F.N.B. Q2 Earnings Call Highlights

F.N.B. (NYSE:FNB) reported stronger second-quarter 2026 earnings, record revenue and continued balance sheet growth, while management lowered its full-year net interest income outlook, citing deposit competition and the impact of changes in short-term rates.

Chairman, President and CEO Vince Delie said earnings per share rose 17% from a year earlier to $0.42, with net income of $149 million. Total revenue reached a record $463 million, including net interest income of $366 million and non-interest income of $97 million. Delie said the results helped drive a 9% year-over-year increase in pre-provision net revenue and positive operating leverage.

The company also reported tangible book value per common share of $12.24, up 10% from a year earlier. F.N.B. repurchased $47 million, or 2.7 million shares, during the quarter at a weighted average price of $17.46. Management said capital remained strong, with a tangible common equity ratio near 9% and return on average tangible common equity of 14%.

Loan Growth Led by C, Consumer Lending

Period-end loans rose at a 7.5% annualized rate from the prior quarter, with Delie pointing to growth in commercial and industrial lending, consumer lending and seasonal residential mortgage production. He said C growth of 8% annualized on a linked-quarter basis was driven by lower risk-rated, high-quality commercial borrowers.

Chief Financial Officer Vince Delie said spot total loans and leases ended the quarter at $35.8 billion. Consumer loans increased $547 million, while commercial loans and leases rose $111 million. C loans and commercial leases were up more than 8% annualized, primarily due to growth in the Mid-Atlantic and Pittsburgh markets. Commercial real estate balances declined $129 million linked quarter as expected payoffs continued.

Management said residential mortgage growth was partly seasonal and tied to the company’s physician lending program. During the question-and-answer session, executives said the second quarter is typically the seasonal peak for that business as physicians leave school and move into hospital roles.

F.N.B. said average total deposits grew at a 3% annualized pace, supported by non-interest-bearing balances, low-cost transaction deposits and time deposits. Spot non-interest-bearing deposits increased $53 million and exceeded $10 billion for the second consecutive quarter, remaining at 26% of total deposits.

Net Interest Income Guidance Revised Lower

The company reported a second-quarter net interest margin of 3.25%, unchanged from the prior quarter. Net interest income increased more than 7% on a linked-quarter annualized basis. Total earning asset yields fell one basis point to 5.13%, while Total cost of funds declined two basis points to 1.99%.

F.N.B. lowered its full-year net interest income guidance to a range of $1.485 billion to $1.515 billion. The company said the revision reflected first-half results and an expectation that heightened deposit competition will continue. Management’s outlook assumes no Federal Reserve interest rate actions in 2026. Third-quarter net interest income is projected at $375 million to $385 million.

In response to an analyst question, the chief financial officer said second-quarter net interest income was affected by a decline in one-month SOFR, tighter spreads on higher-quality loans and the competitive deposit environment. He said F.N.B. has about $13 billion of loans tied to one-month SOFR. He also noted that the June net interest margin was 3.27%, a couple of basis points above the full-quarter level.

Executives said public funds deposits typically build in the second half of the year. The chief financial officer estimated the seasonal surge has historically been about $500 million, plus or minus a few hundred million dollars. Management also pointed to a treasury management deposit pipeline of more than $1 billion, though some larger relationships have longer lead times.

Asset Quality Remains Stable

Chief Credit Officer Gary Guerrieri said asset quality metrics improved during the quarter. Delinquencies and nonperforming loans and OREO each decreased three basis points from the prior quarter, totaling 71 basis points and 31 basis points, respectively. Net charge-offs were 19 basis points, up one basis point from the prior quarter.

Guerrieri said criticized loans declined slightly in the quarter and were down 68 basis points from a year earlier. Funded provision expense totaled $21.3 million, supporting loan growth. The ending funded reserve stood at $447 million, or 1.25% of loans. Including acquired unamortized loan discounts, the reserve was 1.3%, and nonperforming loan coverage was 420%.

Guerrieri said the company continues to maintain qualitative overlays for potential supply chain impacts related to events in the Middle East and tariff uncertainty. He described the consumer portfolio as “very strong,” with average origination FICO scores of 784, delinquency of 66 basis points and charge-offs of six basis points.

Fee Income, Expenses and Technology Investments

Non-interest income totaled $97 million, up 6.5% from the second quarter of 2025. Capital markets income increased 16% to $8 million, helped by debt Capital markets, interest rate derivatives, international banking and early contributions from investment banking and public finance. Wealth management revenue rose nearly 8% year-over-year to $22 million.

Non-interest expense was $253 million, up 2.9% from a year earlier. Salaries and benefits increased 4.4%, occupancy and equipment rose 5.1%, and outside services increased 11.6%. The efficiency ratio was 53.7%, down more than 100 basis points from the year-ago quarter.

Delie highlighted F.N.B.’s use of data analytics and technology, including its proprietary eStore and Common App. He said the company is developing an AI-enabled customer aggregation and insight tool called Insight 360, which is expected to go live by the end of the year. Management said the tool is intended to help clients and bankers optimize banking relationships and improve product penetration.

Full-Year Outlook

F.N.B. maintained its full-year guidance for period-end loans and deposits to grow in the mid-single digits. Full-year non-interest income guidance remained $370 million to $390 million, with third-quarter levels expected between $93 million and $98 million. Full-year non-interest expense guidance was tightened to $1.01 billion to $1.02 billion, with management expecting to be toward the high end of that range. Third-quarter expenses are expected to be $255 million to $260 million.

The company lowered its full-year provision guidance to $80 million to $95 million from $85 million to $105 million, citing favorable first-half credit performance. Management said the final result will depend on loan growth and charge-off activity. The full-year effective tax rate is expected to be 21% to 22%, excluding any investment tax credit activity.

Delie closed the call by saying management expects “a really strong ending to the year,” citing momentum across several areas of the business.

About F.N.B. (NYSE:FNB)

F.N.B. Corporation is a bank holding company headquartered in Pittsburgh, Pennsylvania. Through its principal subsidiary, FNB Bank, the company provides a broad range of commercial and consumer financial services. Founded in 1864 as the First National Bank of Pennsylvania, F.N.B. has grown through both organic expansion and strategic acquisitions to become a regional banking franchise.

The company's main business activities include traditional deposit-taking and lending services, such as checking and savings accounts, mortgages, home equity lines of credit, and consumer and commercial loans.

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