FNB - Earnings call transcript Q3 2018

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Operator

Hello. And welcome to the F.N.B. Corporation's Third Quarter 2018 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this conference is being recorded. turn Relations. over to Manager Matthew like Investor of now the to conference Lazzaro, I'd Mr. go please Lazzaro, ahead.

Matt Lazzaro

will in operating Corporation reports it Good the viewed available to Exchange be Services our financial release, This in Exchange F.N.B. release. measures. our you. Commission earnings the Thank of prepared morning, statements not to measures call. conference non-GAAP everyone, in will often call will contain Non-GAAP alternative corporate results Relations call and materials Securities A corporate and Delie, materials registration & our and Commission call to financial Chairman, website. CEO. Us, presentation presentation our with website. now with section Please an the earnings directly the and most files of included Vince to GAAP measures and forward-looking disclosures our link welcome and replay earnings and and until to and President non-GAAP Shareholder reported reports refer related Securities our as these of over I filed non-GAAP measures in of and addition XX, GAAP be should GAAP. and statements comparable Reconciliations to our this for with accordance and are in to forward-looking on and available our the the About contained the financial Investor turn webcast be October posted statement in

Vince Delie

morning, welcome earnings our call. Good and to

cover quality, further then Vince I any the we'll review And and call Credit Chief for call. since Calabrese, are Guerrieri, Gary our results. our quarter the will detail and questions. Vince asset our development highlights Officer. financial will today last provide me the provide Officer; recent open Gary of up will on our results and Joining Chief Financial

wealth income Tangible book and pleased $X.XX common net on year-over-year increase Operating quarter very per The operating quarter, margin per reflected interest deposit insurance and quality $X.XX positive XX%. A increased to our value quarter improving reduction million XX% management, a available and share. the from and to exceeded with results businesses, results. million million $XXX net loan continued tangible positive increase banking. loan The results, $XXX positive to per diluted is highlight was and $XX key asset highlighted expenses item and the third share leverage, mortgage for shareholders We common high performance fee I record $X.XX in solid the third quarter. growth, deposit strong capital are earnings in per share $X.XX market, XXXX. very quarter's to return want quarter's of from by a this equity significant notable strong share for based revenue XX% growth, to the core produced average of reflected operating the total growth,

moving XX.X% linked initiatives leverage mortgage. to operating On X% basis, We commercial loan indirect totaled total positive average a and forward. carefully growth finance, consistent growth. our generating drive and residential while by meaningfully The and expenses expenses continue linked control equipment on on have we to auto a place in quarter led basis, efficiency of ratio quarter managing focus improved revenue ongoing

from On Washington the the across commercial side, Triad Atlantic DC. production the Mid we in Charlotte, and our had Piedmont team strong in specifically Cleveland, quarterly and region

X%; leasing reflect a portfolios and commercial combined flat permanent while estate grew industrial and was escalation market takeouts. commercial in Our an real

quarter. residential coupled volumes diversification growth with our pipeline a during origination and XX% optimistic for growth. are geographic that will our continued the path of provide portfolio strong The consumer We record loan reflects indirect

increase that in the I'll in I total of the in the growth as total through were Carolinas you can On note market grew to focused see year-over-year steadily to household deposit the acquisition. are growth XX%. of seasonal striving a on a want DDA from almost inflows basis, the deposits. across in and majority bearing that Total share gained and our and markets benefits the grew funding the deposits noninterest FDIC through total XX% with spot also balances time average On side, new and FNB keenly we June, mix. data in deposits XX% continued quarter we footprint. deposits reiterate increasing average includes X% improve

of these organic the second quarter the mix with our by of further compared driven capital the holistic evident with annualized funding. balances a execution the the management our strengthen high improved spot and treasury be portion Successful sheet balance of XX.X%. complimentary, quarters funding clients, loan basis, DDAs. to in commercial strategy to services. been growth to of fee services, always clients will On has primary consecutive deposit value the based is customer of in position offer ratio expanding particularly and to to strategy Generating double-digit this and Our provider products have increasing relationships a

As I grow attractive continues book on common and per share, tangible returns FNB achieved tangible mentioned equity. earlier, to value

is incremental profitability provides with the tangible more lower we inflection book capital in flexibility more are level, supports point XX%. pace, ratio capital higher we rapid value going has us an payout increased, this build creates generating our and than dividend at value as returns. while a which forward At As below which has achieving growth. management, our more moved This

going new adjacent strategic markets. Bank September we deposit digital new can out deposits existing has since FNB to growth, last strengthening Now, to and digital I'd for on to customers. deposits platform we future continuing opportunities. that on prospects Gary, Through the Bank early With I see support development and the initiative deposits focus extended call. build households are flexibility offering for relationships attractive targeting efforts to the were FNB the so it that we our so source across Seaboard over expand we turn channel, to forward. deposit the digital these have with asset our basis provide products he but and to it to where It's its still we of selective this making Eastern use grow capabilities an These potential quality key share this initiative by In can complement going launched excited will like to and delivery and opportunistic forward. to applications, capabilities refining about an Gary? areas physical where results. is a offering, core call offer on

Gary Guerrieri

good morning, Thank you, and Vince, everyone.

a our with at third several X.XX% last with which are September the basis, delinquency ended over pleased favorably trend performance risk, which levels. to basis On an positive We the of represents XX low continue credit during quarter portfolio metrics continued and over credit the increase historically of points GAAP quarters. June

two excluding linked basis from basis accounting basis quarter While OREO to the points of points. at net point were charge-offs basis XX and slightly September impact ticked the end XX NPLs XX by annualized solid Core Finance. Regency points up sale at

Let's now followed at results remarks quarter by look brief the a take book. the acquired for some originated on portfolio the

points. levels. million first ending a year quarter trend in of period $XX.X portfolio. the from NPLs XX basis points, level The June annualized. at by of delinquency points. loan September basis impact a net points. picking up points long-term originated and to to to basis year-over-year OREO fairly provision when covered ago And of the low very charge-offs charge-offs and X%. an for marked of to bps Regency favorable two originated Turning The level compared move end improved by an the at of which XX XX sell, remained accounting were basis increase points The reflecting position ended solid by September originated slightly basis represents direction the organic of at originated the The Absent basis XX XX continues reserve growth improvement net at XX stable

Now slight Though slightly direction reflecting results delinquency $XX quarter looking $XX the billion was summary, totaling at combined coverage end. totaling quarter totaled portfolio Contractual million quality at it trend a third delinquency the linked migration the XXXX. of our positive quarter million, loan with increased position in by reduction of credit continues XX% with end, year-over-year quarter to acquired reserve in evidenced are total remained we level. a $XXX quarter In acquired we to the noted as our portfolio a some million X.XX%. final quarter of at the favorable $X.X at The of position inclusive for mark, a and results million. the pleased portfolio ending up covered adequately enter the credit $X.X stand remains as which

a throughout well-balanced results philosophies remaining variety continues a cycles, credit economic strong loan point focused our of decisions. risk proactive credit portfolio selective maintaining risk by management principles to mitigation of in underwriting, proof on and sound and that our demonstrate are credit a book Our consistent

committed for I lending further credit to Vince long-term or the our profile. Chief Calabrese, sacrificing higher in diverse with company our to risk to both now growth positions core new and Officer us the Our without over for continues risk quality remain strategy of objectives. which Financial his us principles support will standards high call credit positioning and opportunities to markets growth and growth our provide turn for opportunities, We existing remarks. our

Vince Calabrese

good financial for outlook morning, fourth everyone. and the the results third I will our discuss Today, high-level quarter Thanks and Gary, quarter. for

gain a an in see were on in from the quarter on in and $X.XX sale operating basis, second earnings $X.XX the can the quarter share $X.XX $X.XX you are XXXX. of Regency. including per On presentation, we quarter X share $X.XX the from of for As increase the share, of third Side the the third an per quarter per for

up starting start $XXX lending, growth Let's healthy home quarter balances X% auto, Linked declined. equity on combined residential quarter million indirect in or a sheet for $XXX continue X. consumer loan In annualized. to growth see and the while the Slide we with balance million average was

had XX% newer as strong and to the another had continues side, On build our quarter, across in we volume up business commercial the that solid markets. origination commercial leasing footprint annualized

X.X% XX substantially of As to quarter. acquired Carolinas runoff $XXX million entered C&I an this team, quarter portfolios of combined is The in during leasing the this and grew growth the noted, sign going the the we encouraging prior portfolio compared the the declined forward. to stability after performance runoff contributing lending prospects months regarding third potential to $XXX moderation Vince Also annualized overall quarter. our and million

short-term even growth replace with strategic annualized to or Investor We million. $XXX million endeavor basis, deposits. total annualized As Call, including million. to of XX% $XXX $XXX asset a term short- decreased an in $XXX deposits and borrowings $XXX million earning spot basis, time million short- On in On declined average you were term or or in growth deposits. may July recall XX% annualized a with noninterest bearing deposits growth cost XX% our balance successful in lower of with borrowings $XXX this borrowings quarter have million of we average focus that from

Turning into of and reflecting in Finance income on Net to acquired income X. statement $X.X the decreased interest cash Regency the million two recoveries sale months Slide reduction the $X.X loans, million quarter. an on

The attractive compared with a third the and and interest of did The quarter a margin from loans one was net on X.XX% net based reflecting month funded X.XX% and XX realized to largely of loans high benefit higher level movements LIBOR borrowings. prime second in interest earning reduction basis quarter. income the assets acquired upward more quarter deposits cash mix point recoveries last the in from

third core two-thirds the about up short-term consistent the the net of quarter, of to our three with basis Regency through guidance. the basis with of sale removed margin points a the NIM borrowings the quarter. was way prior X.X X points basis, proceeds of from margin of sale On reduction Additionally,

the to with the quarter ahead from guidance fourth margin full impact of Regency Looking six expect basis or in we points provided another basis July. the quarter, sale consistent we on a so

and strong fixed while higher fee second quarter reported our the noninterest contributions the at quarter activity, or XX.X% now wealth generated based combined $X.X loss Regency a solid results. and charges line look grew driven in levels seasonally Slide million second fee increased management reflecting income X expense Let's by X. related to $X.X Service on with businesses on assets noninterest income included $X.X income million with continued and million Total while mortgage of X.X% gained, branch consolidations. from

healthy was increased swap insurance with strong, the quarter X.X% across and continued seasonally up capital Carolinas. footprint, including posted Additionally, markets from activity the contributions another strong

$X.X the million, when benefits linked biggest X, million driver expenses costs $X.X excluding declined was Turning the branch X.X% announced year savings to in the the The compensation we or recognize consolidations consolidation Slide quarter from branch second sale quarter. and earlier the of in as Regency. which and decreased

mentioned last adjustment tax reflect XXX-k contribution that claim, payroll Additionally, the reduction quarter. expenses medical and insurance the we discretionary

a As the XXX XX.X%. result, overall efficiency basis points to improved ratio

ratio X.XX% per quarterly equity have of the year. to towards assets XX book our Moving represents progress building grew in you. capital. tangible goal points X% share our quarter The reaching Tangible basis last of discussed many $X.XX $X.XX level tangible first another of we which to increases increased quarter of with common $X.XX this to and quarter value

Lastly, our and ratio build tangible dividend share. enabling quarter below for CC XX% faster per in ratio the payout dipped the book value a

Finally, expectations our the quarter. I'll for on fourth comment

guidance. nine Now to that quarter and We months be previously be prior and track. expect range both provided. we do expect we growth the saw are the to deposit strong look fees a into in year, this on better with provision expenses than line And

to growth as for to in be environment the loan growth. loan for Regency now digits single single competitive digit area combined we sale, the expect high mid the opposed more with Given would

closing expect low net August, income to end With the sale to area. of the growth we Regency in mid of single-digit at interest be the

that produced rate, we guidance tax for a expectations. positioned our earnings is back line over feel With our company right line and the good about I'll our call Overall, in is the view share. Vince. guidance previous to been with in quarter and line the for quarter a has Regarding the way net-net still bottom our the fourth On it turn with of per solid XXXX. basis,

Vince Delie

Thank you.

to to team the their would call our thank hard the I returning Before operator, and like dedication. work for

XXXX. a As great we have during accomplished deal

year. total deposit testament Cleveland the on what we metrics places work consecutive year fourth as best and to an top to presented the included on Pennsylvania These work addition by Times. workplace consecutive the in second for recognition most for solid our publications strong our Pittsburgh year for eighth Business operator finalists an growth, The FNB culture, team that, was to while return are tangible earlier for consecutive and Pittsburgh the quarterly to PA a of a Maryland people. record income, in the western growth, our common accolades XXXX In value recognition year growth in list and growth, efficiency ratio build Baltimore, from these eighth efforts, for back improved these execute in company's delivered sustainable a year value. XX% to best over the year-over-year net place team's is noninterest With revenue, deposit continued These record equity, I points double-digit EPS of with and will loan strategy, summary, In our a XX% on shareholder proof successfully to creating XX.X%. turn call ability our the long-term questions. results this

Operator

this And Sandler first from Instructions] question Frank O'Neill. morning's [Operator Schiraldi

Frank Schiraldi

Good morning.

geographies trending questions just there run-off about couple others how enough at bit the point? Could footprint? to commercial Carolina on the first this to compared origination. a offset is down you little growth Just a loan if faring or on segment there in And your talk is

Vince Delie

last three increases Carolinas in the over The months quarter. steady Yes. during the shown portfolio has the

doing new we're that is had has think in in The terms than production the there higher designed is the getting point business. well And run-off, The increases where were very So Frank. company. run-off portfolio-- the it portfolio. we off, of starting I to trail historically to been we've for incremental the much

the contributed that comments Cleveland So during Washington mentioned quarter. Charlotte nicely is as -they as and Piedmont prepared were well I the Triad in portfolio my production starting and that contribute. that the team to had DC to

well our --our sustain strategy And that. I need sustain so believe growth we that investment that the thesis. diversification, to to we're do diversification is So that we're positioned rate geographic we in can

Frank Schiraldi

there? nice about deposit you that would is I after geography there non-interest in customers. the you Is standpoint? corporate obviously larger the there mean that talked was any about you from geography growth the Okay growth bearing out and talked very out stands quarter, call and a any going

Vince Delie

call would Carolinas I did I Well the and out again.

scratching because just we in And extraordinarily up were away you momentum starting I move we primary those still And surface if headquarters that's origination. where treasury see about FDIC data for excluding They of of deposits out Carolinas. not branch have terms market the a we're look we're there, customers. just there. performed areas from bank management we're every like lot the deposit in centrally well the think at the the to

contribute So strong central the future growth the a I pursue. the would the it's said, board. the expect think with in several from Having It the board. we the Metro Carolinas very growth. in recent terms significantly had part great acquisition to success I is years some ago. most really deposit significant quarter of growth. saw across we had to testament that of the And in state, strategies that some deposit over all Pittsburgh that This

strategies bank management will good in drive treasury number data We wholesale that have and the bank the consumer in particularly a deposit to both in of the category. prospects targeting with analytics growth continue demand deposit

Frank Schiraldi

consolidation benefit of and incremental Okay talked just we and the in the through costs quarter-over-quarter? what's finally consolidation helped. just benefit XQ the to the remind expenses deal could Regency story, in push those about expenses pieces in just think you Regency branch here, sort wondered terms What then that branch guys of obviously of this and about does as you us incremental our if Regency, XQ I two quarter closed, closed

Vince Delie

Vince expense address Calabrese can the base.

Vince Calabrese

had full-year Yes. on per was cost we that million about whole, this branches so say announced savings Once couple I $X it's things. are of would a we that commented $XXX,XXX The it's kind figure impact. realized the a XX. as fully branch, we

own. of in closed you May; you Now point XX that I of this where realized we that out say have would the have kind savings right gate. of you properties XX% have about we the at branches don't the that for

of to rest to property instance, the out XX cost. carrying those owned sell take eight For of stuff we the the

you rate. that kind owned. had $X consolidated once sold September, run five fully six of So to and of everything We so are properties we in the that kind gone the million are six of get late

the fourth you'll quarter. per XX% say for the of branch -XX% $XXX,XXX So those in get

incremental some that the consolidated there. branches we're benefit there's So selling in And in the then we had May. still of process

that get to again, And noninterest $X full million noninterest them components. may run gave July takes net Regency $X of the a income expenses you $X as would $X kind then and a quarters quarter to million recall in we of expense it million. kind away; rate. about million income when few So the a $X give I'll million, million And was interest provision was go $X.X to the

So kind is away. term $X.X impact that the of the go million pretax in would short

expense a that benefit noninterest had of the you So third September. basically in

You'll get the of rest fourth the in that quarter. benefit

at So rate of Regency branches from you've that the be a like will the kind they take bit said just full longer. little perspective run

Frank Schiraldi

what so for in I good was times those if Okay branches the those that XX% of you third XX that you times you annualized. branch about could gives just a assume of branches the think consolidation mean sort XXX pretty quarter XX $XXX,

Vince Calabrese

XX% Yes, -XX%

Operator

with The Nicholas Inc. next Austin Stephens comes from question

Austin Nicholas

just on that you digit about quarter Hey, kind the as morning. as far? growth into guys. of is that ready hitting look loan loan Good number thinking talking mid-single Maybe you're that out not fourth may think XXXX. about and of again Are comment kind you the how growth about to we that and be

Vince Delie

XXXX. not commenting on really We're

for we that trying our you give three indication to feel us. put what Vince quarter I was have pretty out an given behind fourth about we quarters will expectations think tell are you the we there. confident I what

the but about strong everybody, period. XX% levels pipeline disclosing pipeline, not We information over because have up pipelines have the We're company. a we record across anymore confuses it previous

into in selective said So environment, we're credit that, Having in I we quarter. very become the will have fourth caution moving this terms of approval. good feeling about

are So are on There of higher robust we're of focusing pursuit quality others their in more opportunities. credit that terms credit.

credit and we're that I through of pull changes think really varies upon credit based appetite others. it guarded. pipeline And being that So very appetite,

want --we're objectives. to focusing the still if So to forward geographies our add achieve that. we're any know manage growth I and leveraging to as in don't us we color help risk, investment move you Gary multiple

think We to I in construction increased finance activity as I'll one we're permanent --we financing construction. is do market for mini-perm the the the reason thing level there because has take in are the position tend do mention a short to we'll significantly. of out, guarded CRE asset other and then well the portfolio

has a that created headwind. So

it know so heard don't it's Gary the You've something that you here well. happening calls, seeing repeated want it unique FNB is not on to across color. to industry. any give if as We're I

Gary Guerrieri

Yes.

I covered lower and non-recourse, is the naturally there. markets life to transactions it quite CRE In and looking at think rates. coming term, the amortization well with business companies Vince in longer longer reference there, their fixed

investment reentered opportunities So they've you're that's yield. looking and what seeing as market the for

think of the this is at I going So industry point. on that some experiencing

I think a going while. for to continue that's

Vince Calabrese

I that that the to estate would is the is to the commercial real talking about, spot, related Vince plus moving digit and mid-single change guidance Regency. Gary we're add XX/XX stuff from is really

out removed of will be that So $XXX we the spot. million

So factors of high mid-single to that. the spot spot kind the single of those on bring digits loop the kind digits to close the just from of kind us two

Gary Guerrieri

That's point. a good

Austin Nicholas

understood. it, Got

helpful points kind out moving expected can to look coming of fourth negative heard some the comments guess to that you the just and on six would quarter on we expect that's kind some fourth on given move margin core your margin I pieces, us you the as basis the impact maybe just the Regency you then comments I give quarter? Okay, maybe out. as go given of how beyond of to

Vince Calabrese

Yes.

I think few a on margin. just comments

basis X.X that you that the my numbers through look remarks. the mentioned for purchase points accounting think quarter, margin in up core X the Regency when excluding excluding was I I to

part beta. success cost that and overall reducing is funds we borrowings this of key our think for quarter good had short-term of I reducing

the nine cost XX% of up XX. which this basis went quarter, up funds is went beta, last points it So quarter

strategy. overall the funds key part cost managing of of kind the of So is

and continuing funding to mix deposit to posture ahead, overall impact the obviously generally do earning the a excluding has neutral. supports generate rate kind an purchase The to look the And are management you our subject it stable generate commercial better the we earning risk is retail. obviously, remind on of asset interest assets mix is IRR then versus As margin, a everybody XX-Q the the the you data I margin we of sensitive look accounting overall assets into and in have. every that's basis funding quarter. we disclose mean core that for on

So XX on prime of it's X.XX% hard curve it with it's would XX% and a somewhat of look talk year core I margin the people for had this that I are guess to but one-month our X.XX% stable to moved to does remember yield up, predict was loans yesterday, about It certainty important LIBOR. of basis. lot morning. the or but And tied while steepening the help

impact the mean So and points know. this volatile is a XX-year not out morning. as huge five it's I we I went basis

quarter. should basis say of into core the a kind on fourth margin stable overall I would get So

Operator

The next Michael question Young from comes SunTrust. with

Michael Young

there? stronger early a to organic ask tell is closures forward maybe Hey, branch that but just too far kind forward done you generation more going that thus the good it's on morning. confidence of with to Vince give footprint. Then and early branch little throughout the an basis additional you've move deposit Does rationalizations it to giving or

Vince Delie

No.

as think on in last expansion de said focused I we consolidation XX novo past improvement for the we've years. the

locations. transaction market profitability look evaluate We at We an volumes So we ongoing have potential. process.

branches. us to reduce legacy I of opportunity continue the number to there's think for

greater because areas production, produce tempered be we feel expansion also we're locations the can closing. are that by high-growth we're Now selectively than that opening that'll levels production we in ones

So the I --but closure. offsetting not they're

And at over we're when deposit change total. period I to lose bodes sign, over the originated as in proven that is sit will it franchise. forward at going look shift that whole heavily this mix think wholesale think room deposit our And time don't just focused at this for and keenly something it. growth if deposit time the us on a mix more and I well it. more I you look significant There's sleep but that in So in company say a I look versus positive experienced, rely that long continuously on has over funding. the fact moving we're we you think I funding a we've is and very And the generating balances deposit it's of growth still

Michael Young

the curious that quarter there was it build stakes on to consumer for thanks purchase whether you growth be relationships side? Okay, where loan any and in try just or the indirect

Vince Delie

No.

Michael Young

Okay, sorry and little core -- I'm then

Vince Delie

material if there there strategy. I our were purchases. That's don't no purchases. I No would were but say know not material any

Michael Young

pay guide, glide to the Okay portfolio there you're lower reasons pace of year reaffirming but or we're of pay downs expect pay of full and the still you kind do from path down increase here? understand Or in going are loan feel kind growth off pretty any you'd why an in forward? activity acquired that confident a on

Vince Calabrese

just a couple would comments acquired. I Yes. on

of well guidance, slightly all, single-digit the taking impacts digit it First did high mid-single to of we given market change as the a the commercial real as on out estate mix. from Regency

So that. just to clarify

cash briefly, we've volatility always far there in loans. said our of level as acquired activity far impact as statement from portfolio, excess just quarter lot a there's of recoveries on depending income As resolving the acquires the as quarter-to-

last So was quarter XX it at was which high watermark. basis really high new a points

quarter. we're same at which points quarter first as basis This the are two the

lower the of of kind range. the So end

level. the that which we'll loan the as have but XXX was last points stable it accounting basis runoff quarter, eight So came acquired incremental the same does quite quarter-to-quarter. The the the book vary of down bit quarter of something a normal accretion then into in piece I considered from kind purchase was significantly that each And accretion.

you quarter, last XXX quarter the XXX last the it expected the four We in to the second at year. to continue in XXX over it the When fourth look levels quarters, moderate. was first, in

the like the to made it So good at this comments there, prospects precision and remarks in prepared third to of a quarter stand and like more stability had my XXX level of running. I about run it's the mean feels hard look quarter the rate. kind than next the with would expect I we quarter team where been where I predict but

So it's to going probably a forward. rate pretty good run use reasonable

Operator

Haire The question comes with next Jefferies. from Casey

Casey Haire

good thanks, guys. Yes, morning

follow-up strong to to expect pay to want on CD outlook, so -- was s funding of It couple follow-up shift growth should funding positive Just mix was CD the a allowed pay down continue growth the borrowings? this which side, strong down The borrowings. you specifically questions the we strategy. on to that the pretty quarter, NIM

Vince Delie

the on second helped balances part that's running XX% because We've positive funds were FTP, down have grow yield that accounts of well us we with a operating consumer pursue; in DDA about because in pricing and deposits new and strategy with quarter past. customers past, that we the the growth I would of as say historically the It transfer Well, the I balances the the pricing balances bank. the time shifted focus strategy. attracted this CD it's mentioned change DDA us that Actually X,XXX the has in balances. benefit in is as DDA curve. I of increasing double-digit in wasn't

balances us to I be that's So grow way strategy wouldn't that going was moderate the our it say bearing moving which over it's the forward, but that noninterest objective. has we helped will time, so

Casey Haire

yields side, understood. out we've it the at about competitive is terms so yield your money if And book perspective X.X% -- loan the in X.X%? and loan like structure, core about, very that but yielding from from look lot new asset production, guess versus looks pricing loan of is I switching your a to I Okay, the heard a it's what there

Vince Calabrese

to securities additive a is the quarter the is at starting I quarter I you so on comments is were the portfolio, said second starting rates couple was rate on on, put those the is new and loans yield. basis where the have yields would of points this that on up new just on the of the where like rate from starting new the which up XX So higher The than up we topic yield, from this look that, last loans say and if loan that the X.XX% on portfolio. the the The loans that XX overall obviously contributing consecutive yield you the bps which kind from reinvestment quarter on and versus overall also here. rate the new rates helps. starting last then rate portfolio

have kind so the we're roll-off rate. investing yield this We rate, roll-off equivalent points million of a quarter quarter than tax than invested the higher we at where $XXX higher XXX basis another so X.XX%

So on loans interest both rate, starting that's to income. than the similar additive are to higher the coming

Vince Delie

There is but of the pressure thing first. markets life investment payoffs at that by being and out other of corporate it in structural cycle. Gary large near it. on is, that taken CRE I'll the That's on the so very in margin, of only those yielding the look insurance investment difficult where And we've kind payoffs the going are are to or reality grade assets I public comment some on or an the pricing are competitive. they're impact life some The borrowers. add so Casey, companies, we permanent, experienced really companies lower has the can of creep, and agree it's it's that particularly grade

Gary Guerrieri

mean, in it's reference I the to more pricing competitiveness, really and same. structure the of

We the both recently did I market see pricing. to structure CRE presence. as well mentioned more and and competitiveness as continue earlier Vince And across

in factor want critical is risk continues strategy markets, perspective So we've is growth from profile it. investments our which it the made our to maintaining the diverse and and our where the we the

we exactly of and are opportunities continuing underwrite forever. have as seeing we're We plenty credit to

do key ours a a way. risk from is continue strategy of that perspective, that to So growth management we'll and it and a

Vince Delie

we've after call share like that M&A previous come we compete areas, when can through larger and metropolitan to our significant us the we periods designed this. it more get said effectively call so was repeatedly In strategy,

So I Gary to mentioned others, think the that's we're to our to ability we've positioned to been extraordinarily right. us we well provide relative how selectively with geographically as portfolio. to grow are, what Anyway add able given

Casey Haire

Okay, great.

you. Just rate, this rate for said you a last one. tax is good The

year-to-date I rate? the the tax it's just --I had mean what's of XX%, I expectation XX%. thought go think forward I kind was

Vince Calabrese

and would what XX% for quarter XX% is It'll we fourth be between the expect.

Operator

the next Gilbert And you. KBW. with comes Thank question Collyn from

Collyn Gilbert

morning good Thanks, guys.

up Just discussion. to the on follow deposit

that sort put rate of the that in bucket? on guys this the of quarter, on you're what CDs So on what blended putting what the is you you or put

Vince Delie

disclose don't blended really the We rate.

Collyn Gilbert

know sort Okay. How just that I you funding that that aware with paid given remixing? compares down on the how are of about were the the takes generally, borrowings are

Gary Guerrieri

this already it we beyond for more I Yes, think, really Anything call, appropriate detail look it. be would how to. Vince on to us that at wish our I funding reveals discuss holistically, at I think He looked it I answered because not strategies in our the question. address that's overall costs would than and

and total would manage funding that's at I cost of the funds, costs how we So it. look say, overall

Collyn Gilbert

to just discussion what then yield happen September Okay. And months loan month have the Vince end NIM, the some the of to around was? do clarify you and the

Vince Calabrese

but for indication something the loans as you is have I've new We Collyn. that's we're on money we so told throughout far the putting we quarter it, an X.XX% disclose, not are where on as so.

Collyn Gilbert

the you think the in then full Vince I year for you're accretion track Is presume had accretion. correct? I to And guided still there. of XXXX. $XX said you Okay. I know $XX that the on million million to past,

Vince Calabrese

Yes.

Collyn Gilbert

then And as Okay. we that incremental into changes you number XXXX? to see go accretion any

Vince Calabrese

the full next We'll from our guidance account year, provide all when give January we year. you for

Operator

And Thank Davidson. Russell question you. comes D.A. then with from Gunther

Russell Gunther

Good morning, guys.

an six quick fourth heard from clarify what incremental I bps compression is an the had in incremental quarter impact we Vince, Regency but or on that X should since a in quarter, that XQ? the we fourth Just margin. X X.XX% bps stable the of is expect for bps the of incremental

Vince Calabrese

incremental an six basis it's No, points.

the point in margins. a interest last as $X basis XX July gave dollar we on as to is the impact impacts, that million income figures net the X far So of

it, X So be to the it fully quarter which fourth out it's you of would kind total. once in have in XX

branch basis So look charge-off when we impact pieces all on then the X at again have removed rate fact points, had then about charge-off way. the other half as also I the statement rate from and total income another company's said top of income you the in that. there's And last impact is to just and the the points consolidations and basis three is X relevance, a on six overall, July, of of then the million going the gets kind effect you pretax

Russell Gunther

question Last Okay, great. I is on appreciate for clarification me capital. the there.

comment would kind about we expect at buybacks the at to here? the get appetite your bogey some dividend here should that below increased mentioned the flexibility, year. You of and payouts guys as could your like X% be flexibility M&A you'll of more thinking you With XX. end be on you It looks TCE

Vince Delie

Yes.

I I think a time, over called was I important. payout that out had think it's relatively because dividend mean high we've ratio.

strategy to I the is and closer of over and cost organically take to and grow share, the company improve that book think through XX%, grow ultimately started out, grow I the balance value was as CEO when the well. acquisition, sheet TCE per tangible profitability time as

that As several acquisitions, we've we've relative years goal moved our normal look --in we the more indicated had completed through process peers. large several to ratio dividend and of that payout ago very was terms to

contributed $X we've nearly a years, billion in dividends. XX to shareholders last the Over

went cannot back repatriation be other shareholders. used capital to that purposes So for and the

book continue share we expect, a options our time point where that we add we to at value profitability TCE now our improved. we're capital. We're Now growing at to level and per tangible our we're where have has to to over a relative point where

company buyback, company forward. about time to use is it we that's for. growth what that we unique earnings when think positions if in move it, for It's increase a an our whatever objective future, us growth you and for do, So very dividend decide investing well we retained as in can the the

and table, raise. So our of levels without that organically a I progress to out our need our capital to wanted wouldn't been I ability anything manage simply capital of the has because enhanced, profitability take growing off point the capital and driving

Operator

question you. And the Partners. Martin FIG with from comes Thank next Brian

Brian Martin

Hey, guys.

or a Vince, Just than maybe an you absolute maybe annual standpoint, quarter guess numbers kind Regency of fourth putting expenses the a more bit three than change just biggest quarter obviously that expense I a to up the million number but couple a from going second, but they standpoint? one this one I the covered, back driver based on Is correct on look couple, as for that's were of out just impact at that bit expense things is the thought of kind little a that's sound the basis. on were the from Vince, little and of better $X the just for comes

Vince Calabrese

comments the Regency Brian but at Yes, think couple is important, on it I if a piece, expenses. you look just just

was second non-run million. this quarter $XXX out run So you is when the items kind the $XXX rate quarter rate million, take of

claims, ahead the to do Regency, we have do but coming out look their get you of when through in you medical quarter, have things some fourth quarter, fourth So seasonal that you savings have the the full also deductibles. people happen

fourth So medical claims quarter. always the increase in

then there's also accruals And so always We October end in of strong, year always that typically around true they some really ups and quarter. level having the energy true incentive it's book a out to And cold fourth up increase in have of closing does on that the focused higher normal been incentive those comes if you commissions are there are successful, the accruals is happen. teams have very higher that costs. a and costs, you right here, so with

of swing are year. it's closer million versus that million it's number of is probably maybe but the accruals because reality lot the with out. some to higher the it's $XXX even we the So the The play there's of still lower, close function how And of seasonal to end between and incentive and really somewhere Regency out a item, $XXX things. big the

roll key that certainty, any through fourth to parts piece quarter. that those moving but the of expenses So will it's the are predict in kind with hard

Vince Delie

we But hope compensation happens. We incentive accrual. rooting higher are for that

Brian Martin

you. got I And color. the appreciate I just the things. other then

from that North up picture go big we but to expansion, some this how guys Carolina you is get to you like rate fees? the standpoint significant how should on benefits and as feel should guys at a I have step-up adding the no of the I in, we're where continue continue income we're from with it you run today, point kind guess side Yadkin nothing think do at significant from fee On about guess, done, there's

Vince Calabrese

on results the side, income continue was was look saw the increase increases the Board you would across The footprint you mortgage nice, the wealth and at X.X% every to increase I XX% significant mean were strong, the if year-over-year. as management, I the through that capital put say for year-over-year items noninterest it Carolinas markets then banking, really mean, I contribution quarter. from you whole very

there's swap a increased there. lot still in every instance, last and quarters of few quarter For revenue the upside has the

forward just So there there to and look keep through we building more that. to is kind of

So out of nothing generation individual I of revenue kind call out footprint. our whole just but continued

Brian Martin

them, seen The Yes, and CRE last the talked without an guys behind numbers two. stable you payoffs have say pretty putting look more have I been enough at first, those the on mean okay, a mean quarter you escalation pickup about fair I or you just they've --it's would when been in in general, you side, seen just payoffs those or then but from and you second payoffs? third elevated in

Gary Guerrieri

slight payoffs continue I busier. a little the have pickup say have become that to a companies more Brian would for life as I that in those we that space. would expect seen aggressive in

Brian Martin

one Gary. for you, right. then just And all Okay, other the

is credit is concerning or feels that's it you're there anything pause any at point pretty trends anything in I from the you on the but mean guess this credit sounds this seeing? guys everything at good point I quality you like causing Just that perspective,

Gary Guerrieri

at here our across portfolio mentioned, of quarter. with any we really and we're now. We're I the and the the all look at of As portfolios. right very We're the positioned any point concerns where positioned we're we pleased books where of this seeing like as really end at it's not in

Vince Delie

those de-risk under-performance credit. a where sheet. be give a I categories portfolios. may looked number and out of Gary gone Gary have And of through balance cycle. at way as there to his addressed his we we We've he's I'll move felt mean team And

shape. in we're So pretty good sitting

Brian Martin

was that as in last the on borrowings, today on strategy you borrowings then path guess borrowing execute is I would the big the is goes deposit move one to the that lower asked terms number quarter, a be strategy? the as just funding someone side, your absolute in And expectation of line but there's lower the item or on that just -- general continue it I I with Okay. guess just the are on short-term be the general about think that you --and should this the execute on kind I know level

Vince Delie

have That is you down borrowings reality strategy is see it. low-cost overnight we fluctuations those drive continuously to preferably The seen with deposits the CDs. not

normal be cycle, will seasonal facilities our is there So That's fund to to we where business, goal periods eradicate that. of be have those ultimately to in into time our will operations. cycles but our

reduce the a dependency strategy. overnight So long the margin way upside our that creates from for in and on we to want perspective a those borrowings us in do run. That's it

Operator

any you. Thank management And return are to as I there comments. no the questions floor present to would closing time, like more for at the

Vince Delie

with really pleased you. the quarter fourth And appreciate support appreciate thank we're questions. in I were looking quarter. quarter. the another very to we reporting strong I and Yes, your forward the

hard deliver. Thank everybody. time. So work to we'll your Take Appreciate you care.

Operator

conference now Thank you. attending for has you today's The Thank concluded. presentation.

You your may disconnect now lines.

F.N.B. (FNB) 23 Oct 182018 Q3 Earnings call transcript