FNB - Earnings call transcript Q3 2021

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Operator

Good morning and welcome to the F.N.B. Corporation Third Quarter 2021 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note, today’s event is being recorded. I would now like to turn the conference over to Lisa Constantine, Investor Relations. Ms. ahead. go please Constantine,

Lisa Constantine

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

Vince Delie

Thank our quarter third welcome you to and earnings call.

$X.XX, our Joining to quarter me was EPS today increase on Credit an Officer. Chief Officer Guerrieri, and third are Chief F.N.B.’s earnings $X.XX. basis Gary our year-to-date a Vince share, representing Calabrese, of and bringing quarter per Financial linked XX%

$XXX customer million, fee loan linked visible on businesses income led strong on pipelines, to our Our revenue quarter and underlying performance quarter with a record core XX% digital across of momentum this engagement. up growth, annualized basis, our

one Let’s of loan block growth. core with these look building starting each at

strong loan totaled Pittsburgh, consumer and in the positive the annualized quarter region. Cleveland, on equity. PPP X% lending Harrisburg Spot basis, of direct Consumer residential in commercial a across linked activity with increases in driven region nearly linked led X% and annualized mortgages quarter, excluding is every the growth home Raleigh by installment portfolios. by loan both commercial spot forgiveness, over notably growth and X% pickup linked growth, quarter, footprint, a lending our Our grew impact in annualized

evidenced calls slight improvement as and the our As the loan loan by spot growth, XX% higher pipeline that pipeline we had recover. in indicated Commercial teams for In Mortgage due healthy expectation higher increase in of nearly and strong the consumer the year-over-year. loan our demand utilization, to line is year-over-year. environment. We continues pipeline record the in the due – interest rates interest reached production earnings and with XX% to and a refinance more being prior slowed saw a jumped levels economy rate recently build quarter production to because has materializing. had decline in activity now overall up activity September record

In total path have sustained growth. are pipelines have loan as addition, normalized. we decreased indicate a Overall, our optimistic revenues for margins that

strategic capital our a million contributions income wealth strong execute with markets plan, record continued As from revenue. we well non-interest as to have SBA solid management reached as and $XX

efforts XX% has low even our during revenue. of Through suite more diversifying environment. non-interest expanding rate our become services, streams on emphasis income important our our our product comprises total Our revenue a enhancing and of now

our ago a to was years online several for integrate banking experience. in-branch mobile, designed introduced strategy channels and clicks-to-bricks convenient Our seamless and

website content. mobile at new XXXX XX% usage app has substantial driving and industry technology the which year-to-date our experience, in PPP important, clicks-to-bricks year, engagement resulted due extremely COVID beginning last website origination. of been and our channels. videos The to many increase period After Solutions to increased cart adoption with we retail in offerings, has included and shopping has platform our to increased invest built in including with leading same in of which website usage compared digital and digital features the continuing e-Store the our Center, Our philosophy a launching our of

then, our consumer We that continue applications to we with And customers most of online customers digital and and through launched weekend. on applications our mortgage or our our came equity demonstrated digital quickly outside cards e-store. for applications, to XX% option In make of mortgages multiple credit apply since as the banking application normal enhancements those approximately May, all our for on hours products, to provide were by business loans. functionality and the home submitted And flexible channel. of enables easily including deposits, XX%

card our credit third business In as in of small applications Online to even plan deposits products half addition, as multiple will next quarter. and by were the well shopping launch loans we loans applications made make digitally a over and application year be auto available loan for F.N.B. all year, easier. end. products experience to And for for unified the deposit virtually single

recommended identify introduced our and and supporting policies which and recently secure Our assist service application approvals. capabilities will intelligence automation by questions. to procedures to eliminating expand portal new the fields reduce frequently customers. input a to and customer expedite The chatbot our clients’ added be to over will time. Broader of disclosures use and asked top upload also scripting documentation XXX interface and provide customers’ chatbot, address information our automated F.N.B. employees will redundant e-signature will and artificial in apply a

increased in the Gary? quality will continue We both efficiency call the turn our client to current Gary which while engagement marketplace. discuss With differentiating client to about to to and our over enhancements are excited and F.N.B. asset and operating the upcoming improve digital acquisition that, I our drive platform, will position.

Gary Guerrieri

Vince Thank you, good and everyone. morning

of the both level the delinquency ended net and the performance of loans, credit positive and metrics. was key further continued losses non-performing improvement third in all and for year-to-date positioned quarter Our credits credit quarterly results periods. This across very by low well reductions following our portfolio in solid marked rated

which improving and reached have broader stimulus government across of Additionally, immaterial X.X% including trends level to total results, an further the contributed of deferrals, these economy loans. have only favorable

provision basis at following net at reserve NPLs highlights period to a Let’s during some quality year-to-date X.XX%. year-over-year had in GAAP were and basis to XX the the prior credit solid at were $XX ended reduction. reached with quarter NPLs in of declined when Net net of annualized, excluding basis The quarter million an our very the a from recognized at now and solid points, million to $X.X points million the NPLs XX improvements quarter ex-PPP OREO commercial improvement a third peak, million, quarter the the very at for decreasing stand the of for position. the X X X by level stand was reflecting basis X quarter’s quarter points reduction in level delinquency, the at points, a X.XX% September resulted improvement totaled the a ex-PPP improved charge-offs bps solid in benefit charge-offs reduction bps compared We balances, on PPP their representing basis level. quarter. non-accruals representing the review basis point during basis while within or low basis. book. The The point reserve $X.X This annualized XX% these when $XX down on notable linked that year to a in X ago X a position end a

during Our September NPLs the quarter. the position at level noted following reductions of in NPL further XXX% improved coverage ending solid a very

customers pleased Our total ending acquired and quarter X.XX%. We vigilant risks reserve our to and the in economy the are attentive rated of credit non-performing moving markets operate. the position, in unamortized very and levels. which of made within discounts have totaled portfolio both inclusive to of with the emerging year remained reduce and we closing, into position continued we we progress the In broader and the further any final our

timely the virus, and will remains as to growing that consistent managing balanced time-tested we nature support of the in fit the underwriting, Officer, the call continued that input move approach principles various throughout our chain and well profile desired portfolio this foundation our and objectives and economic highly growth now and with remarks. elevated I served our his ahead. over labor With selectively future Vince evolving supply us the of Financial credit risk environment our to competitive pursuing Chief have of our costs management opportunities sound and turn comprehensive loan This Calabrese, consistent our will and cycles. credit disruptions, for

Vince Calabrese

results. strong Thanks, financial was and pleased provide with quarter results Gary. for this quarter. I our for quarter will fourth the very Overall, the we are and guidance third a the Today, discuss

revenue million, a $XX.X on common income continued focus drove nearly to fee diversified of Our on leading or to pre-provision operating record record return $X.X an quarter, XX% reaching $XXX contribution income and equity XX%. basis strategic non-interest net million a million on tangible linked up

book a tangible of share reached X.X% quarter $X.XX, per Our on $X.XX linked increase or an value basis.

highlights through walk Let’s Slide detail, the financials on starting with greater the X. in

loans total linked record the $XX $XXX increase X.X% quarter increased leases drove reached generated more reflective basis, increased $XXX or quarter of EPS an increasing a $X.XX to in is on or million basis X.X% $X.XX XX.X%. a million, net to of this which and of quarter building annualized, quarter period over Third year a a strong X.X% increasing and an end quarter. stockholders available million commercial common $XXX.X growth, million $XXX on from consumer loans ago But or quarter $XXX record the revenue growth underlying $X.XX, of to million X.X% up PPP, increase second total or year. the excluding and million, or $XX.X with prior the annualized the On loans income and of linked loan million annualized

this XX% than quarter last higher of with XX% said, across was third production growth Vince As quarter levels the higher footprint and XXXX. loan than

continue sheet PPP saw and of lower Slide million. and leases was with loans totaled an X. entirely the to acceleration balances on we at the $XXX forgiveness loans billion, as leases $XX.X Let’s Reported $XXX average due quarter average with decreasing which million, ended commercial average and balance

of average deposit $XX.X non-interest side, billion, an accounts. increase deposit primarily billion $X.X or the bearing in deposits On X.X% totaled

to see larger maintaining a rate continue as account for than pandemic. We low preferences the before in interest customers’ as a more environment well liquid deposit shift balances in accounts

seen digitally. accounts also acceleration deposit have we addition, opened In of an

million, increase X% or $XXX.X totaled income interest the an net X, of Slide from million $X.X prior to quarter. Turning

contribution accretion, income increase reflecting favorable costs. more or Moving increased and $X.X accounting lower deposit and mix an loans, purchase funding average net interest X.X%, million to in PPP

by accretion, acquired margin from net significant higher these a offset from expecting to PPP and during the basis net net accretion a quarter. point the which increased basis June reduced contribution of was a of cash points interest quarter increase loan When discount portion XX. points interest balances excluding end margin loan are Excess the reflecting PPP excluding a Reported impacts, XXX, interest We our as higher basis contribution points. to basis higher of slight margin $X.X of benefit XX loan billion grew declined X income, net points. X tailwind interest discount growth PPP for occurred basis and that end, balances average acquired X balances, cash cash excess at XX% XX

Service X and expense quarter, reflecting non-interest $X Now, contributions increasing seasonally XX. other income Capital included swap previously each as X.X% well from recovery a million Slides markets in let’s on very from prior loan average from businesses. to XX.X% million, higher $XX.X with non-interest or lending to look as the $X.X charges contributions in strong million, totaled with million, million Reported activity quarter. increased of customer this non-interest continued debt a million solid activity at non-interest included other increased premium million was and markets off strong, commercial $X.X syndication, be Also Record $X.X income non-interest income SBA written volumes. income. or our and expense income broad other reflecting in $X income from capital sizes on fee-based $X.X volumes with and banking. $XXX.X international assets. contributions transaction increased million activity

strong operating an million diversified produced increased or driven consistent Excluding levels positioned fee-based to and the increasing are fourth commissions driven from million Overall, quarter On $X.X businesses. production with non-interest X.X% we by expense incentives, items, for of believe was revenue, our well employee and benefits or the we increase due non-operating quarter. and basis, by performance-related record total $X.X which X.X%. was strong and salaries contributions

on Page guidance Now, let’s turn fourth to quarter XX.

We million million. be expect $XXX to PPP forgiveness $XXX to

million. the PPP loan third interest contribution contribution balances $XX quarter’s to $XX With to a $XX are decreasing, of range we the with million a million estimating compared to income of net PPP

$XXX expect from we XXs we Continuing be $XX in for diversified an contribution, operating to close net revenue and related low on to PPP million production we is relative is to Non-interest expect expense non-interest the single-digits incentives the to interest as our fourth around to expected income quarter. which million be the benefit out year. Excluding subject quarter. income base, normal to up be to basis, third the high commissions

and expect We the to rate be tax XX.X%. between effective XX%

to We meet last guide our quarter. quickly like year we mid single-digits. XXXX given would I Lastly, guidance will our review loan believe growth of full

With expect will full revenue level and I expected slightly will the commissions, performance we strong which expenses We compensation-related back to that, turn Vince. with provision call higher. solid up XXXX continue on to earnings. we of incentives year a dependent Full year growth. loan believe be the finish provision to with the GAAP year-over-year, Overall, bringing production-related will impact is incremental

Vince Delie

Thanks, Vince.

Bank We everything underway moving currently is that overall, is and are very pleased to Howard smoothly. integration announce

strong to look impressed with base Howard’s are We with employees working customer them. and and forward

We close experience. to still prestigious for early are banking national mobile the F.N.B. strategy, received expecting for was our digital recently again award best-in-class once We a XXXX. clicks-to-bricks. recognized in our transaction

fee chat service mobile continued statements enabling will and and mobile mobile F.N.B.’s to look bill customers features Our would include items. a for F.N.B. product, have e-Store where taking literacy with soon payee Deposit, offered customers select new Pay, mobile the deposited center, proprietary app. a of picture to for Express financial a offering our a in to a investment availability be top and immediate their Other be within credit funds add by enables available which feel mobile productive Snap and support,

sincere you a F.N.B. Lastly, I’d employees. offer all to thank to like

clients demonstrates This revenue. to is able quarterly person’s of performance our drive have been each to that record F.N.B. because the and of we quarter’s dedication commitment our and achieve employees. It

their our I the Our organization hard operator the continued employees With to are over heart for I work. Operator? to want questions. that, and turn the of call for thank them will

Operator

you. comes question Yes, this Schiraldi from thank morning’s first [Operator Frank Instructions] Piper Sandler. And with

Frank Schiraldi

morning. Good

Vince Delie

Hey, Frank.

Frank Schiraldi

you this billion to bit over expectation if builds is a for could $X.X line? you down thoughts wondered to trying you Vince, maybe – most in working expect your cash, to wondered Just just Do talk time. of the about if could little securities just bottom the excess stick on these mentioned deposits you What that around? creep the

Vince Calabrese

– very The Yes. deposit to say sticky, every deposits really the of the and first we I with to is would have PPP the been No, continue definitely deposits it XXXX. the merger forward probably – the the that cash growth have goal level borrowings. back move here. as There quarter with to going we to related opportunities quarter work deploy to primary once Howard their billion we loans goal is that close $X.X fund to of is from

So, opportunity there. that’s an

basically are more portfolio, bit quarter. going a investment to we flows. the cash little On We this reinvested reinvest

on Reinvestment flows some running at on There put to were XX rates million work. some there than than of portfolio. sure. opportunities rate for are money still invested we cash of the kind cash better earning in runoff for lower quarter, $XXX the to XXX the the the million. XXX During It’s of $XXX

now cash will and any we So get sheet. portfolio related that. see look on sheet have actually up be securities bit pre-invest some some primary it securities a and as using other balance a we there first see from in Howard’s But and for first in here. of between that to cash borrowings our fund may go bit the We to at the take little that transactions maybe is quarter, of we might little closing the then full loans goal portfolio we if other to to our And a deploy balance opportunities the Frank, the quarter. whole put

Frank Schiraldi

we for? sort borrowings that then us And And you the from the XXXX on the things the would specifically? extracted, you use remind saves that mentioned just could you expect that if include of of cash Howard, what wondered Okay. could accretion I like with being timing cost in should

Vince Calabrese

back so overall we will sheet everything come But phased-in balance for in a guess a was When the Frank. current give on basis, the far have. we guidance as accretion, and as – Yes. we January, the refresh year. they different we you overall. did if model, what drivers will kind full where the give all fully That’s we really that’s announced we I figure X% of the go the year, to when full most

Frank Schiraldi

terms timing, you’ve just when to Okay. by? the you saves that, fully I phased those in don’t about in Have cost you know be lastly the – past. expect on I in just talked just recall of

Vince Delie

We get the year. Yes, mentioned expect we in saves XX% end the year, the Frank. of the first full by of to cost

will XXX% of a then will that in. will throughout second we said, upfront then some in of we the we to get So the of big like get them will chunk with the kind year. actions I year, bring And take. we And

Frank Schiraldi

you. Okay, great. Thank

Vince Calabrese

Thanks, Frank.

Operator

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

Timur Braziler

morning. in Timur for good Braziler is filling Jared. This Hi,

Vince Delie

Good How you? Timur. morning, are

Timur Braziler

this we look the quarter? this And ‘XX you’re how is loan your get into change Maybe on quarter, what spike starting growth, up loan talk commercial I momentum on a utilization for of there. headwind, And is loan the growth through can growth? ‘XX? hear nice consecutive as little at x that the PPP for guess loan you you I kind can an was your early rates quarters gaining, some look gaining new during momentum the maybe bit, commentary seeing at expectation utilization two then rate this what growth sustainable

Vince Delie

Right.

this I think is – Vince Delie.

next loan growth give cover we We guidance year. the for when will ‘XX

at two dive going quarters, to across pretty good the look So growth our past I geographies. we’ve But that now. into we’re if had right you don’t think

If multiple for and going effectively drive you happening. that now some and into loan plan diversity, recall, think enough create to scale to geographies expand where our I time compete stating geographic can we with was growth that’s

coming which of X-state covers We’re various footprint, seeing our growth the parts area. from

Washington, opportunities and Greensboro that D.C. Carolinas. And there. with and our So momentum. markets Charleston Baltimore a performing We’ve we then We the years over great the is are the very in few a time. to expansion we’re some have ago, got team and perform pretty Cleveland in Charleston seeing well. Raleigh region well good is and team up markets, a picking traditional Mid-Atlantic doing into well. Charlotte Pittsburgh contributing, in contributing continues our expanded

So we we feel borrowing pretty we’ve support perspective, a on manufacturing sit. about From where increased utilization that a credit good little facilities areas. bit and other seen of

they of We not been quarter. aspects read of you one mean say bit the last a robust. projects. economy, the evident, there think thing disruption, sidelines the of the position. I issues about the material really is borrowers And still quite still various cash clients will the for it’s raw a I from sidelines, then purely then as close of because higher who terms are is certain which are commodity in stockpiling pretty up the that for cost we have supply fairly pricing did still experiencing of on raw materials of line on reflected lot are have in in many with and I basically chain building prevents are our that sitting inventory pipelines but them you And that’s utilization. – growth, the

pipeline, pipeline. stated rebuilding in my is comments, digit The year-over-year. double I we’re as up the So

about commercial that we’re the optimistic space. So in

year-over-year. very we strong up that’s the XX% side, and have consumer On pipeline, a

that and what comment that have could in appears just are out if there. line it funded utilization consumers borrowed. we Gary, you So have what commitments we on and

Gary Guerrieri

Thanks. Vince. Sure,

to of we the quarter, specifically terms increase. X.X% utilization, commercial saw In a line

XX% XX%, XX from went so it little – So over a almost X%. to

was a the across the for that pressures that activity. positive some that So mentioned on issues said economy and supply real. the touched up are in the all things that move – and of chain Vince And

was holding is But of it see quarter. that to a good So during the at increase bay some bit. that that

experience, tail split and the And really talk fundings significant the unfunded The XX, unfunded XX mention well loans us end to months. C&I growth closed about and as growth up we was, CRE, over that a did loan about that’s other some between There look of we come. of the solid we growth were third quarter. will thing loan headwind future even that that over saw from closings during standpoint But those nice were that next as as are we I fund as $X.X XX, remain for to a did the ahead. want billion loan and

Timur Braziler

to over the platforms or going as – remainder with Can switching just And starting are gears color. Okay. your you’re so, that as Maybe the is of of year. of by as is talk third that driving next coming far well? either towards us through course well. what part going into next some building AI as and the And year parties for you out AI partnering versus implemented Thanks technology the process looking for underwriting applications, the some maybe the initiatives is if in-house? online as already just this of handled go remind approach at to strategy style that be more and to be of the –

Vince Delie

Yes.

the control interface. is to approach Our

the a interface with from the we’re proprietary So developing client. perspective,

can our exciting physical put for footprint the we’re we us we’re then pick to across it shopping actually website, And is us, what where shopping the reach very customers So doing products by check the in a into go out is multiple and for continuing refine multiple cart, our processing e-Store locations. that a in that. solutions product, mentioned to And it put of cart applications. opens and not they center door millions have I may

add offering. continuing that We’re to to

experience with working and companies, small, make both better. to of that with to large a variety technology are We partner

next application, open a developing on will a permit year. be application, proprietary scheduled that’s which launched to products mid single are We customers omni-channel multiple and to

products. of origination as the we mortgage added added loan stood I forward, just couple We We think that, platform. a products. we up other move

includes total ability XX% the about process mortgage digitally, business, applications the and in information in a our which opened example, transactions. upload we’ve for portal to of So

going to we And extremely well. consumer all do recently, that’s launched the we So ability launched loans. –

going loans to to small to portal streamline upload up help We’re stand a with business information processing.

on built end. that’s of being all front So the out

fin-tech large We’re to in partnering with and but various within small are help respects products, companies they smaller being the entities, deliver some per then our and framework. delivered

mobile ‘XX in users, that the so our in done, up mobile we’ve really on a extraordinarily what a the to our pretty build So well been control award received up quarter the bank, it considerably at award the strategy gotten our digital the pandemic from will We’ve e-Store e-Store we web is open and mean quarter takes because as of and by is is versus usage that basis, into out create And our refining customers. interface, as even channel which to the year-over-year we’ve the into to national more of out we November it mean, that account. coming you keep looking changing for actually the it. in traffic interface, space. easy – use application is increase first make app incorporate received I possible it’s look And I which mobile BCX, prominent to if a first able the at when been ‘XX think

So banking basically, XX% mobile in usage. we’re up

in We’re traffic. up web XX%

XX% up person-to-person online in Zelle – banking XX% We’re XX% usage. usage, in

to within or ability that company. various the shopping has experience appointments also through our website professionals our – schedule about with averaging bankers We’re

appointments month. XXX about per averaging We’re

been down month at the peaked during has deposit applications access the X,XXX per It’s we’re that sustained. robust. greater and averaging site. still to been people it’s have X,XXX as fairly about it’s So through branches, but come pandemic then And

that’s of team. what we’re we’re AI all developed exciting part things for And of of bunch We here, we about So whole I think analytics the reasons. most talk doing. side, a the on then the using a

We process data. to capabilities quantities of large both the have self-developed

quickly. millions have the and of it from process millions processed have be works data and that the can and infrastructure and to with And of by and efficiency data products and for people. So take with usage intelligence Millions and on work sale hub then we centralized to fairly have we disparate the management the finance to to within who They our people marketing, product and the improve bits work systems within our company. and credit. we information artificial applications information with understand They position really team utilize e-Store analytics

all on. of that’s So going

We’re developed. I that would the that drive revenue the to and chatbot we another of much be it as efficiency example our to think are also and built that growth. using we people out in technology to ways use And pretty plugging thinking

I stop and So I’ll stuff, pretty there. on exciting but... very sorry, I’m went long,

Timur Braziler

great Thanks, color, you. Vince. Thank

Vince Delie

Yes.

Operator

Thank you. And the with KBW. Perito next question comes from Michael

Michael Perito

good Hi, question. taking my for Thanks guys. morning

Vince Delie

Mike. morning, Good

Michael Perito

I stick a side I the just on have for wanted follow-ups. a technology second couple of then. to

economics of as customers could kind of how you So unit of share growing look answer. I kind was incrementally you is changing more that the branches of versus curious historically if guys have a the digitally weave you maybe taken – kind or do anything have and about

but you revenues talking a was to guys side, you at aren’t of more I mean guidance cost expenses. or expand forward yet, know can do dynamic the that you some grow have moving down that this is really than think ratio further? a kind fairly and investments flat need the you On I that these of efficiency point year managed ratio guys bit efficiency drive rates to next

Vince Delie

because been have efficiently we us investments deposits had help think technology more the a offering, have still experienced we generate we’ve loans. markets, branches move And No, infrastructure, forward. and with since growth. legacy as in huge It – branch infrastructure revenue system, closed we’ve that two there branches. those because we that, I’ve for cut help We’ve will and don’t In over the XXX things our I will do grown digital example. some us actually that of

what originate become we And me, those from investments is forward. to going get aided growth the and our strategy a people in that that out that become loan to As to marrying want as will sales services the a into that there and e-delivery it so has clicks-to-bricks very that, they that channel products depository were for historically the it a really is they branches. and been with branches to is or seen much looking kind integrate cost better people improve know lower that concierge online better, easier and are than help So in able are where both delivery have technology. to is to we us the that indication that perspective branch we’ve engage clear moving And way. the and with channel of consumers only it’s then our facilitate within convenient by at shopping we And refine they it, get then

our effectively. great the So planning all industry, We’ve of rate. the And to We’ve focusing strategic to away is investing that’s I investment we more future together. lot because compete think heavy said us. We’ve finally that the in it’s run on is it’s a I two there I think truly in a lot of obviously, of mean, along. embedded job. we’ve to lifting in done these to behind is cycles areas. come that us that from that behind and all prepared A come, spent starting need but I and not shied be believe space

a done of us game. have people Our keeping phenomenal job the in

Vince Calabrese

business trust, cost to more ratio. all We’ve would opportunity through customers, helps just channel, the lot down for Plus, each that revenue, in a to more invested fin-tech, through drive brings that opportunity drive getting efficiency efficiency all businesses wealth insurance, I add an and channel. business

another that’s it, So of element too.

Michael Perito

fourth the more if guess, but line line, process you. one. Thank just I two, the wondering I forward? than growth I on should a the I from little us of Is you your service that activity? talk income provided could market or commercial sales economic on to side, we the non-interest And know was rebound anything specifically. to number you be line robust bit maybe product nice kind mean, a two guide anything give color And of the $XX.X expect And to going on saw to moving there if continues wanted – new items I around maybe about not Helpful. that then capital quarter. million, positive side, number within which a really fairly for be or that a more guys charge rebound.

Vince Delie

Well, growing to providing transaction, income. up we’re momentum two services related and clients. treasury there management look to gaining picked management we’re strategy, of the because things in the treasury there. at fees – commercial really made fee space is for client new acquisition the fee you We’ve depository the we’ve when In investments

capital is perspective, that you area. then at markets, we’ve a that capital good we look a capabilities. when side the to build on continue flip So from what of attributable markets done out on bit growth And to our

and loans. very on have C&I team focuses a syndicating both We CRE good and

paid we So to get syndicate.

transactions capital debt a of have our economics a that where done completed able out. just we’re of we because to number that’s and We markets markets capability participate we’ve group off, bond and taken debt in capital built

fee income to forward the move We’re with focusing that finance. on generating approvals finance. and public We’ve we need municipal received

robust lending government We fairly program. a have

So that in hand. hand goes

participation across area the bond we – finance add in people And core what is help be economics us public and our participate important of offer moving – the as obviously, to So good that derivatives in We’ve forward. activity well. and space pretty our continued within footprint core the important piece will

large middle because consider we hedging they the space in was because part capabilities, upper for markets That So And FX won business to do in the capital in have I and capital very FX. of of that. then – of have we’re capabilities, players which effectively against area some all and transactions really the I spot compete of a corporate market of mention to market, can’t just able largest customers. is country another our combination our

strong, all with together that diverse of within that a provides of source business. good, markets So, us streams capital revenue

Michael Perito

Got it. it. Appreciate questions. Helpful Thank color. for guys taking my you

Vince Delie

Thanks Mike.

Vince Calabrese

Thanks Mike.

Operator

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

Russell Gunther

good guys. Hi, morning

Vince Delie

Russell. Hi,

Russell Gunther

throughout we the growth Just the fourth of number. and conversation get the to reminder assumes at underwriting about high there. annualized appreciate cycles. circle consistent to a It quarter The the over has the strong growth growth rather back single-digit comfortable mid- past single-digit in forward, LPOs a And mean, a Gary amount grower quarters with your for loan high from mid-single-digit second, reiteration. higher then as towards into over I for like the about past But the the type couple keep M&A. shouldn’t bigger is to I and of markets And you’ve picture you to more few reason, than years think a that mid-single going what any just there moved of begin digits? feeling about would F.N.B. end range?

Vince Delie

high single-digit forma. historically, Well, pro have been we

if the out M&A of digits, you report were rate growth. stripped loan and long high the on company, to contribution double of organic sustained street. the prior at average an a We we time out looked it a over to looked growth time at used period organic to that basis. and pandemic, for We the the including single-digit For M&A period

move platform. the And in think return that substantial, those certainly pandemic, given we’re we’ve as I it’s going we’ve investments was to the the So made we doable, to experienced, levels. disruption given through fairly cycle, our which the

really the bank have in for have Northeast. the compete Mid-Atlantic $XX we opportunity where cities you XX the in markets, in If fairly and a structured look consider share midsized we at to and Southeast right, billion a those, substantial the how we’re large and them to

that this Gary to mean and he on the do end do on have even we didn’t potential could because front and I maintain we a discipline. are faster of that, will I We the underwriting deal able credit still stuff. have we our of to comment further is great if that let grow standards.

want would if to comment, I be you don’t So, that great. – Gary,

Gary Guerrieri

has diversification a think, very that COVID the Yes. Thanks, Vince. And question, we of good Russell is opportunities markets, absolutely The pace. are continued impact I at critical. mid-single from to in standpoint we us, range. guidance of your the seeing a mean

growth from As has last that you can range. of couple quarters, see the been strong X% plus in

kind move that behind put that’s there are and that’s expect said, availability And That inflationary everyone to us. of issues well So, issues costs. as think are be labor these we pressures, all you that as knows we be. as that, will where to and forward some of we I issues real, and where see like supply chain

to we of and through. confident continue is have worked ability grow to our need in we the to headwinds economy quarters. So, couple produce feel of to But be the there in a last been we the lot very loan that are good what book about able in

Russell Gunther

you, tangential Thank of guys. Yes. one then kind Understood on the follow-up. And growth trajectory. just

M&A the to you So, the that, have recent pretty successful LPO strategy. been announcement prior with

you And think the balance to forward, versus to in? particular it? balance market model you do how about the want And M&A? that to LPO do going any want or or you you best into how way As about up what’s scale move go

Vince Delie

Yes.

focused we say said, to historically, provide as I out have shareholders. here, be what will I is grow context, of really organic company to sure try the making to on growth sometimes Our focus, I but are taken to real is benefits the on positioned

opportunity M&A an going when sure, to Howard, at So, are it. up look like we comes

an We the do are against to can. if And opportunities in to for most way sense strategic opportunity, type going we think to other of will measure us pursue it we capital. it makes it invest shareholder-friendly we that

on to returns So, are capital us. important

excess that – we capital. of have We repeatedly, we don’t have have historically said tons

grow high equity. share tangible to book value on been has maintain strategy and returns per tangible common Our

strategy people we that. digital extraordinarily us we of an company us to based a high as would the platform the And investments considerable digital organization. without alone. a the technology So, upon any focus gives really upside were and I think revenue, potential our continue amount valuing in be on If

say, I and do how deploy at So, capital. we that look

end going investments we or so into And revenue about we have clients can fits up to focus technology footprint, that’s that do. cautious to customer be comes of be our to that smaller the drive helps base. something that company. in If the the gain us about, very our M&A what it are We within would on pick efficiency use

Russell Gunther

Well, Great. my guys. that’s taking Thanks questions. me for for it

Vince Delie

Yes. Thanks Russell.

Operator

And you. [indiscernible] question the Research Thank Seaport with from next is Partners.

Unidentified Analyst

gentlemen. Yes. here. in got as terms loan or that the Are opportunities Vince, more have you others? in that Good differential terms stand across of and geographies have look out I been of questions maybe morning pricing any various you Thanks. seeing difference than But markets answered.

Vince Delie

And that. people everybody board. my my have know It’s I old career. the extraordinarily says tell that competitive I heard across I in

don’t tell me please that. So,

have just You win, to right.

have structure and you the we deliver they deal accommodate gets are so them. the the to and products all what right time, need appropriately the So, borrower at secure best

it’s extraordinarily So, an competitive environment.

competitors, growth at is pricing is where less lower example, with I which And Bank, KeyBank, not spots for Chase, but materially better, have Huntington, PNC. U.S. market, everybody should the look think there little you it’s different. theoretically Cleveland, competition, a are it’s if huge a loaded says

market that which is competitive loaded So, as is competitors. Charlotte, as large with

to have execute we So, better.

on stay customers. to have still focused people a business. We is This

is to people in to So, we basically and our growth. that they – drive marketplace, people sure have our make aware right are brand of markets have brand the in aware those the

If buildings Greensboro, you we look perspective, opportunities to went at our strategy Raleigh, name in visibility Charlotte. in from a negotiated

brand building Charlotte or into locations slightly all merged multiple promote a had We right, because a in bank And we a is it’s it, We and in big name our maybe and markets did office consolidated our XX-story then building. have number actually, us to for them way moved cost-effective very We and one we with bought of push, merged even that we bought a into better. expensive a not because that together. operations. that banks the smaller building

of elevated We our profile retail good from markets. we and novo cities. out basis, channel have the So, in very a a built perspective de delivery banking optimized all commercial we in – these on those a

And So, very long hopefully, question. answered are think we I your runway. positioned. I Well, that well

Unidentified Analyst

Thank Yes. you.

Operator

you. Thank

Stephens, is next Inc. Preston, from Brody Your question

Samuel Varga

Varga is Good Samuel morning. Brody for Preston. This

Vince Delie

Good you? morning. How are

Samuel Varga

to side. wanted hold I there I to was on that of borrowings, on swapped currently the of Q, using some My last billion FHLB according which Howard to first question to around and the understand was planning the down this sheet. liquidity year. the supposed the mature are about – on that was But you balance is borrowings ask some $X.X pay

little wanted bit And the the just about new ask so what to dynamic ones? replacing old borrowings a is around I the re-pricing

Vince Calabrese

in $XXX $XXX I months. another November. in and XX borrowings, Yes, is February then can we and million more the basis XXX. million It’s $XXX next you There January four at loan have tell and to million points in the mature at whole

those kind the the then balance part first will we there, XXX. that at of mature, left we And once merger have two So, sheet. million our quarter, $XXX look of will at with whole evaluate really as and piece

after will we in be what next left that’s four matures months. that the $XXX So, million

Samuel Varga

And moving different moving then Understood. pieces provided you Thank you. color all the the over thank there. for – just fee the income on you to

the swap income, higher to So, bit rate, there a I ask there or it’s The run a to fee that reset a wanted onetime quarter elevated this a is And – and if little back here. offset going is for of down? so, is expense corresponding of clarification on more is any nature side step that? of to for in just that for kind

Vince Calabrese

say would for record I mean it’s definitely a quarter – if So, us. look you I

that had If you a a of north three quarters, look and over last we had had XX $XX through have seven another quarter it. quarters, the it and has million handle

lumpy. I forecast number then because market in its million new we has capital capital it has running which first far second be invested capabilities Vince’s the the lumpy mean the will in of already for the pretty that baked a strong quarter doesn’t $X.X and little in we a that I business. point, have that side fourth XX.X it’s derivative supplement businesses international syndication go forward. of it, markets we year existence, added where mean year-to-date in debt so into I have, our still I have all north will it the So, we think think as guidance but But of with to But quarter. of and were

Samuel Varga

to Thank left much to ask how tell if you. quick are what be of me PPPs – Got wanted a you recognized? could just last it. then one, I And the

Vince Calabrese

worth Yes, fees million there left then have income remaining. interest million, on you $XX of is the $XX and

come million of income million fees then that we and in about quarter. earned $XX to it’s million interest un-accreted left, on is the million $XXX of Now to $X over $X.X

Samuel Varga

Understood. my very taking Thanks questions. for much

Operator

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

Brian Martin

morning. Good guys. Hey

Vince Delie

Brian. morning Good

Brian Martin

Just a couple things me. of for quick

quarter. gets got in back million you for if it. chunk minute. Just in most next the mean, on That a some to gets $XX gave that gets like of of year. that a It the left just PPP resolved – of – good you I seems guidance half fourth first

think fair to about first quarter, PPP. are kind that through we that? maybe how So, Is of

Vince Calabrese

is by Yes. it Definitely, middle totally the around, envision of clients I There changes. so. the year, gone. Brian, think being would Well, The it, pace right. of I moves it

and thinking to… are about filings tax return We when want they

Vince Delie

There were different tranches, too.

the So, billion consideration. came last $X last that The take you on have tranche... recently, more to into

Vince Calabrese

There is XXX of the XXX from that’s round two.

Gary Guerrieri

Yes.

the would of I year. next over that I two So, in to say would quarters first come expect

Brian Martin

Okay, it. got

core the margin, the Okay. of next of you with takes the just puts on quarters the just in Alright. and And growth, you a it then the accretion? and core maybe about tailwind couple liquidity of of loan the little just near-term kind excess Vince, kind how the on talk can bit maybe kind just about like mentioned and the takes sounds here guess, PPP, but – here? of margin I a puts

Vince Delie

the there comments on just Yes, balance going I I dollars, too net at excess different you margins the But moving comment with a cash and directions look everything. parts – will income on make here. sheet Brian, in many for interest just will dollars, if few is the right,

down purchase and income for about up the went related $X.X interest million. million accounting of was that up net quarter PPP was PPP million. $X.X So, $X million. to $X.X was

about million just obviously third spot $X to and the loan to contributes we kind second quarter million to growth that talked growth. million – related quarter was in had core that. you of $X So, The that loan $X.X solid

have bring today average deposits. during quarter. We cost of interest-bearing as the quarter brought down the basis We points XX. our here that The we was XX, for and to another continued X sit spot down the is

kind the mature. X the CDs already month of points roll a down. in is the as up there basis cost. So, then interest-bearing continue benefit on to deposit about It’s they basis And consumer CDs points another of X

obviously, right. and a cash, level you put pieces perspective, of So, excess the those of if margin in there kind then all is from significant

margin for the that the quarter. As points that have see reduced by on you can basis slide added we XX

we interest as the affects points We sure, XX that, deploy affects percentage, mean in income. also and I obviously to dollars that. So, the basis it on net that in start for were

put net to added every that work we income. the to interest loans, So, obviously, is for dollar

all kind digits our the PPP So, versus contribution that up of third excluding quarter. fourth baked is said what’s in being being into the quarter of low-single kind

Brian Martin

it. Got

last what quarter said sounded are lower and maybe similar when you growth quarter, And quite get of you Okay. the the did of That’s year-over-year loan I were guys the it strength on this of than given the at Just or right I kind today the – you – – the but start were at like the with or get just up helpful. misunderstood pipelines side, it you didn’t rebuilding levels? loan how – change? is of pipelines quarter linked that kind now type the going pipelines they just

Vince Delie

It stronger. varies. The is consumer pipeline

production XX% in commitments as So, will a On was it’s unfunded there Gary period had fund up, year-over-year. because have. will the is billion that, The $X.X quarter that’s pipeline indicated, be up we up that it that down is And huge. as we up we huge I time substantially. linked a over within basis, commercial said, production,

larger capitalize we as balance are to quarter, So, last I able into they on have that’s hopefully, pipeline. the strong. each the and commercial very out, we how some other And Commercial look we at it. would the consumer opportunities in of move rebuild

Vince Calabrese

the will unfunded to that Plus loans up. the you we start fund of have tailwind

growth. also that benefits the So, loan

Vince Delie

into And as well. that year over will carry next

So, one quarter. not just that’s

Brian Martin

Right.

Okay. Perfect.

the maybe just mean – on I one Yes. Okay. for Gary.

think credits said I classified, you the down, were rated the on Just Gary.

criticized Just what can And talk given classified maybe how strong quarter? think prospectively, then you just appears how with happened credit reserve, about comment to or on just the should the we about be? in

Gary Guerrieri

movement last about that million categories, compared quarter, of criticized across the $XXX Brian. at you reduction And as the continued to when of reduction strong about look XX% quarter classified. similarly Yes, positive QX, this in was

refinancing to continuing to assets them. off the books able normal course in be the of other So, move banks classified just

opportunity take seen with the is out to of So, underwriting that’s being there. special that team assets our advantage continuing

a So, take to advantage that continue positive will of we move, that. is and

will those reserve, real, those the your of of issues, And mentioned subject around the supply expect I the mentioned, through see you labor ‘XX forward into normalizing late question terms economy continued headwinds issues. into and In in I economy potentially as the ‘XX. to those I staying moving costs. that some the in before, inflation, and strong would slight are chain as reserve and you reductions get

that holds will how economy will the we on basis we we manage accordingly. see so a forward. that out, play monitor to Naturally, there and as continue So, growth will go and to as manage well, loan comes something regular continue into we

Brian Martin

maybe Okay. sneak one if one Perfect. just Then in. can last I

the fee income. on Just

competitors looking about at or service this I guess what something guess line I this been think topic on industry the saw in just charge charges we the are that going point, But the continues where doing to with line as it’s think a at have forward? this growth I – the something quarter. guys I that is are, grow you service item,

Vince Delie

on of certification service down, Well, it it a the reporting second out where I it’s to overdraft. line within item. our can’t expect We And rolled just Overdrafts, which product clients product, received what would down. in depends trend best performance. terms sales category

us. So, I category pressure to changes expect in the I just – make continued industry, for not for that expect and

an not focus. of area that’s So,

to service ways to We categories for the within the other are customers provide, area. and of call revenue to our them, streams trying build we charge high-value to look fees

area continue are we to grow. management area, that that it’s we I actually card products done from by grown rebounded consistently category. treasury started where but as So, out. expect And There Debit been contributors muted well, other pandemic. have one that mentioned, has rolling is double of to to really nicely in number the a that digit other pretty

you to category. seeing So, that are interchange contribution

and cards driving clients. We fees the continue to category. for procurement cards interchange within That’s rollout commercial our

in of area. that’s the that that like that category – strategy, looking our how markets upon forward growth going So, would the based are strategy. for view diversification modest we within we it capital And execution is diversification

Brian Martin

Perfect.

Okay, Thanks appreciate for Thanks guys. question I helpful. guys. that’s the it.

Vince Calabrese

Brian. Thanks

Vince Delie

I out the Well, have still don’t close call. line? know operator Okay. questions. the any Is Hello. other just we on am if I going the to

issues. I we technical having think some are

in for if the please we try thank respond us, does appropriately. But have will and everyone, somebody question, call. participating So, a to call you,

portfolio a for am I lot exciting about of quarter. on our great us has we very and things team done. at sit F.N.B. the is had and and very There of our quality we think that positioning thrilled work a the here the going And I where

their contributions F.N.B., everyone. you I invest care, shareholders here would of everybody for like So, in to and thank at continuing Thank you. to Take thank our for all our to company.

F.N.B. (FNB) 19 Oct 212021 Q3 Earnings call transcript