PR Newswire | Jul 16, 2020 06:01PM EDT

79% Increase from Prior Quarter

07/16 17:00 CDT

F.N.B. Corporation Reports Second Quarter 2020 Earnings per Share of $0.25, a 79% Increase from Prior QuarterRevenue increased to $306 million ~ Funded $2.6 billion in PPP Loans ~ Continued to serve our customers and communities during the pandemic PITTSBURGH, July 16, 2020

PITTSBURGH, July 16, 2020 /PRNewswire/ -- F.N.B. Corporation (NYSE: FNB) reported earnings for the second quarter of 2020 with net income available to common stockholders of $81.6 million, or $0.25 per diluted common share. Comparatively, first quarter of 2020 net income available to common shareholders totaled $45.4 million, or $0.14 per diluted common share, and second quarter of 2019 net income available to common stockholders totaled $93.2 million, or $0.29 per diluted common share. The results for the second quarter of 2020 reflect the impact of $2.6 billion of loans originated through the United States Department of Treasury Paycheck Protection Program (PPP), as well as expenses related to COVID-19 of $2.0 million and an estimated $17.1 million of incremental provision for credit losses due to the COVID-19 related impacts on our allowance for credit losses (ACL) modeling results. Total significant, outsized, or unusual items were $19.4 million (pre-tax), or $0.05 per diluted common share.

Vincent J. Delie, Jr., President, Chairman and Chief Executive Officer of F.N.B. Corporation, said of its results, "As we all continue to experience many new challenges, our most recent performance demonstrates the tremendous power and dedication of our workforce and their ability to innovate and adapt to serve our constituents. As essential workers, our team has put in thousands of hours to ensure that customers have access to the funding, tools and expertise they need to maintain their livelihoods. As we move forward, I am confident that our team's compassionate and resilient attitudes will continue to shape our performance and will translate into results for our customers, communities and shareholders.

Our Company's efforts are apparent in the performance we achieved in this challenging and difficult economic environment. Operating earnings per share in the quarter increased 63% to $0.26, even with a substantial credit reserve build due to the potential impact of COVID-19 and changing macroeconomic conditions. Core revenue trends remained solid with total revenue increasing 6% annualized to $306 million, and total assets growing nearly $3 billion to end June at $38 billion. Compared to the first quarter, loans and deposits increased $2.3 billion and $3.6 billion, or 10% and 15%, respectively. Capital markets and mortgage banking set new records with revenues of $13 million and $17 million, respectively. Operating expenses were well-controlled as our efficiency ratio equaled 53.7% for the quarter."

Second Quarter 2020 Highlights(All comparisons refer to the second quarter of 2019, except as noted)

* Growth in total average loans was $2.8 billion, or 12.5%, with average commercial loan growth of $2.8 billion, or 19.5%, and average consumer loan growth of $59 million, or 0.7%. Total loan growth included $2.6 billion of PPP commercial loans originated during the second quarter of 2020. * Total average deposits grew $3.4 billion, or 14.3%, primarily due to an increase in average non-interest-bearing deposits of $2.1 billion, or 34.2%, and an increase in average interest-bearing demand deposits of $2.1 billion, or 21.4%, partially offset by a managed decrease in average time deposits of $1.1 billion, or 19.7%. Growth in average deposits reflected inflows from the PPP and government stimulus checks, in addition to organic growth in customer relationships. * The loan to deposit ratio was 92.1% at June 30, 2020, compared to 95.0% at June 30, 2019 as deposit growth outpaced loan growth. * Net interest income decreased $2.4 million, or 1.1%, attributable to lower interest rates compared to 2019 due to the Federal Open Market Committee (FOMC) lowering its target rate to 0-0.25% from 2.25%-2.50% between July 2019 and March 2020. * On a linked-quarter basis, the net interest margin (FTE) (non-GAAP) decreased 26 basis points to 2.88%, driven by the impact of the FOMC actions. Average loan yields declined 69 basis points and the total cost of funds decreased 34 basis points, as the cost of interest-bearing deposits decreased 37 basis points. Compared to the second quarter of 2019, the net interest margin declined 32 basis points from 3.20%. * Non-interest income increased $2.8 million, or 3.7%, led by an $8.9 million, or 117.4%, increase in mortgage banking income and a $2.6 million, or 26.8%, increase in capital markets. Service charges decreased $8.1 million, or 25.4%, largely due to significantly lower transaction volumes in the COVID-19 environment. * The effective tax rate was 16.0%, compared to 19.7%, primarily due to renewable energy investment tax credits recognized during the second quarter of 2020. * The efficiency ratio (non-GAAP) improved 80 basis points to 53.7%, compared to 54.5%. * The annualized net charge-offs to total average loans ratio decreased 3 basis points to 0.13% from 0.16%. * The ratio of tangible common equity to tangible assets (non-GAAP) decreased 35 basis points to 6.97%, with net PPP loan balances impacting the June 30, 2020 TCE ratio by 52 basis points. The June 30, 2020 metric also includes the Day 1 Current Expected Credit Losses (CECL) adoption impact of $50.6 million, or 14 basis points, as well as incremental provision for credit losses related to the estimated impact of COVID-19 on our ACL modeling results. The significant, unusual, or outsized items in 2020 totaled $63.7 million after-tax, or 18 basis points, and impacted tangible book value per common share (non-GAAP) by $0.20 per share. On a linked-quarter basis, tangible book value per common share (non-GAAP) increased $0.17, or 2.3%, to $7.63.

Non-GAAP measures referenced in this release are used by management to measure performance in operating the business that management believes enhances investors' ability to better understand the underlying business performance and trends related to core business activities. Reconciliations of non-GAAP operating measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release.

Quarterly Results Summary 2Q20 1Q20 2Q19

Reported results

Net income available to common $81.6 $45.4 $93.2 stockholders (millions)

Net income per diluted common share 0.25 0.14 0.29

Book value per common share (period-end) 14.82 14.67 14.30

Pre-provision net revenue (reported) 129.7 106.3 130.0 (millions)

Operating results (non-GAAP)

Operating net income available to common $83.2 $53.5 $95.4 stockholders (millions)

Operating net income per diluted common 0.26 0.16 0.29 share

Tangible common equity to tangible assets 6.97 %7.36 %7.32 %(period-end)

Tangible book value per common share $7.63 $7.46 $7.11 (period-end)

Pre-provision net revenue (operating) $135.7 $116.5 $132.9 (millions)

Average diluted common shares outstanding 325,153 326,045 325,949 (thousands)

Significant items impacting earnings^1 (millions)

Pre-tax COVID-19 expense $(2.0) $(2.0) $-

After-tax impact of COVID-19 expense (1.6) (1.6) -

Pre-tax branch consolidation costs - (8.3) (2.9)

After-tax impact of branch consolidation - (6.5) (2.3) costs

Other unusual or outsized items impacting earnings^1 (millions)

Pre-tax provision for COVID - impacted ACL(17.1) (37.9) - modeling results

After-tax impact of provision for COVID - (13.5) (29.9) - impacted ACL modeling results

Pre-tax MSR impairment (0.3) (7.7) (1.3)

After-tax MSR impairment (0.3) (6.1) (1.0)

Pre-tax accelerated vesting of certain - (5.6) - 2020 stock grants

After-tax accelerated vesting of certain - (4.4) - 2020 stock grants

Total significant, unusual or outsized $(19.4) $(61.5) $(4.2) items pre-tax

Total significant, unusual or outsized $(15.4) $(48.5) $(3.3) items after-tax



Year-to-Date Results Summary 2020 2019

Reported results

Net income available to common $127.0 $185.3 stockholders (millions)

Net income per diluted common share 0.39 0.57

Pre-provision net revenue (reported) 235.9 260.2 (millions)

Operating results (non-GAAP)

Operating net income available to common $136.7 $188.9 stockholders (millions)

Operating net income per diluted common 0.42 0.58 share

Pre-provision net revenue (operating) 252.2 264.8 (millions)

Average diluted common shares outstanding 325,716 325,697 (thousands)

Significant items impacting earnings^1 (millions)

Pre-tax COVID-19 expense $(4.0) $-

After-tax impact of COVID-19 expense (3.1) -

Pre-tax branch consolidation costs (8.3) (4.5)

After-tax impact of branch consolidation (6.5) (3.6) costs

Other unusual or outsized items impacting earnings^1 (millions)

Pre-tax provision for COVID - impacted ACL(55.0) - modeling results

After-tax impact of provision for COVID - (43.4) - impacted ACL modeling results

Pre-tax MSR impairment (8.0) (2.6)

After-tax MSR impairment (6.3) (2.1)

Pre-tax accelerated vesting of certain (5.6) - 2020 stock grants

After-tax accelerated vesting of certain (4.4) - 2020 stock grants

Total significant, unusual or outsized $(80.9) $(7.1) items pre-tax

Total significant, unusual or outsized $ (63.7) $(5.7) items after-tax

(1) Favorable (unfavorable) impact on earnings.

Second Quarter 2020 Results - Comparison to Prior-Year Quarter

Net interest income totaled $228.0 million, decreasing $2.4 million, or 1.1%, as significant growth in average loans and deposits of $2.8 billion and $3.4 billion, respectively, partially offset the repricing impact from lower interest rates on variable and adjustable-rate loans. Total average earning assets increased $2.9 billion, or 9.8%, due to the average loan growth. The net interest margin (FTE) (non-GAAP) declined 32 basis points to 2.88%, as earning asset yields decreased 83 basis points reflecting lower yields on variable-rate loans as the quarterly average LIBOR and Prime rates significantly decreased. The total cost of funds also decreased 53 basis points to 0.67%, compared to 1.20%, due to reduced costs on interest-bearing deposits of 51 basis points and lower borrowing costs.

Average loans totaled $25.6 billion, an increase of $2.8 billion, or 12.5%, primarily due to PPP loans originated during the quarter. Average total commercial loan growth totaled $2.8 billion, or 19.5%, including $1.7 billion, or 34.6%, growth in commercial and industrial loans and $960 million, or 10.8%, growth in commercial real estate balances. Excluding PPP loans, origination activity remained solid with organic growth in the Pennsylvania, Cleveland, North and South Carolina, and Mid-Atlantic (Greater Baltimore-Washington D.C. markets) regions. Average consumer loan growth was $59 million, or 0.7%, with growth in residential mortgages of $191 million, or 5.8%, and direct installment loans of $165 million, or 9.5%, partially offset by a decline in consumer lending heavily impacted by COVID-19 as indirect auto loans decreased $162 million, or 8.3%, and consumer lines of credit decreased $135 million, or 8.8%.

Average deposits totaled $27.3 billion, an increase of $3.4 billion, or 14.3%, supported by growth in non-interest bearing demand deposits of $2.1 billion, or 34.2%, and interest-bearing demand deposits of $2.1 billion, or 21.4%. The growth in deposits was driven by deposits for PPP funding and government stimulus activities, as well as solid organic growth in customer relationships. The loan-to-deposit ratio was 92.1% at June 30, 2020, compared to 95.0% at June 30, 2019.

Non-interest income totaled $77.6 million, increasing $2.8 million, or 3.7%. Mortgage banking operations income increased $8.9 million, or 117.4%, primarily due to $16.8 million in origination and secondary marketing revenue, compared to $8.8 million in the second quarter of 2019, as sold mortgage production volume increased 31% to $438 million and gain on sale margins have improved. Capital markets income grew $2.6 million, or 26.8%, to a record $12.5 million, reflecting balanced activity across the footprint. Insurance commissions and fees increased $1.4 million, or 32.3% representing the benefit from new business in North and South Carolina, as well as organic growth in commercial lines. Service charges decreased $8.1 million, or 25.4%, due to noticeably lower transaction volumes given COVID-19, although customer transaction volume began to increase late in the quarter.

Non-interest expense totaled $175.9 million, increasing $0.7 million, or 0.4%. Non-interest expense increased $1.0 million, or 0.6%, when excluding $2.0 million of COVID-19 expenses in the second quarter of 2020 and $2.3 million of branch consolidation costs in the second quarter of 2019. In the second quarter of 2020, the Company also recognized an impairment of $4.1 million from a renewable energy investment tax credit transaction. The related renewable energy investment tax credits were recognized during the quarter as a benefit to income taxes. Occupancy and equipment expense decreased $1.9 million, or 6.0%. The efficiency ratio (non-GAAP) improved 80 basis points to 53.7%, compared to 54.5%.

The ratio of non-performing loans, 90 days past due, and other real estate owned (OREO) to total loans and OREO remained consistent at 0.75%. Prior to the adoption of CECL, acquired (purchased credit deteriorated, or PCD) loans were excluded from our nonperforming disclosures. PCD loans that meet the definition of non-accrual are now included in the disclosures and resulted in a $65 million increase in non-accrual loans in the second quarter of 2020, compared to the second quarter of 2019. Total delinquency remains at satisfactory levels, and improved 3 basis points to 0.92%, compared to 0.95% at June 30, 2019. Excluding PPP loans at June 30, 2020, total delinquency increased 6 basis points to 1.01%.

The provision for credit losses totaled $30.2 million, compared to $11.5 million, driven by an estimated $17.1 million of incremental provision due to the COVID-19 related impacts on our ACL modeling results. Net charge-offs were $8.5 million, or 0.13% annualized of total average loans, which declined from $9.0 million, or 0.16%. The ratio of the ACL to total loans and leases was 1.40% and 0.83% at June 30, 2020 and June 30, 2019, respectively. Excluding PPP loans that do not carry an ACL losses due to a 100% government guarantee, the ACL losses to total loan and leases ratio equaled 1.54%, or an impact of 14 basis points. The CECL adoption on January 1, 2020, resulted in a Day 1 increase to the ACL of $105.3 million. As of June 30, 2020, total loans in deferral related to the COVID-19 pandemic totaled $2.4 billion. Over 98% of the $2.4 billion of loans in deferment were current and in good standing at December 31, 2019.

The effective tax rate was 16.0%, compared to 19.7%, driven by benefits from renewable energy investment tax credits.

The tangible common equity to tangible assets ratio (non-GAAP) decreased 35 basis points to 6.97% at June 30, 2020, compared to 7.32% at June 30, 2019, as the PPP loan activity impacted the TCE ratio by 52 basis points at June 30, 2020. The tangible book value per common share (non-GAAP) was $7.63 at June 30, 2020, an increase of $0.52, or 7.3%, from $7.11 at June 30, 2019.

Second Quarter 2020 Results - Comparison to Prior Quarter

Net interest income totaled $228.0 million, a decrease of $4.7 million, or 2.0%, from the prior quarter total of $232.6 million as loan and deposit growth mostly offset the impact from lower interest rates. The net interest margin (FTE) (non-GAAP) decreased 26 basis points to 2.88%, driven by a full-quarter impact of the FOMC action to lower the target Fed Funds rate range on March 16, 2020 to 0.00%-0.25%. Additionally, average 1-month LIBOR fell to 0.36% from 1.41% in the prior quarter.

Total average earning assets increased $2.0 billion, or 6.7%, due primarily to $2.1 billion of significant loan growth driven by PPP and strong organic commercial loan activity. The total yield on earning assets declined 58 basis points to 3.54%, reflecting lower yields on variable and adjustable-rate loans due to lower interest rates. The total cost of funds decreased to 0.67% from 1.01%, as costs on interest-bearing deposits decreased 37 basis points.

Average loans totaled $25.6 billion with average commercial loan growth of $2.1 billion, or 14.1%, and a slight decrease in average consumer loans of $15.3 million, or 0.2%. Average commercial loans included growth of $1.2 billion, or 21.9%, in commercial and industrial loans and an increase of $857 million, or 9.6%, in commercial real estate. Commercial organic origination activity was led by the Pennsylvania and Mid-Atlantic regions. Consumer balances included an increase in average residential mortgage loans of $53 million, or 1.6%, largely attributable to higher refinancing activity given the lower interest rate environment and average direct installment loans also increased $66 million, 3.6%. This was partially offset by declines in average balances of indirect auto loans by $94 million, or 4.9%, and average consumer lines of credit by $40 million, or 2.8%.

Average deposits totaled $27.3 billion, increasing $2.7 billion, or 10.8%, driven by an increase in non-interest bearing deposits of $1.8 billion, or 29.3%. Interest-bearing deposits increased $807 million, or 4.4%, net of the managed decline of $273 million, or 5.8%, in time deposits. The loan-to-deposit ratio was 92.1% at June 30, 2020, compared to 96.5% at March 31, 2020.

Non-interest income totaled $77.6 million, increasing $9.1 million, or 13.3%, as mortgage banking operations increased $17.6 million due to $16.8 million of origination and secondary marketing revenue. The mortgage banking results also included a $0.3 million unfavorable interest rate-related valuation adjustment on mortgage servicing rights in the second quarter compared to an unfavorable $7.7 million valuation adjustment in the first quarter. Mortgage production increased $306 million, or 55%, from the prior quarter with large contributions from North Carolina and the Mid-Atlantic regions. Capital markets income increased $1.4 million, or 12.6%, with strong contributions from interest rate derivative activity across the footprint. Service charges decreased $6.2 million, or 20.5%, due to noticeably lower transaction volumes in the COVID-19 environment.

Non-interest expense totaled $175.9 million, a decrease of $19.0 million, or 9.7%, and included $2.0 million of expenses associated with COVID-19 in the second quarter of 2020, compared to $15.9 million of outsized, unusual or significant expenses occurring in the first quarter. Excluding outsized, unusual, or significant expenses, non-interest expense declined $5.1 million, or 2.9%, primarily related to lower salaries and employee benefit expense as higher production-related commissions were more than offset by lower employer-paid taxes, as well as higher production-related salary deferrals from loan origination activities. In the second quarter of 2020, the Company also recognized an impairment of $4.1 million in other non-interest expense from a renewable energy investment tax credit transaction. The related renewable energy investment tax credits were recognized during the quarter as a benefit to income taxes. The efficiency ratio (non-GAAP) improved to 53.7%, compared to 59.0%.

The ratio of non-performing loans, 90 days past due, and OREO to total loans and OREO increased 8 basis points to 0.75%. Total delinquency remains at favorable levels, and decreased 21 basis points to 0.92%, compared to 1.13% at March 31, 2020. Excluding PPP, total delinquency decreased 12 basis points to 1.01%.

The provision for credit losses totaled $30.2 million, compared to $47.8 million. The provision for credit losses exceeded net charge-offs of $8.5 million, or 0.13% annualized, of total average loans and leases compared to $5.7 million, or 0.10% annualized, of total average loans. The ratio of the ACL to total loans and leases decreased to 1.40% from 1.44% at March 31, 2020, but included PPP loans that do not carry an ACL due to a 100% government guarantee. Excluding PPP net loans, the ACL to total loans and leases ratio equaled 1.54%, an impact of 14 basis points.

The effective tax rate was 16.0%, compared to 18.8%, reflecting the benefit of certain renewable energy investment tax credits.

The tangible common equity to tangible assets ratio (non-GAAP) decreased 39 basis points to 6.97% at June 30, 2020, compared to 7.36% at March 31, 2020, as the PPP loan activity impacted the TCE ratio by 52 basis points at June 30, 2020. Tangible book value per common share (non-GAAP) was $7.63 at June 30, 2020, an increase of $0.17 from March 31, 2020.

June 30, 2020 Year-To-Date Results - Comparison to Prior Year-To-Date Period

Net interest income totaled $460.6 million, decreasing $0.4 million, or 0.1%, reflecting a lower rate environment offset by average earning asset growth of $2.0 billion, or 6.9%. The net interest margin (FTE) (non-GAAP) contracted 22 basis points to 3.01%, primarily due to the impact of lower interest rates as year-to-date average 1-month LIBOR declined to 0.90% from 2.47% for the first half of 2019. The yield on earning assets decreased 55 basis points to 3.82%, while the cost of funds improved 34 basis points to 0.83%, primarily due to actions taken to reduce the cost of interest-bearing deposits given the low interest rate environment.

Average loans totaled $24.6 billion, an increase of $2.0 billion, or 8.8%, due to benefit from PPP activity and solid origination activity across the footprint. Growth in average commercial loans totaled $1.9 billion, or 13.3%, including growth of $1.4 billion, or 28.9%, in commercial and industrial loans. Commercial growth was led by strong commercial activity in the Pennsylvania, North Carolina, and Mid-Atlantic regions. Total average consumer loan growth of $113 million, or 1.3%, was led by increases in residential mortgage loans of $215 million, or 6.7%, and direct installment balances of $132 million, or 7.5%, partially offset by a decline of $130 million, or 8.4%, in consumer credit lines and $104 million, or 5.3%, in indirect auto loans.

Average deposits totaled $25.9 billion, increasing $2.3 billion, or 9.8%, due to average growth of $1.7 billion, or 17.9%, in interest-bearing demand deposits and $1.2 billion, or 20.7%, in non-interest-bearing deposits. On a spot basis, total deposits increased $4.7 billion, or 19.6%, driven by deposits for PPP funding and government stimulus activities, as well as solid organic growth in customer relationships.

Non-interest income totaled $146.2 million, increasing $5.9 million, or 4.2%. On an operating basis, non-interest income increased $9.6 million, or 6.7%, attributable to the record growth in our fee-based businesses of capital markets with an increase of $7.7 million, or 48.6%, reflecting FNB's strong relationships with new and existing commercial customers, and mortgage banking income with an increase of $4.0 million, or 34.7%, as production levels increased 32.9% and gain on sale increased 42.2%. There were also increases in insurance commissions and fees of $3.1 million, or 33.1%, and trust income of $1.5 million, or 10.9%. There was a decline in service charges of $8.2 million, or 13.2%, as there were noticeably lower customer transaction volumes in the COVID-19 environment, however volumes began to increase late in the second quarter.

Non-interest expense totaled $370.8 million, increasing $29.8 million, or 8.8%. Excluding significant, unusual, or outsized items totaling $17.9 million year-to-date in 2020, non-interest expense increased $12.0 million, or 3.5%. This increase was attributable to increases in outside services of $3.0 million, or 9.9%, and higher salaries of $12.2 million, or 6.6%, primarily related to normal merit increases and production-related commissions. The efficiency ratio (non-GAAP) totaled 56.4%, compared to 54.0% in 2019.

The provision for credit losses was $78.0 million, compared to $25.1 million, which included an estimated $55 million of COVID-19 related provision in the first six months of 2020. Net charge-offs totaled $14.2 million, or 0.12%, of total average loans, compared to $16.6 million, or 0.15%, in 2019.

The effective tax rate was 17.0% for 2020, compared to 19.5% in 2019, primarily due to renewable energy investment tax credits recognized during the second quarter of 2020.

Use of Non-GAAP Financial Measures and Key Performance Indicators

To supplement our Consolidated Financial Statements presented in accordance with GAAP, we use certain non-GAAP financial measures, such as operating net income available to common stockholders, operating earnings per diluted common share, return on average tangible equity, return on average tangible common equity, return on average tangible assets, tangible book value per common share, the ratio of tangible equity to tangible assets, the ratio of tangible common equity to tangible assets, allowance for credit losses to loans and leases, excluding PPP, non-performing loans to loans and leases excluding PPP loans, non-performing loans and 90 days past due and OREO to loans and leases plus OREO, excluding PPP, net loan charge-offs to average loans and leases excluding PPP loans, past due and non-accrual loans to loans and leases excluding PPP loans, pre-provision net revenue to average tangible common equity, efficiency ratio, and net interest margin (FTE) to provide information useful to investors in understanding our operating performance and trends, and to facilitate comparisons with the performance of our peers. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities. The non-GAAP financial measures and key performance indicators we use may differ from the non-GAAP financial measures and key performance indicators other financial institutions use to assess their performance and trends.

These non-GAAP financial measures should be viewed as supplemental in nature, and not as a substitute for or superior to, our reported results prepared in accordance with GAAP. When non-GAAP financial measures are disclosed, the Securities and Exchange Commission's (SEC) Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. Reconciliations of non-GAAP operating measures to the most directly comparable GAAP financial measures are included later in this release under the heading "Reconciliations of Non-GAAP Financial Measures and Key Performance Indicators to GAAP".

Management believes charges such as branch consolidation costs and COVID-19 expense are not organic costs to run our operations and facilities. These charges are considered significant items impacting earnings as they are deemed to be outside of ordinary banking activities. The branch consolidation charges principally represent expenses to satisfy contractual obligations of the closed branches without any useful ongoing benefit to us. These costs are specific to each individual transaction and may vary significantly based on the size and complexity of the transaction. The COVID-19 expenses represent special Company initiatives to support our front-line employees and the communities we serve during an unprecedented time of a pandemic.

To provide more meaningful comparisons of net interest margin and efficiency ratio, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets (loans and investments) to make it fully equivalent to interest income earned on taxable investments (this adjustment is not permitted under GAAP). Taxable-equivalent amounts for the 2020 and 2019 periods were calculated using a federal statutory income tax rate of 21%.

Cautionary Statement Regarding Forward-Looking Information

This document may contain statements regarding F.N.B. Corporation's outlook for earnings, revenues, expenses, tax rates, capital and liquidity levels and ratios, asset quality levels, financial position and other matters regarding or affecting our current or future business and operations. These statements can be considered as "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve various assumptions, risks and uncertainties which can change over time. Actual results or future events may be different from those anticipated in our forward-looking statements and may not align with historical performance and events. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance upon such statements. Forward-looking statements are typically identified by words such as "believe," "plan," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "will," "should," "project," "goal," and other similar words and expressions. We do not assume any duty to update forward-looking statements, except as required by federal securities laws.

F.N.B.'s forward-looking statements are subject to the following principal risks and uncertainties:

* Our business, financial results and balance sheet values are affected by business and economic circumstances, including, but not limited to: (i) developments with respect to the U.S. and global financial markets; (ii) actions by the Federal Reserve Board, U.S. Treasury Department, Office of the Comptroller of the Currency and other governmental agencies, especially those that impact money supply, market interest rates or otherwise affect business activities of the financial services industry; (iii) a slowing or reversal of current U.S. economic environment; and (iv) the impacts of tariffs or other trade policies of the U.S. or its global trading partners. * Business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through effective use of systems and controls, third-party insurance, derivatives, and capital management techniques, and to meet evolving regulatory capital and liquidity standards. * Competition can have an impact on customer acquisition, growth and retention, and on credit spreads, deposit gathering and product pricing, which can affect market share, deposits and revenues. Our ability to anticipate and continue to respond to technological changes and COVID-19 challenges can also impact our ability to respond to customer needs and meet competitive demands. * Business and operating results can also be affected by widespread natural and other disasters, pandemics, including the COVID-19 pandemic crisis, dislocations, terrorist activities, system failures, security breaches, significant political events, cyberattacks or international hostilities through impacts on the economy and financial markets generally, or on us or our counterparties specifically. * Legal, regulatory and accounting developments could have an impact on our ability to operate and grow our businesses, financial condition, results of operations, competitive position, and reputation. Reputational impacts could affect matters such as business generation and retention, liquidity, funding, and the ability to attract and retain management. These developments could include: * Changes resulting from a U.S. presidential administration or legislative and regulatory reforms, including changes affecting oversight of the financial services industry, consumer protection, pension, bankruptcy and other industry aspects, and changes in accounting policies and principles. * Changes to regulations governing bank capital and liquidity standards. * Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or other inquiries. These matters may result in monetary judgments or settlements or other remedies, including fines, penalties, restitution or alterations in our business practices, and in additional expenses and collateral costs, and may cause reputational harm to FNB. * Results of the regulatory examination and supervision process, including our failure to satisfy requirements imposed by the federal bank regulatory agencies or other governmental agencies. * The impact on our financial condition, results of operations, financial disclosures and future business strategies related to the implementation of the new FASB Accounting Standards Update 2016-13 Financial Instruments -Credit Losses commonly referred to as the "current expected credit loss" standard or CECL.

* The COVID-19 pandemic and the regulatory and governmental actions implemented in response to COVID-19 have resulted in significant deterioration and disruption in financial markets and national and local economic conditions and record levels of unemployment and could have a material impact on, among other things, our business, financial condition, results of operations or liquidity, or on our management, employees, customers and critical vendors and suppliers.

The risks identified here are not exclusive. Actual results may differ materially from those expressed or implied as a result of these risks and uncertainties, including, but not limited to, the risk factors and other uncertainties described under Item 1A Risk Factors and Risk Management sections of our Annual Report on Form 10-K (including MD&A section) for the year ended December 31, 2019, our subsequent 2020 Quarterly Reports on Form 10-Q (including the risk factors and risk management discussions) and our other subsequent filings with the SEC, which are available on our corporate website at https://www.fnb-online.com/about-us/investor-relations-shareholder-services. We have included our web address as an inactive textual reference only. Information on our website is not part of this Report.

Conference Call

F.N.B. Corporation (NYSE: FNB) announced the financial results today for the second quarter of 2020 at 6:00 PM ET Thursday, July 16, 2020. Chairman, President and Chief Executive Officer, Vincent J. Delie, Jr., Chief Financial Officer, Vincent J. Calabrese, Jr., and Chief Credit Officer, Gary L. Guerrieri, plan to host a conference call to discuss the Company's financial results Friday, July 17, 2020 at 8:15 AM ET.

Participants are encouraged to pre-register for the conference call at http://dpregister.com/10145866. Callers who pre-register will be provided a conference passcode and unique PIN to bypass the live operator and gain immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.

Dial-in Access: The conference call may be accessed by dialing (844) 802-2440 (for domestic callers) or (412) 317-5133 (for international callers). Participants should ask to be joined into the F.N.B. Corporation call.

Webcast Access: The audio-only call and related presentation materials may be accessed via webcast through the "Investor Relations" section of the Corporation's website at www.fnbcorporation.com. Access to the live webcast will begin approximately 30 minutes prior to the start of the call.

Presentation Materials: Presentation slides and the earnings release will also be available on the Corporation's website at www.fnbcorporation.com, by accessing the "About Us" tab and clicking on "Investor Relations" then "Investor Conference Calls".

A replay of the call will be available shortly after the completion of the call until midnight ET on Friday, July 24, 2020. The replay can be accessed by dialing (877) 344-7529 (for domestic callers) or (412) 317-0088 (for international callers); the conference replay access code is 10145866. Following the call, a link to the webcast and the related presentation materials will be posted to the "Investor Conference Calls" section of F.N.B. Corporation's website at www.fnbcorporation.com.

About F.N.B. Corporation

F.N.B. Corporation (NYSE:FNB), headquartered in Pittsburgh, Pennsylvania, is a diversified financial services company operating in seven states and the District of Columbia. FNB's market coverage spans several major metropolitan areas including: Pittsburgh, Pennsylvania; Baltimore, Maryland; Cleveland, Ohio; Washington, D.C.; and Charlotte, Raleigh, Durham and the Piedmont Triad (Winston-Salem, Greensboro and High Point) in North Carolina. The Company has total assets of nearly $38 billion and approximately 350 banking offices throughout Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina and Virginia.

FNB provides a full range of commercial banking, consumer banking and wealth management solutions through its subsidiary network which is led by its largest affiliate, First National Bank of Pennsylvania, founded in 1864. Commercial banking solutions include corporate banking, small business banking, investment real estate financing, government banking, business credit, capital markets and lease financing. The consumer banking segment provides a full line of consumer banking products and services, including deposit products, mortgage lending, consumer lending and a complete suite of mobile and online banking services. FNB's wealth management services include asset management, private banking and insurance.

The common stock of F.N.B. Corporation trades on the New York Stock Exchange under the symbol "FNB" and is included in Standard & Poor's MidCap 400 Index with the Global Industry Classification Standard (GICS) Regional Banks Sub-Industry Index. Customers, shareholders and investors can learn more about this regional financial institution by visiting the F.N.B. Corporation website at www.fnbcorporation.com.

F.N.B. CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited) % Variance

2Q20 2Q20 For the Six Months Ended % June 30,

2Q20 1Q20 2Q19 1Q20 2Q19 2020 2019 Var.

Interest Income

Loans and leases, $245,378$265,533$275,445(7.6) (10.9)$ 510,911$ 544,500 (6.2) including fees

Securities:

Taxable 27,373 31,335 31,740 (12.6) (13.8)58,708 64,590 (9.1)

Tax-exempt 7,941 8,046 8,061 (1.3) (1.5) 15,987 16,004 (0.1)

Other 154 1,226 988 (87.4) (84.4)1,380 1,450 (4.8)

Total Interest 280,846 306,140 316,234 (8.3) (11.2)586,986 626,544 (6.3) Income

Interest Expense

Deposits 34,466 49,467 54,417 (30.3) (36.7)83,933 104,794 (19.9)

Short-term 8,320 13,760 22,140 (39.5) (62.4)22,080 47,950 (54.0)borrowings

Long-term 10,099 10,282 9,270 (1.8) 8.9 20,381 12,800 59.2 borrowings

Total Interest 52,885 73,509 85,827 (28.1) (38.4)126,394 165,544 (23.6)Expense

Net Interest 227,961 232,631 230,407 (2.0) (1.1) 460,592 461,000 (0.1) Income

Provision for 30,177 47,838 11,478 (36.9) 162.9 78,015 25,107 210.7 credit losses

Net Interest Income After 197,784 184,793 218,929 7.0 (9.7) 382,577 435,893 (12.2) Provision for Credit Losses

Non-Interest Income

Service 23,938 30,128 32,068 (20.5) (25.4)54,066 62,285 (13.2)charges

Trust services7,350 7,962 7,018 (7.7) 4.7 15,312 13,802 10.9

Insurance commissions 5,835 6,552 4,411 (10.9) 32.3 12,387 9,308 33.1 and fees

Securities commissions 3,763 4,539 4,671 (17.1) (19.4)8,302 9,016 (7.9) and fees

Capital 12,515 11,113 9,867 12.6 26.8 23,628 15,903 48.6 markets income

Mortgage banking 16,550 (1,033) 7,613 (1,702.1)117.4 15,517 11,518 34.7 operations

Dividends on non-marketable2,766 4,678 4,135 (40.9) (33.1)7,444 9,158 (18.7)equity securities

Bank owned 3,924 3,177 3,103 23.5 26.5 7,101 5,944 19.5 life insurance

Net securities97 53 - 83.0 - 150 - - gains

Other 890 1,357 1,954 (34.4) (54.5)2,247 3,291 (31.7)

Total Non-Interest 77,628 68,526 74,840 13.3 3.7 146,154 140,225 4.2 Income

Non-Interest Expense

Salaries and employee 93,992 103,805 94,289 (9.5) (0.3) 197,797 185,573 6.6 benefits

Net occupancy 13,594 21,448 15,593 (36.6) (12.8)35,042 30,658 14.3

Equipment 15,610 16,046 15,473 (2.7) 0.9 31,656 30,298 4.5

Amortization 3,343 3,339 3,479 0.1 (3.9) 6,682 6,958 (4.0) of intangibles

Outside 17,000 16,896 16,110 0.6 5.5 33,896 30,855 9.9 services

FDIC insurance5,371 5,555 6,013 (3.3) (10.7)10,926 11,963 (8.7)

Bank shares and franchise 4,029 4,092 3,130 (1.5) 28.7 8,121 6,597 23.1 taxes

Other 22,993 23,711 21,150 (3.0) 8.7 46,704 38,077 22.7

Total Non-Interest 175,932 194,892 175,237 (9.7) 0.4 370,824 340,979 8.8 Expense

Income Before 99,480 58,427 118,532 70.3 (16.1)157,907 235,139 (32.8)Income Taxes

Income taxes 15,870 11,010 23,345 44.1 (32.0)26,880 45,825 (41.3)

Net Income 83,610 47,417 95,187 76.3 (12.2)131,027 189,314 (30.8)

Preferred stock 2,010 2,010 2,010 - - 4,020 4,020 - dividends

Net Income Available to $81,600 $45,407 $93,177 79.7 (12.4)$ 127,007$ 185,294 (31.5)Common Stockholders

Earnings per Common Share

Basic $0.25 $0.14 $0.29 78.6 (13.8)$ 0.39 $ 0.57 (31.6)

Diluted 0.25 0.14 0.29 78.6 (13.8)0.39 0.57 (31.6)

Cash Dividends per Common 0.12 0.12 0.12 - - 0.24 0.24 - Share

F.N.B. CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in millions) % Variance

2Q20 2Q20

2Q20 1Q20 2Q19 1Q20 2Q19

Assets

Cash and due from banks $398 $363 $427 9.6 (6.8)

Interest-bearing deposits with 533 201 72 165.2 640.3 banks

Cash and Cash Equivalents 931 564 499 65.1 86.6

Securities available for sale 3,301 3,194 3,279 3.4 0.7

Securities held to maturity 3,050 3,179 3,079 (4.1) (0.9)

Loans held for sale 108 82 332 31.7 (67.5)

Loans and leases, net of 26,162 23,871 22,543 9.6 16.1 unearned income

Allowance for credit losses (365) (343) (188) 6.4 94.1

Net Loans and Leases 25,797 23,528 22,355 9.6 15.4

Premises and equipment, net 332 331 328 0.3 1.2

Goodwill 2,262 2,262 2,262 - -

Core deposit and other 61 64 74 (4.7) (17.6)intangible assets, net

Bank owned life insurance 547 545 539 0.4 1.5

Other assets 1,332 1,300 1,156 2.5 15.2

Total Assets $37,721$35,049$33,9037.6 11.3

Liabilities

Deposits:

Non-interest-bearing demand $8,650 $6,511 $6,139 32.9 40.9

Interest-bearing demand 12,510 11,009 9,593 13.6 30.4

Savings 2,969 2,664 2,515 11.4 18.1

Certificates and other time 4,266 4,562 5,484 (6.5) (22.2)deposits

Total Deposits 28,395 24,746 23,731 14.7 19.7

Short-term borrowings 2,411 3,443 3,711 (30.0)(35.0)

Long-term borrowings 1,630 1,633 1,338 (0.2) 21.8

Other liabilities 388 385 370 0.8 4.9

Total Liabilities 32,824 30,207 29,150 8.7 12.6

Stockholders' Equity

Preferred stock 107 107 107 - -

Common stock 3 3 3 - -

Additional paid-in capital 4,081 4,075 4,057 0.1 0.6

Retained earnings 796 754 683 5.6 16.5

Accumulated other comprehensive(35) (45) (72) (22.2)(51.4)loss

Treasury stock (55) (52) (25) 5.8 120.0

Total Stockholders' Equity 4,897 4,842 4,753 1.1 3.0

Total Liabilities and $37,721$35,049$33,9037.6 11.3 Stockholders' Equity

F.N.B. CORPORATION 2Q20 1Q20 2Q19 AND SUBSIDIARIES

(Unaudited) Interest Interest Interest

(Dollars in Average Income/ Yield/Average Income/ Yield/Average Income/ Yield/thousands)

Balance Expense Rate Balance Expense Rate Balance Expense Rate

Assets

Interest-bearing $300,164 $154 0.21%$163,450 $1,226 3.02%$66,324 $988 5.97%deposits with banks

Taxable investment 5,083,104 27,340 2.15 5,297,596 31,335 2.37 5,296,831 31,740 2.40 securities ^ (2)

Non-taxable investment 1,115,976 10,010 3.59 1,125,766 10,068 3.58 1,121,655 10,062 3.59 securities ^(1)

Loans held for sale 106,368 1,055 3.97 76,457 984 5.15 89,671 1,063 4.75

Loans and leases ^ 25,602,178 245,438 3.85 23,509,124 265,828 4.54 22,759,878 275,921 4.86 (1) (3)

Total Interest 32,207,790 283,997 3.54 30,172,393 309,441 4.12 29,334,359 319,774 4.37 Earning Assets^(1)

Cash and due from 339,054 375,106 365,824 banks

Allowance for credit(347,227) (307,496) (190,182) losses

Premises and 333,322 335,594 329,381 equipment

Other assets 4,286,739 4,079,637 3,891,734

Total Assets $36,819,678 $34,655,234 $33,731,116

Liabilities

Deposits:

Interest-bearing $11,889,77414,172 0.48 $11,035,73625,144 0.92 $9,794,796 25,132 1.03 demand

Savings 2,844,104 564 0.08 2,618,395 1,827 0.28 2,519,657 2,163 0.34

Certificates and 4,396,779 19,731 1.80 4,669,556 22,495 1.94 5,472,936 27,122 1.99 other time

Total interest-bearing 19,130,657 34,467 0.72 18,323,687 49,466 1.09 17,787,389 54,417 1.23 demand deposits

Short-term 2,631,009 8,319 1.27 3,305,058 13,761 1.67 3,716,627 22,140 2.37 borrowings

Long-term borrowings1,630,902 10,099 2.49 1,457,531 10,282 2.84 1,082,384 9,270 3.44

Total Interest-Bearing 23,392,568 52,885 0.91 23,086,276 73,509 1.28 22,586,400 85,827 1.52 Liabilities

Non-interest-bearing8,143,171 6,296,976 6,069,106 demand deposits

Total Deposits and 31,535,739 0.67 29,383,252 1.01 28,655,506 1.20 Borrowings

Other liabilities 404,280 397,515 354,885

Total Liabilities 31,940,019 29,780,767 29,010,391

Stockholders' equity4,879,659 4,874,467 4,720,725

Total Liabilities and Stockholders' $36,819,678 $34,655,234 $33,731,116 Equity

Net Interest Earning$8,815,222 $7,086,117 $6,747,959 Assets

Net Interest Income 231,112 235,932 233,947 (FTE) ^(1)

Tax Equivalent (3,151) (3,301) (3,540) Adjustment

Net Interest Income $227,961 $232,631 $230,407

Net Interest Spread 2.63% 2.84% 2.85%

Net Interest Margin 2.88% 3.14% 3.20%^ (1)



The net interest margin and yield on earning assets (all non-GAAP measures) are (1)presented on a fully taxable equivalent (FTE) basis, which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%.

(2)The average balances and yields earned on taxable investment securities are based on historical cost.

Average balances for loans include non-accrual loans. Loans and leases consist (3)of average total loans and leases less average unearned income. The amount of loan fees included in interest income is immaterial.

F.N.B. CORPORATION AND Six Months Ended June 30, SUBSIDIARIES

(Unaudited) 2020 2019

(Dollars in thousands) Interest Interest

Average Income/ Yield/Average Income/ Yield/

Balance Expense Rate Balance Expense Rate

Assets

Interest-bearing deposits$231,807 $1,380 1.20%$60,279 $1,450 4.85%with banks

Taxable investment 5,190,350 58,675 2.26 5,370,269 64,590 2.41 securities ^ (2)

Non-taxable investment 1,120,871 20,078 3.58 1,115,212 19,981 3.58 securities ^(1)

Loans held for sale 91,413 2,040 4.47 61,469 1,571 5.13

Loans and leases ^(1) 24,555,651 511,265 4.18 22,570,742 546,071 4.87 (3)

Total Interest Earning 31,190,092 593,438 3.82 29,177,971 633,663 4.37 Assets ^ (1)

Cash and due from banks 357,080 371,703

Allowance for credit (327,361) (186,850) losses

Premises and equipment 334,458 330,711

Other assets 4,183,187 3,877,715

Total Assets $35,737,456 $33,571,250

Liabilities

Deposits:

Interest-bearing demand $11,462,75539,316 0.69 $9,723,662 48,695 1.01

Savings 2,731,250 2,391 0.18 2,514,929 4,233 0.34

Certificates and other 4,533,167 42,226 1.87 5,410,633 51,866 1.93 time

Total interest-bearing 18,727,172 83,933 0.90 17,649,224 104,794 1.20 demand deposits

Short-term borrowings 2,968,033 22,080 1.49 4,012,589 47,950 2.39

Long-term borrowings 1,544,217 20,381 2.65 873,185 12,800 2.96

Total Interest-Bearing 23,239,422 126,394 1.09 22,534,998 165,544 1.48 Liabilities

Non-interest-bearing 7,220,074 5,981,427 demand deposits

Total Deposits and 30,459,496 0.83 28,516,425 1.17 Borrowings

Other liabilities 400,897 368,152

Total Liabilities 30,860,393 28,884,577

Stockholders' equity 4,877,063 4,686,673

Total Liabilities and $35,737,456 $33,571,250 Stockholders' Equity

Net Interest Earning $7,950,670 $6,642,973 Assets

Net Interest Income (FTE) 467,044 468,119 ^ (1)

Tax Equivalent Adjustment (6,452) (7,119)

Net Interest Income $460,592 $461,000

Net Interest Spread 2.73% 2.89%

Net Interest Margin ^(1) 3.01% 3.23%



The net interest margin and yield on earning assets (all non-GAAP measures) are presented on a fully taxable equivalent (FTE) (1)basis, which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%.

(2)The average balances and yields earned on taxable investment securities are based on historical cost.

Average balances for loans include non-accrual loans. Loans and (3)leases consist of average total loans and leases less average unearned income. The amount of loan fees included in interest income is immaterial.

F.N.B. CORPORATION AND SUBSIDIARIES

(Unaudited)



For the Six Months Ended June 30,

2Q20 1Q20 2Q19 2020 2019

Performance Ratios

Return on average6.89 %3.91 %8.09 %5.40 %8.15 %equity

Return on average tangible equity ^13.58 7.91 16.43 10.75 16.67 (1)

Return on average tangible common 13.84 7.92 16.84 10.89 17.11 equity ^(1)

Return on average0.91 0.55 1.13 0.74 1.14 assets

Return on average tangible assets ^1.01 0.62 1.25 0.82 1.26 (1)

Net interest 2.88 3.14 3.20 3.01 3.23 margin (FTE) ^(2)

Yield on earning 3.54 4.12 4.37 3.82 4.37 assets (FTE) ^(2)

Cost of interest-bearing 0.72 1.09 1.23 0.90 1.20 deposits

Cost of interest-bearing 0.91 1.28 1.52 1.09 1.48 liabilities

Cost of funds 0.67 1.01 1.20 0.83 1.17

Efficiency ratio 53.74 59.03 54.47 56.36 53.96 ^(1)

Effective tax 15.95 18.84 19.70 17.02 19.49 rate

Pre-provision net revenue (reported) / 21.30 17.52 22.83 19.41 23.33 average tangible common equity ^ (1)

Pre-provision net revenue (operating) / 22.30 19.20 23.33 20.76 23.74 average tangible common equity ^ (1)

Capital Ratios

Equity / assets 12.98 13.81 14.02 (period end)

Common equity / assets (period 12.70 13.51 13.70 end)

Common equity 9.4 9.1 9.1 tier 1^ (3)

Leverage ratio 7.79 7.96 7.96

Tangible equity / tangible assets 7.27 7.69 7.66 (period end) ^(1)

Tangible common equity / tangible6.97 7.36 7.32 assets (period end) ^(1)

Common Stock Data

Average diluted common shares 325,152,572 326,045,182 325,949,353 325,715,867 325,697,221 outstanding

Period end common shares 323,205,925 322,674,191 324,807,131 outstanding

Book value per $14.82 $14.67 $14.30 common share

Tangible book value per common 7.63 7.46 7.11 share ^(1)

Dividend payout 48.14 %86.24 %42.19 %61.76 %42.37 %ratio (common)



(1)See non-GAAP financial measures section of this Press Release for additional information relating to the calculation of this item.

The net interest margin and yield on earning assets (all non-GAAP (2)measures) are presented on a fully taxable equivalent (FTE) basis, which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%.

June 30, 2020 Common Equity Tier 1 ratio is an estimate and (3)reflects the election of a five-year transition to delay the full impact of CECL on regulatory capital for two years, followed by a three-year transition period.

F.N.B. CORPORATION AND SUBSIDIARIES

(Unaudited)

(Dollars in millions)

% Variance

2Q20 2Q20

2Q20 1Q20 2Q19 1Q20 2Q19

Balances at period end

Loans and Leases:

Commercial $9,305 $9,126 $8,832 2.0 5.4 real estate

Commercial and 7,709 5,644 5,028 36.6 53.3 industrial^ (1)

Commercial 497 444 385 12.0 29.1 leases

Other 40 46 37 (13.9)7.0

Commercial loans and 17,551 15,260 14,282 15.0 22.9 leases

Direct 1,947 1,880 1,758 3.6 10.7 installment

Residential 3,520 3,444 3,022 2.2 16.5 mortgages

Indirect 1,767 1,863 1,968 (5.1) (10.2) installment

Consumer LOC1,377 1,424 1,513 (3.3) (9.0)

Consumer 8,611 8,611 8,261 - 4.2 loans

Total loans $26,162$23,871$22,5439.6 16.1 and leases



Note: Loans held for sale were $108, $82 and $332 at 2Q20, 1Q20, and 2Q19, respectively.

(1) PPP loans were $2.5 billion at 2Q20.

% Variance

Average 2Q20 2Q20 For the Six Months Ended% balances June 30,

Loans and 2Q20 1Q20 2Q19 1Q20 2Q19 2020 2019 Var. Leases:

Commercial $9,818 $8,960 $8,858 9.6 10.8 $9,280 $8,853 4.8 real estate

Commercial and 6,677 5,476 4,959 21.9 34.6 6,220 4,825 28.9 industrial^ (1)

Commercial 490 435 375 12.6 30.6 463 373 24.2 leases

Other 43 48 53 (9.2) (17.8)11 51 (78.6)

Commercial loans and 17,028 14,919 14,245 14.1 19.5 15,974 14,102 13.3 leases

Direct 1,915 1,849 1,750 3.6 9.5 1,882 1,750 7.5 installment

Residential 3,461 3,408 3,270 1.6 5.8 3,434 3,220 6.7 mortgages

Indirect 1,802 1,896 1,964 (4.9) (8.3) 1,849 1,953 (5.3) installment

Consumer LOC1,396 1,437 1,531 (2.8) (8.8) 1,417 1,546 (8.4)

Consumer 8,574 8,590 8,515 (0.2) 0.7 8,582 8,469 1.3 loans

Total loans $25,602$23,509$22,7608.9 12.5 $24,556 $22,5718.8 and leases

F.N.B. CORPORATION AND SUBSIDIARIES

(Unaudited) % Variance

(Dollars in millions) 2Q20 2Q20

Asset Quality Data 2Q20 1Q20 2Q19 1Q20 2Q19

Non-Performing Assets

Non-performing loans ^(1) $170 $134 $93 26.9 82.8

Other real estate owned (OREO) 21 20 32 5.0 (34.4)

Non-performing assets $191 $154 $125 24.0 52.8

Non-performing loans / total loans 0.65 %0.56 %0.41 % and leases

Non-performing loans + 90 days past due + OREO / total loans and leases0.75 0.67 0.77 + OREO

Delinquency ^(2)

Loans 30-89 days past due $64 $131 $94 (51.1)(31.9)

Loans 90+ days past due 7 6 47 16.7 (85.1)

Non-accrual loans 170 134 74 26.9 129.7

Past due and non-accrual loans $241 $271 $215 (11.1)12.1

Past due and non-accrual loans / 0.92 %1.13 %0.95 % total loans and leases



(1)Does not include loans acquired in a business combination at fair value for 2Q19.

(2)Delinquency for the acquired portfolio was $88 at 2Q19.

F.N.B. CORPORATION AND SUBSIDIARIES

(Unaudited) % Variance

(Dollars in 2Q20 2Q20 For the Six Months Ended% millions) June 30,

Allowance 2Q20 1Q20 2Q19 1Q20 2Q19 2020 2019 Var. Rollforward

Allowance for Credit Losses^ (1)

Balance at beginning of $343.3 $195.9 $185.7 75.2 84.9 $195.9 $179.6 9.1 period

Provision for 30.2 47.8 11.5 (36.9)162.978.0 25.1 210.8 credit losses

Net loan (charge-offs)/ (8.5) (5.7) (9.0) 49.1 (5.8)(14.2) (16.6) (14.5) recoveries

Adjustment due to CECL - 105.3 - 105.3 - adoption

Allowance for $365.0 $343.3 $188.2 6.3 94.0 $365.0 $188.1 94.0 credit losses

Allowance for credit losses /1.40 %1.44 %0.83 % total loans and leases

Allowance for credit losses / total 214.5 255.6 202.8 non-performing loans

Net loan charge-offs (annualized) / 0.13 0.10 0.16 0.12 %0.15 % total average loans and leases



(1)The allowance for credit losses for the acquired portfolio was $4 at June 30, 2019.

F.N.B. CORPORATION AND SUBSIDIARIES

(Unaudited)



RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE INDICATORS TO GAAP



We believe the following non-GAAP financial measures provide information useful to investors in understanding our operating performance and trends, and facilitate comparisons with the performance of our peers. The non-GAAP financial measures we use may differ from the non-GAAP financial measures other financial institutions use to measure their results of operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with U.S. GAAP. The following tables summarize the non-GAAP financial measures included in this press release and derived from amounts reported in our financial statements.



% Variance

2Q20 2Q20 For the Six Months Ended % June 30,

2Q20 1Q20 2Q19 1Q20 2Q19 2020 2019 Var.

Operating net income available to common stockholders:

(Dollars in thousands)

Net income available to $81,600$45,407$93,177 $ 127,007$ 185,294 common stockholders

COVID-19 1,989 1,962 - 3,951 - expense

Tax benefit of COVID-19 (418) (412) - (830) - expense

Branch consolidation- 8,262 2,871 8,262 4,505 costs

Tax benefit of branch - (1,735) (603) (1,735) (946) consolidation costs

Operating net income available to $83,171$53,484$95,44555.5(12.9)$ 136,655$ 188,853 (27.6)common stockholders (non-GAAP)



Operating earnings per diluted common share:

Earnings per diluted $0.25 $0.14 $0.29 $ 0.39 $ 0.57 common share

COVID-19 0.01 0.01 - 0.01 - expense

Tax benefit of COVID-19 - - - - - expense

Branch consolidation- 0.03 0.01 0.03 0.01 costs

Tax benefit of branch - (0.01) - (0.01) - consolidation costs

Operating earnings per diluted $0.26 $0.16 $0.29 62.5(10.3)$ 0.42 $ 0.58 (27.6)common share (non-GAAP)

F.N.B. CORPORATION AND SUBSIDIARIES

(Unaudited)

For the Six Months Ended June 30,

2Q20 1Q20 2Q19 2020 2019

Return on average tangible equity:

(Dollars in thousands)

$ Net income $336,278 $190,710 $381,796 $263,494 (annualized) 381,765

Amortization of intangibles, 10,623 10,610 11,024 10,615 11,085 net of tax (annualized)

Tangible net $ income $346,901 $201,320 $392,820 $274,109 (annualized) 392,850 (non-GAAP)



Average total $ stockholders' $4,879,659 $4,874,467 $4,720,725 $4,877,063 equity 4,686,673

Less: Average intangible (2,324,696) (2,327,901) (2,329,625) (2,326,299) (2,330,619)assets ^(1)

Average tangible $ stockholders' $2,554,963 $2,546,566 $2,391,100 $2,550,764 equity 2,356,054 (non-GAAP)



Return on average 13.58 %7.91 %16.43 %10.75 % 16.67 tangible equity (non-GAAP) %

Return on average tangible common equity:

(Dollars in thousands)

Net income available to $ common $328,193 $182,625 $373,733 $255,409 stockholders 373,660 (annualized)

Amortization of intangibles, 10,623 10,610 11,024 10,615 11,085 net of tax (annualized)

Tangible net income $ available to common $338,816 $193,235 $384,757 $266,024 384,745 stockholders (annualized) (non-GAAP)



Average total $ stockholders' $4,879,659 $4,874,467 $4,720,725 $4,877,063 equity 4,686,673

Less: Average preferred (106,882) (106,882) (106,882) (106,882) (106,882) stockholders' equity

Less: Average intangible (2,324,696) (2,327,901) (2,329,625) (2,326,299) (2,330,619)assets ^(1)

Average $ tangible common$2,448,081 $2,439,684 $2,284,218 $2,443,882 equity 2,249,172 (non-GAAP)



Return on average 17.11 tangible common13.84 %7.92 %16.84 %10.89 % equity % (non-GAAP)

Return on average tangible assets:

(Dollars in thousands)

$ Net income $336,278 $190,710 $381,796 $263,494 (annualized) 381,765

Amortization of intangibles, 10,623 10,610 11,024 10,615 11,085 net of tax (annualized)

Tangible net $ income $346,901 $201,320 $392,820 $274,109 (annualized) 392,850 (non-GAAP)



$ Average total $36,819,678 $34,655,234 $33,731,116 $35,737,456 assets 33,571,250

Less: Average intangible (2,324,696) (2,327,901) (2,329,625) (2,326,299) (2,330,619)assets ^(1)

Average $ tangible assets$34,494,982 $32,327,333 $31,401,491 $33,411,157 (non-GAAP) 31,240,631



Return on average 1.01 %0.62 %1.25 %0.82 % 1.26 tangible assets (non-GAAP) %



(1) Excludes loan servicing rights.

F.N.B. CORPORATION AND SUBSIDIARIES

(Unaudited)



2Q20 1Q20 2Q19

Tangible book value per common share:

(Dollars in thousands, except per share data)

$ Total stockholders' equity $4,896,827 $4,841,987 4,753,189

Less: Preferred stockholders' (106,882) equity (106,882) (106,882)

(2,336,071)Less: Intangible assets^ (1) (2,323,028) (2,326,371)

$ Tangible common equity (non-GAAP) $2,466,917 $2,408,734 2,310,236



324,807,131Common shares outstanding 323,205,925 322,674,191



$ Tangible book value per common share (non-GAAP) $7.63 $7.46 7.11

Tangible equity / tangible assets (period end):

(Dollars in thousands)

$ Total stockholders' equity $4,896,827 $4,841,987 4,753,189

(2,336,071)Less: Intangible assets ^(1) (2,323,028) (2,326,371)

$ Tangible equity (non-GAAP) $2,573,799 $2,515,616 2,417,118



$ Total assets $37,720,827 $35,048,746 33,903,440

(2,336,071)Less: Intangible assets ^(1) (2,323,028) (2,326,371)

$ Tangible assets (non-GAAP) $35,397,799 $32,722,375 31,567,369



Tangible equity / tangible 7.66 assets (period end) (non-GAAP)7.27 % 7.69 % %

Tangible common equity / tangible assets (period end):

(Dollars in thousands)

$ Total stockholders' equity $4,896,827 $4,841,987 4,753,189

Less: Preferred stockholders' (106,882) equity (106,882) (106,882)

(2,336,071)Less: Intangible assets^ (1) (2,323,028) (2,326,371)

$ Tangible common equity (non-GAAP) $2,466,917 $2,408,734 2,310,236



$ Total assets $37,720,827 $35,048,746 33,903,440

(2,336,071)Less: Intangible assets^ (1) (2,323,028) (2,326,371)

$ Tangible assets (non-GAAP) $35,397,799 $32,722,375 31,567,369



Tangible common equity / 7.32 tangible assets (period end) 6.97 % 7.36 % (non-GAAP) %



(1) Excludes loan servicing rights.

F.N.B. CORPORATION AND SUBSIDIARIES

(Unaudited)

2Q20

Allowance for credit losses / loans and leases, excluding PPP loans (period-end):

(Dollars in thousands)

ACL - loans $364,993

Loans and leases $26,161,982

Less: PPP loans outstanding (2,480,772)

Loans and leases, excluding PPP loans (non-GAAP) $23,681,210

ACL loans / loans and leases, excluding PPP loans 1.54 %(non-GAAP)

Non-performing loans / loans and leases, excluding PPP loans

(Dollars in thousands)

Non-performing loans $170,134

Loans and leases $26,161,982

Less: PPP loans outstanding (2,480,772)

Loans and leases, excluding PPP loans (non-GAAP) $23,681,210

Non-performing loans / loans and leases, excluding PPP 0.72 %loans (non-GAAP)

Non-performing loans + 90 days past due + OREO / loans and leases + OREO, excluding PPP loans

(Dollars in thousands)

Non-performing loans + 90 days past due + OREO $196,284

Loans and leases $26,161,982

Plus: OREO 20,389

Less: PPP loans outstanding (2,480,772)

Loans and leases + OREO, excluding PPP loans (non-GAAP)$23,701,599

Non-performing loans + 90 days past due + OREO / loans 0.83 %and leases + OREO, excluding PPP loans (non-GAAP)

Net loan charge-offs (annualized) / average loans and leases, excluding PPP loans

(Dollars in thousands)

Net loan charge-offs (annualized) $34,187

Average loans and leases $25,602,178

Less: Average PPP loans outstanding (1,905,031)

Average loans and leases, excluding PPP loans $23,697,147 (non-GAAP)

Net loan charge-offs (annualized) / average loans and 0.15 %leases, excluding PPP loans (non-GAAP)

Past due and non-accrual loans / loans and leases, excluding PPP loans

(Dollars in thousands)

Past due and non-accrual loans $240,610

Loans and leases $26,161,982

Less: PPP loans outstanding (2,480,772)

Loans and leases, excluding PPP loans (non-GAAP) $23,681,210

Past due and non-accrual loans / loans and leases, 1.02 %excluding PPP loans (non-GAAP)

F.N.B. CORPORATION AND SUBSIDIARIES

(Unaudited)

For the Six Months Ended June 30,

2020 2Q20 1Q20 2Q19 2019



KEY PERFORMANCE INDICATORS

Pre-Provision Net Revenue / Average Tangible Common Equity:

(Dollars in thousands)

Net interest $ income $227,961 $232,631 $230,407 $460,592 461,000

Non-interest income 77,628 68,526 74,840 146,154 140,225

Less: Non-interest (175,932) (194,892) (175,237) (370,824) (340,979) expense

Pre-provision $ net revenue $129,657 $106,265 $130,010 $235,922 (as reported) 260,246

Pre-provision net revenue $ (as reported) $521,478 $427,395 $521,469 $474,436 (annualized) 524,805

Adjustments:

Add: Branch consolidation costs - - 546 - 1,722 (non-interest income)

Add: COVID - 19 expense (non-interest 1,989 1,962 - 3,951 - expense)

Add: Branch consolidation costs - 8,262 2,325 8,262 2,783 (non-interest expense)

Add: Tax credit-related impairment 4,101 - - 4,101 - project (non-interest expense)

Pre-provision net revenue $ (operating) $135,747 $116,489 $132,881 $252,236 (non-GAAP) 264,751

Pre-provision net revenue $ (operating) $545,972 $468,515 $532,984 $507,244 (annualized) 533,889 (non-GAAP)

Average total $ shareholders' $4,879,659 $4,874,467 $4,720,725 $4,877,063 equity 4,686,673

Less: Average preferred shareholders' (106,882) (106,882) (106,882) (106,882) (106,882) equity

Less: Average intangible (2,324,696) (2,327,901) (2,329,625) (2,326,299) (2,330,619)assets ^(1)

Average tangible $ common equity $2,448,081 $2,439,684 $2,284,218 $2,443,882 (non-GAAP) 2,249,172

Pre-provision % net revenue (reported) / average 21.30 %17.52 %22.83 %19.41 23.33 tangible common equity % (non-GAAP)

Pre-provision % net revenue (operating) / average 22.30 %19.20 %23.33 %20.76 23.74 tangible common equity % (non-GAAP)

Efficiency ratio (FTE):

(Dollars in thousands)

Total $ non-interest $175,932 $194,892 $175,237 $370,824 expense 340,979

Less: Amortization (3,343) (3,339) (3,479) (6,682) (6,958) of intangibles

Less: OREO expense (639) (1,647) (954) (2,286) (2,023)

Less: COVID-19 expense (1,989) (1,962) - (3,951) -

Less: Branch consolidation - (8,262) (2,325) (8,262) (2,783) costs

Less: Tax credit-related project (4,101) - - (4,101) - impairment

Adjusted $ non-interest $165,860 $179,682 $168,479 $345,542 expense 329,215



Net interest $ income $227,961 $232,631 $230,407 $460,592 461,000

Taxable equivalent 3,151 3,301 3,540 6,452 7,119 adjustment

Non-interest income 77,628 68,526 74,840 146,154 140,225

Less: Net securities (97) (53) - (150) - gains

Add: Branch consolidation - - 546 - 1,722 costs

Adjusted net interest $ income (FTE) +$308,643 $304,405 $309,333 $613,048 non-interest 610,066 income



% Efficiency ratio (FTE) 53.74 %59.03 %54.47 %56.36 (non-GAAP) 53.96 %



(1) Excludes loan servicing rights.

View original content: http://www.prnewswire.com/news-releases/fnb-corporation-reports-second-quarter-2020-earnings-per-share-of-0-25--a-79-increase-from-prior-quarter-301095160.html

SOURCE F.N.B. Corporation