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F.N.B. Corporation’s (FNB - Free Report) fourth-quarter 2021 adjusted earnings per share of 30 cents met the Zacks Consensus Estimate. The bottom line reflects a rise of 7.1% from the prior-year quarter.
Results were primarily aided by a rise in fee income, lower expenses and provision benefits. However, a fall in net interest income (NII) was the undermining factor.
Results excluded certain significant items. Including those, net income available to common stockholders was $96.5 million, growing 37.5% from the year-ago quarter.
For 2021, adjusted earnings per share of $1.24 surpassed the Zacks Consensus Estimate of $1.22. The bottom line jumped 29.2% from 2020. Net income available to common stockholders (GAAP basis) was $396.6 million, growing 42.7% from the previous year.
Revenues & Expenses Decline
Quarterly net revenues were $302.3 million, down marginally year over year.
NII was $223.3 million, down 4.7% year over year. Growth in average earning assets was offset by the repricing impact on earning asset yields from lower interest rates, mitigated by the improved funding mix, with reductions in higher-cost borrowings, and the cost of interest-bearing deposits.
The net interest margin (FTE basis) (non-GAAP) contracted 32 basis points (bps) to 2.55%.
Non-interest income was $79 million, up 15.5% from the prior-year quarter. The improvement was due to strong contributions from capital markets and wealth management, as well as higher service charges reflecting increased customer activity, partially offset by lower contributions from mortgage banking, given the strong levels in the fourth quarter of 2020.
Non-interest expenses were down 8.9% year over year to $181.6 million.
As of Dec 31, 2021, the common equity Tier 1 (CET1) ratio was 9.9%, up from 9.8% as of Dec 31, 2020.
Credit Quality Improves
Net charge-offs were 0.02% of average loans, down 39 bps year over year. Given the improvement in credit trends, F.N.B. Corp’s provision for credit losses was a benefit of $2.4 million against provision expenses of $17.6 million in the prior-year quarter.
The ratio of non-performing loans, 90 days past due, and other real estate owned (OREO) to total loans and OREO declined 36 bps year over year to 0.41%.
Our Take
F.N.B. Corporation’s efforts to improve fee income and opportunistic acquisitions are expected to keep aiding the top line. Its solid liquidity position bodes well for the future. Also, the company's capital deployment activities seem impressive, through which it will keep enhancing shareholder value. However, the low-interest-rate environment remains a major concern for the company. Moreover, elevated expenses might hamper bottom-line growth to some extent.
F.N.B. Corporation Price, Consensus and EPS Surprise
Robust advisory business, reserve releases and a rise in loan demand drove JPMorgan’s (JPM - Free Report) fourth-quarter 2021 earnings of $3.33 per share. The bottom line handily outpaced the Zacks Consensus Estimate of $3.01. Results included net credit reserve releases. Excluding this, earnings were $2.86 per share.
JPM’s equity markets revenues and fixed-income markets revenues fell 2% and 16%, respectively, on a year-over-year basis. Total markets revenues of $5.3 billion declined 11%. While lower rates continued to hurt JPMorgan’s interest income, it was more than offset by a rise in loan balances.
Bank of New York Mellon Corporation’s (BK - Free Report) fourth-quarter 2021 adjusted earnings of $1.04 per share surpassed the Zacks Consensus Estimate of $1.02. The bottom line represents a rise of 8.3% from the prior-year quarter.
For BK, its quarterly results were aided by provision benefits and a rise in fee income. Growth in asset balances was another tailwind. However, a marginal fall in net interest income and higher expenses were the undermining factors.
Citigroup (C - Free Report) delivered an earnings surprise of 5.04% in fourth-quarter 2021. Income from continuing operations per share of $1.46 handily outpaced the Zacks Consensus Estimate of $1.39. However, the reported figure declined 24% from the prior-year quarter.
Citigroup’s investment banking revenues jumped in the quarter under review, driven by equity underwriting as well as growth in advisory revenues. However, fixed-income revenues were down due to declining rates and spread products.
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F.N.B. Corporation (FNB) Q4 Earnings Meet, Costs Decline Y/Y
F.N.B. Corporation’s (FNB - Free Report) fourth-quarter 2021 adjusted earnings per share of 30 cents met the Zacks Consensus Estimate. The bottom line reflects a rise of 7.1% from the prior-year quarter.
Results were primarily aided by a rise in fee income, lower expenses and provision benefits. However, a fall in net interest income (NII) was the undermining factor.
Results excluded certain significant items. Including those, net income available to common stockholders was $96.5 million, growing 37.5% from the year-ago quarter.
For 2021, adjusted earnings per share of $1.24 surpassed the Zacks Consensus Estimate of $1.22. The bottom line jumped 29.2% from 2020. Net income available to common stockholders (GAAP basis) was $396.6 million, growing 42.7% from the previous year.
Revenues & Expenses Decline
Quarterly net revenues were $302.3 million, down marginally year over year.
NII was $223.3 million, down 4.7% year over year. Growth in average earning assets was offset by the repricing impact on earning asset yields from lower interest rates, mitigated by the improved funding mix, with reductions in higher-cost borrowings, and the cost of interest-bearing deposits.
The net interest margin (FTE basis) (non-GAAP) contracted 32 basis points (bps) to 2.55%.
Non-interest income was $79 million, up 15.5% from the prior-year quarter. The improvement was due to strong contributions from capital markets and wealth management, as well as higher service charges reflecting increased customer activity, partially offset by lower contributions from mortgage banking, given the strong levels in the fourth quarter of 2020.
Non-interest expenses were down 8.9% year over year to $181.6 million.
As of Dec 31, 2021, the common equity Tier 1 (CET1) ratio was 9.9%, up from 9.8% as of Dec 31, 2020.
Credit Quality Improves
Net charge-offs were 0.02% of average loans, down 39 bps year over year. Given the improvement in credit trends, F.N.B. Corp’s provision for credit losses was a benefit of $2.4 million against provision expenses of $17.6 million in the prior-year quarter.
The ratio of non-performing loans, 90 days past due, and other real estate owned (OREO) to total loans and OREO declined 36 bps year over year to 0.41%.
Our Take
F.N.B. Corporation’s efforts to improve fee income and opportunistic acquisitions are expected to keep aiding the top line. Its solid liquidity position bodes well for the future. Also, the company's capital deployment activities seem impressive, through which it will keep enhancing shareholder value. However, the low-interest-rate environment remains a major concern for the company. Moreover, elevated expenses might hamper bottom-line growth to some extent.
F.N.B. Corporation Price, Consensus and EPS Surprise
F.N.B. Corporation price-consensus-eps-surprise-chart | F.N.B. Corporation Quote
Currently, F.N.B. Corporation carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Large Banks
Robust advisory business, reserve releases and a rise in loan demand drove JPMorgan’s (JPM - Free Report) fourth-quarter 2021 earnings of $3.33 per share. The bottom line handily outpaced the Zacks Consensus Estimate of $3.01. Results included net credit reserve releases. Excluding this, earnings were $2.86 per share.
JPM’s equity markets revenues and fixed-income markets revenues fell 2% and 16%, respectively, on a year-over-year basis. Total markets revenues of $5.3 billion declined 11%. While lower rates continued to hurt JPMorgan’s interest income, it was more than offset by a rise in loan balances.
Bank of New York Mellon Corporation’s (BK - Free Report) fourth-quarter 2021 adjusted earnings of $1.04 per share surpassed the Zacks Consensus Estimate of $1.02. The bottom line represents a rise of 8.3% from the prior-year quarter.
For BK, its quarterly results were aided by provision benefits and a rise in fee income. Growth in asset balances was another tailwind. However, a marginal fall in net interest income and higher expenses were the undermining factors.
Citigroup (C - Free Report) delivered an earnings surprise of 5.04% in fourth-quarter 2021. Income from continuing operations per share of $1.46 handily outpaced the Zacks Consensus Estimate of $1.39. However, the reported figure declined 24% from the prior-year quarter.
Citigroup’s investment banking revenues jumped in the quarter under review, driven by equity underwriting as well as growth in advisory revenues. However, fixed-income revenues were down due to declining rates and spread products.