FNB - Earnings call transcript Q4 2024

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Operator

Good morning, everyone, and welcome to the F.N.B. Fourth Quarter 2024 Earnings Conference Call [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please also note this event is being recorded. like of the Investor I'd Lisa over time, Manager Hajdu, Relations. this to floor turn to At Ma'am, please go ahead.

Lisa Hajdu

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

Vincent J. Delie

welcome our call. to fourth and you, earnings Thank quarter

our share. geographic robust Gary loan full Financial or EPS quarter and X% of execution million. team XXXX, footprint, objectives. yet base business common of capital income further to Chief and materially In Joining balance well $X.XX, diluted industry of as our we million, grow, operating diverse share balance strength the the sheet occurred to of our record X.X%. suite continue and to tangible model F.N.B. leverage and and increased generated achieving highlighting products diversified success. our a technology, of of available the another growth company our $XXX ratio bankers. Noninterest future record CETX XX% year Guerrieri, Chief as year-over-year a as value our to frontline growth strengthened to our per me of remains results We the services. focused These strategic optimizing outpacing per throughout reflecting our of income and deposit of shareholders level book Credit $X.XX for XX.X% brings operating today sheet and Vince are reported common net Officer; balance our value drive XXXX robust Officer. F.N.B. to and record fourth position best continues our $XX.XX. F.N.B. achieved Calabrese, This $XXX.X on shareholder sheet successful

building tools. prior digital increase deposit and the from our share and the strength. F.N.B. duration XX December debt markets similar fixed senior sustained markets of in year We of convexity signifying that sheet the issuances basis part the XXX securities and of valuable superior robust profitability, the X that into of ended approximately success yielding footprint an XX%. in $XXX recently a over franchise million credit billion share year. top quality [indiscernible] demonstrated physical now confidence Deposits overall have throughout $XX.X sale of $X.X proceeds tremendous peers, share at commitment, in As deposit the XX% securities balance to reinvested income hold and has profile. F.N.B. top and execution available-for-sale improvement, point X.XX% favorable market with we and and by of a $XXX relative also X.XX%, yielding similar an deposit million billion, issued our completed received a

expected deposit the growing fourth million quarter, to which quarter, the deposits peers. increased with meaningfully deposits on overall total is outperform our continue linked cost $XXX at funds. In We while focus managing of X.X%, cost

eStore We our our will be fintech which into to continue F.N.B provides invested F.N.B. customers the a consumers. assist to transactions reoccurring to deposit in embedded technology that to enable build move direct to their and out technology recently instantaneously

relationships, expect banks on F.N.B. improved customer greater products and the X-year process investments outperform our growth share up year apply becoming than simultaneously. strategic to obstacles an doubling our the to ] success consumer banks The the further competitors. December than eStore have of fewer opportunity [ created common industry XXXX and to to more tripling drive loan our customers' primary application, strong anniversary full introducing loan with in at delivery outpaced in the onboarding We growth. more HX gain customers into allowing channel for deposit XX small the deepen bank. the marked based deposit data, market large deposits and and

seeing are impressive We adoption.

example, XX%. consumer nearly For and is deposit monthly period. volume same Average of levels application monthly and launch app common application eStore to up the comparing is volume volume since XX% up the the over average when prelaunch loan consumer

reached continue and well increase of the partner, noninterest to 'XX, In from our which high recognize an all-time benefit in of invest additional deposits. income small $XXX we income, for XXXX. We providing and as having noninterest market continuing features insurance, products the middle to diverse scheduled banking in commercial growth streams, to as will momentum revenue our addition million and services new the eStore to enhancements and business fintech functionality relationship-based for gained in including opportunities

team has products complement business and and new success great units our high-value Our had existing introducing that services. identifying

of high providing dollar noninterest additional and banking wholesale compounded groups offerings value or a and annual than reducing and us that contributed revenue face our During expanded rate consumer our X% new our income lines have products fees, with the to significantly established for XX in fee XX-year have investment more continuously income, composition. In granularity now X on additional these business last creating consumer the years, of generators, while growth clients. returns banking are multimillion for

markets with to banking enhance further to capital expanding products F.N.B. business management and payment forward fee-based include services merchant our commodities for and investment finance is public offerings Looking plans to services, treasury capabilities. hedging, year, commercial this

we it infrastructure to As a continue advantage and to and that competitive we as maintain durable that requirements. both can grow expand scalable leveraged vital regulatory a and meet be is F.N.B.,

risk internal comprehensive introduce to is has a taken risk steps to increase management executing and reduce automation processes as and strengthen business F.N.B. consideration framework practices year, well in our key fraud savings. strategies. This Our government efficiency, create cost as

reporting peers We efficiency. us believe future various necessary is our a risk, real to risk investments infrastructure that this variety and will we our are automation to time. We to build drive enhancements to of technology data provided scorecard leveraging operational in a units move dynamic and of step enable that credit out economic and through productivity for strong continue drive stable F.N.B.'s the approach to fully engage software has automation as component overall cycles. quality has into asset outperformed management and

performance environment. has credit shifting of call economic a what Gary, provide will to a over credit solid in turn performance. review been now Our I the Gary? overall was who will

Gary L. Guerrieri

improvement Net good XX XX quarter bps and We quality with totaled metrics period everyone. and NPLs OREO morning, at Vince, at delinquency basis up ended from stable the points, year-end quarter the remaining quarter bps. the X charge-offs with ended levels. Total basis prior you, up Thank and X loan at and points, portfolio. Total our asset Criticized linked bps loans quarter $XX.X provision the the continued on quarter points performance covering and were points the environment. expense basis basis a XX economic for charge-offs. million, solid down reflecting basis, across in for stood year, current supporting XX reflecting at funded XX the growth

discounts, CRE to or satisfactory at NPLs million, the The of of at funded quarter. When position NPL million, reserve in portfolio XXXX, stands portfolio in quarter. billion $X.X XXX%, reserve basis levels increase and of our with reviewed X.XX%, Our $XXX coverage the completed ending $X.X discounts. $XXX continue unamortized at XX the at metrics an at credit from remain that we matured CRE loan and had prior approximately process million remains and the approximately acquired strong nonowner current XX the stands of ending was X.XX%, points, maturing unchanged delinquency at inclusive respectively. Throughout our including with nonowner

CRE of quarter our reviewed $X the in was approximately billion loan ongoing portfolio assessment Additionally, process. nonowner risk rating through the

reduction the a with pleased outcome slight loans. the criticized are We of in reviews with

on position going portfolio aggressive the into year. well also certain should action credits that We the took

the the year ending this managing to risk, of approach part quarter, exposure capital. credit total XXX% portfolio reduced CRE by the of proactive nonowner we've at risk-based As million in $XXX approximately

We continue a to perform with quarter, portfolio targeted reviews of other along portfolios each test. stress full

economic current current Our loan our where quarter in in solid results we testing credit ACL covering with quarters been this on severe quarter to levels, perform expected the in projected of downturn, including as an ended our a CRE. In with nonowner-occupied XX% additional charge-offs over the metrics our at year the our consistent stress closing, recent applied continuing economic portfolio prior with shock environment. have for

to allow philosophy. and risk core ahead investments in I in the remarks. ongoing Our us prudent for and year look over while our actions. We quickly staff now Chief Financial management identify credit Calabrese, will to analytics credit underwriting in turn risk growth remaining his call take our to systems, loan achieving forward the Officer, proactive consistent and Vince

Vincent J. Calabrese

I $XXX.X energy financial year million securities of Today, quarter XXXX. Fourth financing fourth the as the debt our $X.XX or per in results, loss investment through restructure securities excluding and and investment walking credit $XX share first the Gary, totaled Thanks, quarter's focus tax restructuring. details quarter as operating the on the well renewable completed guidance million full income the on investment will issuance morning. for including good November, pretax transaction when net the on and

as on recognized income taxes company financing financing by The will project included XXXX. The a transactions $XXX credits of fourth financing to the receivable, pretax energy $XX.XX renewable value, team of of an quarter's valuation management balance share. In the was AOCI, business profile. a sold noncredit maturities with offset partially performance of energy renewable includes fourth and realized in from million This available during leasing half sale our the benefit a of incrementally as senior serve December As to impairment their duration expense. note strategies, with noninterest fourth for originate XXXX. latter year-over-year and million solar transaction. million on the a tax $XX.X is in yield reinvested other sheet similar investment to model. in the quarter, In XX.X% as which by maturing securities reflected of $XXX $XXX basis loss not did F.N.B. in X.XX% of tangible quarter. Proceeds unrealized our further record were sheet lower-yielding its position balance sold increased with securities flexibility notes enhanced issuing million at book in part already the the of December, Because per investment securities ongoing impact part liquidity convexity which replacement senior debt occurring were in new million $XX.X average from of a a were related contributions commercial also and loss sub the

While X.X% given project spot reflecting was the benefited were the X.X% be loans line lines we at interest the footprint can at offset by of closings leases auto rates. and million Commercial $XXX continue to and third energy ending CRE year. capital equipment sector, of billion construction diverse leases which in in remained increased year-end of $XXX reduced was leases levels strong and million scheduled billion, lead strong for in renewable Commercial production $XXX times. our $XXX to market the mortgage, quarter. quarter X% loan growth to reductions residential and somewhat X.X% billion. Consumer sale long flat, the and active XXXX loans and both have of an loans difficult investment financing. Full million XXXX by loan Total finance reflecting and geographic total or growth energy predict $XX.X $X.X or linked assets growth led up in credit business. rising Fourth renewable pipeline or were year loan essentially lower quarter, $XX.X million year utilization, permanent despite the

noninterest-bearing linked or of X% slightly XXXX the to more $X.X the Average given increase led Carolina the quarter, growth XXXX, the decrease portfolio down the deposits $XX.X decreased X.XX% basis the earning at management variable grew X% an points year-end [indiscernible] basis X.X% December deposits. Success of strong cuts liquidity in a and costs checking demand to $XXX X% generated quarter interest total gathering assets basis billion, nearly our point impact to this impacted in the interest-bearing by at loans on by loan XX.X% given million reflecting half and of quarter loans reduced to balance was [ loans over levels higher as securities auto points costs mix to the quarter a improvement sheet from shedding slight linked million XX Average linked than basis asset yield and over linked in loan a totaled strength the the Federal of point quarter market for resets. portfolio XXXX to growth consumer on loan value an of a loan-to-deposit declined total linked to deposits last was in quarter. driven in million, deposit decreased increase quarter, growth $XXX the were interest For $X.X XXX further begin rate and and $XXX.X X.XX% higher from noninterest-bearing spot securities with the example, rose growth or initiatives markets. Consumer XX were deposits linked increase. deposit quarter quarter. Earning September Time prior borrowings investments restructuring. Interest-bearing commercial in XXX sale only mortgage to stable at grew deposits XX.X% net $XXX]. markets ending the basis levels completed strength Total million of the rate up declined ongoing of basis balances. of essentially driven end interest-bearing quarter, residential basis quarter. Spot quarter compared driving XX.X% investment demand points Offsetting $XXX year-end, in XX improvement ratio from interest-bearing our to in of impact billion, million CDs deposit continued linked mid-XXXX. Fourth point in balances. X Reserve peak flat in generation. Average driven third noninterest-bearing on yields by money brokered X% overall deposit balances income

quarter Our versus linked September and than since balances XXXX cuts in XXXX, the rate the higher The basis points bringing year-end total was quarter. quarter. Average net cumulative for equaled interest rates the time provided declined deposit quarter X.XX%, paid expectation spot third resulting X margin on quarter, the XX% interest point on net XX% down beta fourth X throughout call. money margin at began market fed December full the our interest the basis margin

trend on lower of pricing in funds deposit Fed net step expect we Reserve strategically to margin first actions. continue quarter We XXXX relatively downward the and the a rate, in stable with the dependent Federal interest and in

by an million impact income gain servicing a lower the rose which mortgage income rights given on of $XX.X noninterest to Turning the was renewable million Noninterest linked in offset banking operating margins The Mortgage sharp benefited strong syndication debt fourth performance-related banking is to included $XXX.X lower to reflecting as volume investments mortgage we for the focus management this base offset valuation an continued earlier. Salaries manage the compensation. Strategic commitment capital manner, to and higher employer share income leverage half providing our quarter was associated significantly year-over-year employee of were markets demonstrating and up And expense deploy result revenue. the ratio book internal to risk per disciplined basis in equity prior increase quarter, ratio expense. improved a at tangible restructuring. and operating capital market and continued the and variable a Approximately fees and a or the quarter. Capital were higher-than-expected also tax continue well generation. when remained solid the $XX.X $X.X totaled to ratio expected with hiring efficiency million $X.X our XXXX. F.N.B's which Noninterest quarter benefits higher infrastructure which international of on common strong in production quarter. securities markets a in costs million to as expenses sale claims, health excluding reached value. related or million increased on by $XX.XX. million, credit levels XX.X% from partially driven our intangible to basis, quarter, $XX an increased the income million and XX.X%, high-cost capital partially due and that expenses care expense all-time increase the shareholder grow swap in $X fourth XX.X% operating quarter during recovery, highs, our by second of flexibility $X.XX performance CETX to capital linked rates linked On increase million at share to energy mentioned from value common increase paid to X.X% $XX.X at basis. was transaction

and full XXXX, for Let's the starting guidance balance the quarter now first look sheet. the year with at

increase digits to across million geographic interest full $X.XXX be to footprint. Full first For and is $X.XXX share expected between net expected our $XXX market to the million. year-end and continue between with deposits loans income we versus year expected quarter are year mid-single billion, $XXX and our period-end as XXXX grow diverse XXXX, billion

the XX a XX in with $XX June. for cut of XXXX. in million. a expenses treasury of tax management basis first between another is $XX credit million year to in quarter cut capital expected $XXX million point million, increase million range markets Vince inclusive be assumes rate rate guidance noninterest to fourth $XXX $XXX the expense offerings, Noninterest X.X% and and between Our the excluding to March and $XXX at in guidance mentioned product related expected This earlier. Full to when expected the the is new income midpoint basis the for is representing million the year of quarter point be

to to activity. on normal in expense dependent growth the million, and quarter million between be compensation million. expenses expected provision charge-off higher taxes. $XXX to noninterest net first higher compensation and is expected and in payroll due loan The are range stock $XXX First expense million long-term the $XXX This quarter of is seasonally $XX XXXX

does investment that and any be include should tax Lastly, credit the which rate full tax XX%, year not may occur. XX% between effective activity

Before at year turn like Delie service call Vince he would XXth as the F.N.B. moves over, I his congratulate I to of into

award. led what he to nearly and analytics faced, billion multiple $XX tenure, successfully through proud data has of in F.N.B. list the to been well-deserved of values honors, Among visionary by of for especially leader assets most awards billion, and all in the recently has catapulted named are culture list and as tools an Year leadership. F.N.B. from multitude under Vic's achieved most to admired F.N.B. leadership This guided to organizations a some F.N.B. was and named have the industry Magazine, right his companies the long Forbes, in XXXX the of by $X the trusted During His the CEO around has a prominent economic banking challenging the and on recognition the doing and times builds we teamwork cycles the Time CEO our developed and Newsweek. as of most industry stakeholders. Vince such digital globe grow best U.S. is of

We you, in omnichannel Best XX rated our having strategy. On dedication as have and have earned Excellence and our in received highly and led gained our awards leading now more consistent F.N.B. by and garnered of claims your behalf on F.N.B. Directors, for the regional in our both and mobile Vince, based international Board eStore Export our top we Brand Award to of than click-to-bridge branch and a banking national just innovative more awards for Service as feedback. President's thank And over team national than addition leading recognition workplace, XXX app, platform, banking decade, "E" a workplace for employee a

Vincent J. Delie

professional all of words, have the and of of has Thanks we executive career organization the our years have all to people been due that of dedication Every Vince. at F.N.B. but in XX few quality employees. kind of a this which largely very makes leader, for team at the it's my my F.N.B., have some best the My possible.

the new the anniversary XXXX. value headquarters allocation our neighborhood back into new of in District celebrated XXX customer from and milestones digital So a application and moved thank we engagement. We new our and our on to eStore common We you. Reflecting growth state-of-the-art in quality its led Hill capabilities and conservative industry XX-storey all to all our Pittsburgh's in expanded our underwriting where and our while point Lower mobile lead footprint Deposit loan-to-deposit and while bringing continue in peak stakeholders. set achieved standards. XXXth F.N.B. records, improvement the to ratio a generated throughout year. loans proprietary during basis consistent the was upholding peer-leading

thank value revenue continued streams XX.X%, of our XX% sheet on record strengthened an achieved all risk lines support for of diversified in turn to continued business. teams their and our and equity build XXXX. across return and tangible common XX.X% now the balance achieve as for our grew of management practices our to I we will on you, the also celebrate shareholders record our want with operator milestones income book ratio their conservative XXXX our to contributions We CETX Thank a questions. we noninterest for operating call year-over-year, tangible and over momentum

Operator

first today Our from Instructions] Daniel Raymond [Operator Tamayo James. question from comes

Daniel Tamayo

on that the income the year. fee this and guidance initiatives first you Maybe factor how they Vince, mentioned, into

those on what may your for timing initiatives around businesses growth and of and prospects new ultimate and those be investments. curious thoughts Just kind investments

Vincent J. Delie

guidance Sure. A are because reflected perspective an -- of been the we and the expense portion in run as people already recognized online some well. We've rate expenses has the in brought reflected from several had businesses, pretty with And line. success -- we in these began markets the we I began debt capital revenue. of particularly generating starting think the immediately group, capital and good the investment markets

breakeven offset point starting neutral starting revenue brought example, team. 'XX. year So to us to the for doing to And little expect and fairly build in some in particular, 'XX to in I X, returns that finance, to for that the is immediately banking quick bit that that of begin that that we're out expense advisory stream that of became identified much revenue business into to pretty generate to out. then units the and begin expect in we're true. That's business the going would we've clients Public expect pretty true there's the would enough be business, investment revenue a the would same a is there. on. I several business, an on. in because different, we in what with to And attractive I associated bring shift group we're over and generate but ongoing that we we're same

I it meaningfully I incredibly would accretive So see impactful. be expect X. all don't to in, to 'XX, earnings being it in year But

excited So businesses, derivatives about particular. areas terms we're the hedging our those X commodities pretty then building in And in just existing we've program. added out of to

We syndications have our actually built capability. out

in we starting that's the even to pretty So did move right direction. further And well this quarter.

Daniel Tamayo

A record level.

Vincent J. Delie

record us. level syndications of a Yes, left-lead for

So balance fees as given pursue bigger has our with scale the has it. increased sheet it's us ability with larger to increased, and our transactions associated

build-out So been benefit our And from And in categories. -- really create would of We've a can think a that to as team. That's over it diverse for time. syndication on us. provide that's us company grown us income in I but annual to I clients, well and and out I the X% said, very you set with of fee a number it's do 'XX a well that, into strategy pretty of also I to number of expect areas a our basis. mean positive we played continue to support was the see for 'XX sources. compounded to

that. excited pretty we're about So

Vincent J. Calabrese

even the business ones $X as the Vince's quickly. very [indiscernible] that scratch, Yes, businesses we become just to from revenue And these quickly, would I as small. is start have comments, talked incremental we in And the add we've about started and to million-plus cost expanded.

Vincent J. Delie

people. capital facility, we a we really in markets trading have new together everybody recruit makes exciting. our bringing have area. It to And it easier It's floor, a

As they we them full on our bring see in, could display. capabilities

to a encourage and you get ever I'd chance, you visit. If come

impressive. pretty it's So

Daniel Tamayo

talked for associated think. But color. already, [indiscernible] guidance I been about talked as those and little a follow-up, some how Great. not are than on meaningful X% them Appreciate guess with them for growth maybe the some expense maybe have as 'XX, costs less the side. all you incurred we that you the a of and of about

talked then about savings the cost that? quarter. drivers on the Just some you And last initiatives curious of primary call think

Just there's that curious 'XX. expense that rate drive outlook a into for if initiatives or some down plan still growth an might

Vincent J. Calabrese

just in items just drove And the credit in really charge just impairment quarter, above tax then we related that, $XXX was increase that which the $XX.X at offset came $XXX we $XXX,XXX. tax would mentioned health start to that $XX.X let fourth I claims Yes, credit. And the million. to that a was $X So the an with had -- we care in me million X above in XX% costs our high-cost number, of right? the million $XXX valuation increased kind piece a came investment of million increase range,

have So quarter. affected those fourth X things the

So as far the as a and kind going million. million the have of year, you $XX.X run won't rate into next $X

of be what actual still the close XX%. to XX%, expected down a than to think little I definitely will claims when for the kind higher bit XX% be will we 'XX we started year, quite it but

approach of baked into out requirements standard there's there. kind the are ] as [ $XX like that's So height guidance. Things we billion, that

similar dollars as have 'XX. a there's of been all the you So increase years. in this Again, on guidance. into probably for baked that we've couple stabilizes was is there it a in then in probably 'XX. of couple And million get working a We'll that into of 'XX. expense And

we as kind just So lines build and of of some the defense. of first of out second kind

Vincent J. Delie

you're And the Yes. seeing I'd elevated. expenses That's are that. why say

coming, more XXXX it's management as in through risk area think, guide, the move which spend Otherwise, right, reflected a we're X%, guiding, better our we have ], would I the as there's comply has been of much expect is efficiency with build-out on I why [ the growth. a basis, core heightened in been position. And to seeing happening. That You're ratio would standards.

been keeps have it that pursuing number a X%, we're initiatives better. So of which reflected are to under it would expense build, offset expense that mean that's I there X%.

to at move we issues. be salary expense have run rate into as least those the for operating reflected expenses, we in the So would expect 'XX, the compliance

Vincent J. Calabrese

million X And to then quarter. you optimization saving first had a in as fourth I improvements, every that's X, leveraging every a restricted all baked increase X, out would $XX with for and many that company. AI the and that cost payroll the facility cost seasonal initiatives just to areas first know space tools we've automation under saving you'll how of million and remind everybody, variety restarting expenses stock taxes into guidance. And from that quarter see the years, have which $XX quarter. year, the and I we of of first know, year quarter, just continuous negotiation, Again, optimization process target don't happens we other a comes meaningful That's year have the

So we -- year. hit single and that every

So kind of how new of additional that's of expenses and fund some part we initiatives. these

Operator

from question Gunther Stephens. next from Our comes Russell

Russell Elliott Gunther

I wanted sense margin the about just like start year. as It get growth the deposit you and course a how to for matching over deposit you're progression looks of thinking guide loan on growth. the the cost and

for in. get into are will yields your that deposit cost margin loan the So a to just tie new trying spread where commercial sense be? you And coming on the the kind of what if new on touching could competitive just pressures or net

Vincent J. Calabrese

have looking as I a levers sheet say Yes. different the at balance job of as does pricing. far XX good Slide would kind that we

[indiscernible]. We percentage interest-bearing [indiscernible] we for peers the reminder, our X a and basis. XX.X% total by as way what Just on kind cumulative outperformed had for of up the finished in up data, at data deposits points deposit we

good way start customer, costs customer think, on plan I good a pivoted a team, did job established of the as kind managing going very up, Our by down. deposit to

of obviously. be The So the on comfortable it, in right, is CDs the our perspective, still But to the data to account way of from down marketing timing end outperform again down. kind on beta kind would a we're overall year, an cumulative forecasting. To kind with it mid-XXs. matters, of low basis the by to what date, lowered we've XXX mid-XXs our and of rates XXX best money this in points. we're By of goal

a So XXX. lock bit up We've the more. kind moved to Fed's of move those little for

working mind, deposits. But in are the day too, every we're on of guys deposit kind Our growing keep cost. still optimizing

for a ratio So that's down. been loan-to-deposit focus our to bring us

our with monitoring of growing customers it and the kind rates the down and continue So guys still the the competitors, monitoring will deposits act balancing elasticity our just bringing down. is continue. And are to work deposit

baked guidance. all that's the into So

our of have Fed there cuts slide kind guidance X June We March says. and in as

So way will it's be to goal the a And active on the process. outperform very down. just again,

Russell Elliott Gunther

the earlier, market it stats XX%, and share how do appreciate M&A the markets is touching Vince. X me. if and something to XX on you that Maybe plan XX%. last you just top for I appreciate one that shared specific and go then about to you'd 'XX? look like increase color, to And top share in you'd on I just touch

Vincent J. Delie

saying to want of Well, I'm on investment an would I banker record be the going today. to go

investment I I to banker wouldn't said want ago. couple a an So be of years

I think that's changed. all

it it's right, I to healthy think permits and achieve try environment that we're helps creates way clients, in thing headed capital, banks the occur that M&A think into helps the naturally. And a helps -- the efficiency. as I all obtain to board an industry the smaller around shareholder

same the deployment going said I strategy, focus think to activity. is of which back we're is still optimal to M&A on F.N.B. capital. more the that, Having

to a look variety we're deploy just capital, of So not ways M&A. to going at

think we've our broadened I footprint.

interested we're out in going build in. to the continue We're the and what about asked to Carolinas markets our presence Southeast. most You in

We and and potential particularly Raleigh to Charlotte Deposits, in of to have the continue grow. Triad. Piedmont tons

think scratched the surface. only I we've

a for dramatically. had the our brand us particular, we've bankers in amount X-plus we we're established awareness As market in out because product TM years, set our for of build in there's and has tremendous improved upside

there's So there. upside significant

there particularly think opportunities Washington, are Mid-Atlantic us. Virginia, I for the Northern region, in and in D.C.

expand to markets channel. build continue from a We our in and novo delivery those perspective out de

in $X deposits our in And and we're good then more billion were upside traditional #X there's custody really excluding large true moving market that retail portfolios. done a in worth broker job of deposit markets perspective. into Pittsburgh, banks have markets, from in think total we've those deposit a share, I global

mature there's deposit think continue of areas I that for are drive Again, we'll focus us to the on to So plenty more growth. opportunities.

that Cleveland share much Baltimore. an are that and us, base very larger and than big of much, players opportunity there So are and large grow some control our Pittsburgh deposit to have in we market chunks

Vincent J. Calabrese

digital our tools. separate And

Vincent J. Delie

Yes. strategically pretty the of focus the side, Most been placed investment, of in consumer acquisition to has acquisition, eStore our clients. And we've flipping the over on the heavily side, invested digital platform. -- client consumer the ease in the

of itself one concept filling where eStore you products, the as to an loan by up So out purchase application example. can deposit products XX simultaneously, consumer

add that to continuing are We to platform.

that We year repetitive ACH occur payments that instantaneously. moved accounts, move in occur will this capabilities have checking to us will will permit transactions that direct deposit be

our investment we opens be way, up company a making primacy to fee a with as through income, partner the us along also maintain those consumer fee account through meaningful a in gross which to going we're the it, that with we're fintech call noninterest-bearing and move grow able improve impact on helps So the in, immediately. That's time. the we picked going good to income margin things when positive have bank. customer And ability an an over deposits comes our eStore to client

that So things to drive those are doing the share. we're

areas and in mentioned. a contingent pretty recognition. in where And markets focus have that's Carolinas And we're brand the geographically, on spot. will Anyway, think Washington, advantage good I D.C. certainly, the that mature we taking the the growth I area, more increased of be strategy. the the Virginia,

think our sitting 'XX to achieve moving continue and to very a into I good position 'XX. we're in objectives

Operator

KBW. comes Motta Our Kelly from question from next

Kelly Motta

just it's kind positive guess prepared emerge thinking operating said year. I leverage through operating in your of I remarks half and expect leverage. this back of to believe back you stepping the

to between about you to ahead, the be efficiency thinking look investments as you that benefits overall longer and wondering, for of the you Just event. operating leverage versus of balance what getting reap continue and term should to the your we bank of how make continue kind

management from perspective you wondering that? Just guys, approach how a

Vincent J. Calabrese

making we've we've about efficiency have I continue top with an The quartile. ratio, to make. can been comment. efficiency continued investments and that, the to And we the in have that that we even talked that's ratio

us. the or So -- I the year, quarter we've if were focus in in quartile, think last the And consistently X top X. that's not we a top for

definitely kind year. I forward, we that's about year. and dollar move and as mean, this operating leverage statement then the positive of percentage underpinning full a it. And and the there we've getting of made the the to on half So I second year by an really into basis both mean as the get we

that will into we're having ramp baked full obviously. But shooting on that starting for what the happens what's dependent what of up of of with second positive rates, year. to in half year would be and kind the for be Some the leverage with operating our interest guidance it really

we're expenses. We've So always managers disciplined been. of

initiatives revenue. mentioned where $XX cost in we anywhere -- the can And again, through investing, to I is a earlier. grow out $XX taking balancing investing from it's million [indiscernible] savings the we're while charge we're a So But we're of that act. million it's lot always,

we're So types of in. mindful not of the we're investing things that very

clearly return will a for sure. nice and year, operating leverage focus it's it So positive for this to be us, to

Vincent J. Delie

pretty as interest Yes. income. Kelly, you we know, on net dependent are still

the been that investment need So focus. the environment and that's changes rate is to on the slope efficient we interest we our changes. What the changes rate as and and returns of highest getting as and the possible focused possible interest capital stay curve being can as

ability operations. us the of the from changes in of strategic activities perspective. we move the sufficient AI, project a we have an automation perspective, results in which produce catalyst the track optimize that we automated the forward to irrespective the going what's And an about future, from in moving within units think should efficiency on a use have, way, very as to I that significant as excited reporting are operating underway our to well rates. I'm pretty the keep into

from So perspective every in operations AI us of area. us occur actions efficiency. in to drive that thousands will an tools develop help the being day help our That's able that going monitor to future

we from it's technology preparing for. future, today, here us not move into that an but coming, the So there's we're quite should a bit help and that's coming expense as perspective

you strategically, answer. term long kind So of that would be my ask

I operations think with the the of there's a just industry, F.N.B. in not expense to tremendous out take opportunity area.

Kelly Motta

helpful. credit That you your apologize the commercial you've the seen earlier touched any call, is too change and given to early administration, new to new or in I make but necessitate that And is on clients if investments in incredibly optimism change any loans? investments see lines greater perhaps Or among one willingness undertake kind and on draw have this of just of it still there? would

Vincent J. Delie

I conversations clients, No, conditions move forward. Obviously, with to on more business euphoria be about they're seems had think optimistic I the we there it. as for think based I've the about

particularly, leads again, see to that we're capital planning investment, of I'm I starting beginning excited. the think for which increased demand. And to

and profitability to industries. I other gains right, of on returns, and efficiency, the capital applies because ability for there be to in things spoke receive I think about And also increased the that higher should deploy us investment. those

we're So building time, particularly for I of to a see over C&I think opportunities. going demand

Vincent J. Calabrese

doing So our right. customers acquisitions,

Vincent J. Delie

the customers side And other transactions. pursuing of M&A That's it.

market Everything have us the And opportunities just provide us within we'll I serve, opportunities died, participate services. facilities We more just activity for for to credit markets and that everything kind of in and because will creates capital right? think lead we in which the to base our stopped. customer M&A see that

I the opportunities sale the end because you'll think I into even And also advisory us in that activity fees, the the more investment the is perfect to roll benefit of market the for see launching from banking companies of spectrum. to also time proceeds our platform we're wealth but create lower think for middle that the platform. will

in time pretty So I think the where we're we think, cycle, investments the we're and making, in that the are are smart. I given

to. it out So pays works I we way all and hope it off expect the

I think there is demand.

Vincent J. Calabrese

began thing been And comment That's there's to net income. and a -- year. that's are billion a $XXX drag quarter. to just interest $XX swaps about off. I million could quarter talked other off, the to positive this Kelly that in total, roll One those on a the $X about to have we've $XXX a was -- million rolling

the off rolled rest and and of May, July October. on first X, January The one them

quarter drag go away a going year. as be will million you $XX that So through the

additive third we second, quarters. that's as interest net the So income the and get to fourth into also

Operator

Navas next question Manuel D.A. from from Our Davidson. comes

Manuel Navas

'XX little a quarter. first on this, pace the NIM bit but talk the cadence NIM kind NII the touched have of of might can and about across or You stable in you of

go it where June, the across cut and would the there March from had in year? You

Vincent J. Calabrese

I the like us. feels quarter just here up would fourth mean, I Yes. say, it's for

through And would expect X then you go really So a the take a know, site basis don't up, first in I to the X just so. it key point, to slower, there. And as ] ] points, the as you March the [ and gradually to cost another few or [ we cash-sensitive look points overall. bit build with quarter, go basis year with still June little going we're

delay in the run organically We an and us helps helpful continue move because as earlier. manage standpoint. up for slowdown Fed in neutral of to deposit The kind short the you mentioned from I risk is rate it costs down, interest catch the back to cuts

XX%]. X [ today. [ that been putting XXX $X.X ] months barriers. the in in CDs mature billion repricing just does we next and [ good of They talking again, give $XX have another are -- we net -- we billion job kind liabilities $X.X have different that ] have because next that a Slide have data the a kind to of months, on the billion X of -- in points, the XX to We've at So and with you moving XXX about few parts. But in CDs

or So have area. that's billion in off annual cash the investment positive in X rolling flows [indiscernible] portfolio kind from then that's X [ of to [ we're ] X there, reinvesting or And of around XX we XX too. And X%]. currently

our that [indiscernible]. similar those we have guide. get to the that you that Fed slower, interest are variable our then loans, And SOFR the billion net have are levers and $XX some the you are the loans So going of in with of benefit moving on. And the income rate tied

the has X that there. Our in guide [indiscernible]

Manuel Navas

would your to end that of way less with think Is about the go sensitivity cuts? towards it? high What the guide the you

Vincent J. Calabrese

into beyond. cut But the get in In for want the sure. down you still and have cuts less fewer one short end it's -- short the additive, as run, run, cuts you 'XX it's it's to We short additive those come

Manuel Navas

How towards from pretty does maybe And in up? should in year yet the the the pipelines expect will slower what's come decline? regional optimize looking growth I a optimism, are of loan it business not growth. start into is bit How Or And little first of loan heard -- the now? strong translating that tilt growth? response right still on start giving we

Vincent J. Calabrese

said those great down, at end mean asking were Last went the when question. pipelines the of that the questions. We banking to are, which I that continue for holiday similar I a commercial season, Yes. the quarter, was they through period -- are slower I be. seasonal year.

starting I So those I to pipeline lower, that's expect cycle on pipelines towards in likely of look markets demand and fairly of still kind [indiscernible] you second up a that the in at more to lending, C&I pipelines, what's board. But the in banking. we're particular, at pretty long-term the much last for remain variety more because to the that, C&I seasonal expect term, probably across call, as in, normal I build, year. And year, than I would XX% aligns I commercial expecting XX-day As the half right? and XX% the of pick the that's build come short at said look the look briskly with pipeline momentum to to throughout the

I lower a see seen we're would continued that typically is seeing period. from say be geographic we've perspective, So would in here. a expectation. opportunities my growth because we're We This mature. Pittsburgh

to right Carolinas, trend continue better slightly we've to great had The actually direction. in continue the get those. In Carolinas traction. we the So pipelines are the in

expect Mid-Atlantic's would as the there's I year, us those markets. a well do little think through there. trailing move I think bit I we So upside And in then to

world. So drivers Carolinas Pittsburgh forward. the still see operation But specific by or core that's and it's moving our pipeline our pretty for led the we how much

Manuel Navas

the this step be year? the potential already upside curve the half would the much is to question. that after I'll What back guidance? in if of steepen how in continues And And the back

Vincent J. Delie

to forecast, we have it yield I into answer when the happen model we And curve we upside question, rates. and the don't we we at that look impactful I correction is out guide inverted, banks going as upon curve think the right? expect don't today, time. with general. think the for the baked sit correct more is in have, yield based more guidance. our to slightly what look think the slowed we I'll that let And still And at I as Vince we but that -- over that

So I it would at that way. look

run, short mentioned, liability associated the on in also shift. the pricing think there's a right, as with side, lag Vince I when things

be going flat rate a if inverted to the that's in to there cycle an run, stuck help with in in longer curve. So long but or short fewer are cuts, the run, going yield you you're

that of don't to goes want kind a tricky question, you And if to bit right? So modeling. that. add there's know quite the it's into I a

Vincent J. Calabrese

the to obviously, would can add do daily the back right? better deposit focus that have. just we that's the may of managing costs And every the price clearly down, range. into higher you going I weekly betas, end briefly, job So put we

something we interest do, that the to that's the peers will better additive higher. that's better do income, So we net that outperform but it be

Vincent J. Delie

in. shift can try perspective But managing from we're neutral. to to We deposit right, maximize not interest we or we're taking we that take everything the perspective, bets mix. doing profitability optimize rates. just to whatever do client a -- we can, a don't the We're we're book in environment to And on pricing

know the how we today. out. what how guide is year And got think the guide that's plays operate. on you've we So We'll I the and based see

Vincent J. Calabrese

relationships. And relationships as Again, get you very year. in to 'XX the standpoint as you next as steeper deposits, into us. relationships. curve, very positive we've new Yes. We've exit year growing as much for clearly, is and yield job and nice broadening those additive bringing into a the done you that's a And 'XX this from profitability broaden been a

Operator

from comes from Sandler. question next Our Piper Frank Schiraldi

Frank Schiraldi

Gary couple a credit. first -- on for on Just

thoughts reserve Just been the and continued on your normalization curious credit has quarters. stable your very we last over few see here do in

your on nonowner-occupied Just continued any that reserve and in on curious tailwind, and assumption could XXXX thoughts some commercial potential reductions maybe if if be releases estate? a real

Gary L. Guerrieri

portfolio XXXX we position sit and of today the assets. all with reference to stability into where as that's within the in to where has Frank, think stable. portfolio the reflection of sit individual total going each been the I of the extremely Yes, we reserve, in it And the a

of looking terms type we've a guided to I in So ahead, fairly mean, provision of stable expenses.

We good of QX book. around we the business, as aggressive today. were sits are position in in and to the aggressive of managing the book feel where it extremely We

we been industry the continue positioned facing. we'll existing feel the So have to moment about good that and at environment through where the work is we

CRE, in during just nonowner a remarks, quarter, we the mentioned occupied the standpoint, that I from quarter. In my terms year, were of total million $XXX CRE in down just

construction For down being the percentage full was centered $XXX to $XXX about it as We're year, million. that And continuing office $XXX on focus capital excess nonowner being moving of the really was and a in exposure down of down. million. million around

I would forward. expect we So move continue as to see that

which move up secondary there, The We have is we opened assets do. what bit. markets some to a quite them expect saw

do So through the positive we continuing is well. a year that that surely move event ahead. as we as And see

Frank Schiraldi

thoughts looking curious just framework Vince, just I regulatory appreciate lastly, a your lighter of broad bit touch regulatory the being maybe new Okay. the And of -- the at a that. then in administration. idea little

a thoughts, that streamlined burden your potential pickup for benefits move maybe those a M&A process standards any whether there? you Or specific do Just higher. see curious, the maybe questions to maybe does industry expense of the thresholds some your You more heightened and just here? mean mentioned reduce

your curious there. thoughts broad just So

Vincent J. Delie

in impact sure Yes, the I'm of banks expense size of terms will not our be reduction. that immediate

ago, failures run. materially years I regulators the the that demeanor change several in think the short shouldn't of occurred given that bank the

see as in I run, relief. the long some I think think we'll the administration carries on,

relief mainly board. just was I across is that -- believe previous think that I the -- the of I anti-M&A kind administration

doing convinced the I'm policies rules regulators So that. that of banks of prevented were and a M&A. were enforcing lot that the imposed from

think will up. I that ease

enforcement I permit will going why across board, more ago. just books a regulators years permit it that changing banker be on the with think But M&A aren't I few associated of not occur, in institution So the large I an pursue to think and sector, is a but not materially. risks would rigor to the change in are operating to generally, banking regulations investment the want isn't today, which the which the

of steady, with been and be will consistent think regulatory have more rules. OCC I in pretty the the application that particularly bodies the that the

outside what's some kind going of I risk go safety management, happen regime. in of are think of normal soundness enforcement the away the the to actions that things and

for seems there think administration. this a to appetite the I by under types those of different be moves regulators

institutions. large, us requirements. some see but of requirements the III about to That's capital Obviously, banks, immediate for my changes for changes think I down So the large they'll to trickle liquidity larger view. talked relief. They've kind and impacts Basel those

see material but think relief, going I in don't in it's happening. result we'll that some see I not to expense. reduction

Operator

[Operator Instructions].

comes question from from Montgomery. Martin next Our Brian Janney

Brian Martin

of question are on how curve], deposit, competition, there [ seeing in think one give today. those the about of Just the kind kind Vince. you I kind Can just talked loan a little what yields, trending? you're you of color terms But just on yields on of

Vincent J. Calabrese

the books That's the X.X%. on Sure. and I of putting around during of where new on we look if of been kind fourth we've mean you the at December. made came loans months couple November last that loans the quarter,

at basis overall a the from so. But than basis ] down yield. it's it's still the quarter [ X.X XX So rate, XX prior greater or points at portfolio points

still right kind clearly that the [ of to X.X% blend loans additive where on ] we're the blended around But it's rate that that's kind putting putting we're of with So level. that. of

Brian Martin

you. Got

be just front there can the new versus terms market? about kind terms looking you if the M&A us market? weighing to remind then you're mean for? And year, I get an -- more M&A just then or on to I the are the in any guys it's -- the do deals Or And pretty existing guess, earn-back of opportunities markets more just of a and buybacks are can Okay. you smaller that of it opportunities potential terms in you're looking side, kind it's dynamic. is in just more just talk the to on you we additive be a the -- guess, on about I this side. would would if potential of that in share think of capital

on if new filling be kind wondering the expectation just of just of kind to would ones recent of that maybe looking some be in So somewhere front. or like more your

Vincent J. Delie

we not looking an entertain perspective. transactions. -- for We I've said our would opportunities. M&A position as We changed transformational Sure. haven't before, We're really from

company we we those markets in the that I is think the ensure work that positioned do can right, we dynamic returns pretty generate manage some some well to have internally, and to and risk. in fairly achieve markets,

So internally. still out I of grow existing and pretty -- terms our footprint will help -- think tangible that to growth us the we was think us, from perspective, some very focusing we some opportunity return we're profitable that significant earn book from value businesses some We can focusing get would appealing very of a return to we expect the perspective. And a back in were on event find dilution. in then that an very quick

fairly want [indiscernible] in the of at twenties, demand Returns out We ability have So said deposit franchises, a a We've also I'd then dilute high-teens franchise trying mix, to we right? say, looking continue and cost rates not the would effectively, dilute. internal the the to that. be to to We're for with we're deposit before. I've look deposit our healthy built this years, pretty look within looking efficiency X to to not to return manage substantial. strong efficiently. And ratio.

substantial been We've we if exposure, cost to make terms from not want time. we credit that would reducing of looking that in the could sure grow we're portfolio, amount out. I mentioned did right? we perspective to a a take over So something, that CRE of

continue fees Tier which of produce markets as looking when mentioned, Gary? significantly. at that, opportunities, the Concentration we're and because to right, relative look like we more to better a a high larger to C&I you perspective, that think and X lower peers improve do right, continue loan-to-deposit on to for us we're perspective, I to focusing fairly profile. From capital, capital We it would risk return that. I down than brought

expansion the the a player. have capital into year robust perspective liquidity move an of economic and demand be the from So the or to we as more we loan perspective, part

And the right I that's And changes kind direction are we about really the the economically. think of advantage good in to strategy. position really of where to moving we're us are. occurring take feel that I

provides So it if I'm do accretion. at dividend EPS earn-back us sit what the with happening, not with sense, fixated we our either. on every M&A. capital the We're reasonable here We're at share the is I not don't looking quarter. We are capital think makes and if that's excess going the what's only then examine to answer. And buybacks it look again, needs.

look at out, as how depending things So on going play well. we're to that

capital shareholders. and do for the So we for continue at look to we optimal we're and of deployment mantra look that. to That's been area of kind our each going

Vincent J. Calabrese

of at capital the the levels of gives ratio expectation attractive, CETX more stock still to valuations XX.X%, that things higher our higher it to very have pursue share level us earnings, of part internal the flexibility consideration. definitely Vince generation, mentioned. With Yes, and is repurchase

Vincent J. Delie

decisions already capital We the returns. We're than operating our best of not time absolute pocket, deploy that result to to very running produce provide really -- period and we think we that the us in make right? that have with profile not change of proven shareholders long we're that not that's in of looking or hole company opportunities can want effectively sure We're to change capital. position a peers. the advantage is over out the not But marketplace I smart risk a in to make better the take -- the

that's So going Hope focus. to be that's the helpful.

Operator

[indiscernible] gentlemen, for remarks. ladies Vince over today's session. ending turn like floor And the Delie I'd to closing and be to back question-and-answer any

Vincent J. Delie

had a solid choppy a in year We pretty environment.

place XX management for And the the that think here. be they've kudos to for the employees a work and can't years in team So last the to all to I done.

So been it's exciting. very

a things better circumstances with. matter I get crash. You've couldn't surviving. no thrown crisis, done. my team. and we're the are, a liquidity what done together group the and But crisis, appreciate ask to well lot we we of at And or financial us, a pandemic, a We're volume really rally work we're things doing for here, a I tremendous people They've career

much. So thank very you

Operator

ladies do thank presentation. today's conference for and conclude I you gentlemen, that, we'll with And and joining. call

your You may now lines. disconnect

F.N.B. (FNB) 22 Jan 252024 Q4 Earnings call transcript