FNB FNB Corporation

Period-End Loans and Deposits Linked-Quarter Growth of 2.5% and 2.3%, respectively

PITTSBURGH, Oct. 18, 2023 /PRNewswire/ -- F.N.B. Corporation (NYSE: FNB) reported earnings for the third quarter of 2023 with net income available to common stockholders of $143.3 million, or $0.40 per diluted common share. Comparatively, third quarter of 2022 net income available to common stockholders totaled $135.5 million, or $0.38 per diluted common share, and second quarter of 2023 net income available to common stockholders totaled $140.4 million, or $0.39 per diluted common share.

On an operating basis, third quarter of 2023 earnings per diluted common share (non-GAAP) was also $0.40. By comparison, the third quarter of 2022 was $0.39 per diluted common share (non-GAAP) on an operating basis, excluding $2.1 million (pre-tax) in merger-related significant items. The second quarter of 2023 was $0.39 per diluted common share (non-GAAP) on an operating basis, excluding $0.2 million (pre-tax) of merger-related significant items.

"We are pleased with F.N.B. Corporation's third quarter financial results, reporting $0.40 of earnings per diluted common share and an 18.2% return on tangible common equity (non-GAAP). In addition, we continued to outperform the industry with our quarterly loan and deposit growth of 2.5% and 2.3%, respectively, while adhering to our conservative risk management standards," said F.N.B. Corporation Chairman, President and Chief Executive Officer, Vincent J. Delie, Jr. "Our capital ratios remained at good levels as tangible common equity to tangible assets (non-GAAP) finished the quarter at 7.54%, CET1 totaled 10.2%, and tangible book value per common share (non-GAAP) was $9.02 at September 30th, an increase of $1.00, or 12.5%, year over year. FNB's focus on internal capital generation provides support for our effort to grow loan and deposit share across our footprint. Given the strength of our performance, FNB is well-prepared to meet the needs of our consumer and business clients with a broad array of products and services, a strong balance sheet, ample liquidity and a commitment to achieving success for all of our stakeholders."

Third Quarter 2023 Highlights
(All comparisons refer to the third quarter of 2022, except as noted)

• Period-end total loans and leases increased $3.4 billion, or 11.7%, which includes the UB Bancorp (Union) acquisition that closed in the fourth quarter of 2022. Commercial loans and leases increased $2.0 billion, or 10.8%, and consumer loans increased $1.4 billion, or 13.3%. FNB's organic loan growth was driven by the continued success of our strategy to grow high-quality loans and deepen customer relationships across our diverse geographic footprint.
• On a linked-quarter basis, period-end total loans and leases increased $796.4 million, or 2.5%, as commercial loans and leases increased $470.0 million and consumer loans increased $326.4 million with strong seasonal contributions from the Physicians First mortgage program. Average loans and leases increased $691.2 million, or 2.2%, linked quarter, with growth of $449.4 million in average consumer loans and $241.8 million in average commercial loans and leases.
• On a linked-quarter basis, period-end total deposits increased $790.6 million, or 2.3%. The mix of non-interest-bearing deposits to total deposits was relatively stable and equaled 31% at September 30, 2023, compared to 32% at June 30, 2023. FNB ended the quarter with approximately 78% of total deposits insured by the Federal Deposit Insurance Corporation (FDIC) or collateralized.
• Total average deposits grew $507.3 million, or 1.5%, led by increases in average time deposits, that offset the decline in other deposit categories as customers continue to migrate deposits into higher-yielding deposit products.
• Net interest income increased $29.5 million, or 9.9%, to $326.6 million primarily due to the benefit of growth in earning assets, the impact from the higher interest rate environment, and deposit growth accompanied by prudent management of deposit betas.
• Net interest margin (FTE) (non-GAAP) increased 7 basis points to 3.26% as a result of higher yields on loans, investment securities and interest-bearing deposits with banks reflecting the higher interest rate environment, partially offset by increased cost of funds. On a linked-quarter basis, net interest margin (non-GAAP) decreased 11 basis points, largely due to the increases in rates paid on interest-bearing deposits and total borrowings offsetting the increases in yields on earnings assets.
• The ratio of non-performing loans and OREO to total loans and OREO increased 4 basis points to 0.36%. Total delinquency increased 4 basis points to 0.63%, compared to 0.59% at September 30, 2022. Both measures continue to remain at historically low levels.
• The provision for credit losses of $25.9 million supported loan growth and included $18.8 million in additional provision for the previously disclosed $31.9 million isolated commercial loan that was downgraded to non-performing status late in the second quarter of 2023 based upon initial indications of allegedfraud. Upon later findings uncovered during our ongoing investigation, including subsequent bankruptcy filings by our borrower and its primary supplier in the third quarter of 2023, the outstanding balance was fully charged-off.
• The third quarter of 2023 reflected net charge-offs of $37.7 million, or 0.47% annualized of total average loans. Excluding the previously mentioned charge-off, net charge-offs would have been $5.8 million, or 0.07% annualized of total average loans (non-GAAP).
• The effective tax rate was 11.5% primarily due to renewable energy investment tax credits recognized as part of a solar project financing transaction originated by our commercial leasing business.
• The efficiency ratio (non-GAAP) remained at a good level of 51.7% compared to 49.4% for the year-ago quarter.
• Common Equity Tier 1 (CET1) regulatory capital ratio was 10.2% (estimated), compared to 9.7% at September 30, 2022, and 10.1% at June 30, 2023. Tangible book value per common share (non-GAAP) of $9.02 increased $1.00, or 12.5%, compared to September 30, 2022, and $0.23, or 2.6%, compared to June 30, 2023. Accumulated other comprehensive income/loss (AOCI) reduced the tangible book value per common share (non-GAAP) by $1.06 as of September 30, 2023, primarily due to the impact of higher interest rates on the fair value of available-for-sale (AFS) securities, compared to a reduction of $1.08 as of September 30, 2022, and $0.99 as of June 30, 2023.

Non-GAAP measures referenced in this release are used by management to measure performance in operating the business that management believes enhances investors' ability to better understand the underlying business performance and trends related to core business activities. Reconciliations of non-GAAP operating measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release. For more information regarding our use of non-GAAP measures, please refer to the discussion herein under the caption, Use of Non-GAAP Financial Measures and Key Performance Indicators.

Third Quarter 2023 Results – Comparison to Prior-Year Quarter
(All comparisons refer to the third quarter of 2022, except as noted)

Net interest income totaled $326.6 million, an increase of $29.5 million, or 9.9%, compared to $297.1 million, as total average earning assets increased $2.8 billion, or 7.4%, including a $3.3 billion increase in average loans and leases from organic origination activity and acquired Union loans. Total average borrowings increased $2.0 billion partially due to maintaining additional liquidity on the balance sheet following the banking industry disruption earlier this year. In addition to the growth in average earning assets, net interest income benefited from the repricing impact of the higher interest rate environment on earning asset yields, which was partially offset by the higher cost of interest-bearing deposits given that customer preferences migrated toward time deposits.

The net interest margin (FTE) (non-GAAP) increased 7 basis points to 3.26%, as the yield on earning assets (non-GAAP) increased 144 basis points to 5.11%, primarily due to higher yields on loans, investment securities and interest-bearing deposits with banks reflecting the higher interest rate environment. The total cost of funds increased 143 basis points to 1.93% with a 179 basis point increase in interest-bearing deposit costs to 2.36%, as well as an increase of 106 basis points in long-term debt costs. Between September 30, 2022 and September 30, 2023, the Federal Open Market Committee (FOMC) raised the target Federal Funds interest rate by 225 basis points.

Average loans and leases totaled $31.7 billion, an increase of $3.3 billion, or 11.6%, including growth of $1.8 billion in commercial loans and leases and $1.5 billion in consumer loans. The increase in average commercial loans and leases included $955.7 million, or 8.8%, in commercial real estate growth and $718.6 million, or 10.8%, in commercial and industrial loan growth, driven primarily by organic growth in the Pittsburgh, Cleveland and North Carolina markets. The increase in average consumer loans included a $1.5 billion increase in residential mortgages largely reflecting adjustable-rate mortgages which we retained on the balance sheet and the continued success of the Physicians First mortgage program, as well as a $64.1 million increase in indirect auto loans.

Average deposits totaled $34.1 billion with growth in average time deposits of $2.7 billion more than offsetting the decline in average non-interest-bearing demand deposits of $1.0 billion, average interest-bearing demand deposits of $908.2 million, and average savings deposits of $309.9 million as customers continued to migrate balances into higher-yielding products. The increase in average deposits resulted from organic growth in new and existing customer relationships and inflows from the Union acquisition. The funding mix has shifted compared to the year-ago quarter with non-interest-bearing deposits comprising 31% of total deposits at September 30, 2023, compared to 35%.

Non-interest income totaled $81.6 million, a slight decrease of $0.9 million, or 1.1%, compared to the third quarter of 2022. Capital markets income totaled $7.1 million, a decrease of $2.5 million, or 26.3%, reflecting contributions from international banking offset by a decrease in swap fees, syndications and debt capital markets income as commercial customer transactions have slowed in this macroeconomic environment. Mortgage banking operations income decreased $1.2 million driven primarily by negative fair value marks on mortgage loans given the sharp increase in mortgage rates during the current quarter, which was partially offset by the loan sold volume increase of 56% compared to the year-ago quarter. Service charges decreased $1.2 million, or 3.3%, with strong treasury management services and interchange fees partially offsetting the impact of overdraft practice changes FNB implemented in the first quarter of 2023. Dividends on non-marketable securities increased $2.5 million, or 77.4%, reflecting higher Federal Home Loan Bank dividends due to additional borrowings. Wealth management revenues increased $1.8 million, or 11.4%, as securities commissions and fees and trust income increased 14.4% and 9.6%, respectively, through contributions across the geographic footprint and an increase in assets under management on a year-over-year basis.

Non-interest expense totaled $218.0 million, increasing $22.9 million, or 11.8%. On an operating basis (non-GAAP), non-interest expense increased $25.0 million, or 13.0%, compared to the third quarter of 2022. Salaries and benefits increased $6.7 million, or 6.3%, primarily from production-related commissions and normal annual merit increases. Net occupancy and equipment increased $6.7 million, or 19.3%, largely from the acquired Union expense base, as well as technology-related investments. Outside services increased $1.8 million, or 9.4%, with higher volume-related technology and third-party costs, including the impact of the inflationary macroeconomic environment. FDIC insurance increased $3.0 million, or 58.3%, reflecting the previously announced FDIC assessment rate increase which was effective in the first quarter of 2023. The efficiency ratio (non-GAAP) equaled 51.7%, compared to 49.4%.

The ratio of non-performing loans and OREO to total loans and OREO increased 4 basis points to 0.36%. Total delinquency increased 4 basis points to 0.63%, compared to 0.59% at September 30, 2022. Both measures continue to remain at historically low levels.

The provision for credit losses was $25.9 million, compared to $11.2 million in the third quarter of 2022, with the current quarter's level reflecting loan growth and $18.8 million for the previously disclosed $31.9 million commercial loan that was downgraded to non-performing status in the second quarter of 2023 and fully charged-off during the third quarter of 2023 due to allegedfraud. The third quarter of 2023 reflected net charge-offs of $37.7 million, or 0.47% annualized of total average loans, compared to $2.8 million, or 0.04% annualized, due to the previously mentioned charge-off. Excluding the impact of this charge-off, the third quarter of 2023 net charge-offs would have been $5.8 million, or 0.07% annualized of total average loans (non-GAAP). The allowance for credit losses (ACL) was $400.6 million, an increase of $15.3 million, with the ratio of the ACL to total loans and leases decreasing 9 basis points to 1.25%.

The effective tax rate was 11.5%, compared to 20.7% in the third quarter of 2022, primarily due to renewable energy investment tax credits recognized in the third quarter of 2023 as part of a solar project financing transaction.

The CET1 regulatory capital ratio was 10.2% (estimated) at September 30, 2023 and 9.7% at September 30, 2022. Tangible book value per common share (non-GAAP) was $9.02 at September 30, 2023, an increase of $1.00, or 12.5%, from $8.02 at September 30, 2022. AOCI reduced the current quarter tangible book value per common share (non-GAAP) by $1.06, compared to a reduction of $1.08 at the end of the year-ago quarter, largely due to the unrealized losses on AFS securities resulting from the higher interest rate environment. The growth in tangible book value per common share (non-GAAP) was driven by strong retained earnings with a dividend payout ratio of 30.3% in the third quarter of 2023.

Third Quarter 2023 Results – Comparison to Prior Quarter
(All comparisons refer to the second quarter of 2023, except as noted)

Net interest income totaled $326.6 million, a decrease of $2.7 million, or 0.8%, from the prior quarter total of $329.2 million, primarily due to higher deposit costs and migration to time deposits, as well as higher total average borrowings, largely offset by growth in earning assets and higher earning asset yields. Total average earning assets increased $640.7 million, or 1.6%, to $40.2 billion. The total yield on earning assets (non-GAAP) increased 17 basis points to 5.11%, due to higher yields on loans and investment securities. The total cost of funds increased 29 basis points to 1.93%, as the total cost of borrowings increased 21 basis points to 4.49% and the cost of interest-bearing deposits increased 39 basis points to 2.36%. The resulting net interest margin (FTE) (non-GAAP) decreased 11 basis points to 3.26%, moderating from the 19 basis point decline reported last quarter. The FOMC raised the target Federal Funds interest rate by 25 basis points during the third quarter of 2023.

Average loans and leases totaled $31.7 billion, an increase of $691.2 million, or 2.2%, as consumer loans increased $449.4 million, or 4.0%, and commercial loans and leases increased $241.8 million, or 1.2%. Average commercial loans and leases was led by growth of $107.9 million, or 1.5%, in commercial and industrial loans and $94.6 million, or 0.8%, in commercial real estate. The organic quarterly growth in commercial loans and leases was led by the Pittsburgh, Mid-Atlantic and North Carolina markets. Consumer loan growth includes average residential mortgages increasing $453.9 million, or 7.8%, driven by growth in adjustable-rate mortgages and the seasonally strong production from the Physicians First mortgage program.

Average deposits totaled $34.1 billion, increasing $368.6 million, or 1.1%, primarily due to seasonal municipal deposit inflows and organic deposit growth. Period-end total deposits increased $790.6 million, or 2.3%. Period-end time deposits increased $457.8 million, or 8.6% and interest-bearing demand deposits increased $712.7 million, or 5.2%, which were partially offset by non-interest-bearing deposits declining $209.8 million, or 1.9%, and savings balances declining $170.1 million, or 4.5%, resulting from the shift in customers' preferences to higher-yielding deposit products. The mix of non-interest-bearing deposits to total deposits was 31% at September 30, 2023, compared to 32%. The loan-to-deposit ratio was 92.9% at September 30, 2023, stable compared to 92.7%.

Non-interest income totaled $81.6 million, a $1.2 million, or 1.5%, increase from the prior quarter. Capital markets income increased $1.2 million, or 20.3%, led by international banking, with continued solid contributions from swap fees, syndications and debt capital markets income. Insurance commissions and fees decreased $0.9 million, or 15.8%, due to strong overall production in the prior quarter. Mortgage banking operations income decreased $1.0 million, or 20.2%, due to negative fair value marks given the sharp increase in mortgage rates during the third quarter.

Non-interest expense totaled $218.0 million, an increase of $6.0 million, or 2.9%. Net occupancy and equipment increased $3.5 million, or 9.3%, largely due to the impact of technology investments and the inflationary macroeconomic environment. Marketing expenses increased $1.5 million, or 37.4%, due to the timing of digital marketing campaigns which helped drive deposit growth and acquire additional households. FDIC insurance increased $0.5 million, or 7.1%, from loan growth and balance sheet mix changes. The efficiency ratio (non-GAAP) equaled 51.7%, compared to 50.0%.

The ratio of non-performing loans and OREO to total loans and OREO decreased 10 basis points to 0.36% and delinquency totaled 0.63%, a 12 basis point decrease. Both measures continue to remain at historically low levels. The provision for credit losses was $25.9 million, compared to $18.5 million. The provision for credit losses supported loan growth and included $18.8 million for the previously disclosed $31.9 million commercial loan that was downgraded to non-performing status in the second quarter of 2023 and fully charged-off during the third quarter of 2023 due to allegedfraud. The third quarter of 2023 reflected net charge-offs of $37.7 million, or 0.47% annualized of total average loans, compared to $8.7 million, or 0.11% annualized. Excluding the previously mentioned charge-off, the third quarter of 2023 net charge-offs would have been $5.8 million, or 0.07% annualized of total average loans (non-GAAP). The ACL was $400.6 million, a decrease of $12.1 million, with the ratio of the ACL to total loans and leases totaling 1.25% at September 30, 2023 compared to 1.32% at June 30, 2023, reflecting strong loan growth and the previously mentioned charge-off activity.

The effective tax rate was 11.5%, compared to 20.5%, primarily due to renewable energy investment tax credits recognized in the third quarter of 2023 as part of a solar project financing transaction.

The CET1 regulatory capital ratio was 10.2% (estimated), an increase from 10.1% at June 30, 2023, benefiting from retained earnings growth in the quarter. Tangible book value per common share (non-GAAP) was $9.02 at September 30, 2023, an increase of $0.23 per share. AOCI reduced the current quarter-end tangible book value per common share (non-GAAP) by $1.06 reflecting increased unrealized losses on AFS securities caused by the higher interest rate environment, compared to a reduction of $0.99 at the end of the prior quarter.

September 30, 2023 Year-To-Date Results – Comparison to Prior Year-To-Date Period

Net interest income totaled $992.5 million, increasing $207.6 million, or 26.4%, as the higher interest rate environment benefited earning asset yields given the asset sensitive positioning of the balance sheet and the higher yields on new loan originations. The net interest margin (FTE) (non-GAAP) increased 53 basis points to 3.39%. The yield on earning assets (non-GAAP) increased 172 basis points to 4.91%, reflecting higher yields on variable-rate loans, investment securities and interest-bearing deposits with banks. The cost of funds increased 124 basis points to 1.59% as the cost of interest-bearing deposits increased 162 basis points to 1.95% from the impact of the higher interest rate environment and increased deposit competition, and the cost of borrowings increased 185 basis points primarily from increased borrowings for additional liquidity during the banking industry disruption in 2023.

Average loans totaled $31.1 billion, an increase of $3.8 billion, or 13.8%, including growth of $2.0 billion in commercial loans and leases and $1.8 billion in consumer loans. Growth in total average commercial loans included growth of $978.3 million, or 9.2%, in commercial real estate and $904.5 million, or 14.2%, in commercial and industrial loans. The organic growth in 2023 is primarily attributable to growth across our diverse footprint, with the largest increases noted in the Cleveland, Pittsburgh and Charlotte markets. Growth in total average consumer loans was due to an increase in residential mortgage loans of $1.4 billion, indirect installment loans of $206.3 million, and direct home equity installment loans of $106.2 million. Average loan growth also benefited from the addition of the Union-acquired loans in December 2022.

Average deposits totaled $34.0 billion, increasing $595.7 million, or 1.8%. Driven by solid organic growth in customer relationships, as well as the Union acquisition, time deposits increased $2.0 billion, more than offsetting the decline of $775.8 million in interest-bearing demand deposits, $539.6 million in non-interest-bearing deposits and $93.9 million in savings deposits.

Non-interest income totaled $241.2 million, a decrease of $1.7 million, or 0.7%. Capital markets decreased $5.5 million, or 21.9%, as swap activity declined consistent with lower commercial loan production in the current macroeconomic environment, partially offset by an increase in debt capital markets and international banking. Mortgage banking operations income decreased $4.3 million, or 23.7%, as secondary market revenue declined from 2022 due to the sharp increase in interest rates and the gain on sale margins moderating to historical levels. Service charges decreased $0.7 million, or 0.7%, with strong treasury management services, interchange fees and higher customer activity largely offsetting the impact of overdraft practice changes that FNB implemented in the first quarter of 2023. Dividends on non-marketable securities increased $7.2 million, or 87.7%, reflecting higher FHLB dividends due to additional borrowings. Wealth management revenues increased $5.6 million, or 11.9%, as securities commissions and fees and trust income increased 20.0% and 7.1%, respectively, through contributions across the geographic footprint and an increase in assets under management. Other non-interest income declined $2.6 million, or 20.0%, as Small Business Administration (SBA) premium income declined from elevated levels, reflecting the higher interest rate environment, reduced market premiums and correspondingly lower sold loan volumes. Additionally, Small Business Investment Company (SBIC) funds income decreased, reflecting normal fluctuations based on the performance of the underlying portfolio companies.

Non-interest expense totaled $649.9 million, an increase of $34.6 million, or 5.6%, from 2022. Excluding significant items totaling $2.2 million in 2023 and $36.9 million in 2022, operating non-interest expense (non-GAAP) increased $69.3 million, or 12.0%. Salaries and employee benefits increased $24.9 million, or 7.7%, related to annual merit increases, reduced salary deferrals given lower loan origination volumes and the addition of the acquired Union expense base. Net occupancy and equipment increased $13.6 million, or 12.9%, primarily from technology-related investments and the acquired Union expense base. Outside services increased $7.4 million, or 13.9%, with higher volume-related technology and third-party costs, as well the impact of the inflationary macroeconomic environment. FDIC insurance increased $8.0 million, or 53.1%, driven by the previously announced FDIC assessment rate increase which was effective in the first quarter of 2023 as well as loan growth and balance sheet mix changes. Amortization of intangibles increased $4.9 million, or 47.3%, related to the Union core deposit intangible. The efficiency ratio (non-GAAP) equaled 50.8% on a year-to-date basis, compared to 54.7%, reflecting the strong 8% operating leverage gained on a year-to-date basis from higher revenue and disciplined expense management.

The provision for credit losses was $58.5 million, compared to $35.6 million year-to-date in 2022. The provision for credit losses in 2022 included $19.1 million of initial provision for non-purchase credit deteriorated (non-PCD) loans associated with the Howard acquisition. The year-over-year increase was driven primarily by loan growth, charge-off activity and included $31.9 million in provision for the previously disclosed commercial loan that was downgraded to non-performing status in the second quarter of 2023 and fully charged-off during the third quarter of 2023 due to allegedfraud. Net charge-offs totaled $59.6 million, or 0.26% of total average loans, compared to $4.3 million, or 0.02%, in 2022. Excluding the previously mentioned charge-off, net charge-offs would have been $27.7 million, or 0.12% annualized of total average loans (non-GAAP), remaining at historically low levels. The ACL was $400.6 million at September 30, 2023, an increase of $15.3 million, with the ratio of the ACL to total loans and leases decreasing 9 basis points to 1.25%, reflecting the strong loan growth and the previously mentioned charge-off activity.

The effective tax rate was 17.4% for 2023, compared to 20.5% in 2022, primarily due to renewable energy investment tax credits recognized in the third quarter of 2023 as part of a solar project financing transaction.

Use of Non-GAAP Financial Measures and Key Performance Indicators
To supplement our Consolidated Financial Statements presented in accordance with GAAP, we use certain non-GAAP financial measures, such as operating net income available to common stockholders, operating earnings per diluted common share, net loan charge-offs, excluding an isolated commercial loan charge-off due to allegedfraud (annualized) to total average loans and leases, return on average tangible equity, return on average tangible common equity, operating return on average tangible common equity, return on average tangible assets, tangible book value per common share, the ratio of tangible equity to tangible assets, the ratio of tangible common equity to tangible assets, pre-provision net revenue (reported), operating pre-provision net revenue, efficiency ratio, and net interest margin (FTE) to provide information useful to investors in understanding our operating performance and trends, and to facilitate comparisons with the performance of our peers. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities. The non-GAAP financial measures and key performance indicators we use may differ from the non-GAAP financial measures and key performance indicators other financial institutions use to assess their performance and trends.

These non-GAAP financial measures should be viewed as supplemental in nature, and not as a substitute for, or superior to, our reported results prepared in accordance with GAAP. When non-GAAP financial measures are disclosed, the Securities and Exchange Commission's (SEC) Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. Reconciliations of non-GAAP operating measures to the most directly comparable GAAP financial measures are included later in this release under the heading "Reconciliations of Non-GAAP Financial Measures and Key Performance Indicators to GAAP."

Management believes items such as merger expenses, initial provision for non-PCD loans acquired and branch consolidation costs are not organic to run our operations and facilities. These items are considered significant items impacting earnings as they are deemed to be outside of ordinary banking activities. The merger expenses and branch consolidation costs principally represent expenses to satisfy contractual obligations of the acquired entity or closed branch without any useful ongoing benefit to us. These costs are specific to each individual transaction and may vary significantly based on the size and complexity of the transaction.

To facilitate peer comparisons of net interest margin and efficiency ratio, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets (loans and investments) to make it fully equivalent to interest income earned on taxable investments (this adjustment is not permitted under GAAP). Taxable-equivalent amounts for the 2023 and 2022 periods were calculated using a federal statutory income tax rate of 21%.

Cautionary Statement Regarding Forward-Looking Information
This document may contain statements regarding F.N.B. Corporation's outlook for earnings, revenues, expenses, tax rates, capital and liquidity levels and ratios, asset quality levels, financial position and other matters regarding or affecting our current or future business and operations. These statements can be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve various assumptions, risks and uncertainties which can change over time. Actual results or future events may be different from those anticipated in our forward-looking statements and may not align with historical performance and events. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance upon such statements. Forward-looking statements are typically identified by words such as "believe," "plan," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "will," "should," "project," "goal," and other similar words and expressions. We do not assume any duty to update forward-looking statements, except as required by federal securities laws.

FNB's forward-looking statements are subject to the following principal risks and uncertainties:

• Our business, financial results and balance sheet values are affected by business, economic and political circumstances, including, but not limited to: (i) developments with respect to the U.S. and global financial markets; (ii) supervision, regulation, enforcement and other actions by several governmental agencies, including the Federal Reserve Board, Federal Deposit Insurance Corporation, Financial Stability Oversight Council, U.S. Department of Justice (DOJ), Consumer Financial Protection Bureau, U.S. Treasury Department, Office of the Comptroller of the Currency and Department of Housing and Urban Development, state attorney generals and other governmental agencies, whose actions may affect, among other things, our consumer and mortgage lending and deposit practices, capital structure, investment practices, dividend policy, annual FDIC insurance premium assessment and growth, money supply, market interest rates or otherwise affect business activities of the financial services industry; (iii) a slowing of the U.S. economy in general and regional and local economies within our market area; (iv) inflation concerns; (v) the impacts of tariffs or other trade policies of the U.S. or its global trading partners; and (vi) the sociopolitical environment in the U.S.
• Business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through effective use of systems and controls, third-party insurance, derivatives, and capital management techniques, and to meet evolving regulatory capital and liquidity standards.
• Competition can have an impact on customer acquisition, growth and retention, and on credit spreads, deposit gathering and product pricing, which can affect market share, loans, deposits and revenues. Our ability to anticipate, react quickly and continue to respond to technological changes and significant adverse industry and economic events can also impact our ability to respond to customer needs and meet competitive demands.
• Business and operating results can also be affected by difficult to predict uncertainties, such as widespread natural and other disasters, pandemics, including post-pandemic return to normalcy, global events and geopolitical instability, including the Ukraine-Russia conflict and the emerging military conflict in Israel and Gaza, shortages of labor, supply chain disruptions and shipping delays, terrorist activities, system failures, security breaches, significant political events, cyber-attacks, international hostilities or other extraordinary events which are beyond FNB's control and may significantly impact the U.S. or global economy and financial markets generally, or us or our counterparties, customers or third-party vendors specifically.
• Legal, regulatory and accounting developments could have an impact on our ability to operate and grow our businesses, financial condition, results of operations, competitive position, and reputation. Reputational impacts could affect matters such as business generation and retention, liquidity, funding, and the ability to attract and retain talent. These developments could include:
  • Policies and priorities of the current U.S. presidential administration, including legislative and regulatory reforms, more aggressive approaches to supervisory or enforcement priorities with consumer and anti-discrimination lending laws by the federal banking regulatory agencies and the DOJ, changes affecting oversight of the financial services industry, regulatory obligations or restrictions, consumer protection, taxes, employee benefits, compensation practices, pension, bankruptcy and other industry aspects, and changes in accounting policies and principles.
  • Ability to continue to attract, develop and retain key talent.
  • Changes to regulations or accounting standards governing bank capital requirements, loan loss reserves and liquidity standards.
  • Changes in monetary and fiscal policies, including interest rate policies and strategies of the FOMC.
  • Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or inquiries. These matters may result in monetary judgments or settlements, enforcement actions or other remedies, including fines, penalties, restitution or alterations in our business practices, including financial and other type of commitments, and in additional expenses and collateral costs, and may cause reputational harm to FNB.
  • Results of the regulatory examination and supervision process, including our failure to satisfy requirements imposed by the federal bank regulatory agencies or other governmental agencies.
  • Business and operating results are affected by our ability to effectively identify and manage risks inherent in our businesses, including, where appropriate, through effective use of policies, processes, systems and controls, third-party insurance, derivatives, and capital and liquidity management techniques.
  • The impact on our financial condition, results of operations, financial disclosures and future business strategies related to the impact on the allowance for credit losses due to changes in forecasted macroeconomic conditions as a result of applying the "current expected credit loss" accounting standard, or CECL.
  • A failure or disruption in or breach of our operational or security systems or infrastructure, or those of third parties, including as a result of cyber-attacks or campaigns.
  • Increased funding costs and market volatility due to market illiquidity and competition for funding.

FNB cautions that the risks identified here are not exhaustive of the types of risks that may adversely impact FNB and actual results may differ materially from those expressed or implied as a result of these risks and uncertainties, including, but not limited to, the risk factors and other uncertainties described under Item 1A Risk Factors and the Risk Management sections of our 2022 Annual Report on Form 10-K, our subsequent 2023 Quarterly Reports on Form 10-Q (including the risk factors and risk management discussions) and our other 2023 filings with the SEC, which are available on our corporate website at https://www.fnb-online.com/about-us/investor-information/reports-and-filings or the SEC's website at www.sec.gov. We have included our web address as an inactive textual reference only. Information on our website is not part of our SEC filings.

Conference Call
F.N.B. Corporation (NYSE: FNB) announced the financial results for the third quarter of 2023 on Wednesday, October 18, 2023. Chairman, President and Chief Executive Officer, Vincent J. Delie, Jr., Chief Financial Officer, Vincent J. Calabrese, Jr., and Chief Credit Officer, Gary L. Guerrieri, plan to host a conference call to discuss the Company's financial results on Thursday, October 19, 2023, at 8:30 AM ET.

Participants are encouraged to pre-register for the conference call at https://dpregister.com/sreg/10182862/fa84ef834e. Callers who pre-register will be provided a conference passcode and unique PIN to bypass the live operator and gain immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.

Dial-in Access: The conference call may be accessed by dialing (844) 802-2440 (for domestic callers) or (412) 317-5133 (for international callers). Participants should ask to be joined into the F.N.B. Corporation call.

Webcast Access: The audio-only call and related presentation materials may be accessed via webcast through the "About Us" tab of the Corporation's website at www.fnbcorporation.com and clicking on "Investor Relations" then "Investor Conference Calls." Access to the live webcast will begin approximately 30 minutes prior to the start of the call.

Presentation Materials: Presentation slides and the earnings release will also be available on the Corporation's website at www.fnbcorporation.com by accessing the "About Us" tab and clicking on "Investor Relations" then "Investor Conference Calls."

A replay of the call will be available shortly after the completion of the call until midnight ET on Thursday, October 26, 2023. The replay can be accessed by dialing 877-344-7529 (for domestic callers) or 412-317-0088 (for international callers); the conference replay access code is 2075271. Following the call, a link to the webcast and the related presentation materials will be posted to the "Investor Relations" section of F.N.B. Corporation's website at www.fnbcorporation.com.

About F.N.B. Corporation
F.N.B. Corporation (NYSE: FNB), headquartered in Pittsburgh, Pennsylvania, is a diversified financial services company operating in seven states and the District of Columbia. FNB's market coverage spans several major metropolitan areas including: Pittsburgh, Pennsylvania; Baltimore, Maryland; Cleveland, Ohio; Washington, D.C.; Charlotte, Raleigh, Durham and the Piedmont Triad (Winston-Salem, Greensboro and High Point) in North Carolina; and Charleston, South Carolina. The Company has total assets of over $45 billion and approximately 350 banking offices throughout Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington, D.C. and Virginia.

FNB provides a full range of commercial banking, consumer banking and wealth management solutions through its subsidiary network which is led by its largest affiliate, First National Bank of Pennsylvania, founded in 1864. Commercial banking solutions include corporate banking, small business banking, investment real estate financing, government banking, business credit, capital markets and lease financing. The consumer banking segment provides a full line of consumer banking products and services, including deposit products, mortgage lending, consumer lending and a complete suite of mobile and online banking services. FNB's wealth management services include asset management, private banking and insurance.

The common stock of F.N.B. Corporation trades on the New York Stock Exchange under the symbol "FNB" and is included in Standard & Poor's MidCap 400 Index with the Global Industry Classification Standard (GICS) Regional Banks Sub-Industry Index. Customers, shareholders and investors can learn more about this regional financial institution by visiting the F.N.B. Corporation website at www.fnbcorporation.com.