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F.N.B. Corp (FNB) Q3 Earnings Beat, Stock Tanks on Provisions
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F.N.B. Corporation’s (FNB - Free Report) third-quarter 2022 adjusted earnings per share of 39 cents outpaced the Zacks Consensus Estimate of 36 cents. The bottom line reflects a 14.7% rise from the prior-year quarter.
The results were primarily aided by a rise in net interest income (NII) and solid loan demand. Higher interest rates supported growth in margins. However, increased expenses, lower fee income and rising provisions were the undermining factors. This higher-than-expected increase in credit cost seems to have weighed on investor sentiments, as the stock tanked 6.2% in after-hours trading.
After considering significant items, the net income available to common stockholders was $135.5 million or 38 cents per share, up from $109.5 million or 34 cents per share in the year-ago quarter.
Revenues Improve, Expenses Rise
The net revenues were $379.6 million, up 18.1% year over year. The top line also beat the Zacks Consensus Estimate of $360.8 million.
The NII was $297.1 million, surging 27.8%. Growth in average earning assets and the repricing impact of the higher interest rate environment on earning asset yields, partially offset by the higher cost of interest-bearing deposit accounts and reduced PPP contributions, resulted in the upswing.
The net interest margin (FTE basis) (non-GAAP) expanded 47 basis points (bps) to 3.19%.
The non-interest income was $82.5 million, down 7.2%. The fall was primarily due to lower mortgage banking income and capital markets income.
The non-interest expenses were up 5.9% to $195.1 million. Operating non-interest expenses totaled $193.0 million, rising 5.3%.
As of Sep 30, 2022, the common equity Tier 1 (CET1) ratio was 9.8% compared with 9.9% as of Sep 30, 2021.
At the end of the third quarter, the average loans and leases were $28.4 billion, up 4.4% sequentially. The average deposits totaled $33.6 billion, down marginally.
Credit Quality Worsening
The ratio of non-performing assets and 90-days past due loans to total loans and other real estate owned declined 15 bps year over year to 0.36%.
F.N.B. Corp’s provision for credit losses was $11.2 million against a provision benefit of $1.8 million recorded in the prior-year quarter. This reflected substantial loan growth, projected “macroeconomic slowdown” and lower prepayment speed expectations.
In the reported quarter, the company recorded net charge-offs to total average loans of 0.04%, up 1 bp from the prior-year quarter.
Conclusion
F.N.B. Corp has received all regulatory approvals for its planned merger with Greenville-based UB Bancorp. The all-stock deal, signed in June, is valued at nearly $117 million and will likely close in December. The deal is projected to be almost 2% accretive to earnings, with fully phased-in cost savings on a GAAP basis.
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. 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
Washington Federal’s (WAFD - Free Report) fourth-quarter fiscal 2022 (ended Sep 30) earnings of $1.07 per share handily surpassed the Zacks Consensus Estimate of 91 cents. The figure reflects a year-over-year jump of 48.6%.
Results were primarily aided by higher rates, robust deposits and improving loan balances, which drove net interest income (NII). However, an increase in expenses, a fall in total other income and higher provisions were the headwinds for WAFD.
Associated Banc-Corp (ASB - Free Report) is scheduled to release quarterly numbers on Oct 20.
Over the past 30 days, the Zacks Consensus Estimate for Associated Banc-Corp’s quarterly earnings has moved 1.7% lower to 58 cents. This suggests a 3.6% increase from the prior-year quarter.
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F.N.B. Corp (FNB) Q3 Earnings Beat, Stock Tanks on Provisions
F.N.B. Corporation’s (FNB - Free Report) third-quarter 2022 adjusted earnings per share of 39 cents outpaced the Zacks Consensus Estimate of 36 cents. The bottom line reflects a 14.7% rise from the prior-year quarter.
The results were primarily aided by a rise in net interest income (NII) and solid loan demand. Higher interest rates supported growth in margins. However, increased expenses, lower fee income and rising provisions were the undermining factors. This higher-than-expected increase in credit cost seems to have weighed on investor sentiments, as the stock tanked 6.2% in after-hours trading.
After considering significant items, the net income available to common stockholders was $135.5 million or 38 cents per share, up from $109.5 million or 34 cents per share in the year-ago quarter.
Revenues Improve, Expenses Rise
The net revenues were $379.6 million, up 18.1% year over year. The top line also beat the Zacks Consensus Estimate of $360.8 million.
The NII was $297.1 million, surging 27.8%. Growth in average earning assets and the repricing impact of the higher interest rate environment on earning asset yields, partially offset by the higher cost of interest-bearing deposit accounts and reduced PPP contributions, resulted in the upswing.
The net interest margin (FTE basis) (non-GAAP) expanded 47 basis points (bps) to 3.19%.
The non-interest income was $82.5 million, down 7.2%. The fall was primarily due to lower mortgage banking income and capital markets income.
The non-interest expenses were up 5.9% to $195.1 million. Operating non-interest expenses totaled $193.0 million, rising 5.3%.
As of Sep 30, 2022, the common equity Tier 1 (CET1) ratio was 9.8% compared with 9.9% as of Sep 30, 2021.
At the end of the third quarter, the average loans and leases were $28.4 billion, up 4.4% sequentially. The average deposits totaled $33.6 billion, down marginally.
Credit Quality Worsening
The ratio of non-performing assets and 90-days past due loans to total loans and other real estate owned declined 15 bps year over year to 0.36%.
F.N.B. Corp’s provision for credit losses was $11.2 million against a provision benefit of $1.8 million recorded in the prior-year quarter. This reflected substantial loan growth, projected “macroeconomic slowdown” and lower prepayment speed expectations.
In the reported quarter, the company recorded net charge-offs to total average loans of 0.04%, up 1 bp from the prior-year quarter.
Conclusion
F.N.B. Corp has received all regulatory approvals for its planned merger with Greenville-based UB Bancorp. The all-stock deal, signed in June, is valued at nearly $117 million and will likely close in December. The deal is projected to be almost 2% accretive to earnings, with fully phased-in cost savings on a GAAP basis.
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. 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 carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Date of Other Banks
Washington Federal’s (WAFD - Free Report) fourth-quarter fiscal 2022 (ended Sep 30) earnings of $1.07 per share handily surpassed the Zacks Consensus Estimate of 91 cents. The figure reflects a year-over-year jump of 48.6%.
Results were primarily aided by higher rates, robust deposits and improving loan balances, which drove net interest income (NII). However, an increase in expenses, a fall in total other income and higher provisions were the headwinds for WAFD.
Associated Banc-Corp (ASB - Free Report) is scheduled to release quarterly numbers on Oct 20.
Over the past 30 days, the Zacks Consensus Estimate for Associated Banc-Corp’s quarterly earnings has moved 1.7% lower to 58 cents. This suggests a 3.6% increase from the prior-year quarter.