F.N.B. Corporation Reports Q4 2023 Earnings and Strategies for 2024
2024-01-20
F.N.B. Corporation, led by Chairman, President, and Chief Executive Officer Vince Delie, reported its Q4 2023 earnings per share of $0.38. However, the company's revenue for the quarter fell short of expectations by $66.72 million. Despite this, F.N.B. Corporation achieved record full-year 2023 revenue of $1.6 billion.
In Q4 2023, F.N.B. Corporation's net income available to common shareholders was $49 million on a reported basis and $139 million on an operating basis. The company also recorded a record net income available to common shareholders of $1 for the full year.
F.N.B. Corporation's strategy for maintaining a stable deposit base involves outperforming its peers in the industry and keeping total deposit costs and overall cost of funds low. At the end of the year, the company had a total deposit mix of non-interest-bearing deposits to total deposits of 29.4%.
The company's spot deposit costs ended the year below 2%, which was over 50 basis points better than its peers in the third quarter. F.N.B. Corporation also achieved a tangible common equity to tangible assets ratio of 7.8%, the highest level in its history and exceeding the peer median. To improve forward returns in earnings, the company recently completed the sale of approximately $650 million of available-for-sale securities, announced the redemption of $110 million of preferred stock, and transferred $355 million of indirect auto loans to held for sale.
Looking ahead to 2024, F.N.B. Corporation aims to bring small businesses into the fold by offering business loans, deposits, and payments through the Common application in eStore. The company's goal is to maintain a stable deposit base and manage its loan-to-deposit ratio, which is expected to be in the mid-90s. F.N.B. Corporation also plans to actively manage its deposit book and pricing to optimize its balance sheet.
In terms of asset quality, F.N.B. Corporation reported that total delinquency finished the year at 70 basis points, NPLs and OREO decreased to 34 basis points, and criticized loans were down 13 basis points. The net charge-offs for the quarter were 10 basis points and for the full year were 22 basis points. The provision expense for the quarter was $13.2 million. The company's ending funded reserve is $406 million or 1.25% of loans, and the NPL coverage position is 418%. F.N.B. Corporation's strategy for the non-owner-occupied CRE portfolio is to monitor the rate environment and proactively address upcoming maturities. The delinquency for the non-owner-occupied CRE portfolio was 32 basis points, and NPLs were 18 basis points at year-end.
F.N.B. Corporation also provided insights into its financial performance and operations. The company's efficiency ratio for the fourth quarter was 52.5%, which is in the top quartile of peers. Over the last five years, F.N.B. Corporation achieved over $75 million in cost savings, excluding acquisition synergies. The company's capital ratios at the end of the year include a CET1 ratio of 10.1% and tangible common equity of 7.8%. AOCI reduces tangible book value per common share by $0.65 as of year-end. The company's tangible book value grew 15% to a record $9.47 in 2023.
During the earnings call, F.N.B. Corporation also discussed topics such as the realized loss on investment securities in the fourth quarter, the impact of the sale of investment securities on the company's earnings, the loan-to-deposit ratio at the end of the year, the underlying period-end loan growth since year-end 2022, the duration of the securities portfolio at December 31, and the total deposit amount at the end of the year.
The article provides a comprehensive overview of F.N.B. Corporation's Q4 2023 earnings and full-year performance, as well as its strategies and goals for the future. The company's approach to maintaining a stable deposit base, managing deposit costs, and optimizing its balance sheet is highlighted. Additionally, F.N.B. Corporation's asset quality metrics, net charge-offs, provision expense, funded reserve, NPL coverage position, and strategy for the non-owner-occupied CRE portfolio are discussed. The article also touches on the company's financial performance, efficiency ratio, capital ratios, and tangible book value.