Please expand on the strategic initiatives driving the increase in the full-year expense guide to the higher end of the range.

The increased expenses are due to investments in the 'Fit-to-brick' strategy (30 de novo branches, DC Metro ATMs), eStore enhancements, and a new 360-degree customer view platform leveraging AI for internal and external data aggregation and product recommendations. This includes personnel expense for development contractors, with some costs being transitory. “We continue to invest in the eStore and have some new initiatives looking to create a 360 view of our customers. We began that initiative to be able to pull in internal data as well as external data so that our customer-facing employees have all the data right at their fingertips on what customers have here and somewhere else and then leverage AI to kind of say, well, what's the next product that would make sense for them.”

Given the 3.30% NIM in March, what are the expectations for Q2 NIM trends and spot deposit costs?

The 3.30% exit NIM provides good momentum. Management expects NIM to gradually increase a few basis points per quarter, supported by reinvesting investment securities at higher rates (75-125 bps above roll-off) and maturing CDs. Spot interest-bearing deposit cost is 2.36%, and total spot deposit cost is 1.99%. They see opportunities to strategically lower deposit costs, especially through noninterest-bearing deposits and large commercial relationships. “I mean, our guidance implies that going up gradually a few basis points or so a quarter between the first quarter and the end of the year. And without the Fed cut expected for the rest of the year, at this point, there are several levers we have to support net interest income growth.”

With the strong buyback in Q1, is the CET1 ratio being managed flat? What are your thoughts on the Basel III proposal?

Management aims to maintain the CET1 ratio around 11.4%, with 11% as a floor, to support future loan growth. They will continue opportunistic buybacks, having authorized an additional $250 million. The 8% dividend increase reflects strong capital levels. Basel III Endgame is being studied and would have a meaningful impact if implemented as proposed, but it's not currently baked into capital deployment plans. “I mean we've been using 11% as a floor for CET1. We're at 11.4%, and we're not looking to really drive that down. We'd like to have a powder there. if the loan growth and when the loan growth really accelerates and comes on board, we want to have that capital to support the loan growth.”

FNB

F.N.B. (FNB) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· Apr 17, 2026

Source: earnings call transcript

Executive summary

F.N.B. Corporation Q1 FY26 — Solid Performance Driven by Loan Growth and Capital Management

F.N.B. Corporation delivered a solid first quarter, marked by strong loan growth, particularly in C&I and consumer segments, and robust capital generation. The company demonstrated positive operating leverage and continued its commitment to shareholder returns through a dividend increase and expanded share repurchase program. Strategic investments in technology and digital capabilities are ongoing, aiming to enhance customer experience and drive future efficiency and revenue growth, despite some near-term expense pressures.

Highlights

Net income of $137 million, with EPS increasing 19% over Q1 FY25 to $0.38.
Pre-provision net revenue increased 17% from the year-ago quarter, generating positive operating leverage of 4.9%.
Period-end loan growth of 3.9% annualized linked quarter, driven by C&I and consumer loans.
Tangible book value per share of $12.06, representing an 11% increase from the year-ago quarter.
Announced an 8% increase to quarterly cash dividend to $0.13 per share and an additional $250 million share repurchase authorization.

Concerns

Net interest margin (NIM) decreased 3 basis points sequentially to 3.25% due to timing of Fed rate cut and seasonal deposit outflows.
Other noninterest expense increased $6.8 million or 30% YoY due to higher fraud losses, litigation-related expenses, and mortgage down payment assistance program.
CRE balances were down $110 million linked quarter due to expected payoffs, though new opportunities are emerging.

Guidance & targets

Category	Target	Timeline	Confidence
Net Interest Income	$1.495 billion to $1.535 billion high materiality	FY26	High
Net Interest Income	$370 million and $380 million medium materiality	Q2 · FY26	High
Noninterest Income	$370 million to $390 million high materiality	FY26	High
Noninterest Income	$90 million and $95 million medium materiality	Q2 · FY26	High
Noninterest Expense	$1 billion and $1.02 billion high materiality	FY26	High
Noninterest Expense	$250 million and $255 million medium materiality	Q2 · FY26	High
Provision for Credit Losses	$85 million to $105 million high materiality	FY26	High
Effective Tax Rate	21% and 22% medium materiality	FY26	High
Period-end Loans and Deposits Growth	mid-single digits high materiality	FY26	High
Net Interest Income (prior guidance)	$355 million to $365 million medium materiality	Q1 · FY26	High

FNB operating KPIs by quarter

FNB operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Return on tangible common equity (ROTCE)	13.2% Our capital ratios remained strong and continue to move favorably, all while producing a strong return on average tangible common equity of 13.2%. Source: earnings call transcript	14% FNB capital levels remained strong with TC at nearly 9% and with a solid return on average tangible common equity at 14%. Source: earnings call transcript	+0.8 pt
Net interest margin	3.25% First quarter's net interest margin was 3.25% and down 3 basis points sequentially as the timing of the Fed rate cut in December 2025 impacted NIM for the quarter. Source: earnings call transcript	3.25% While the second quarter's net interest margin of [ 3.25% ] was equal to last quarter's NIM and Net interest income increased more than 7% on a linked-quarter annualized basis. Source: earnings call transcript	0 pt
Efficiency ratio	56.1% The first quarter efficiency ratio remained solid at 56.1% down meaningfully from 58.5% a year ago, and we continue to manage our expense base in a disciplined manner. Source: earnings call transcript	53.7% Even with these increases, the second quarter efficiency ratio remains solid at 53.7%, down more than 100 basis points from the year ago quarter, and we continue to manage our expense base in a disciplined manner. Source: earnings call transcript	-2.4 pt
Common equity tier 1 ratio (CET1)	11.4% The 8% quarterly common dividend increase marks our first quarterly dividend increase since 2007 and reflects our strong financial performance and capital levels as evidenced by the TCE ratio of nearly 9% and the CET1 ratio of 11.4%. Source: earnings call transcript	11.4% Stepped up repurchase pace and our recent quarterly common dividend increase reflects our strong financial performance and capital levels as evidenced by the TCE ratio of nearly 9% and a stable CET1 ratio of 11.4% in the quarter. Source: earnings call transcript	0 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Pennsylvania State University Official and exclusive retail bank and financial provider

FNB announced its partnership as the official and exclusive retail bank and financial provider to the Pennsylvania State University, effective July. This includes on-campus banking services and treasury management for all campuses.

Pittsburgh International Airport ATM network and sponsorship

FNB opened its first ATM offering foreign currency disbursement (Canadian dollars and Mexican pesos) at the new Pittsburgh International Airport. FNB also has a state-of-the-art banking center and sponsorship at the new terminal.

Risks & headwinds

Geopolitical uncertainty Ongoing

Qualitative overlays maintained

Mitigation:Comprehensive risk management oversight, including concentrations of credit line utilization, proactive CRE management, stress testing, and 360-degree risk view of client relationships. Loan portfolio and customer base have proved resilient through past disruptions.

Deposit pricing pressures FY26

Expected to continue

Mitigation:Strategic focus on growing noninterest-bearing deposits, analyzing different components of deposit costs, and targeting larger deposit relationships. Balancing deposit growth to fund loan growth with managing down deposit costs.

CRE market headwinds Q1 FY26, expected to continue

CRE balances down $110 million linked quarter

Mitigation:Letting large bonds go to the permanent market, being choosy with new assets, aggressively pursuing solid new CRE credit opportunities, and expecting CRE concentration to be lower in Q2/Q3 before stabilization.

Increased investments in franchise growth and strategic initiatives FY26

Noninterest expense expected at higher end of $1 billion-$1.02 billion FY26 range

Mitigation:These investments are expected to drive future revenue and efficiency gains, with some personnel/contractor expenses being transitory and not embedded in the long-term run rate. Focus on return-oriented projects.

What to watch in Q2 FY26

Net Interest Margin (NIM) trajectory

Q2 FY26 and beyond

Current 3.25% (Q1 FY26), 3.30% (March exit)

Target Gradual increase of a few basis points per quarter

Why it matters

NIM trajectory is a key driver of profitability, especially with no Fed rate cuts assumed for FY26. Its expansion will indicate effective deposit cost management and asset repricing.

I mean, our guidance implies that going up gradually a few basis points or so a quarter between the first quarter and the end of the year.

Find out whether FNB delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you elaborate on the strong C&I loan growth in Q1, the acceleration towards quarter-end, and the near-record pipelines?

Management noted significant activity across the company, including high-quality opportunities from investment-grade corporate borrowers and M&A. Pipelines are near record levels, and growth would have been stronger without a maturing loan payout. They expect this momentum to build throughout the year.

“The pipelines have increased significantly and are pretty close to near record levels. It's really across the whole company. On top of that, we've seen a lot of high-quality opportunities from very strong investment grade type of larger corporate borrowers.”

asked by Daniel Tamayo · answered by Gary L. Guerrieri

2 min read 6 chapters

Detailed narrative

Strategic Investments and Digital Innovation

FNB is actively investing in its 'Fit-to-brick' strategy, including launching 30 de novo branches over the next 5 years and expanding ATM networks. Significant investments are also directed towards enhancing digital capabilities, such as the eStore and a new 360-degree customer view initiative.

This platform aims to integrate internal and external data, leveraging AI to provide personalized product recommendations and streamline the customer experience, with a proprietary mortgage application also in development.

Loan Growth and Portfolio Quality

The company reported strong period-end loan growth of 3.9% annualized linked quarter, primarily driven by C&I and consumer loans. C&I pipelines are near record levels, with increased activity across the company and high-quality opportunities from investment-grade corporate borrowers. The consumer portfolio remains robust, with average origination FICO scores of 782 and delinquency/charge-offs at multi-year lows.

FNB emphasizes that its growth does not benefit from NDF or private credit lending.

Capital Management and Shareholder Returns

FNB maintains strong capital ratios, with a CET1 ratio of 11.4% and a return on average tangible common equity of 13.2%. The Board approved an 8% increase in the quarterly cash dividend to $0.13 per share and authorized an additional $250 million for share repurchases, bringing total remaining capacity to $300 million.

Since 2009, FNB has returned $2.4 billion in capital to shareholders through dividends and repurchases, demonstrating a commitment to optimizing shareholder value while supporting growth.

Net Interest Margin and Deposit Strategy

The net interest margin (NIM) for Q1 FY26 was 3.25%, down 3 basis points sequentially, impacted by the timing of Fed rate cuts and seasonal deposit outflows. Management expects NIM to gradually increase throughout the year, supported by reinvestment rates on investment securities (75-125 bps above roll-off) and maturing CDs.

The company is focused on strategically growing deposits, particularly noninterest-bearing, and managing deposit costs, with a spot deposit beta of 27% since September 2024.

Noninterest Income Diversification

Noninterest income increased 3.7% year-over-year to $91 million, with strong contributions from Capital Markets (up 27.8%) and Wealth Management (up 2.8%). The company anticipates further growth in fee income from investment banking, public finance, mortgage business, and treasury management, including new significant client wins like Penn State University. International banking and interchange activity are also expected to contribute to diversification and growth.

Asset Quality and Risk Management

Asset quality metrics remained solid, with net charge-offs at 18 basis points and nonperforming loans at 34 basis points. Criticized loans increased slightly due to seasonality. The company maintains qualitative overlays related to geopolitical uncertainties. CRE exposure declined to 194% of Tier 1 capital plus allowance, with management actively pursuing high-quality new CRE opportunities while existing projects move to the permanent market.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.