F.N.B. Corporation (NYSE:FNB) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 24, 2018 • 10:30 am ET


F.N.B. Corporation (NYSE:FNB) Q1 2018 Earnings Conference Call - Preliminary Transcript


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Vincent Delie

Central Pennsylvania, Cleveland and our Greater Baltimore and Washington DC markets. In North and South Carolina, the Piedmont Triad, Eastern Carolina and Charlotte markets, all grew commercial loan balances from year-end, and we expect to see increased contributions in the coming quarters.

Looking ahead, we're well-positioned to drive growth and we're optimistic about the significant commercial opportunities we have in front of us and plan to build on this early momentum. Across the company, we have exceptional leaders in place. We are fully staffed and we are confident that we can build on our first quarter success.

In addition to the pick up in C&I activity, our equipment finance group has seen more opportunities and increased demand from commercial customers. Continued expansion of equipment finance to small business and middle market borrowers was outlined as one of the 2018 strategic objectives on the last call.

In fact, ending commercial leases increased 19% annualized compared to December, and we expect this trend to continue, in part thanks to the passage of the tax reform and the positive impact it has had on our customers and prospects.

Turning to non-interest income, we delivered very good results across our fee-based businesses. Total SBA revenue reached $1.6 million as gain on sale income surpassed $1 million for the first time in a quarter.

As we stand today, we have a full SBA team in place actively calling on customers across our franchise. In our capital markets area, we recently reorganized, including adding local product specialists to support the needs of our larger clients. Capital markets income saw increased contributions from syndication fees in international banking and the commercial swap activity in our Carolina region has begun to accelerate.

During the first quarter, we executed a number of transactions in the Carolinas with total swap fee income from the region increasing significantly. This is up from virtually nothing last year. Both SBA and the capital markets business were identified as key strategic areas for us going into 2018, and we're off to a good start.

Moving on, wealth management delivered strong results, up 12% linked-quarter, as trust income increased 9% and brokerage increased 16%, each benefiting from the expanded footprint and increased contributions from the Carolina regions. Approximately, half of the increase in wealth management fee income compared to the prior quarter was from North and South Carolina.

Mortgage banking, which is usually softer in the first quarter and insurance rebounding from a typical fourth quarter low, both performed very well and we look to build off their strong base to help us achieve our total non-interest income expectations.

In the consumer bank, average consumer loans grew 2% annualized, led by mortgage and indirect auto loans. On the deposit side, total average deposits decreased slightly with growth in time deposits and savings, offsetting -- offset by expected seasonal reductions in business and municipal balances.

We have demonstrated ability to gather deposits, and it remains a point of emphasis for us, particularly given the environment. We