FNB(FNB) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company's earnings per share grew 14% to a record $0.41, with net income available to common shareholders increasing to $150 million [4] - Operating pre-provision net revenue increased 18% year-over-year, contributing to a peer-leading efficiency ratio of 52% [4] - Total revenue reached a record $457 million, with non-interest income hitting a record $98.2 million [4][18] - The return on average tangible common equity was 15%, and tangible book value per share grew 11% to $11.48 [5][21] Business Line Data and Key Metrics Changes - Period-end loans increased 3% on an annualized linked quarter basis, driven by equipment finance, consumer lending, and seasonal residential mortgage production [5] - Equipment finance saw a strong quarter with 21% annualized loan growth, while commercial and industrial loans grew 2% [5][11] - Non-interest income from capital markets grew 27%, with wealth management revenues increasing 8% year-over-year [19][21] Market Data and Key Metrics Changes - The company experienced annualized linked quarter deposit growth of 7%, outpacing the industry [6] - Non-interest-bearing deposits comprised 26% of total deposits, stable from the prior quarter, with total deposit costs at 1.93% [7] - The company ranked in the top five in nearly 50% of its markets and in the top three in nearly 30% [6][37] Company Strategy and Development Direction - The company plans to add 30 new branches by 2030, focusing on high-growth markets in the Carolinas and Mid-Atlantic [24] - The strategy emphasizes growing low-cost deposits and reducing commercial real estate concentration [6] - The company is leveraging AI and data analytics to enhance customer engagement and operational efficiency [9][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth driven by fiscal policies and a more robust business environment [14] - The company remains focused on core commercial and industrial lending, with a disciplined approach to credit risk management [11][82] - Management highlighted the importance of maintaining a strong capital position to support balance sheet growth and optimize shareholder returns [21][45] Other Important Information - The company has a CET1 ratio of 11% and a TCE ratio of 8.7%, both record levels [21] - The company is actively managing its capital position and remains opportunistic regarding share buybacks [23][45] Q&A Session Summary Question: Concerns about refinancing risk in the mortgage book - Management indicated that they have strategically shifted pricing in the conforming space and are not overly concerned about prepayment speeds impacting margins [29][30] Question: Insights on deposit growth and market performance - Management noted strong deposit growth across various markets, particularly in the Carolinas, driven by competitive technology offerings and effective execution [32][34] Question: Future capital management strategy - Management confirmed a focus on optimizing shareholder value through disciplined capital management, including potential buybacks and dividend discussions [42][45] Question: Updates on fee income growth opportunities - Management highlighted recent investments in investment banking and treasury management as key areas for future fee income growth, with expectations for continued expansion [84][88]