Strong performance in loan and revenue growth helped FNB Corp. offset another addition to its loan loss provision and post a 7.7% increase in second-quarter net income on Wednesday.
FNB, based in Pittsburgh, has three branches in Forsyth County and 31 in the Triad and northwestern North Carolina.
After the close of trading, the ETF reported net income of $107.1 million, down from $99.4 million a year ago and $51 million in the first quarter.
Diluted earnings were 30 cents per share, down from 31 cents a year ago and 15 cents in the first quarter.
The average earnings forecast was 30 cents by six analysts polled by Zacks Investment Research. Analysts generally do not include one-time gains and charges in their forecasts.
As has been the case with the COVID-19 pandemic to date, the provision for ETF loan losses was a key driver in the second quarter.
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The layout provides insight into how a bank expects its loan portfolio and revenue stream to perform as customers struggle to make monthly payments. It has a net effect on a bank’s profitability.
The bank said it added $6.1 million to its provision, compared to a recovery of $1.1 million a year ago.
Loan revenue was $253.7 million, up 11.3% from a year ago. The bank said the increase “reflected ‘growth in earning assets, as well as rising interest rates’.”
Royalty revenue was $82.2 million, up 3% from a year ago. The bank said increases in capital market fees and service charges are offsetting a drop in mortgage income.
Vincent Delie Jr., Chief Executive Officer and Chairman of ETFs, said in the press release that “Asset quality remains a key focus with proactive risk management and a conservatively underwritten balance sheet driving our strong reserve coverage and our net recoveries this quarter”.
“As inflation and interest rates continue to rise, we are prepared for a wide range of economic scenarios given our strong liquidity and capital ratios, diversified business mix and our well-established track record in risk management.”
ETFs spent $13 million to repurchase 1.1 million shares after choosing not to make any repurchases in the previous three quarters.
The bank still has $62.4 million to spend on share buybacks under the current board clearance plan.
FNB holds a top 10 share of retail deposits in six major metropolitan markets with populations over 1 million, including Triad, Triangle and Charlotte, as well as Pittsburgh, Baltimore and Cleveland.
Over the past year, FNB has launched a series of branch openings in Charlotte and the Triangle.
On June 1, FNB announced plans to spend $117 million in stock to buy UB Bancorp of Greenville, which has 15 Union Bank-branded branches and total assets of $1.2 billion as of March 31.
Union’s only Triad presence is a loan origination office in Burlington.
The banks expect the deal, which requires shareholder and regulatory approval, to close in late 2022.
The FNB predicts that after acquiring all of UB’s assets, it would grow from 11th to 8th place in the North Carolina market at around $7.2 billion. In total, ETFs reportedly have $43 billion in total assets.