F.N.B. Corporation (NYSE:FNB) Q3 2017 Earnings Conference Call Transcript
Oct 19, 2017 • 10:30 am ET
Yes, thank you. We will now begin the question-and-answer session. (Operator Instructions)
Jared Shaw, Wells Fargo Securities.
Could we start maybe just on the Carolinas? If you can give us an update on how the progress is going with hiring new commercial lenders, and what the outlook there is? And then also, when you look at that pipeline -- the commercial pipeline of $1 billion, how long will that take to convert to actual close loans?
Yes, first of all, let's start with staffing levels in the -- in North Carolina alone, we've added -- or we've hired, not added. It's already reflected in the run rate in the expense base, but we brought in about 25 bankers across the disciplines ranging from wealth, private banking and wholesale banking. Those are hires since the beginning of the year in preparation for the conversion and beyond. I would say that from a staffing perspective, we're pretty much fully staffed in those markets with the capacity to handle that pipeline very effectively and potentially grow it over time. So we have, I think a very good team that's well-positioned and ready to go. So I wouldn't anticipate making staffing changes at this point in those markets. There are opportunistic hires. There are people that have come to us that are interested in working for FNB in those markets, and we'll make decisions about whether or not that makes financial sense for us. But in certain circumstances, we will hire optimistic -- optimistically and when we have opportunity. So I would say, overall, staffing is very, very strong relative to our initial expectation. So it's coming much better. That pipeline -- portion of that pipeline typically, about 30% of the way we report our pipelines is within 90 days. So, assuming that we would convert a 100% of those prospects. And we have a pre-determined methodology that we apply for probabilities, so it's all over the board. The expected value from $1 billion pipeline obviously is a heck of lot better than $600 million or $500 million, which is where we were two quarters ago, so it's nearly double what it was. And there's some very, very good transactions that we're fairly confident we're going to be able to close in the fourth quarter into the first quarter. So overall, I'd say, we're very optimistic.
And where did balances end the quarter in those markets or commercial balances?
Yes, we don't -- we're not going to get into the details relative to individual regions. But I will tell you that, there has been a considerable amount of, let's say it, asset exchange. We've originated pretty well on those markets. But we've also had exits related to the commercial portfolio, where either we are not interested in the industry or their undesirable credits that have been moved out. So in Gary's comments, there was quite a bit of activity in the acquired portfolio.
Plus normal runoff, too.
Yes, plus have normal runoff in those acquired