FNB(US:FNB)2025-07-18 13:32Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $130.7 million, or $0.36 per share, with a linked quarter revenue growth of 6.5% [5][19] - Pre-provision net revenue rose 16% from the prior quarter to $192 million, with total revenues reaching a quarterly record of $438 million [5][19] - The CET1 ratio approached 11%, tangible common equity stood at 8.5%, and tangible book value per share increased by 13% year over year to $11.14 [5][25] Business Line Data and Key Metrics Changes - Net interest income was $347 million, while non-interest income reached a record $91 million, more than doubling over the last ten years [5][24] - Average loans and leases totaled $34.5 billion, reflecting a 5.3% annualized linked quarter increase, driven by consumer and commercial loan growth [20] - Non-interest expense totaled $246.2 million, with increases primarily due to strategic hiring and technology investments [24][25] Market Data and Key Metrics Changes - Average total deposits grew to over $37 billion, with a loan-to-deposit ratio of 91.9%, down slightly from the last quarter [6][21] - The company maintained a non-interest-bearing demand deposit level of 26% [6][21] - The cumulative total deposit beta since interest rate cuts began in September was 28% at quarter end [21] Company Strategy and Development Direction - The company is focused on organic growth and diversifying revenue streams, particularly in non-interest income [8][9] - Recent expansions into public finance and corporate investment banking services are part of the strategy to enhance high-value business lines [9] - The integration of the eStore common application into the branch origination platform aims to improve customer onboarding and experience [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for a pickup in commercial loan growth in 2025, supported by a strong short-term commercial loan pipeline [20] - The company is closely monitoring the impact of tariffs and geopolitical events on its loan portfolio while managing strong liquidity and capital positions [12][17] - Management highlighted the importance of maintaining a disciplined approach to credit risk management amid a volatile economic environment [12][17] Other Important Information - The company repurchased 725,000 shares at a weighted average price of $13.85 during the quarter [6] - The efficiency ratio remained favorable at 54.8%, with expectations for positive operating leverage in the second half of 2025 [25] - The company has created a generative AI task force to explore new use cases and ensure responsible risk management around AI usage [12] Q&A Session Summary Question: Margin guidance and expectations - Management indicated that the margin is expected to be flattish to slightly up in the next two quarters, with a significant contribution from growth in earning assets and lower cost of funds [33][34] Question: Expense guidance and investments - The increase in guidance was primarily due to the down payment assistance program, with expectations for higher commissions tied to revenue performance [38][39] Question: Deposit cost perspective and competition - Management noted that total interest-bearing deposit costs are expected to remain stable until the Fed moves, with confidence in their ability to gather deposits due to a diverse geographic footprint [48][49] Question: Future loan growth composition - The company anticipates a shift towards commercial loan growth while the mortgage lending business is expected to taper off, with a focus on high-quality deposits [91][92] Question: Capital management strategy - The company views its capital position as a buffer for funding loan growth, with active share repurchase programs and potential dividend considerations [111][113]