks can look like great bargains at first glance, but you often get what you pay for. These mediocre businesses often have less earnings power, meaning there is more reliance on a re-rating to generate good returns - an unlikely scenario for low-quality companies.
3. First Commonwealth Financial (FCF) Research Report: Q4 CY2025 Update
Regional banking company First Commonwealth Financial (NYSE:FCF) announced better-than-expected revenue in Q4 CY2025, with sales up 14.3% year on year to $137.9 million. Its non-GAAP profit of $0.43 per share was 3.2% above analysts’ consensus estimates.
First Commonwealth Financial (FCF) Q4 CY2025 Highlights:
- Net Interest Income: $113.2 million vs analyst estimates of $111.8 million (19.1% year-on-year growth, 1.3% beat)
- Net Interest Margin: 4% vs analyst estimates of 3.9% (11.2 basis point beat)
- Revenue: $137.9 million vs analyst estimates of $135.7 million (14.3% year-on-year growth, 1.6% beat)
- Efficiency Ratio: 52.8% vs analyst estimates of 53.4% (60.2 basis point beat)
- Adjusted EPS: $0.43 vs analyst estimates of $0.42 (3.2% beat)
- Tangible Book Value per Share: $11.22 vs analyst estimates of $11.19 (10.8% year-on-year growth, in line)
- Market Capitalization: $1.81 billion
Company Overview
Tracing its roots back to the Great Depression era of 1934, First Commonwealth Financial (NYSE:FCF) is a financial holding company that provides consumer and commercial banking, wealth management, and insurance services across Pennsylvania and Ohio.
First Commonwealth operates primarily through its banking subsidiary, First Commonwealth Bank (FCB), which serves as the cornerstone of its financial services ecosystem. The bank maintains numerous community banking offices throughout western and central Pennsylvania and Ohio, complemented by commercial lending operations in key metropolitan areas including Harrisburg, Cleveland, and Columbus.
The company's revenue streams flow from a diversified loan portfolio that includes commercial business loans, commercial real estate financing, construction loans, residential mortgages, and consumer lending products. For businesses, First Commonwealth provides working capital lines of credit and term loans secured by business assets, while also offering specialized commercial real estate financing for both owner-occupied and investment properties. On the consumer side, the bank provides home mortgages, home equity products, personal loans, and indirect auto financing.
Beyond traditional banking, First Commonwealth enhances its value proposition through additional service lines. Its wealth management division helps clients with investment management and trust services, while First Commonwealth Insurance Agency offers various insurance products to both individuals and businesses. In 2022, the company expanded its commercial offerings by launching an equipment leasing and finance division.
The bank's deposit products—ranging from non-interest bearing checking accounts to certificates of deposit—serve as its primary funding source. First Commonwealth has pursued growth through both strategic acquisitions, such as its 2023 purchase of Centric Financial Corporation, and organic expansion with new branch openings and service offerings.
4. Regional Banks
Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.
First Commonwealth Financial competes with other regional banks operating in Pennsylvania and Ohio such as PNC Financial Services (NYSE:PNC), KeyCorp (NYSE:KEY), Huntington Bancshares (NASDAQ:HBAN), and S&T Bancorp (NASDAQ:STBA), as well as national banks and credit unions serving the same markets.
5. Sales Growth
Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Over the last five years, First Commonwealth Financial grew its revenue at a tepid 7.4% compounded annual growth rate. This fell short of our benchmark for the banking sector and is a poor baseline for our analysis.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. First Commonwealth Financial’s recent performance shows its demand has slowed as its annualized revenue growth of 4.1% over the last two years was below its five-year trend. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, First Commonwealth Financial reported year-on-year revenue growth of 14.3%, and its $137.9 million of revenue exceeded Wall Street’s estimates by 1.6%.
Net interest income made up 77.7% of the company’s total revenue during the last five years, meaning lending operations are First Commonwealth Financial’s largest source of revenue.
Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.
6. Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
First Commonwealth Financial’s EPS grew at a remarkable 13.7% compounded annual growth rate over the last five years, higher than its 7.4% annualized revenue growth. However, we take this with a grain of salt because its efficiency ratio didn’t improve and it didn’t repurchase its shares, meaning the delta came from factors we consider non-core or less sustainable over the long term.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
First Commonwealth Financial’s two-year annual EPS declines of 5.4% were bad and lower than its 4.1% two-year revenue growth.
Diving into the nuances of First Commonwealth Financial’s earnings can give us a better understanding of its performance. A two-year view shows First Commonwealth Financial has diluted its shareholders, growing its share count by 1.3%. This has led to lower per share earnings. Taxes can also affect EPS but don’t tell us as much about a company’s fundamentals. 
In Q4, First Commonwealth Financial reported adjusted EPS of $0.43, up from $0.35 in the same quarter last year. This print beat analysts’ estimates by 3.2%. Over the next 12 months, Wall Street expects First Commonwealth Financial’s full-year EPS of $1.52 to grow 16.6%.
7. Tangible Book Value Per Share (TBVPS)
The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.
First Commonwealth Financial’s TBVPS grew at an impressive 7.4% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 10.7% annually over the last two years from $9.15 to $11.22 per share.
Over the next 12 months, Consensus estimates call for First Commonwealth Financial’s TBVPS to grow by 11.1% to $12.47, mediocre growth rate.
8. Balance Sheet Assessment
Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.
Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.
This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.
New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.
Over the last two years, First Commonwealth Financial has averaged a Tier 1 capital ratio of 11.9%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.
9. Return on Equity
Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.
Over the last five years, First Commonwealth Financial has averaged an ROE of 11.6%, respectable for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired.
10. Key Takeaways from First Commonwealth Financial’s Q4 Results
It was encouraging to see First Commonwealth Financial beat analysts’ revenue expectations this quarter. We were also happy its net interest income narrowly outperformed Wall Street’s estimates. On the other hand, its EPS slightly beat. Zooming out, we think this was a mixed quarter. The stock remained flat at $17.72 immediately following the results.
11. Is Now The Time To Buy First Commonwealth Financial?
Updated: January 27, 2026 at 11:39 PM EST
Before investing in or passing on First Commonwealth Financial, we urge you to understand the company’s business quality (or lack thereof), valuation, and the latest quarterly results - in that order.
First Commonwealth Financial isn’t a terrible business, but it doesn’t pass our bar. For starters, its revenue growth was uninspiring over the last five years, and analysts don’t see anything changing over the next 12 months. And while First Commonwealth Financial’s projected EPS for the next year implies the company’s fundamentals will improve, its estimated sales for the next 12 months are weak.
First Commonwealth Financial’s P/B ratio based on the next 12 months is 1.1x. This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're pretty confident there are more exciting stocks to buy at the moment.
Wall Street analysts have a consensus one-year price target of $19.17 on the company (compared to the current share price of $17.72).