FNB - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the F.N.B. Corporation First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. Instructions]. [Operator event today's being is note, recorded. Please now Matthew Lazzaro, would like to to over conference the Manager turn I of Relations. Investor Mr. go please ahead. Lazzaro,

Matthew Lazzaro

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

Vince Delie

our call. earnings Thank welcome to you and

expressing results by continued Credit open highly Financial our Vince team the morning and this Chief Officer. the my the Gary despite like impressive entire for Chief are produced F.N.B me I’d presented Joining appreciation who to challenges pandemic. Officer; call by our Guerrieri, Calabrese,

share, quarter an favorable pre-COVID-XX are rates last first I'm given income economic environment extraordinary or state equity the tangible the significant on XX par proud a common net interest with per levels, changes months. so on during in the less quarter of $X.XX results XX%. totaled quartile in resulting upper to XX return million First that accomplishment and

basis. company fundamental both Our allowance and strong total capitalized excluding for X.XX%. performance revenue demonstrated increased ratios capital risk-based and a a PPP remains strength record as at an insurance from and linked quarter loans, wealth year-over-year F.N.B increased credit well new on at by record noninterest XX management losses, with capital solid income and established mortgage We for revenues supported banking, in markets. million, contributions

originated to while paying by of $XX.XX. last dividend quarter billion our at basis, we two commitment week, share PPP increased we quarter, an linked during executing $X.XX $X.XX on price share the declaring attractive of buybacks the X quarter to per tangible book common of $X.XX, value nearly round quarterly an During On as a average loans. XX million our continue of dividend

letter expenses. areas this three-year year's In increased for priority reduction discussed of deeper our gained produces remains addition, we've capital streams. for expense XX% quarter quarters to deployment completing our successfully we XXXX, first to risk with scale, $XX XX.X%, ratio to return compared a CETX where improving shareholders. diversified seasonally management the in revenue reflecting that adjusted on into three The our XX $XX prioritize and strengthened dive shareholders as basis initiative. meet options a cost track manner and points are efficiency target, highest ratio risk to the expense million we our elevated both top I'll continue profile Diligent savings totaled the our million our in our Today, annual to take

our we've services. and our businesses of and of products cover will expanded continually the how I suite First, fee-based expansion value-added successful

initiative. de our digital to provide F.N.B’s the want novo highlight capabilities and about clicks-to-bricks updates I strategy new Next, within

quality stakeholders. asset differentiate details to up ourselves reviews of on financials, delivered and with our how of Gary value and we all will after I a Vince provides summary wrap Lastly,

we’ve One revenue areas in XXXX of our goal the diversifying mix. to main our was emphasized annual our overall report

management, last businesses, been annual has fee-based many more consistently several rate growth generated investments interest stream. revenues. value-added net through and environment fee-based in leveraged have banking, And we over these specifically double fee-based to capital digit have we've which to years, the our the of that led markets, interest last successfully significant headwinds, challenging mitigate XX granular months, revenue growing margin growth in Over mortgage a been businesses a what wealth rates insurance

year’s to XXXX, the quarter success last continued as of first we've build million, have the or on businesses XX XXXX. quarter During those of increased to first compared XX%,

If you of our long-term core fee-based in clients, and strategy our namely recall, banking markets. scale and we services offer to to capital to invest mortgage businesses our laid products out

of adding each as As we levels our D.C. expanded scope depth attractive records Washington and Maryland; Baltimore, and as transformed set into client services, XXXX, are markets In the mortgage capacity banking relationships. production Carolinas, footprint to operations quarter. F.N.B we and continues such to grow the continue to and

are of and origination. investment relation record mortgage pipelines in for this at levels held As week, production to both

in business billion breaking mortgage fee than income. banking a more had year record in X in total Our and XX production with XXXX, million

become will economic broader confident levels for support a money mortgage Even and environment volume. greater production of are that have geography loans as rates favorable more and total a healthy portion risen, we a purchase

to million our international syndications, through businesses banking just those expanded capabilities than over platform, with X markets building contributing derivatives revenues to significantly Turning capital now and from million our our organically, XX platforms annually. we've more

capital reach and markets market and breadth geared middle enhanced capital upper the our markets large platform corporate clients. expanded have of towards capabilities with debt our we Additionally,

and revenue are issuance other focusing debt. specific on we municipal that provide finance the specialty and opportunities Looking public in also corporate of ahead, with broader verticals will opportunities

Along now digital credit to for plans continues and We its clients. robust F.N.B’s fees new will As launching consumer products. our decisions overall embedding overdrafts with opportunity features can experience. to making well utilize can center completely. while how to the comprehensive customer application. directly e-signature setting we've purchase The services value-added channel loan within dynamic the a single checking, products appointment products the utilizing branch. for the management mobile out businesses, our through to with clients as to we capabilities solution delivery finalize phase implementing products. number to F.N.B so of better with Consumers our expand new sales evolving our through and multiple designed advanced online of application deposit scores, mobile shopping recently consumer rolled is application single important business identify NSF e-store and deliver to and relative provide bank the fee-based This elements clients eStyle into preferences, application, we streamline conduct is our platform omni-channel such as our and the physical a as next when products digital investments, to data-driven products cart with a continue apply prevent offering in capabilities, our

end-to-end manage to and or focused digital the loans our products more mobile of seamlessly F.N.B that online channels, we the are of continue make to other so services are for bringing we consumer process and our application for consumers using delivery able add and Additionally, on online in within products and applications coming progress services. as products quarters

Charleston, established is of This company investments set investing our hub example in us addition Carolina for to that products fee-based to market. position to to and enter our complete consumer of commercial efficiency. growth the In make physical technology, de have in growth delivery to locations the successful permits higher South and year, our accelerated in targeted we we novo channel offer retail an a strategy teams and a are five market. branch firmly will a that regional complementing continue

the in country. more recruited largest than funded The commercial relative financial to their were and of quartile upper branches key the indicators of million assets institutions retail bankers since Carolina XXX the during originated team some South ranked performance Our locations XXXX. inception, in the from has among

There and near-term exciting ahead, basis was high with all-time many both de fastest are in an market investments happening pipelines market digital first novo technology. companywide quarter XXXX. growing the XXXX commercial are Looking a commercial year on South things and full the growth percentage and for at our Carolina

And management to will our performance. is Gary over discuss transition the call are risk to that, Another credit our area Gary? proud I progress. we of and with

Gary Guerrieri

and good you, morning, Vince, everyone. Thank

of to continue see across year. We quarter positive the performance portfolio first during our the credit

the prior commercial key for positive basis across trends some credit typical results a the to point quarter, past now overview portfolio, levels levels. across at brief to very first and quarter in improved improvement The of proactively at metrics number a is the deferral as in March quarter review our to reduce level the was delinquency basis following taken macroeconomic over our expected of lower highlights points, followed well board to actions Our portfolios current consumer improved industries. by quarter. book, the due seasonally driven as solid like the favorable a would I remained some challenged of exposure the most which XX better end representing XX than positioning linked consumer levels, as and by the last quarter of with

a NPLs very at while improvement and or excluding at XX nearly at bips pay XX loans, the XX provision on at quarter $X basis a an The stands a $XX basis level for million reduction basis. of nonaccrual ending the of totaling with on in of the March improvement linked basis, level, contractually XX solid points. quarter The a March basis points. points, largely expense came continuing volume, non-GAAP points resulting an in loan quarter, basis, non-GAAP current by million to of driven reserve million, NPLs of annualized basis on OREO PPP level stands $X first a X.XX%. and with position ended Excluding delinquency was X charge-offs bips half PPP at our loans during in Net XX

X.XX% X.XX%, in X.X% coverage commercial stands Excluding this essentially of like quarter. of portfolio non-GAAP improvement deferral levels position our also ACL you the coverage March, our Inclusive the portfolio, and following At total to down the X PPP loan from point. stands over levels. provide previously the core noted remaining of point number to basis at at a acquired on with reserve up NPL the brief deferrals ceased NPL favorable the our I'd our of requests quarter. the discount, our loan have unamortized with borrowers at during XXX%, remaining prior new at now are the update end

reduce have to with the smaller these we to as throughout continue credits pandemic, entire monitor that continue the the economy as We expectation actively will numbers done up. opens the

any stress of towards stay signs could continue the portfolio performance potentially we show end sensitive track asset the ahead of to and mix tail Additionally, pandemic. our trends classes that of to

identify the to closing, proactively that are to with our risk company. more the exposure and and potential made consistent solid if any risk book management, is pleased In we the very the continue start continued the to financially work in we've opportunities down As to are action progress our we to the to arise take areas approach industries. with strategically sensitive of will and limited beneficial year

economy attentive proactive risk management anticipated of now as on Calabrese, Financial the As principles our his continues Vince through I the Officer the keep turn economy look for well will credit remarks. we the to to to to across and are disciplined second and core Chief in the activity we positioned managing over half credits accelerating focused footprint, evolve, our workout underwriting our broader from portfolio book our the call our forward an year.

Vince Calabrese

our Thanks, results morning. good Gary, current and some discuss of expectations. I our financial will Today, and

Slide on At lower record build losses at of and noted this high basis impact the X, loan growth, included well the a quality XXXX trends, asset of including year-over-year interest on the rate translating level, As significantly solid expenses provision for and partially offset recent by into EPS income quarter significant results up low noninterest the the revenue onset continued $X.XX, managed of was the at for levels environment. pandemic. as first first reserve quarter quarter of significantly a

PPP strength pipelines, X.X% XXs, funded This of increased On Let's a million review Page by in lows for balances net XXX line and Commercial X.X two for the offset remain fourth PPP the balances PPP XXX a partially of low loans rate. quarter. upside utilization at million total highs. long XXX commercial during the the on into Average on rates increased which funded loans at spot a up all-time forgiveness. range long were about X. level record as basis quarter, the in creates with of as a our translates of are growth loans XXXX, the for decreased normalized in which year-over-year reflected utilization round on billion basis X.X% first in near quarter X.X% balance basis million balances sheet total

grew interest-bearing quarter Turning demand the deposits strengthens deposit growth deposit partially increased quarter. X.X% a billion, first for or deposit to bolsters offset basis the in a deposits, and basis. quarter annualized, X.X and on of XX% and with deposits our the on by decrease XX.X% XX%, growth to at strong deposits, time total a managed average liquidity at mix ratio of XXXX, On year-over-year of annualized end ample Discontinued basis XX.X% noninterest-bearing spot deposits being in a deposits. linked led loan a by our with noninterest-bearing increased our

points net The statement, XXX income were a to negative basis last margin XX.X income the compared quarter. declined X.X% interest higher X margin balances XX as net basis impact on cash average reported Turning quarter. to or million to narrowed to compared fourth the interest point the

the drivers X margin and a loans. from X point lower point purchase on reduction PPP to acquired basis Additional a reduction benefit were contribution a accounting basis in in

the improved for XX X benefits with quarter Excluding continuing down deposit points to points these from which the from underlying fourth manage basis margin basis interest-bearing XX costs, impacts, points to basis the quarter. increased

the these the X spot basis a our cost reductions funds quarter ending at of moving on XX deposits than cost forward. basis With lower basis, average, points further the expect we in points of

due sold mortgage XX. production fourth positive banking footprint slides was look at a the the a on Noninterest remained margins now basis. strong to expanded year-over-year gain on management. noninterest and XX% that volume XX% under income and XX million, levels XX expanded as impacts expense income management market to with record increased up in Wealth strong record Let's quarter million at and on sale totaled assets on income and XX

capital insurance also markets from fee for results supported record and contributions Solid income the quarter. the

the totaled the salaries and operating and XXXX, noninterest first Looking X.X to an expense million XXX.X benefits million, the quarter. with in of year at technology, the across relatively to fourth the seasonal flat to X.X%, growth to related On equipment of XXXX basis long-term timing similar to Occupancy in seasonal X.X first key X.X%, due due quarter to of investments related compared Slide XX, ago year's normal and in weather. or recognition million last prior an on employee operating quarter. or quarter expenses digital basis expansion increased and of compensation expense adverse markets X.X million increased primarily footprint quarter

up XX Our XX%, to capital CETX strategy from an ratio even reflecting period, to last buyback X.X% optimize improved of March, million this F.N.B’s estimated with deployment. over

towards activity reported first levels, and from generally outlook, weighted as net be from contribution our to half be interest expect the interest to we similar to be to we income pickup 'XX PPP flat quarter. income year Turning expect the first in loan quarter the to a of second net the

assumptions, digit loan mid our XXXX, of from unchanged and year ex guidance. single our transaction remain prior full the PPP, For deposit growth

mortgage strong pipelines banking, We expected for with in income in given mentioned, second total $XX range the the contributions Vince million high quarter. noninterest expect the continued

current our our provision, expectations in in subject the half down year. origination is January, second outlook to from activity loan of the For

higher current expenses We from to for first expense in on forecasted to and on of of quarter expect be savings XX second quarter are seasonally mortgage million conditions. track for expenses based the our operating down target XXXX, the our achieve level

For compared the be slightly revenues XXXX be expenses to XXXX, of down we expect full year to and still to year-over-year. stable

Vince. of be tax to effective back change year assuming full the rate the XX%, rate now expect call XX%. I'll to statutory the to turn around tax we corporate Lastly, no

Vince Delie

lot our of with covered successfully a wrap I up We've want F.N.B today growth ground to executing strategy differentiates Vince. long-term and moving how Thanks, forward.

top First and regional market attractive a broad many is a growth in in a position across foremost, markets as unique F.N.B a share bank with geography.

a market service high position, serving borrowers this and can Given market our prefer. personal level product provide middle that to makers dedicated specialists and our local consumers touch relationship-based decision

growth to equity. of our exceptionally the shareholders and optimal accomplish funding an returns common on team bankers, tangible across provide have the pursue to We and footprint relationships objectives, talented with levels necessary peer-leading capital our

risk and we've enable an customer maintain superior the a to technology, better As to invested and experience, throughout quality while F.N.B to in quartile management organization, maintaining consistently and improve top prudently data varying profitability analytics asset efficiency relative ratio cycles, peers.

a for have customer with We advantage. recognized sustained our competitive shifting providing digital F.N.B have for mobile been that positioning the and offerings company and the by experience improved preferences

Our culture management decision disciplined local of to us maintain our risk profile. allows approach making risk to and lower and underwriting

of maintain we growth cumulative to We mid loan of approach losses, granular are digit level and because can single driving our to a lower diversified that high unique while credit.

people built these week, to quarters standout you Excellence for banking focused based And to strength further the quality the the services in and call advance employees a the our recognition XXXX will relationships simultaneously of XX for Operator? from total and consumer their of of in back World's clients Again, is company with more the by which of and XXXX, to specific Awards, one on has with F.N.B. response. a during ranking our amid relates consecutive all The our closing, including COVID-XX dedication, in operator questions. of just our experience now Best was commercial shareholders. commercial on it communities, as for As F.N.B Greenwich position States our recognition to client Greenwich thank value say excellence honors creating three Associates market on want continued F.N.B than continuing recognized by crisis to on while lasting Best In the this, of Brand received and meaningful globe. the named Banks last advisory are feedback. and decade. only bank for and past scale banks to operational its to turn for efficiency XXX United around of and Forbes' cultivating culture, for commitment I XX banks our be includes we gaining our client

Operator

Yes. Thank you.

We will session. Frank from [Operator Sandler. Schiraldi begin now this question with the first morning's And Piper question-and-answer Instructions]. comes

Frank Schiraldi

Good morning, everyone.

Vince Delie

Frank. morning, Good

Frank Schiraldi

of liquidity talk on managed wondered you where the bit I little terms about you how a these to Just see than that yield, to deposits starting sticking loan that dry? in there potential transitory, to redirecting around if more of for the keep Are securities books, is you powder enough could or term. can enough you growth it near in book excess the some with the you start that seek

Vince Calabrese

Yes. quarter, it put we I billion. as bit the a ending in would say there, quarter built the comments the was $X.X during quite around

we and second in Bank billion commented advances half use will activity up we as loan to Federal some the year. pick think That are year. this of Loan maturing expect as look the do I that do we have the We ahead $X.X Home of of on, cash.

actually started of end that flows XXX to We million bit, little there, a exclusive securities year. the reinvest the from it of the grew at had in portfolio, we T-bills have cash the

So were at in we're XX the about reinvesting now the where north one, quarter. basis earlier they are, cash from flow up the rates of points that there least

the of that securities the same of the quarter as portfolio, far current as around of expectation. So the end level is kind dollar kind as

and up up from cash. that sense. and the don't to pretty the really advances a investment makes flow that go We portfolio cash blow loan significant. So using up then think activity the some portfolio. picking The don't that maturing that is We combination of of and along really want

cash kind next going over XX billion months, to the months. the that’s XX there's next Over X.X of flow

significantly there’s from we if rate cash portfolio where rates the that things -- depending moved go flows. there's the and invest a we good we to will continue we So here. as quarter, on during would if opportunistic, like, than opportunity see has go But remit to forward more rates opportunity XX-year we – the be

Frank Schiraldi

the lastly, Okay, thoughts and industry it you far updated about I'm into seen lot in if little then M&A. a your just so a wondering great. We've just could XXXX. And on bit talk of

It pipeline. and into guys have could how You could there's of plenty M&A like? what opportunity. organic just look But about sounds talked like the strong strategy a wondering the fit deal

Vince Delie

a as de had we of success fairly groups, my well I geography. broad in particularly expansion Well, about Obviously, some with are Yes. unlike novo growth think performance strategy, starting comments, some we see some we’re good banks We've is positioned number good as prepared feel are at But to mentioned perspective. markets. midsized D.C. a spread We're Charleston. other in high inevitable, our where I a very forward, and across move we progress pretty point very one I from we're another. now or Washington way M&A strongly And in in

We've very I very solid some think got that We've pipelines. we posted measured quarters. some very solid got good growth.

digitally upside through attractive as one. for strategic That's our created, is, We the deploy I the into. substantial those expanded half drive of plan. at an execute in think disciplined first of into capital. there's very growth job obviously looking opportunities from acquisition and we've good is continue to where we've And obviously, high themselves in we we're to our and award executing. year, try we think platform said year. It's opportunity a Going to that large as that organic we felt that both we an have have. that book compensation amount markets a shareholders diligence. Two towards pay experience a longer-term one In integration continue due that out group the example repeatedly with here and here is the was pipelines tangible LTIP half share with little But been of incentive plan. we'll of present the bit, focus in I’m we've grow per example and growth actually play The that itself shareholders an There's perspective, we've to that past align the we our demand people good second see one to – performing grow, interest surge good value of our second the the tremendous to shifting gears very a to we've in is but the dividend. starting event done the

as So of an tangible returns plan. also return our out cost we is growth higher by off is level performing long-term our base equity on driving grow capital capital internal and common at important a and incentive short factor, and taking part

long but know along market, it, obviously doing but something that I acquisitions. answer, And still in a of ours if look probability of point. we're really would capable a at attractive, It's that's focus principal a not at focus of that there's high we comes that's So ours. works it's not a this

Frank Schiraldi

right. All

Okay. Thanks, guys.

Vince Delie

Frank. Thanks,

Vince Calabrese

Thanks, Frank.

Operator

Fargo And comes next question you. Wells Thank from Jared the with Shaw Securities.

Jared Shaw

morning, Hi. Good everybody.

Vince Delie

Good morning, Jared.

Vince Calabrese

Jared. morning, Good

Jared Shaw

opportunities Maybe back more the you point over Are primary targeted that the good to an efficiency as shifting shift made really reaching will now? comes like your expense other expense on this expenses, it to, is said or could cuts. at story you there ratio additional progress efficiency a of be you revenue lower that driver

Vince Calabrese

the couple on of Yes, expenses. just comments a

there’s quarter, we the first mentioned During the seasonality. --

happens were the about of that million there's taxes you total, in in about was Payroll that seasonality Now million cost the we quarter. The Utilities when X.X were up X.X $XX million. million. restart at talked X.X year. compensation first the in base stock

recurring. kind million there's that $XX really of isn't So

slightly down as a third save expenses $XXX cost of in level for quarter come of still So as the here, several go we from is on execute it. to into of And million $XX the the as second from how I quarter, first And we're is being dollar row. you we mean cost we as noticed, full seasonally you quarter for the three down next ahead expenses of the far kind guiding year XXXX this which those from where then And guidance savings, year kind million. will year in the baked elevated levels. million have our area from to look

company and had continue there's be in our belt. the a focus costs. of tool in discipline belt tool been of kind things that to So always management The on the in we've

monitoring including they We've of our Renegotiating some vendors some ones. a optimizing the It’s continued -- of the evolve. RPA retail to off closely all robotic our customer as through as contracts far have also starting of automation. just as bank, of constant. large throughout preferences going topic. the our is optimization back operating facilities. And top We're As those, dusted but of then branches process space as success far is XXX not footprint, kind kind

initiatives of we're the on big that and looking 'XX. last savings kind be bunch of a additive things have that's that been a part of at will for That's and of newer over cost focus to initiatives in a focusing us of the of so We as 'XX years. kind kind item, we've couple

Jared Shaw

great. color. over Okay, good Thanks, Vince. It’s allowance. Maybe shifting to the

dependence With you can either on few the to should allowance see economic maybe we backdrop, level, as the we ratio towards go qualitative the back combination migrate next see one that how improving maybe quarters? lower overlays of through quickly something or a day to that start the through provisioning growth? expect Is

Vince Delie

opportunity move there's and consensus that through we expect impacted XXX upgrades When about and benefits forward. as expect We by but the million quarter in there it, standpoint we bit model-related cycle. are XXXs And million. we in criticized mentioned look one assets benefits level Jared. We so The we forward day I this model-related portfolio. the as did round around benefit about high Hi, and at in reductions criticized forecast, versus from to XX% figures, do assets about the at to as or you bit do the Yes. the of see pandemic. we of a we expect reserve upgrades the $XXX were in right move down XXX of position a of QX to that a We do little forecast million as credit it’s there. and that see We that terms continue and criticized in move see from CECL, expect benefit today XX XX%. little were delta going well of a from did

it of around a Right improved do of are standpoint, XXs coming end we the as piece those benefits comment qualitative now, we see near of we about low from performance high sit So a varies from seeing number Final to XX%. it model framework that. in the some credits.

from So qualitative to that I go or would expect at where any slightly. it's up not vary

So barely well. as benefit piece of it there was that some in

Jared Shaw

me, on C&I in Is finally so get seeing normal bank And your commented in third Okay. to then for that And significant type that new strong about that talking the being you more utilization in the and that, geographically. Carolinas is or of really level markets? the you maybe customers new just legacy any just quarter? focus or pipelines trends to are you're customers back when do primarily that think you you

Vince Delie

would things. say couple I a of

it in year. First the getting to all, contemplate not the of normal second back rates half of necessarily does utilization

there's It's liquidity a of still sitting the to for lot cash lot of There's our on that deploy a while corporate capital. sidelines going take think clients. out there. I to a

that's the we a it. better. got one had, the Northeast Midwest slower out corporate in as M&A. are year, upon the of we've quarter. in sit been call said coming The in aspect of much pipelines first better today, has based that are to, upper there that So production and second Southeast, larger we've the large opportunities that of middle markets, in actually that, are of of In half our funded market are little legacy Having the it, the a that number we've production what the kind space

portfolio. within size legacy opportunities markets should capital the with of our some us markets commercial that growth both a in So we've number and piece drive got for of the

across Pittsburgh, then quite that's markets. there's the the Carolinas, Cleveland, Baltimore So still of a bit activity in And board.

about pipelines optimistic that. we're pretty The have grown considerably. So

we has recall, light exceeds actually you had that said we in if things little year. the a where was big closing the in at because fourth rebuilt a but it quarter, and quarter, were high quarter So last last

So, new both we're more I combination second optimistic really that. it's that of about half existing growing achieving And you the of that that put there out we seeing. guidance and in with opportunities the year. and helps a the we're hope customers

Gary Guerrieri

opportunities the bankers last but seen four credit brought new Carolinas leadership we've pipeline. months, have. board, one activity already in area new worked to is the in some it's some in name really the opportunities, over really through some We six increasing a lot quality of generating We've there the we've nice the across and with on high that Charlotte that in of good

about excited we're So that.

Vince Delie

have, we've We many I of capital options a quarter, Jared, think our do to that even because ever enhance on. the which ratio down quarter, better we of I were will lot about prospects that back the show feel balance loan solid There's of substantial amount though it our really to XX%. about now than sheet that got the think we couldn't have, of earnings. buy growth road. this there's historically. liquidity was deploy growth activity we The I liquidity fairly loan I didn't going CETX able quarter a for think When I shares

So, it's without as to I throughout looked at and we on quarter good substantial we quarter reserve this foundation the pretty release, a year. the did well move build as

Jared Shaw

color. the appreciate I Thanks. great. That's

Vince Delie

you. Thank

Vince Calabrese

Thanks, Jared.

Gary Guerrieri

Jared. Thanks,

Operator

Thank you.

Young Michael from with Truist comes next Securities. Your question

Michael Young

Hi. Good questions. the morning. for Thanks

Vince Delie

Mike. Hi,

Vince Calabrese

Michael. morning, Good

Michael Young

But revenue to Obviously, wanted other that it with on of the of fine are the little now. have round wasn't a the point or So noticed things putting the revenue maybe second is more too you I overall? PPP guidance just I offsetting color guide on adjusted a start upward? just guidance.

Vince Calabrese

Michael, did it we two revise Actually January where round in PPP. the guidance, was from given

the it originally, -- full year in down. contribution. pretty trying And remember round about to it, slightly Down moved in from it the revenue given had to strong. we I'm it was up guide January. We the was come stable two XXXX, So has moved

said sit here to As we today. I mentioned, $X up billion as We're a X.X. we

move guidance So reflect to the did up that. we

Michael Young

at thanks. of lot there's I of know And purchase we ex be that accretion, and is would to growth basis, loan But core a pieces. continue as steadily to margin as of having here follow-up a NII kind think just accounting of the of on kind we if should a guess question outlook. climb on returns? bottomed PPP moving just I in deployed Okay, liquidity look maybe potential kind a dollars,

Vince Calabrese

is was in the where into the contribution the for you did impact the reduced slide first income it the quarter. flat as was Yes, PPP be can on on guidance this net you from have first to interest quarter. there fourth the see from quarter, Coming

million. declined So overall, X.X that kind ran it against – of

the So of comparable it that you side in so PPP. first, at it won't affect a we of The have doesn't to expect the from it, where second to doesn't quarter be was level cash a kind in drag it dollars, affect margin. the

new if interest in So slide it's deep noticed, an there's good a to kind and don’t we there put a kind you drag. of in And of volume. given there's composition the where income quarter, -- Slide XX, we ended know net additional I

contribution, the comparable the PPP in I a a from we expect really think worse the of getting from quarter. perspective, but perspective. mentioned, second kind on accretion little is contribution acquired cash be would bit not and loans to margin the a I the dollar Like PCD levels

first LIBOR dollar’s had less other X day. have million. those. the million. In quarter, X And one of came day, basis affects down kind is So One being then was less based on things. That flat us. X we you the points. That

So a of first quarter kind we helped things had forward as moved here. quite it that from few affecting

expect So, half year. the into second dollar’s I the move to that as flat you as forward the up get would of we

the to I I PPP things one kind important of loan really bridge look is of that's think as that that really the at the increasing. contribution, activity a

the of this number the really the it activity each the this the half second bit the in up a a in of as traditional loan year. So look But coming because similar quarter. quarter, for third activity down XX has loan been in picking commercial We contribution little nice quarter. serves was a quarter, commercial XX bridge, fourth in It to quarter. in second

would answer I Michael, talk I long of of there, to a with but just So kind statement. there. think agree moving yes, kind But wanted in your I through parts the

Michael Young

just And buyback, Okay. XX million the last the maybe remaining. on share one just one

on about other thoughts is forward, stock appetite price given good talk you it's activity going and today see Now any Can again this kind of it where quarter. to just there?

Gary Guerrieri

Yes, and decide kind what XX%, that optimize the balance on to we'll we happens capital? be opportunistic. CETX as of base, have what we We look at in capital capital that our should at do And said, sheet. opportunities some allocation you day have depending with now Vince a every

XX year, if in So it strong, doesn't up of active. there second of We we from balance But as the kind we're come quite still the kind to repurchasing active attractive. definitely as how we kind we valuation as will very transpire is see think have -- growth through stock more million of ramps loan far of If be sheet movements here. continue the left. less that’s just half the to be

the So we'll on active. continue amount, and so first we’ll And We we're aligned far we've XX shareholder interest. as as the to appropriately. good bought to very manage it been right quarter, those, a thing do million in continue all

Michael Young

Okay. Thank you.

Operator

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

Russell Gunther

morning, Good guys. Hi.

Vince Delie

Russell. morning, Good

Russell Gunther

one Just follow quick while capital up on we're return.

on any color an perspective, size comments your down great? from Vince, Thank returning the ultimately provide would Could would additional or bit So, where M&A you perspective, of in go asset a like little you you. inevitability geographic be road? of to to the in just of thoughts fill terms

Vince Delie

transactions would I appealing. most be think the that, obviously, in-market

As disciplined. we've I've always said, been fairly

for book designed grow plans tangible compensation Our are value. to us incentive

that. I looking not to diluted So large do can tell you a we're transaction,

We'll on. at in that release we're that's I get to I business we've think that have don't more because think focus. applications executing the it. specific look XX,XXX digitally. But it. the done my we mentioned to that We want principal in great than model we're quote open not again, I a

launched before just before digital was or January. fortunately, in we right it was our whole it – Unfortunately, I So right should pandemic. platform the say,

to focus really this to PPP all didn't on originations, able great digitally we We coming which it to So we a we had and customers, liked. year. that's have more but were have did promote and opportunity online accommodate like would shift gears

So grow as that's And we'll that platform opportunity organically only a have starting. well. to great through

as loans. consumer loans, applications be that, ability and take home segment, later we're to So in our the then and business to mortgage enhancing that we we're applications take in loan platform, on to year integrate able equity, in small the consumer going

from after bit significantly And going So our perspective. strategically change But ability on. to market will a little go the that marketing focus we've shift I that a will all efficiently got know share.

positive don't that I few M&A part of feel think I are on our But So, things because roll I we and it's something that have an desperate to out pretty DNA. quite it again, certainly going that a do. important isn't

Russell Gunther

and were questions guys, you thoughts Thank your the asked very appreciate I answered. there. And of rest my much.

Vince Delie

much. so you Thank

Vince Calabrese

Thanks, Russell.

Operator

Haire from Jefferies. Thank Casey you. And question the comes with next

Elan Zanger

This guys. Casey. is morning, Zanger on Good Hi. Elan for

a sheet? seeing Could there money was talk loan So some new where of and maybe PPP, just at looking the spread on coming kind yield little the you that's what's yields, compression, there, compression. core ex about the still loan outlook bit are you balance the

Vince Delie

opportunities that range. XXX, solid to XXX quality we're the the tell Yes, the tenor they real the upon asset. The had extremely in period. credit again. to XXX credit up during down quality for when XXX you in they can spreads, moved terms depending you I that upon They estate depending of and XXX seeing transaction, are go of ranging back from soft the have moved the are generally

XX% extreme transactions Some of range. that, good of under amounts you with a slightly but equity, type that gives pretty very maybe strong equity,

Vince Calabrese

And I would add. just

during PPP new loans for made the the kind the side, were if a the X.XX three standpoint. a the on you new fourth at from in It far rate quarter, and As as put loans the we of quarter, coupon was quarter. X.XX%

ex of number to coupon kind down So X% PCD X.XX. brings was PPP, that

So kind apples-to-apples that's kind average X.XX through it's an sheet of there. versus running number. But of the see the X.XX, the you balance

good. which stability So is some there,

Elan Zanger

just going coming cash the on is that Okay. that's showed securities in that quarter? And the off I the Where to understand flow you back reinvestment today relative more back XXX then in. rates, it's first

Vince Calabrese

points quarter, happened moved at. what significantly. For is we March, during XXX we look basis we By the reinvesting it were available. what was the reinvestment at as that January, XX In rates, had

the to So stuff proxy to kind for use money X of work. is we're a But rolling to off putting of rolling that's where good in kind that's again, the XX. off

in securities shorter will quarter, long, there’s during that see backend kept reinvest. of reinvestment. but again we duration years. We we lock gap make continue narrow, be you I We've Like still And as said through someday. with and the that stuff less far the points going much today. kind more gives earlier, figures were on so we the have benefit March. roll So There's and difference definitely for and some we’ll to bets we'll We're there's not in not side of XX of still When that where as a we're many opportunistic. the move XX that active, active reinvesting loaded to we definitely January the we’re the that basis here and so there. we up active going to when less kind like, yield

Elan Zanger

low now. ones right Okay, so the

guys. Okay, great. That's all for me. Thanks,

Vince Calabrese

you. Thank

Operator

Thank next you. from Samuel Inc. the And question with comes Varga Stephens

Samuel Varga

on Good morning. for I’m Brody.

Vince Delie

morning. Good

Samuel Varga

off more ask and the to wanted the going question. of a just couple questions portfolio on kind I previous on loan

compression? Looking percentage a of at backstop rates, in are loans kind of loan can some what expect flowing where of the we to

Vince Calabrese

put around it the recent us in so we've time. benefits an sounds been process active probably moved place, us. those it XX% been through this there's so That of say I cycle, want has up. next for number portfolio, going to we're as been or -- to There's

Vince Delie

the environment to has originations negated [ph]. included floors. essentially competitive Gary floors haven't ability get The recently, I don't the know, But --

Gary Guerrieri

getting to interest than made six it and during difficult well, back much getting to at And has competitive, nine we and the very go good floors floors transactions fewer into progress the today this I were that more in It pretty and timeframe. successful significantly transactions, rate getting reducing getting more is We're as back it today. spread commentary been. is Again, point. it's when months we

Vince Delie

to going the risk That's of profile based borrower. upon the vary

close borrower not them. to to a a is to agree going borrower floor and on floor. situation, the to to to going a agree higher quality the If it's riskier a going credit, not a floor it's if be you're able So is

we credit compete tend after to just -- like everybody higher quality we to So says, opportunities. go tend

that's really our we environment, So best. competitive the and a function of try

Gary Guerrieri

it's today. really at where That’s

Samuel Varga

at around contract? the another the percentage what floating floor the percent has And that, already, rate understand. then point total? you. what portfolio understand Thank the of XX So rate loan I a guess I floating of data I for but

Vince Calabrese

total of portfolio. XX% is combined adjustable and the variable total The loan

that's that one-month and there's give to Just And overall X.X% in tied is prime billion, point typically data X XX%, that at another embedded is which then $X.X a XX% billion. LIBOR at gives figure. to

Samuel Varga

Thank this. very those If the hike this question Awesome. bips more above start much. of you just tied would sometime what the were floor? we to see percent to year, one And getting XX rate then a at floor

Vince Delie

at if gotten any. It A very, very very, would of basis floors very oriented them, very many points. XXX; We've percentage the few in small XX. be Most XX low. of at

Samuel Varga

me. it Thank you. would great. And Thank be that very from you Okay, much.

Vince Delie

you. Thank

Operator

Janney Thank comes next from question you. Montgomery. And Brian with the Martin

Brian Martin

Hi. Good morning, guys.

Vince Delie

Good morning, Brian.

Brian Martin

and service and we you are up sustainable half. quarter Vince, fees growth way, kind Just today, you at wondering guess the thinking it that kind fees I I can kick income guess feels and mortgage of pretty I level? and mortgage as as in from the that of where type right bit? market rebound, if here in But guess remains second is other just fee last of capital income charges kind the you color comment the talked the into half service look this level, fee the about on looking pipeline. the of And I debt in getting pick a with on if you the high appreciate that the and sustainability know, at in -- and second I pickup about have way that strong charges

Vince Calabrese

Yes.

characterization characterization. a of very the stable. good think I It's

right, the of particularly we look record million though been there. is as as to [ph] diversified it's million a a would out a number. has very mortgage strong every helps, quarter. at expect is, through markets is forward from strong even second because year, to be X very, Capital quarter its it not similarly last very value being strong, X have record lights But everything here, We from the we quarter, as it down

million-ish into look XX we baked as at Brian, that So guidance, around we're our what's figure quarter. per

of really comes it, starting. to are just stability that the way at some good if a upside with with initiatives some is look So newer

upside there's of the kind because think into it. the not it's of I baked that's newness yet So some guidance

Brian Martin

Right.

one Perfect. others. or then just Okay. And maybe two

on collected. Just the forgiveness going remaining the that and to are be fees

expectation there, 'XX? over of some of Given your lot picture, in 'XX? Is how in into realize piece much expect little 'XX guess overhang it you round see, that might I Is is that two just to that into XX coming do that big that just a to, 'XX? more with the maybe a in versus bleeding

Vince Calabrese

related Yes. that's That hasn't been XX to XX there, of two. million yet. it portal opened is round The

you have machine is that to needs the kind So where cranking of the happen there.

second I I the earlier, -- Brian, of similar quarter. would mentioned looking as there for So say couple next for the a level quarters, in would

Trying is Third come some -- a a million tail few ton from probably of not would quarter what's that go there. for there's but into pretty there. kind look left down to 'XX, through that small, right. think There's goes our ahead 'XX

Brian Martin

Okay.

Vince Calabrese

it And I year I me. front most in of in be 'XX, the have would don’t Brian. full have quarterly. of just the

Brian Martin

Got you.

how about me just then looking just Okay. is want on to they're and Midwest, guess the that. doing I pipeline, Southeast, the obviously, Perfect. The understood your well. comments remind pipelines your sure -- Northeast comments today? I in I And just just on the make the just

Vince Delie

Yes.

the a Baltimore markets; really They half of year quarter. slower better And and finished both. much first legacy D.C. cover Cleveland, for the then was in a even had Baltimore, is that's strong year the little The year, our it really great Baltimore. area. Pittsburgh, last second

is upper of areas, the market half second pipelines in very I think particularly for solid for and the middle those year. large corporate the

So see decent. for continues and and pretty the production on the first fees been capital par of and It's coming sizable have funding generate will both starting last build. opportunities pipelines to been strong with some year to markets has their It we're us. their In Southeast, quarter in.

but Charlotte in. we're do pretty is them small lot a business then portfolio, bit Finance, even We're So Charlotte, that and a the And this expecting activity. performing under of have, to coming particular, CRE seeing which group, of more other well is in in a we there's year. quite little this Builder based in some units

Gary Guerrieri

It's very active.

Vince Delie

There's quite going bit on. a

If from was solid production there our at at it's the were rest what been great sizable a -- in more you the was for next first than legacy the Southeast look pipeline. – job, contributions of I probably to -- didn't us say, more end-to-end look do was the a trying the in funded and I quarters, pipeline for a year, increase three there's When market. sizable overall the you the quarter

I we there's tells So That's that me trying there that more communicate. lot was on thought. a had what going out initially to than

Brian Martin

That's you. guys. Thanks, I I helpful That's then. appreciate all have it. and Got

Vince Delie

Thank Brian. you,

Vince Calabrese

Thanks, Brian.

Operator

And you. the floor to would question-and-answer does closing the that Thank to for like return comments. management any I conclude session.

Vince Delie

in we've the interest I because Yes. the through challenges very, the to environment thank And our Again, the performed tremendous everybody, and has the despite in I'd rate amount. employees particular, gone challenges like forward to well with all thank they've had. the a company had think forge very given economic pandemic. we've And environment

the So thank and And year. employees detailed of the safe Take the thoughtful you and to everybody, you to covering our thank thank And and analysts us of analysis. for next to such your contribution. you. and the look care. rest forward quarter all for I stay providing

Operator

Thank you. concluded. for now presentation. Thank today’s conference you is The attending

now You lines. may disconnect your

F.N.B. (FNB) 20 Apr 212021 Q1 Earnings call transcript