Release Date: January 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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.
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