Executive Summary

Q4 2024 GAAP EPS was $0.30, flat sequentially, while non-GAAP operating EPS rose to $0.38 from $0.34 in Q3; operating performance was supported by stable net interest income, resilient fee generation ex-restructuring, and lower cost of funds, offset by a $34M securities restructuring loss and higher operating expenses tied to renewable energy tax credit financing and healthcare costs .
Balance sheet quality and capital strengthened: CET1 reached 10.6%, tangible book value per share rose to $10.49 (+11% YoY), and the loan-to-deposit ratio improved to 91% with period-end deposits at $37.1B (+6.9% YoY); asset quality remained solid with NPLs/loans at 0.47% and net charge-offs at 0.24% annualized .
Management issued 2025 guidance: FY NII $1.345–$1.385B; FY non-interest income $350–$370M; FY non-interest expense $965–$985M; provision $85–$105M; tax rate 21–22%; Q1 2025 NII $315–$325M and non-interest income $85–$90M; positive operating leverage targeted in 2H25, assuming 25 bp Fed cuts in March and June .
Catalysts and watch items: deposit cost downshift and deposit betas (cumulative spot down beta targeted mid-30s), incremental NII tailwind from $1B of swaps rolling off (~$10M/quarter drag abating during 2025), expansion of fee businesses (capital markets, public finance, commodities hedging), and continued CRE de-risking; one-off restructuring/tax credit items in Q4 cloud optics but raise forward run-rate returns .

What Went Well and What Went Wrong

What Went Well
- Resilient core earnings power: Operating EPS rose to $0.38 (vs. $0.34 in Q3) despite two Fed cuts in Q4; NIM only down 4 bps to 3.04% as cost of funds fell 14 bps and mix improved .
- Strong balance sheet and capital: CET1 10.6% (record), TBVPS $10.49 (+10.8% YoY), TCE/TA 8.18%, period-end deposits +6.9% YoY to $37.1B; LDR improved to 91% .
- Fee momentum and diversification: Operating non-interest income was $84.9M; CEO highlighted record $350M FY operating fee income and expansion into capital markets, public finance, commodities hedging; “we immediately began generating revenue” in debt capital markets and expect new lines to be “meaningfully impactful” in 2026 .
What Went Wrong
- One-off headwinds: $34.0M realized securities loss (pre-tax) to reposition AFS portfolio; $10.4M (pre-tax) valuation impairment tied to renewable energy ITC financing; both weighed on reported PPNR/non-interest income and expenses .
- NIM pressure from rate cuts: Earning asset yield fell 17 bps QoQ to 5.34% as variable-rate loans reset lower; NIM slipped to 3.04% despite lower deposit and borrowing costs .
- Elevated operating costs: Operating expenses up linked-quarter (ex-Q3 significant items) on $10.4M tax credit-related impairment and ~$6M adverse healthcare claims; mgmt also investing to meet “heightened standards” as assets approach $50B .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
EPS (GAAP, $)	$0.13	$0.30	$0.30
EPS (Operating, $)	$0.38	$0.34	$0.38
Net Interest Income ($MM)	$324.0	$323.3	$322.2
Non-Interest Income ($MM)	$13.1	$89.7	$50.9
Total Revenue ($MM, NII+Non-Int)	$337.1	$413.0	$373.1
Net Interest Margin (FTE, %)	3.21%	3.08%	3.04%
Yield on Earning Assets (FTE, %)	5.25%	5.51%	5.34%
Cost of Funds (%)	2.14%	2.56%	2.42%
Efficiency Ratio (FTE, %)	52.51%	55.16%	56.88%
Provision for Credit Losses ($MM)	$13.2	$23.4	$22.3
Net Charge-offs (annualized, % avg loans)	0.10%	0.25%	0.24%

Segment/Non-interest income detail (selected):

Category ($MM)	Q4 2023	Q3 2024	Q4 2024
Service charges	$19.8	$24.0	$23.1
Capital markets income	$7.3	$6.2	$6.6
Mortgage banking operations	$7.0	$5.5	$7.0
BOLI income	$2.9	$6.5	$3.5
Net securities gains (losses)	$(67.4)	$(0.0)	$(34.0)

Key balance sheet and credit KPIs:

KPI	Q4 2023	Q3 2024	Q4 2024
Period-end Loans ($MM)	$32,323	$33,717	$33,939
Period-end Deposits ($MM)	$34,711	$36,771	$37,107
Loan-to-Deposit Ratio	93%	92%	91%
CET1 (%)	10.0%	10.4%	10.6%
TBVPS ($)	$9.47	$10.33	$10.49
NPLs / Loans (%)	0.33%	0.38%	0.47%
Delinquency (past due & non-accrual) / Loans (%)	0.70%	0.79%	0.83%
ACL / Loans (%)	1.25%	1.25%	1.25%

Context on notable Q4 items:

Sold $231M of AFS securities (1.41% yield) for reinvestment at ~4.78%; recognized $34.0M pre-tax loss .
Recognized $28.4M renewable energy investment tax credits (income tax benefit) and a related $10.4M pre-tax non-credit valuation impairment in other non-interest expense .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Income	FY 2025	N/A	$1.345B–$1.385B	New
Net Interest Income	Q1 2025	N/A	$315M–$325M	New
Non-Interest Income	FY 2025	N/A	$350M–$370M	New
Non-Interest Income	Q1 2025	N/A	$85M–$90M	New
Non-Interest Expense	FY 2025	N/A	$965M–$985M	New
Non-Interest Expense	Q1 2025	N/A	$245M–$255M (seasonally higher comp)	New
Provision for Credit Losses	FY 2025	N/A	$85M–$105M	New
Effective Tax Rate	FY 2025	N/A	21%–22% (ex ITCs)	New
Loans (period-end growth)	FY 2025	N/A	Mid-single digits YoY	New
Deposits (period-end growth)	FY 2025	N/A	Mid-single digits YoY	New
NIM	Q1 2025	N/A	“Relatively stable” vs Q4; rate-dependent	New
Operating leverage	FY 2025	N/A	Positive in 2H25 (full-year goal)	New

Note: Management assumption includes two 25 bp Fed cuts (March and June) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Deposit growth and pricing/betas	Q2: Deposits +0.7% LQ; non-interest-bearing stable at 29% . Q3: Deposits +5% LQ; NIBD 27%; cumulative up beta ~40% .	Q4: Deposits +0.9% LQ; NIBD 26%; total cost of funds −14 bps; cumulative down beta targeted mid-30s; lowered top CD/MM rates by 100–125 bps since Fed started cutting .	Improving cost and mix; disciplined repricing.
Fee income expansion	Q2/Q3: Non-interest income strong; record $89.7M in Q3 .	Record $350M FY operating fee income; expanding into commodities hedging, public finance, and commercial IB; left-lead syndication records .	Expanding product scope and scale.
Balance sheet optimization	Q2: Auto loan sale planned/executed; NIM 3.09% . Q3: $431M auto loan sale; loan/deposit ratio to 92% .	$231M AFS sale (loss $34M) reinvested at ~4.78%; LDR 91% .	Proactive repositioning; future yield uplift.
CRE risk management	Q2/Q3: Asset quality near lows; ACL ~1.24–1.25% .	Reduced non-owner CRE by ~$300M in Q4 (>$500M FY); NPLs/loans 0.47%; delinquency 0.83%; ACL/loans 1.25% .	Continued de-risking; stable reserves.
Technology/eStore & onboarding	Q2/Q3: Digital investments underpin growth .	eStore common app adoption; fintech integration to move direct deposit/recurring transactions “instantaneously” to FNB .	Enhancing primacy, deposit capture.
Rate path/NIM outlook	Q3: NIM 3.08% (−1 bp LQ) .	Q4 NIM 3.04% (−4 bps LQ); guidance: stable Q1’25; NII sensitivity benefits if fewer cuts; $1B swaps roll-off removes ~$10M/qtr drag through 2025 .	Near-term stabilization, gradual tailwinds.
Regulatory & M&A landscape	Q3: Not quantified .	Mgmt sees M&A environment improving under new administration; still focused on organic growth, targeted high-return moves, quick TBV earn-back if deals pursued .	Optionality improves; disciplined stance.

Management Commentary

CEO (press release): “FNB further strengthened its liquidity and capital position… record CET1 ratio of 10.6%... Tangible book value per share grew 11% year-over-year… record full-year operating non-interest income… expectation for strong revenue growth and a return to positive operating leverage” .
CEO (call): “We now hold top 5 deposit share in 50% of our markets and top 10 in over 80%... Deposits ended the year at $37.1 billion... total deposit cost at 2.2%, expected to meaningfully outperform peers” .
CFO: “$231 million of lower-yielding securities were sold… proceeds reinvested… 4.78%… realized loss did not incrementally impact tangible book value… TBV up 10.8% to $10.49” .
Chief Credit Officer: “Net charge-offs totaled 24 basis points and 19 basis points for the year… reduced the nonowner CRE portfolio exposure by approximately $300 million in the quarter, ending the year at 220% of total risk-based capital” .

Q&A Highlights

Fee initiatives and timing: New public finance and investment banking teams expected to contribute in 2025 with more meaningful earnings impact in 2026; DCM became “neutral in year 1,” and left-lead syndications hit a record .
Expense trajectory: Q4 included $10.4M tax credit-related impairment and ~$6M adverse healthcare claims; 2025 expense guide reflects investment to meet heightened standards near $50B; seasonal Q1 comp adds $12–$15M .
Deposit costs and NIM: Targeting cumulative down betas in mid-30s; top CD/MM rates lowered 100–125 bps; Q1 2025 NIM expected relatively stable; fewer Fed cuts would bias NII to high end of range .
Loan demand and pipelines: Pipelines seasonally soft exiting Q4 (down ~10–15%), with momentum expected to improve through 2025, led by Carolinas and Pittsburgh .
NII tailwinds: ~$1B swaps rolling off quarterly (Jan/May/Jul/Oct) remove ~$10M per quarter drag over 2025 .
Capital deployment/M&A: Focus on high-return internal growth; if M&A, require quick TBV earn-back (~≤3 years) and strong IRR; buybacks considered given valuation and 10.6% CET1 .

Estimates Context

We attempted to retrieve S&P Global consensus for Q4 2024 and FY 2025 to compare results versus Street, but estimates were unavailable due to a temporary SPGI access limit. As a result, we cannot quantify beat/miss versus consensus for EPS or revenue this quarter [SPGI access error].
Directionally, reported EPS ($0.30 GAAP; $0.38 operating) and stable NII align with management’s tone of resilient core performance, while adjusted fee income and expenses provide a clearer run-rate view absent securities restructuring and tax credit-related items .

Key Takeaways for Investors

Core earnings resilient amid rate cuts: Operating EPS up to $0.38; NIM only −4 bps QoQ with falling cost of funds—suggests defensible margin as deposit betas normalize and swaps roll off in 2025 .
Capital and liquidity optionality: CET1 10.6%, LDR 91%, record TBVPS provide flexibility for organic growth, targeted fee expansion, and potential buybacks/M&A without compromising resilience .
Fee diversification is a medium-term growth lever: Capital markets, public finance, and commodities hedging should add breadth; management expects more meaningful accretion in 2026 .
Securities and tax credit optics are one-offs: The $34M securities loss and $10.4M tax credit-related impairment depress reported optics but improve forward portfolio yield and tax efficiency; watch for cleaner run-rate in 2025 .
Asset quality stable with CRE de-risking: NPLs/loans 0.47%, ACL/loans 1.25%; non-owner CRE reduced by ~$300M in Q4 and >$500M in 2024 .
2025 guide sets measurable checkpoints: Track Q1 NII ($315–$325M), non-interest income ($85–$90M), expense run-rate ($245–$255M), and progress toward 2H positive operating leverage under two-cut macro .
Tactical rate sensitivity: Slower/fewer cuts would near-term aid NII and margin; deposit pricing execution and down betas remain critical to hitting the high end of NII guidance .

Sources: Q4 2024 8-K and Exhibit 99.1 press release ; Q4 2024 earnings press release (PR Newswire) -; Q4 2024 earnings call transcript -; Q3 2024 press release -; Q2 2024 press release -; Senior notes offering press release (Dec-2024) .

FNB CORP/PA/ (FNB)·Q4 2024 Earnings Summary