FNB Corporation

11/03/2026 | Press release | Distributed by Public on 11/03/2026 13:45

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This MD&A represents an overview of, and highlights, material changes to our financial condition and consolidated results of operations at and for the nine-month periods ended September 30, 2026 and 2025. This MD&A should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained herein and our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026. Our results of operations for the nine months ended September 30, 2026 are not necessarily indicative of results expected for the full year.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that do not relate to historical facts and that are based on current assumptions, beliefs, estimates, expectations and projections, many of which, by their nature, are inherently uncertain and beyond our control. Forward-looking statements may relate to various matters, including our financial condition, results of operations, plans, objectives, future performance, business or industry, and usually can be identified by the use of forward-looking words, such as "anticipates," "assumes," "believes," "can," "continues," "could," "enable," "estimates," "expects," "forecasts," "goal," "intends," "likely," "may," "might," "objective," "plans," "positioned," "potential," "projects," "remains," "should," "target," "trend," "will," "would," or similar words or expressions or variations thereof, and the negative thereof, but these terms are not the exclusive means of identifying such statements. You should not place undue reliance on forward-looking statements, as they are subject to risks and uncertainties, including, but not limited to, those described below. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make.
There are various important factors that could cause future results to differ materially from historical performance and any forward-looking statements. Factors that might cause such differences, include, but are not limited to:
•the credit risk associated with the substantial amount of commercial loans and leases in our loan portfolio;
•the volatility of the mortgage banking business and real estate values, which can be influenced by economic conditions or trends, interest rates, and local market trends;
•changes in market interest rates, U.S. federal government shutdowns and the unpredictability of monetary, tax and other policies of government agencies, including tariffs or the imposition and enforceability of tariffs, trade wars, barriers or restrictions, threats of such actions or related uncertainties;
•the impact of changes in interest rates on the value of our investment securities portfolios;
•the impact that shifts in local and regional commercial real estate market conditions, interest rate fluctuations, geographic commercial office space availability and tenant demand and independent appraisal revisions and other factors beyond our control may have on our branch and headquarters properties and other real estate we own;
•changes in our ability to obtain liquidity as and when needed to fund our obligations as they come due, including as a result of adverse changes to our credit ratings;
•the risk associated with uninsured deposit account balances;
•regulatory limits on our ability to receive dividends from our subsidiaries and pay dividends to our shareholders;
•our ability to recruit and retain qualified banking professionals;
•the financial soundness of other financial institutions and the impact of volatility in the banking sector on us;
•changes and instability in economic conditions and financial markets, in the regions in which we operate or otherwise, including a contraction of economic activity, economic downturn or uncertainty and international conflict, including in the Middle East, disruption of supply chain and energy supply markets and capital markets, changes to inflation expectations and other related uncertainties;
•our ability to continue to invest in technological improvements and artificial intelligence solutions as they become appropriate or necessary;
•any interruption in or breach in security of our information systems, or other cybersecurity risks;
•risks associated with reliance on third-party vendors and related to our use of artificial intelligence in connection with business and operations;
•our capability to effectively deploy multi-layered defense strategies to mitigate risks associated with evolving artificial intelligence enabled fraud schemes;
•risks associated with the use of models, estimations and assumptions in our business;
•the effects of adverse weather events and public health emergencies;
•the risks associated with acquiring other banks and financial services businesses, including integration into our existing operations;
•the extensive federal and state regulations, supervision and examination governing almost every aspect of our operations, and potential expenses associated with complying with such regulations;
•our ability to comply with the consent orders entered into by FNBPA with the DOJ and the North Carolina State Department of Justice, and related costs and potential reputational harm;
•changes in federal, state or local tax rules and regulations or interpretations, or accounting policies, standards and interpretations;
•the effects of climate change and related legislative and regulatory initiatives; and
•any reputation, credit, interest rate, market, operational, litigation, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above.
We caution that the risks identified here are not exhaustive of the types of risks that may adversely impact us and actual results may differ materially from those expressed or implied as a result of these risks and uncertainties, including, but not limited to, the risk factors and other uncertainties described under Item 1A. Risk Factors and the Risk Management sections of our 2025 Annual Report on Form 10-K (including the MD&A section) and our other 2026 filings with the SEC, which are available on our corporate website at https://www.fnb-online.com/about-us/investor-information/reports-and-filings or the SEC's website at www.sec.gov. We have included our web address as an inactive textual reference only. Information on our website is not part of our SEC filings.
You should treat forward-looking statements as speaking only as of the date they are made and based only on information then actually known to us. We do not undertake, and specifically disclaims any obligation to update, or revise any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
A description of our critical accounting policies is included in the MD&A section of our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026 under the heading "Application of Critical Accounting Policies". There have been no significant changes in critical accounting policies or the assumptions and judgments utilized in applying these policies since December 31, 2025.
USE OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE INDICATORS
To supplement our Consolidated Financial Statements presented in accordance with GAAP, we use certain non-GAAP financial measures, such as operating net income available to common shareholders, operating earnings per diluted common share, return on average tangible common equity, return on average tangible assets, tangible book value per common share, the ratio of tangible common equity to tangible assets, pre-provision net revenue (reported), operating pre-provision net revenue, efficiency ratio and net interest margin (FTE) to provide information useful to investors in understanding our operating performance and trends, and to facilitate comparisons with the performance of our peers. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities. The non-GAAP financial measures and key performance indicators we use may differ from the non-GAAP financial measures and key performance indicators other financial institutions use to assess their performance and trends.
These non-GAAP financial measures should be viewed as supplemental in nature, and not as a substitute for, or superior to, our reported results prepared in accordance with GAAP. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included later in this Report under the heading "Reconciliations of Non-GAAP Financial Measures and Key Performance Indicators to GAAP".
Management believes certain items (e.g., FDIC special assessment) are not organic to running our operations and facilities. These items are considered significant items impacting earnings as they are deemed to be outside of ordinary banking activities.
These costs are specific to each individual transaction and may vary significantly based on the size and complexity of the transaction.
To facilitate peer comparisons of net interest margin and efficiency ratio, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets (loans and investments) to make it fully equivalent to interest income earned on taxable investments (this adjustment is not permitted under GAAP). Taxable-equivalent amounts for 2026 and 2025 were calculated using a federal statutory income tax rate of 21%.
FINANCIAL SUMMARY
Net income for the third quarter of 2026 was $152.9 million, or $0.43 per diluted common share. Comparatively, third quarter of 2025 net income totaled $149.5 million, or $0.41 per diluted common share. On an operating basis, there were no significant items impacting earnings for the third quarter of 2026. By comparison, third quarter of 2025 operating earnings per diluted common share (non-GAAP) was $0.41, excluding a $(2.3) million (pre-tax) significant item impacting earnings due to a reduction in an FDIC special assessment.
For the third quarter of 2026, we generated record net interest income, expanded net interest margin and increased tangible book value per common share (non-GAAP) 7% year-over-year, while continuing to return capital through share repurchase activity and an attractive common stock dividend. We continue to leverage technology investments to gain market share throughout our diverse geographic footprint with 8.5% annualized linked-quarter total loan and lease growth and 8.9% annualized linked-quarter total deposit growth. Our consistent underwriting standards and comprehensive credit monitoring program contributed to solid credit quality results for the quarter. We continued to invest in innovative technology to grow primary relationships and low-cost deposits, while also maintaining a focus on expanding high-value fee-based businesses to diversify revenue streams.
Income Statement Highlights
•Net interest income totaled $376.5 million, an increase of $17.3 million, or 4.8%, from the year-ago quarter, reflecting growth in average earning assets and lower interest-bearing deposit costs, partially offset by lower yields on earning assets (non-GAAP).
•Net interest income increased $10.8 million, or 3.0%, compared to the second quarter of 2026 primarily due to growth in earning assets, higher yields on earning assets (non-GAAP) and the impact of one more day in the current quarter more than offsetting a slight increase in the cost of funds.
•The net interest margin (FTE) (non-GAAP) increased 4 basis points to 3.29% from the year-ago quarter primarily driven by a decrease in cost of funds by 22 basis points, partially offset by a decrease of 18 basis points in the yield on earning assets. The FOMC increased the target federal funds rate by 25 basis points in September 2026.
•The provision for credit losses was $19.6 million, a decrease of 18.1% from the year-ago quarter, with net charge-offs of $11.0 million, or 0.12% annualized of total average loans, compared to $19.7 million, or 0.22% annualized of total average loans, in the year-ago quarter.
•Non-interest income totaled $92.6 million benefiting from our diversified business model and related revenue generation, with a decrease of $4.4 million, or 4.5%, linked quarter, due mainly to higher residual gains on equipment leases in the prior quarter.
•Total revenue equaled $469.1 million, a 2.6% increase from the year-ago quarter, driven by growth in net interest income.
•Non-interest expense totaled $256.9 million, an increase of $13.4 million, or 5.5%, compared to the year-ago quarter, primarily due to increases in net occupancy and equipment expense, outside services expense and FDIC insurance expense. When adjusting for a ($2.3) million significant item in the third quarter of 2025, operating non-interest expense (non-GAAP) increased $11.1 million, or 4.5%.
•Pre-provision net revenue (non-GAAP) totaled $212.2 million, with the 1.3% increase from the prior quarter; driven by record net interest income.
Balance Sheet Highlights
•For the quarter ending September 30, 2026, average loans and leases totaled $36.1 billion, an increase of $1.3 billion, or
3.7%, over the quarter ending September 30, 2025, with growth of $1.2 billion in average consumer loans and $115.4 million in average commercial loans and leases.
•On a linked-quarter basis, period-end total loans and leases increased $768.0 million, or 8.5% annualized, with growth in consumer loans and commercial loans and leases of $435.3 million and $332.7 million, respectively.
•For the quarter ending September 30, 2026, average deposits totaled $38.8 billion, an increase of $914.1 million, or 2.4%, over the quarter ending September 30, 2025, reflecting growth in average interest-bearing demand deposits of $640.6 million, average money market deposits of $443.8 million, average non-interest-bearing demand deposits of $134.0 million, and average savings deposits of $30.6 million more than offsetting the decline in average time deposits of $334.8 million.
•On a linked-quarter basis, period-end total deposits increased $870.6 million, or 8.9% annualized, driven by growth in money market deposits of $710.9 million, interest-bearing demand deposits of $239.0 million and non-interest-bearing demand deposits of $77.5 million more than offsetting the decline in time deposits of $121.4 million.
•The loan-to-deposit ratio was 92.4% at September 30, 2026, compared to 92.5% at June 30, 2026 and 90.9% at September 30, 2025.
•The ratio of non-performing loans plus OREO to total loans and leases plus OREO increased 2 basis points from the prior quarter to 0.33%. Total delinquency was 0.75%, a 4 basis point increase from the prior quarter. The overall asset quality metrics remain at satisfactory levels.
•The ACL on loans and leases was $455.5 million, an increase of $18.2 million compared to September 30, 2025, driven primarily by loan growth, with the ratio of the ACL to total loans and leases remaining stable at 1.25%.
•Tangible book value per common share (non-GAAP) of $12.28 increased $0.80, or 7.0%, compared to September 30, 2025, and $0.04, or 0.3%, compared to June 30, 2026. AOCI reduced the tangible book value per common share (non-GAAP) by $0.53 as of September 30, 2026, primarily due to the impact of higher rates on the fair value of AFS securities, compared to a reduction of $0.22 as of September 30, 2025, and $0.29 as of June 30, 2026.
•The CET1 capital ratio was 11.3%, compared to 11.1% at September 30, 2025 and 11.4% at June 30, 2026. The tangible common equity to tangible assets ratio (non-GAAP) was 8.7%, compared to 8.7% at September 30, 2025 and 8.9% at June 30, 2026.
•During the third quarter of 2026, we repurchased $50.9 million, or 2.7 million shares, of our common stock at a weighted average share price of $18.69. For the year-to-date period ending September 30, 2026, we repurchased $133 million, or 7.4 million shares, of common stock at a weighted average share price of $17.90, representing 2.1% of shares outstanding at the beginning of the year.
TABLE 1
Three Months Ended
September 30,
Quarterly Results Summary 2026 2025
Reported results
Net income available to common shareholders (millions) $ 152.9 $ 149.5
Earnings per diluted common share 0.43 0.41
Book value per common share 19.42 18.52
Operating results (non-GAAP)
Operating net income available to common shareholders (millions) 152.9 147.7
Operating earnings per diluted common share 0.43 0.41
Average diluted common shares outstanding (thousands) 354,965 361,670
Significant items impacting earnings(1) (millions)
FDIC special assessment reduction (pre-tax) $ - $ 2.3
FDIC special assessment reduction (after-tax) - 1.8
Total significant items (pre-tax) $ - $ 2.3
Total significant items (after-tax) $ - $ 1.8
Capital measures
CET1 capital ratio 11.27 % 11.07 %
Tangible common equity to tangible assets (non-GAAP) 8.69 8.69
Tangible book value per common share (non-GAAP) $ 12.28 $ 11.48
Nine Months Ended
September 30,
Year-to-Date Results Summary 2026 2025
Reported results (1)
Net income available to common shareholders (millions) $ 438.6 $ 396.7
Earnings per diluted common share 1.23 1.09
Operating results (non-GAAP)
Operating net income available to common shareholders (millions) 438.6 394.9
Operating earnings per diluted common share 1.23 1.09
Average diluted common shares outstanding (thousands) 357,521 362,329
Significant items impacting earnings(1) (millions)
FDIC special assessment reduction (pre-tax) $ - $ 2.3
FDIC special assessment reduction (after-tax) - 1.8
Total significant items (pre-tax) $ - $ 2.3
Total significant items (after-tax) $ - $ 1.8
(1) Favorable (unfavorable) impact on earnings
RESULTS OF OPERATIONS
Three Months Ended September 30, 2026 Compared to the Three Months Ended September 30, 2025
Net income for the three months ended September 30, 2026 was $152.9 million, or $0.43 per diluted common share, compared to $149.5 million, or $0.41 per diluted common share, for the three months ended September 30, 2025. On an operating basis, there were no significant items impacting earnings for the third quarter of 2026. By comparison, third quarter of 2025 operating earnings per diluted common share (non-GAAP) was $0.41, excluding a $(2.3) million (pre-tax) significant item impacting earnings due to a reduction in an FDIC special assessment.
Net interest income totaled $376.5 million, an increase of $17.3 million, or 4.8%, reflecting growth in earning assets and lower interest-bearing deposit costs, partially offset by lower yields on earning assets. The net interest margin (FTE) (non-GAAP) increased 4 basis points to 3.29%. The provision for credit losses was $19.6 million, compared to $24.0 million. Non-interest income decreased $5.6 million, or 5.7%, primarily due to decreases in mortgage banking operations income, capital markets income and other non-interest income. Non-interest expense for the third quarter of 2026 increased $13.4 million, or 5.5%, primarily due to increases in net occupancy and equipment expense, outside services expense and FDIC insurance expense.
Financial highlights are summarized below:
TABLE 2
Three Months Ended
September 30, 		$ %
(dollars in thousands, except per share data) 2026 2025 Change Change
Net interest income $ 376,522 $ 359,272 $ 17,250 4.8 %
Provision for credit losses 19,640 23,991 (4,351) (18.1)
Non-interest income 92,599 98,170 (5,571) (5.7)
Non-interest expense 256,943 243,535 13,408 5.5
Income taxes 39,676 40,407 (731) (1.8)
Net income $ 152,862 $ 149,509 $ 3,353 2.2 %
Earnings per common share - Basic $ 0.43 $ 0.41 $ 0.02 4.9 %
Earnings per common share - Diluted 0.43 0.41 0.02 4.9
Cash dividends per common share 0.13 0.12 0.01 8.3
The following table presents selected financial ratios and other relevant data used to analyze our performance:
TABLE 3
Three Months Ended
September 30,
2026 2025
Return on average equity 8.84 % 9.02 %
Return on average tangible common equity (1)
14.15 14.94
Return on average assets 1.19 1.20
Return on average tangible assets (1)
1.27 1.29
Equity to assets 13.09 13.30
Average equity to average assets 13.46 13.28
Tangible common equity to tangible assets (1)
8.69 8.69
CET1 capital ratio 11.27 11.07
Dividend payout ratio 30.14 29.05
Book value per common share $ 19.42 $ 18.52
Tangible book value per common share (1)
12.28 11.48
(1) Non-GAAP
The following table provides information regarding the average balances and yields earned on interest-earning assets (non-GAAP) and the average balances and rates paid on interest-bearing liabilities:
TABLE 4
Three Months Ended September 30,
2026 2025
(dollars in thousands) Average
Balance 		Interest
Income/
Expense 		Yield/
Rate 		Average
Balance 		Interest
Income/
Expense 		Yield/
Rate
Assets
Interest-bearing deposits with banks $ 1,546,215 $ 13,367 3.43 % $ 1,738,570 $ 18,286 4.17 %
Taxable investment securities (1)
7,094,947 66,751 3.76 6,611,222 59,506 3.60
Tax-exempt investment securities (1)(2)
951,728 8,405 3.53 1,003,661 8,742 3.48
Loans held for sale 281,326 5,172 7.35 312,034 5,480 7.02
Loans and leases (2)(3)
36,114,741 505,434 5.56 34,814,280 507,107 5.79
Total interest-earning assets (2)
45,988,957 599,129 5.18 44,479,767 599,121 5.36
Cash and due from banks 385,202 415,030
Allowance for credit losses (459,294) (440,868)
Premises and equipment 575,001 560,685
Other assets 4,488,218 4,504,231
Total assets $ 50,978,084 $ 49,518,845
Liabilities
Deposits:
Interest-bearing demand $ 6,674,309 19,270 1.15 $ 6,033,758 15,893 1.05
Money market 11,824,440 86,798 2.91 11,380,618 95,708 3.34
Savings 3,106,539 6,924 0.88 3,075,982 7,557 0.97
Certificates and other time 7,160,868 59,129 3.28 7,495,691 68,409 3.62
Total interest-bearing deposits 28,766,156 172,121 2.37 27,986,049 187,567 2.66
Short-term borrowings 2,644,489 24,999 3.75 1,682,747 17,764 4.16
Long-term borrowings 1,851,978 22,338 4.79 2,511,652 31,369 4.96
Total interest-bearing liabilities 33,262,623 219,458 2.62 32,180,448 236,700 2.92
Non-interest-bearing demand deposits 10,039,263 9,905,230
Total deposits and borrowings 43,301,886 2.01 42,085,678 2.23
Other liabilities 814,313 856,542
Total liabilities 44,116,199 42,942,220
Shareholders' equity 6,861,885 6,576,625
Total liabilities and shareholders' equity $ 50,978,084 $ 49,518,845
Net interest-earning assets $ 12,726,334 $ 12,299,319
Net interest income (FTE) (2)
379,671 362,421
Tax-equivalent adjustment (3,149) (3,149)
Net interest income $ 376,522 $ 359,272
Net interest spread 2.56 % 2.44 %
Net interest margin (2)
3.29 % 3.25 %
(1)The average balances and yields earned on investment securities are based on historical cost.
(2)The interest income amounts are reflected on an FTE basis (non-GAAP), which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%. The yield on earning assets and the net interest margin are presented on an FTE basis (non-GAAP). We believe this measure is commonly used in the industry to evaluate net interest income and provides a relevant comparison between taxable and non-taxable amounts.
(3)Average loans and leases consist of average total loans, including non-accrual loans, less average unearned income.
Net Interest Income
Net interest income on an FTE basis (non-GAAP) totaled $379.7 million, increasing $17.3 million, or 4.8%, reflecting growth in average earning assets and lower interest-bearing deposit costs and borrowing costs, partially offset by lower yields on earning assets. The net interest margin (FTE) (non-GAAP) increased 4 basis points to 3.29%. The yield on earning assets (non-GAAP) decreased 18 basis points to 5.18%, driven by a 23 basis point decline in yields on loans to 5.56%, partially offset by a 15 basis point increase in yields on investment securities to 3.73%. Total cost of funds decreased 22 basis points to 2.01%, with a 47 basis point decrease in total borrowing costs to 4.17% and a 29 basis point decrease in interest-bearing deposit costs to 2.37%. The FOMC increased the target federal funds rate by 25 basis points in September 2026.
Interest income on an FTE basis (non-GAAP) was $599.1 million for both the third quarters of 2026 and 2025, resulting in a lower yield on earning assets (non-GAAP) of 18 basis points, despite the growth in average earning assets of $1.5 billion. The increase in average earning assets was primarily driven by a $1.3 billion, or 3.7%, increase in average loans and leases and an increase of $431.8 million in average investment securities.
Interest expense of $219.5 million for the third quarter of 2026 decreased $17.2 million from the same quarter of 2025, primarily due to a 22 basis point reduction in the cost of funds, partially offset by the growth in average interest-bearing deposits. Average total deposits increased $914.1 million, or 2.4%, reflecting solid organic growth in new and existing customer relationships. The funding mix was stable with non-interest-bearing demand deposits comprising 26% of total deposits at both September 30, 2026 and 2025. Average short-term borrowings increased $961.7 million, or 57.2%, at lower rates paid, while average long-term borrowings decreased $659.7 million, or 26.3%, which included the maturity of $350 million in senior notes in August 2025 and $100 million in subordinated notes in October 2025, combined with decreases in average long-term FHLB borrowings. The decrease in total cost of funds is comprised of a 47 basis point decrease in total borrowing costs and a 29 basis point decrease in interest-bearing deposit costs to 2.37%.
The following table provides certain information regarding changes in net interest income on an FTE basis (non-GAAP) attributable to changes in the average volumes and yields earned on interest-earning assets and the average volume and rates paid for interest-bearing liabilities for the three months ended September 30, 2026, compared to the three months ended September 30, 2025:
TABLE 5
(in thousands) Volume Rate Net
Interest Income (1)
Interest-bearing deposits with banks $ (1,794) $ (3,125) $ (4,919)
Investment securities (2)
5,556 1,352 6,908
Loans held for sale (532) 224 (308)
Loans and leases (2)
16,977 (18,650) (1,673)
Total interest income (2)
20,207 (20,199) 8
Interest Expense (1)
Deposits:
Interest-bearing demand 3,235 142 3,377
Money market 3,289 (12,199) (8,910)
Savings 215 (848) (633)
Certificates and other time (2,728) (6,552) (9,280)
Short-term borrowings 9,463 (2,228) 7,235
Long-term borrowings (8,109) (922) (9,031)
Total interest expense 5,365 (22,607) (17,242)
Net change (2)
$ 14,842 $ 2,408 $ 17,250
(1)The amount of change not solely due to rate or volume changes was allocated between the change due to rate and the change due to volume based on the net size of the rate and volume changes.
(2)Interest income amounts are reflected on an FTE basis (non-GAAP), which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%. We believe this measure is commonly used in the industry to evaluate net interest income and provides a relevant comparison between taxable and non-taxable amounts.
Provision for Credit Losses
Provision for credit losses is determined based on management's estimates of the appropriate level of ACL needed to absorb expected life-of-loan losses in the loan and lease portfolio, after giving consideration to charge-offs and recoveries for the period. The following table presents information regarding the provision for credit loss expense and net charge-offs:
TABLE 6
Three Months Ended
September 30, 		$ %
(dollars in thousands) 2026 2025 Change Change
Provision for credit losses on loans and leases $ 19,165 $ 24,889 $ (5,724) (23.0) %
Provision for unfunded loan commitments
366 (859) 1,225 142.6
Total provision for credit losses on loans and leases 19,531 24,030 (4,499) (18.7)
Provision for investment securities 109 (39) 148 379.5
Total provision for credit losses $ 19,640 $ 23,991 $ (4,351) (18.1) %
Net loan charge-offs $ 11,018 $ 19,691 $ (8,673) (44.0) %
Net loan charge-offs (annualized) / total average loans and leases 0.12 % 0.22 %
Provision for credit losses on loans and leases for the third quarter of 2026 declined $4.5 million, or 18.7%, and reflected net charge-offs of $11.0 million, or 0.12% annualized of total average loans, compared to $19.7 million, or 0.22% annualized, in the third quarter of 2025. For additional information relating to the allowance and provision for credit losses, refer to the "Allowance for Credit Losses on Loans and Leases" section of this MD&A.
Non-Interest Income
The breakdown of non-interest income for the three months ended September 30, 2026 and 2025 is presented in the following table:
TABLE 7
Three Months Ended
September 30, 		$ %
(dollars in thousands) 2026 2025 Change Change
Service charges $ 24,515 $ 23,191 $ 1,324 5.7 %
Interchange and card transaction fees 13,494 13,424 70 0.5
Trust services 12,151 11,647 504 4.3
Insurance commissions and fees 5,388 4,495 893 19.9
Securities commissions and fees 9,129 8,868 261 2.9
Capital markets income 6,423 7,875 (1,452) (18.4)
Mortgage banking operations 5,569 9,183 (3,614) (39.4)
Dividends on non-marketable equity securities 7,489 6,110 1,379 22.6
Bank owned life insurance 4,668 4,208 460 10.9
Net securities gains (losses) 58 - 58 -
Other 3,715 9,169 (5,454) (59.5)
Total non-interest income $ 92,599 $ 98,170 $ (5,571) (5.7) %
Total non-interest income decreased $5.6 million, or 5.7%, to $92.6 million for the third quarter of 2026, compared to $98.2 million for the third quarter of 2025. The variances in the individual non-interest income items are explained in the following paragraphs.
Service charges increased $1.3 million, or 5.7%, driven by solid treasury management activity and higher consumer transaction volume.
Capital markets income of $6.4 million reflected solid contributions from our numerous businesses while decreasing $1.5 million, or 18.4%, primarily due to the record debt capital markets and international banking income in the third quarter of 2025.
Mortgage banking operations income decreased $3.6 million, or 39.4%, primarily driven by tighter gain-on-sale margins and net fair value adjustments given the volatility of interest rates during the quarter.
Dividends on non-marketable equity securities increased $1.4 million, or 22.6%, primarily due to an increase in average FHLB borrowings, combined with an increase in the FHLB dividend payment rate.
Other non-interest income was $3.7 million and $9.2 million for the three months ended September 30, 2026 and 2025, respectively, with the decrease primarily due to a $5.4 million recovery in the third quarter of 2025 on an other asset that was previously written off as part of a 2017 acquisition.
Non-Interest Expense
The breakdown of non-interest expense for the three months ended September 30, 2026 and 2025 is presented in the following table:
TABLE 8
Three Months Ended
September 30, 		$ %
(dollars in thousands) 2026 2025 Change Change
Salaries and employee benefits $ 132,848 $ 131,575 $ 1,273 1.0 %
Net occupancy 20,700 19,161 1,539 8.0
Equipment 30,338 25,662 4,676 18.2
Outside services 30,024 26,033 3,991 15.3
Marketing 4,332 5,517 (1,185) (21.5)
FDIC insurance 8,677 6,351 2,326 36.6
Bank shares tax 4,443 3,959 484 12.2
Other 25,581 25,277 304 1.2
Total non-interest expense $ 256,943 $ 243,535 $ 13,408 5.5 %
Total non-interest expense for the third quarter of 2026 increased $13.4 million, or 5.5%, from the same period of 2025. On an operating basis (non-GAAP), non-interest expense increased $11.1 million, or 4.5%, when excluding a significant item of $(2.3) million in the third quarter of 2025. The variances in the individual non-interest expense items are explained in the following paragraphs.
Net occupancy and equipment increased $6.2 million, or 13.9%, primarily due to technology-related investments and higher occupancy costs.
Outside services increased $4.0 million, or 15.3%, driven by higher third-party legal and consulting costs.
Marketing expense decreased $1.2 million, or 21.5%, due to the timing of various marketing promotions.
FDIC insurance was higher by $2.3 million, or 36.6%, due to the $2.3 million reduction in the FDIC special assessment during the third quarter of 2025.
TABLE 9
The following table presents non-interest expense for the three months ended September 30, 2026 and 2025 excluding a significant item impacting earnings in the third quarter of 2025:
Three Months Ended September 30, $ %
(dollars in thousands) 2026 2025 Change Change
Total non-interest expense, as reported $ 256,943 $ 243,535 $ 13,408 5.5 %
Significant item:
FDIC special assessment - 2,272 (2,272)
Total non-interest expense, excluding significant item (1)
$ 256,943 $ 245,807 $ 11,136 4.5 %
(1) Non-GAAP
Income Taxes
The following table presents information regarding income tax expense and certain tax rates:
TABLE 10
Three Months Ended
September 30,
(dollars in thousands) 2026 2025
Income tax expense $ 39,676 $ 40,407
Effective tax rate 20.6 % 21.3 %
Statutory federal tax rate 21.0 21.0
Income tax expense was lower for the third quarter of 2026. Although pre-tax income increased slightly, the impact on income tax expense was offset by the recognition of a deferred tax benefit related to a capital loss.
Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
Net income for the first nine months of 2026 was $438.6 million, or $1.23 per diluted common share, compared to $396.7 million, or $1.09 per diluted common share, for the first nine months of 2025. There were no significant items impacting earnings for the first nine months of 2026. For the first nine months of 2025, operating earnings per diluted common share (non-GAAP) was $1.09, excluding $(2.3) million (pre-tax) of a significant item impacting earnings due to a reduction in an FDIC special assessment.
Net interest income totaled $1.1 billion, an increase of $71.2 million, or 6.9%, compared to $1.0 billion, reflecting growth in average earning assets and lower interest-bearing deposit costs and borrowing costs, partially offset by a lower yield on interest earning assets. The net interest margin (FTE) (non-GAAP) increased 10 basis points to 3.26%. The provision for credit losses for the first nine months of 2026 totaled $59.5 million, compared to $67.1 million. Net charge-offs for the first nine months of 2026 totaled $43.9 million, or 0.17% annualized of total average loans, compared to $54.0 million, or 0.21% annualized of total average loans. Non-interest income totaled $280.5 million, an increase of $3.6 million, or 1.3%, compared to $277.0 million, reflecting increased revenue from wealth management, service charges, insurance commissions and fees, capital markets income and higher dividends on non-marketable equity securities, partially offset by decreased income from mortgage banking operations. Non-interest expense totaled $768.1 million, increasing $31.5 million, or 4.3%, reflecting increased salaries and employee benefit costs, net occupancy and equipment expense, outside services expense and other non-interest expense.
Financial highlights are summarized below:
TABLE 11
Nine Months Ended
September 30, 		$ %
(dollars in thousands, except per share data) 2026 2025 Change Change
Net interest income $ 1,101,523 $ 1,030,313 $ 71,210 6.9 %
Provision for credit losses 59,463 67,081 (7,618) (11.4)
Non-interest income 280,535 276,951 3,584 1.3
Non-interest expense 768,057 736,571 31,486 4.3
Income taxes 115,909 106,918 8,991 8.4
Net income $ 438,629 $ 396,694 $ 41,935 10.6 %
Earnings per common share - Basic $ 1.23 $ 1.10 $ 0.13 11.8 %
Earnings per common share - Diluted 1.23 1.09 0.14 12.8
Cash dividends per common share 0.38 0.36 0.02 5.6
The following table presents selected financial ratios and other relevant data used to analyze our performance:
TABLE 12
Nine Months Ended
September 30,
2026 2025
Return on average equity 8.59 % 8.19 %
Return on average tangible common equity (1)
13.81 13.74
Return on average assets 1.16 1.08
Return on average tangible assets (1)
1.24 1.17
Equity to assets 13.09 13.30
Average equity to average assets 13.54 13.21
Tangible common equity to tangible assets (1)
8.69 8.69
CET1 capital ratio 11.27 11.07
Dividend payout ratio 31.00 33.02
Book value per common share $ 19.42 $ 18.52
Tangible book value per common share (1)
12.28 11.48
(1) Non-GAAP
The following table provides information regarding the average balances and yields earned on interest-earning assets (non-GAAP) and the average balances and rates paid on interest-bearing liabilities:
TABLE 13
Nine Months Ended September 30,
2026 2025
(dollars in thousands) Average
Balance 		Interest
Income/
Expense 		Yield/
Rate 		Average
Balance 		Interest
Income/
Expense 		Yield/
Rate
Assets
Interest-bearing deposits with banks $ 1,634,508 $ 42,671 3.49 % $ 1,734,300 $ 53,147 4.10 %
Taxable investment securities (1)
6,995,234 191,298 3.65 6,546,054 171,096 3.48
Tax-exempt investment securities (1)(2)
967,382 25,600 3.53 1,006,126 26,243 3.48
Loans held for sale 348,135 18,718 7.17 247,438 13,519 7.29
Loans and leases (2)(3)
35,509,872 1,474,405 5.55 34,458,648 1,483,204 5.75
Total interest-earning assets (2)
45,455,131 1,752,692 5.15 43,992,566 1,747,209 5.31
Cash and due from banks 378,783 401,509
Allowance for credit losses (453,116) (435,677)
Premises and equipment 570,226 551,738
Other assets 4,494,763 4,529,221
Total assets $ 50,445,787 $ 49,039,357
Liabilities
Deposits:
Interest-bearing demand $ 6,611,504 55,837 1.13 $ 6,135,852 51,093 1.11
Money market 11,739,220 256,706 2.92 11,001,664 278,008 3.38
Savings 3,101,693 20,132 0.87 3,083,456 22,497 0.98
Certificates and other time 7,222,049 177,241 3.28 7,321,336 202,987 3.71
Total interest-bearing deposits 28,674,466 509,916 2.38 27,542,308 554,585 2.69
Short-term borrowings 2,245,532 62,455 3.71 1,645,644 51,999 4.21
Long-term borrowings 1,945,677 69,380 4.77 2,692,580 101,153 5.02
Total interest-bearing liabilities 32,865,675 641,751 2.61 31,880,532 707,737 2.97
Non-interest-bearing demand deposits 9,937,391 9,789,501
Total deposits and borrowings 42,803,066 2.00 41,670,033 2.27
Other liabilities 812,575 892,612
Total liabilities 43,615,641 42,562,645
Shareholders' equity 6,830,146 6,476,712
Total liabilities and shareholders' equity $ 50,445,787 $ 49,039,357
Net interest-earning assets $ 12,589,456 $ 12,112,034
Net interest income (FTE) (2)
1,110,941 1,039,472
Tax-equivalent adjustment (9,418) (9,159)
Net interest income $ 1,101,523 $ 1,030,313
Net interest spread 2.54 % 2.34 %
Net interest margin (2)
3.26 % 3.16 %
(1)The average balances and yields earned on investment securities are based on historical cost.
(2)The interest income amounts are reflected on an FTE basis (non-GAAP), which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%. The yield on earning assets and the net interest margin are presented on an FTE basis (non-GAAP). We believe this measure is commonly used in the industry to evaluate net interest income and provides a relevant comparison between taxable and non-taxable amounts.
(3)Average loans and leases consist of average total loans, including non-accrual loans, less average unearned income.
Net Interest Income
Net interest income on an FTE basis (non-GAAP) totaled $1.1 billion, increasing $71.5 million, or 6.9%, reflecting growth in average earning assets and lower interest-bearing deposit costs and borrowing costs, partially offset by lower yields on earning assets. The net interest margin (FTE) (non-GAAP) increased 10 basis points to 3.26%. The yield on earning assets (non-GAAP) decreased 16 basis points to 5.15%, driven by a 20 basis point decline in yields on loans to 5.55%, partially offset by a 15 basis point increase in yields on investment securities to 3.63%. Total cost of funds decreased 27 basis points to 2.00%, with a 31 basis point decrease in interest-bearing deposit costs to 2.38% and a 51 basis point decrease in total borrowing costs. The FOMC increased the target federal funds rate by 25 basis points in September 2026 but cut the target federal funds rate by 75 basis points during the second half of 2025.
Interest income on an FTE basis (non-GAAP) of $1.8 billion, increased $5.5 million, or 0.3%, resulting from growth in average earning assets of $1.5 billion, partially offset by a decrease of 16 basis points in the yield on earning assets (non-GAAP). The increase in average earning assets was primarily driven by a $1.1 billion, or 3.1%, increase in average loans and leases and an increase of $410.4 million in average investment securities.
Interest expense of $641.8 million decreased $66.0 million primarily due to a 27 basis point reduction in the cost of funds, partially offset by growth in average interest-bearing deposits. Average total deposits increased $1.3 billion, or 3.4%, reflecting solid organic growth in new and existing customer relationships. The funding mix was stable with non-interest-bearing demand deposits comprising 26% of total deposits at both September 30, 2026 and 2025. Average short-term borrowings increased $599.9 million, or 36.5%, at lower yields, while average long-term borrowings decreased $746.9 million, or 27.7%, which included the maturity of $350 million in senior notes in August 2025 and $100 million in subordinated notes in October 2025, combined with a decline in average long-term FHLB borrowings. The decrease in total cost of funds is comprised of a 51 basis point decrease in total borrowing costs and a 31 basis point decrease in interest-bearing deposit costs to 2.38%.
The following table provides certain information regarding changes in net interest income on an FTE basis (non-GAAP) attributable to changes in the average volumes and yields earned on average interest-earning assets and the average volume and rates paid for average interest-bearing liabilities for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025:
TABLE 14
(in thousands) Volume Rate Net
Interest Income (1)
Interest-bearing deposits with banks $ (2,723) $ (7,753) $ (10,476)
Investment securities (2)
14,771 4,788 19,559
Loans held for sale 5,373 (174) 5,199
Loans and leases (2)
37,954 (46,753) (8,799)
Total interest income (2)
55,375 (49,892) 5,483
Interest Expense (1)
Deposits:
Interest-bearing demand 7,418 (2,674) 4,744
Money market 16,178 (37,480) (21,302)
Savings 766 (3,131) (2,365)
Certificates and other time (1,506) (24,240) (25,746)
Short-term borrowings 17,999 (7,543) 10,456
Long-term borrowings (27,563) (4,210) (31,773)
Total interest expense 13,292 (79,278) (65,986)
Net change (2)
$ 42,083 $ 29,386 $ 71,469
(1)The amount of change not solely due to rate or volume changes was allocated between the change due to rate and the change due to volume based on the net size of the rate and volume changes.
(2)Interest income amounts are reflected on an FTE basis (non-GAAP), which adjusts for the tax benefit of income on certain tax-exempt loans and investments using the federal statutory tax rate of 21%. We believe this measure is commonly used in the industry to evaluate net interest income and provides a relevant comparison between taxable and non-taxable amounts.
Provision for Credit Losses
The following table presents information regarding the provision for credit loss expense and net charge-offs:
TABLE 15
Nine Months Ended
September 30, 		$ %
(dollars in thousands) 2026 2025 Change Change
Provision for credit losses on loans and leases $ 59,813 $ 68,467 $ (8,654) (12.6) %
Provision for unfunded loan commitments (649) (1,291) 642 49.7
Total provision for credit losses on loans and leases 59,164 67,176 (8,012) (11.9)
Provision for investment securities 299 (95) 394 414.7
Total provision for credit losses $ 59,463 $ 67,081 $ (7,618) (11.4) %
Net loan charge-offs $ 43,863 $ 54,013 $ (10,150) (18.8) %
Net loan charge-offs (annualized) / total average loans and leases 0.17 % 0.21 %
The provision for credit losses on loans and leases was $59.2 million, compared to $67.2 million for the first nine months of 2025. The first nine months of 2026 included net charge-offs of $43.9 million, or 0.17% annualized of total average loans, compared to $54.0 million, or 0.21% annualized of total average loans, in the first nine months of 2025, reflecting continued strong credit quality performance. The ACL on loans and leases was $455.5 million, an increase of $18.2 million, driven by loan growth as the ratio of the ACL to total loans and leases remained stable at 1.25%.
Non-Interest Income
The breakdown of non-interest income for the nine months ended September 30, 2026 and 2025 is presented in the following table:
TABLE 16
Nine Months Ended
September 30, 		$ %
(dollars in thousands) 2026 2025 Change Change
Service charges $ 71,034 $ 68,476 $ 2,558 3.7 %
Interchange and card transaction fees 39,284 39,048 236 0.6
Trust services 37,556 35,638 1,918 5.4
Insurance commissions and fees 17,022 15,396 1,626 10.6
Securities commissions and fees 27,614 26,570 1,044 3.9
Capital markets income 21,238 20,095 1,143 5.7
Mortgage banking operations 17,233 22,482 (5,249) (23.3)
Dividends on non-marketable equity securities 20,467 17,838 2,629 14.7
Bank owned life insurance 14,109 13,396 713 5.3
Net securities gains (losses) 87 58 29 50.0
Other 14,891 17,954 (3,063) (17.1)
Total non-interest income $ 280,535 $ 276,951 $ 3,584 1.3 %
Total non-interest income increased $3.6 million, or 1.3%. The variances in significant individual non-interest income items are explained in the following paragraphs.
Service charges increased by $2.6 million driven by solid treasury management activity and higher consumer transaction volume.
Wealth management revenues increased $3.0 million, or 4.8%, as trust services income and securities commissions and fees increased 5.4% and 3.9%, respectively, through continued strong contributions across the geographic footprint.
Insurance commissions and fees increased $1.6 million, or 10.6%, primarily relating to new organic production activity in 2026.
Capital markets income increased $1.1 million, or 5.7%, reflecting solid contributions from debt capital markets, customer interest rate derivative revenue and international banking income.
Mortgage banking operations income decreased $5.2 million, or 23.3%, primarily driven by tighter gain-on-sale margins, net fair value adjustments from pipeline hedging activity and increased MSR amortization from elevated payoff activity.
Dividends on non-marketable equity securities increased $2.6 million, or 14.7%, primarily due to an increase in the average balance of short-term FHLB advances, combined with an increase in the FHLB dividend payment rate.
Other non-interest income was $14.9 million and $18.0 million for the first nine months of 2026 and 2025, respectively, with the decrease primarily due to a $5.4 million recovery in the third quarter of 2025 on an other asset that was previously written off as part of a 2017 acquisition.
Non-Interest Expense
The breakdown of non-interest expense for the nine months ended September 30, 2026 and 2025 is presented in the following table:
TABLE 17
Nine Months Ended
September 30, 		$ %
(dollars in thousands) 2026 2025 Change Change
Salaries and employee benefits $ 404,158 $ 396,552 $ 7,606 1.9 %
Net occupancy 64,092 58,218 5,874 10.1
Equipment 87,391 79,535 7,856 9.9
Outside services 84,731 77,691 7,040 9.1
Marketing 11,887 15,107 (3,220) (21.3)
FDIC insurance 24,405 23,756 649 2.7
Bank shares tax 13,462 12,055 1,407 11.7
Other 77,931 73,657 4,274 5.8
Total non-interest expense $ 768,057 $ 736,571 $ 31,486 4.3 %
Total non-interest expense for the first nine months of 2026 increased $31.5 million, a 4.3% increase from the same period of 2025. On an operating basis, non-interest expense (non-GAAP) increased $29.2 million, or 4.0%, when adjusting for a significant item of $(2.3) million in the first nine months of 2025. See Table 18 in this section for a list of the significant items impacting earnings. The variances in the individual non-interest expense items are further explained in the following paragraphs.
Salaries and employee benefits increased $7.6 million, or 1.9%, primarily reflecting normal annual merit increases and strategic hiring associated with our efforts to grow market share and support strategic technology initiatives.
Net occupancy and equipment expense increased $13.7 million, or 10.0%, primarily due to technology-related investments and higher occupancy costs.
Outside services expense increased $7.0 million, or 9.1%, driven by higher third-party legal and consulting costs.
Marketing expense decreased $3.2 million, or 21.3%, primarily due to the timing of certain marketing campaigns.
Bank shares tax expense increased $1.4 million, or 11.7%, resulting from growth in the capital base subject to the tax.
Other non-interest expense was $77.9 million and $73.7 million for the first nine months of 2026 and 2025, respectively, with the increase due to higher fraud losses and various litigation-related expenses.
The following table presents non-interest expense excluding a significant item impacting earnings:
TABLE 18
Nine Months Ended
September 30, 		$ %
(dollars in thousands) 2026 2025 Change Change
Total non-interest expense, as reported $ 768,057 $ 736,571 $ 31,486 4.3 %
Significant item:
FDIC special assessment - 2,272 (2,272)
Total non-interest expense, excluding significant item (1)
$ 768,057 $ 738,843 $ 29,214 4.0 %
(1) Non-GAAP
Income Taxes
The following table presents information regarding income tax expense and certain tax rates:
TABLE 19
Nine Months Ended
September 30,
(dollars in thousands) 2026 2025
Income tax expense $ 115,909 $ 106,918
Effective tax rate 20.9 % 21.2 %
Statutory federal tax rate 21.0 21.0
Income tax expense was higher for the nine months ended September 30, 2026, primarily due to higher pre-tax income, offset slightly by higher deduction levels from employee stock compensation vesting and the recognition of a deferred tax benefit related to a capital loss.
FINANCIAL CONDITION
The following table presents our condensed Consolidated Balance Sheets:
TABLE 20
(dollars in millions) September 30,
2026 		December 31,
2025 		$
Change 		%
Change
Assets
Cash and cash equivalents $ 2,526 $ 2,498 $ 28 1.1 %
Investment securities 8,151 7,844 307 3.9
Loans held for sale 237 515 (278) (54.0)
Loans and leases, net 36,081 34,338 1,743 5.1
Goodwill and other intangibles 2,507 2,516 (9) (0.4)
Other assets 2,551 2,518 33 1.3
Total Assets $ 52,053 $ 50,229 $ 1,824 3.6 %
Liabilities and Shareholders' Equity
Deposits $ 39,550 $ 38,759 $ 791 2.0 %
Borrowings 4,804 3,918 886 22.6
Other liabilities 886 793 93 11.7
Total Liabilities 45,240 43,470 1,770 4.1
Shareholders' Equity 6,813 6,759 54 0.8
Total Liabilities and Shareholders' Equity $ 52,053 $ 50,229 $ 1,824 3.6 %
Lending Activity
The loan and lease portfolio consists principally of loans and leases to individuals and small- and medium-sized businesses within our primary markets in seven states and the District of Columbia. Our market coverage spans several major metropolitan areas including: Pittsburgh, Pennsylvania; Baltimore, Maryland; Cleveland, Ohio; Washington, D.C.; Charlotte, Raleigh, Durham and the Piedmont Triad (Winston-Salem, Greensboro and High Point) in North Carolina; and Charleston, South Carolina. In December 2025, we transferred approximately $200 million of performing residential mortgage loans to held-for-sale in anticipation of a loan sale that closed in February 2026 as part of balance sheet management actions.
Following is a summary of loans and leases:
TABLE 21
(dollars in millions) September 30,
2026 		December 31,
2025 		$
Change 		%
Change
Commercial real estate $ 11,780 $ 12,274 $ (494) (4.0) %
Commercial and industrial 8,766 7,718 1,048 13.6
Commercial leases 799 791 8 1.0
Other 159 141 18 12.8
Total commercial loans and leases 21,504 20,924 580 2.8
Direct installment 2,654 2,678 (24) (0.9)
Residential mortgages 9,738 8,882 856 9.6
Indirect installment 964 767 197 25.7
Consumer lines of credit 1,677 1,526 151 9.9
Total consumer loans 15,033 13,853 1,180 8.5
Total loans and leases $ 36,537 $ 34,777 $ 1,760 5.1 %
Our commercial real estate portfolio included $8.0 billion of non-owner-occupied loans of which 17.0% represented office loans. The non-owner-occupied commercial real estate portfolio is diversified across property type and geographies with an average loan size of $1.5 million. Additionally, we have a continued focus on core commercial and industrial lending activity with traditional middle market customers with commercial and industrial loans increasing $1.0 billion, or 13.6%, compared to December 31, 2025. Our minimal non-depository financial institution (NDFI) balances at 1.6% of total loans is well below peer and industry median levels with the large majority of FNB's NDFI portfolio in the FNBPA Call Report's "Other Loans" category which supports firm's working capital and acquisition growth strategies, not lending activities. For consumer lending, residential mortgages increased $856.0 million, compared to December 31, 2025, largely due to the continued successful execution in key markets and long-standing strategy of serving the purchase market.
Non-Performing Assets
Following is a summary of non-performing assets:
TABLE 22
(dollars in millions) September 30,
2026 		December 31,
2025 		$
Change 		%
Change
Commercial real estate $ 62 $ 45 $ 17 37.8 %
Commercial and industrial 37 35 2 5.7
Commercial leases 1 3 (2) (66.7)
Other - 2 (2) (100.0)
Total commercial loans and leases 100 85 15 17.6
Direct installment 4 4 - -
Residential mortgages 11 12 (1) (8.3)
Indirect installment 1 1 - -
Consumer lines of credit 3 3 - -
Total consumer loans 19 20 (1) (5.0)
Total non-performing loans and leases 119 105 14 13.3
Other real estate owned 2 3 (1) (33.3)
Total non-performing assets $ 121 $ 108 $ 13 12.0 %
Non-performing assets increased $12.9 million, or 12.0%, from December 31, 2025, with the ratio of non-performing loans and OREO to total loans and leases and OREO increased 2 basis points to 0.33% and levels remaining at or near historically low levels.
Allowance for Credit Losses on Loans and Leases
The CECL model takes into consideration the expected credit losses over the life of the loan at the time the loan is originated. The model used to calculate the ACL is dependent on the portfolio composition and credit quality, as well as historical experience, current conditions and forecasts of economic conditions and interest rates. Specifically, the following considerations are incorporated into the ACL calculation:
•a third-party macroeconomic forecast scenario;
•a 24-month R&S forecast period for macroeconomic factors with a reversion to the historical mean on a straight-line basis over a 12-month period; and
•the historical through-the-cycle default mean calculated using an expanded period to include a prior recessionary period.
At September 30, 2026 and December 31, 2025, we utilized a third-party consensus macroeconomic forecast reflecting the current and projected macroeconomic environment. For our ACL calculation at September 30, 2026, the macroeconomic variables that we utilized included, but were not limited to: (i) the purchase only Housing Price Index, which increases 4.1% over our R&S forecast period, (ii) a CRE Price Index, which increases 1.1% over our R&S forecast period, (iii) S&P Volatility,
which increases 15.9% in 2026 and decreases 4.6% in 2027 and (iv) personal and business bankruptcies, which increase and decrease, respectively, over the R&S forecast period but average below the historical through-the-cycle period. Macroeconomic variables that we utilized for our ACL calculation as of December 31, 2025 included, but were not limited to: (i) the purchase only Housing Price Index, which increases 4.3% over our R&S forecast period, (ii) a CRE Price Index, which decreases 0.5% over our R&S forecast period, (iii) S&P Volatility, which decreases 2.2% in 2026 and 7.9% in 2027 and (iv) personal and business bankruptcies, which increase steadily over the R&S forecast period but average below the historical through-the-cycle period.
Following is a summary of certain data related to the ACL and loans and leases:
TABLE 23
Net Loan Charge-Offs Net Loan Charge-Offs to Average Loans ACL at
Nine Months Ended
September 30, 		Nine Months Ended
September 30, 		September 30,
(dollars in millions) 2026 2025 2026 2025 2026
Commercial real estate $ 17.3 $ 18.8 0.07 % 0.07 % $ 163.4
Commercial and industrial 16.6 25.6 0.06 0.10 119.6
Commercial leases 2.2 0.2 0.01 - 21.3
Other commercial 2.2 2.9 0.01 0.01 4.8
Direct installment 0.3 0.3 - - 25.2
Residential mortgages 2.0 2.0 0.01 0.01 103.2
Indirect installment 3.1 3.7 0.01 0.02 10.8
Consumer lines of credit 0.2 0.5 - - 7.2
Total net loan charge-offs on loans and leases, net loan charge-offs (annualized)/average loans $ 43.9 $ 54.0 0.17 % 0.21 % $ 455.5
Allowance for credit losses/total loans and leases 1.25 % 1.25 %
Allowance for credit losses/non-performing loans 382.11 % 349.93 %
The ACL on loans and leases of $455.5 million at September 30, 2026 increased $16.0 million, or 3.6%, from December 31, 2025, while our ending ACL coverage ratio declined 1 basis point to 1.25%. The ACL as a percentage of non-performing loans for the total portfolio increased to 382% as of September 30, 2026, compared to 350% as of September 30, 2025 and decreased from 418% as of December 31, 2025, with coverage levels remaining at historically high levels.
Total provision for credit losses for the nine months ended September 30, 2026 was $59.5 million, compared to $67.1 million for the same period in 2025. Annualized net charge-offs were 0.17% for the nine months ended September 30, 2026, compared to 0.21% for the first nine months of 2025.
Deposits
Our primary source of funds is deposits. Our diversified and granular deposit base is comprised of business, consumer and municipal customers who we serve within our footprint.
Following is a summary of deposits:
TABLE 24
(dollars in millions) September 30,
2026 		December 31,
2025 		$
Change 		%
Change
Non-interest-bearing demand $ 10,134 $ 9,914 $ 220 2.2 %
Interest-bearing demand 6,834 6,740 94 1.4
Money market 12,406 11,707 699 6.0
Savings 3,021 3,090 (69) (2.2)
Certificates and other time deposits 7,155 7,308 (153) (2.1)
Total deposits $ 39,550 $ 38,759 $ 791 2.0 %
The mix of non-interest-bearing demand deposits to total deposits was stable at 26% at both September 30, 2026 and December 31, 2025. We ended the quarter with approximately 76% of all deposits insured by the FDIC or collateralized.
Capital Resources and Regulatory Matters
Our capital position depends in part on the access to, and cost of, funding for new business initiatives, the ability to engage in expanded business activities, the ability to pay dividends and the level and nature of regulatory oversight.
The assessment of capital adequacy depends on a number of factors such as expected organic growth in the Consolidated Balance Sheet, asset quality, liquidity, earnings performance and sustainability, changing competitive conditions, regulatory changes or actions, and economic forces. We seek to maintain a strong capital base to support our growth and expansion activities, to provide stability to current operations and to promote public confidence.
Pursuant to and in compliance with applicable SEC laws, rules and regulations, we may, from time to time, issue and sell in one or more offerings any combination of common stock, preferred stock, debt securities, depositary shares, warrants, stock purchase contracts or units.
During the third quarter of 2026, we repurchased $50.9 million, or 2.7 million shares, of common stock at a weighted average share price of $18.69, as we focused on optimizing capital deployment with our strong internal capital generation. In April 2026, we announced that our Board of Directors authorized a new share repurchase program with total remaining repurchase capacity of approximately $202 million at September 30, 2026. The repurchases will be made from time to time on the open market at prevailing market prices or in privately negotiated transactions. The purchases will be funded from available working capital. There is no guarantee as to the exact number of shares that will be repurchased and we may discontinue purchases at any time.
Capital management is a continuous process, with capital plans and stress testing for FNB and FNBPA updated at least annually. These capital plans include assessing the adequacy of expected capital levels assuming various scenarios by projecting capital needs for a forecast period of two to three years beyond the current year. From time to time, we issue shares initially acquired by us as treasury stock under our various benefit plans. We may issue additional preferred or common stock to maintain our well-capitalized status.
FNB and FNBPA are subject to various regulatory capital requirements administered by the federal banking agencies. Quantitative measures established by regulators to ensure capital adequacy require FNB and FNBPA to maintain minimum amounts and ratios of total, tier 1 and CET1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of leverage ratio (as defined). Failure to meet minimum capital requirements could lead to initiation of certain mandatory, and possibly additional discretionary actions, by regulators that, if undertaken, could have a direct material effect on our Consolidated Financial Statements, dividends and future business and corporate strategies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, FNB and FNBPA must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting
practices. FNB's and FNBPA's capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
At September 30, 2026, the capital levels of both FNB and FNBPA exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered "well-capitalized" for regulatory purposes.
In this volatile economic and uncertain environment, we frequently run stress tests for a variety of economic situations, including severely adverse scenarios. Under these scenarios, the results of these stress tests indicate that our regulatory capital ratios would remain above the regulatory requirements and we would be able to maintain appropriate liquidity levels, demonstrating our expected ability to continue to support our customers and communities under stressful financial conditions.
Following are the capital amounts and related ratios for FNB and FNBPA:
TABLE 25
Actual
Well-Capitalized
Requirements (1)
Minimum Capital
Requirements plus Capital Conservation Buffer
(dollars in millions) Amount Ratio Amount Ratio Amount Ratio
As of September 30, 2026
F.N.B. Corporation
Total capital $ 5,108 12.79 % $ 3,995 10.00 % $ 4,194 10.50 %
Tier 1 capital 4,503 11.27 2,397 6.00 3,395 8.50
CET1 4,503 11.27 n/a n/a 2,796 7.00
Leverage 4,503 9.25 n/a n/a 1,948 4.00
Risk-weighted assets 39,947
FNBPA
Total capital $ 5,342 13.45 % $ 3,971 10.00 % $ 4,169 10.50 %
Tier 1 capital 4,549 11.46 3,177 8.00 3,375 8.50
CET1 4,469 11.25 2,581 6.50 2,780 7.00
Leverage 4,549 9.39 2,422 5.00 1,938 4.00
Risk-weighted assets 39,708
As of December 31, 2025
F.N.B. Corporation
Total capital $ 4,971 13.08 % $ 3,799 10.00 % $ 3,989 10.50 %
Tier 1 capital 4,317 11.36 2,279 6.00 3,229 8.50
CET1 4,317 11.36 n/a n/a 2,659 7.00
Leverage 4,317 9.11 n/a n/a 1,896 4.00
Risk-weighted assets 37,991
FNBPA
Total capital $ 5,188 13.75 % $ 3,774 10.00 % $ 3,963 10.50 %
Tier 1 capital 4,371 11.58 3,019 8.00 3,208 8.50
CET1 4,291 11.37 2,453 6.50 2,642 7.00
Leverage 4,371 9.27 2,357 5.00 1,885 4.00
Risk-weighted assets 37,743
(1) Reflects the well-capitalized standard under Regulation Y for F.N.B. Corporation and the prompt corrective action framework for FNBPA.
In accordance with Basel III Capital Rules, the minimum capital requirements plus capital conservation buffer, which are presented for each period above, represent the minimum requirements needed to avoid limitations on distributions of dividends and certain discretionary bonus payments.
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act)
The Dodd-Frank Act broadly affects the financial services industry by establishing a framework for systemic risk oversight, creating a resolution authority for institutions determined to be systemically important, mandating higher capital and liquidity requirements, requiring banks to pay increased fees to regulatory agencies and containing numerous other provisions aimed at strengthening the sound operation of the financial services sector that significantly change the system of regulatory oversight as described in more detail under Part I, Item 1, "Business - Government Supervision and Regulation" included in our 2025 Annual Report on Form 10-K as filed with the SEC on February 24, 2026.
LIQUIDITY
Our primary liquidity management goal is to satisfy the cash flow requirements of customers and the operating cash needs of FNB with cost-effective funding. Our Board of Directors has established an Asset/Liability Management Policy to guide management in achieving and maintaining earnings performance consistent with long-term goals, while maintaining acceptable levels of interest rate risk, a "well-capitalized" Balance Sheet and appropriate levels of liquidity. Our Board of Directors has also established Liquidity and Contingency Funding Policies to guide management in addressing the ability to identify, measure, monitor and control both normal and stressed liquidity conditions. These policies designate our ALCO as the body responsible for meeting these objectives. The ALCO, which is comprised of members of executive management, reviews liquidity on a continuous basis and approves significant changes in strategies that affect Balance Sheet or cash flow positions. Liquidity is centrally managed daily by our Treasury Department.
Parent Company Liquidity
The parent company's funding requirements primarily consist of shareholder dividends, debt service, income taxes, operating expenses, funding of non-bank subsidiaries, and stock repurchases. The parent company's funding sources primarily consist of dividends and interest received from FNBPA and other direct subsidiaries, net taxes collected from subsidiaries included in the consolidated tax returns, fees for services provided to subsidiaries and the issuance of debt instruments. The dividends received from FNBPA and other direct subsidiaries may be impacted by the parent's or its subsidiaries' capital and liquidity needs, statutory laws and regulations, corporate policies, contractual restrictions, profitability and other factors. In addition, through one of our subsidiaries, we regularly issue subordinated notes, which are guaranteed by FNB.
Management utilizes various strategies to ensure sufficient cash on hand is available to meet the parent company's funding needs. Significant funding sources for the parent company include dividends from subsidiaries, other operating income and access to the capital markets. During the third quarter of 2026, FNBPA paid dividends to the parent of $125 million, an increase of $30 million when compared to the second quarter of 2026, and well within the regulatory capacity to pay dividends to FNB. The Board of Directors regularly assesses and approves appropriate levels of dividends from subsidiaries. In April 2026, we announced that our Board of Directors authorized a new share repurchase program. During the third quarter of 2026, we repurchased $50.9 million, or 2.7 million shares, of FNB stock at an average cost of $18.69. Total remaining repurchase capacity as of September 30, 2026 was approximately $202 million. The parent company's cash position at September 30, 2026 was $292.2 million, an increase of $3.9 million from December 31, 2025. Beginning in the second quarter of 2026, we increased the quarterly common stock cash dividend to $0.13. We have historically been opportunistic when accessing the capital markets, and we expect to continue with that strategy.
Two metrics that are used to gauge the adequacy of the parent company's cash position are the Liquidity Coverage Ratio (LCR) and Months of Cash on Hand (MCH). The LCR is defined as the sum of cash on hand plus projected cash inflows over the next 12 months divided by projected cash outflows over the next 12 months. The MCH is defined as the number of months of corporate expenses and dividends that can be covered by the existing cash on hand. The LCR and MCH ratios and Parent company cash on hand are presented in the following table:
TABLE 26
September 30,
2026 		December 31,
2025 		Internal
Limit
Liquidity coverage ratio 3.1 times 2.3 times > 1 time
Months of cash on hand 12.9 months 14.0 months > 12 months
Parent company cash on hand (millions) $ 292.2 $ 288.3 n/a
The LCR at September 30, 2026 increased primarily due to the timing of stock repurchases and dividends from the bank subsidiary. Similarly, the MCH ratio is impacted by the timing of dividends and stock repurchases. In the remaining months of 2026, there are no scheduled debt maturities, a positive for the ratio. Management has concluded that our cash levels remain appropriate to meet future obligations given the current market environment.
Bank Liquidity
Bank-level liquidity sources from assets include payments from loans and investments, as well as the ability to securitize, pledge or sell loans, investment securities and other assets. Liquidity sources from liabilities are generated primarily through the banking offices of FNBPA in the form of deposits and customer repurchase agreements. FNBPA also has access to reliable and cost-effective wholesale sources of liquidity. Short- and long-term funds are available for use to help fund normal business operations, and unused credit availability can be utilized to serve as contingency funding if faced with a liquidity crisis.
Over time, our liquidity position has been positively impacted by FNBPA's ability to generate growth in relationship-based deposit accounts. Organic growth in low-cost transaction deposits has been complemented by management's continued strategy of deposit gathering efforts focused on attracting new customer relationships across our geographic footprint and deepening relationships with existing customers, in part through internal lead generation efforts leveraging our data analytics capabilities. Total average deposits for the quarter ended September 30, 2026 increased $174.6 million compared to total average deposits for the quarter ended December 31, 2025, with average interest-bearing deposits increasing $154.0 million and average non-interest-bearing demand deposits increasing $20.6 million. The mix of non-interest-bearing demand deposits to total deposits remained stable with both the prior quarter and December 31, 2025 at 26%. Our loan to deposit ratio stood at 92.4% at September 30, 2026, compared to 89.7% at December 31, 2025.
The following table presents certain information relating to FNBPA's credit availability and salable unpledged investment securities:
TABLE 27
(dollars in millions) September 30,
2026 		December 31,
2025
Unused wholesale credit availability $ 18,256 $ 18,345
Unused wholesale credit availability as a % of FNBPA assets 35.3 % 36.7 %
Salable unpledged government and agency securities $ 1,400 $ 1,183
Cash and salable unpledged government and agency securities as a % of FNBPA assets 6.7 % 6.5 %
Uninsured Deposit Coverage Ratio 135.2 % 139.1 %
Our bank-level liquidity position remains strong. Our cash balances held at the FRB were $2.1 billion at both September 30, 2026 and December 31, 2025. A portion of our available borrowing capacity includes capacity at the FRB's Discount Window. Through various actions, including optimizing collateral between FHLB and FRB and pledging additional loans to the FRB, management has increased availability from this source by $0.2 billion to $3.6 billion since December 31, 2025. We have no borrowings under this facility. Additional sources of unused wholesale credit availability for FNBPA include the ability to borrow from the FHLB, correspondent bank lines, and access to other funding channels. In addition to credit availability, FNBPA also has excess cash and salable unpledged government and agency securities that could be utilized to meet funding needs. At September 30, 2026, FNBPA has $3.4 billion of cash and salable unpledged government and agency securities representing 6.7% of total assets, compared to $3.3 billion and 6.5%, respectively, at December 31, 2025. This compares to a policy minimum of 3.0%. The Uninsured Deposit Coverage Ratio is designed to determine the amount of funding sources available to cover uninsured deposit outflows. At September 30, 2026, approximately 76% of our deposits were insured by the FDIC or collateralized, consistent with December 31, 2025 levels.
Our contingency funding policy and periodic liquidity stress testing of multiple stress scenarios is particularly valuable as we actively manage our liquidity. Management will continue to evaluate appropriate levels of liquidity based on expected loan and deposit growth, other balance sheet activity and the current market environment.
Another metric for measuring liquidity risk is the liquidity gap analysis. The following liquidity gap analysis as of September 30, 2026 compares the difference between our cash flows from existing earning assets and interest-bearing liabilities over future time intervals. Management calculates this ratio at least quarterly and it is reviewed regularly by ALCO. Management monitors the size of the liquidity gaps so that sources and uses of funds are reasonably matched in the normal course of business and in relation to implied forward rate expectations. A reasonably matched position lays a strong foundation for managing future loan and deposit growth while providing flexibility to manage future interest rate exposures. A positive gap position means that more assets are expected to mature over the next 12 months than liabilities. The allocation of non-maturity deposits and customer repurchase agreements to the twelve-month categories is based on the estimated lives of each product.
TABLE 28
(dollars in millions) Within
1 Month 		2-3
Months 		4-6
Months 		7-12
Months 		Total
1 Year
Assets
Loans $ 1,479 $ 1,556 $ 2,044 $ 3,402 $ 8,481
Investments 2,224 164 280 534 3,202
3,703 1,720 2,324 3,936 11,683
Liabilities
Non-maturity deposits 349 697 1,046 2,093 4,185
Time deposits 889 1,761 1,505 2,211 6,366
Borrowings 2,372 410 315 339 3,436
3,610 2,868 2,866 4,643 13,987
Period Gap (Assets - Liabilities) $ 93 $ (1,148) $ (542) $ (707) $ (2,304)
Cumulative Gap $ 93 $ (1,055) $ (1,597) $ (2,304)
Cumulative Gap to Total Assets 0.2 % (2.0) % (3.1) % (4.4) %
The twelve-month cumulative gap to total assets ratio was (4.4)% as of September 30, 2026, compared to (2.2)% as of December 31, 2025. The change in the twelve-month cumulative gap to total assets was primarily related to lower prepayment estimates, decreased investment securities maturities, decreased loans held for sale and increased short-term borrowings. ALCO regularly monitors various liquidity ratios, stress scenarios of our liquidity position and assumptions considering market disruptions, lending demand, deposit behavior, and funding availability. The stress scenarios forecast that adequate funding will be available even under severe conditions. Management believes we have sufficient liquidity available to meet our normal operating and contingency funding cash needs for the next twelve months and for the foreseeable future.
MARKET RISK
Market risk refers to potential losses arising predominantly from changes in interest rates, foreign exchange rates, equity prices and commodity prices. Interest rate risk is comprised of repricing risk, basis risk, yield curve risk and options risk. We are primarily exposed to interest rate risk inherent in our lending and deposit-taking activities as a financial intermediary. To succeed in this capacity, we offer an extensive variety of financial products to meet the diverse needs of our customers. These products sometimes contribute to interest rate risk for us when product groups possess different cash flow characteristics. For example, depositors may want short-term deposits, while borrowers may desire long-term loans.
Changes in market interest rates may result in changes in the fair value of our financial instruments, cash flows and net interest income. Subject to its ongoing oversight, the Board of Directors has given ALCO the responsibility for market risk management, which involves devising policy guidelines, risk measures and limits, and managing the amount of interest rate risk and its effect on net interest income and capital. We use derivative financial instruments, among other strategies, for interest rate risk management purposes.
We use an asset/liability model to measure our interest rate risk. Interest rate risk measures we utilize include earnings simulation, EVE and gap analysis. Gap analysis and EVE are static measures that do not incorporate assumptions regarding future business. Gap analysis, while a helpful diagnostic tool, displays cash flows for only a single rate environment. EVE's long-term horizon helps identify changes in optionality and longer-term positions. However, EVE's liquidation perspective does not translate into the earnings-based measures that are the focus of managing and valuing a going concern. Net interest income simulations explicitly measure the exposure to earnings from changes in market rates of interest. In these simulations, our current financial position is combined with assumptions regarding future business activities to calculate net interest income
under various hypothetical rate scenarios. The ALCO regularly reviews earnings simulations over multiple years under various interest rate scenarios. Reviewing these various measures provides us with a comprehensive view of our interest rate risk profile, which provides the basis for balance sheet management strategies.
The following repricing gap analysis as of September 30, 2026 compares the difference between the amount of interest-earning assets and interest-bearing liabilities subject to repricing. The allocation of non-maturity deposits and customer repurchase agreements to the one-month maturity category below is based on the estimated sensitivity of each product to changes in market rates. For example, if a product's rate is estimated to increase by 50% as much as the market rates, then 50% of the account balance was placed in this category.
TABLE 29
(dollars in millions) Within
1 Month 		2-3
Months 		4-6
Months 		7-12
Months 		Total
1 Year
Assets
Loans $ 16,309 $ 1,247 $ 865 $ 1,644 $ 20,065
Investments 2,255 217 333 633 3,438
18,564 1,464 1,198 2,277 23,503
Liabilities
Non-maturity deposits 11,890 - - - 11,890
Time deposits 976 1,760 1,503 2,207 6,446
Borrowings 2,026 725 209 325 3,285
14,892 2,485 1,712 2,532 21,621
Off-balance sheet (1,750) - 250 250 (1,250)
Period Gap (Assets - Liabilities + Off-balance sheet) $ 1,922 $ (1,021) $ (264) $ (5) $ 632
Cumulative Gap $ 1,922 $ 901 $ 637 $ 632
Cumulative Gap to Earning Assets 4.1 % 1.9 % 1.4 % 1.3 %
Management utilizes the repricing gap analysis as a diagnostic tool in managing net interest income and EVE risk measures. Repricing gap analysis, while useful, has some limitations in measuring interest rate risk. The positive cumulative gap positions indicate that we have a greater amount of repricing earning assets than repricing interest-bearing liabilities over the subsequent twelve months, resulting in our slightly asset sensitive position. As a result of management's strategies to organically reduce its asset sensitive position, the twelve-month cumulative repricing gap to total assets was 1.3% as of September 30, 2026, down from 3.2% at December 31, 2025. Management's intention is to maintain a slightly asset sensitive position given the current market environment. Specific actions during the third quarter of 2026 included lengthening the average term of newly originated time deposits, increasing the percent of variable and adjustable rate loans and executing an interest rate derivative. These actions provide flexibility as we continue to evaluate our current IRR position and the potential for rising interest rates.
In addition to the repricing gap analysis above, we model rate scenarios which move all rates gradually over twelve months (Rate Ramps). We also model rate scenarios which move all rates in an immediate and parallel fashion (Rate Shocks) and model scenarios that gradually change the shape of the yield curve. Using a static Balance Sheet structure and utilizing net interest income simulations, the following table presents an analysis of the potential sensitivity of our net interest income to changes in interest rates using Rate Ramps and Rate Shocks and the sensitivity of EVE using Rate Shocks. The variance percentages represent the change between the net interest income and EVE calculated under the particular rate scenario compared to the net interest income and EVE that was calculated assuming market rates as of September 30, 2026. The calculated results do not reflect management's potential actions.
TABLE 30
September 30,
2026 		December 31,
2025 		ALCO
Limits
Net interest income change over 12 months (Rate Ramps):
+ 200 basis points 1.2 % 1.6 % (10.0) %
+ 100 basis points 0.6 0.8 (10.0)
- 100 basis points (0.7) (0.9) (10.0)
- 200 basis points (1.6) (1.9) (10.0)
Net interest income change over 12 months (Rate Shocks):
+ 200 basis points 1.9 2.5 (10.0)
+ 100 basis points 1.0 1.4 (10.0)
- 100 basis points (1.3) (1.8) (10.0)
- 200 basis points (3.1) (4.2) (10.0)
Economic value of equity (Rate Shocks):
+ 300 basis points 2.2 5.6 (25.0)
+ 200 basis points 1.8 4.2 (15.0)
+ 100 basis points 1.1 2.7 (10.0)
- 100 basis points (2.1) (3.9) (10.0)
- 200 basis points (5.3) (9.5) (15.0)
There are multiple factors that influence our interest rate risk position and impact on net interest income, including external factors such as the shape of the yield curve, the competitive landscape and expectations regarding future interest rates, as well as internal factors regarding product offerings, product mix and pricing and re-pricing of loans and deposits. Our current interest rate risk position is slightly asset sensitive. A key driver of this position resulted from the origination of consumer and commercial loans with short-term repricing characteristics, some of which have been swapped to a fixed rate. Total variable and adjustable-rate loans were 63.5% of total net loans and leases at September 30, 2026 and 63.4% at December 31, 2025. Forty-six percent of our net loans and leases reprice within the next three months and are indexed to short-term SOFR, Prime and other indices. Furthermore, we regularly sell long-term fixed-rate residential mortgages in the secondary market.
Management continues to be proactive in managing our IRR position with the intention to maintain exposures around the current near neutral levels. During the first nine months of 2026, management adjusted the IRR position by purchasing investment securities with an average duration of 4.5 years, originating adjustable-rate mortgage loans with longer-duration fixed-rate reset periods, originating commercial adjustable rate loans with shorter term reset periods, lengthening the average maturity of our time deposit portfolio by almost two months and maintaining borrowings with variable rates and varying maturities. As a result, the net interest income percentage change over 12 months shown above in both the up and down rate ramp scenarios remains consistent with management's intention to maintain a slightly asset sensitive position.
We also utilize derivatives to manage the IRR position. These positions are used to protect the fair value of assets and liabilities by converting the contractual interest rate on a specified amount (i.e., notional amounts) to another interest rate index or to hedge the variability in cash flows attributable to the contractually specified interest rate by converting the variable rate index into a fixed rate. The volume, maturity and mix of derivative positions change periodically as we adjust our broader interest rate risk management objectives, and the balance sheet positions to be hedged. At September 30, 2026 the notional balance of these cash flow hedges totaled $1.75 billion, an increase of $300 million compared to December 31, 2025.
Derivative financial instruments are also offered to enable commercial customers to meet their financing and investing objectives and for their risk management purposes. We typically enter into offsetting third-party contracts with reputable counterparties with substantially matching terms to economically hedge the exposure related to these derivatives. At September 30, 2026, the commercial customer-related interest rate derivatives totaled $5.9 billion (notional), down from $6.1 billion (notional) at December 31, 2025. For additional information regarding interest rate derivatives, see Note 11, "Derivative Instruments and Hedging Activities" in the Notes to Consolidated Financial Statements in this Report.
We recognize that all asset/liability models have some inherent shortcomings. Asset/liability models require certain assumptions to be made, such as prepayment rates on interest-earning assets and repricing impact on non-maturity deposits,
which may differ from actual experience. These business assumptions are based upon our experience, business plans, economic and market trends and available industry data. While management believes that its methodology for developing such assumptions is reasonable, there can be no assurance that modeled results will be achieved. Furthermore, the metrics are based upon the static Balance Sheet structure as of the valuation date and do not reflect planned growth or management actions that could be taken.
CREDIT RATINGS
Credit ratings are subject to ongoing review by rating agencies, which consider a number of factors, including our financial strength, performance, prospects and operations as well as other factors not under our control. Other factors that influence our credit ratings include changes to the rating agencies' methodologies for our industry or certain security types; the rating agencies' assessment of the general operating environment for financial services companies; our relative positions in the markets in which we compete; our various risk exposures, our strong credit risk management and other risk management policies and activities; pending litigation and other contingencies; our reputation; our liquidity position, diversity of funding sources and funding costs; the current and expected level and volatility of our earnings; our capital position and capital management practices; our corporate governance; current or future regulatory and legislative initiatives; and the agencies' views on whether the U.S. government would provide meaningful support to us or our subsidiaries in a crisis. Our credit ratings affect the cost and availability of short- and long-term funding and collateral requirements for certain derivative instruments. Credit rating downgrades or negative watch warnings could negatively impact our reputation with lenders, investors and other third parties, which could also impair our ability to compete in certain markets or engage in certain transactions.
FNB and FNBPA are rated investment grade by three of the Nationally Recognized Statistical Rating Organizations. The following table presents the credit ratings for FNB and FNBPA as of September 30, 2026:
TABLE 31
Moody's Standard & Poor's Kroll
F.N.B. Corporation
Issuer credit rating Baa2 BBB- A-
Senior debt Baa2 BBB- A-
Subordinated debt Baa2 n/a BBB+
First National Bank of Pennsylvania
Baseline credit assessment Baa1 n/a n/a
Issuer credit rating Baa1 BBB A
Senior debt n/a n/a A
Subordinated debt n/a n/a A-
Bank deposits A2/P-1 n/a A
Short-term borrowings n/a A-2 K1
Outlook for F.N.B. Corporation and First National Bank of Pennsylvania Stable Stable Stable
n/a - not applicable
RISK MANAGEMENT
As a financial institution, we take on a certain amount of risk in every business decision, transaction and activity. Accordingly, we have designed an ERM Framework in accordance with applicable regulatory guidelines which includes risk management practices designed to identify, assess, monitor and report the material risks known throughout the organization in pursuit of our business strategies. Our Board of Directors and senior management have identified six major categories of risk: credit risk, market risk, liquidity risk, operational risk, compliance risk and strategic risk. Reputation risk is considered across all six major risk categories as a consequential risk. In its oversight role of our risk management function, the Board of Directors focuses on the strategies, analyses and conclusions of management relating to identifying, understanding and managing risks to optimize total shareholder value, while balancing prudent business and safety and soundness considerations to safeguard our reputation.
We support our risk management processes and business oversight through a three-line model and a governance structure at the Board of Directors and management levels.
The three-line model consists of:
•First Line - consists of our businesses and enterprise support areas that engage in risk-taking activities and are principally responsible for owning and managing the day-to-day operational activities in accordance with the risk frameworks.
•Second Line - consists of the Risk Management and Compliance Departments responsible for developing risk frameworks and identifying, assessing, overseeing and controlling enterprise aggregate risks independent from the First Line.
•Third Line - consists of the Internal Audit Department, responsible for developing and executing a risk-based audit plan to provide assurance on the compliance and effectiveness of controls and risk management practices throughout the organization independent from the First and Second Lines.
Our Board of Directors is responsible for the oversight of management on behalf of our shareholders. The Board of Directors has assistance in carrying out its duties and may delegate authority through the following standing Board Committees which are also more fully described in our 2026 proxy statement:
•Audit Committee - provides oversight of our internal and external audit processes. In addition, monitors the integrity of the Consolidated Financial Statements, internal controls over financial reporting, qualifications and independence of our audit function.
•Nominating and Corporate Governance Committee - responsible for oversight of our governance policies and practices, shareholder engagement and selecting and recommending nominees for election to the FNB and FNBPA Boards of Directors.
•Compensation Committee - reviews and approves compensation and incentive compensation performance metrics of our SEC Section 16 reporting officers, and reviews and implements compensation and benefit matters having corporate-wide significance.
•Executive Committee - joint session of the FNB and FNBPA Board of Directors to cover special matters, as deemed necessary, in between regularly scheduled board meetings.
•Risk Committee - provides oversight and approves the ERM Framework including the review and approval of risk appetite and tolerances and risk management policies and practices to identify, assess, monitor and report material risks.
•Credit Risk, Fair Lending and Community Reinvestment Act (CRA) Committee - responsible for providing oversight of credit and lending risk management strategies and objectives of FNB and FNBPA, providing oversight of FNBPA's CRA program, policy and practices, and performing reviews of fair lending strategies, analysis and results to assist with its credit oversight responsibilities.
The Board Risk Committee serves as the primary point of contact between our Board of Directors and the Risk Management Council (RMC), which is the senior management level committee responsible for identifying, assessing, monitoring and reporting on material enterprise-wide risks. The Risk Committee and RMC are supported by other risk management
committees, including Credit Risk Committees, the Operational Risk Committee, the Compliance Risk Committee and the ALCO.
Risk appetite is an integral element of our ERM Framework and of our business and capital planning processes through our Board Risk Committee and RMC. We use our risk appetite processes to promote appropriate alignment of risk, capital and performance tactics, while also considering risk appetite constraints from both financial and non-financial perspectives. The Board of Directors adopted an enterprise risk appetite that defines acceptable risk limits under which we seek to operate in pursuit of optimizing returns. As such, we monitor a series of Key Risk Indicators for various business lines and operations units to measure performance alignment with our stated risk appetite. Our top-down risk appetite process serves as a mitigant for undue risk-taking for bottom-up planning from our various business functions. Our Board Risk Committee, in collaboration with our RMC, approves our risk appetite on an annual basis, or more frequently, as needed to reflect changes in the risk, regulatory, economic and strategic plan environments, with the goal of ensuring that our strategic plans and business operations remain consistent with our risk appetite given the current economic and regulatory environments, as well as shareholders' expectations.
Our ERM Framework provides the standards by which we will identify, assess, control, monitor and report on material risks across the organization. Reports relating to our risk appetite and strategic plans, and our ongoing monitoring thereof, and our aggregate risk profile, are regularly presented to our various management level risk oversight committees and reported up through our Board Risk Committee.
We continue to assess our risk management practices on an ongoing basis and are making investments as necessary to position ourselves for continued growth through sound risk management practices.
The Board of Directors believes that our enterprise-wide risk management process is effective and enables the Board of Directors to:
•assess the quality of the information they receive;
•understand our businesses and investments and risk-related financial, accounting, legal, regulatory and strategic considerations necessary to assess the material risks that FNB faces;
•oversee and assess how senior management evaluates material risk; and
•assess appropriately the effectiveness of our enterprise-wide risk management processes.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE INDICATORS TO GAAP
Reconciliations of non-GAAP financial measures and key performance indicators discussed in this Report to the most directly comparable GAAP financial measures are included in the following tables.
TABLE 32
Operating net income available to common shareholders
Three Months Ended
September 30, 		Nine Months Ended
September 30,
(in thousands) 2026 2025 2026 2025
Net income available to common shareholders $ 152,862 $ 149,509 $ 438,629 $ 396,694
FDIC special assessment - (2,272) - (2,272)
Tax expense (benefit) of FDIC special assessment - 477 - 477
Operating net income available to common shareholders (non-GAAP) $ 152,862 $ 147,714 $ 438,629 $ 394,899
The table above shows how operating net income available to common shareholders (non-GAAP) is derived from amounts reported in our financial statements. We believe certain charges, such as the item presented above are not organic costs to run our operations and facilities. These costs are specific to each individual transaction, and may vary significantly based on the size and complexity of the transaction.
TABLE 33
Operating earnings per diluted common share
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2026 2025 2026 2025
Earnings per diluted common share $ 0.43 $ 0.41 $ 1.23 $ 1.09
FDIC special assessment - (0.01) - (0.01)
Tax expense (benefit) of FDIC special assessment - - - -
Operating earnings per diluted common share (non-GAAP) $ 0.43 $ 0.41 $ 1.23 $ 1.09
TABLE 34
Return on average tangible common equity
Three Months Ended
September 30, 		Nine Months Ended
September 30,
(dollars in thousands) 2026 2025 2026 2025
Net income available to common shareholders (annualized) $ 606,465 $ 593,162 $ 586,445 $ 530,379
Amortization of intangibles, net of tax (annualized) 9,552 12,507 10,012 12,578
Tangible net income available to common shareholders (annualized) (non-GAAP) $ 616,017 $ 605,669 $ 596,457 $ 542,957
Average total shareholders' equity $ 6,861,885 $ 6,576,625 $ 6,830,146 $ 6,476,712
Less: Average intangible assets (1)
(2,508,078) (2,522,022) (2,511,147) (2,524,978)
Average tangible common equity (non-GAAP) $ 4,353,807 $ 4,054,603 $ 4,318,999 $ 3,951,734
Return on average tangible common equity (non-GAAP) 14.15 % 14.94 % 13.81 % 13.74 %
(1) Excludes loan servicing rights.
TABLE 35
Return on average tangible assets
Three Months Ended
September 30, 		Nine Months Ended
September 30,
(dollars in thousands) 2026 2025 2026 2025
Net income (annualized) $ 606,465 $ 593,162 $ 586,445 $ 530,379
Amortization of intangibles, net of tax (annualized) 9,552 12,507 10,012 12,578
Tangible net income (annualized) (non-GAAP) $ 616,017 $ 605,669 $ 596,457 $ 542,957
Average total assets $ 50,978,084 $ 49,518,845 $ 50,445,787 $ 49,039,357
Less: Average intangible assets (1)
(2,508,078) (2,522,022) (2,511,147) (2,524,978)
Average tangible assets (non-GAAP) $ 48,470,006 $ 46,996,823 $ 47,934,640 $ 46,514,379
Return on average tangible assets (non-GAAP) 1.27 % 1.29 % 1.24 % 1.17 %
(1) Excludes loan servicing rights.
TABLE 36
Tangible book value per common share
(dollars in thousands, except per share data) September 30, 2026 September 30, 2025
Total shareholders' equity $ 6,813,263 $ 6,635,620
Less: Intangible assets (1)
(2,506,602) (2,520,013)
Tangible common equity (non-GAAP) $ 4,306,661 $ 4,115,607
Common shares outstanding 350,838,483 358,381,940
Tangible book value per common share (non-GAAP) $ 12.28 $ 11.48
(1) Excludes loan servicing rights.
TABLE 37
Tangible common equity to tangible assets
(dollars in thousands) September 30, 2026 September 30, 2025
Total shareholders' equity $ 6,813,263 $ 6,635,620
Less: Intangible assets (1)
(2,506,602) (2,520,013)
Tangible common equity (non-GAAP) $ 4,306,661 $ 4,115,607
Total assets $ 52,053,325 $ 49,888,522
Less: Intangible assets (1)
(2,506,602) (2,520,013)
Tangible assets (non-GAAP) $ 49,546,723 $ 47,368,509
Tangible common equity to tangible assets (non-GAAP) 8.69 % 8.69 %
(1) Excludes loan servicing rights.
TABLE 38
Pre-provision net revenue
Three Months Ended
(in thousands) September 30, 2026 June 30, 2026 September 30, 2025
Net interest income $ 376,522 $ 365,723 $ 359,272
Non-interest income 92,599 96,951 98,170
Less: Non-interest expense (256,943) (253,249) (243,535)
Pre-provision net revenue (reported) (non-GAAP) $ 212,178 $ 209,425 $ 213,907
Pre-provision net revenue (reported) (annualized) (non-GAAP) $ 841,792 $ 840,000 $ 848,651
Adjustments:
Add (Less): FDIC special assessment (non-interest expense) $ - $ - $ (2,272)
Operating pre-provision net revenue (non-GAAP) $ 212,178 $ 209,425 $ 211,635
Operating pre-provision net revenue (annualized) (non-GAAP) $ 841,792 $ 840,000 $ 839,637
TABLE 39
Efficiency ratio
Three Months Ended
September 30, 		Nine Months Ended
September 30,
(dollars in thousands) 2026 2025 2026 2025
Non-interest expense $ 256,943 $ 243,535 $ 768,057 $ 736,571
Less: Amortization of intangibles (3,048) (3,991) (9,479) (11,909)
Less: OREO expense (251) (578) (634) (1,209)
Add (Less): FDIC special assessment - 2,272 - 2,272
Adjusted non-interest expense $ 253,644 $ 241,238 $ 757,944 $ 725,725
Net interest income $ 376,522 $ 359,272 $ 1,101,523 $ 1,030,313
Taxable equivalent adjustment 3,149 3,149 9,418 9,159
Non-interest income 92,599 98,170 280,535 276,951
Less: Net securities (gains) losses (58) - (87) (58)
Adjusted net interest income (FTE) + non-interest income $ 472,212 $ 460,591 $ 1,391,389 $ 1,316,365
Efficiency ratio (FTE) (non-GAAP) 53.71 % 52.38 % 54.47 % 55.13 %
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