FNB(US:FNB)2024-01-19 18:55Financial Data and Key Metrics Changes - The company reported a fourth quarter net income available to common shareholders of $49 million and an operating income of $139 million, with full-year 2023 operating performance highlighted by record revenue of $1.6 billion and record net income of $569 million [80][102] - Tangible book value per share increased 15% year-over-year to a record high of $9.47, approaching the $10 milestone [80][104] - The cumulative deposit beta was reported at 34.3%, with spot deposit costs ending the year below 2%, outperforming peers by over 50 basis points [81][117] Business Line Data and Key Metrics Changes - Total loans and leases ended the year at a record $32.8 billion, an increase of $2.4 billion since year-end 2022, with strong loan production across commercial and consumer segments [75][115] - Operating non-interest income totaled $80.4 million, with mortgage banking operations income increasing by $3.1 million linked quarter due to improved gain on sale margins [91] Market Data and Key Metrics Changes - The company maintained a stable deposit base with total deposits ending the year at $34.7 billion, unchanged from the prior year despite elevated competition [81][117] - The efficiency ratio for the fourth quarter was reported at 52.5%, with a full-year efficiency ratio of 51.2%, demonstrating effective cost management [121] Company Strategy and Development Direction - The company aims to enhance customer experience by integrating business loans, deposits, and payments into the Common application in the eStore, allowing simultaneous applications for multiple products [74] - Strategic investments in delivery channels and digital tools are expected to deepen customer relationships and increase market share [82][108] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued loan growth despite economic challenges, with expectations for mid-single-digit growth in loans and low-single-digit growth in deposits for 2024 [105][106] - The company plans to closely monitor macroeconomic trends and manage risks proactively, maintaining a balanced portfolio throughout economic cycles [98][101] Other Important Information - The company completed the sale of approximately $650 million of available-for-sale securities and transferred $355 million of indirect auto loans to held for sale, which is expected to enhance future profitability [89][96] - Total delinquency across the portfolio was reported at 89 basis points, with consistent performance across the portfolio and prudent underwriting practices [59][76] Q&A Session Summary Question: What is the expected impact of deposit beta on net interest income? - Management indicated that cumulative deposit beta is expected to peak around 35%, with active management of the deposit book and pricing strategies in place [17][118] Question: How does the company view loan growth prospects? - Management expressed confidence in achieving mid to high single-digit loan growth, supported by strong commercial pipelines and strategic pricing adjustments [9][26] Question: What are the expectations for non-interest income in 2024? - Non-interest income is projected to benefit from diversified fee-based strategies, with full-year results expected between $325 million and $345 million [106][107] Question: How is the company managing its commercial real estate portfolio? - Management highlighted proactive risk management strategies and consistent underwriting practices, with low delinquency rates in the non-owner-occupied CRE portfolio [86][152]