FNB(US:FNB)2023-02-23 16:00Financial Performance - Total assets increased to $43,725 million in 2022, up from $39,513 million in 2021, representing a growth of 5.6%[433]. - Net loans and leases rose to $29,853 million in 2022, compared to $24,624 million in 2021, marking an increase of 21.5%[433]. - Total deposits grew to $34,770 million in 2022, up from $31,726 million in 2021, reflecting a 9.6% increase[433]. - Net interest income after provision for credit losses was $1,056 million in 2022, compared to $906 million in 2021, an increase of 16.5%[435]. - Net income available to common stockholders reached $431 million in 2022, up from $397 million in 2021, a growth of 8.6%[435]. - Non-interest income totaled $323 million in 2022, slightly down from $330 million in 2021, a decrease of 2.1%[435]. - Total non-interest expense increased to $826 million in 2022, compared to $733 million in 2021, representing a rise of 12.7%[435]. - Comprehensive income for 2022 was $144 million, down from $382 million in 2021, a decrease of 62.3%[436]. - Net income for the year ended December 31, 2022, was $439 million, an increase of 8.4% from $405 million in 2021[438]. Credit Losses and Allowances - As of December 31, 2022, F.N.B. Corporation's net loan and lease portfolio was $30.3 billion, with an associated allowance for credit losses (ACL) of $402 million[420]. - The ACL is based on management's evaluation of lifetime credit losses, incorporating quantitative reserves, asset-specific reserves, and qualitative reserves[420]. - The qualitative reserve in the ACL captures factors such as regulatory, legal, and technological environments, competition, and forecast uncertainty[420]. - The overall ACL was compared to historical losses and peer data to ensure it reflects a reasonable estimate of lifetime losses[422]. - The corporation recorded a provision for credit losses of $64 million in 2022, a significant increase from $1 million in 2021[438]. - The allowance for credit losses on loans and leases increased to $402 million in 2022 from $344 million in 2021, reflecting a rise of 16.9%[433]. - The total allowance for credit losses on loans and leases and allowance for unfunded loan commitments was $423.1 million at December 31, 2022[585]. - The ending ACL coverage ratio was 1.33% at December 31, 2022, compared to 1.38% at December 31, 2021[585]. Acquisitions - The acquisition of Howard Bancorp, completed on January 22, 2022, was valued at approximately $443 million, enhancing the company's presence in the Mid-Atlantic Region with assets of about $2.4 billion[525]. - The acquisition of Union, completed on December 9, 2022, was valued at approximately $126 million, adding low-cost granular deposits and increasing the company's presence in North Carolina with assets of about $1.1 billion[530]. - Goodwill recognized from the Howard acquisition amounted to $177 million, while goodwill from the Union acquisition was $37 million, both recorded in the Community Banking business segment[527][533]. - The company incurred merger expenses of $31 million related to the Howard acquisition and $14.3 million for the Union acquisition[527][533]. Internal Controls and Audit - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2022, concluding it was effective based on the COSO criteria[425]. - The independent auditor expressed an unqualified opinion on the consolidated financial statements for the three years ended December 31, 2022, affirming compliance with U.S. GAAP[415]. - F.N.B. Corporation has maintained effective internal control over financial reporting, as confirmed by the independent auditor's assessment[425]. - The audit included evaluating the design and effectiveness of controls over the ACL process, ensuring management's assessments were supported[421]. Securities and Investments - The amortized cost of available-for-sale (AFS) debt securities as of December 31, 2022, was $3.622 billion, with unrealized losses of $348 million[539]. - The total amortized cost of held-to-maturity (HTM) debt securities was $4,087 million, with a fair value of $3,687 million, reflecting unrealized losses of $403 million[541]. - The fair value of available-for-sale (AFS) debt securities in an unrealized loss position totaled $1,868 million as of December 31, 2022, with unrealized losses of $138 million[545]. - The municipal bond portfolio had a carrying amount of $1.1 billion as of December 31, 2022, with an average rating of AA and 100% of the portfolio rated A or better[547]. Loan Portfolio and Performance - Total loans and leases amounted to $30,255 million as of December 31, 2022, compared to $24,968 million in 2021, reflecting a growth of 21%[570]. - Total consumer loans reached $10,965 million in 2022, showing an increase from $2,864 million in 2021[564]. - Non-performing loans increased to $113 million in 2022 from $88 million in 2021, representing a 28.4% increase[569]. - The ratio of non-performing loans and leases to total loans and leases was 0.37% in 2022, compared to 0.35% in 2021[569]. - The company utilizes delinquency transition matrices to forecast credit risk, analyzing payment activity, FICO scores, and external factors like unemployment[566]. Goodwill and Intangible Assets - Goodwill increased to $2,477 million at the end of 2022, up from $2,262 million at the end of 2021, reflecting an increase of 9.5% due to acquisitions[598]. - The company recorded amortization expense of $14 million for intangible assets in 2022, compared to $12 million in 2021, a rise of 16.7%[600]. - Core deposit intangibles are amortized over ten years using accelerated methods, while customer renewal lists are amortized over eight to thirteen years[488]. Cash Flows and Investments - Net cash flows provided by operating activities increased significantly to $1,218 million in 2022 from $530 million in 2021[438]. - The net cash flows used in investing activities were $3,055 million in 2022, compared to $153 million in 2021, indicating a substantial increase in cash outflows[438]. - The corporation's financing activities resulted in a net cash flow of $18 million in 2022, a decrease from $1,733 million in 2021[438].