FNB(FNB) - 2024 Q4 - Annual Report

Financial Performance - Net income for 2024 was $465 million, a decrease of 4.13$485 million in 2023[430]. - Comprehensive income for 2024 was $531 million, down from$607 million in 2023, a decrease of 12.5%[431]. - Earnings per common share for 2024 were $1.27, a slight decrease from$1.32 in 2023[430]. - Total interest income rose to $2,252 million in 2024, an increase of 14.14$1,973 million in 2023[430]. - Non-interest income reached $316 million in 2024, up 24.41$254 million in 2023[430]. - Total non-interest expense increased to $961 million in 2024, up from$915 million in 2023, marking a growth of 5.03%[430]. - Net cash flows provided by operating activities were $642 million in 2024, up 51.8$423 million in 2023[433]. - Total cash and cash equivalents at the end of 2024 were $2,419 million, an increase of 53.7$1,576 million at the end of 2023[433]. Loan and Lease Portfolio - As of December 31, 2024, F.N.B. Corporation's net loan and lease portfolio was $33.9 billion, with an associated allowance for credit losses (ACL) of$422.8 million[416]. - Net loans and leases increased to $33,516 million in 2024, compared to$31,917 million in 2023, reflecting a growth of 5.02%[429]. - Total loans and leases, net of unearned income, increased to $33,939 million as of December 31, 2024, up from$32,323 million in 2023[533]. - The total outstanding modified loans amounted to $53.3 million in 2024, with various modifications including term extensions and rate reductions[554]. - The total commercial loans and leases portfolio increased by 3.3$12,705 million as of December 31, 2024, compared to $12,305 million in 2023[533]. Credit Losses and Allowance - The ACL is based on management's evaluation of lifetime credit losses, incorporating quantitative reserves, asset-specific reserves, and qualitative reserves[416]. - The provision for credit losses was$80 million in 2024, compared to $72 million in 2023, indicating an 11.11$422.8 million by the end of 2024, up from $405.6 million at the beginning of the year, reflecting a net charge of$62.7 million[564]. - The total provision for credit losses for the year ended December 31, 2024 was $79.8 million, compared to$71.8 million in 2023[569]. - Net charge-offs were $62.7 million during 2024, compared to$67.7 million during 2023, which included a 31.9 million commercial loan charge-off due to fraud allegations[569]. Internal Controls and Audit - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2024, concluding it was effective based on the COSO criteria[421]. - Ernst & Young LLP expressed an unqualified opinion on the consolidated financial statements for the years ended December 31, 2024, 2023, and 2022[410]. - The internal control over financial reporting includes policies and procedures to ensure accurate financial statement preparation in accordance with U.S. GAAP[426]. - The audit included evaluating the design and operating effectiveness of controls over the ACL process, ensuring compliance with management's assessments[417]. Deposits and Funding - Total deposits grew to 37,107 million in 2024, up 6.87% from $34,711 million in 2023[429]. - Non-interest-bearing demand deposits decreased to$9,761 million in 2024, down from $10,222 million in 2023, a decline of 4.5$16,668 million in 2024, compared to $14,809 million in 2023, reflecting an increase of 12.5$2,506 million in 2023 to $1,256 million in 2024, a reduction of 50.2$1,900 million in 2023 to $585 million in 2024, a decline of 69.1$3,620 million, with a fair value of $3,466 million, reflecting unrealized losses of$158 million[517]. - The amortized cost of Held to Maturity (HTM) debt securities was $3,979 million, with a fair value of$3,644 million, indicating unrealized losses of $338 million[519]. - The company sold$231.4 million of AFS securities during 2024, resulting in a realized loss of $34.0 million, while reinvesting proceeds into securities yielding 4.78$2,774 million as of December 31, 2024, with unrealized losses of $158 million[522]. - The municipal bond portfolio had a carrying amount of$1.0 billion as of December 31, 2024, with 99% rated A or better and an average rating of AA[524]. Goodwill and Intangible Assets - Goodwill represents the excess of the acquisition cost over the fair value of net assets acquired, subject to annual impairment testing[477]. - The company performs a quarterly goodwill impairment assessment, considering qualitative factors to determine if the fair value of a reporting unit is less than its carrying value[479]. - The net carrying amount of core deposit intangibles decreased to $49 million in 2024 from$66 million in 2023, a decline of 25.8%[581]. - Total amortization expense for intangible assets was $18 million in 2024, down from$20 million in 2023, a decrease of 10%[582]. Risk Management - The company employs an internal risk rating system to monitor credit quality, with ongoing reviews of loan performance and borrower conditions[540]. - Non-performing loans and leases increased to $159 million in 2024 from$107 million in 2023, representing a rise of 48.6%[550]. - The ratio of non-performing loans and leases to total loans and leases increased to 0.47% in 2024 from 0.33% in 2023[550]. - The company utilizes delinquency transition matrices to forecast credit risk based on various factors including FICO scores and unemployment[546].