Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Commonwealth Financial Corporation acquisition of Centric Financial Corporation conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Ryan Thomas, Vice President of Finance and Investor Relations. Please go ahead. Thank you, Dennis. Good morning, everyone. Thank you for joining us today to discuss First Commonwealth Financial Corporation's acquisition of Centric Financial Corporation. Participating on today's call will be Mike Price, President and CEO, Jim Reske, Chief Financial Officer, Jane Grebenc, Bank President and Chief Revenue Officer, and Brian Karrip, our Chief Credit Officer. As a reminder, a copy of yesterday's press release can be accessed by logging on to fcbanking.com and clicking the Investor Relations link at the top of the page. We also included a supplemental slide presentation on our website that will be referenced during today's call. Before we begin, I need to remind listeners that today's call contains forward-looking statements with respect to the future performance and financial conditions of both First Commonwealth and Centric Financial that involves risks and uncertainties. Further information is contained within yesterday's press release, which we encourage you to review. Additionally, we may refer to non-GAAP measures, which are intended to supplement, but not substitute, the most directly comparable GAAP measures. The press release and supplemental slide presentation contains financial information and other quantitative information to be discussed today, as well as a reconciliation of GAAP to non-GAAP measures. I will now turn the call over to Mike. Hey. Thank you, Ryan. We are pleased to announce the acquisition of Centric Financial Corporation with $1 billion in assets headquartered in Harrisburg, Pennsylvania. It's worthwhile to note that this will be our sixth acquisition in the last seven years, and we've looked at about 60 M&A opportunities in that time, which is another way of saying that we've been selective and disciplined. We've done very well with the five acquisitions we've done. Each strategic opportunity has made us a better bank, been financially compelling in the long run, and had a relatively clear path forward to success. Slide five of the investor deck delineates our success with acquisitions over the years. For example, the subtotal of Ohio loans acquired in four M&A opportunities at closing is $731 million, and we now have $2.3 billion of loans in that state. We know how to buy a bank and grow it from there. All of our previous acquisitions have followed a similar pattern of low risk metro market extension transactions that have provided a chassis on which we could build a commercial bank. In general, this acquisition represents a continuation of that strategy. However, one thing that makes Centric particularly attractive to us is that it already has a strong commercial growth engine. As I got to know Patricia Husic through the Pennsylvania Bankers Association over the past several years, my admiration grew for the commercially focused, growth oriented bank she and her team were able to build. Through conversations that began over a year ago, Patti and I realized that there was a strong similarity between our two cultures and that a strategic partnership made sense. Looking ahead, we expect Centric to be a source of growth on the commercial side, but also to provide additional tailwinds in the retail bank as we introduce our offerings in mortgage, indirect, HELOC, HE loans through branches and SBA to their customers. This acquisition makes financial sense as well. For several years now, as we approach the $10 billion asset threshold, we've been asked how we intended to cross, and our answer was consistent with what most $9 billion banks would say. We're prepared to cross organically, but we'd prefer to cross via acquisition because of the significant loss of interchange income due to the Durbin Amendment. Of course, the odds are fairly low that the right partner comes along at just the right time in a geography that we want to be in at a price that makes sense. Of course, that institution would have to want to partner with us and not the competition. Centric is the right bank for First Commonwealth at the right time. Page nine of the investor deck talks through how the $24 million earning stream we are acquiring more than offsets the loss of $13 million in interchange income as we cross $10 billion. It's also important to note that the timing of the deal is good because it doesn't accelerate our crossing of the $10 billion threshold any sooner than we would have organically. This is the important part, even if we weren't crossing $10 billion, Centric is the right partner for us. With its $1 billion in assets and, like, seven branches, Centric extends our franchise in the demographically attractive markets surrounding Harrisburg and Lancaster and just west of Philadelphia. The demographics of their markets improve our overall demographic profile, which is not something we can say for a lot of other potential partners in our geography. Furthermore, this acquisition builds upon our familiarity with Central and Eastern Pennsylvania markets that we obtained through our recent Central Pennsylvania branch acquisition. Finally, about half of Centric's lending is in the Philadelphia area, a market where we have a significant toehold in commercial real estate lending and where our newly formed equipment finance group is headquartered. Looking to the future, our approach to M&A hasn't changed. We would be happy to do additional transactions that move us further beyond the $10 billion threshold, so long as they make sense strategically and financially for our shareholders. Moving beyond the $10 billion threshold with a larger deal is not as important, though, as ensuring that any given transaction improves our profitability on the other side. Even without M&A, our organic growth opportunities remain strong, including balanced commercial consumer loan growth, the new equipment finance effort, our SBA and other fee income businesses, all within the umbrella of a regional business model. With that, I'll turn it over to Jim Reske, our CFO. Thanks, Mike. Mike's already covered the strategic highlights of the transaction, so I'll focus on what makes this transaction compelling from a financial point of view. It's important to note, first of all, that Centric has been a strong, standalone performer. Page six of the investor deck provides some of their profitability figures, and while we aren't providing peers data in the deck, their profitability figures compare very favorably to peers. When compared to similarly sized Mid-Atlantic publicly traded banks, their core return on average assets, core return on average tangible common equity, and net interest margin are all in the 75th percentile or greater. Their efficiency ratio is five full points below the peer median. If you look at page seven of the investor deck, you can see that this financial performance has been powered by a commercially oriented balance sheet, which, as Mike mentioned, is particularly attractive to us. Turning now to the deal metrics on page 10, this is a transaction that is a success for both sets of shareholders. We are paying 1.31x tangible book value and 9.2x forward earnings. If you look at the top left of page 11, you'll see that this price results in modest tangible book value dilution of 3.1%, which with 6.8% accretion in the first full year, be earned back in two years. As is customary in recently announced deals, we've also provided these figures excluding AOCI and rate marks, in which case the earn back period falls to 1.4 years. Pro forma capital ratios are all solid, in part because the consideration is all stock. The acquisition improves our key performance ratios, including ROA, ROE, NIM and efficiency. What you don't see on this page is that the transaction is also good for Centric shareholders, who will be receiving a 42.5% premium for their stock. They are also receiving the liquid stock in exchange for their shares with a first-time dividend. They will own 9% of the company pro forma, which is commensurate with their earnings contribution. A final word or two about our assumptions. In sum, we believe that they are conservative and achievable. We assume loan growth of 6%, which is consistent with our mid- to high-single-digit growth philosophy. Based on our due diligence, we have identified 35% cost saves, which is in line with recently announced transactions. We have listed the interest rate marks on page 10, which we feel were relatively modest, in part because fortunately, Centric does not have a large securities portfolio for a bank of its size. Finally, I'm sure you'll note that our credit mark is 3.33%. Centric has not yet adopted CECL, so in a way, this transaction adopts CECL for them in that we ran their loan portfolio through our own CECL model to establish the mark, including separate marks on their hospitality and SBA portfolios. I would also say that in due diligence, we applied our credit culture to Centric's loan portfolio. Our credit culture has not only been continually refined in the decades since the Great Recession, but also is appropriate for a bank our size. With that, we'll take any questions you may have. At this time, I would like to remind everyone, in order to ask a question, simply press star then the number one on your telephone keypad. We'll pause for a moment to compile the Q&A roster. Your first question's from the line of Frank Schiraldi with Piper Sandler. Please go ahead. Morning. Just going through some presentations and releases of Centric. It appears to me, I mean, that ex-PPP growth really ramped up in suburban Philly and the Philly region over, you know, really the last two quarters especially. Could you talk about that a bit and, you know, where that growth is coming on and how big an opportunity that market is compared to Harrisburg? Well, first of all, I would just say we've had some success recently there with our commercial real estate offering and without a location there. You've kind of hit the nail on the head. We're really excited about that market. We've really done some high quality industrial real estate and warehouse space and it's been a good market for us. We've been there for probably the better part of five years, and we have about $300 million there already. They do it quite well. We have some similar customers, although they're on the books and they have some terrific relationships. We're really excited about that area, just to the west and up into Doylestown and Bucks County. It's a great market. Okay. Then on page nine of where you guys talk about Durbin, you mention additional earnings offset as provided by a ramp up in equipment finance. Just curious if that's, as you know, assumed to be synergistic. Does this acquisition really help in that effort or is that sort of a separate to the deal? It's in the same geography. It is indeed separate. However, I think having the equipment finance and Centric in that market certainly is good for our brand. That will be a business that's small ticket leasing that will be more regional and national in scope. Obviously this business will be a commercial lending business. Then we'll add the consumer piece through the branch. They have a terrific branch in an area called Devon. We're excited about being able to fill out the consumer side as well as build upon the success they've already had on the commercial side. They have some terrific lenders in that market. Frank, this is Jim Reske. Just in hindsight, that last bullet point probably should have been indented under the other bullet of major pieces of it. To be clear there, we're talking about our organic prospects, that the equipment finance is not part of the synergies of the deal. Sure. Okay. Great. Then, if I could just sneak in one more. You know, Mike, you mentioned that your approach to M&A hasn't changed. I hate talking about future deals when we're talking about this deal, but in terms of future acquisitions, since you mentioned it, would you say that this maybe shifts the focus towards for additional deals towards Philly a bit, given you've got this small foothold now and you already had a foothold in the commercial real estate. You've got a small foothold in the Philly footprint now in terms of franchise. Do you feel like maybe you need additional acquisitions or additional acquisitions would really help you take advantage of that? Just wondering if this shifts the geographic focus at all in terms of potential future deals. Not necessarily. I think the thing we like about Centric is, it's branch light. The branches and where they're located is terrific, so we can punch above our weight. They have a commercial offering that, I think, will really fit well with us and we can grow there. I think when we think about gathering deposits, you know, our eye is still probably towards Ohio, honestly. This is really a terrific transaction that gets us into great demographics. I think that we will build out our commercial banking operation and then work the consumer through the branches that Centric already has. Jane, anything you want to add on that? No, I think that's right. Opportunistically, we will. You know, we always prefer something that we can get to and back in the same day. We'll keep focused on that big circle. Great. Okay. Thanks for all the color. Your next question is from the line of Karl Shepard with RBC Capital Markets. Please go ahead. Hey, good morning, everybody. Good morning. Mike, you touched that on it at the top. Historically, you guys have been very selective with M&A. I wanted to ask, you know, what about Centric stood out kind of from some of the other deals that you have looked at? I think maybe you're hinting at, you know, the demographics of the new markets, but if you could expand on that'd be great. You know, it really starts with Patti Husic, the CEO. I've known her through the PBA for 10 years. The culture she's built, I just like her people. I think they'll fit well with us. I love the way that Centric has built out branches strategically that cover central Pennsylvania and are really in the right spot in where we'd like to be in the Philly MSA. They're well done. It's a scalable model, and I think we can do a lot with what she's built. I think the culture would be the first thing. You know, we're both customer-centered. We care a lot. We're out with our people all the time doing calls, both Jane and I and Brian and others. Patti does the same thing. I think culture was probably at the top of the list. Okay. As a follow-up. You guys have equipment finance kicking in this year. You'll have Centric next year. I think Jim gave 6% as an assumed growth number, but you guys also sound pretty optimistic about some of the opportunities to build out consumer as well. Do you want us to think any differently about kind of the medium and longer term growth profile of your company? You know, I don't think so. I think, I mean, our guidance has been high single digits, which I think going into a period where rates have gone up is gonna be challenging enough. You know, I don't think so. I think, we have to make sure our credit quality is very, very good, and we will. That we really have an enduring business model on the revenue side that will perform well through the ups and downs of economic cycles. Okay. If I can squeeze in one last one. You guys on slide five gave kind of the balances of Ohio over time and highlighted the success of building that out. Anything you really want us to think about, that's specific that you can use from that playbook as it relates to Centric? Help us understand what's really worked in Ohio and you know, what might be repeatable with this one. Yeah. I mean, I would just take you to page five in the presentation. You know, we acquired $185 million in loans. We now have over $650 million. Those two branches in Columbus, DCB and First Community, and First Community Bank, you know, acquired $383 million and $61 million. We now have $1.2 billion. You ask, what's the secret sauce? I mean, I wish it was something that would dazzle you. It's having culture, getting really good people and keeping performers, and being supportive and having a culture of producers. Having a credit box that's open and constructive and works closely. I mean, Brian has put regional credit officers in each of these places so we can be super responsive. You know, being aligned with our people. Our regional business model has been really effective in connecting the dots and cross-selling in these markets. We have terrific regional presidents in Ohio. It's a little bit more than a grind than it looks on the surface. I mean, I don't know, Jane, this is really your area. I mean, anything you would add? Well, in every case, Ohio generally is branch light. Centric is branch light. By definition, it will be commercially led. We will just try to cross-sell the heck onto that chassis. Consumer loan, mortgage, indirect, wealth, insurance, SBA. That's what we've done in Ohio. We're just gonna wash, rinse, and repeat. Okay. Thanks for all the help. Thank you. Your next question is from the line of Michael Perito with KBW. Please go ahead. Hey, guys. Good morning. Good morning. Question for Jim. Curious, you know, the pro forma of the bank says $10.6 billion. You know, you don't get the full year Durbin impact until 2025. Just, you know, assuming no M&A, I mean, you know, what type of. You know, I guess in your internal modeling or just even if it's just a range, just curious what type of asset size you guys can get to, you know, with no M&A by the time, you know, the full Durbin impact comes into play in 2025. Yeah. I think it's really driven by our loan growth prospects. There's a really great loan growth opportunity across the board. We think that's really driven by having a balanced commercial and consumer loan philosophy that's driven the composition of our balance sheet. If there's a season where commercial is strong and consumer is not so strong, it balances out. Our loan growth experience year to date has been really strong. Even in a market where people just talk a slowdown, it's been good and solid and very much within our credit appetite. That's all been very good. The balance sheet will go over $10 billion, we thought, organically next year anyway. We thought that we were very confident we could keep the balance sheet under $10 billion by the end of this year. That's what we've been saying publicly. When we got strong loan growth, it really looked like it was gonna cross over next year anyway. We could just keep the balance sheet growing, to answer your question directly, after that. This leaps us over, gives us that early stream, but we can keep the balance sheet growth at that kind of with the loan growth with it, lead to high single digit rate, keep our balance sheet growth in sort of that. Got it. Helpful. Just lastly, I apologize if you mentioned this. I got on the call a few minutes late. Just what core was Centric on and when is the conversion planned? I know you guys gave timelines around the cost savings. Just curious if you could get a little more specific on that. Yeah. I mean, somewhat serendipitously, they're on Jack Henry SilverLake, and we are as well. Okay. That is helpful. Yeah. You know, we're looking for a close after year-end and a conversion in the first quarter of next year. Great. All right, guys. Thank you for taking my questions. Appreciate it. Thank you. Your next question's from the line of Manuel Navas with D.A. Davidson. Please go ahead. Hey, good morning. Good morning. Could you go into more detail on where the cost savings are coming from? I think that last question helped with that, with you guys both being on Jack Henry. Just kind of give more detail on where the 35% is gonna come from. Yeah. It's gonna look a lot like a typical deal. A lot of the cost saves are driven by reductions in the salary expense line. There's really no reduction in occupancy because we don't plan on closing any branches. There's no branch overlap. Other things such as professional fees, data processing, advertising, there's those types of cost saves that we expect. I want to reiterate, the 35% is not just some nice round number that we guessed at. We actually went through very clearly and identified all the cost saves, even layered in additional costs we might think we need to add, like buying IT equipment, and came up with a net number that gives us confidence that 35% is really achievable. Also, you kind of described how this deal came together. Was there a bidding process? Was it pre-negotiated because of your knowledge of the CEO? It was a negotiated opportunity for us. Again, Patti and I have known each other for a long time and, you know, just began to have some discussions probably almost two years ago. Okay. That's helpful. The pro forma capital ratios. I think it does lay it out later in the deck. Does that include M&A charges and day two CECL? It does. It includes all that. The pro forma capital ratios. The pro forma capital ratios should give you clarity on that. There is a hit of capital because those one-time charges and the goodwill we're creating. Yeah, thankfully, I think our tangible common and our total risk-based capital, our regulatory capital ratios are strong to begin with. There's some impact to pro forma capital ratios. It's probably about 30 basis points on TCE/TA and about 80 basis points on total risk-based, but we still end up in a really good spot. It was one of the reasons why it turns into an all-stock deal at the end of the day. Great. That's helpful. Just the last bit. Okay. I think that's really helpful. Thank you. You bet. Your next question is from the line of Matthew Breese with Stephens Inc. Please go ahead. Good morning. I was hoping. Good morning. Could you give me an initial estimate for the goodwill created from the transaction and then expectations for accretable yield or purchase accounting income for 2023 and 2024? You know, I can follow up with you on the exact amount of the accretable yield. I mean, it's all in the model in the pro forma, but I don't have the number off the top of my head. We'll disclose that going forward, and we have in the past. The goodwill generated is about $44 million and there's also an intangible for the core deposits of close to $18 million. Okay. Could you give us some color around Centric's credit profile? Just a quick glance shows somewhat elevated MPAs at 1.2%. Late last year, there appeared to have been a chunkier charge-off. Just touch on those two topics. Curious, and also curious whether or not there's portions of the balance sheet that we should expect to run off on their end. Yeah, I'll let Brian Karrip start, our Chief Credit Officer. As we showed on slide 12, we did extensive due diligence, including file review, underwriting practice review, loan administration, and risk rating accuracy. From a credit perspective, there is some overlap in credit philosophy, approach, risk appetite, and there's some differences. Our credit marks do reflect the differences and our approach to credit as well as some of the marks associated with day one CECL. Our diligence was extensive, as we showed on slide 12. Okay. You know, prior to the deal announcement, at least I had been modeling the balance sheet to maintain a sub-$10 billion overall size. I'm curious, you know, and one of the offsets was the securities portfolio in run-off mode. I'm just curious your thoughts on overall balance sheet growth. If loan growth outlook does not change, should we expect the securities portfolio to grow or at least stay static from here? That's a great question. You know, we have been doing just balance sheet management this year to stay below 10 billion. You're right, securities portfolio run-off is one of the offsets that we use and would use. It could potentially do other asset sales if we needed to stay below $10 billion this year because of Durbin hit is so punitive. That with cost with essentially a bit of crossover behind us, we won't have to think about those things. We'll be able to just look at it opportunistically in terms of leveraging capital, if it makes sense to purchase securities or you know, other asset categories. It's a great question. The balance sheet growth will probably be a little stronger than it is now because we won't have to worry about those kinds of balance sheet management strategies. Okay. For modeling purposes, is it fair to assume, at least in the near term, securities stay flat or maybe a little bit of growth versus trending down? No, we're still in run-off mode with securities. If we're growing right now, at least until the end of this year, we're gonna make sure that growth is loan growth, not securities growth. For securities growth, as you'd imagine, the paydown has slowed down. Prepayment speeds has slowed. But that portfolio is still in run-off mode this year. If we need to next year, we can always grow it opportunistically. Having said all that, by the way, our preference is still for loan growth and as opposed to securities growth. Yep. Okay. The other one was just in the deal deck. You'd note that the deal is, I think, 6.8% accretive to 2024 EPS. Just curious what the baseline for 2024 EPS was. Was that a consensus driven number or an internal number? Then also, does that number include the 50% impact from Durbin, given your opening comments that the deal or no deal, this does not kind of change the trajectory of when we'd cross $10 billion? Yeah. It does. Yes. All our numbers are driven off consensus numbers. I think that's pretty typical practice in deals and comps in the market. We don't have estimates that go out that far to begin with. Our estimates for our standalone earnings stream did reflect a Durbin impact. The accretion is based off of the difference to that earnings stream. We said, what is our organic earnings going to look like? What are our organic earnings going to look like with the Durbin impact out to 2024? What is Centric do to that earnings stream? That's how the accretion is modeled. I'm sorry. The standalone 2024 estimate did not include Durbin. The 6.8% accretion does include Durbin? No, the standalone does reflect the loss of $13 million of interchange due to Durbin. The way we did that, basically, just to give you even more detail, was assume that the earnings growth we were going to have in 2024 was going to be offset by the Durbin impact such that earnings growth in 2024 would remain relatively flat. Again, the standalone earnings stream from which our base reflects the lost interchange income from crossing over $10 billion at the end of 2023. To be even more specific, that means you lose that Durbin impact half in the first year and then full impact the second year. That's kind of what we've laid out on slide nine. Okay. Then my last one, you know, again, for modeling purposes. I noticed there was a bit of a delta in the reported share count and then in the footnotes for Centric. What is the all-in share count that we should be using in applying for the exchange ratio? Assuming the adjusted for options and warrants. Then secondarily, I would also assume that there's no buybacks near term until the deal is closed. Is that fair? That is. To answer the last question first, that is fair. There's regulations prohibiting us buying back shares until their shareholder meeting anyway. We'll be out of the market for the time being, at least until their shareholder votes and potentially until the deal closes. The shares we're going to issue here all in are about 9.7 million shares. All their warrants and options will be settled in shares of FCF stock, not for cash. There's fractional shares, of course, but that's peanuts. 9.7 million shares issued on top of our share count. Great. Okay. That's all I had. I'll leave it there. Thanks for taking my questions. You bet. Thank you. Your next question is a follow-up from the line of Frank Schiraldi with Piper Sandler. Please go ahead. Yeah, I just wanted to follow up on your comments on Patti. You noted in the presentation she's gonna be joining your board, and you say she'll remain active in the local market. Just wondering if is it too early to say or can you say anything about her staying on in some sort of, you know, management role? And can you talk or speak to any sort of non-compete and non-solicitation in place? Thanks. Well, she's joining us as an independent director, which precludes her from being part of the management team. I just think in her role, she cares deeply about her customers and her people, and I'm just excited for her to kind of shepherd us through this, conversion and integration. Our directors get calls from customers from time to time, and I'm sure she'll handle those appropriately. I do believe she does have a non-compete. Okay. All right. Thank you. Thank you. Your next question is a follow-up from the line of Manuel Navas with D.A. Davidson. Please go ahead. Hey, thanks. Sorry, thanks for the follow-up. Does this deal preclude you from pursuing any others prior to the close? Any thoughts on kind of that, on the speed, where you could consider other transactions? It would not preclude us from pursuing other things. There's nothing in the works. Our focus is to do a great job with this conversion and integration of these two good banks between now and the end of the year. That work will start as soon as this call ends. All right. That covers kind of like what you're seeing in the M&A market. Nothing else is in there, so I guess that covers what you're seeing in the M&A market. That would have been my next question. There's just not a lot out there, unfortunately. We're all in when there is something out there. It's just a great way to grow your bank. If you can make the cultural fit right and there's a clear path of execution and you can keep the risk under control, the execution risk that is, it's a great way to grow your bank, and we hope to do more of it. Thank you. This concludes the question and answer portion of today's conference. I will now turn the call back to President and CEO, Mike Price, for closing remarks. I always say this, but we just appreciate your sincere interest in First Commonwealth and following us closely and keeping us always on our toes. Thank you for that. Ladies and gentlemen, thank you for joining today's conference call. You may now disconnect.