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1. Company Snapshot

1.a. Company Description

F.N.B. Corporation, a financial holding company, provides a range of financial services primarily to consumers, corporations, governments, and small- to medium-sized businesses.The company operates through three segments: Community Banking, Wealth Management, and Insurance.It offers commercial banking solutions, including corporate and small business banking, investment real estate financing, business credit, capital market, and lease financing services.


The company also provides consumer banking products and services, such as deposit products, mortgage and consumer lending services, and mobile and online banking services; and wealth management services comprising personal and corporate fiduciary services comprising administration of decedent and trust estates; securities brokerage and investment advisory services, mutual funds, and annuities; and commercial and personal insurance, and reinsurance products, as well as mezzanine financing options for small- to medium-sized businesses.As of December 31, 2021, it operated 334 banking offices in Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington, D.C., and Virginia.F.N.B. Corporation was founded in 1864 and is headquartered in Pittsburgh, Pennsylvania.

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1.b. Last Insights on FNB

F.N.B. Corporation's recent performance was driven by strong Q3 earnings, fueled by a 37% year-over-year increase in earnings per diluted common share to $0.41. Record revenue of $457 million and growing deposits and loans, supported by digital initiatives and AI-driven strategies, contributed to the positive trend. The company's expanding margins, robust noninterest income, and industry-leading reserve coverage also played a role. Brokerages have a consensus "Moderate Buy" rating, with five issuing a buy recommendation. A quarterly cash dividend of $0.12 per share on common stock was also declared.

1.c. Company Highlights

2. F.N.B. Corporation Delivers Strong Q2 Earnings with Record Net Interest Income

F.N.B. Corporation reported a robust second-quarter performance, with net income available to common shareholders of $130.7 million, or $0.36 per share, exceeding consensus estimates of $0.33. The company achieved linked-quarter revenue growth of 6.5%, driven by record net interest income of $347 million and noninterest income of $91 million. The net interest margin expanded by 16 basis points to 3.19%, reflecting higher earning asset yields and effective balance sheet management. Pre-provision net revenue rose 16% to $192 million, underscoring strong core profitability.

Publication Date: Jul -19

📋 Highlights
  • Net Income Growth: - Net income available to common shareholders was $130.7 million, or $0.36 per share.
  • Revenue Growth: - Linked-quarter revenue growth of 6.5%, driven by record net interest income of $347 million and noninterest income of $91 million.
  • Net Interest Margin Expansion: - The net interest margin expanded by 16 basis points to 3.19%, with earning asset yields at 5.33%.
  • Asset Quality Improvement: - Total delinquency decreased by 13 basis points to 62 basis points, with net charge-offs at 25 basis points.
  • Share Repurchases: - The company repurchased 725,000 shares at a weighted average price of $13.85.

Balance Sheet and Capital Management

The company maintained a solid capital position, with a CET1 ratio approaching 11% and tangible common equity of 8.5%. Tangible book value per share increased 13% year-over-year to $11.14, demonstrating strong equity growth. F.N.B. also repurchased 725,000 shares at a weighted average price of $13.85, showcasing its commitment to returning capital to shareholders while maintaining a healthy capital buffer.

Asset Quality and Credit Performance

Asset quality metrics improved notably, with total delinquency declining 13 basis points to 62 basis points. Net charge-offs were 25 basis points, reflecting the company's disciplined credit underwriting and stable economic conditions. The allowance for credit losses remained prudent at $432 million, or 1.25% of loans, providing a cushion against potential future credit losses.

Guidance and Future Outlook

F.N.B. raised its 2025 net interest income guidance to $1.37 billion to $1.39 billion, incorporating expectations for 25 basis point rate cuts in September and December. Noninterest income guidance was revised upward to $355 million to $365 million for the full year, with third-quarter levels expected between $87.5 million and $92.5 million. The company also tightened its provision guidance to $85 million to $100 million, reflecting a benign credit environment and strong asset quality trends.

Valuation and Strategic Initiatives

Trading at a P/E ratio of 12.53 and a price-to-tangible book value (P/TBV) of 0.12, F.N.B. shares appear attractively valued, especially given the company's strong profitability and capital return initiatives. The dividend yield of 2.99% and free cash flow yield of 5.71% further enhance the stock's appeal. Management emphasized its focus on organic growth, particularly in commercial loans, and highlighted the success of its de novo branching strategy, with 30 branches added in the past couple of years.

Long-Term Growth Prospects

F.N.B. continues to execute on its strategic initiatives, including investments in technology and treasury management capabilities, to drive deposit growth and diversify revenue streams. The company's optimism about future loan growth, particularly in the commercial and industrial (C&I) segment, aligns with its long-term strategy of maintaining a high-quality deposit base and expanding its footprint in attractive markets like Virginia and the D.C. area.

3. NewsRoom

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F.N.B. Corporation (NYSE:FNB) Given Average Recommendation of “Moderate Buy” by Brokerages

Dec -03

Source: defenseworld.net

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F.N.B. Corporation Declares Cash Dividend of $0.12 on Common Stock

Nov -12

Source: prnewswire.com

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F.N.B. Corporation Merits An Upgrade With Margins Expanding And Increased Guidance

Nov -05

Source: seekingalpha.com

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Les FNB Evolve (BIGY) ouvrent les marchés

Nov -04

Source: feeds.newsfilecorp.com

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F.N.B. Corporation: Attractive Combination Of Growth And Quality (Upgrade)

Nov -03

Source: seekingalpha.com

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FNB Reinforces Standing as a Leading Employer with 2025 National Culture Excellence Awards

Oct -30

Source: prnewswire.com

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FNB CEO Vincent J. Delie, Jr. Named 'CEO of the Year - USA' by The Digital Banker

Oct -23

Source: prnewswire.com

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FNB Stock Up 1.6% as Q3 Earnings Beat on Higher NII, Provisions Rise

Oct -17

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.44%)

6. Segments

Community Banking

Expected Growth: 8.5%

F.N.B. Corporation's Community Banking segment growth of 8.5% is driven by strategic branch expansion, increased commercial lending, and deposit growth. Additionally, investments in digital banking platforms and customer relationship management tools have enhanced customer experience, leading to increased market share and revenue growth.

Wealth Management

Expected Growth: 7.5%

F.N.B. Corporation's 7.5% growth in Wealth Management is driven by strategic acquisitions, expanded investment product offerings, and a growing client base. Additionally, the company's focus on digital transformation, enhanced customer experience, and a strong advisory team have contributed to the segment's growth.

Parent and Other

Expected Growth: 6.0%

F.N.B. Corporation's 6.0% growth in Parent and Other segments is driven by strategic acquisitions, expansion of commercial lending, and increased fee income from treasury management and capital markets services. Additionally, cost savings initiatives and a favorable interest rate environment contribute to the growth.

Insurance

Expected Growth: 10.5%

F.N.B. Corporation's 10.5% insurance growth driven by strategic acquisitions, expansion into new markets, and increased demand for commercial and personal insurance products. Additionally, investments in digital platforms and data analytics have enhanced customer experience, retention, and cross-selling opportunities, contributing to the segment's growth.

7. Detailed Products

Consumer Banking

Provides personal banking services, including checking and savings accounts, credit cards, loans, and investment services

Commercial Banking

Offers a range of commercial banking services, including cash management, treasury management, and commercial lending

Wealth Management

Provides investment management, trust services, and wealth planning to individuals, families, and institutions

Insurance

Offers a range of insurance products, including life insurance, disability insurance, and long-term care insurance

Mortgage Banking

Provides mortgage lending services, including residential and commercial mortgage loans

Capital Markets

Provides investment banking, equity and fixed income sales and trading, and research services

8. F.N.B. Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

F.N.B. Corporation operates in the banking industry, where customers have various alternatives for their financial needs. However, the company's diversified product offerings and strong brand presence mitigate the threat of substitutes.

Bargaining Power Of Customers

F.N.B. Corporation's customers have some bargaining power due to the availability of alternative banking services. However, the company's large customer base and diversified revenue streams reduce the bargaining power of individual customers.

Bargaining Power Of Suppliers

F.N.B. Corporation's suppliers, such as technology providers and vendors, have limited bargaining power due to the company's large scale and diversified operations.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and capital requirements. This limits the threat of new entrants and provides F.N.B. Corporation with a relatively stable competitive landscape.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. F.N.B. Corporation faces intense rivalry from other regional banks and larger national banks.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.53%
Debt Cost 4.33%
Equity Weight 57.47%
Equity Cost 9.09%
WACC 7.07%
Leverage 74.00%

11. Quality Control: F.N.B. Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Regions Financial

A-Score: 6.6/10

Value: 5.1

Growth: 4.8

Quality: 7.8

Yield: 8.0

Momentum: 6.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
First Horizon

A-Score: 6.4/10

Value: 5.8

Growth: 4.7

Quality: 5.8

Yield: 7.0

Momentum: 9.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
FNB

A-Score: 6.4/10

Value: 5.9

Growth: 5.3

Quality: 5.4

Yield: 7.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Zions Bank

A-Score: 6.3/10

Value: 6.7

Growth: 7.0

Quality: 5.8

Yield: 6.0

Momentum: 7.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Comerica

A-Score: 6.1/10

Value: 5.8

Growth: 4.6

Quality: 5.6

Yield: 8.0

Momentum: 7.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Key

A-Score: 5.6/10

Value: 5.2

Growth: 2.7

Quality: 5.2

Yield: 8.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

16.91$

Current Price

16.91$

Potential

-0.00%

Expected Cash-Flows