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F.N.B. Corp (FNB) Stock Falls 1.8% After Q2 Earnings Miss
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Shares of F.N.B. Corporation (FNB - Free Report) lost 1.8% in after-market trading following the release of its lower-than-expected second-quarter 2024 results. Adjusted earnings per share of 34 cents lagged the Zacks Consensus Estimate by a penny. Moreover, the bottom line reflected a decline of 12.8% from the prior-year quarter.
The results were primarily affected by higher provisions, higher expenses and lower net interest income (NII). Nonetheless, a higher non-interest income and a rise in average loans and deposits’ balance offered some support.
After considering significant items, net income available to its common stockholders was $123 million, down 12.4% year over year. Our estimate for the metric was $124.4 million.
Revenues Decline, Expenses Rise
Quarterly net revenues were $403.8 million, down 1.4% from the year-earlier quarter. The top line lagged the Zacks Consensus Estimate of $407.6 million.
NII was $315.9 million, down 4%. The fall was mainly due to higher deposit costs, partly offset by growth in earning assets and higher earning asset yields. Our estimate for NII was pegged at $323.9 million.
Net interest margin (FTE basis) (non-GAAP) contracted 28 basis points (bps) year over year to 3.09%.
Non-interest income was $87.9 million, which was up 9.5%. The improvement was driven by a rise in all fee income components. Our estimate for the metric was $82.4 million.
Non-interest expenses were $226.6 million, up 6.9% year over year. Our estimate for the same was $220.6 million. After excluding significant items impacting earnings, adjusted expenses rose 6.6% to $225.8 million.
As of Jun 30, 2024, the common equity Tier 1 (CET1) ratio was 10.2% compared with 10.1% in the prior-year quarter.
At the end of the second quarter, average loans and leases were $33.3 billion, up 2.8% on a sequential basis. Average deposits totaled $34.6 billion, which was up 1.2%.
Credit Quality Improves
FNB’s provision for credit losses was $20.2 million, up 9.2% from the prior-year quarter. Our estimate for provisions was $19.5 million.
The ratio of non-performing loans and other real estate owned (OREO) to total loans and OREO decreased 14 bps to 0.33%. Also, net charge-offs to total average loans were 0.09%, which was down 2 bps.
Further, total delinquency decreased 12 bps to 0.63%.
Our Take
FNB’s solid liquidity position bodes well for the future. The company’s top line is expected to benefit from its efforts to increase fee income, diverse revenue streams and opportunistic acquisitions. However, persistently rising expenses are expected to hurt profits in the near term.
F.N.B. Corporation Price, Consensus and EPS Surprise
WaFd, Inc.’s (WAFD - Free Report) third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of 76 cents per share handily surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line rose 4.1% sequentially.
The quarter marked the first full quarter after the completion of the acquisition of Luther Burbank Corporation.
WAFD’s results reflected a rise in NII and other income, which aided the top line. Also, higher loan balances and lower provisions were other positives. However, a rise in expenses and a slight decline in the deposit balance acted as spoilsports.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2024 earnings per share of $1.31 beat the Zacks Consensus Estimate of $1.19. However, the bottom line compared unfavorably with $1.35 per share registered in the year-ago quarter.
HWC’s results were aided by an increase in non-interest income. However, a decline in NII and higher expenses and provisions were the undermining factors.
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F.N.B. Corp (FNB) Stock Falls 1.8% After Q2 Earnings Miss
Shares of F.N.B. Corporation (FNB - Free Report) lost 1.8% in after-market trading following the release of its lower-than-expected second-quarter 2024 results. Adjusted earnings per share of 34 cents lagged the Zacks Consensus Estimate by a penny. Moreover, the bottom line reflected a decline of 12.8% from the prior-year quarter.
The results were primarily affected by higher provisions, higher expenses and lower net interest income (NII). Nonetheless, a higher non-interest income and a rise in average loans and deposits’ balance offered some support.
After considering significant items, net income available to its common stockholders was $123 million, down 12.4% year over year. Our estimate for the metric was $124.4 million.
Revenues Decline, Expenses Rise
Quarterly net revenues were $403.8 million, down 1.4% from the year-earlier quarter. The top line lagged the Zacks Consensus Estimate of $407.6 million.
NII was $315.9 million, down 4%. The fall was mainly due to higher deposit costs, partly offset by growth in earning assets and higher earning asset yields. Our estimate for NII was pegged at $323.9 million.
Net interest margin (FTE basis) (non-GAAP) contracted 28 basis points (bps) year over year to 3.09%.
Non-interest income was $87.9 million, which was up 9.5%. The improvement was driven by a rise in all fee income components. Our estimate for the metric was $82.4 million.
Non-interest expenses were $226.6 million, up 6.9% year over year. Our estimate for the same was $220.6 million. After excluding significant items impacting earnings, adjusted expenses rose 6.6% to $225.8 million.
As of Jun 30, 2024, the common equity Tier 1 (CET1) ratio was 10.2% compared with 10.1% in the prior-year quarter.
At the end of the second quarter, average loans and leases were $33.3 billion, up 2.8% on a sequential basis. Average deposits totaled $34.6 billion, which was up 1.2%.
Credit Quality Improves
FNB’s provision for credit losses was $20.2 million, up 9.2% from the prior-year quarter. Our estimate for provisions was $19.5 million.
The ratio of non-performing loans and other real estate owned (OREO) to total loans and OREO decreased 14 bps to 0.33%. Also, net charge-offs to total average loans were 0.09%, which was down 2 bps.
Further, total delinquency decreased 12 bps to 0.63%.
Our Take
FNB’s solid liquidity position bodes well for the future. The company’s top line is expected to benefit from its efforts to increase fee income, diverse revenue streams and opportunistic acquisitions. However, persistently rising expenses are expected to hurt profits in the near term.
F.N.B. Corporation Price, Consensus and EPS Surprise
F.N.B. Corporation price-consensus-eps-surprise-chart | F.N.B. Corporation Quote
Currently, FNB carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
WaFd, Inc.’s (WAFD - Free Report) third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of 76 cents per share handily surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line rose 4.1% sequentially.
The quarter marked the first full quarter after the completion of the acquisition of Luther Burbank Corporation.
WAFD’s results reflected a rise in NII and other income, which aided the top line. Also, higher loan balances and lower provisions were other positives. However, a rise in expenses and a slight decline in the deposit balance acted as spoilsports.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2024 earnings per share of $1.31 beat the Zacks Consensus Estimate of $1.19. However, the bottom line compared unfavorably with $1.35 per share registered in the year-ago quarter.
HWC’s results were aided by an increase in non-interest income. However, a decline in NII and higher expenses and provisions were the undermining factors.