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

Apr 24, 2018 • 10:30 am ET

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

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Executive
Vincent Calabrese

increased $2.4 million, or 3.7%. Wealth management had a strong quarter due to higher sales activity, higher equity markets and increased brokerage activity, resulting in trust income and securities commissions growing at a strong combined 12%.

Capital markets revenue increased 6%, which included growth in all three components of swap income, syndication fees and international banking. The capital markets and wealth businesses have really started to benefit from our expanded footprint. We're optimistic we'll continue to see increased contributions in those categories.

Insurance posted seasonally strong revenue of $5.1 million higher by 13%. Mortgage banking revenue was also strong coming in at the same level as last quarter even in the face of the first quarter typically being slower for that business.

Total SBA revenue was $1.6 million, which included over $1 million of gain on sale revenue more than doubled the gain on sale in the prior quarter. Overall, we were pleased with the fee income results in the quarter and think that our relatively strong start to the year bodes well for 2018 and beyond.

Turning to Slide 9. Expenses increased $5.6 million linked-quarter when excluding the merger-related items in the fourth quarter. The biggest driver of the increase was a $3.3 million increase in personnel expense that we talked about last quarter, due to the normal resetting of employee taxes in the New Year. Occupancy and equipment expense also increased $1.8 million, as is typical in the first quarter, due to cost for snow removal and utilities.

Lastly, as discussed in January, shares tax increased $1.7 million on a linked-quarter basis. The efficiency ratio ticked up to 55.8% from 53.1%, but was improved from 57.2% in the first quarter of last year. The linked-quarter increase was partly due to a lower FTE adjustment related to the new federal tax rate, combined with the normal seasonal increase in expenses in the first quarter of the year and the impact of having fewer days of net interest income in the first quarter.

Overall, given our performance in the first quarter, we think we're well-positioned to reach our targets for the year. The one area, where our team will be particularly focused is on deposit growth throughout the rest of the year, and we believe that we will be able to reach our growth objectives as seasonal flow start to turn and we continue with our successful deposit gathering strategies.

With that, I'll turn the call back over to Vince. Vince?

Executive
Vincent Delie

In summary, we are pleased by the early momentum established in the first quarter. I want to reiterate that our central focus is to deliver a sustained earnings per share growth trajectory. We're encouraged by the increased activity in the commercial bank, notably C&I and equipment finance, as well as the number of growth opportunities across the footprint for all of our businesses. We stand today well-positioned to deliver a strong 2018 financial performance.

Operator, let's open the call up to questions.