F.N.B. Corporation (NYSE:FNB) Q3 2017 Earnings Conference Call - Final Transcript
Oct 19, 2017 • 10:30 am ET
I think, that that plus the loan growth, as Vince commented on, positions us well for our future benefits and net interest income.
And then on the capital side seeing good growth incrementally on the TCE ratio. In the past, you'd commented at around 7%, you feel is a good level for the structure of the balance sheet. Do you still feel that longer-term 7% is a good place to be and that you can get there with the organic growth?
Yes, I would say that, as we look ahead with the earnings generation from the company and that expanding as we go forward as you get Yadkin into year two, we would expect the TCE ratio to go above 7%. And if you look out over the next few years using reasonable assumptions, you get into the mid-7%. So really looking to move that number up north of 7% to kind of in the near-term just through normal retained earnings is really, really what we're targeting there. And then with the loan opportunities, we still have to deploy capital that we have. The payout ratio will kind of naturally migrate down into the kind of mid to low 40s over the next few years also, which will support the growth, also give us some continued movement upwards in the TCE ratio, and still very comfortable with where we are given our risk position.
And then just finally for me, you talked about the data analytics and the lead generation. Are you tying branch incentive compensation to utilizing that data and successfully moving prospects into actual customers?
Yes, actually it's directly correlated to the categories that those branch managers need to perform in. So we have pretty broad categories. We're not really activity-based here from an incentive compensation standpoint. We're more output or outcome-based. So, the growth in the portfolios is how they get compensated, which avoids some of the issues that other financial institutions have had with that behavior. But I think that those data analytics, those leads that are being pushed out are being pushed out in buckets relative to deposits loans and fee-based products that they can cross-sell to their customer base. And it's been very well received by the field, and we've had excellent results, as I mentioned in my prepared comments. In fact, one in five calls results in an appointment, that's pretty remarkable. So I would expect that to continue to feed the consumer business and ultimately benefit fee income as we move into next year. Particularly in North Carolina, where there was less of a focus on that consumer segment by Yadkin. The other thing I will mention is, the data analytics have helped us in terms of deposit gathering. If you look at while -- a unique anomaly occurred where we had a U-shaped curve in terms of volume per day in the deposit category. We actually produced nearly 17% growth in deposits on a spot basis. So our deposits on a