10-K: F.N.B. Corporation Reports Solid 2024 Results, Exceeds Peer Performance

F.N.B. Corporation announces its 2024 financial results, highlighting growth in assets, loans, and deposits while navigating an uncertain interest rate environment.

Summary

• F.N.B. Corporation's net income available to common shareholders for 2024 was $459.3 million, or $1.27 per diluted common share.
• Total assets reached nearly $49 billion, with loans at $34 billion and deposits at $37 billion as of December 31, 2024.
• The company achieved record market capitalization, ending the year at $5.3 billion.
• Tangible book value per share grew 11% year-over-year to a record $10.49.
• The CET1 ratio reached a record 10.6%, and the tangible common equity to tangible assets ratio was 8.2%.
• Non-interest income reached $316 million, with record operating non-interest income of $350 million.
• Year-over-year loan growth was 5.0%, and deposit growth was 6.9%.
• Total delinquencies were at 0.83%, and net charge-offs were at 0.19% for the full year 2024.
• The FOMC lowered the target range for the federal funds rate by 100 basis points in 2024.

Sentiment

Score: 7

Explanation: The document presents a mixed sentiment. While there are positive aspects such as record market capitalization and growth in certain areas, there are also negative aspects such as decreased net interest income and increased non-interest expense. The overall tone is cautiously optimistic.

Positives

• F.N.B. exceeded peer performance on loan growth, deposit growth, and deposit cost management.
• The company achieved record market capitalization, ending the year at $5.3 billion.
• Tangible book value per share grew 11% year-over-year to a record $10.49.
• The CET1 ratio reached a record 10.6%, and the tangible common equity to tangible assets ratio was 8.2%.
• Non-interest income reached $316 million, with record operating non-interest income of $350 million.
• The company improved the loan-to-deposit ratio through strong deposit gathering initiatives.
• The ACL coverage position remains strong at 265%.

Negatives

• Net interest income decreased 2.7% due to higher interest-bearing deposit costs and the impact of FOMC's interest rate cuts.
• Operating earnings per diluted common share decreased 11.5% from 2023.
• Non-interest expense increased 8.7% on an operating basis, driven primarily by higher salaries and employee benefits expense.

Risks

• Credit risk associated with commercial loans and leases.
• Volatility of the mortgage banking business.
• Changes in market interest rates and unpredictability of monetary policies.
• Liquidity risk and ability to obtain funding.
• Reputation risk and potential negative perceptions.
• Operational risks, including cybersecurity threats and reliance on third-party vendors.
• Legal and compliance risks, including changes in regulations and potential enforcement actions.
• Strategic risk related to maintaining historical growth levels.

Future Outlook

Economists are projecting that the target funds rate will likely decline further in small periodic increments, however the timing, extent, and frequency of such reductions remain uncertain.

Management Comments

• We achieved solid corporate performance in 2024 by, among other things, exceeding peer performance on loan growth, deposit growth, and deposit cost management amidst an uncertain interest rate environment.
• We achieved new milestones and set new records, notably in the areas of non-interest income, capital, and deposit market share.
• We benefited from our geographic footprint, investments in technology, strong balance sheet and high caliber front-line bankers to generate year-over-year loan growth of 5.0% and robust deposit growth of 6.9%.

Industry Context

The report acknowledges the challenges and uncertainties in the banking sector, including the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank, and the resulting regulatory scrutiny and potential for increased compliance costs.

Comparison to Industry Standards

• F.N.B. exceeded peer performance on loan growth, deposit growth, and deposit cost management.
• The report references the KBW NASDAQ Regional Banking Index as a benchmark for stock performance.
• The report mentions the Financial Stability Report from the FRB, which discusses trends in commercial and residential real estate markets.

Legal Proceedings

• FNBPA reached a settlement with the DOJ and the State of North Carolina to resolve fair lending allegations related to mortgage lending activities in the Winston-Salem and Charlotte, North Carolina markets.

Related Party Transactions

• In late 2024, the majority of our Pittsburgh-based employees moved into the new headquarters building under leases with a related party.

Stakeholder Impact

• Shareholders will be impacted by the company's financial performance and dividend payouts.
• Employees will be impacted by changes in compensation, benefits, and employment opportunities.
• Customers will be impacted by the availability and pricing of financial products and services.
• Communities will be impacted by the company's community reinvestment activities and fair lending practices.

Next Steps

• The company will continue to monitor and manage its liquidity and capital position.
• The company will continue to assess its risk management practices and make investments as necessary.
• The company will continue to focus on promoting equity and economic prosperity in the markets that it serves.

Key Dates