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F.N.B. Corporation’s (FNB - Free Report) first-quarter 2022 adjusted earnings per share of 26 cents surpassed the Zacks Consensus Estimate of 24 cents. The bottom line reflects a decline of 7.1% from the prior-year quarter.
Results were primarily aided by a rise in net interest income (NII). However, higher expenses and provisions, along with a decline in fee income, were the undermining factors. Probably because of these negatives, shares of the company lost 1.8% in after-market trading.
Results excluded the Howard Bancorp merger-related significant items and branch consolidation costs. Including those, net income available to common stockholders was $51 million, down 44.1% from the year-ago quarter.
Revenues Improve, Expenses Rise
Net revenues were $312.4 million, up 2.2% year over year.
NII was $234.1 million, up 5% year over year. Growth in average earning assets was partly offset by the repricing impact on earning asset yields, mitigated by the lower cost of interest-bearing deposit accounts and improved funding mix, with a reduction in higher-cost borrowings and growth in non-interest bearing deposit accounts.
The net interest margin (FTE basis) (non-GAAP) contracted 14 basis points (bps) to 2.61%.
Non-interest income was $78.3 million, down 5.4% from the prior-year quarter. The decline was primarily due to a fall in mortgage banking income, partly offset by the rise in service charges and wealth management revenues.
Non-interest expenses were up 23% year over year to $227.4 million.
As of Mar 31, 2022, the common equity Tier 1 (CET1) ratio was 10%, in line with the Mar 31, 2021 level.
Credit Quality: A Mixed Bag
Net charge-offs were 0.03% of average loans, down 8 bps year over year. The ratio of non-performing loans, 90 days past due, and other real estate owned (OREO) to total loans and OREO declined 24 bps year over year to 0.44%.
However, F.N.B. Corp’s provision for credit losses was $18 million, up significantly from $5.9 million in the prior-year quarter.
Share Repurchase Update
In first-quarter 2022, the company repurchased 2.2 million shares for $29.8 million.
In April 2022, the company’s board of directors authorized a $150-million share repurchase program.
Our Take
F.N.B. Corp’s efforts to improve fee income and opportunistic acquisitions are expected to keep aiding the top line. Its solid liquidity position bodes well for the future. In the reported quarter, the company completed the acquisition of Howard Bancorp, Inc. The all-stock deal, valued at $418 million, was announced in July 2021.
The company's capital deployment activities seem impressive, through which it will keep enhancing shareholder value.
F.N.B. Corporation Price, Consensus and EPS Surprise
Lower markets revenues, reserve build and a decline in IB fees affected JPMorgan’s (JPM - Free Report) first-quarter 2022 earnings of $2.63 per share, which missed the Zacks Consensus Estimate of $2.73. The reported quarter’s results included net credit reserve build and losses in Credit Adjustments & Other.
In the first quarter, JPM reported a net credit reserve build of $902 million, given the “higher probabilities of downside risks.”
Wells Fargo’s (WFC - Free Report) first-quarter 2022 earnings per share of 88 cents surpassed the Zacks Consensus Estimate of 81 cents. However, the bottom line declined 14% year over year. Results in the reported quarter included the impact of a $1.1-billion decline in allowance for credit losses.
Results benefited from higher NII, provision benefits, a marginal decline in costs and solid average loan growth. Further, WFC’s credit quality remained robust in the quarter. However, disappointing non-interest income and weakness in the mortgage business were the major headwinds.
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F.N.B. Corp (FNB) Stock Dips Despite Q1 Earnings Beat, Costs Up
F.N.B. Corporation’s (FNB - Free Report) first-quarter 2022 adjusted earnings per share of 26 cents surpassed the Zacks Consensus Estimate of 24 cents. The bottom line reflects a decline of 7.1% from the prior-year quarter.
Results were primarily aided by a rise in net interest income (NII). However, higher expenses and provisions, along with a decline in fee income, were the undermining factors. Probably because of these negatives, shares of the company lost 1.8% in after-market trading.
Results excluded the Howard Bancorp merger-related significant items and branch consolidation costs. Including those, net income available to common stockholders was $51 million, down 44.1% from the year-ago quarter.
Revenues Improve, Expenses Rise
Net revenues were $312.4 million, up 2.2% year over year.
NII was $234.1 million, up 5% year over year. Growth in average earning assets was partly offset by the repricing impact on earning asset yields, mitigated by the lower cost of interest-bearing deposit accounts and improved funding mix, with a reduction in higher-cost borrowings and growth in non-interest bearing deposit accounts.
The net interest margin (FTE basis) (non-GAAP) contracted 14 basis points (bps) to 2.61%.
Non-interest income was $78.3 million, down 5.4% from the prior-year quarter. The decline was primarily due to a fall in mortgage banking income, partly offset by the rise in service charges and wealth management revenues.
Non-interest expenses were up 23% year over year to $227.4 million.
As of Mar 31, 2022, the common equity Tier 1 (CET1) ratio was 10%, in line with the Mar 31, 2021 level.
Credit Quality: A Mixed Bag
Net charge-offs were 0.03% of average loans, down 8 bps year over year. The ratio of non-performing loans, 90 days past due, and other real estate owned (OREO) to total loans and OREO declined 24 bps year over year to 0.44%.
However, F.N.B. Corp’s provision for credit losses was $18 million, up significantly from $5.9 million in the prior-year quarter.
Share Repurchase Update
In first-quarter 2022, the company repurchased 2.2 million shares for $29.8 million.
In April 2022, the company’s board of directors authorized a $150-million share repurchase program.
Our Take
F.N.B. Corp’s efforts to improve fee income and opportunistic acquisitions are expected to keep aiding the top line. Its solid liquidity position bodes well for the future. In the reported quarter, the company completed the acquisition of Howard Bancorp, Inc. The all-stock deal, valued at $418 million, was announced in July 2021.
The company's capital deployment activities seem impressive, through which it will keep enhancing shareholder value.
F.N.B. Corporation Price, Consensus and EPS Surprise
F.N.B. Corporation price-consensus-eps-surprise-chart | F.N.B. Corporation Quote
Currently, F.N.B. Corp sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Large Banks
Lower markets revenues, reserve build and a decline in IB fees affected JPMorgan’s (JPM - Free Report) first-quarter 2022 earnings of $2.63 per share, which missed the Zacks Consensus Estimate of $2.73. The reported quarter’s results included net credit reserve build and losses in Credit Adjustments & Other.
In the first quarter, JPM reported a net credit reserve build of $902 million, given the “higher probabilities of downside risks.”
Wells Fargo’s (WFC - Free Report) first-quarter 2022 earnings per share of 88 cents surpassed the Zacks Consensus Estimate of 81 cents. However, the bottom line declined 14% year over year. Results in the reported quarter included the impact of a $1.1-billion decline in allowance for credit losses.
Results benefited from higher NII, provision benefits, a marginal decline in costs and solid average loan growth. Further, WFC’s credit quality remained robust in the quarter. However, disappointing non-interest income and weakness in the mortgage business were the major headwinds.