First Commonwealth Financial (FCF) in Indiana, Pa., reported higher quarterly profit because of reduced loan-loss provisions and lower operating costs.
The $6.2 billion-asset company's first-quarter earnings rose 2% from a year earlier, $12.3 million. Earnings per share of 13 cents were a penny higher than the estimates of analysts polled by Bloomberg.
First Commonwealth's net interest income was relatively flat, at $46.5 million. The net interest margin compressed by 12 basis points, to 3.33%.
"Loan growth is challenging as we remain disciplined in our loan underwriting guidelines," President and Chief Executive T. Michael Price said in a Tuesday press release. "Here too, we believe this discipline will add future strategic advantage."
Noninterest income was also flat, at $14.9 million. The company sold its registered investment advisory business in the first quarter at a net gain of $1.2 million. The revenue was offset by a $1.4 million decline in commercial loan swap revenue.
Noninterest expense fell 4%, to $40 million, after the company scaled back on salary and employee benefits expenses. Reduced Pennsylvania shares taxes and other real estate owned and loan collection costs also contributed to the decline.
First Commonwealth cut its loan-loss provision by 29%, to $3.2 million. Net chargeoffs plunged 68%, to $3 million.