• Operating Net Income: $136.7 million for Q4 2024, $0.38 per diluted common share.
• Full-Year Operating EPS: $1.39 for 2024.
• Loan Growth: 5% year-over-year in 2024.
• Deposit Growth: 6.9% year-over-year in 2024, ending at $37.1 billion.
• Non-Interest Income: Record level of $350 million in 2024.
• CET1 Ratio: Record 10.6%.
• Tangible Book Value Per Share: Increased 11% to $10.49.
• Net Interest Income: $322.2 million for Q4 2024.
• Net Interest Margin: 3.04% for Q4 2024.
• Non-Interest Expense: $248.2 million for Q4 2024.
• Efficiency Ratio: 56.9% for Q4 2024.
• Asset Quality Metrics: Total delinquency at 83 basis points, NPLs and OREO at 48 basis points.
• Net Charge Offs: 24 basis points for Q4 2024, 19 basis points for the year.
• Provision Expense: $23.2 million for Q4 2024.
• Total Assets: $48.6 billion at year-end 2024.
• Loan to Deposit Ratio: 91.5% at year-end 2024.

• Warning! GuruFocus has detected 8 Warning Signs with FNB.

Release Date: January 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• F N B Corp (NYSE:FNB) reported a strong fourth quarter operating net income of $136.7 million, or $0.38 per diluted share.
• The company achieved year-over-year loan growth of 5% and deposit growth of 6.9%, outpacing industry averages.
• Non-interest income reached a record level of $350 million, showcasing a diversified business model.
• FNB strengthened its balance sheet with a record CET1 ratio of 10.6% and increased tangible book value per share by 11%.
• The company successfully completed a strategic sale and reinvestment of securities, improving yield by 337 basis points.

Negative Points

• Total delinquency increased to 83 basis points, up four basis points from the previous quarter.
• Net charge-offs were 24 basis points for the quarter, indicating some credit quality challenges.
• The company faced a $34 million pretax loss on investment securities restructuring.
• Healthcare costs increased unexpectedly by $6 million due to high-cost claims.
• Pipelines for loan growth remain lower, with a 10% to 15% decrease in various markets.

Q & A Highlights

Q: Can you provide more details on the fee income initiatives and their impact on the 2025 guidance? A: Vincent Delie, CEO, explained that some investments have already been recognized in expenses. The capital markets line has shown success, with new business units like public finance expected to generate revenue in 2025. The break-even point for these initiatives is quick, with significant revenue expected by 2026. The strategy is to diversify income sources and support clients, which has been successful with a 9% compounded annual growth in non-interest income.

Q: What are the primary drivers of the expected expense growth in 2025, and are there plans to reduce this growth rate in 2026? A: Vincent Calabrese, CFO, noted that the fourth quarter expenses were higher due to a $10.4 million valuation impairment charge and increased healthcare costs. For 2025, expenses related to heightened standards and risk management are included in the guidance. Cost-saving initiatives are ongoing, and the company expects to stabilize expenses by 2026.

Q: How are you managing deposit costs and net interest margin in 2025? A: Vincent Calabrese, CFO, stated that FNB aims to outperform peers in managing deposit costs as rates decrease. The company has already reduced rates on CDs and money market accounts by 100-125 basis points. The guidance includes two expected Fed rate cuts, and the goal is to continue growing deposits while optimizing costs.

Q: What are FNB's plans for market share growth, and is M&A a consideration for 2025? A: Vincent Delie, CEO, emphasized focusing on the Carolinas and Southeast for growth, with significant potential in Charlotte and Raleigh. M&A is seen as a natural part of the industry, but FNB will focus on optimal capital deployment. The company is not seeking transformational transactions but will consider opportunities that align with strategic goals.

Q: How does FNB plan to achieve positive operating leverage in 2025? A: Vincent Calabrese, CFO, mentioned that despite investments, FNB maintains a top-quartile efficiency ratio. Positive operating leverage is expected by the second half of 2025, depending on interest rates. The company focuses on disciplined expense management and revenue growth through strategic investments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.