On October 18, 2024, F N B Corp (FNB, Financial) released its 8-K filing for the third quarter of 2024. The company reported net income available to common stockholders of $110.1 million, or $0.30 per diluted share, falling short of analyst estimates of $0.35 per share. Revenue for the quarter was $323.3 million, also below the estimated $410.78 million. F N B Corp provides a comprehensive range of financial services, primarily through its Community Banking segment, which is the main revenue driver.
Performance and Challenges
F N B Corp's performance in the third quarter of 2024 was marked by a decrease in net income compared to both the previous quarter and the same period last year. The company faced challenges due to a strategic sale of $431 million in performing indirect auto loans, which resulted in a pre-tax loss of $11.6 million. This move was part of a balance sheet management strategy aimed at improving the loan-to-deposit ratio and capital ratios. Despite these efforts, the company's earnings per share fell short of expectations, highlighting the impact of increased non-interest expenses and a challenging interest rate environment.
Financial Achievements
Despite the earnings shortfall, F N B Corp achieved significant financial milestones. The company reported a 5% linked-quarter growth in deposits, amounting to $1.8 billion, and a 15% year-over-year increase in tangible book value per share to $10.33. These achievements underscore the company's ability to leverage its client relationships and digital capabilities to drive growth. The tangible common equity ratio reached an all-time high of 8.2%, and the Common Equity Tier 1 (CET1) ratio improved to 10.4%, reflecting strong capital management.
Key Financial Metrics
F N B Corp's net interest income for the quarter was $323.3 million, a 2.4% increase from the previous quarter, driven by improved asset yields and loan growth. However, the net interest margin slightly declined to 3.08% due to higher costs of funds. Non-interest income reached a record $89.7 million, benefiting from diversified revenue streams. The company's efficiency ratio stood at 55.2%, indicating effective cost management despite increased expenses.
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Income (millions) | $110.1 | $123.0 | $143.3 |
| Earnings per Share | $0.30 | $0.34 | $0.40 |
| Net Interest Income (millions) | $323.3 | $315.9 | $326.6 |
| Non-Interest Income (millions) | $89.7 | $87.9 | $81.6 |
Analysis and Outlook
F N B Corp's third-quarter results reflect a mixed performance, with strong deposit growth and capital ratios offset by lower-than-expected earnings. The strategic sale of auto loans and increased non-interest expenses impacted profitability. However, the company's robust capital position and diversified income streams provide a solid foundation for future growth. As the banking industry navigates a challenging economic environment, F N B Corp's focus on leveraging digital capabilities and managing costs will be crucial for sustaining its competitive edge.
“FNB’s robust linked-quarter deposit growth of $1.8 billion, or 5%, highlights our ability to leverage our significant client relationships, digital and data analytics capabilities as part of our Clicks to Bricks strategy and our diverse geographic footprint to manage the loan-to-deposit ratio which improved nearly 500 basis points from last quarter to 91.7%,” said F.N.B. Corporation Chairman, President and Chief Executive Officer, Vincent J. Delie, Jr.
Explore the complete 8-K earnings release (here) from F N B Corp for further details.
