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FC

FNB CORP/PA/ (FNB)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was strong: diluted EPS $0.36 and record total revenue $438.2M, driven by a 16 bps sequential NIM expansion to 3.19%, higher earning-asset yields, and record non-interest income; PPNR rose 16% q/q to $192.0M .
  • EPS and revenue beat Wall Street: EPS consensus $0.339 vs actual $0.36 (beat), revenue consensus $424.2M vs actual $438.2M (beat). Values retrieved from S&P Global*.
  • Capital at all-time highs: CET1 10.8% (est.), TCE/TA 8.5%, TBV/share $11.14 (+12.8% y/y); loan-to-deposit ratio improved to 92% .
  • Guidance raised: FY 2025 NII to $1.37–$1.39B (from $1.345–$1.385B); non-interest income to $355–$365M; provision high-end trimmed to $100M; Q3 targets set (NII $345–$355M; non-interest income $87.5–$92.5M; opex $240–$250M) .
  • Potential stock catalysts: margin expansion, record fee income breadth (capital markets, wealth, interchange), and raised NII guidance; watch higher provision/charge-offs and DOJ-related Community Uplift expense pacing .

What Went Well and What Went Wrong

  • What Went Well
    • “Record revenue of $438 million, a 6.5% linked-quarter increase… Pre-provision net revenue grew 16%” — CEO Vincent Delie . NIM expanded 16 bps to 3.19% on improved asset yields and lower deposit costs .
    • Record non-interest income $91.0M; capital markets reached record debt capital markets income; wealth revenues +5.2% y/y; interchange up 7.1% q/q .
    • Capital strength: CET1 10.8% (est.), TCE/TA 8.5%; TBV/share up 12.8% y/y to $11.14; company repurchased ~0.7M shares at $13.85 while maintaining above operating capital levels .
  • What Went Wrong
    • Provision rose to $25.6M (q/q +$8.1M); net charge-offs increased to $21.8M (0.25% annualized) vs 0.15% prior quarter .
    • DOJ settlement-driven “Community Uplift” program increased other non-interest expense; opex +8.7% y/y (operating opex +9.0% y/y) .
    • Loan growth skewed to residential mortgages; C&I utilization declined; CRE balances continue to be actively reduced (NOO CRE down, office watchlist remains monitored) .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Diluted EPS ($)$0.30 $0.32 $0.36
Net Interest Income ($MM)$322.2 $323.8 $347.2
Non-Interest Income ($MM)$50.9 $87.8 $91.0
Net Interest Margin (FTE, %)3.04% 3.03% 3.19%
Provision for Credit Losses ($MM)$22.3 $17.5 $25.6
Efficiency Ratio (FTE, %)56.9% 58.5% 54.83%
CET1 Ratio (%)10.6% (est.) 10.7% (est.) 10.8% (est.)
TBV per Share ($)$10.49 $10.83 $11.14

Segment and balance-mix highlights

MetricQ4 2024Q1 2025Q2 2025
Avg Loans & Leases ($B)$33.83 $34.05 $34.50
Avg Commercial Loans & Leases ($B)$21.17 $21.21 $21.29
Avg Consumer Loans ($B)$12.66 $12.84 $13.21
Avg Deposits ($B)$36.97 $36.97 $37.13
NIB Deposits (% of total, period-end)26% 26% 26%
Loan-to-Deposit Ratio (period-end)91% 92% 92%

Asset quality and rate dynamics

MetricQ4 2024Q1 2025Q2 2025
NPLs + OREO / Loans + OREO (%)0.48% 0.48% 0.34%
Delinquency (%)0.83% 0.75% 0.62%
ACL / Loans (%)1.25% 1.25% 1.25%
Cost of Funds (%)2.42% 2.32% 2.26%
Yield on Earning Assets (FTE, %)5.34% 5.23% 5.33%

Estimate comparison (Q2 2025)

MetricConsensusActualSurprise
Primary EPS Consensus Mean ($)0.339*0.36 Beat
Revenue Consensus Mean ($MM)424.17*438.21 Beat

Values retrieved from S&P Global*.

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
Net Interest Income (non-FTE)FY 2025$1.345–$1.385B $1.370–$1.390B Raised
Net Interest Income (non-FTE)Q3 2025N/A$345–$355M New detail
Non-Interest IncomeFY 2025$350–$370M $355–$365M Raised
Non-Interest IncomeQ3 2025N/A$87.5–$92.5M New detail
Non-Interest ExpenseFY 2025$965–$985M $975–$985M Low-end raised (+$10M)
Non-Interest ExpenseQ3 2025$235–$245M (implied prior cadence) $240–$250M Slightly higher
Provision ExpenseFY 2025$85–$105M $85–$100M High-end lowered
Effective Tax RateFY 202521–22% 21–22% Maintained
Spot Loans & Deposits GrowthFY 2025Mid-single digits Mid-single digits Maintained
Common DividendQ3 2025N/A$0.12 declared (payable Sept. 15) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/digital & eStore Common AppLaunched direct deposit switch; emphasis on primacy and digital onboarding .Common App submissions +108% q/q; now omni-channel; AI used for “next best product”; added business deposit products; expanding to business loans in 2026 .Accelerating adoption and scope.
Tariffs/macro monitoringSurvey showed <5% of C&I/owner-occupied at higher risk; allowance sensitivities and stress tests; cautious pipelines .Continued granular monitoring; C&I line utilization down; equipment finance poised to benefit from bonus depreciation; margin guide baked with two rate cuts .Risk viewed as manageable; cautious optimism.
Product performance breadthCapital markets and wealth growth; record non-interest income run-rate exiting 2024 .Record non-interest income; debt capital markets, international banking, swaps, syndications strong .Broad-based fee momentum.
Regional trends & depositsDe novo expansion; deposit mix improvements; NIB stable ~26%; Carolinas deposits +17% y/y .Deposit pipeline strong; targeted TM wins; NIB stable; aim to lower L/D ratio further .Sustained deposit gathering discipline.
Regulatory/legal (DOJ settlement)Noted settlement impacts and expense items; proactive compliance .Community Uplift down payment assistance program increased opex; expected to taper in 2026 .Near-term opex headwind; known/managed.

Management Commentary

  • “F.N.B. Corporation reported strong second quarter results… record revenue of $438 million… Pre-provision net revenue grew significantly with linked-quarter growth of 16%” — Vincent J. Delie, Jr., Chairman, President & CEO .
  • “Net interest margin… up 16 basis points… We had growth in earning assets, higher yields… lower cost of funds… we’re guiding to flattish to up a tick” — Vincent J. Calabrese, CFO .
  • “Our digital channels… and a new vertical of AI and innovation… will now report to our Chief Strategy Officer” — Vincent J. Delie (organizational realignment for AI/data scale) .
  • “Total delinquency ended at 62 bps… NPLs and OREO at 34 bps… criticized loans down 4.5%” — Gary L. Guerrieri, Chief Credit Officer .

Q&A Highlights

  • Margin/NII cadence: CFO sees NIM “flattish to up a tick” into Q4 with September/December cuts assumed; Q3 NII expected upper half of $345–$355M .
  • Deposit costs and competition: Deposit costs to be roughly steady until Fed cuts; strong commercial deposit pipeline; aim to further lower L/D ratio .
  • Expense outlook: Community Uplift cost ~$3.1M in Q2; similar pacing near-term, then taper; variable commissions tied to revenue .
  • Loan growth composition: Residential mortgage seasonally strong; commercial pipeline (90-day) up ~20%; CRE balances continue to decline .
  • Capital deployment and buybacks: CET1 ~10.8% operating floor; continued opportunistic repurchases as visibility improves; loan growth remains priority use of capital .

Estimates Context

  • Q2 2025 EPS: consensus $0.339 vs actual $0.36 — beat*. Q2 2025 revenue: consensus $424.2M vs actual $438.2M — beat*. Values retrieved from S&P Global*.
  • Implications: Street likely raises FY NII and EPS given stronger-than-expected margin expansion, fee breadth, and raised FY NII guidance .

Key Takeaways for Investors

  • Margin expansion and rate beta management are working; deposit costs declined 10 bps q/q and earning-asset yields increased; guidance implies maintained NIM with upside if cuts are delayed .
  • Fee diversification is a differentiator: record non-interest income with multiple growth levers (DCM, swaps, international, wealth, interchange, SBA) — less reliance on rate-only drivers .
  • Capital strength provides flexibility: CET1/TCE at record levels supports growth and opportunistic buybacks while maintaining buffers .
  • Watch credit normalization: provision and NCOs up sequentially; asset quality ratios improved (NPLs/OREO down); continued proactive CRE risk reduction .
  • Near-term opex headwind from DOJ program but transparency/taper expected; efficiency ratio improved to 54.8% .
  • Digital/AI execution is a structural tailwind to primacy and cross-sell (Common App omni-channel, business deposits added) — likely supports deposits/NIB, interchange, and TM fees .
  • Tactical setup: Raised FY NII and fee guidance with Q3 ranges; catalysts include sustained NIM, deposit wins, and capital markets momentum; risks include macro/tariff volatility and charge-off trajectory .

Notes: Values retrieved from S&P Global* for consensus comparisons.