FNB Corporation

11/05/2025 | Press release | Distributed by Public on 11/05/2025 12:47

Quarterly Report for Quarter Ending September 30, 2025 (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, 2025 and 2024. This MD&A should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained herein and our 2024 Annual Report on Form 10-Kfiled with the SEC on February 27, 2025. Our results of operations for the nine months ended September 30, 2025 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;
•changes in market interest rates, the U.S. federal government shutdown and the unpredictability of monetary, tax and other policies of government agencies, including tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, or threats of such actions;
•the impact of changes in interest rates on the value of our investment securities portfolios;
•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;
•our ability to continue to invest in technological improvements 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 artificial intelligence;
•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 2024 Annual Report on Form 10-K(including the MD&A section), our subsequent 2025 Quarterly Reports on Form 10-Q (including the risk factors and risk management discussions) and our other 2025 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 disclaim 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 2024 Annual Report on Form 10-Kfiled with the SEC on February 27, 2025 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, 2024.
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, operating non-interest expense, 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 operating 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 2025 and 2024 were calculated using a federal statutory income tax rate of 21%.
FINANCIAL SUMMARY
Net income available to common shareholders for the third quarter of 2025 was $149.5 million, or $0.41 per diluted common share. Comparatively, third quarter of 2024 net income available to common shareholders totaled $110.1 million, or $0.30 per diluted common share. On an operating basis, earnings per diluted common share (non-GAAP) was $0.41 for the third quarter of 2025, excluding $(2.3) million (pre-tax) of significant items impacting earnings per diluted common share, while the third quarter of 2024 was $0.34, excluding $15.3 million (pre-tax) of significant items impacting earnings.
We reported record earnings per diluted common share of $0.41, an increase of 14% from the prior quarter, with record total revenue of $457 million principally driven by growth in net interest income, margin expansion and record non-interest income. Pre-provision net revenue (non-GAAP) grew 11% linked-quarter contributing to positive operating leverage and an efficiency ratio (non-GAAP) of 52% in the top-quartile on a peer relative basis. Our growing profitability further strengthened capital levels to all-time highs with a CET1 regulatory capital ratio of 11.1%, tangible book value per common share (non-GAAP) growth of 11% year-over-year and a return on tangible common equity ratio (non-GAAP) of 15%. Our performance is supported by our consistent underwriting standards and proactive credit risk management actions, which led to continued solid credit results for the quarter including a 7.3% decline in criticized loans from the prior quarter.
Income Statement Highlights
•Net interest income totaled a record $359.3 million, an increase of $12.1 million, or 3.5%, from the prior quarter, primarily due to growth in earning assets, lower cost of funds and the impact of one more day in the current quarter.
•On a linked-quarter basis, the net interest margin (FTE) (non-GAAP) increased 6 basis points to 3.25%, reflecting a 3 basis point improvement in the total yield on earning assets (non-GAAP) and a 3 basis point decline in the total cost of funds.
•The provision for credit losses was $24.0 million, a decrease of $1.6 million from the prior quarter, with net charge-offs of $19.7 million, or 0.22% annualized of total average loans, compared to $21.8 million, or 0.25% annualized, in the prior quarter, reflecting continued proactive management of the loan portfolio.
•Non-interest income totaled a record $98.2 million, an increase of $7.2 million, or 7.9%, from the prior quarter, benefiting from our diversified business model and related revenue generation.
•Pre-provision net revenue (non-GAAP) totaled $213.9 million, an 11.4% increase from the prior quarter, driven by continued strong non-interest income generation, growth in net interest income and well-managed non-interest expense.
Balance Sheet Highlights
•For the quarter ending September 30, 2025 average loans and leases totaled $34.8 billion, an increase of $1.0 billion, or 3.0%, over the quarter ending September 30, 2024, primarily driven by consumer loan growth of $994.7 million.
•Average deposits totaled $37.9 billion, an increase of $2.3 billion, or 6.4%, as the growth in average interest-bearing demand deposits of $2.1 billion, average time deposits of $261.3 million and average non-interest-bearing demand deposits of $38.2 million more than offset the decline in average savings deposits of $155.9 million.
•On a linked-quarter basis, average loans and leases increased 3.6% annualized, and average deposits increased 8.2% annualized.
•The loan-to-deposit ratio was 91% at September 30, 2025, a slight improvement compared to 92% for both June 30, 2025 and September 30, 2024.
•The ratio of non-performing loans plus OREO to total loans and leases plus OREO increased 3 basis points from the prior quarter to 0.37%. The ratio was 0.39%, or a decrease of 2 basis points compared to September 30, 2024. Total delinquency decreased 14 basis points to 0.65%, compared to 0.79% at September 30, 2024, and increased 3 basis points from the prior quarter. The overall asset quality metrics remain at solid levels, reflecting continued proactive management of the loan portfolio.
•The ACL on loans and leases was $437.3 million, an increase of $17.1 million compared to September 30, 2024, 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 $11.48 increased 11.1% compared to September 30, 2024, and 3.1% compared to June 30, 2025. AOCI reduced the tangible book value per common share (non-GAAP) by $0.22 as of September 30, 2025, primarily due to the impact of unrealized losses on AFS securities, compared to a reduction of $0.43 as of September 30, 2024, and $0.26 as of June 30, 2025.
•Record capital levels with the CET1 capital ratio at 11.1% compared to 10.4% at September 30, 2024, and 10.8% at June 30, 2025. The tangible common equity to tangible assets ratio (non-GAAP) was also a record at 8.7%, compared to 8.2% at September 30, 2024, and 8.5% at June 30, 2025.
•During the third quarter of 2025, we repurchased $12 million, or 0.8 million shares, of our common stock at a weighted average share price of $15.50 while maintaining capital above stated operating levels and supporting loan growth in the quarter.
TABLE 1
Three Months Ended
September 30,
Quarterly Results Summary 2025 2024
Reported results
Net income available to common shareholders (millions) $ 149.5 $ 110.1
Earnings per diluted common share 0.41 0.30
Book value per common share 18.52 17.38
Operating results (non-GAAP)
Operating net income available to common shareholders (millions) 147.7 122.2
Operating earnings per diluted common share 0.41 0.34
Average diluted common shares outstanding (thousands) 361,670 362,426
Significant items impacting earnings(1) (millions)
Pre-tax FDIC assessment reduction $ 2.3 $ -
After-tax impact of FDIC assessment reduction 1.8 -
Pre-tax software impairment - (3.7)
After-tax impact of software impairment - (2.9)
Pre-tax loss related to indirect auto loan sale - (11.6)
After-tax impact of loss related to indirect auto loan sale - (9.1)
Total significant items pre-tax $ 2.3 $ (15.3)
Total significant items after-tax $ 1.8 $ (12.0)
Capital measures
CET1 capital ratio 11.07 % 10.44 %
Tangible common equity to tangible assets (non-GAAP) 8.69 8.17
Tangible book value per common share (non-GAAP) $ 11.48 $ 10.33
Nine Months Ended
September 30,
Year-to-Date Results Summary 2025 2024
Reported results
Net income available to common shareholders (millions) $ 396.7 $ 349.5
Earnings per diluted common share 1.09 0.96
Operating results (non-GAAP)
Operating net income available to common shareholders (millions) 394.9 368.5
Operating earnings per diluted common share 1.09 1.02
Average diluted common shares outstanding (thousands) 362,329 362,583
Significant items impacting earnings(1)(millions)
Preferred dividend equivalent at redemption $ - $ (4.0)
Pre-tax branch consolidation costs - (1.2)
After-tax impact of branch consolidation costs - (0.9)
Pre-tax FDIC assessment 2.3 (5.2)
After-tax impact of FDIC assessment 1.8 (4.1)
Pre-tax software impairment - (3.7)
After-tax impact of software impairment - (2.9)
Pre-tax loss related to indirect auto loan sales - (9.0)
After-tax impact of loss related to indirect auto loan sales - (7.1)
Total significant items after-tax $ 1.8 $ (19.0)
(1) Favorable (unfavorable) impact on earnings
RESULTS OF OPERATIONS
Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
Net income available to common shareholders for the three months ended September 30, 2025 was $149.5 million, or $0.41 per diluted common share, compared to $110.1 million, or $0.30 per diluted common share, for the three months ended September 30, 2024. On an operating basis, third quarter of 2025 earnings per diluted common share (non-GAAP) was $0.41, excluding $(2.3) million (pre-tax) of significant items impacting earnings. By comparison, third quarter of 2024 earnings per diluted common share (non-GAAP) was $0.34 on an operating basis, excluding the $11.6 million (pre-tax) loss on indirect auto loan sale and $3.7 million (pre-tax) software impairment.
Net interest income totaled $359.3 million, an increase of $35.9 million, or 11.1%, 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 17 basis points to 3.25%. The provision for credit losses was $24.0 million, compared to $23.4 million. Non-interest income increased $8.5 million, or 9.5%, primarily due to increases in mortgage banking operations income, capital markets income, wealth management revenue and other non-interest income. Non-interest expense for the third quarter of 2025 decreased $5.9 million, or 2.4%. On an operating basis, non-interest expense (non-GAAP) increased $11.6 million, or 5.0%, when excluding significant items of $(2.3) million in the third quarter of 2025 and $15.3 million in the same quarter of 2024.
Financial highlights are summarized below:
TABLE 2
Three Months Ended
September 30, 		$ %
(dollars in thousands, except per share data) 2025 2024 Change Change
Net interest income $ 359,272 $ 323,329 $ 35,943 11.1 %
Provision for credit losses 23,991 23,438 553 2.4
Non-interest income 98,170 89,688 8,482 9.5
Non-interest expense 243,535 249,431 (5,896) (2.4)
Income taxes 40,407 30,045 10,362 34.5
Net income $ 149,509 $ 110,103 $ 39,406 35.8 %
Earnings per common share - Basic $ 0.41 $ 0.30 $ 0.11 36.7 %
Earnings per common share - Diluted 0.41 0.30 0.11 36.7
Cash dividends per common share 0.12 0.12 - -
The following table presents selected financial ratios and other relevant data used to analyze our performance:
TABLE 3
Three Months Ended
September 30,
2025 2024
Return on average equity 9.02 % 7.10 %
Return on average tangible common equity (1)
14.94 12.43
Return on average assets 1.20 0.92
Return on average tangible assets (1)
1.29 1.01
Equity to assets 13.30 13.02
Average equity to average assets 13.28 13.01
Tangible common equity to tangible assets (1)
8.69 8.17
CET1 capital ratio 11.07 10.44
Dividend payout ratio 29.05 39.58
Book value per common share $ 18.52 $ 17.38
Tangible book value per common share (1)
11.48 10.33
(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,
2025 2024
(dollars in thousands) Average
Balance 		Interest
Income/
Expense 		Yield/
Rate 		Average
Balance 		Interest
Income/
Expense 		Yield/
Rate
Assets
Interest-bearing deposits with banks $ 1,738,570 $ 18,286 4.17 % $ 1,003,513 $ 11,276 4.47 %
Taxable investment securities (1)
6,611,222 59,506 3.60 6,177,736 48,317 3.13
Tax-exempt investment securities (1)(2)
1,003,661 8,742 3.48 1,023,050 8,816 3.45
Loans held for sale 312,034 5,480 7.02 300,326 5,729 7.61
Loans and leases (2)(3)
34,814,280 507,107 5.79 33,802,701 511,564 6.03
Total interest-earning assets (2)
44,479,767 599,121 5.36 42,307,326 585,702 5.51
Cash and due from banks 415,030 414,536
Allowance for credit losses (440,868) (427,826)
Premises and equipment 560,685 501,588
Other assets 4,504,231 4,620,414
Total assets $ 49,518,845 $ 47,416,038
Liabilities
Deposits:
Interest-bearing demand $ 17,364,490 111,572 2.55 $ 15,215,815 108,762 2.84
Savings 3,125,868 7,586 0.96 3,281,732 10,406 1.26
Certificates and other time 7,495,691 68,409 3.62 7,234,412 79,868 4.39
Total interest-bearing deposits 27,986,049 187,567 2.66 25,731,959 199,036 3.08
Short-term borrowings 1,682,747 17,764 4.16 2,345,960 29,934 5.06
Long-term borrowings 2,511,652 31,369 4.96 2,314,914 30,473 5.24
Total interest-bearing liabilities 32,180,448 236,700 2.92 30,392,833 259,443 3.39
Non-interest-bearing demand deposits 9,905,230 9,867,006
Total deposits and borrowings 42,085,678 2.23 40,259,839 2.56
Other liabilities 856,542 985,545
Total liabilities 42,942,220 41,245,384
Shareholders' equity 6,576,625 6,170,654
Total liabilities and shareholders' equity $ 49,518,845 $ 47,416,038
Net interest-earning assets $ 12,299,319 $ 11,914,493
Net interest income (FTE) (2)
362,421 326,259
Tax-equivalent adjustment (3,149) (2,930)
Net interest income $ 359,272 $ 323,329
Net interest spread 2.44 % 2.12 %
Net interest margin (2)
3.25 % 3.08 %
(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 to be the preferred industry measurement of net interest income and provides 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) increased $36.2 million, or 11.1%, primarily due to growth in earning assets, lower total average borrowings and lower deposit costs, partially offset by lower yields on earning assets. Average earning assets of $44.5 billion increased $2.2 billion, or 5.1%, primarily driven by an increase in average loans and leases. Average interest-bearing liabilities of $32.2 billion increased $1.8 billion, or 5.9%, driven by an increase of $2.3 billion in average interest-bearing deposits, which supported the growth in earning assets. Our net interest margin FTE (non-GAAP) increased 17 basis points on a year-over-year basis to 3.25%. The yield on earning assets (non-GAAP) decreased 15 basis points to 5.36%, driven by a 24 basis point decline in yields on loans to 5.79%, reflecting reduced interest rate levels as the FOMC lowered the target Federal Funds interest rate by 125 basis points between August 2024 and September 30, 2025, offset by a 41 basis point increase in yields on investment securities to 3.58% partially due to the AFS securities sold in November 2024 as part of our balance sheet repositioning. Total cost of funds decreased 33 basis points to 2.23% with a 42 basis point decrease in interest-bearing deposit costs to 2.66% and a 51 basis point decrease in total borrowing costs, inclusive of the December 2024 offering of $500 million of 5.722% fixed-rate/floating rate senior notes and the August 2025 maturity of $350 million of 5.150% senior notes.
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, 2025, compared to the three months ended September 30, 2024:
TABLE 5
(in thousands) Volume Rate Net
Interest Income(1)
Interest-bearing deposits with banks $ 7,767 $ (757) $ 7,010
Investment securities (2)
3,970 7,145 11,115
Loans held for sale 212 (461) (249)
Loans and leases(2)
9,492 (13,949) (4,457)
Total interest income(2)
21,441 (8,022) 13,419
Interest Expense (1)
Deposits:
Interest-bearing demand 21,073 (18,263) 2,810
Savings (1,007) (1,813) (2,820)
Certificates and other time 2,213 (13,672) (11,459)
Short-term borrowings (8,939) (3,231) (12,170)
Long-term borrowings 2,680 (1,784) 896
Total interest expense 16,020 (38,763) (22,743)
Net change (2)
$ 5,421 $ 30,741 $ 36,162
(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 to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.
Interest income on an FTE basis (non-GAAP) of $599.1 million for the third quarter of 2025, increased $13.4 million, or 2.3%, from the same quarter of 2024, resulting from an increase in average earning assets of $2.2 billion. The increase in average earning assets was primarily driven by a $1.0 billion, or 3.0%, increase in average loans and leases and an increase of $735.1 million in average interest-bearing deposits with banks. Average consumer loans increased $994.7 million, or 7.9%, with a $1.1 billion increase in residential mortgage loans largely due to the continued successful execution in key markets by our mortgage banker team and our long-standing strategy of serving the purchase market. This growth was partially offset by a decrease in average indirect auto loans of $222.3 million reflecting the sale of $431 million that closed in September of 2024. Average commercial loan growth of $16.8 million, or 0.1%, reflected by increases of $4.5 million in commercial and industrial loans and $100.9 million in commercial leases, partially offset by a decrease of $100.9 million in commercial real estate loans. The increase in average commercial loans and leases was driven by growth in the North Carolina and Cleveland markets, offset by
higher attrition levels driven by activity in the secondary market. The yield on average earning assets (non-GAAP) decreased 15 basis points to 5.36% for the third quarter of 2025, primarily due to a 24 basis point decrease in yields on loans to 5.79%, offset by a 41 basis point increase in yields on investment securities to 3.58%, benefiting from balance sheet restructuring activities in 2024.
Interest expense of $236.7 million for the third quarter of 2025 decreased $22.7 million from the same quarter of 2024, primarily due to lower overall cost of funds and lower average borrowings. The growth in average interest-bearing demand deposits of $2.1 billion, average time deposits of $261.3 million and average non-interest-bearing demand deposits of $38.2 million more than offset the decline in average savings deposits of $155.9 million as customers continued to migrate balances into higher-yielding products. The growth in average total deposits reflected organic growth in new and existing customer relationships. Average short-term borrowings decreased $663.2 million, or 28.3%, primarily reflecting a decrease in FHLB borrowings as a result of our organic deposit growth. Average long-term borrowings increased $196.7 million, or 8.5%, primarily reflecting the December 2024 issuance of $500 million in senior notes due in 2030, partially offset by the maturity of $350 million in senior notes in August 2025. The total cost of funds decreased 33 basis points to 2.23% with a 42 basis point decrease in interest-bearing deposit costs to 2.66%, and a decrease of 51 basis points in total borrowing costs.
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) 2025 2024 Change Change
Provision for credit losses on loans and leases $ 24,889 $ 22,850 $ 2,039 8.9 %
Provision for unfunded loan commitments
(859) 601 (1,460) n/m
Total provision for credit losses on loans and leases 24,030 23,451 579 2.5
Provision for investment securities (39) (13) (26) n/m
Total provision for credit losses $ 23,991 $ 23,438 $ 553 2.4 %
Net loan charge-offs $ 19,691 $ 21,450 $ (1,759) (8.2) %
Net loan charge-offs (annualized) / total average loans and leases 0.22 % 0.25 %
n/m - not meaningful
Provision for credit losses for the third quarter of 2025 reflected net charge-offs of $19.7 million, or 0.22% annualized of total average loans, compared to $21.5 million, or 0.25% annualized, in the third quarter of 2024, reflecting continued proactive management of the loan portfolio and the utilization of previously established reserves. 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, 2025 and 2024 is presented in the following table:
TABLE 7
Three Months Ended
September 30, 		$ %
(dollars in thousands) 2025 2024 Change Change
Service charges $ 23,191 $ 24,024 $ (833) (3.5) %
Interchange and card transaction fees 13,424 12,922 502 3.9
Trust services 11,647 11,120 527 4.7
Insurance commissions and fees 4,495 5,118 (623) (12.2)
Securities commissions and fees 8,868 7,876 992 12.6
Capital markets income 7,875 6,194 1,681 27.1
Mortgage banking operations 9,183 5,540 3,643 65.8
Dividends on non-marketable equity securities 6,110 6,560 (450) (6.9)
Bank owned life insurance 4,208 6,470 (2,262) (35.0)
Net securities gains (losses) - (28) 28 n/m
Other 9,169 3,892 5,277 135.6
Total non-interest income $ 98,170 $ 89,688 $ 8,482 9.5 %
n/m - not meaningful
Total non-interest income increased by $8.5 million, or 9.5%, to a record of $98.2 million for the third quarter of 2025, compared to $89.7 million for the third quarter of 2024. The variances in the individual non-interest income items are explained in the following paragraphs.
Wealth management revenues increased $1.5 million, or 8.0%, as securities commissions and fees and trust services income increased 12.6% and 4.7%, respectively, through continued strong contributions across the geographic footprint and a $0.8 billion, or 5.5%, increase in the market value of assets under administration to $14.9 billion at September 30, 2025.
Capital markets income increased $1.7 million, or 27.1%, driven by record debt capital markets and international banking income, as well as contributions from customer swap activity, syndications, public finance and advisory services.
Mortgage banking operations income increased $3.6 million, or 65.8%, due to strong sold loan volumes, net positive fair value adjustments from pipeline hedging activity and an MSR impairment of $2.8 million in the third quarter of 2024. Mortgage sold production increased 21% from the year-ago quarter.
BOLI income decreased $2.3 million, or 35.0%, reflecting lower life insurance claims.
Other non-interest income increased $5.3 million, or 135.6%, primarily due to a $5.4 million recovery on an other asset previously written off as part of the 2017 Yadkin Financial Corporation acquisition.
Non-Interest Expense
The breakdown of non-interest expense for the three months ended September 30, 2025 and 2024 is presented in the following table:
TABLE 8
Three Months Ended
September 30, 		$ %
(dollars in thousands) 2025 2024 Change Change
Salaries and employee benefits $ 131,575 $ 126,066 $ 5,509 4.4 %
Net occupancy 19,161 22,384 (3,223) (14.4)
Equipment 25,662 23,469 2,193 9.3
Outside services 26,033 24,383 1,650 6.8
Marketing 5,517 6,023 (506) (8.4)
FDIC insurance 6,351 10,064 (3,713) (36.9)
Bank shares and franchise taxes 3,959 3,931 28 0.7
Other 25,277 33,111 (7,834) (23.7)
Total non-interest expense $ 243,535 $ 249,431 $ (5,896) (2.4) %
Total non-interest expense of $243.5 million for the third quarter of 2025 decreased $5.9 million, or 2.4%, from the same period of 2024. Non-interest expense increased $11.6 million, or 5.0%, when excluding significant items of $(2.3) million in the third quarter of 2025 and $15.3 million in the same quarter of 2024. The variances in the individual non-interest expense items are explained in the following paragraphs.
Salaries and employee benefits of $131.6 million increased $5.5 million, or 4.4%, primarily reflecting strategic hiring, continued investments in our risk management infrastructure and higher production-related compensation.
Net occupancy and equipment of $44.8 million decreased $1.0 million, or 2.2%, as the costs associated with technology-related investments and de novo branch expansion were more than offset by the software impairment charge of $3.7 million incurred during the third quarter of 2024.
FDIC insurance decreased $3.7 million, or 36.9%, largely due to the $2.3 million reduction in the FDIC special assessment related to the replenishment of the FDIC's Deposit Insurance Fund associated with protecting uninsured depositors following the failed banks in early 2023 based on loss information at that time provided by the FDIC.
Other non-interest expense decreased $7.8 million, or 23.7%, primarily due to the $11.6 million loss on indirect auto loan sale in the third quarter of 2024, partially offset in the third quarter of 2025 by the impact of Community Uplift, a mortgage down payment assistance program that also includes commitments from our previously announced settlement agreement with the DOJ.
The following table presents non-interest expense excluding significant items for the three months ended September 30, 2025 and 2024:
TABLE 9
Three Months Ended September 30, $ %
(dollars in thousands) 2025 2024 Change Change
Total non-interest expense, as reported $ 243,535 $ 249,431 $ (5,896) (2.4) %
Significant items:
FDIC special assessment 2,272 - 2,272
Software impairment - (3,690) 3,690
Loss related to indirect auto loan sale - (11,572) 11,572
Total non-interest expense, excluding significant items (1)
$ 245,807 $ 234,169 $ 11,638 5.0 %
(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) 2025 2024
Income tax expense $ 40,407 $ 30,045
Effective tax rate 21.3 % 21.4 %
Statutory federal tax rate 21.0 21.0
Income tax expense was higher for the third quarter of 2025 primarily due to higher pre-tax income.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Net income available to common shareholders for the first nine months of 2025 was $396.7 million, or $1.09 per diluted common share, compared to $349.5 million, or $0.96 per diluted common share for the first nine months of 2024. On an operating basis (non-GAAP), net income available to common shareholders for the first nine months of 2025 was $394.9 million, or $1.09 per diluted common share, compared to $368.5 million or $1.02 per diluted common share for the first nine months of 2024.
Net interest income totaled $1.0 billion, an increase of $72.1 million, or 7.5%, compared to $958.2 million, reflecting growth in earning assets, partially offset by balance growth in higher yielding deposit products. The net interest margin (FTE) (non-GAAP) increased 5 basis points to 3.16%. Total cost of funds decreased 19 basis points to 2.27% with a 26 basis point decrease in interest-bearing deposit costs to 2.69% and a 34 basis point decrease in total borrowing costs. The yield on earning assets (non-GAAP) declined 14 basis points to 5.31%, driven by a 22 basis point decline in yields on loans to 5.75%, offset by a 35 basis point increase in yields on investment securities to 3.48%, benefiting from balance sheet restructuring activities in 2024. The provision for credit losses for the first nine months of 2025 totaled $67.1 million, compared to $57.5 million. Net charge-offs for the first nine months of 2025 totaled $54.0 million, or 0.21% annualized of total average loans, compared to $42.1 million, or 0.17% annualized. Non-interest income totaled $277.0 million, compared to $265.5 million, reflecting increased mortgage banking operations income, capital markets income, wealth management revenue and other non-interest income. Non-interest expense totaled $736.6 million, increasing $23.4 million, or 3.3%. On an operating basis (non-GAAP), non-interest expense increased $44.8 million, or 6.5%, compared to the first nine months of 2024 as the year-ago period included significant items impacting earnings of $19.1 million. Salaries and benefits increased $20.4 million, or 5.4%, primarily reflecting strategic hiring, continued investments in our risk management infrastructure and higher production-related compensation. Additionally, net occupancy and equipment expense increased $5.6 million, or 4.2%, and outside services increased $7.2 million, or 10.2%, offset by an FDIC insurance expense decline of $8.9 million due to the special assessment expense of $5.2 million in 2024, combined with the $2.3 million reduction to the special assessment in the third quarter of 2025.
Financial highlights are summarized below:
TABLE 11
Nine Months Ended
September 30, 		$ %
(dollars in thousands, except per share data) 2025 2024 Change Change
Net interest income $ 1,030,313 $ 958,227 $ 72,086 7.5 %
Provision for credit losses 67,081 57,517 9,564 16.6
Non-interest income 276,951 265,472 11,479 4.3
Non-interest expense 736,571 713,139 23,432 3.3
Income taxes 106,918 97,572 9,346 9.6
Net income 396,694 355,471 41,223 11.6
Less: Preferred stock dividends - 6,005 (6,005) (100.0)
Net income available to common shareholders $ 396,694 $ 349,466 $ 47,228 13.5 %
Earnings per common share - Basic $ 1.10 $ 0.97 $ 0.13 13.4 %
Earnings per common share - Diluted 1.09 0.96 0.13 13.5
Cash dividends per common share 0.36 0.36 - -
The following table presents selected financial ratios and other relevant data used to analyze our performance:
TABLE 12
Nine Months Ended
September 30,
2025 2024
Return on average equity 8.19 % 7.81 %
Return on average tangible common equity (1)
13.74 13.63
Return on average assets 1.08 1.02
Return on average tangible assets (1)
1.17 1.11
Equity to assets 13.30 13.02
Average equity to average assets 13.21 13.07
Tangible common equity to tangible assets (1)
8.69 8.17
CET1 capital ratio 11.07 10.44
Dividend payout ratio 33.02 37.51
Book value per common share $ 18.52 $ 17.38
Tangible book value per common share (1)
11.48 10.33
(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,
2025 2024
(dollars in thousands) Average
Balance 		Interest
Income/
Expense 		Yield/
Rate 		Average
Balance 		Interest
Income/
Expense 		Yield/
Rate
Assets
Interest-bearing deposits with banks $ 1,734,300 $ 53,147 4.10 % $ 915,076 $ 28,661 4.18 %
Taxable investment securities (1)
6,546,054 171,096 3.48 6,151,500 141,706 3.07
Tax-exempt investment securities (1)(2)
1,006,126 26,243 3.48 1,032,573 26,698 3.45
Loans held for sale 247,438 13,519 7.29 216,403 12,534 7.73
Loans and leases (2) (3)
34,458,648 1,483,204 5.75 33,148,858 1,482,613 5.97
Total interest-earning assets (2)
43,992,566 1,747,209 5.31 41,464,410 1,692,212 5.45
Cash and due from banks 401,509 404,234
Allowance for credit losses (435,677) (417,393)
Premises and equipment 551,738 485,378
Other assets 4,529,221 4,588,437
Total assets $ 49,039,357 $ 46,525,066
Liabilities
Deposits:
Interest-bearing demand $ 17,086,648 329,018 2.57 $ 14,812,493 301,716 2.72
Savings 3,134,324 22,580 0.96 3,351,144 30,541 1.22
Certificates and other time 7,321,336 202,987 3.71 6,728,312 217,137 4.31
Total interest-bearing deposits 27,542,308 554,585 2.69 24,891,949 549,394 2.95
Short-term borrowings 1,645,644 51,999 4.21 2,461,925 90,472 4.90
Long-term borrowings 2,692,580 101,153 5.02 2,179,733 85,364 5.23
Total interest-bearing liabilities 31,880,532 707,737 2.97 29,533,607 725,230 3.28
Non-interest-bearing demand deposits 9,789,501 9,908,989
Total deposits and borrowings 41,670,033 2.27 39,442,596 2.46
Other liabilities 892,612 999,327
Total liabilities 42,562,645 40,441,923
Shareholders' equity 6,476,712 6,083,143
Total liabilities and shareholders' equity $ 49,039,357 $ 46,525,066
Net interest-earning assets $ 12,112,034 $ 11,930,803
Net interest income (FTE) (2)
1,039,472 966,982
Tax-equivalent adjustment (9,159) (8,755)
Net interest income $ 1,030,313 $ 958,227
Net interest spread 2.34 % 2.17 %
Net interest margin (2)
3.16 % 3.11 %
(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 to be the preferred industry measurement of net interest income and provides 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 $1.0 billion, increasing $72.5 million, or 7.5%, reflecting growth in earning assets, partially offset by balance growth in higher yielding deposit products. Average earning assets grew $2.5 billion, or 6.1%, primarily driven by loan growth. Additionally, we reinvested the proceeds of the AFS securities sold in November 2024 as part of our balance sheet repositioning with an average yield of 1.41% into securities yielding 4.78% with a similar duration and convexity profile. Average interest-bearing demand deposits increased $2.3 billion, or 15.4%, with customers migrating into higher-yielding deposit products. Total average borrowings decreased $303.4 million primarily due to a decrease in FHLB borrowings, partially offset by an increase in senior debt. The net interest margin (FTE) (non-GAAP) increased 5 basis points to 3.16%.
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 nine months ended September 30, 2025, compared to the nine months ended September 30, 2024:
TABLE 14
(in thousands) Volume Rate Net
Interest Income (1)
Interest-bearing deposits with banks $ 25,091 $ (605) $ 24,486
Investment securities (2)
10,164 18,771 28,935
Loans held for sale 1,849 (864) 985
Loans and leases (2)
17,057 (16,466) 591
Total interest income (2)
54,161 836 54,997
Interest Expense (1)
Deposits:
Interest-bearing demand 60,345 (33,043) 27,302
Savings (2,951) (5,010) (7,961)
Certificates and other time 16,027 (30,177) (14,150)
Short-term borrowings (30,903) (7,570) (38,473)
Long-term borrowings 18,965 (3,176) 15,789
Total interest expense 61,483 (78,976) (17,493)
Net change (2)
$ (7,322) $ 79,812 $ 72,490
(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 to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.
Interest income on an FTE basis (non-GAAP) of $1.7 billion, increased $55.0 million, or 3.3%, resulting from growth in average earning assets of $2.5 billion. The increase in earning assets was primarily driven by a $1.3 billion, or 4.0%, increase in average loans and leases and an increase of $819.2 million in average interest-bearing deposits with banks. Average consumer loans increased $944.2 million, or 7.7%, with a $1.2 billion increase in residential mortgages largely due to the continued successful execution in key markets and our long-standing strategy of serving the purchase market. Average indirect installment loans decreased $329.2 million, or 29.9%, reflecting the $431 million sale that closed in the third quarter of 2024, partially offset by new organic growth in the portfolio. Average commercial loan growth of $365.6 million, or 1.8%, included increases of $153.5 million in commercial real estate, $108.5 million in commercial leases and $89.5 million in commercial and industrial loans. The increase in average commercial loans and leases was driven by activity across the footprint, including the Charlotte and eastern North Carolina markets with strong contributions from our commercial leasing team. The increase in commercial real estate included fundings on previously originated construction projects. The yield on average earning assets (non-GAAP) decreased 14 basis points to 5.31%, driven by a 22 basis point decline in yields on loans to 5.75%, partially offset by a 35 basis point increase in yields on investment securities to 3.48%.
Interest expense of $707.7 million decreased $17.5 million primarily due to a 19 basis point reduction in the cost of funds, partially offset by the growth in average interest-bearing deposits. Average total deposits increased $2.5 billion, or 7.3%, reflecting robust organic growth in new and existing customer relationships. The growth in average interest-bearing demand deposits of $2.3 billion and average time deposits of $593.0 million more than offset the decline in average savings deposits of $216.8 million and average non-interest-bearing demand deposits of $119.5 million as customers migrated balances into higher-yielding products. The funding mix has slightly shifted with non-interest-bearing demand deposits comprising 26% of total deposits at September 30, 2025, compared to 27% at September 30, 2024. Average short-term borrowings decreased $816.3 million, or 33.2%, primarily reflecting a decrease in FHLB borrowings as a result of our organic deposit growth. Average long-term borrowings increased $512.8 million, or 23.5%, primarily reflecting the December 2024 issuance of $500 million in senior notes, partially offset by the maturity of $350 million in senior notes in August 2025. The decrease in total cost of funds is comprised of a 34 basis point decrease in total borrowing costs and a 26 basis point decrease in interest-bearing deposit costs to 2.69%.
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) 2025 2024 Change Change
Provision for credit losses on loans and leases $ 68,467 $ 56,672 $ 11,795 20.8 %
Provision for unfunded loan commitments (1,291) 869 (2,160) (248.6)
Total provision for credit losses on loans and leases 67,176 57,541 9,635 16.7
Provision for investment securities (95) (24) (71) 295.8
Total provision for credit losses $ 67,081 $ 57,517 $ 9,564 16.6 %
Net loan charge-offs $ 54,013 $ 42,076 $ 11,937 28.4 %
Net loan charge-offs (annualized) / total average loans and leases 0.21 % 0.17 %
The provision for credit losses on loans and leases was $67.2 million, compared to $57.5 million for the first nine months of 2024. The provision for credit losses for the first nine months of 2025 was primarily due to loan growth and net charge-off activity. The first nine months of 2025 included net charge-offs of $54.0 million, or 0.21% annualized of total average loans, compared to $42.1 million, or 0.17% annualized, in the first nine months of 2024, reflecting continued proactive management of the loan portfolio. The ACL on loans and leases was $437.3 million, an increase of $17.1 million, reflecting overall loan growth and a stable ratio of the ACL to total loans and leases at 1.25%.
Non-Interest Income
The breakdown of non-interest income for the nine months ended September 30, 2025 and 2024 is presented in the following table:
TABLE 16
Nine Months Ended
September 30, 		$ %
(dollars in thousands) 2025 2024 Change Change
Service charges $ 68,476 $ 67,925 $ 551 0.8 %
Interchange and card transaction fees 39,048 38,627 421 1.1
Trust services 35,638 34,019 1,619 4.8
Insurance commissions and fees 15,396 17,843 (2,447) (13.7)
Securities commissions and fees 26,570 24,011 2,559 10.7
Capital markets income 20,095 17,668 2,427 13.7
Mortgage banking operations 22,482 20,410 2,072 10.2
Dividends on non-marketable equity securities 17,838 19,648 (1,810) (9.2)
Bank owned life insurance 13,396 13,232 164 1.2
Net securities gains (losses) 58 (31) 89 n/m
Other 17,954 12,120 5,834 48.1
Total non-interest income $ 276,951 $ 265,472 $ 11,479 4.3 %
n/m - not meaningful
Total non-interest income increased $11.5 million, or 4.3%. The variances in significant individual non-interest income items are explained in the following paragraphs.
Wealth management revenues increased $4.2 million, or 7.2%, to a record $62.2 million as securities commissions and fees and trust services income increased 10.7% and 4.8%, respectively, through continued strong contributions across the geographic footprint. Additionally, the market value of assets under administration increased $0.8 billion, or 5.5%, to $14.9 billion at September 30, 2025.
Insurance commissions and fees decreased $2.4 million, or 13.7%, primarily due to lower contingent fees during the first nine months of 2025.
Capital markets income increased $2.4 million, or 13.7%, driven by debt capital markets and international banking income, as well as contributions from customer swap activity, syndications, public finance and advisory services.
Mortgage banking operations income increased $2.1 million, or 10.2%, from higher sold loan volumes, net hedging impacts and an MSR impairment of $2.6 million in the first nine months of 2024. During the first nine months of 2025, we sold $1.1 billion of residential mortgage loans, a 14.6% increase compared to $1.0 billion for the same period of 2024.
Dividends on non-marketable equity securities decreased $1.8 million, or 9.2%, reflecting lower FHLB dividends resulting from a lower average balance of FHLB stock, related to decreased FHLB borrowings.
Other non-interest income increased $5.8 million, or 48.1%, primarily due to a $5.4 million recovery on an other asset previously written off as part of the 2017 Yadkin Financial Corporation acquisition.
Non-Interest Expense
The breakdown of non-interest expense for the nine months ended September 30, 2025 and 2024 is presented in the following table:
TABLE 17
Nine Months Ended
September 30, 		$ %
(dollars in thousands) 2025 2024 Change Change
Salaries and employee benefits $ 396,552 $ 376,109 $ 20,443 5.4 %
Net occupancy 58,218 60,611 (2,393) (3.9)
Equipment 79,535 71,576 7,959 11.1
Outside services 77,691 70,513 7,178 10.2
Marketing 15,107 15,460 (353) (2.3)
FDIC insurance 23,756 32,680 (8,924) (27.3)
Bank shares and franchise taxes 12,055 11,987 68 0.6
Other 73,657 74,203 (546) (0.7)
Total non-interest expense $ 736,571 $ 713,139 $ 23,432 3.3 %
Total non-interest expense of $736.6 million for the first nine months of 2025 increased $23.4 million, a 3.3% increase from the same period of 2024. On an operating basis, non-interest expense (non-GAAP) increased $44.8 million, or 6.5%, when adjusting for significant items of $(2.3) million and $19.1 million in the first nine months of 2025 and 2024, respectively. 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 $20.4 million, or 5.4%, primarily reflecting strategic hiring associated with our efforts to grow market share and continued investments in our risk management infrastructure, as well as higher production-related compensation and normal annual merit increases.
Net occupancy and equipment expense of $137.8 million increased $5.6 million, or 4.2%, largely from technology-related investments and increased occupancy costs including de novo branch expansion.
Outside services increased $7.2 million, or 10.2%, with higher volume-related technology and third-party costs associated with ongoing investments in our ERM Framework and digital banking platform.
FDIC insurance decreased $8.9 million, or 27.3%, primarily due to the special assessment expense of $5.2 million in 2024 to further replenish the FDIC's Deposit Insurance Fund associated with protecting uninsured depositors following the failed banks in early 2023 based on loss information at that time provided by the FDIC, combined with the $2.3 million reduction to the FDIC special assessment in the third quarter of 2025.
Other non-interest expense was $73.7 million and $74.2 million for the first nine months of 2025 and 2024, respectively. The decrease was primarily due to a $9.0 million loss on the indirect auto loan sales for the first nine months of 2024, partially offset by the impact of Community Uplift, a mortgage down payment assistance program that was enhanced and expanded in conjunction with our previously announced settlement agreement with the DOJ.
The following table presents non-interest expense excluding significant items impacting earnings:
TABLE 18
Nine Months Ended
September 30, 		$ %
(dollars in thousands) 2025 2024 Change Change
Total non-interest expense, as reported $ 736,571 $ 713,139 $ 23,432 3.3 %
Significant items:
Branch consolidation costs - (1,194) 1,194
FDIC special assessment 2,272 (5,212) 7,484
Software impairment - (3,690) 3,690
Loss related to indirect auto loan sales - (8,969) 8,969
Total non-interest expense, excluding significant items (1)
$ 738,843 $ 694,074 $ 44,769 6.5 %
(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) 2025 2024
Income tax expense $ 106,918 $ 97,572
Effective tax rate 21.2 % 21.5 %
Statutory federal tax rate 21.0 21.0
Income tax expense was higher for the nine months ended September 30, 2025, primarily due to higher pre-tax income, partially offset by increased net LIHTC. The effective tax rate, however, decreased slightly as a result of an increase in net tax credits.
FINANCIAL CONDITION
The following table presents our condensed Consolidated Balance Sheets:
TABLE 20
(dollars in millions) September 30,
2025 		December 31,
2024 		$
Change 		%
Change
Assets
Cash and cash equivalents $ 2,413 $ 2,419 $ (6) (0.2) %
Investment securities 7,669 7,445 224 3.0
Loans held for sale 278 218 60 27.5
Loans and leases, net 34,520 33,516 1,004 3.0
Goodwill and other intangibles 2,520 2,529 (9) (0.4)
Other assets 2,489 2,498 (9) (0.4)
Total Assets $ 49,889 $ 48,625 $ 1,264 2.6 %
Liabilities and Shareholders' Equity
Deposits $ 38,441 $ 37,107 $ 1,334 3.6 %
Borrowings 4,004 4,268 (264) (6.2)
Other liabilities 808 948 (140) (14.8)
Total Liabilities 43,253 42,323 930 2.2
Shareholders' Equity 6,636 6,302 334 5.3
Total Liabilities and Shareholders' Equity $ 49,889 $ 48,625 $ 1,264 2.6 %
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.
Following is a summary of loans and leases:
TABLE 21
(dollars in millions) September 30,
2025 		December 31,
2024 		$
Change 		%
Change
Commercial real estate $ 12,568 $ 12,705 $ (137) (1.1) %
Commercial and industrial 7,590 7,550 40 0.5
Commercial leases 829 765 64 8.4
Other 153 144 9 6.3
Total commercial loans and leases 21,140 21,164 (24) (0.1)
Direct installment 2,678 2,676 2 0.1
Residential mortgages 8,888 7,986 902 11.3
Indirect installment 767 739 28 3.8
Consumer lines of credit 1,484 1,374 110 8.0
Total consumer loans 13,817 12,775 1,042 8.2
Total loans and leases $ 34,957 $ 33,939 $ 1,018 3.0 %
Our commercial real estate portfolio included $8.8 billion of non-owner-occupied loans of which 17.9% represented office loans. Our top 25 non-owner-occupied commercial real estate loans averaged approximately $23 million per exposure with the
office component primarily made up of mid-sized offices located outside of central business districts with 42% of the office portfolio averaging less than $5 million per exposure. For consumer lending, residential mortgages increased $0.9 billion, compared to December 31, 2024, 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,
2025 		December 31,
2024 		$
Change 		%
Change
Commercial real estate $ 59 $ 88 $ (29) (33.0) %
Commercial and industrial 44 51 (7) (13.7)
Commercial leases 3 3 - -
Other 2 2 - -
Total commercial loans and leases 108 144 (36) (25.0)
Direct installment 3 2 1 50.0
Residential mortgages 9 7 2 28.6
Indirect installment 1 2 (1) (50.0)
Consumer lines of credit 4 4 - -
Total consumer loans 17 15 2 13.3
Total non-performing loans and leases 125 159 (34) (21.4)
Other real estate owned 3 3 - -
Total non-performing assets $ 128 $ 162 $ (34) (21.0) %
Non-performing assets decreased $34.5 million, from $162.4 million at December 31, 2024 to $127.9 million at September 30, 2025, due to proactive credit risk management of the portfolio with 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, 2025 and December 31, 2024, we utilized a third-party consensus macroeconomic forecast reflecting the current and projected macroeconomic environment. For our ACL calculation at September 30, 2025, the macroeconomic variables that we utilized included, but were not limited to: (i) the purchase only Housing Price Index, which increases 3.4% over our R&S forecast period, (ii) a CRE Price Index, which decreases 4.0% over our R&S forecast period, (iii) S&P Volatility, which increases 91.1% in 2025 and decreases 19.8% in 2026 and (iv) personal and business bankruptcies, which increase steadily over the R&S forecast period but average below the historical through-the-cycle period. While we have not changed our ACL modeling methodology, we continually assess our key macroeconomic variables and their correlation to our historical and expected portfolio performance. During the quarter ended September 30, 2025, we changed certain macroeconomic variables used for ACL modeling purposes as we believe the new variables better correlate to our historical performance over the economic cycles. Macroeconomic variables that we utilized for our ACL calculation as of December 31, 2024 included, but
were not limited to: (i) the purchase only Housing Price Index, which increases 7.4% over our R&S forecast period, (ii) a Commercial Real Estate Price Index, which increases 3.9% over our R&S forecast period, (iii) S&P Volatility, which increases 34.9% in 2025 and 2.5% in 2026 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) 2025 2024 2025 2024 2025
Commercial real estate $ 18.8 $ 22.0 0.07 % 0.09 % $ 178.1
Commercial and industrial 25.6 9.7 0.10 0.04 95.0
Commercial leases 0.2 0.2 - - 23.3
Other commercial 2.9 2.0 0.01 0.01 4.6
Direct installment 0.3 0.2 - - 26.0
Residential mortgages 2.0 0.1 0.01 - 94.2
Indirect installment 3.7 7.5 0.02 0.03 9.1
Consumer lines of credit 0.5 0.4 - - 7.0
Total net loan charge-offs on loans and leases, net loan charge-offs (annualized)/average loans $ 54.0 $ 42.1 0.21 % 0.17 % $ 437.3
Allowance for credit losses/total loans and leases 1.25 % 1.25 %
Allowance for credit losses/non-performing loans 349.93 % 326.65 %
The ACL on loans and leases of $437.3 million at September 30, 2025 increased $14.5 million, or 3.4%, from December 31, 2024. Our ending ACL coverage ratio was stable at 1.25% at both September 30, 2025 and December 31, 2024. The ACL as a percentage of non-performing loans for the total portfolio increased to 350% as of September 30, 2025, compared to 265% as of December 31, 2024.
Total provision for credit losses for the nine months ended September 30, 2025 was $67.1 million, compared to $57.5 million for the same period in 2024. Net charge-offs were $54.0 million for the nine months ended September 30, 2025, compared to $42.1 million for the first nine months of 2024.
We continue to closely review our loan portfolio for tariff impacts as tariffs continue to evolve and remain uncertain. Our actions include granular monitoring of credit line utilization and industry concentrations, by portfolio and country. For example, during the first quarter of 2025, we highlighted that we estimated that less than 5% of the exposures would have high direct impacts from tariffs and concluded that FNB remained well positioned at this point in time, with manageable exposure to the most heavily tariff-impacted businesses and consumer portfolios. We continue to diligently monitor our loan portfolio and engage in active dialogue with our customers. A wider credit quality impact could result from a slowing or a recessionary macroeconomic environment, which we monitor via our ongoing quarterly stress testing process.
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,
2025 		December 31,
2024 		$
Change 		%
Change
Non-interest-bearing demand $ 9,969 $ 9,761 $ 208 2.1 %
Interest-bearing demand 17,803 16,668 1,135 6.8
Savings 3,114 3,178 (64) (2.0)
Certificates and other time deposits 7,555 7,500 55 0.7
Total deposits $ 38,441 $ 37,107 $ 1,334 3.6 %
Total deposits increased $1.3 billion, or 3.6%, from December 31, 2024, due to growth in new and existing customer relationships. We ended the quarter with approximately 77% 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. On December 11, 2024, we completed a registered debt offering in which we issued $500 million aggregate principal amount of 5.722% fixed rate / floating rate senior notes due in 2030. The net proceeds of the debt offering after deducting underwriting discounts and commissions and offering costs were $496.7 million. These proceeds were used for general corporate purposes, which included investments at the holding company level, capital to support the growth of FNBPA and refinancing of outstanding indebtedness. On August 25, 2025, $350 million in senior debt that was issued in August 2022 matured.
Since inception of our $300 million stock purchase program, we repurchased 16.6 million shares at a weighted average share price of $11.81 for $196.3 million, with $103.7 million remaining for repurchase under this program. During the third quarter of 2025, we repurchased 0.8 million shares at a weighted average share price of $15.50 for $12.0 million. Any 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. The Inflation Reduction Act of 2022 requires a 1% excise tax on stock repurchases.
On February 15, 2024, we redeemed all our 7.25% Fixed Rate / Floating Rate Non-Cumulative Perpetual Preferred Stock in the amount of $111 million. The preferred stock is no longer outstanding and dividends will no longer accrue on such securities.
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 2-3 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, 2025, 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, 2025
F.N.B. Corporation
Total capital $ 4,860 12.79 % $ 3,799 10.00 % $ 3,989 10.50 %
Tier 1 capital 4,204 11.07 2,279 6.00 3,229 8.50
CET1 4,204 11.07 n/a n/a 2,659 7.00
Leverage 4,204 8.92 n/a n/a 1,886 4.00
Risk-weighted assets 37,988
FNBPA
Total capital $ 5,057 13.40 % $ 3,773 10.00 % $ 3,961 10.50 %
Tier 1 capital 4,229 11.21 3,018 8.00 3,207 8.50
CET1 4,149 11.00 2,452 6.50 2,641 7.00
Leverage 4,229 9.02 2,344 5.00 1,875 4.00
Risk-weighted assets 37,728
As of December 31, 2024
F.N.B. Corporation
Total capital $ 4,635 12.35 % $ 3,755 10.00 % $ 3,942 10.50 %
Tier 1 capital 3,971 10.58 2,253 6.00 3,191 8.50
CET1 3,971 10.58 n/a n/a 2,628 7.00
Leverage 3,971 8.75 n/a n/a 1,816 4.00
Risk-weighted assets 37,546
FNBPA
Total capital $ 4,794 12.86 % $ 3,728 10.00 % $ 3,914 10.50 %
Tier 1 capital 3,962 10.63 2,982 8.00 3,169 8.50
CET1 3,882 10.41 2,423 6.50 2,610 7.00
Leverage 3,962 8.78 2,257 5.00 1,806 4.00
Risk-weighted assets 37,280
(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 2024 Annual Report on Form 10-Kas filed with the SEC on February 27, 2025.
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. During the fourth quarter of 2024, we successfully completed an offering of fixed to floating rate senior notes maturing in December 2030 for $496.7 million in net proceeds. The issuance was met with strong investor interest and was priced with a coupon of 5.722%, a spread of 165 basis points above the yield of a comparable term Treasury Note. During the third quarter of 2025, $350.0 million in senior debt that was issued in August 2022 matured. During the second quarter of 2025, we redeemed $25.0 million in other subordinated debt assumed from our previous acquisition of UB Bancorp that was set to reprice at a higher interest rate. We have historically been opportunistic when accessing the capital markets, and we expect to continue with that strategy. The parent company's cash position at September 30, 2025 was $403.5 million, decreasing $399.9 million since December 31, 2024, primarily due to the maturities and redemptions discussed above, as well as the repurchase of $32.1 million, or 2.2 million shares of FNB stock at an average cost of $14.30.
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,
2025 		December 31,
2024 		Internal
Limit
Liquidity coverage ratio 2.0 times 1.5 times > 1 time
Months of cash on hand 14.5 months 13.7 months > 12 months
Parent company cash on hand (millions) $ 403.5 $ 803.4 n/a
As previously mentioned, our parent company cash on hand decreased from December 31, 2024, primarily due to the maturity of senior debt during the third quarter of 2025. The LCR at September 30, 2025 includes the scheduled maturity of $100 million of subordinated debt that matured in October 2025, which is considered a cash outflow for the ratio calculations. The MCH increased from December 31, 2024, primarily due to the debt maturities and redemptions relative to the cash balance on hand. Management has concluded that our cash levels remain appropriate 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. These strategies resulted in total deposit growth of $1.3 billion, or 3.6%, compared to December 31, 2024, with interest-bearing demand deposits, non-interest-bearing demand deposits and time deposits increasing $1.1 billion, $207.6 million and $55.3 million, respectively. Savings account balances declined $63.2 million compared to December 31, 2024. The mix of non-interest-bearing demand deposits to total deposits remained stable with the prior quarter at 26%. Our loan to deposit ratio stood at 91% at both September 30, 2025 and December 31, 2024.
At September 30, 2025, approximately 77% of our deposits were insured by the FDIC or collateralized, consistent with December 31, 2024 levels. Our cash balances held at the FRB were $2.0 billion at both September 30, 2025 and December 31, 2024. 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.
The following table presents certain information relating to FNBPA's credit availability and salable unpledged investment securities:
TABLE 27
(dollars in millions) September 30,
2025 		December 31,
2024
Unused wholesale credit availability $ 16,949 $ 16,056
Unused wholesale credit availability as a % of FNBPA assets 34.2 % 33.2 %
Salable unpledged government and agency securities $ 1,174 $ 927
Salable unpledged government and agency securities as a % of FNBPA assets 2.4 % 1.9 %
Cash and salable unpledged government and agency securities as a % of FNBPA assets 6.3 % 6.0 %
Uninsured Deposit Coverage Ratio 137.1 % 124.1 %
Our bank-level liquidity position remains strong. Our contingency funding policy and periodic liquidity stress testing of multiple stress scenarios is particularly valuable as we successfully manage our liquidity. A portion of our available borrowing capacity includes capacity at the FRB's Discount Window. 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, 2025, FNBPA has $3.1 billion of cash and salable unpledged government and agency securities representing 6.3% of total assets, an improvement from $2.9 billion and 6.0% at December 31, 2024. 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. This ratio has improved from December 31, 2024 due to various actions undertaken by management, including expanding borrowing capacity at the FHLB and FRB.
Another metric for measuring liquidity risk is the liquidity gap analysis. The following liquidity gap analysis as of September 30, 2025 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 better foundation for dealing with additional funding needs during a potential liquidity crisis. 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 $ 1,281 $ 1,717 $ 1,943 $ 3,704 $ 8,645
Investments 2,030 205 303 628 3,166
3,311 1,922 2,246 4,332 11,811
Liabilities
Non-maturity deposits 335 669 1,004 2,008 4,016
Time deposits 1,336 1,830 2,335 1,641 7,142
Borrowings 1,372 364 20 435 2,191
3,043 2,863 3,359 4,084 13,349
Period Gap (Assets - Liabilities) $ 268 $ (941) $ (1,113) $ 248 $ (1,538)
Cumulative Gap $ 268 $ (673) $ (1,786) $ (1,538)
Cumulative Gap to Total Assets 0.5 % (1.3) % (3.6) % (3.1) %
The twelve-month cumulative gap to total assets ratio was (3.1)% as of September 30, 2025, compared to (5.0)% as of December 31, 2024. The improvement in the twelve-month cumulative gap to total assets was primarily related to
management's shorter-term time deposit offerings, which reduced our asset sensitivity. In addition, the 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 thereafter for the foreseeable future.
MARKET RISK
Market risk refers to potential losses arising predominately 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, 2025 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 $ 15,820 $ 1,089 $ 909 $ 1,760 $ 19,578
Investments 2,068 209 340 623 3,240
17,888 1,298 1,249 2,383 22,818
Liabilities
Non-maturity deposits 10,831 - - - 10,831
Time deposits 1,423 1,828 2,333 1,637 7,221
Borrowings 1,261 778 11 418 2,468
13,515 2,606 2,344 2,055 20,520
Off-balance sheet (1,650) - - 400 (1,250)
Period Gap (Assets - Liabilities + Off-balance sheet) $ 2,723 $ (1,308) $ (1,095) $ 728 $ 1,048
Cumulative Gap $ 2,723 $ 1,415 $ 320 $ 1,048
Cumulative Gap to Earning Assets 6.1 % 3.2 % 0.7 % 2.3 %
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, thereby creating our current asset sensitive position. As a result of management's strategies to reduce its asset sensitive position, the twelve-month cumulative repricing gap to total assets was 2.3% as of September 30, 2025, down from 4.5% at December 31, 2024. Specific pricing actions included an emphasis on originating shorter-term time deposits so more interest-bearing liabilities will mature in less than 12 months, hence reducing the repricing gap differential.
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, 2025. The calculated results do not reflect management's potential actions.
TABLE 30
September 30,
2025 		December 31,
2024 		ALCO
Limits
Net interest income change over 12 months (Rate Ramps):
+ 200 basis points 1.5 % 3.0 % (10.0) %
+ 100 basis points 0.8 1.5 (10.0)
- 100 basis points (0.9) (1.5) (10.0)
- 200 basis points (1.8) (3.1) (10.0)
Net interest income change over 12 months (Rate Shocks):
+ 200 basis points 2.3 3.9 (10.0)
+ 100 basis points 1.3 2.0 (10.0)
- 100 basis points (1.5) (2.2) (10.0)
- 200 basis points (3.4) (4.6) (10.0)
Economic value of equity (Rate Shocks):
+ 300 basis points 5.3 4.5 (25.0)
+ 200 basis points 4.0 3.3 (15.0)
+ 100 basis points 2.6 1.9 (10.0)
- 100 basis points (3.8) (3.2) (10.0)
- 200 basis points (9.3) (6.9) (15.0)
There are multiple factors that influence our interest rate risk position and impact 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 62.9% of total net loans and leases at both September 30, 2025 and December 31, 2024. 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 interest rate risk (IRR) position with the intention to manage to a more neutral position given the current market expectations for lower short-term interest rates. During the first nine months of 2025, management adjusted the IRR position by purchasing investment securities with an average duration of 4.1 years, originating adjustable-rate mortgage loans with longer-duration fixed-rate reset periods, strategically meeting our customers' preferences for deposit products with shorter-term time deposits and maintaining borrowings with variable rates and varying maturities. As a result, the net interest income change over 12 months shown above in both the up and down rate ramp scenarios is, as intended, closer to neutral when compared to December 31, 2024.
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. During the fourth quarter of 2024, we executed $1.0 billion notional balance receive-fixed interest rate swaps designated as cash flow hedges for variable rate commercial loans at an average rate of 3.9% and average maturity of 42.3 months. During the second quarter of 2025, we executed $250 million (notional) at a rate of 3.7% and a maturity of 20 months. At September 30, 2025, we have a total of $1.70 billion (notional) of these cash flow hedges at an average rate of 3.4% and average maturity of 23.4 months with $250 million (notional) of this total maturing on October 1, 2025 at a rate of 0.69%. Additionally, we have a $200.0 million (notional) interest rate collar on variable rate commercial loans with strike rates between 2.8525% and 5.50% that matures in April 2026. These actions lowered our asset sensitivity.
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, 2025, the commercial customer-related interest rate swaps totaled $6.0 billion (notional), up from $5.9 billion (notional) at December 31, 2024. For additional information regarding interest rate swaps, see Note 10, "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
Our credit ratings affect the cost and availability of short- and long-term funding and collateral requirements for certain derivative instruments.
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 and 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.
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. In particular, holders of deposits which exceed FDIC insurance limits may perceive such a downgrade or warning negatively and withdraw all or a portion of such deposits.
The following table presents the credit ratings for FNB and FNBPA as of September 30, 2025:
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 Negative 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 and risk management practices 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 three lines of defense and a governance structure at the Board of Directors and management levels.
The lines of defense model consists of:
•First Line of Defense - 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 of Defense - consists of the Risk Management Department responsible for developing risk frameworks and identifying, assessing, overseeing and controlling enterprise aggregate risks independent from the First Line of Defense.
•Third Line of Defense - is Internal Audit and develops and executes 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 of Defense.
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:
•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 selecting and recommending nominees for election to the FNB and FNBPA Boards of Directors.
•Compensation Committee- reviews performance and compensation of senior management 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 management policies and practices, to identify, assess, monitor and report material risks.
•Credit Risk, Fair Lending and Community Reinvestment Act Committee- responsible for providing oversight of credit and lending strategies and objectives.
The 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 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 capacity and appetite constraints from both financial and non-financial risks. 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 limit 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 practices to identify, assess, control, monitor and report on risk 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 and planning committees and periodically 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 and heightened regulatory risk management expectations for large banking institutions with average total consolidated assets of $50 billion or more.
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 the businesses, investments and financial, accounting, legal, regulatory and strategic considerations, and the material risks that FNB faces;
•oversee and assess how senior management evaluates material risk; and
•assess appropriately the quality of our enterprise-wide risk management processes.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE INDICATORS TO GAAP
Reconciliations of non-GAAP operating 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) 2025 2024 2025 2024
Net income available to common shareholders $ 149,509 $ 110,103 $ 396,694 $ 349,466
Preferred dividend at redemption - - - 3,995
Branch consolidation costs - - - 1,194
Tax benefit of branch consolidation costs - - - (251)
FDIC special assessment (2,272) - (2,272) 5,212
Tax expense (benefit) of FDIC special assessment 477 - 477 (1,095)
Software impairment - 3,690 - 3,690
Tax benefit of software impairment - (775) - (775)
Loss related to indirect auto loan sales - 11,572 - 8,969
Tax benefit of loss related to indirect auto loan sales - (2,430) - (1,883)
Operating net income available to common shareholders (non-GAAP) $ 147,714 $ 122,160 $ 394,899 $ 368,522
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 preferred dividend at redemption, FDIC special assessment, software impairment, loss related to indirect auto loan sales and branch consolidation costs 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,
2025 2024 2025 2024
Earnings per diluted common share $ 0.41 $ 0.30 $ 1.09 $ 0.96
Preferred dividend at redemption - - - 0.01
Branch consolidation costs - - - -
Tax benefit of branch consolidation costs - - - -
FDIC special assessment (0.01) - (0.01) 0.01
Tax expense (benefit) of FDIC special assessment - - - -
Software impairment - 0.01 - 0.01
Tax benefit of software impairment - - - -
Loss related to indirect auto loan sales - 0.03 - 0.02
Tax benefit of loss related to indirect auto loan sales - (0.01) - (0.01)
Operating earnings per diluted common share (non-GAAP) $ 0.41 $ 0.34 $ 1.09 $ 1.02
TABLE 34
Return on average tangible common equity
Three Months Ended
September 30, 		Nine Months Ended
September 30,
(dollars in thousands) 2025 2024 2025 2024
Net income available to common shareholders (annualized) $ 593,162 $ 438,019 $ 530,379 $ 466,806
Amortization of intangibles, net of tax (annualized) 12,507 13,753 12,578 13,926
Tangible net income available to common shareholders (annualized) (non-GAAP) $ 605,669 $ 451,772 $ 542,957 $ 480,732
Average total shareholders' equity $ 6,576,625 $ 6,170,654 $ 6,476,712 $ 6,083,143
Less: Average preferred shareholders' equity - - - (17,554)
Less: Average intangible assets (1)
(2,522,022) (2,535,769) (2,524,978) (2,539,822)
Average tangible common equity (non-GAAP) $ 4,054,603 $ 3,634,885 $ 3,951,734 $ 3,525,767
Return on average tangible common equity (non-GAAP) 14.94 % 12.43 % 13.74 % 13.63 %
(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) 2025 2024 2025 2024
Net income (annualized) $ 593,162 $ 438,019 $ 530,379 $ 474,826
Amortization of intangibles, net of tax (annualized) 12,507 13,753 12,578 13,926
Tangible net income (annualized) (non-GAAP) $ 605,669 $ 451,772 $ 542,957 $ 488,752
Average total assets $ 49,518,845 $ 47,416,038 $ 49,039,357 $ 46,525,066
Less: Average intangible assets (1)
(2,522,022) (2,535,769) (2,524,978) (2,539,822)
Average tangible assets (non-GAAP) $ 46,996,823 $ 44,880,269 $ 46,514,379 $ 43,985,244
Return on average tangible assets (non-GAAP) 1.29 % 1.01 % 1.17 % 1.11 %
(1) Excludes loan servicing rights.
TABLE 36
Tangible book value per common share
(dollars in thousands, except per share data) September 30, 2025 September 30, 2024
Total shareholders' equity $ 6,635,620 $ 6,248,456
Less: Intangible assets (1)
(2,520,013) (2,533,856)
Tangible common equity (non-GAAP) $ 4,115,607 $ 3,714,600
Ending common shares outstanding 358,381,940 359,585,544
Tangible book value per common share (non-GAAP) $ 11.48 $ 10.33
(1) Excludes loan servicing rights.
TABLE 37
Tangible common equity to tangible assets
(dollars in thousands) September 30, 2025 September 30, 2024
Total shareholders' equity $ 6,635,620 $ 6,248,456
Less: Intangible assets (1)
(2,520,013) (2,533,856)
Tangible common equity (non-GAAP) $ 4,115,607 $ 3,714,600
Total assets $ 49,888,522 $ 47,975,574
Less: Intangible assets (1)
(2,520,013) (2,533,856)
Tangible assets (non-GAAP) $ 47,368,509 $ 45,441,718
Tangible common equity to tangible assets (non-GAAP) 8.69 % 8.17 %
(1) Excludes loan servicing rights.
TABLE 38
Operating non-interest expense
Three Months Ended
September 30, 		Nine Months Ended
September 30,
(in thousands) 2025 2024 2025 2024
Non-interest expense $ 243,535 $ 249,431 $ 736,571 $ 713,139
Branch consolidation costs - - - (1,194)
FDIC special assessment 2,272 - 2,272 (5,212)
Software impairment - (3,690) - (3,690)
Loss related to indirect auto loan sales - (11,572) - (8,969)
Operating non-interest expense (non-GAAP) $ 245,807 $ 234,169 $ 738,843 $ 694,074
TABLE 39
Pre-provision net revenue
Three Months Ended
(in thousands) September 30, 2025 June 30, 2025
Net interest income $ 359,272 $ 347,196
Non-interest income 98,170 91,015
Less: Non-interest expense (243,535) (246,225)
Pre-provision net revenue (reported) (non-GAAP) $ 213,907 $ 191,986
Pre-provision net revenue (reported) (annualized) (non-GAAP) $ 848,651 $ 770,055
Adjustments:
Add (Less): FDIC special assessment (non-interest expense) (2,272) -
Operating pre-provision net revenue (non-GAAP) $ 211,635 $ 191,986
Operating pre-provision net revenue (annualized) (non-GAAP) $ 839,637 $ 770,055
TABLE 40
Efficiency ratio
Three Months Ended
September 30, 		Nine Months Ended
September 30,
(dollars in thousands) 2025 2024 2025 2024
Non-interest expense $ 243,535 $ 249,431 $ 736,571 $ 713,139
Less: Amortization of intangibles (3,991) (4,376) (11,909) (13,197)
Less: OREO expense (578) (354) (1,209) (744)
Add (Less): Branch consolidation costs - - - (1,194)
Add (Less): FDIC special assessment 2,272 - 2,272 (5,212)
Less: Software impairment - (3,690) - (3,690)
Less: Loss related to indirect auto loan sales - (11,572) - (8,969)
Adjusted non-interest expense $ 241,238 $ 229,439 $ 725,725 $ 680,133
Net interest income $ 359,272 $ 323,329 $ 1,030,313 $ 958,227
Taxable equivalent adjustment 3,149 2,930 9,159 8,755
Non-interest income 98,170 89,688 276,951 265,472
Less: Net securities (gains) losses - 28 (58) 31
Adjusted net interest income (FTE) + non-interest income $ 460,591 $ 415,975 $ 1,316,365 $ 1,232,485
Efficiency ratio (FTE) (non-GAAP) 52.38 % 55.16 % 55.13 % 55.18 %
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