FNB Stock Gains 5% as Q1 Earnings Beat on Higher NII, Provisions Soar

Shares of F.N.B. Corporation FNB jumped 5% in after-hours trading following the release of its first-quarter 2025 results. Earnings of 32 cents per share outpaced the Zacks Consensus Estimate of 30 cents. Also, the bottom line compared favorably with adjusted earnings of 34 cents in the prior-year quarter.

Results benefited from growth in net interest income (NII). Higher loans and deposits are other positives. However, higher provisions and expenses and a slight fall in non-interest income were the undermining factors. 

Net income available to its common stockholders was $116.5 million, relatively stable year over year. Our estimate for the metric was $107.4 million.

FNB’s Revenues Improve, Expenses Rise

Quarterly net revenues were $411.6 million, up 1.2% from the year-earlier quarter. Further, the top line beat the Zacks Consensus Estimate of $409.4 million. 

NII was $323.8 million, up 1.5% from the prior-year quarter. The increase was mainly driven by growth in earning assets, partly offset by higher deposit costs. On the other hand, net interest margin or NIM (FTE basis) (non-GAAP) contracted 15 basis points (bps) year over year to 3.03%. Our estimates for NII and NIM were pegged at $319.7 million and 3.03%, respectively.

Non-interest income was $87.8 million, down marginally. The growth in service charges, trust services and bank-owned life insurance mainly supported the rise, offset by lower capital markets income, insurance commissions and fees, mortgage banking operations income and dividends on non-marketable equity securities. Our estimate for the metric was $87.5 million.

Non-interest expenses were $246.8 million, up 4.1% year over year. Excluding one-time costs incurred last year's quarter, adjusted expenses rose 5.4%. Our estimate for the same was $249.7 million. 

At the end of the first quarter, net loans and leases were $33.8 billion, up almost 1% on a sequential basis. Total deposits were $37.2 billion, which was up marginally. Our estimates for net loans and leases and total deposits were $34.54 billion and $38.15 billion, respectively.

F.N.B. Corp’s Credit Quality Deteriorates

FNB’s provision for credit losses was $17.5 million, jumping 25.9% from the prior-year quarter. Our estimate for provisions was $20.8 million.

The ratio of non-performing loans and other real estate owned (OREO) to total loans and OREO increased 15 bps to 0.48%. Further, total delinquency increased 11 bps to 0.75%.

FNB’s Capital Ratios Improve, Profitability Ratios Weaken

As of March 31, 2025, the Tier I leverage ratio was 8.72%, up from 8.62% in the year-ago quarter. Tangible common equity to tangible assets ratio increased to 8.37% from the prior-year quarter’s 7.99%. 

As of March 31, 2025, the common equity Tier 1 (CET1) ratio was 10.7% compared with 10.2% in the prior-year quarter.

At the end of the first quarter, the return on total average assets was 0.97%, down from 1.08% in the year-ago period. Return on average equity was 7.42% compared with 8.15% in the prior-year quarter.

FNB’s Share Repurchase Update

During the reported quarter, F.N.B. Corp repurchased 0.7 million shares at an average price of $13.48.

Our Take on FNB

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, relatively high rates and opportunistic acquisitions. However, persistently rising expenses, higher funding costs and significant commercial loan exposures amid a challenging backdrop 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 #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of FNB’s Peer Banks

WaFd, Inc.’s WAFD second-quarter fiscal 2025 (ended March 31) adjusted earnings of 65 cents per share outpaced the Zacks Consensus Estimate of 60 cents. Also, the bottom line increased significantly year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Results were primarily aided by a rise in NII and non-interest income. Lower non-interest expenses and provision for credit losses also supported WAFD’s performance. However, the decline in loan balance acted as a spoilsport.

Hancock Whitney Corp.’s HWC first-quarter 2025 earnings per share of $1.38 exceeded the Zacks Consensus Estimate and the year-ago figure of $1.28.

Results benefited from an increase in non-interest income and NII. Lower provisions were another positive for HWC. However, higher adjusted expenses alongside lower loan and deposit balances were headwinds.

Only $1 to See All Zacks' Buys and Sells

We're not kidding.

Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.

Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research