F.N.B. Corporation Reports Second Quarter 2024 Earnings

^{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. For more information regarding our use of non-GAAP measures, please refer to the discussion herein under the caption, Use of Non-GAAP Financial Measures and Key Performance Indicators.}

SecondQuarter 2024Results - Comparison to Prior-Year Quarter
(All comparisons refer to the secondquarter of 2023, except as noted)

Net interest income totaled $315.9 million, a decrease of $13.4 million, or 4.1%, primarily due tohigher deposit costs resulting from balance migration to higher yielding deposit products, as well as increased total average borrowings, partially offset by growth in earning assets and higher earning asset yields. Total average earning assets increased $1.9 billion, or 4.8%, driven by an increase in average loans and leases from solid origination activity. Total average borrowings increased$761.7 millionto support strong loan growth.

The net interest margin (FTE) (non-GAAP) decreased 28basis points to 3.09%. The yield on earning assets (non-GAAP) increased 49basis points to 5.43%, reflecting the higher interest rate environment. The increase was driven by a 65 basis point increase on investment securities to 3.14% which benefited from the balance sheet restructuring in late 2023 and a 43 basis point increase on loans to 5.96%. Total cost of funds increased 82basis points to 2.46%with a 96basis point increase in interest-bearing deposit costs to 2.93%, and an increase of 122 basis points in short-term borrowing costs to fund the strong loan growth. Since the current interest rate increases began in March 2022, our total cumulative spot deposit beta equaled 38% at June 30, 2024, consistent with our expectations.

Average loans and leases totaled $33.3 billion, an increase of $2.2 billion, or 7.1%, including growth of $1.3 billionin commercial loans and leases and $943.7 millionin consumer loans. Commercial real estate increased $970.6 million, or 8.3%, commercial and industrial loans increased $224.7 million, or 3.1%, and commercial leases increased $68.3 million, or 11.6%. The increase in average commercial loans and leases was driven by activity across the footprint, with double-digit year-over-year growth across the Carolinas. The Pittsburgh and Cleveland regions and commercial equipment finance also posted strong contributions. The increase in commercial real estate included fundings on previously originated projects. The increase in average consumer loans included a $1.3 billionincrease in residential mortgages largely due to the continued successful execution in key markets by our expanded mortgage banker team and long-standing strategy of serving the purchase market. This growth was partially offset by a decrease in indirect auto loans of $363.0 millionreflecting the sale of $332 millionof such loans that closed in the first quarter of 2024.

Average deposits totaled $34.6 billion, an increase of $813.8 million, or 2.4%, from the prior-year quarter. The growth in average time deposits of $1.6 billionand average interest-bearing demand deposits of $740.0 millionmore than offset the decline in average non-interest-bearing demand deposits of $1.1 billionand average savings deposits of $483.2 millionas customers continued to migrate balances into higher-yielding products. While the funding mix has shifted compared to the year-ago quarter with non-interest-bearing deposits comprising 29%of total deposits at June 30, 2024, compared to 32%a year ago, it has remained stable compared to both March 31, 2024, and December 31, 2023.

Non-interest income totaled $87.9 million, a 9.5%increase compared to $80.3 millionin the secondquarter of 2023. Service charges increased $2.8 million, or 13.6%, primarily due to strong Treasury Management activity and higher consumer transaction levels. Mortgage banking operations income increased$2.0 million, driven by improved gain on sale from strong production volumes. Wealth Management revenues increased$1.8 million, or 10.2%, as securities commissions and fees and trust income increased 13.7%and 7.9%, respectively, through continued strong contributions across the geographic footprint. Dividends on non-marketable equity securities increased $1.4 million, reflecting higher Federal Home Loan Bank (FHLB) dividends due to additional borrowings.

The ratio of non-performing loans and OREO to total loans and OREO decreased 14basis points to 0.33%. Total delinquency decreased 12basis points to 0.63%, compared to 0.75%at June 30, 2023. Both measures continue to remain at or near historically low levels.

The provision for credit losses was $20.2 million, compared to $18.5 millionin the secondquarter of 2023. The secondquarter of 2024reflected net charge-offs of $7.8 million, or 0.09%annualized of total average loans, compared to $8.7 million, or 0.11%annualized. The allowance for credit losses (ACL) was $418.8 million, an increase of $6.0 million, with the ratio of the ACL to total loans and leases decreasing 8basis points to 1.24%reflecting net loan growth and charge-off activity.

The effective tax rate was 21.6%, compared to 20.5%in the secondquarter of 2023.

The CET1 regulatory capital ratio was 10.2% (estimated) at June 30, 2024, and 10.1%at June 30, 2023. Tangible book value per common share (non-GAAP) was $9.88at June 30, 2024, an increase of $1.09, or 12.4%, from $8.79at June 30, 2023. AOCI reduced the current quarter tangible book value per common share (non-GAAP) by $0.67, compared to a reduction of $0.99at the end of the year-ago quarter.

SecondQuarter 2024Results - Comparison to Prior Quarter
(All comparisons refer to the firstquarter of 2024, except as noted)

Net interest income totaled $315.9 million, a decrease of $3.1 million, or 1.0%, from the prior quarter total of $319.0 million, primarily due to higher cost of funds from incremental short-term borrowings and continued balance growth in higher yielding deposit products, largely offset by higher earning assets. The total yield on earning assets (non-GAAP) increased 3basis points to 5.43%due to higher yields on both loans and investment securities. The total cost of funds increased 13basis points to 2.46%, as the total cost of borrowings increased 26 basis points to 5.13% and the cost of interest-bearing deposits increased 11basis points to 2.93%. The resulting net interest margin (FTE) (non-GAAP) decreased 9basis points to 3.09%, largelydue to increased borrowings to fund the strong loan growth in the quarter.

Average loans and leases totaled $33.3 billion, an increase of $874.8 million, or 2.7%, as average commercial loans and leases increased $454.5 million, or 2.2%, and average consumer loans increased $420.3 million, or 3.5%. The increase in average commercial loans and leases included growth of$389.0 million, or 3.2%, in commercial real estate loans and growth of $57.5 million, or 0.8%, in commercial and industrial loans. The quarterly growth of commercial loans and leases was led by the Pittsburgh, Charlotte and Charleston markets. The increase in commercial real estate included fundings on previously originated projects. For consumer lending, average residential mortgages increased $392.5 million, driven by the seasonal growth in mortgage originations.

Average deposits totaled $34.6 billion, increasing $385.2 million, or 1.1%, due to organic growth in new and existing customer relationships. Average certificates of deposits increased $346.4 millionand interest-bearing demand deposits increased $108.3 million, which were partially offset by declines in savings balances of $51.3 million, resulting from customers' preferences for higher-yielding deposit products. Period-end non-interest-bearing deposits increased $80.0 million, or 0.8%, and the mix of non-interest-bearing deposits to total deposits was 29%at both June 30, 2024and March 31, 2024. The loan-to-deposit ratio was 96%at June 30, 2024, compared to 94%, driven by the strong seasonal loan growth.

Non-interest income totaled $87.9 million, stable with the strong prior quarter's result. Service charges increased $2.8 million, or 13.4%, primarily due to strong Treasury Management activity and seasonally higher consumer transaction levels. Capital markets income totaled $5.1 million, a decrease of $1.2 million, or 18.8%, due to lower commercial customer transaction activity. Mortgage banking operations income decreased $1.0 million, or 12.1%, driven by a slight decline in sold loan volume and net fair value adjustments from pipeline hedging activity.

Non-interest expense totaled $226.6 million, compared to $237.1 millionin the prior quarter. When adjusting for significant items of $0.8 million^[3] in the secondquarter of 2024and $3.0 million^[4] in the firstquarter of 2024, non-interest expense decreased $8.3 million, or 3.5%, on an operating basis (non-GAAP). Salaries and employee benefits decreased $8.2 million, primarily related to normal seasonal long-term compensation expense of $6.9 million in the first quarter of 2024, as well as seasonally higher employer-paid payroll taxes in the prior quarter. Marketing expenses decreased$1.4 million, or 26.2%, due to the timing of marketing campaigns. On an operating basis, net occupancy and equipment increased $0.8 million, or 1.9%, largely due to technology-related investments.

The ratio of non-performing loans and OREO to total loans and OREO remained stable at 0.33%and delinquency decreased 1basis point to 0.63%. Both measures continue to remain at or near historically low levels. The provision for credit losses was $20.2 million, compared to $13.9 million, to support the strong loan growth. The secondquarter of 2024reflected net charge-offs of $7.8 million, or 0.09%annualized of total average loans, compared to $12.8 million, or 0.16%annualized. The ACL was $418.8 million, an increase of $12.5 million, with the ratio of the ACL to total loans and leases equaling 1.24%at June 30, 2024, compared to 1.25%at March 31, 2024.

The effective tax rate was 21.6%, compared to 21.5%.

The CET1 regulatory capital ratio was 10.2% (estimated), stable with March 31, 2024. Tangible book value per common share (non-GAAP) was $9.88at June 30, 2024, an increase of $0.24per share, or 10.0% annualized. AOCI reduced the current quarter-end tangible book value per common share (non-GAAP) by $0.67compared to a reduction of $0.70at the end of the prior quarter.

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, operating return on average tangible common equity, return on average tangible assets, tangible book value per common share, the ratio of tangible common equity to tangible assets, pre-provision net revenue (reported), operating pre-provision net revenue, operating non-interest expense, 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 items such as merger expenses, FDIC special assessment, loss on indirect auto loan sale, preferred deemed dividend at redemption and branch consolidation costs are not organic to run our operations and facilities. These items are considered significant items impacting earnings as they are deemed to be outside of ordinary banking activities. These costs are specific to each individual transaction and may vary significantly based on the size and complexity of the transaction.

To facilitate peer 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 2024and 2023were 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 "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.

FNB'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, economic and political circumstances, including, but not limited to: (i) developments with respect to the U.S. and global financial markets; (ii) supervision, regulation, enforcement and other actions by several governmental agencies, including the Federal Reserve Board, Federal Deposit Insurance Corporation, Financial Stability Oversight Council, U.S. Department of Justice (DOJ), Consumer Financial Protection Bureau, U.S. Treasury Department, Office of the Comptroller of the Currency and Department of Housing and Urban Development, state attorney generals and other governmental agencies, whose actions may affect, among other things, our consumer and mortgage lending and deposit practices, capital structure, investment practices, dividend policy, annual FDIC insurance premium assessment and growth, money supply, market interest rates or otherwise affect business activities of the financial services industry; (iii) a slowing of the U.S. economy in general and regional and local economies within our market area; (iv) inflation concerns; (v) the impacts of tariffs or other trade policies of the U.S. or its global trading partners; and (vi) the sociopolitical environment in the U.S.

• 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, loans, deposits and revenues. Our ability to anticipate, react quickly and continue to respond to technological changes and significant adverse industry and economic events can also impact our ability to respond to customer needs and meet competitive demands.

• Business and operating results can also be affected by difficult to predict uncertainties, such as widespread natural and other disasters, wars, pandemics, including post-pandemic return to normalcy, global events and geopolitical instability, including the Ukraine-Russia conflict and the military conflict in Israel and Gaza, shortages of labor, supply chain disruptions and shipping delays, terrorist activities, system failures, security breaches, significant political events, cyber-attacks, international hostilities or other extraordinary events which are beyond FNB's control and may significantly impact the U.S. or global economy and financial markets generally, or us or our counterparties, customers or third-party vendors 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 talent. These developments could include:
  • Policies and priorities of the current U.S. presidential administration, including legislative and regulatory reforms, more aggressive approaches to supervisory or enforcement priorities with consumer and anti-discrimination lending laws by the federal banking regulatory agencies and the DOJ, changes affecting oversight of the financial services industry, regulatory obligations or restrictions, consumer protection, taxes, employee benefits, compensation practices, pension, bankruptcy and other industry aspects, and changes in accounting policies and principles.
  • Ability to continue to attract, develop and retain key talent.
  • Changes to regulations or accounting standards governing bank capital requirements, loan loss reserves and liquidity standards.
  • Changes in monetary and fiscal policies, including interest rate policies and strategies of the FOMC.
  • Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or inquiries. These matters may result in monetary judgments or settlements, enforcement actions or other remedies, including fines, penalties, restitution or alterations in our business practices, including financial and other types of commitments, and in additional expenses and collateral costs, and may cause reputational harm to us.
  • 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.
  • Business and operating results are affected by our ability to effectively identify and manage risks inherent in our businesses, including, where appropriate, through effective use of policies, processes, systems and controls, third-party insurance, derivatives, and capital and liquidity management techniques.
  • The impact on our financial condition, results of operations, financial disclosures and future business strategies related to the impact on the allowance for credit losses due to changes in forecasted macroeconomic conditions as a result of applying the "current expected credit loss" accounting standard, or CECL.
  • A failure or disruption in or breach of our operational or security systems or infrastructure, or those of third parties, including as a result of cyber-attacks or campaigns.
  • Increased funding costs and market volatility due to market illiquidity and competition for funding.

FNB cautions that the risks identified here are not exhaustive of the types of risks that may adversely impact FNB and 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 the Risk Management sections of our 2023Annual Report on Form 10-K (including the MD&A section), our subsequent 2024Quarterly Reports on Form 10-Q (including the risk factors and risk management discussions) and our other 2024filings with the SEC, which are available on our corporate website at https://www.fnb-online.com/about-us/investor-information/reports-and-filings or the SEC's website at www.sec.gov. We have included our web address as an inactive textual reference only. Information on our website is not part of our SEC filings.

Conference Call
F.N.B. Corporation (NYSE: FNB) announced the financial results for the secondquarter of 2024on Wednesday, July 17, 2024. 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 on Thursday, July 18, 2024, at 8:30 AM ET.

Participants are encouraged to pre-register for the conference call at https://dpregister.com/sreg/10190236/fce8da90f0. 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 "About Us" tab of the Corporation's website at www.fnbcorporation.com and clicking on "Investor Relations" then "Investor Conference Calls." 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 Thursday, July25, 2024. 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 2016205. Following the call, a link to the webcast and the related presentation materials will be posted to the "Investor Relations" section of F.N.B. Corporation's website at www.fnbcorporation.com.