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F.N.B. Corp (FNB) Rides on Buyouts, Higher Costs a Headwind
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F.N.B. Corp (FNB - Free Report) remains well-poised for growth on solid loan balances, higher interest rates, strategic acquisitions, robust balance sheet and efforts to improve fee income. However, mounting operating expenses are likely to hamper profitability to some extent.
F.N.B. Corp is focused on improving revenues. The company's net revenues witnessed a CAGR of 5.6% over the last six-years (2017-2022), mainly driven by steady loan growth and a rise in fee income. Net loans saw a CAGR of 7.5% over the same time frame. Decent economic growth, strategic expansion moves and rising loan demand will continue the uptrend in the quarters ahead. Our estimates suggest that the company's GAAP revenues will witness a CAGR of 5.1% over the next three years ending 2025.
With the Federal Reserve expected to keep interest rates high in the near term, FNB's net interest margin (NIM) is anticipated to improve in the quarters ahead.
Since 2005, the company has successfully integrated many buyouts. Last year, the company completed the acquisitions of UB Bancorp and Howard Bancorp. These and past acquisitions will continue to support financials. Given a solid balance sheet and liquidity position, FNB is likely to continue its inorganic expansion strategy.
FNB's non-interest expenses have remained elevated over the past several years, with the metric witnessing a CAGR of 3.9% for the last six-years (ended 2022). The rise was mainly due to an increase in salaries and employee-benefit costs. We project non-interest expenses to increase at a CAGR of 1.7% over the next three years ending 2025.
Further, analysts are bearish on the stock’s earnings prospects. The Zacks Consensus Estimate for F.N.B Corp's current-year earnings has been revised marginally down over the last 30 days. The company currently carries a Zacks Rank #3 (Hold).
In the past three months, shares of F.N.B. Corp have dropped 11.9% compared with the industry's 13.6% decline.
The Zacks Consensus Estimate for UBAB's 2023 earnings has been unchanged in the past 30 days. UBAB's shares have surged 42.9% over the past six months. Currently, UBAB sports a Zacks Rank #1.
RBCAA currently carries a Zacks Rank #2 (Buy). Its Zacks Consensus Estimate for 2023 have been revised marginally upward in the past 30 days. Over the past six months, RBCAA’s shares have moved up 4.4%.
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F.N.B. Corp (FNB) Rides on Buyouts, Higher Costs a Headwind
F.N.B. Corp (FNB - Free Report) remains well-poised for growth on solid loan balances, higher interest rates, strategic acquisitions, robust balance sheet and efforts to improve fee income. However, mounting operating expenses are likely to hamper profitability to some extent.
F.N.B. Corp is focused on improving revenues. The company's net revenues witnessed a CAGR of 5.6% over the last six-years (2017-2022), mainly driven by steady loan growth and a rise in fee income. Net loans saw a CAGR of 7.5% over the same time frame. Decent economic growth, strategic expansion moves and rising loan demand will continue the uptrend in the quarters ahead. Our estimates suggest that the company's GAAP revenues will witness a CAGR of 5.1% over the next three years ending 2025.
With the Federal Reserve expected to keep interest rates high in the near term, FNB's net interest margin (NIM) is anticipated to improve in the quarters ahead.
Since 2005, the company has successfully integrated many buyouts. Last year, the company completed the acquisitions of UB Bancorp and Howard Bancorp. These and past acquisitions will continue to support financials. Given a solid balance sheet and liquidity position, FNB is likely to continue its inorganic expansion strategy.
FNB's non-interest expenses have remained elevated over the past several years, with the metric witnessing a CAGR of 3.9% for the last six-years (ended 2022). The rise was mainly due to an increase in salaries and employee-benefit costs. We project non-interest expenses to increase at a CAGR of 1.7% over the next three years ending 2025.
Further, analysts are bearish on the stock’s earnings prospects. The Zacks Consensus Estimate for F.N.B Corp's current-year earnings has been revised marginally down over the last 30 days. The company currently carries a Zacks Rank #3 (Hold).
In the past three months, shares of F.N.B. Corp have dropped 11.9% compared with the industry's 13.6% decline.
Image Source: Zacks Investment Research
Banks Worth a Look
A couple of better-ranked stocks from the banking space are United Bancorporation of Alabama (UBAB - Free Report) and Republic Bancorp (RBCAA - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for UBAB's 2023 earnings has been unchanged in the past 30 days. UBAB's shares have surged 42.9% over the past six months. Currently, UBAB sports a Zacks Rank #1.
RBCAA currently carries a Zacks Rank #2 (Buy). Its Zacks Consensus Estimate for 2023 have been revised marginally upward in the past 30 days. Over the past six months, RBCAA’s shares have moved up 4.4%.