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F.N.B. Corp (FNB) Rides on Loans & Buyouts Amid Cost Woes

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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. Nonetheless, mounting operating expenses and a deteriorating operating backdrop are major headwinds.

F.N.B. Corp remains focused on bolstering revenue growth. 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. Further, net loans saw a CAGR of 7.5% over the same time frame. Strategic expansion moves and decent loan demand will help the uptrend continue in the quarters ahead. Our estimates suggest a CAGR of 5% in GAAP revenues over the 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. Though the cost of funding will weigh on NIM expansion, we project the metric to be 3.51% this year.

Since 2005, the company has successfully integrated many buyouts. In 2022, it completed the acquisitions of UB Bancorp and Howard Bancorp. These and past acquisitions will keep supporting 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 record a CAGR of 2.2% by 2025.

In the past three months, shares of F.N.B. Corp have declined 20.3% compared with theindustry's 18.2% fall.

 

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Banks Worth a Look

A couple of better-ranked stocks from the finance space are Pathward Financial, Inc. (CASH - Free Report) and First Citizens BancShares (FCNCA - Free Report) .

The Zacks Consensus Estimate for Pathward Financial’s earnings for fiscal 2023 has been revised 1.8% upward over the past 60 days. Its shares have gained 6% in the past six months. Currently, CASH carries a Zacks Rank #2 (Buy).

First Citizens BancShares currently sports a Zacks Rank #1 (Strong Buy). Its earnings estimates for 2023 have been revised 67% upward over the past 30 days. In the past six months, FCNCA’s shares have rallied 56.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.


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First Citizens BancShares, Inc. (FCNCA) - free report >>

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Pathward Financial, Inc. (CASH) - free report >>

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