FNB - Earnings call transcript Q4 2021

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Operator

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

Lisa Constantine

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

Vince Delie

Quarter Fourth Call. Earnings to our Thank you. Welcome

our Chief the earnings Company highest bringing FNB's the are Calabrese, $X.XX, of to share Officer, Officer. Vince Gary our Credit XXXX. today per since $X.XX; me Guerrieri, quarter Financial earnings a Joining year in share the earnings Chief fourth full our was restructuring per and

fourth growth, and well First physician, program. the launch dentists, veterinarian. the to as as robust highlighted is and eStore This and of to by dedicated was needs the solid Physicians quarter In mobile offering commercial enhanced service full EPS personal of rollout the of number, digital our the the addition loan

Spot of significant third growth. XX% growth or PPP, the provide earnings. of with accretion growth of the accomplishment our loan impacts in $XXX each Strong these through loan walk to PPP interest quarter growth, [Indiscernible] XXXX. starting accounting and the sequential loan purchase net from XXXX momentum income, excluding Let's million annualized annualized supported increased excluding XX%

our of demonstrating our beginning achieving In mobile X. loans. credit banking into ability November, can our new X. lines with FMV series home X. successfully services our digitally. customers increase suite and upgraded loan enhancements, growth to routine and where X. achieved acquisition closes of or approximately strong X January, expanding of to purchase our diversification of creates once to experience, across billion equity our strategy. we to geographic pro a a Schedule X. XX.X% forma equity PPP initial loan FNB addition drove bank, given of in and Howard to loan home XXXX the This was last mortgage shopping digital installment including $X.X the and small loan credit, of year-over-year loan from quarters X. time products guidance fully of on which full-year balance. growth This billion, consecutive led X. adding $XX growth app annual of days. Bank X% of year-end benefit quarterly we've production due Commercial virtually. $XX X. FNB cards, part At December strong our growth sheet XX, the excluding of organic the couple as loans a bankers our build balance assets footprint, business billion that with conduct a e-Store integrated Bank total loans products, innovative customers transactions, mobile tool platform applications, of also ' features online the

by our recognized in Global app indicates Bank recently of that Our call S&P commensurate industry. with analysis had our banking the the mobile Intelligence, mobile apps their Direct, offering America. which and mobile any of JPMorgan most And Market and is was X more competitive FNB comprehensive than peers, of features

strategy for In award recognized banking addition, prestigious our mobile we best experience. also in were received class and clicks-to-bricks, digital our for a national

stars. and X.X store integrating This mobile most payment our In customers, streamline rating was the of likely access as addition as received upgrade enhanced to use, app openings well industry-leading incorporate app by and eStore, customers modern capability, to and was upgraded account new to are direct navigation, such look, mobile our tool, chat. by evidenced an a shopping features

healthcare in year We better to improve into because out and digital commercial First and we've of products management Program unique to manner. on e-Store. financial personnel deposit tremendous. and increase X. products, new through wealth of platform digitally the This in continue enhanced our footprint, efficient physicians, meeting a last and suite and a are opportunity medical outcomes is fully customer in industry each and Few for Physicians grown physician holistic We've our the consumer scalable dedicated the our With XXX,XXX loans, healthcare Veterinarians created Physician veterinarians invested X. weeks s, and other version Dentists, XX accessible and our share loans members services and debt of X. professionals, market of customers products. rolled services we XX% X. months additional in dentists our products $X to our over student to includes over digital ago, and of integrate loans, serve our services. acquisition billion needs

healthcare there and our is new Given opportunity program significant customers the acquire within the deepen industry. current to digital relationships investment the existing our momentum with a in combined capabilities, with

acquisition. Lastly, touch I on Howard to wanted the Bank

XXnd the in days our on integration February with before the final are close January We Xth. system's on

We're more employees with than expect transition retaining Howard's very closely are worked have expected. smooth. We employees impressed Howard and with the talented to and frontline be originally team

we to on join excited to track in F.N.B. dynamic progressing acquisition expense the July out them achieve overall In the in market. fact, for saves well, been our And has across announcement. strong. The retention our footprint this laid are as we're is

acquisition, one-time Asset product to non-interest than originally call are Washington, than and Gary to day clients Gary? overall Baltimore growth will come more in to costs the that, our Both quality suite income in two, additional including over the similar and we new planned. comment expected introduce our past will the on better turn credit to And drive to With originally DC. our has expanded improved credit quality. mark, I we expected. now to

Gary Guerrieri

in of strength. And out entered the year everyone. portfolios position as ended with across positive Thank morning, another a closed you, of Vince. performance good year, and all XXXX our we We continued successful

we quality our declined, delinquency credits. further level credit in saw quarter, and the improvement rated During NPLs of as as did

levels. new historic Additionally, our full-year fourth net charge-offs, that both quarter and reached low

solid delinquency linked-quarter down balances XXXX, million environment. year GAAP XX% an Let's our basis to XXXX. totaled as consistent charge-offs our $X.X December review non-accrual X.X%, update On of followed from basis. macroeconomic time The remains highlights the risk was a stood took XX portfolio and a improvement for that representing at a a as a level remarks stand quality improvement a outlook points some levels position million X.XX% impacted ahead improvement point NPLs decreasing low XX are position two position reserve Net extra $X.X the Howard annualized, the stand the at PPP points, low nearly basis to level. for net late off continued full-year the Bank the December now six reduction an a closing following the our period and to December XXXX compared improved at economic ended million for proactively brief down X our reflects in our points, improvement. which were credit while non-accruals and PPP the better resulted recognized that to XXXX, $XX of to position at with driving during we the a the XX at reserve reduced solid the OREO in bips charge-offs on during very the in end with the models. $XX on very the basis net credit historically in quarter, quarter taken $XX a points, This basis some for by quarter prior also of challenging acquisition basis, on five X table provision actions a actions portfolio, at to points at million basis of million excluding upcoming bits results. or benefit at in during well year-over-year which with largely representing reduction. directionally loan forecast in the general our factors we This took favorably basis prior XXXX and We

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

like Our you total inclusive now unamortized of acquired updates ending to I'd acquisition. position, reserve share upcoming X.X%. stands Howard the with some around discounts brief at

risk teams credit have portfolio point, of remains Day At anticipated remain we pleased the well performance to our and as and announcement, since the carefully X to expected. is credit our Howard concentrations quality expect be impact profile our Bank tracking we have originally or credit. do diversified of monitoring with this been Our this the will Howard than tracking as standard practice. is better performance loan not impacted Post-close, positioning book, credit which the minimal and

credit another trends, position close are we successful As marked we portfolio very of positive pleased into by our the continued moving out XXXX. with year

proactive which and managing With to proof-point the risks approach us disciplined we review during within of in of we and management and conditions and attentive portfolio, XXXX, markets in vigilant We position the the our our attentive global and and credit entering approach a economy our faced credit ourselves economic broader our emerging XXXX, allowed both remain ongoing risk to take strategically book. operate. uncertain challenges any customers to in the

support and will Officer, XXXX. his this center. the front sound Financial high-quality change, look inflationary to our Vince management our over continues economic of tenant risk as conditions, continue and will to highly including factors This we to of continue macro forward our Chief of foundation manage the through opportunities consistent philosophies to business and for nature ahead to careful environment, with As evolving core objectives Calabrese, virus, remarks. the of I more and in call growth underwriting, we selection book turn credit competitive pressures, our opportunities lending now a

Vince Calabrese

million as a our Gary, at single-digit revenue Operating contribution. exceptional we line and bottom or We losses well full-year income we X revenue, pre quality both excluding at continued past year expenses or Because successful of mid improved $XXX performance expectations a loan year basis. surpassed per with essentially -provision for conditions, economic spot common growth we on pre at Thanks, to the operating strategic the were Through and by was increase of basis. this an $XXX on and stockholders operating -provision expectations is execution strong record to by ended diversified controlled for have million financial revenue our million. delivered our driven full and were We looked net our net $X.XX a PPP, fee XX% X.X% growth, a our billion year-over-year our on $X.X able was the year. income credit PPNR, loan to trends full-year available focus our $X.XX share. net results, provision strategies, produced exceeded

loans our consumer in including quarter has Consumer XX.X% and -pandemic still increased basis, for a commercial per year-over-year a production quarter Fourth annualized from PPP EPS or underlying total on value pre an below lending $XXX loan Slide second financials, $X.X on geographic quarter X. XX.X% is third growth, $XXX the footprint. $X.XX, reflective of was the loans. fourth the end million starting consecutive credit year growth loan XX% loans the quarter. through $X.XX diversified the across XXX Tangible record of X% walk When totaled highlights the share excluding level with Line of increased period a million more of which ago million $X.XX. highest of XX%. operating book to quarter. increase billion Commercial increased to utilization quarter to in Let's production

for small business We record linked-quarter also loans. had growth

low an and Howard Average now cost billion given growth remained a account by PPP with are increase mix $XXX assets growth markets. Reported for utilizing lead billion eight preferences year-over-year Let's acquisition in $XX.X X.X% in the higher balances spot quarter growth on deposits offset to continue balance million XX%. increased loans funding billion, savings our and maintaining securities from ' customers down Average Slide all of $XX average with linked primary balances. checking reduction totaled -quarter with due upcoming average MSA accounts continues cash favorable with X. $XX.X of as cash pre loan balances. X.X% to to earning the The and flat at excess -investment the sheet leases over for

rise, organic We higher the expect to deposit products. expect to growth continue shift Beta as rates to balance growth and and beta products lower

earning higher interest in earning an Turning $XXX.X balances. a and activity, Total was compared these favorable Reported The margin on interest the quarter. in average and assets, X.X% to points remains three point of cash reflecting by XX quarter X basis yields more declined points of loans. reflecting or million, reduced million offset decrease a PPP million stable, XXX mix deposit on XX prior of decreased partially million totaled forgiveness a quarter to lower rate from the Slide assets which interest X. XXX, margin reduction basis But a net the basis total basis $X.X total funding purchase XX interest costs. a points points increase $XXX.X variable cost fourth a net contribution yield accretion, XX.X% on basis factors, of of million, benefit lower income in to for funds, to a offsetting or in balances XXX. the Net was reflecting given margin cash the of the contributions excluding average net decrease $XX.X accounting impact PPP prior PPP, decreased in and increase

let's income income Non-interest at and non-interest expense. Now $XX totaled million. look

in contributions $X.X our continued quarter, debt totaled swap level capital fee-based from the $X.X million; Capital While million from last we businesses. broad this international total activity, achieve income XX.X% to contribution solid and markets loans decreased or indications, record banking. markets,

international charges tripled secondary fourth team $X capabilities the very XXX% Mortgage loans reflecting decreased transaction be to included another indications with banking million becoming $X.X and continue with due higher business XX% quarter, for seasonally lower markets in The revenue or respectively. are in a of income markets impressed activity. capital has We revenue. volumes expansion increasing of pipeline debt $X.X Service SBA non-interest market the our capital customer performance million, our recent plus revenue banking quickly and held-for-sale million in income. sizes average $X.X with XX.X% in increased strong premium operations seasonal and other reduction million to and income us.

to in XXXX credits employee turn and income declined a Reported to lower million benefits, equal XX. linked million XXXX, reduction Now and quarter XX.X% quarter. fourth PPP non-interest expense previously compared very recognition performance-related out by for close ratio guidance well and was XXXX. of and income, levels million due well The a This to record exceeding tax from reflecting XX.X% prior non-interest $X.X commissions positioning quarter driven or third in million. let's Bank mentioned quarter. Efficiency earning to on the or quarter, consecutive taxes X.X% decreased to $X was XXXX, decrease XX.X% $X.X was us primarily managed this shares or $X.X the state and Overall, Page quarter and related last $XXX.X million. the production incentives salaries X.X% to higher franchise strong

growth expect momentum loan We continue. the in to XXXX

we runoff off of to which in Deposits to stimulus We deposits digits teens have expect included loans digits program spot from basis. and the run of government expect year-over-year to Bank benefited with single double underlying projected inclusive Howard. the assumptions, on the XXXX. low grow to in organic are Howard including digits increase basis, this single a With other spot on benefit mid-to-high that growth acquisition the mid-to-high in year a PPP will our begin low in

the all assumptions. includes in income at Howard Bank look statement, now which Let's

between billion between the end to the with year $XXX We quarter million expect first net income million $X.XXX and $XXX million. $XXX to interest

assumes in Our base and guidance with June being currently the two hikes, other rate first the September. in

in the [Indiscernible] range. our the in is to analysis, million between futures. Although, to non-interest $XXX $XXX recent first we the Full-year dollar with income interest and quarter volatility XXs $XX have expected million given high be the rate

for first normal guided first dependent million expense the the Positive We throughout be is CSO better include for not Bank quality to basis growth on net $XX low loan year, on modeled. to Howard an the than to expenses in $XXX do of to originally $XX to $XXX given credit between year. million the XXXX continue quarter Howard. is This expected to to onetime does quarter Howard millions the not include with $XXX day experienced provision million. for throughout and expect the addition the to non-interest with the $XXX provision were $XX the These and in be and operating acquisition seasonality expected full associated million

effective be the call I for XX.X% to XX.X% that year. the With between back will Lastly, full to Vince. rate tax should the turn

Vince Delie

Thanks an leading XXXX. level Vince. billion achieved We drive year-over-year celebrate. comprises a which PPP like I'd year-over-year total with XXXX been FNB significant year to XX% $XX to now Company's or achievements. assets fee revenue. the with highest EPS excluding for all-time million earnings to to at record since many to $XXX restructuring summarize by over $X.X of several accomplishments FNB Generated growth revenue in the of at billion. has XX% great record income high grew strong total loans

in credit XXXX cost through accomplishing customers, strong our of industry, our putting Enhanced Our PPP the savings billion position the our $X.X total serve of Company quality more the rate digital run at supporting our capital Banks $XX and pandemic the our savings team position facilitation than a technologies loans. of our execute top operating. us to to the better during communities X-year achieved and cost liquidity $XX goal in putting million and million.

create to received financial tangible our X% a outstanding and year-over-year operating we also on an our continued performance, to with a communities, rating. to equity. CRA for Through our book value increase and exceptional and efforts were tangible loans shareholders able We common return XX% value to investments low-to-moderate-income provide

approximately in the and dividends $XXX In addition, share through repurchase capital Company program. our returned million

All was of shareholder a difficult this our dedication driving FNB every employees, serving year clients continuously environment would past day. of delivering value performance. though not be focus who possible their to employees exceptional without and on the navigate our This

As superior continued balance in driving capital are operator asset look in turn asset momentum, differentiated the I questions. to solid our given over will sheet, and improving quality, XXXX, loan well-positioned XXXX, I flexibility. alongside growth performance forward we call our that, the to and sensitive technology, for to look employees we working return. With investments

Operator

Very this with [Operator Instructions]. question-and-answer begin good. Thank assemble pause will momentarily the this you. At will question session. Young to Truist Securities. we we comes Michael from time, time, the the roster. first And At

Michael Young

Good morning.

Vince Delie

Michael. morning, Good

Vince Calabrese

Good morning, Michael.

Michael Young

to wanted out grab in try forward? spend operations will strategically with you digital more you market of shift app of and roll strategic and marketing financially think all And both we to or Vince start that that, to I Actually, share a with retail banking the moving marketplace, the there more about both just for maybe online strategically? for dollars see and question what Are efficient you going bank? more do should the how

Vince Delie

Well, I of -- an think adds it really adds elements it both.

The customer deep share where scale of or have we penetration. think significantly it we piece stand really efficiently markets as think the that top operate the may able facing it because not that's well. external I -- have helps us in part digital I within the work market because it streams to Company, important of more is potential as we're up

we So various eStore, then last started digital were products. phased-in we added loan relaunched and or and I year products. think We then -- we and channels it launched having since loan reformatted the it basically our

the in rolled August January. and pretty rolled itself So rolled applications. and in was mortgages consumer well done out We've product September, came card mortgage credit online out and May. But in were with out loans

applications During media those We've that's no but that XXXX We've with able or products. up. to were haven't advertising. little done going content period started. online even digital we And commercials loan almost originate gear to for very we done

the in it time, the one that an to or -- was products long six have this loan in year, the offer. been is interface, it. So We've of time, deposit of much to We depository development doing improve pretty our this a I've next create suite fill we We long way, place. we of can out the omni-channel of simultaneously. in for started build the should applications to space application, the where the the on we've years. deposits for work continuously phase and Because plan year. it of that been a had coming That's the five about last various talking took we XX,XXX products customers go application by standing meantime, end a And working some been for by for couple up a products. In full time. to

create all grabbing we're but that doing products data, a review XX,XXX happened you -- So it. engage XX,XXX we center. if at and e-Store We that If website the in weren't channel and identify we XX%, across retail you and to mobile that What they or on have started restate full services. of on and with then hits that. who call push is through Not And actually them with the for customer look a can and at delivery where the platform, interactions necessarily the they've to people -- have the them themselves, the on follow December, we're look and we up what's had what jumped had the can to but lead of that should optimize those they started back I December, our going we identified led our content to product once bank month e-Store. we particular applications interactions with commercial or process it, solution applications,

the I loans. that's it's off. add And think take to really it's ability to going to but kind started grow our So strategy, of to

it I has think added.

channel. of us I year the through that this helped plus particularly coming categories, certain with XX% think mortgage applications, in in year it's the

the us eke digital So I out work not streams will the side, efficiency, within eliminating it opportunity it then And on to have help these excited or work what out think of lot flip lot scale. we anyway, spent and process the bring on money provide customers great processes. a as onboard we're promoting the will streamline of a to Company, it. advertised we And manual And that's a with about. us

We will this year.

plan it's that, the you and got expense Vince. guidance do included to a in from have We

Vince Calabrese

Another element really to is their insurance, businesses. too digital that businesses the the non-banking the the for wealth, running banking private there's to there bank we've operations so opportunities across made leverage through investments

Michael Young

Thank you Okay. just and for XXXX into the third, guidance the we appreciate rate you're But year. financial X a Maybe if addition A the dollars the you've have would Vince think at as or tying hike financial have incremental looked get it for were into rate the got what to sensitivity guide. baked either - in an for a we be basis to back as you built on follow-up what NIM you on estimate a Calabrese, to hikes, about in?

Vince Calabrese

around options. With so analysis did. we Yeah, different quickly, Yes. moving some things done we've sensitivity

we So quantify rate Basically, for a in if the that. we about March. did that would go we by hike X% have XXXX up get ranges

the So is a already in to XXX the X% adding either the lift it's September to that range, X to XXXX. and guidance have we March June

Michael Young

it helpful. if one Okay, I last And great. sneak in. Really could one

anything been Whether benefit of be done? shrinking it. closing so net and expect that. would that are as or be guys that kind have Are pro you or already a model sheet balance like any we that you to things close there forma increasing Howard, on incorporating to that that should we actions it Just take

Vince Delie

had the the wholesale like think over transactions. we've then pay on course and year. a I nothing of the been we $XXX loan first overall, -- here main we million exit wean and and an from the quality there. deposits we off, in there's $XXX the with their We've else some as today, the side so would would down would credit main happy deposits million about item borrowings borrowings portfolio past or very step And Michael, sit of wholesale of be that's about then that that

sit two items here So really it's just we those as today.

Michael Young

Okay, you. perfect. Thank

Operator

you. Thank

Vince Delie

That's just guide. that's should I mentioned. in in And our Michael, I included included actions comment our -- that too. Those

Michael Young

thanks. Okay,

Operator

Thank question you. the next And Schiraldi Piper with from comes Sandler. Frank

Frank Schiraldi

it follow-up there, you guys I just as could you on morning. guess deposit to provide give question. any quantify if expect model out very of or straight-line up can change the there. after do -- rate in would you first in I then a the maybe don't take deposits do you you terms start hike Good wanted how say few, minimal color use, on but I and approach? that But guys it, the pick I believe actually pricing wondered with you bit you

Vince Calabrese

it's of say. dynamic I a So filing would process, more

'XX the of the XX%. year, then deposit historical the would over XX% to rates, characterize a more the would end would guess expectation maybe And I say, in moves our so get XX% as time, of be the Fed level. or couple it the the Fed way move and today then see think I in, more we sit by deposit try captured here towards that and to be a XX% for and in of move start to some on rates. But impact

Frank Schiraldi

Vince $XX terms wondering guidance this over years, if And was done I the then similar for then cost on And know Apologies just of expenses that's model missed the just into there in you've if three if what last and next of plays million that. [Indiscernible] you the wondering spoke speak given. something year, I for significant you've to you inflation how may just And can I year did, the if have saves in it.

Vince Delie

line we for see know, came third income as what in I XXX was consistent QX, there. guided The a can you non-cash of expectations. [Indiscernible] would comments you basically is with the unchanged on At the from say item expenses couple to. our quarter. Every

Frank, non-interest inflation guidance kind into have so into But second part that second Then baked dollars our move a It's in from forward of expense that the the was say part we standpoint mid-single we the level for what again? a do have. XXXX, millions the year. component is As into we baked digits, I would the

Frank Schiraldi

million XX the saves Cost [Indiscernible]

Vince Calabrese

year you years. over cost number, lot three save we with a of X commented, had, years. got as those We $XX million the branches a The for consolidation

and that Company, operating moves quarter. in leverage move the rate And each gives positive come we we've expect year, lift. as -- I this you and underlying operating an operating that quarter, leverage year. in guidance. as $XX into of standpoint, you we is PPP look bit for year we at know, oparations million first so to more the we there's leverage we for guided leverage the as also comment through, build. buoy obviously cost too. And But is that half little rolling in of that the positive quarter into want the each that's in, and left, should building to at of of I the that here, the even just a operating look if too a have a ex-PPP -- when that So from fourth saves. baked tail and in as But importantly, And total XXXX, positive say the on throughout have And the the there's to have

Frank Schiraldi

Great. Thank you.

Vince Calabrese

Thanks, Frank.

Operator

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

Timur Braziler

filling in morning. good Braziler is How you? are This for Hi, Timur Jared.

Vince Delie

you? are How Good.

Timur Braziler

Good.

So very impressive. loan growth again,

consecutive Third quarter.

pleased conservative else out of could do with guess the that down level then forward And mid-to-high the I guidance, strong time rate you look may we the given are or that continues was your single-digits, guys growth given momentum bring from 'XX spoke, the if occurring current very at you something prove that as December first that was loan in 'XX see some? going. guess pulled last December, think I of you production, any quarter? strong I how the

Vince Delie

we think -- consistent. gave guide fairly I we the is that

fairly grown historically. our we've If look back you to trajectory, where growth it's historically consistent at

we the produce. potential to So single-digit us marketplace, in think our in the still assessment With data -- upper single-digit what skewing we've for would can't. know. mid on of don't what range pipeline gone the obviously, the we with is field economically There stimulus,still, I been potential we rely but is everything economy its the to in on historically, can the feeling input of effects economic say determine upper the towards from and range. to we outperform, stimulus. We that's

what we the comment across the to on pipeline in have the pretty the particularly say are of and pipelines region. South We details good. our but Mid-Atlantic East rely really board, the it's I know today now don't in and good on We would

pretty to potentially. we consumer some us. in The really helped sure, the adoption some and been off pick it's growth small in that see loan So doing categories picks growth starts like in have category well we and off really investment take up if up, That could for certain technology, down has us. business there expansion significant paid

the do you of it's about So quarter, year And the that But that year, the that the is you year, -- we I that's softer. could I Company. don't for quarter? know growth the I asked historical quarters moving then be you guide to were half is guide. that in meant we -- think quarter next where or think three also this mean second if first think And our this into of in additive. had rooted strong I apply first reasonable

Timur Braziler

fourth production, the meant first if 'XX? forward any Yeah. pulled the of was I quarter that quarter of from

Vince Delie

when the they quarter. We There compensation don't Obviously, plans so get deal? going factors. - time want to tell We they having incentive transactions A commercial close people many on Usually, are and are what each the geared close our No. a can't I paid been time. bankers paid, -- why forecast? these towards get close. When Vince banker, to control all Calabrese can't they're the

the between And way But of at think all gets are you delayed, transaction They no back kinds things structured. the there of get pushed they your the there a control decided day, to the [Indiscernible] the spend comp, so that. defer wins banker. stand tug we and war -- I there's end the plans don't year. don't happen. -- to that there's right? in can reason corporate the goes You in are client client the of people really to capex our got March, incentive and into to anybody, So next for

suspect people of So real the people. not and our I by and normal of that or impacted our would flow is production behaviors it's

Timur Braziler

maybe you good for for color. then a Gary. And that. Okay. question Thank That's

I throughout to expectations reversed plays that the the of the maybe outlook takes puts and well the growth, incremental performance, provision in through better when releases, was provision conservative at guess, year? and through out 'XX? the Howard asset comments talk some that maybe providing as on prove just as Day further reserve and of then Looking announced how for Howard as relative to 'XX be quality, X for your deal that Could allowances today.

Gary Guerrieri

is we and growth important of performance I the of Yeah. the we're are continuance going pieces the provision to that put there -- solid -- around the up. across very track that drive the that continue important loan growth nicely. expect book able that And business really that important do manage, to is the to also that around we loan guide. guess Timur, to expense But factor other the

with could we're single-digit we Referencing how upon be to is from provision on mark pleased level, the the earlier. are credit And very was that going and strong X portfolio. it better that expected mentioned depending day as that growth push that move mid as book So performance it Howard, day than forward. the high to X of up

moving those way our is It's good So all told, work by in a going be as to year. direction the factors there. through everything driven we

Timur Braziler

one Thank you. And then more, I if could.

and securities margin spring-loaded and Vince, out the the of balance purchased securities what expect think occurred at that the of like is book the in just And bit repositioning cash some dynamic flow through the I sheet, going in margin. on a and it first into quarter being referenced looking you into was the 'XX. quarter. backend through looks talk the how Just the of quarter of to that Maybe that you the

Vince Calabrese

the average a On basis, references the X.X slide actually spot a the Yeah, to quarter. Sure. X.X down came it during cash from billion. building balance fourth X.X

that into think that and guidance, as about the at our is So year baked for projecting. now X comes we're we we what And 'XX the ended of year number end the excess billion what's cash. down about half between

double investment over pre About -investing of million As portfolio, the Howard little being anticipation acquisition. portfolio good a of far the into flows. that in A the cash as during quarter, portfolio. invested fourth portion we $XXX the the

million. a So the on net basis, grew portfolio $XXX

quarter, we're quarter the fourth In was $XXX third for million. around the reference, investing it $XXX million. During

So in We third put work a $XXX points quarter XX at investing so basis to in in forward million higher year the so January, quarter. good we've invested to than that XXX. this run where far January, far we first we've in the were

So fourth points where that's XX we the And to too, X higher another duration basis than X.X. a in were quarter. low pretty

lot with So to there's at a to as moving $X end we least of the year. at to We've Howard the $X.X the securities at with this looked from of look the parts coming of billion about to the end billion $X.X billion quarter of billion in. end quarter, of at $X.X end March

Timur Braziler

color. Great. you. appreciate and you questions Okay. Thank Thank I for the the nice quarter.

Vince Calabrese

you. Thank Okay.

Operator

And you. next Daniel Raymond James. the from Thank question with comes Tamayo

Daniel Tamayo

everyone. morning, Good

Vince Calabrese

Hi, Dan.

Daniel Tamayo

guide. So the close loop to just on NII the hopefully here

impact excess you've the cash, about talked about the of of repricing. and talked impact You've deposit

through hikes position to sheet timing the hikes? additional in that, and work terms our as terms of for balance next we year. hike the Just of or How's of was like curious the year anything any into the future relative floors incremental the way in benefit first on

Vince Calabrese

have I low. that are would say the floors pretty really we

portfolio. million to you'd of before basis time on $XXX XXX small order current so, them million, XX [Indiscernible] two moves a for We portion that points. benefit or of than Basically, LIBOR billion loans the fed have have term short overall of move. $XX.X that That's have the at a $XXX floors are indexed

far month portfolio, $X.X prime. then we another and Just billion in of to $X.X year to total as loans as the one the end that LIBOR, have remind you billion the total tied at tied to

the the tied entities. levels, four is between home we short down. to it's benefit XX% on of two, the of those portfolio the didn't it have term that way So In the

of that there have why not to balance work that part there's through. back large So of a

Daniel Tamayo

the by that what [Indiscernible] banking you income on about non-interest And how impact great. and then obviously think base Okay, end of mortgage will rest from to wondering a cycle of coming an environment? on could the but those non-interest items to the have side, rising be of you, line income any the rate impacted

Vince Calabrese

say in planning as came the last would an couple the is cycles fee-based made well paid investments we've businesses, in particularly past, of invest I environment when these talked over us, we've in the strategic down. to rates about for

mean, by I business activity driven trust XX% sure and you year-over-year, just wealth If up look commission. charges at different and customer management securities the components,

growth. business nicely. in This million So quarter, Cap look growing third record down the to $X.X for a have to of we're while nice insurance been we that continue million very number. is $XX.X solid markets, lights-out has year, a from the

go We and then forward. onboard, too with have, as will with look coming have. services the for growth that do we [Indiscernible] not we part they of the And depth Howard is, that

to for and a services including Wealth. much set banking, the client broader markets, have their of opportunity we offer, there, capital products base So

them interest in become part we forward our very rate we're all the we customers. The into those looking It's baked so described baked all having much to there. So in. working environment, of Company and guidance, with

Vince Delie

perspective, versus practical be cycle. business in But to a sale pick that we down, margins side the better. right? becomes environment, That have Because rate would peak income a fee of on up that is banking in flip the come us. rising starting on From expect SBA offsetting mortgage for gain to

we Vince capital in debt mentioned, Our in it's platform revenue. million year, that this $X past markets that launched already

strong We're other enough part to meant feel so There as are a moving there's were declines there services deployment next acquisition. model some benefit year. So Southeast management our We this It's in That's that -- the that just the economic traditional fee I then starting guidance at next grow from make Mid-Atlantic that'll fee moving nicely now to products and Vince, we'll we're have to is indication income and And region a and And we There's it. the achieve pipeline we're we'll say help offset opportunities that sorry, we Howard that or and that businesses I the and will it. wanted the across business get in we true there. be I but year, some of and hoping designed footprint. sure Cleveland us, and XXXX. bit I markets. occur look that for our as into other are the part pretty cycles. quite particularly, parts of of, holds in already diversified the a diversification. treasury Pittsburgh well that that income, year. opportunities to perspective larger been transactions that And syndications transactions pretty still has a to lot see [Indiscernible] how as of moved to giving in

Vince Calabrese

is would Part level in mortgage I just as that the were what's guidance our into actually in would if am bottom. And -- $X look probably that for is to expect Fannie why we the of and around expectation down I it's purchase, XX%. look purchase But on May the I XXXX, to add for applications, X% see expectations the business is a XX% to at our market mortgage XX% side million side, you XX%. saying the of fourth quarter up from

the having side XX% on with us side. the given and that well, on we bodes mortgage business model that purchase the So run

I expect all we from equal, to go as here that would being build And XXXX. our things that's too. into through number, So baked guidance

Daniel Tamayo

and that, appreciate that's all had. I color. all I Thanks. great That's

Vince Calabrese

you. All Thank right.

Operator

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

Michael Perito

Most ones. answered, X but been X. morning. just asked my of good quick Hey, have questions and

the over the of to few on the platform, Obviously, having slower. has a easy growth. see CRE little benefit the Just loan last diversified quarters it's but been the growth

to I about Sorry at expecting where see high here comments of to year. that to as mid if into look more I based buckets Any on going single-digit or growth to you're But the this. maybe pipeline this back some the look on the year next diversity similar the curious any there's to room thoughts missed of was the think core you some from. you other heading contribute mix half pipeline? come Is do for

Vince Delie

sizable, looking there's borrowers, the been next year are and involved projects so that lot some course with think a of activity up or some some the still the in are so. d discussions close fairly fund we're projects we of been in I I've that at over there that CRE. of that

pipelines. business So strong we unit next I overall at pipelines, our Carolina very a year, more I would contribute looked but that when have little think expect still to the

lending pretty able MSAs and fairly and I Howard terrific across that Charlotte and to region had we have team has for Mid-Atlantic really been you building Washington that with growth And and us. us. in dynamic deposit the acquisition, strategy. I'm pipeline Southeast We then said -- be really it And achieve in positions in for share good we'll optimistic think in market were helps Charlotte. a expansion substantial these I year. before, bank, the I Mid-Atlantic objectives. we'll think to it's the positioning, so this growth pretty Raleigh, number And the the share see attributable a more that our DC able in There's Charleston secure fact the be market the six as to substantial and

in give good hold as year. continue to a economy the upside some and together in economy we're So -- position this the hopefully, us continues

Gary Guerrieri

the And book we what particular to we're Southeast that's important that a especially challenge as of to we a had in a talked CRE projects in footings we've -- multi-family market, do there on the in Michael, was for move lumpy. mentioned. the secondary of in bit a part one side from the past million standpoint that bit Six of X things of a projects as affected going an QX that the as as $XXX Vince being have to continue that business.

some there So with we to see exits. will continue those lumpiness

Michael Perito

for see were regulatory Helpful. lastly, it. some obviously, markets good just headlines then there And me, about deals in closing. Got uncertainty to it's the

So to closing and as shortly Howard expected. good it's see

if as how on And XXXX more appetite you can you provide -- is market or an isn't and if overall. be curious think robust outlook today? view opportunities from Just the an pipeline just there'll perspective updated and M&A if you the where where

Vince Delie

capital said best focused Well, we really of the possible. we're deployment -- as on I've before,

cost a decent digested. position be about kind it it'd there [Indiscernible] the take in too concerned the Howard expense team, moving it So Company everyone's environment an us wage good from pressure. was Yeah, easily ability gave was of big, it to met the market, an wasn't inflation where was and a criteria, out, into really size, perspective,

timing So really of it worked pressure coming really, PPP. out off well, it the of

to timing and we consumers we digital offer good up with our those products. also the So were could so those pick to eStore our the those launch the was balances upgrades of and offerings,

and that maybe think M&A by experience an within OCC, good I days XX of at not it. we We think, opportunity relative application. approved did example looked [Indiscernible] was of we that's I We the were the thought delays of the size an like we we got able rating regulators very some just proud transaction CRA that. and little we were that outstanding more had I'm of plus our outstanding that rating maybe to concluded a concluded that and just comfortable do that exams but our the and

created, we you think is to we that's And the with not excited most Data to to customers and infrastructure underwriting, within Company of been we've And we're efficiency services, the to see great said the keep a out our gathering in what technology, AI can't the think of to those comfort about, us metrics deal helping our really relationship And and digital credits, team, internally, we've built made reserves able more our that is we're Hub and automation there. from telling very investment but information and the terms drive the that, performance. perspective, I customers Having our products deal Company, inside for that help and regulators Data there more everybody with provision we I'd with listen, that approved. that in gain on our an securing has us just going Analytics what's help estimating also monitor the we've why is I portfolios. the get the in And re-underwriting respond. conservative strong. were

which X that's us should with the areas of expansion provide the opportunities very Company. I to country, very, think to our all and years significant moved for the So big given into of come. of exciting did dynamic And me. very positioning We

it in to that fits is shareholders. to those sure, share into on and gains comes be we're So has that going sense at an us as be something It market if can't going markets. harms something made But look it. driving shareholder-friendly. be perspective our along strategy, And M&A to from focus that

Michael Perito

Helpful.

Vince Delie

it. that's anyways, So

So thank you, I appreciate your question.

Michael Perito

you. I appreciate it. Thank

Operator

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

Russell Gunther

guys. morning, good Hey,

Just a think on what could to Curious happen you on growth the follow-up range. some you needs commentary. if additional to color high-end the provide the hit of

improve, Is can portfolio in So from utilization the you to Just single-family will to it as take you what continuing curious the think high that current drivers of at the that be? the Delta clip? mid single-digit. to C&I

Vince Delie

in it'll XX% I've line and of -- think going areas. to have other think growth utilization. a reports grew in companies working expansion very And with those little seen combination all I capital -- of I earnings I Well, and we're execute be from we have other read to help know facilities.

X%. up amount contributed. were de We really. haven't It's minimis a We that

So while means that other is the I opportunities capital that finance things factor, around more you think is working utilization, a there see activity too. to

across So e-Store and cost-effectively we those we great of more onboard do have middle our the great across opportunity footprint roll being to with digitally the efficiently, But the business much hand-in-hand. footprint. have two a opportunities to it the there go out now small market able customers, in obviously,

in we So there's mortgage rolled I There's our there. program that that out consumer. in upside with First There's upside upside mentioned. Physicians

growth. think to we've a lot channels I of yeah, So got that drive

into -- solid pretty our, going our I -- and So year. that think pipeline is the looking

feeling good. pretty we're So

Russell Gunther

$XX just drivers savings That's there? great then. any Is for then rationalization one or expense on the is mentioned, Thank follow-up last me branch you. that from continued the you And a other million.

Vince Calabrese

the all from normal. Just

Vince Delie

the We have We the he's are ones call an that guy expense driver. because the team. expense real CEO,

Chief the he's Expense So Office.

the whole does branch terrific lot looked time spend to within contract operations the and analytics, counts around the that So people that at team also manually our help we a a look at of and app events data of we process a redundant and of a look area every then at an we we statistics and line that we look really job. reports process. network single and under software as have number every to have We've effort have. at of single likes. Adam eliminate utilization And transaction review intelligent somebody and item then automation, and large automate [Indiscernible] We

in reduction. And team that occupancy also So at of all ties we then expense. have that to the a expense looks

FTEs -- people constantly, has Just don't based We review replacement ratio we transaction position single companies. do any and to even constantly require the reviewing We've that. they're Company upon an at given the volumes [Indiscernible] replacement or been to in very to every many add the Company, fortunate analysis run. turnover let something we justify at staff, that every

there, Our no, it's historical mass a seen leave people. solid. exodus. not We've and vacancy norms. trouble people recruiting been rate has not had within any We've pretty been -- We've here but

in whole for we've think all and And Adam, those good keeping and there's I manage line. a very the think that they so job, it. done us I worked blue, Vince terrific blue, So have process team done job a and things we a are do expenses, to around

Russell Gunther

The too, team? Accolade the with helped Best workplace

Vince Delie

workplace process. just in to the and award last in third-party tremendous engagements hired We part when every a the Yeah. for like years. the they're engagement. year there We just survey and We we of of the employees us in the a one the decade. won is base. best charts publication had for feel employee amount -- market We And awards won off the about XXth for a of won number Pittsburgh

all each genuinely of you're Even So that and the And that I good enjoy of and but results get. the rest People impenetrable culture. think That's This a results, our when our culture anyway. are back we you they the in collaborative like [Indiscernible] be think place of play. -- in crazy, work cultural those us the have -- to into working Company leads it's here not that, that some a very comes I winning. hard performance they liked what to is to I strong. sure, think coming other. It come is good things though

Russell Gunther

your color. for I there, you appreciate Thank it. Great thoughts

Vince Delie

Thanks, Russell.

Operator

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

Samuel Varga

Good morning.

Vince Delie

Evening.

Vince Calabrese

Morning.

Samuel Varga

on questions the But floating us give you securities. couple rate I could wanted to percentage ask securities. of a of quick,

Vince Delie

much, get know Again, that next I I don't have if want to if any. to talking have to go I answer get figure. you question. we can while an your if we're

Samuel Varga

[Indiscernible]. Okay.

Vince Delie

any. don't you much have any, Had of

Samuel Varga

that. for on available give you the portion then Okay. book? a of of follow-up the Could the And sale securities duration

Vince Delie

[Indiscernible] [Indiscernible] to Scott, me. that? Find if text you How's want just it.

Samuel Varga

Did I can maybe comes ask number until up. another question, -- you that

Vince Delie

X X% X% -- -- X% [Indiscernible].

Samuel Varga

The duration?

Vince Delie

is Duration X, yes.

On the [Indiscernible] available

Samuel Varga

the Along can you lift hiring, have you. lines just us about? market do sort share you that, of any of outs team whether tell for it's like of Thank or gains, kind anything initiative that

Vince Delie

their team, why out, to places. either lift where The the And hire the in we're from or good bankers other Yeah, people entire few people we've in Southeast, part think, -- from we teams think our larger in last I at our culture from institutions have hired B that's but the a point just hired can replace a here times number over either Southeast. one of of we've We've a from bit positions. they Wells Wells too number from We and I the of at were come months. hired in BB&T of quite able hired Charleston leading do in the JPMorgan different so generally commercial somebody and at a career, XX We other companies banks. A Pittsburgh. of Pittsburgh, in that's people who's bankers

as think I view people product deep. set our

capital you've treasury won from [Indiscernible] plans which -- solid corporate the we've commercial awards set products most management And good upside. and to markets your of debt the fair of treasury incentive got we in products won the management all are across compensation If way a national provide banker, the award.

coming commercial it made. as the you've So here banker, got

together, just, If But it. share, of to there work various and You're market you. I are these I and a people do to have high worked culture, company, we have open for a there's worked, anybody is work listening on places plans shareholders. of to all they wholesale the the for call relative they low entire bank, win where deposit the areas even many win. that designed for work and commercial never want think here, the do markets, large The describe fighting coming incentive their together to please Other best I spirited management I've me. the share. in of They just within can't the are such there's in a out but compensation and clients a have so collaborative, the wants product call I to companies, marketplace our people can here.

all it's had a United any in like issue So way the bringing the great the said, culture in from from I not States largest down. -- we've bank an people and

So institutions. the smaller

Samuel Varga

I And Understood. any overdraft reduction sneak just have of Do moving last you. Thank if in could the sort plans one. you forward?

Vince Delie

year. rolled We out, can the press a it. was actually was find release were We ahead there. you There that product out a last put curve of

in it non-interest campaign it's X/X check-in segment check-in months. consumer student X the pushes It have that's X think that's a a and why because part the have rise we're -- sought-after electronic checking to the in includes seeing the our top put the dropped Company other months product overdraft used not our second fees cannot fees a last digital that. I product we an we most may offerings. up overdraft out -- sold be X total areas. flattening income though over Again, or on our And or leap, the in third of a behind you product any charged our offering guidance have of student it of in in you and are but it that We even within

the changes into of we've guidance. we've within other be bank. are planning there thing structure So But fee elements changing other baked it's and of one will an our impact, consumer already been made that's number the done a and on

Vince Calabrese

the environment that. studying we're And competitive in

Vince Delie

there. leader market a be can't We

have positive We and on to great. happening. step been what's and received it's on product. very it's we back certified and But And reviews were one it's that Bank watch

Vince Calabrese

Also, could clarify the duration. if I

at total so that X.X at pretty portfolio. it's is to earlier XX, XXXX. said just AFS They're AFS the I The X.X. X.X HTM So the correct similar, duration had is is but X, the what

Samuel Varga

very Thanks all And much. my Thank you me. be for questions. for that will taking

Vince Delie

you. Thank

Operator

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

Brian Martin

Hey, guys, good morning.

you. -- here for question Sorry last to

capital, the repurchases. on in How and talked just thinking on that, little any M&A flexibility? outlook, share the about capital Just you already a outlook bit deployment was which your changes about of you're given

Vince Calabrese

ago. been XX, see deck, slide quarter, Sure, you a at CETX Brian. stable, very it's year the last XX XX can in

there. talked target we about So have XX%

growth there. we're loan of CETX tells mentioned, the the earnings with Vince strong we're holding pleased and you with that the level even So the we had entertaining. XX% creating about flat that generation And

the As like we'll guidance CETX forward to our to I to here loans X-risk given normal expect, baked ratio, still said, from here, capital weighting. for build a But swapping And the we're that of we the ratio opportunistic to then loans for get what's for slowly on look gradually into I PPP share repurchases. rebuild, just end still be our year. to guidance from the have

is it loan Our to for growth. goal first deploy

things. want we we manage loan to extent, We look do deploy purchases and But support with that's timing those is higher of move types in will monitor of to a the we stronger Howard forward the for. loan lever during we But and regulatory interest. end be shareholder on will loan opportunistic way any more be it, our that to the aligned XXXX. just to first growth growth that we'll with continue fully in share approval as and use will and capital to the the But growth. fourth capital didn't quarter on So

Brian Martin

you. Got

on maybe joined a it. Vince. -- I and the bit Okay. What into And the then excess I liquidity. just the but guidance, baked little said you late, this missed

for in where if given. growth margin have the outlook? core you baked points you what given think outlook, the drag basis loan And liquidity as talk excess go is throughout you that the XX in the about XQ I year, in of

Vince Calabrese

Yes.

the So quarter. billion fourth the for in cashed average excess was the $X.X on quarter

see So the on that that drag generated there. slide you the

have comes around is our half, expectation end million deposits related our at kind that that in also a -- Similarly, it the by year. are XXXX to As so gets of billion-and-a-half the of down we PPP for number guide.

year what down to We have been we've the is estimating through we've that been our been come projecting about process, into have going stickier as selling. based a And billion than but guidance. X those

So cash by of $X.X billion-and-a-half average the a then and level the of from the basically, will to an end evolve go year.

in that year. that But can't math that head -- quickly. there through go what's my that I that's do the we So underneath impact lessen will so as

Brian Martin

Yeah.

got clarification Howard, NII timing on to and the impact the the whatnot, given at impact Just close and to NII, close? guide, one baked assumes And the fees make close. here Or was of on next you've the mean, Okay. the and week. that the expenses sure that just want here just what clarify the year-end but, of I guides. in then not I

Vince Calabrese

XX there months. in It's No. for

Brian Martin

Thanks, I thought. I Vince. taking clarify. wanted to appreciate what got just I certainly you I you. the questions. That's

Vince Calabrese

All right. Thanks, Brian

Vince Delie

you. Thank

Operator

and this And Vince for Delie the and question any I'd answer like concludes comments. to session, closing call to return

Vince Delie

morale I everybody. we commend a leadership to field leads could, what were meeting strong. has to the entire I've able when answered glad answer. team Okay. throughout markets. X has really that's our just we I years terrific the spent and with lot with time, question. Great the want you last and the And success. people Thank questions. very and leadership employees; of everybody's the our detailed very different been in Hopefully Thank to interacting questions, for And and these you, been

drive dedication everybody hard for the all and and be the work So mostly commend successful. to the

it shareholders continued you you And thank and and our your support. thank questions thank So please for for keep you. up the to

Operator

you. Thank

Vince Delie

have. That's all I you. Thank

Operator

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

may You disconnect your now lines.

F.N.B. (FNB) 20 Jan 222021 Q4 Earnings call transcript