F.N.B. Corp Earnings Call Highlights Strong Momentum

F.N.B. Corp ((FNB)) has held its Q4 earnings call. Read on for the main highlights of the call.

F.N.B. Corp’s Earnings Call Signals Strong Momentum Despite Macro Uncertainty

The latest earnings call from F.N.B. Corp struck a distinctly upbeat tone, underscored by record annual revenue and earnings, expanding margins, healthier capital levels, and solid deposit growth. Management emphasized that asset quality remains robust and coverage ratios are high, giving the bank room to navigate a choppy rate environment. While there were acknowledgments of tactical and one-time headwinds—such as mortgage-related moves, discrete charitable and impairment charges, and loan balance pressure from payoffs—the overall message was one of durable strength and constructive outlook, tempered only by the usual execution and macroeconomic risks.

Record Annual Revenue and Earnings Underscore Growth Momentum

F.N.B. delivered record full-year 2025 operating revenue of $1.8 billion and operating net income available to common shareholders of $577 million, translating to operating EPS of $1.59. That EPS figure represents a 14% year-over-year increase, signaling that the bank is not only growing its top line but also translating that growth efficiently into profits. For investors, this performance reinforces F.N.B.’s ability to scale earnings even in a complex rate and credit environment.

Q4 Delivers Strong Operating Performance

The fourth quarter capped the year on a high note, with operating net income available to common shareholders of $181.8 million, or $0.50 per diluted share. Total revenues for the quarter reached nearly $458 million, a record for the period and up 12.4% on an operating basis from a year earlier. The quarterly results show F.N.B. sustaining growth through year-end, rather than fading into the close, which is particularly important given the shifting interest-rate backdrop.

Net Interest Income Hits Record as Margins Expand

Net interest income (NII) in Q4 rose to a record $365.4 million, up 1.7% from the prior quarter and 13.4% year-over-year. Net interest margin (NIM) improved to 3.28%, a 3-basis-point linked-quarter increase and 24 basis points higher than a year ago. The bank’s ability to expand margin in a period that already included multiple Fed rate cuts highlights disciplined pricing on both sides of the balance sheet and suggests F.N.B. retains meaningful earnings power as rates evolve.

Capital Strength and Book Value Growth Provide Cushion

F.N.B.’s balance sheet crossed a key milestone, with total assets surpassing $50 billion for the first time. The Common Equity Tier 1 (CET1) ratio stood at a strong 11.4%, while the tangible common equity ratio reached 8.9%. Tangible book value per share climbed to $11.87, up 13.2% year-over-year. This combination of capital strength and book value growth gives the company flexibility to support loan growth, return capital, and withstand potential credit or rate shocks.

Asset Quality and Reserve Coverage Remain Solid

Credit quality indicators continued to look controlled. Total delinquency stood at 71 basis points, up modestly by 6 basis points sequentially, while nonperforming loans and OREO fell to a multiyear low of 31 basis points, down 6 basis points from the prior quarter. Net charge-offs were 19 basis points in Q4 and 20 basis points for the full year—levels that remain low by historical standards. The bank ended the year with a $440 million allowance, representing 1.26% of loans and a 1-basis-point sequential increase, with nonperforming loan coverage at a hefty 438% inclusive of discounts. These metrics support management’s view that credit costs, while normalizing, remain manageable.

Fee Income and Wealth Businesses Drive Diversification

Operating noninterest income reached $92.3 million in the quarter, up 8.8% year-over-year, highlighting the value of fee-based revenue in balancing rate-sensitive NII. Wealth Management was a standout, with revenues rising 15% compared with 2024 levels. Seven fee-based businesses posted all-time highs for the full year, underscoring a successful push to build diversified, recurring income streams that can help smooth earnings through rate and credit cycles.

Deposit Growth Supports Funding Mix and Loan-to-Deposit Ratio

Deposits remained a bright spot, with Q4 average deposits at $38.6 billion, up $740 million and growing at a 7.7% linked-quarter annualized pace. Average noninterest-bearing deposits surpassed $10 billion and grew at a 4.5% annualized rate sequentially—a key positive for funding costs. The loan-to-deposit ratio improved to 89.7%, dropping below the 90% threshold and positioning F.N.B. with a more comfortable liquidity and funding profile as it plans for continued loan growth.

Efficiency Gains and Cost Discipline Backed by Automation and AI

The bank’s efficiency ratio improved to 53.8% in Q4, an improvement of 307 basis points versus the same quarter in 2024. Management highlighted disciplined expense management that has generated $10–$20 million in annual cost savings since 2019, and they see a path to higher run-rate savings in 2026 driven by automation and artificial intelligence initiatives. For shareholders, this indicates not just a one-time efficiency improvement, but a structural push toward better productivity and operating leverage.

Mortgage Portfolio Repositioning Creates Short-Term Headwinds

F.N.B. transferred roughly $200 million of performing residential mortgage loans to held-for-sale in Q4, with the sale expected to close in early 2026. This repositioning, combined with mortgage banking income pressure from higher MSR amortization and a prior-year net MSR fair value recovery, weighed on mortgage-related fee income. While the strategy is aimed at optimizing the balance sheet and risk profile, it brings near-term earnings drag in mortgage fees that investors will need to monitor.

Discrete Items Temporarily Weighed on Q4 Earnings

Fourth-quarter results included several one-off items that dampened reported earnings. F.N.B. made a discretionary $20 million charitable contribution, which lowered operating net income in the period. The quarter also included a $4.4 million pre-tax noncredit impairment on a renewable energy financing receivable, partially offset by $37.2 million of investment tax credits. These items are not expected to recur at the same magnitude but do complicate comparisons and should be adjusted for when assessing underlying run-rate performance.

Earning Asset Yields Face Rate-Cut Pressure

Despite overall margin expansion, the yield on earning assets slipped 11 basis points sequentially, reflecting the effect of 75 basis points of Fed cuts since September 2025 on variable-rate loans. Deposit beta since those cuts has been approximately 25%, meaning deposit costs have not yet fallen as quickly as asset yields. Management emphasized the need for continued proactive deposit pricing and balance-sheet management to protect NIM, especially if the rate-cut cycle unfolds differently than assumed.

CRE De-Risking and Secondary Market Exits Trim Loan Balances

Average commercial real estate loans declined by $158 million sequentially, driven by payoffs and secondary market exits. While these moves reduced CRE concentration to 197% of capital—an important de-risking step given regulatory and market scrutiny—they also created near-term pressure on overall commercial loan balances. Investors should view this as a trade-off between risk reduction and loan growth, with long-term benefits in resilience but short-term headwinds for balance expansion.

Targeted Spending Pushes Up Certain Operating Costs

Operating noninterest expense rose 3.4% year-over-year to $256.5 million. Salaries and employee benefits were up 4.5%, reflecting talent investment and wage pressures. Output services, driven by higher technology and third-party costs, jumped 15.3%, while occupancy and equipment expenses increased 7.3%. These cost pressures partially offset efficiency gains but are linked to strategic investments in technology and infrastructure that management believes will yield future productivity benefits.

Loan Payoffs and Line Utilization Weigh on Growth

Commercial loan growth faced friction from payoff activity and lower line utilization. Average commercial loans and leases decreased slightly, by $54 million sequentially, as customer paydowns and reduced usage of credit lines offset new production. Management stressed that underlying origination volumes remain solid, but the churn from payoffs means the bank must maintain elevated production merely to keep balances flat, adding execution risk to its growth plans.

Rate Path Uncertainty Adds Risk to Guidance

F.N.B.’s outlook is notably sensitive to the interest-rate path. Its 2026 planning assumptions include two sizable Fed cuts totaling 225 basis points, anticipated in April and October. The timing and magnitude of actual rate moves will directly influence NII, NIM, and provision expectations, particularly given the variable-rate nature of much of the loan book and the evolving deposit beta. Management acknowledged that deviations from these assumptions, along with changes in loan growth or charge-offs, could shift results relative to guidance.

Guidance Points to Steady Growth, Stable Margin, and Better Efficiency

For 2026, F.N.B. guided to period-end loans and deposits growing at a mid-single-digit pace, suggesting a steady but not aggressive expansion strategy. Full-year net interest income is projected between $1.495 billion and $1.535 billion, with Q1 NII expected at $355–$365 million under the assumption of 225 basis points of rate cuts later in the year. Noninterest income is forecast at $370–$390 million for the year (Q1: $90–$95 million), while noninterest expenses are targeted at $1.00–$1.02 billion (Q1: $255–$260 million), implying ongoing cost discipline. Provision expense is pegged at $85–$105 million, depending on net loan growth and charge-off trends, and the effective tax rate is expected at 21–22%. Management anticipates a relatively stable NIM in Q1 with modest sequential improvement through year-end, a total spot deposit beta easing toward about 30% by year-end, and terminal betas in the mid-30s. They also see continued cost savings above the historical $10–$20 million run-rate and an efficiency ratio moving into the low-50s in the second half, supported by automation and AI. With CET1 at 11.4% and tangible common equity at 8.9%, F.N.B. believes it has the flexibility to maintain share repurchases at least in line with 2025 levels.

In summary, F.N.B. Corp’s earnings call painted a picture of a bank in strong operating shape, leveraging record revenues, expanding margins, and a solid capital and liquidity base to support moderate, quality-focused growth. Asset quality remains reassuring, fee income is gaining traction, and management is leaning into technology and automation to drive further efficiency gains. While headwinds from rate cuts, mortgage repositioning, and loan payoff activity bear watching, the overall narrative is constructive: F.N.B. appears well-positioned to deliver steady returns as long as it executes on its strategy and navigates the uncertain rate environment with discipline.