F.N.B. Corporation (NYSE:FNB) Q3 2017 Earnings Conference Call Transcript

Oct 19, 2017 • 10:30 am ET

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F.N.B. Corporation (NYSE:FNB) Q3 2017 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Hello and welcome to the F.N.B. Corporation's Third quarter 2017 Quarterly Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note, today's event is being recorded.

I'd now like to turn the conference over to Matt Lazzaro. Mr. Lazzaro, please go ahead.

Executive
Matt Lazzaro

Thank you. Good morning, everyone, and welcome to our earnings call. This conference call of F.N.B. Corporation and the reports we filed with the Securities and Exchange Commission often contain forward-looking statements and non-GAAP financial measures. Non-GAAP financial measures should be viewed in addition to and not as an alternative for our reported results prepared in accordance with GAAP.

(Forward-Looking Cautionary Statements)

A replay of this call will be available until October 26 and the webcast link will be posted to the About Us, Investor Relations & Shareholder Services section of our corporate website.

I will now turn the call over to Vince Delie, President and CEO.

Executive
Vince Delie

Good morning and welcome to our earnings call. Joining me this morning are Vince Calabrese, our CFO; and Gary Guerrieri, our Chief Credit Officer. Gary will discuss asset quality and then Vince will review the financials and open the call up for any questions.

Today, I will review highlights from the quarter and update you on some of our strategic initiatives. Third quarter operating EPS of $0.24 increased 4% on a linked-quarter basis. We produced record revenue and record net income, while improving our efficiency ratio to 53%. The loan to deposit ratio also improved to 94.9% through annualized loan growth of 5%, and an annualized deposit growth of 17%.

Let's first look at the balance sheet. Overall growth in commercial loan portfolio was solid, as origination volume was healthy across the footprint. Looking ahead, we have an abundance of commercial prospects to pursue in our Metro markets, and the total commercial pipeline ended September at a record $2.8 billion. This represents an increase of 5% since June, and we expect this momentum to continue building with North and South Carolina pipelines up significantly from March and now approaching $1 billion.

Looking at the first nine months in total, organic loan and deposit growth continued, with average loans up 6% over last year, just slightly under our guided range. Average transaction deposits grew 4% organically, and we believe there is further upside, given our recent emphasis on deposits.

During the third quarter, we strengthened our ongoing deposit gathering efforts to better position the balance sheet with a more favorable customer base funding mix. Strategically, these efforts are built on driving new household account acquisition and increasing product penetration. We expect this type of deposit gathering will lead to long-term relationships, where we can provide other valuable products and services and further expand our customer base.

Our approach is both a way to attract new households to FNB, as well as deepen existing relationships by having a meaningful and consultative conversation with our customers. A large