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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Cash paid for taxes for the years ended December 31 is as follows:
202520242023
(dollars in thousands)
Federal$33,500 $31,000 $36,250 
States
Other*1,162 1,185 1,380 
Foreign— — — 
Total cash paid for taxes34,662 32,185 37,630 
* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.
The income tax provision for the years ended December 31 is as follows:
202520242023
 (dollars in thousands)
Current tax provision:
Federal$34,600 $31,220 $32,167 
State1,443 1,002 936 
Total current tax provision36,043 32,222 33,103 
Deferred tax provision (benefit):
Federal3,152 3,412 7,488 
State(139)2 (99)
Total deferred tax provision3,013 3,414 7,389 
Total tax provision$39,056 $35,636 $40,492 
The Company did not have any income tax expense (benefit) in foreign jurisdictions for the years ended December 31, 2025, 2024 and 2023.
The statutory to effective tax rate reconciliation for the years ended December 31 is as follows:
 202520242023
 Amount% of
Pretax
Income		Amount% of
Pretax
Income		Amount% of
Pretax
Income
 (dollars in thousands)
Federal Income tax at statutory rate$40,185 21 %$37,424 21 %$41,487 21 %
State and local income tax, net of federal benefit*1,030 1 793 — 725 — 
Tax credits
Low income housing tax credits**(294)— (354)— (381)— 
Other(10)— (4)— (38)— 
Nontaxable or nondeductible items
Tax-exempt interest income, net(900)— (835)— (812)— 
Income from bank owned life insurance(1,444)(1)(1,336)(1)(1,024)(1)
Other614 — 457 — 660 — 
Other adjustments(125)— (509)— (125)— 
Effective income tax rate$39,056 21 %$35,636 20 %$40,492 20 %
* State taxes in Delaware, Indiana, Kentucky, New Jersey, New York made up the majority (greater than 50 percent) of the tax effect in this category for 2025. State taxes in Delaware, Kentucky, New Jersey, New York made up the majority (greater than 50 percent) of the tax effect in this category for 2024. State taxes in Delaware, Illinois, New Jersey, New York and New York City made up the majority (greater than 50 percent) of the tax effect in this category for 2023.
** The benefit is net of associated investment impacts such as proportional amortization and benefit of flow through losses.
The tax effects of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities that represent significant portions of the deferred tax assets and liabilities at December 31 are presented below:
20252024
 (dollars in thousands)
Deferred tax assets:
Lease liability$9,175 $9,561 
Allowance for credit losses26,980 25,459 
Postretirement benefits other than pensions89 201 
Unrealized loss on securities available for sale17,822 28,023 
Net operating loss carryforward60 61 
Deferred compensation3,289 3,008 
Accrued interest on nonaccrual loans763 1,088 
Accrued incentives3,949 3,295 
Unfunded loan commitments & other reserves1,757 879 
Purchase accounting adjustments3,889 4,001 
Other1,127 744 
Total deferred tax assets68,900 76,320 
Deferred tax liabilities:
Loan origination fees and costs(4,268)(2,615)
Right of use asset(8,215)(8,601)
Depreciation of assets(2,608)(1,586)
Section 197 intangibles(4,019)(3,175)
Purchase accounting adjustments(3,231)(2,755)
Other(695)(718)
Total deferred tax liabilities(23,036)(19,450)
Net deferred tax asset$45,864 $56,870 
The Company's insurance subsidiary, FCIA, has approximately $1.5 million of Pennsylvania net operating losses, which begin to expire in 2034. The Company expects to fully utilize the losses prior to expiration.
The holding company has net operating loss carryforwards with the state of Pennsylvania of $246.7 million as of December 31, 2025 and $262.5 million as of December 31, 2024. The Company has recorded a valuation allowance against these carryforward attributes of the holding company as it is not expected to realize these losses given the profitability of the holding company for Pennsylvania tax purposes. The valuation allowance is netted against the net operating loss in the preceding table.
Management assesses all available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Based on our evaluation, as of December 31, 2025, management has determined that no valuation allowance is necessary with the exception of the holding company's net operating loss carryforward deferred tax asset noted above because it is more likely than not that these assets will be realized through future reversals of existing temporary differences and future taxable income.
In accordance with FASB ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes,” the Company has no material unrecognized tax benefits or accrued interest and penalties as of December 31, 2025. The Company records interest and penalties on unrecognized tax benefits as a component of noninterest expense.
First Commonwealth is subject to routine audits of our tax returns by the Internal Revenue Service (“IRS”) as well as all states in which we conduct business. Generally, tax years prior to the year ended December 31, 2022 are no longer open to examination by federal and state taxing authorities.