FNB 3Q Income Drops to $80.8M; CEO ‘Encouraged’ by Outlook

PITTSBURGH, Pa. – F.N.B. Corp., the parent of First National Bank of Pennsylvania, reports third-quarter of net income of $80.8 million, or 25 cents per diluted common share, down from $100.7 million, or 31 cents per share, in the same period a year ago.

The third-quarter results are also down slightly from the bank’s second-quarter earnings of $81.6 million, or 25 cents per share.

“In this challenging economic environment prompted by the global pandemic, FNB continues to produce positive results built on employee protection and assistance, operational response and preparedness, continued customer and community support, and stringent risk management. Our performance is directly attributable to our resilient business model, which is based upon the deployment of technology and expansion into attractive new markets,” said President and CEO Vincent Delie Jr. in a statement.

“Revenue continued to increase and operating EPS totaled $0.26, resulting in an operating return on tangible equity of 14%. These results reflect continued average loan and deposit growth of 2% and 4%, respectively, strong capital markets activity and record mortgage banking levels of $19 million. On a linked-quarter basis, tangible book value per share increased $0.18 to $7.81, as we strengthened our capital ratios while sustaining our quarterly dividend of $0.12 per share. We are encouraged by this quarter’s positive results as FNB remains profitable while building capital and reserves.”

Among the highlights F.N.B. offered in its quarterly earnings report are:

  • Growth in total average loans was $3.3 billion, or 14.7%, with average commercial loan growth of $3.3 billion, or 22.9%, and average consumer loan growth of $57 million, or 0.7%. Total loan growth included $2.5 billion of net PPP commercial loans originated in 2020.
  • Total average deposits grew $4.3 billion, or 17.8%. Growth in average deposits reflected inflows from the PPP and government stimulus activities, in addition to organic growth in new and existing customer relationships.
  • The loan to deposit ratio was 89.1% at September 30, 2020, compared to 93.8% at September 30, 2019, as deposit growth outpaced loan growth and $508 million of indirect auto installment loans were transferred to loans held for sale in September 2020 in anticipation of a loan sale expected to close in the fourth quarter.
  • Net interest income decreased $2.7 million, or 1.2%, attributable to lower interest rates compared to 2019 as the quarterly average 1-month LIBOR rate decreased from 2.18% in the third quarter of 2019 to 0.16% in the third quarter of 2020. The decreases were offset by growth in average earning assets, reductions in the cost of interest-bearing deposits and strong growth in noninterest bearing deposits.

F.N.B.’s performance ratios for the quarters ended Sept. 30, June 30 and Sept. 30, 2019, include:

  • Return on average equity: 6.7%, 6.89%, 8.49%.
  • Return on average assets: 0.88%, 0.91%, 1.2%.
  • Net interest margin: 2.79%, 2.88%, 3.17%.
  • Efficiency ratio: 55.26%, 53.74%, 54.11%.

Total noninterest expenses were $108.21 million, up from $175.93 million in the previous quarter and $177.78 million in the third quarter of 2019.

Nonperforming assets were $178 million, up from $170 million in the second quarter and $95 million in the year-ago quarter. 

Total assets were $37.466 billion in the third quarter, up from $36.819 billion in the previous quarter and the $33.85 billion reported in the third quarter of 2019.

Copyright 2020 The Business Journal, Youngstown, Ohio.