Net income rises at F.N.B. Corporation (NYSE: FNB) in Q1 2026
Filing Impact
Filing Sentiment
Form Type
10-Q
F.N.B. Corporation reported net income of $137 million for the three months ended March 31, 2026, up from $117 million a year earlier. Diluted earnings per share were $0.38 versus $0.32.
Total assets reached $50.6 billion, with loans and leases of $35.1 billion and deposits of $38.9 billion. Net interest income rose to $359 million from $323 million, while the provision for credit losses was $18 million. Asset quality remained stable, with non‑performing loans at 0.33% of total loans and an allowance for credit losses on loans and leases of $443 million, or 1.26% of total loans.
Positive
- None.
Negative
- None.
Insights
F.N.B. shows solid Q1 profit growth with stable credit quality.
F.N.B. Corporation generated Q1 2026 net income of $137 million, up from $117 million, as net interest income increased to $359 million. Higher earning-asset balances, including loans and leases of $35.1 billion, supported topline interest income of $569 million.
Credit costs remain controlled. The provision for credit losses was $18 million, close to the prior year’s $17 million, and the allowance for credit losses on loans and leases was $443 million, or 1.26% of total loans, at March 31, 2026. Non-performing loans were 0.33% of total loans, indicating broadly stable asset quality.
Funding is anchored by deposits of $38.9 billion, slightly higher than year-end, while short- and long-term borrowings totaled $4.2 billion. Future filings may provide more detail on margin trends and any shifts in loan mix across commercial and consumer portfolios.
Key Figures
Total assets: $50.63B
Total deposits: $38.90B
Loans and leases: $35.11B
+5 more
8 metrics
Total assets
$50.63B
Consolidated balance sheet at March 31, 2026
Total deposits
$38.90B
Customer funding at March 31, 2026
Loans and leases
$35.11B
Net of unearned income at March 31, 2026
Net income
$137M
Three months ended March 31, 2026 vs $117M in 2025
Diluted EPS
$0.38
Q1 2026 earnings per common share vs $0.32 in 2025
Net interest income
$359M
Q1 2026 vs $323M in Q1 2025
Provision for credit losses
$18.5M
Total provision on loans and unfunded commitments, Q1 2026
Allowance for credit losses on loans and leases
$443.0M
Reserve level at March 31, 2026 (1.26% of total loans)
Key Terms
Allowance for credit losses, Current expected credit losses (CECL), Mortgage servicing rights (MSRs), Variable interest entity (VIE), +2 more
6 terms
Allowance for credit losses financial
"The ACL on loans and leases of $443.0 million at March 31, 2026 increased $3.5 million..."
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
Current expected credit losses (CECL) financial
"CECL | Current expected credit losses | LGD | Loss given default CET1..."
Current Expected Credit Losses (CECL) is an accounting standard that requires lenders and companies with loans or receivables to estimate and record the lifetime expected losses up front, rather than waiting until a loss is probable. Investors care because CECL changes reported profits and the amount of reserves a firm must hold — like a household setting aside a larger rainy‑day fund based on forecasted storms — which affects capital, dividend capacity and the perceived financial strength of a company.
Mortgage servicing rights (MSRs) financial
"Following is a summary of activity relating to MSRs..."
Variable interest entity (VIE) financial
"Companies in which we hold a controlling financial interest, or are a VIE in which we have the power to direct the activities..."
A variable interest entity (VIE) is a company or legal entity that an investor controls and reports in its financial statements not by owning a majority of shares but through contracts or other arrangements that give it economic rights and decision-making power. Investors care because a VIE can expose them to assets, debts and legal risks without traditional ownership—think of it like running someone else’s branch through a power-of-attorney rather than holding the keys, which can affect transparency and value.
Non-performing assets financial
"Total non-performing assets | $ | 121 | $ | 108 Asset quality ratios..."
Loans or other credit exposures that are not producing expected income because borrowers have stopped making scheduled payments for a significant period (commonly around 90 days). Think of it like a business lending money that has gone quiet — the cash flow stops while the lender still carries the debt on its books. High levels of non-performing assets matter to investors because they reduce a lender’s earnings, tie up capital that could be used for growth, and signal higher risk of future losses.
Trust preferred securities financial
"These trusts have been formed for the sole purpose of issuing TPS, from which the proceeds are then invested in our junior subordinated debentures..."
Trust preferred securities are a hybrid investment that blends features of bonds and stocks: an issuing company places assets into a separate trust which sells these securities and passes regular payments to holders much like bond interest. They can behave like equity for regulatory or accounting purposes while still offering a fixed-income stream, so they matter to investors because they carry higher income than plain bonds but also higher risk and potential sensitivity to issuer capital and credit moves.
Earnings Snapshot
Net income: $137M
Q1 2026
Net income
$137M
from $117M in Q1 2025
Diluted EPS
$0.38
from $0.32 in Q1 2025
Net interest income
$359M
from $323M in Q1 2025
Total assets
$50.63B
vs $50.23B at December 31, 2025
Allowance for credit losses on loans and leases
$443.0M
up from $439.5M at December 31, 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 | |||||
For the quarterly period ended March 31, 2026
or
| Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 | |||||
For the transition period from to
Commission file number 001-31940
F.N.B. CORPORATION
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: 800 -555-5455
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Exchange on which Registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
1
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 30, 2026, the registrant had 355,963,949 shares of common stock outstanding.
2
F.N.B. CORPORATION
FORM 10-Q
March 31, 2026
INDEX
| PAGE | ||||||||
| PART I – FINANCIAL INFORMATION | ||||||||
Glossary of Acronyms and Terms | 4 | |||||||
| Item 1. | Financial Statements | |||||||
Consolidated Balance Sheets | 5 | |||||||
Consolidated Statements of Income | 6 | |||||||
Consolidated Statements of Comprehensive Income (Loss) | 7 | |||||||
Consolidated Statements of Changes in Shareholders’ Equity | 8 | |||||||
Consolidated Statements of Cash Flows | 9 | |||||||
Notes to Consolidated Financial Statements | 10 | |||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 53 | ||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 77 | ||||||
| Item 4. | Controls and Procedures | 77 | ||||||
| PART II – OTHER INFORMATION | ||||||||
| Item 1. | Legal Proceedings | 78 | ||||||
| Item 1A. | Risk Factors | 78 | ||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 78 | ||||||
| Item 3. | Defaults Upon Senior Securities | 78 | ||||||
| Item 4. | Mine Safety Disclosures | 78 | ||||||
| Item 5. | Other Information | 79 | ||||||
| Item 6. | Exhibits | 79 | ||||||
Signatures | 80 | |||||||
3
Glossary of Acronyms and Terms
Acronym | Description | Acronym | Description | |||||||||||
ACL | Allowance for credit losses | FOMC | Federal Open Market Committee | |||||||||||
AFS | Available for sale | FRB | Board of Governors of the Federal Reserve System | |||||||||||
ALCO | Asset/Liability Committee | FTE | Fully taxable equivalent | |||||||||||
AOCI | Accumulated other comprehensive income | GAAP | U.S. generally accepted accounting principles | |||||||||||
ASU | Accounting Standards Update | GSE | Government-sponsored enterprises | |||||||||||
AULC | Allowance for unfunded loan commitments | HTM | Held to maturity | |||||||||||
CECL | Current expected credit losses | LGD | Loss given default | |||||||||||
CET1 | Common equity tier 1 | LIHTC | Various partnerships of affordable housing | |||||||||||
| CMO | Collateralized mortgage obligations | MBS | Mortgage-backed securities | |||||||||||
| DOJ | U.S. Department of Justice | MD&A | Management's Discussion and Analysis of Financial Condition and Results of Operations | |||||||||||
ERM Framework | Enterprise-wide risk management framework | MSRs | Mortgage servicing rights | |||||||||||
EVE | Economic value of equity | OREO | Other real estate owned | |||||||||||
FASB | Financial Accounting Standards Board | Report | Quarterly Report on Form 10-Q | |||||||||||
FDIC | Federal Deposit Insurance Corporation | R&S | Reasonable and Supportable | |||||||||||
FHLB | Federal Home Loan Bank | SBA | Small Business Administration | |||||||||||
FNB | F.N.B. Corporation | SEC | Securities and Exchange Commission | |||||||||||
| FNBIA | F.N.B. Investment Advisors, Inc. | SOFR | Secured Overnight Financing Rate | |||||||||||
FNBPA | First National Bank of Pennsylvania | TPS | Trust preferred securities | |||||||||||
| FNIS | First National Investment Services Company, LLC | U.S. | United States of America | |||||||||||
| FNTC | First National Trust Company | VIE | Variable interest entity | |||||||||||
4
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except share and per share data)
| March 31, 2026 | December 31, 2025 | |||||||||||||
| (Unaudited) | ||||||||||||||
| Assets | ||||||||||||||
| Cash and due from banks | $ | $ | ||||||||||||
| Interest-bearing deposits with banks | ||||||||||||||
| Cash and Cash Equivalents | ||||||||||||||
Debt securities available for sale (amortized cost of $ | ||||||||||||||
Debt securities held to maturity (fair value of $ | ||||||||||||||
Loans held for sale (includes $ | ||||||||||||||
Loans and leases, net of unearned income of $ | ||||||||||||||
| Allowance for credit losses on loans and leases | ( | ( | ||||||||||||
| Net Loans and Leases | ||||||||||||||
| Premises and equipment, net | ||||||||||||||
| Goodwill | ||||||||||||||
| Core deposit and other intangible assets, net | ||||||||||||||
| Bank owned life insurance | ||||||||||||||
| Other assets | ||||||||||||||
| Total Assets | $ | $ | ||||||||||||
| Liabilities | ||||||||||||||
| Deposits: | ||||||||||||||
| Non-interest-bearing | $ | $ | ||||||||||||
| Interest-bearing | ||||||||||||||
| Total Deposits | ||||||||||||||
| Short-term borrowings | ||||||||||||||
| Long-term borrowings | ||||||||||||||
| Other liabilities | ||||||||||||||
| Total Liabilities | ||||||||||||||
| Shareholders’ Equity | ||||||||||||||
Common stock - $ | ||||||||||||||
Authorized – | ||||||||||||||
Issued – | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Retained earnings | ||||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
Treasury stock – | ( | ( | ||||||||||||
| Total Shareholders’ Equity | ||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||||||||
(1)Amount represents loans for which we have elected the fair value option. See Note 19.
See accompanying Notes to Consolidated Financial Statements (unaudited)
5
F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share data)
Unaudited
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Interest Income | |||||||||||||||||||||||
| Loans and leases, including fees | $ | $ | |||||||||||||||||||||
| Investment Securities: | |||||||||||||||||||||||
| Taxable | |||||||||||||||||||||||
| Tax-exempt | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total Interest Income | |||||||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Long-term borrowings | |||||||||||||||||||||||
| Total Interest Expense | |||||||||||||||||||||||
| Net Interest Income | |||||||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
| Net Interest Income After Provision for Credit Losses | |||||||||||||||||||||||
| Non-Interest Income | |||||||||||||||||||||||
| Service charges | |||||||||||||||||||||||
| Interchange and card transaction fees | |||||||||||||||||||||||
| Trust services | |||||||||||||||||||||||
| Insurance commissions and fees | |||||||||||||||||||||||
| Securities commissions and fees | |||||||||||||||||||||||
| Capital markets income | |||||||||||||||||||||||
| Mortgage banking operations | |||||||||||||||||||||||
| Dividends on non-marketable equity securities | |||||||||||||||||||||||
| Bank owned life insurance | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total Non-Interest Income | |||||||||||||||||||||||
| Non-Interest Expense | |||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||
| Net occupancy | |||||||||||||||||||||||
| Equipment | |||||||||||||||||||||||
| Outside services | |||||||||||||||||||||||
| Marketing | |||||||||||||||||||||||
| FDIC insurance | |||||||||||||||||||||||
| Bank shares tax | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total Non-Interest Expense | |||||||||||||||||||||||
| Income Before Income Taxes | |||||||||||||||||||||||
| Income taxes | |||||||||||||||||||||||
| Net Income | |||||||||||||||||||||||
| Earnings per Common Share | |||||||||||||||||||||||
| Basic | $ | $ | |||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements (unaudited)
6
F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
Unaudited
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Debt securities available for sale: | |||||||||||||||||||||||
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $( | ( | ||||||||||||||||||||||
| Derivative instruments: | |||||||||||||||||||||||
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $( | ( | ||||||||||||||||||||||
Reclassification adjustment for gains (losses) included in net income, net of tax expense (benefit) of $ | |||||||||||||||||||||||
| Pension and postretirement benefit obligations: | |||||||||||||||||||||||
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $ | |||||||||||||||||||||||
| Other Comprehensive Income (Loss) | ( | ||||||||||||||||||||||
| Comprehensive Income (Loss) | $ | $ | |||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements (unaudited)
7
F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Dollars in millions, except per share data)
Unaudited
| | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | |||||||||||||||||||||||||||||||||||||||||
Dividends declared on common stock - $ | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Restricted stock compensation | |||||||||||||||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | ( | ||||||||||||||||||||||||||||||||||||||||
Dividends declared on common stock - $ | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Restricted stock compensation | |||||||||||||||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements (unaudited)
8
F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Unaudited
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating Activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: | |||||||||||
| Depreciation, amortization and accretion | |||||||||||
| Provision for credit losses | |||||||||||
| Deferred tax expense (benefit) | |||||||||||
| Loans originated for sale | ( | ( | |||||||||
| Loans sold | |||||||||||
| Net (gains) losses on sale of loans | ( | ( | |||||||||
| Net change in: | |||||||||||
| Interest receivable | ( | ( | |||||||||
| Interest payable | ( | ||||||||||
| Bank owned life insurance, excluding purchases | ( | ( | |||||||||
| Other, net | ( | ( | |||||||||
| Net cash flows provided by (used in) operating activities | |||||||||||
| Investing Activities | |||||||||||
| Net change in loans and leases, excluding sales and transfers | ( | ( | |||||||||
| Debt securities available for sale: | |||||||||||
| Purchases | ( | ( | |||||||||
| Maturities/payments | |||||||||||
| Debt securities held to maturity: | |||||||||||
| Purchases | ( | ( | |||||||||
| Maturities/payments | |||||||||||
| Increase in premises and equipment | ( | ( | |||||||||
| Net proceeds from sales of portfolio loans | |||||||||||
| Net cash flows provided by (used in) investing activities | ( | ( | |||||||||
| Financing Activities | |||||||||||
| Net change in: | |||||||||||
| Deposits | |||||||||||
| Short-term borrowings | |||||||||||
| Proceeds from issuance of long-term borrowings | |||||||||||
| Repayment of long-term borrowings | ( | ( | |||||||||
| Repurchases of common stock | ( | ( | |||||||||
| Cash dividends paid on common stock | ( | ( | |||||||||
| Other, net | |||||||||||
| Net cash flows provided by (used in) financing activities | |||||||||||
| Net Increase (Decrease) in Cash and Cash Equivalents | |||||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and Cash Equivalents at End of Period | $ | $ | |||||||||
See accompanying Notes to Consolidated Financial Statements (unaudited)
9
F.N.B. CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2026
The terms “FNB,” “the Corporation,” “we,” “us” and “our” throughout this Report mean F.N.B. Corporation and our consolidated subsidiaries, unless the context indicates that we refer only to the parent company, F.N.B. Corporation. When we refer to "FNBPA" in this Report, we mean our bank subsidiary, First National Bank of Pennsylvania, and its subsidiaries.
NATURE OF OPERATIONS
F.N.B. Corporation, headquartered in Pittsburgh, Pennsylvania, is a diversified financial services company operating 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. As of March 31, 2026, we had 356 branches throughout Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington D.C. and Virginia.
We provide a full range of commercial banking, consumer banking and wealth management solutions through our subsidiary network which is led by our largest affiliate, FNBPA, founded in 1864. Commercial banking solutions include corporate banking, small business banking, investment real estate financing, government banking, business credit, capital markets and equipment financing. Consumer banking provides a full line of consumer banking products and services, including deposit products, mortgage lending, consumer lending and a complete suite of mobile and online banking services. Wealth management and advisory services include asset management, private banking and insurance.
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Our accompanying Consolidated Financial Statements and these Notes to Consolidated Financial Statements (unaudited) include subsidiaries in which we have a controlling financial interest. We own and operate FNBPA, First National Trust Company, First National Investment Services Company, LLC, First National Insurance Agency, LLC, Bank Capital Services, LLC, F.N.B. Capital Corporation, LLC and FNB America Securities, LLC, and include results for each of these entities in the accompanying Consolidated Financial Statements.
Companies in which we hold a controlling financial interest, or are a VIE in which we have the power to direct the activities of an entity that most significantly impact the entity’s economic performance and have an obligation to absorb losses or the right to receive benefits which could potentially be significant to the VIE, are consolidated. For a voting interest entity, a controlling financial interest is generally where we hold more than 50% of the outstanding voting shares. VIEs in which we do not hold the power to direct the activities of the entity that most significantly impact the entity’s economic performance and an obligation to absorb losses or the right to receive benefits which could potentially be significant to the VIE are not consolidated. Investments in companies that are not consolidated are accounted for using the equity method when we have the ability to exert significant influence. Investments in private investment partnerships that are accounted for under the equity method or the cost method are included in other assets and our proportional interest in the equity investments’ earnings are included in other non-interest income. Investment interests accounted for under the cost and equity methods are periodically evaluated for impairment.
The accompanying interim unaudited Consolidated Financial Statements include all adjustments that are necessary, in the opinion of management, to fairly reflect our financial position and results of operations in accordance with GAAP. All significant intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to the current period presentation. Such reclassifications had no impact on our net income and shareholders' equity. Events occurring subsequent to March 31, 2026 have been evaluated for potential recognition or disclosure in the Consolidated Financial Statements through the date of the filing of the Consolidated Financial Statements with the SEC.
Certain information and Note disclosures normally included in Consolidated Financial Statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The interim operating results are not necessarily indicative of operating results we expect for the full year. These interim unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026.
10
Use of Estimates
Our accounting and reporting policies conform with GAAP. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements (unaudited). Actual results could materially differ from those estimates. Material estimates that are particularly susceptible to significant changes include the ACL, fair value of financial instruments, goodwill and other intangible assets and income taxes and deferred tax assets, which are listed in the critical accounting estimates. For a detailed description of our significant accounting policies and critical accounting estimates, see Note 1, "Summary of Significant Accounting Policies" and the "Application of Critical Accounting Policies" section in the MD&A, both in our 2025 Annual Report on Form 10-K.
NOTE 2. NEW ACCOUNTING STANDARDS
The following table summarizes accounting pronouncements issued by the FASB that we recently adopted or will be adopting in the future.
TABLE 2.1
| Standard | Description | Financial Statements Impact | ||||||||||||
| Income Statement | ||||||||||||||
ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures: Clarifying the Effective Date ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses | This Update requires public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement line items in a tabular format in the notes to the financial statements. Specifically, entities must disaggregate any relevant expense caption that includes one or more of the following natural expense categories: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, (5) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (DD&A). Additionally, this Update also requires entities to disclose selling expense on both an annual and interim basis. This Update does not change the requirements for the presentation of expenses on the face of the income statement. | This Update is to be applied prospectively for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption and retrospective application are permitted. We are currently evaluating the effect this Update will have on related disclosures and our processes, systems, and controls related to the disclosures. | ||||||||||||
11
| Standard | Description | Financial Statements Impact | ||||||||||||
| Software | ||||||||||||||
| ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software | This Update removes the prescriptive stage-based model previously used for capitalization. Capitalization is instead required to begin when management authorizes funding, and the project is likely to be completed and used as intended using the probable-to-complete threshold. Additionally, this Update consolidates guidance applying the new software development principles to website development. | This Update is to be applied using either a prospective, modified transition, or retrospective approach and will be effective as of January 1, 2028. Early adoption of this Update is permitted. The adoption of this Update is not expected to have a material impact on our Consolidated Financial Statements. | ||||||||||||
| Credit Losses | ||||||||||||||
| ASU 2025-08, Financial Instruments—Credit Losses: Purchased Loans | This Update introduces Purchased Seasoned Loans, extending the gross-up approach previously limited to purchased credit-deteriorated assets. An entity applying this approach would add the allowance for credit losses at the date of acquisition to the purchase price to determine the initial amortized cost basis. | This Update is to be applied prospectively for annual periods beginning January 1, 2027. Early adoption of this Update is permitted. The adoption of this Update is not expected to have a material impact on our Consolidated Financial Statements. | ||||||||||||
| Hedging | ||||||||||||||
| ASU 2025-09, Derivatives and Hedging: Hedge Accounting Improvements | This Update expands the hedged risks able to be aggregated in a cash flow hedge based on similar risk exposure, rather than shared risk exposure. Additionally, this Update allows an entity to select an alternative interest rate index or tenor without automatically dedesignating the hedge on forecasted interest payments of choose-your-rate debt instruments. This Update also expands the types of variable price components that can be designated as the hedged risk in a cash flow hedge of a forecasted purchase or sale of a nonfinancial asset. | This Update is to be applied prospectively for annual periods beginning January 1, 2027. Early adoption of this Update is permitted. The adoption of this Update is not expected to have a material impact on our Consolidated Financial Statements. | ||||||||||||
12
NOTE 3. INVESTMENT SECURITIES
The amortized cost and fair value of AFS debt securities are presented in the table below. There was no 15.7 million at March 31, 2026 and $16.2 million at December 31, 2025, and is excluded from the estimate of credit losses and assessed separately in other assets in the Consolidated Balance Sheets. Accordingly, we have excluded accrued interest receivable from both the fair value and amortized cost basis of AFS debt securities.
TABLE 3.1
| (in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||
| Debt Securities AFS: | |||||||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||
| U.S. Treasury | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| U.S. government agencies | |||||||||||||||||||||||||||||
| U.S. GSE | ( | ||||||||||||||||||||||||||||
| Residential MBS: | |||||||||||||||||||||||||||||
| Agency MBS | ( | ||||||||||||||||||||||||||||
| Agency CMO | ( | ||||||||||||||||||||||||||||
| Agency commercial MBS | ( | ||||||||||||||||||||||||||||
| States of the U.S. and political subdivisions (municipals) | ( | ||||||||||||||||||||||||||||
| Other debt securities | ( | ||||||||||||||||||||||||||||
| Total debt securities AFS | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| (in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| Debt Securities AFS: | |||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| U.S. Treasury | $ | $ | $ | $ | |||||||||||||||||||
| U.S. government agencies | |||||||||||||||||||||||
| U.S. GSE | |||||||||||||||||||||||
| Residential MBS: | |||||||||||||||||||||||
| Agency MBS | ( | ||||||||||||||||||||||
| Agency CMO | ( | ||||||||||||||||||||||
| Agency commercial MBS | ( | ||||||||||||||||||||||
| States of the U.S. and political subdivisions (municipals) | ( | ||||||||||||||||||||||
| Other debt securities | |||||||||||||||||||||||
| Total debt securities AFS | $ | $ | $ | ( | $ | ||||||||||||||||||
13
The amortized cost and fair value of HTM debt securities are presented in the following table. The ACL for the HTM portfolio was $0.33 million and $0.29 million at March 31, 2026 and December 31, 2025, respectively. Accrued interest receivable on HTM debt securities totaled $15.5 million and $15.7 million at March 31, 2026 and December 31, 2025, respectively, and is excluded from the estimate of credit losses and assessed separately in other assets in the Consolidated Balance Sheets. Accordingly, we have excluded accrued interest receivable from both the fair value and amortized cost basis of HTM debt securities.
TABLE 3.2
| (in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||
| Debt Securities HTM: | |||||||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||
| Residential MBS: | |||||||||||||||||||||||||||||
| Agency MBS | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Agency CMO | ( | ||||||||||||||||||||||||||||
| Agency commercial MBS | ( | ||||||||||||||||||||||||||||
| States of the U.S. and political subdivisions (municipals) | ( | ||||||||||||||||||||||||||||
| Other debt securities | ( | ||||||||||||||||||||||||||||
| Total debt securities HTM | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| (in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||
| Debt Securities HTM: | |||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||
| Residential MBS: | |||||||||||||||||||||||||||||
| Agency MBS | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Agency CMO | ( | ||||||||||||||||||||||||||||
| Agency commercial MBS | ( | ||||||||||||||||||||||||||||
| States of the U.S. and political subdivisions (municipals) | ( | ||||||||||||||||||||||||||||
| Other debt securities | ( | ||||||||||||||||||||||||||||
| Total debt securities HTM | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| | |||||||||||||||||||||||
Net unrealized losses on the AFS and HTM portfolios are primarily due to the increase in market interest rates since the time of purchase, with 86.3 % of these securities backed or sponsored by the U.S. government as of March 31, 2026. There were no
14
As of March 31, 2026, the amortized cost and fair value of debt securities, by contractual maturities, were as follows:
TABLE 3.3
| Available for Sale | Held to Maturity | ||||||||||||||||||||||
| (in millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
| Due in one year or less | $ | $ | $ | $ | |||||||||||||||||||
| Due after one year but within five years | |||||||||||||||||||||||
| Due after five years but within ten years | |||||||||||||||||||||||
| Due after ten years | |||||||||||||||||||||||
| Residential MBS: | |||||||||||||||||||||||
| Agency MBS | |||||||||||||||||||||||
| Agency CMO | |||||||||||||||||||||||
| Agency commercial MBS | |||||||||||||||||||||||
| Total debt securities | $ | $ | $ | $ | |||||||||||||||||||
Actual maturities may differ from contractual terms because security issuers may have the right to call or prepay obligations with or without penalties. Periodic principal payments are received on residential MBS based on the payment patterns of the underlying collateral.
Following is information relating to investment securities pledged:
TABLE 3.4
| (dollars in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Securities pledged (carrying value): | |||||||||||
| To secure public deposits, trust deposits and for other purposes as required by law | $ | $ | |||||||||
| As collateral for short-term borrowings | |||||||||||
| Securities pledged as a percent of total securities | % | % | |||||||||
15
Following are summaries of the fair values of AFS debt securities in an unrealized loss position for which an ACL has not been recorded, segregated by security type and length of time in a continuous loss position:
TABLE 3.5
| Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | # | Fair Value | Unrealized Losses | # | Fair Value | Unrealized Losses | # | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||||||
| Debt Securities AFS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||
| U.S. government agencies | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. GSE | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential MBS: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency MBS | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency CMO | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency commercial MBS | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| States of the U.S. and political subdivisions (municipals) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other debt securities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | # | Fair Value | Unrealized Losses | # | Fair Value | Unrealized Losses | # | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||||||
| Debt Securities AFS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. government agencies | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| U.S. GSE | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential MBS: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency MBS | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency CMO | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Agency commercial MBS | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| States of the U.S. and political subdivisions (municipals) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other debt securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
We evaluated the AFS debt securities that were in an unrealized loss position at March 31, 2026. Based on the credit ratings and/or implied government guarantee for these securities, we concluded the loss position is temporary and caused by movements of interest rates and does not reflect any expected credit losses. We do not intend to sell these AFS debt securities and it is not more likely than not that we will be required to sell these securities before the recovery of their amortized cost basis.
16
Credit Quality Indicators
We use credit ratings and the most recent financial information to help evaluate the credit quality of our credit-related AFS and HTM securities portfolios. Management reviews the credit profile of each issuer on an annual basis, and more frequently as needed. Based on the nature of the issuers and current conditions, we have determined that investment securities backed by the U.S. Department of the Treasury, Fannie Mae, Freddie Mac, FHLB, Ginnie Mae, and the SBA have zero expected credit loss.
Our municipal bond portfolio, with a carrying amount of $1.0 billion as of March 31, 2026 is highly rated with an average rating of AA and 96 % of the portfolio is rated A or better. All of the investment securities in the municipal portfolio are general obligation bonds. Geographically, municipal bonds generally support our primary footprint as 60 % of the securities are from municipalities located in the primary states within which we conduct business. The average holding size of the securities in the municipal bond portfolio is $2.5 million.
The ACL on the HTM municipal bond portfolio is calculated on each bond using:
•The bond’s underlying credit rating, time to maturity and exposure amount;
•Credit enhancements that improve the bond’s credit rating (e.g., insurance); and
•Moody’s U.S. Municipal Bond Default and Recovery Rates, 1970-2024.
By using these components, we derive the expected credit loss on the HTM general obligation municipal bond portfolio. We further refine the expected credit loss by factoring in economic forecast data using our Commercial and Industrial Non-Manufacturing loan portfolio forecast adjustment as derived through our assessment of the loan portfolio as a proxy for our municipal bond portfolio.
Our corporate bond portfolio, with a carrying amount of $112.1 million as of March 31, 2026 consists of debentures of banks and bank holding companies. The average holding size of the securities in the corporate bond portfolio is $4.7 million.
The ACL on the HTM corporate bond portfolio is calculated using:
•The bond’s credit rating, time to maturity and exposure amount;
•Moody’s Annual Default Study, 03/12/2026; and
•The most recent financial statements.
By using these components, we derive the expected credit loss on the HTM corporate bond portfolio. We further refine the expected credit loss by factoring in economic forecast data using our bank-wide loan portfolio forecast adjustment as derived through our assessment of FNBPA's loan portfolio as a proxy for our corporate bond portfolio.
For the year-to-date periods ending March 31, 2026 and 2025, we had no significant provision expense and no charge-offs or recoveries for the investment securities portfolio. The ACL on the HTM portfolio was $0.33 million, consisting of $0.06 million relating to the municipal bond portfolio and $0.27 million relating to other debt securities, as of March 31, 2026, and $0.06 million relating to the municipal bond portfolio and $0.23 million relating to other debt securities as of December 31, 2025. The AFS securities portfolios did no
17
NOTE 4. LOANS AND LEASES
Accrued interest receivable on loans and leases, which totaled $123.2 million at March 31, 2026 and $124.1 million at December 31, 2025, is excluded from the estimate of credit losses and assessed separately in other assets in the Consolidated Balance Sheets for both periods and is not included in the following tables.
Loans and Leases by Portfolio Segment
Following is a summary of total loans and leases, net of unearned income:
TABLE 4.1
| (in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Commercial real estate | $ | $ | |||||||||
| Commercial and industrial | |||||||||||
| Commercial leases | |||||||||||
| Other | |||||||||||
| Total commercial loans and leases | |||||||||||
| Direct installment | |||||||||||
| Residential mortgages | |||||||||||
| Indirect installment | |||||||||||
| Consumer lines of credit | |||||||||||
| Total consumer loans | |||||||||||
| Total loans and leases, net of unearned income | $ | $ | |||||||||
The remaining accretable discount included in the amortized cost of acquired loans was $19.4 million and $21.2 million at March 31, 2026 and December 31, 2025, respectively.
The loans and leases portfolio categories are comprised of the following types of loans, where in each case the LGD is dependent on the nature and value of the respective collateral:
•Commercial real estate includes both owner-occupied and non-owner-occupied loans, including construction loans, secured by commercial properties where operational cash flows on owner-occupied properties, including rents paid by stand-alone business customers, or rents received by our borrowers from their tenant(s) on both a property and global basis are the primary default risk drivers;
•Commercial and industrial includes loans to businesses that are not secured by real estate where the borrower's leverage and cash flows from operations are the primary default risk drivers;
•Commercial leases consist of leases for new or used equipment where the borrower's cash flow from operations is the primary default risk driver;
•Other is comprised primarily of credit cards and mezzanine loans where the borrower's cash flow from operations is the primary default risk driver;
•Direct installment is comprised of fixed-rate, closed-end consumer loans for personal, family or household use, such as home equity loans and automobile loans where the primary default risk driver is the borrower's employment status and income;
•Residential mortgages consist of conventional and jumbo mortgage loans, including construction loans, for 1-4 family properties where the primary default risk driver is the borrower's employment status and income;
•Indirect installment is comprised of loans originated by approved third parties and underwritten by us, primarily automobile loans where the primary default risk driver is the borrower's employment status and income; and
18
•Consumer lines of credit include home equity lines of credit and consumer lines of credit that are either unsecured or secured by collateral other than home equity where the primary default risk driver is the borrower's employment status and income.
The loans and leases portfolio consists principally of loans to individuals and small- and medium-sized businesses within our primary market in seven states and the District of Columbia. Our primary 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.
The following table shows occupancy information relating to commercial real estate loans:
TABLE 4.2
| March 31, 2026 | December 31, 2025 | ||||||||||
| Commercial real estate: | |||||||||||
| Percent owner-occupied | % | % | |||||||||
| Percent non-owner-occupied | |||||||||||
Credit Quality
We monitor the credit quality of our loan portfolio using several performance measures based on payment activity and borrower performance. We use an internal risk rating assigned to a commercial loan or lease at origination, summarized below.
TABLE 4.3
| Rating Category | Definition | ||||
| Pass | in general, the condition of the borrower and the performance of the loan is satisfactory or better | ||||
| Special Mention | in general, the condition of the borrower has deteriorated, requiring an increased level of monitoring | ||||
| Substandard | in general, the condition of the borrower has significantly deteriorated and the performance of the loan could further deteriorate if deficiencies are not corrected | ||||
| Doubtful | in general, the condition of the borrower has significantly deteriorated and the collection in full of both principal and interest is highly questionable or improbable | ||||
The use of these internally assigned credit quality categories within the commercial loan and lease portfolio permits our use of transition matrices to establish a basis which is then impacted by quantitative inputs from our econometric model forecasts over the R&S period. Our internal credit risk grading system is based on past experiences with similarly graded loans and leases and conforms to regulatory categories. In general, loan and lease risk ratings within each category are reviewed on an ongoing basis according to our policy for each class of loans and leases. Each quarter, we analyze the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the commercial loan and lease portfolio. Loans and leases within the Pass credit category or that migrate toward the Pass credit category generally have a lower risk of loss compared to loans and leases that migrate toward the Substandard or Doubtful credit categories. Accordingly, we apply higher risk factors to Substandard and Doubtful credit categories.
19
The following table summarizes the designated loan rating category by loan class including term loans on an amortized cost basis by origination year and year-to-date gross charge-offs by originating year:
TABLE 4.4
| (in millions) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| COMMERCIAL | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate: | |||||||||||||||||||||||||||||||||||||||||||||||
| Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and Industrial: | |||||||||||||||||||||||||||||||||||||||||||||||
| Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Leases: | |||||||||||||||||||||||||||||||||||||||||||||||
| Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial leases | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial leases gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Other Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||
| Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Total other commercial | |||||||||||||||||||||||||||||||||||||||||||||||
| Other commercial gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial loans and leases | |||||||||||||||||||||||||||||||||||||||||||||||
20
| (in millions) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| CONSUMER | |||||||||||||||||||||||||||||||||||||||||||||||
| Direct Installment: | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | |||||||||||||||||||||||||||||||||||||||||||||||
| Past due | |||||||||||||||||||||||||||||||||||||||||||||||
| Total direct installment | |||||||||||||||||||||||||||||||||||||||||||||||
| Direct installment gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential Mortgages: | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | |||||||||||||||||||||||||||||||||||||||||||||||
| Past due | |||||||||||||||||||||||||||||||||||||||||||||||
| Total residential mortgages | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgages gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Indirect Installment: | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | |||||||||||||||||||||||||||||||||||||||||||||||
| Past due | |||||||||||||||||||||||||||||||||||||||||||||||
| Total indirect installment | |||||||||||||||||||||||||||||||||||||||||||||||
| Indirect installment gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer Lines of Credit: | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | |||||||||||||||||||||||||||||||||||||||||||||||
| Past due | |||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer lines of credit | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer lines of credit gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer loans | |||||||||||||||||||||||||||||||||||||||||||||||
| Total loans and leases | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Total charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
21
| (in millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| COMMERCIAL | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate: | |||||||||||||||||||||||||||||||||||||||||||||||
| Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and Industrial: | |||||||||||||||||||||||||||||||||||||||||||||||
| Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Leases: | |||||||||||||||||||||||||||||||||||||||||||||||
| Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial leases | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial leases gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Other Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||
| Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Total other commercial | |||||||||||||||||||||||||||||||||||||||||||||||
| Other commercial gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial loans and leases | |||||||||||||||||||||||||||||||||||||||||||||||
22
| (in millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| CONSUMER | |||||||||||||||||||||||||||||||||||||||||||||||
| Direct Installment: | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | |||||||||||||||||||||||||||||||||||||||||||||||
| Past due | |||||||||||||||||||||||||||||||||||||||||||||||
| Total direct installment | |||||||||||||||||||||||||||||||||||||||||||||||
| Direct installment gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential Mortgages: | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | |||||||||||||||||||||||||||||||||||||||||||||||
| Past due | |||||||||||||||||||||||||||||||||||||||||||||||
| Total residential mortgages | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgages gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Indirect Installment: | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | |||||||||||||||||||||||||||||||||||||||||||||||
| Past due | |||||||||||||||||||||||||||||||||||||||||||||||
| Total indirect installment | |||||||||||||||||||||||||||||||||||||||||||||||
| Indirect installment gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer Lines of Credit: | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | |||||||||||||||||||||||||||||||||||||||||||||||
| Past due | |||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer lines of credit | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer lines of credit gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer loans | |||||||||||||||||||||||||||||||||||||||||||||||
| Total loans and leases | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Total charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
We use delinquency transition matrices within the consumer and other loan classes to establish the basis for the R&S forecast portion of the credit risk. Each month, management analyzes payment and volume activity, Fair Isaac Corporation (FICO) scores and Debt-to-Income (DTI) scores and other external factors such as unemployment, to determine how consumer loans are performing.
23
Non-Performing and Past Due
The following table provides an analysis of the aging of loans by class.
TABLE 4.5
| (in millions) | 30-89 Days Past Due | > 90 Days Past Due and Still Accruing | Non- Accrual | Total Past Due | Current | Total Loans and Leases | Non-accrual with No ACL | ||||||||||||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||
| Commercial leases | |||||||||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||||||||
| Total commercial loans and leases | |||||||||||||||||||||||||||||||||||||||||
| Direct installment | |||||||||||||||||||||||||||||||||||||||||
| Residential mortgages | |||||||||||||||||||||||||||||||||||||||||
| Indirect installment | |||||||||||||||||||||||||||||||||||||||||
| Consumer lines of credit | |||||||||||||||||||||||||||||||||||||||||
| Total consumer loans | |||||||||||||||||||||||||||||||||||||||||
| Total loans and leases | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| (in millions) | 30-89 Days Past Due | > 90 Days Past Due and Still Accruing | Non- Accrual | Total Past Due | Current | Total Loans and Leases | Non-accrual with No ACL | ||||||||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||
| Commercial leases | |||||||||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||||||||
| Total commercial loans and leases | |||||||||||||||||||||||||||||||||||||||||
| Direct installment | |||||||||||||||||||||||||||||||||||||||||
| Residential mortgages | |||||||||||||||||||||||||||||||||||||||||
| Indirect installment | |||||||||||||||||||||||||||||||||||||||||
| Consumer lines of credit | |||||||||||||||||||||||||||||||||||||||||
| Total consumer loans | |||||||||||||||||||||||||||||||||||||||||
| Total loans and leases | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
24
Following is a summary of non-performing assets:
TABLE 4.6
| (dollars in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Non-accrual loans | $ | $ | |||||||||
| Total non-performing loans and leases | |||||||||||
| Other real estate owned | |||||||||||
| Total non-performing assets | $ | $ | |||||||||
| Asset quality ratios: | |||||||||||
| Non-performing loans and leases / total loans and leases | % | % | |||||||||
Non-performing assets plus | |||||||||||
The carrying value of residential-secured consumer OREO held as a result of obtaining physical possession upon completion of a foreclosure or through completion of a deed in lieu of foreclosure amounted to $1.7 million at March 31, 2026 and $1.1 million at December 31, 2025. The recorded investment of residential-secured consumer OREO for which formal foreclosure proceedings are in process at March 31, 2026 and December 31, 2025 totaled $19.7 million and $16.9 million, respectively.
Approximately $145.5 million of commercial loans are collateral dependent at March 31, 2026. Repayment is expected to be substantially made through the operation or sale of the collateral on the loan. These loans are primarily secured by business assets or commercial real estate.
Loan Modifications
During the period, there are loans whose contractual terms have been modified in a manner that grants a concession to a borrower experiencing financial difficulties. These modifications typically result from loss mitigation activities and could include a term extension, interest rate reduction, principal forgiveness and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral. Accrued interest receivable on loan modifications totaled $0.31 million and $0.02 million at March 31, 2026 and March 31, 2025, respectively, and is excluded from the amortized cost of loan modifications in the tables that follow.
25
The following table shows the amortized cost basis at the end of the reporting period of the loans modified during the period to borrowers experiencing financial difficulty, disaggregated by class of financing receivable, type of concession granted and the financial effect of the modifications made to borrowers experiencing financial difficulty:
TABLE 4.7
| (dollars in millions) | Amortized Cost Basis | % of Total Class of Financing Receivable | Financial Effect | ||||||||||||||
| Three Months Ended March 31, 2026 | |||||||||||||||||
| Term Extension | |||||||||||||||||
| Commercial real estate | $ | % | The modified loans had an average increase in term of extending the maturity date. | ||||||||||||||
| Commercial and industrial | The modified loan had an average increase in term of | ||||||||||||||||
| Residential mortgages | The modified loans had an average increase in term of | ||||||||||||||||
| Total | |||||||||||||||||
| Term Extension and Rate Reduction | |||||||||||||||||
| Residential mortgages | A modification was made with no material financial effect. | ||||||||||||||||
| Total | |||||||||||||||||
| Other | |||||||||||||||||
| Commercial and industrial | The majority resulted in a | ||||||||||||||||
| Consumer lines of credit | A modification was made with no material financial effect. | ||||||||||||||||
| Total | |||||||||||||||||
| Total Outstanding Modified | $ | ||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||
| Term Extension | |||||||||||||||||
| Commercial real estate | $ | % | The modified loans had an average increase in term of | ||||||||||||||
| Direct installment | The modified loans had an average increase in term of | ||||||||||||||||
| Residential mortgages | The modified loans had an average increase in term of | ||||||||||||||||
| Consumer lines of credit | The modified loans had an average increase in term of | ||||||||||||||||
| Total | |||||||||||||||||
| Term Extension and Rate Reduction | |||||||||||||||||
| Residential mortgages | The term was extended, with a weighted average yield reduction of | ||||||||||||||||
| Total | |||||||||||||||||
| Other | |||||||||||||||||
| Commercial and industrial | Multiple modifications were made with no material financial effect. | ||||||||||||||||
| Total | |||||||||||||||||
| Total Outstanding Modified | $ | ||||||||||||||||
Some loan modifications may not ultimately result in the full collection of principal and interest, as modified, and may result in potential incremental losses which are factored into the ACL. There were no additional funds committed to borrowers whose loans were modified during the first three months of 2026.
26
Commercial loans over $1.0 million whose terms have been modified may be placed on non-accrual, individually analyzed and measured based on the fair value of the underlying collateral. Our ACL includes specific reserves for commercial loans modified. There was $1.7 million in specific reserves for commercial loans modified at March 31, 2026 and no specific reserves for commercial loans at December 31, 2025 and pooled reserves for individual loans of $0.5 million and $0.6 million at those same respective dates, based on loan segment LGD. Upon default, the amount of the recorded investment of the modified loan balance in excess of the fair value of the collateral, less estimated selling costs, is generally considered a confirmed loss and is charged-off against the ACL.
All other classes of loans whose terms have been modified are pooled and measured based on the loan segment LGD. Our ACL included pooled reserves for these classes of loans of $1.4 million and $1.3 million as of March 31, 2026 and December 31, 2025, respectively. Upon default of an individual loan, our charge-off policy is followed for that class of loan.
Following is a summary of loans modified in a manner that grants a concession to a borrower experiencing financial difficulties, by class, for which there was a payment default, excluding loans that have been paid off and/or sold. Default occurs when a loan is 90 days or more past due or in non-accrual and is within 12 months of restructuring.
TABLE 4.8
| Amortized cost basis of modified financing receivables that subsequently defaulted: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Term Extension | Term Extension and Rate Reduction | Balloon Payment | Other | Total Outstanding Modified | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial loans and leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct installment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgages | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Term Extension | Term Extension and Rate Reduction | Balloon Payment | Other | Total Outstanding Modified | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial loans and leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct installment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgages | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
27
We closely monitor the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of our modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months:
TABLE 4.9
| Payment status - amortization cost basis: | |||||||||||||||||
| (in millions) | Current | 30-89 Days Past Due | 90+ Days Past Due | ||||||||||||||
| March 31, 2026 | |||||||||||||||||
| Commercial real estate | $ | $ | $ | ||||||||||||||
| Commercial and industrial | |||||||||||||||||
| Total commercial loans and leases | |||||||||||||||||
| Direct installment | |||||||||||||||||
| Residential mortgages | |||||||||||||||||
| Consumer lines of credit | |||||||||||||||||
| Total consumer loans | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
| (in millions) | Current | 30-89 Days Past Due | 90+ Days Past Due | ||||||||||||||
| March 31, 2025 | |||||||||||||||||
| Commercial real estate | $ | $ | $ | ||||||||||||||
| Commercial and industrial | |||||||||||||||||
| Total commercial loans and leases | |||||||||||||||||
| Direct installment | |||||||||||||||||
| Residential mortgages | |||||||||||||||||
| Consumer lines of credit | |||||||||||||||||
| Total consumer loans | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
NOTE 5. ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES
The ACL is maintained for credit losses expected in the existing loan and lease portfolio and is presented as a reserve against loans and leases on the Consolidated Balance Sheets. Loan and lease losses are charged off against the ACL, with recoveries of amounts previously charged off credited to the ACL. Provisions for credit losses are charged to operations based on management’s periodic evaluation of the appropriate level of the ACL.
28
Following is a summary of changes in the ACL, by loan and lease class:
TABLE 5.1
| (in millions) | Balance at Beginning of Period | Charge- Offs | Recoveries | Net (Charge- Offs) Recoveries | Provision for Credit Losses | Balance at End of Period | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Commercial leases | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Total commercial loans and leases | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Direct installment | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgages | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Indirect installment | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Consumer lines of credit | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Total consumer loans | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Total allowance for credit losses on loans and leases | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Allowance for unfunded loan commitments | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Total allowance for credit losses on loans and leases and allowance for unfunded loan commitments | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| (in millions) | Balance at Beginning of Period | Charge- Offs | Recoveries | Net (Charge- Offs) Recoveries | Provision for Credit Losses | Balance at End of Period | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Commercial leases | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Total commercial loans and leases | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Direct installment | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgages | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Indirect installment | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Consumer lines of credit | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Total consumer loans | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Total allowance for credit losses on loans and leases | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Allowance for unfunded loan commitments | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Total allowance for credit losses on loans and leases and allowance for unfunded loan commitments | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
29
Following is a summary of changes in the AULC by portfolio segment:
TABLE 5.2
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Balance at beginning of period | $ | $ | |||||||||||||||||||||
| Provision for unfunded loan commitments and letters of credit: | |||||||||||||||||||||||
| Commercial portfolio | ( | ( | |||||||||||||||||||||
| Balance at end of period | $ | $ | |||||||||||||||||||||
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 mean was calculated using an expanded period to include a prior recessionary period.
At March 31, 2026 and December 31, 2025, we utilized a third-party consensus macroeconomic forecast reflecting the current and projected macroeconomic environment. For our ACL calculation at March 31, 2026, the macroeconomic variables that we utilized included, but were not limited to: (i) the purchase only Housing Price Index, which increases 4.0 % over our R&S forecast period, (ii) a Commercial Real Estate (CRE) Price Index, which increases 1.3 % over our R&S forecast period, (iii) S&P Volatility, which increases 17.5 % in 2026 and decreases 4.6 % in 2027 and (iv) personal and business bankruptcies, which increase and decrease, respectively, over the R&S forecast period but average below the historical through-the-cycle period. Macroeconomic variables that we utilized for our ACL calculation as of December 31, 2025 included, but were not limited to: (i) the purchase only Housing Price Index, which increases 4.3 % over our R&S forecast period, (ii) a Commercial Real Estate Price Index, which decreases 0.5 % over our R&S forecast period, (iii) S&P Volatility, which decreases 2.2 % in 2026 and 7.9 % in 2027 and (iv) personal and business bankruptcies, which increase steadily over the R&S forecast period but average below the historical through-the-cycle period.
The ACL on loans and leases of $443.0 million at March 31, 2026 increased $3.5 million, or 0.8 %, from December 31, 2025. Our ending ACL coverage ratio at March 31, 2026 was 1.26 %, and 1.26 % at December 31, 2025. Total provision for credit losses for the three months ended March 31, 2026 was $18.5 million, compared to $17.5 million in the same period of 2025. Net charge-offs were $15.9 million, or 0.18 % annualized of average total loans, during the three months ended March 31, 2026, compared to $12.5 million, or 0.15 % annualized, for the same period of 2025.
NOTE 6. LOAN SERVICING
Mortgage Loan Servicing
We retain the servicing rights on certain mortgage loans sold. The unpaid principal balance of mortgage loans serviced for others is listed below:
TABLE 6.1
| (in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Mortgage loans sold with servicing retained | $ | $ | |||||||||
30
The following table summarizes activity relating to mortgage loans sold with servicing retained:
TABLE 6.2
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||||
| Mortgage loans sold with servicing retained | $ | $ | |||||||||||||||||||||
Pre-tax net gains (losses) resulting from above loan sales (1) | |||||||||||||||||||||||
Mortgage servicing fees (1) | |||||||||||||||||||||||
(1) Recorded in mortgage banking operations on the Consolidated Statements of Income.
Following is a summary of activity relating to MSRs:
TABLE 6.3
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||||
| Balance at beginning of period | $ | $ | |||||||||||||||||||||
| Additions | |||||||||||||||||||||||
| Payoffs and curtailments | ( | ( | |||||||||||||||||||||
| Impairment (charge) / recovery | ( | ||||||||||||||||||||||
| Amortization / other | ( | ( | |||||||||||||||||||||
| Balance at end of period | $ | $ | |||||||||||||||||||||
| Fair value, beginning of period | $ | $ | |||||||||||||||||||||
| Fair value, end of period | |||||||||||||||||||||||
There was no valuation allowance for MSRs at March 31, 2026 and the valuation allowance for MSRs as of December 31, 2025 was $0.1 million.
The fair value of MSRs is highly sensitive to changes in assumptions and is determined by estimating the present value of the asset’s future cash flows utilizing market-based prepayment rates, discount rates and other assumptions validated through comparison to trade information, industry surveys and the use of independent third-party valuations. Changes in prepayment speed assumptions have the most significant impact on the fair value of MSRs. Generally, as interest rates decline, mortgage loan prepayments accelerate due to increased refinance activity, which results in a decrease in the fair value of MSRs and as interest rates increase, mortgage loan prepayments decline, which results in an increase in the fair value of MSRs. Measurement of fair value is limited to the conditions existing and the assumptions utilized as of a particular point in time, and those assumptions may not be appropriate if they are applied at a different point in time.
31
Following is a summary of the sensitivity of the fair value of MSRs to changes in key assumptions:
TABLE 6.4
| (dollars in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Weighted average life (months) | |||||||||||
| Constant prepayment rate (annualized) | % | % | |||||||||
| Discount rate | % | % | |||||||||
| Effect on fair value due to change in interest rates: | |||||||||||
| +2.00% | $ | $ | |||||||||
| +1.00% | |||||||||||
| +0.50% | |||||||||||
| +0.25% | |||||||||||
| -0.25% | ( | ( | |||||||||
| -0.50% | ( | ( | |||||||||
| -1.00% | ( | ( | |||||||||
| -2.00% | ( | ( | |||||||||
| -3.00% | ( | ( | |||||||||
The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the changes in assumptions to fair value may not be linear. Also, in this table, the effects of an adverse variation in a particular assumption on the fair value of MSRs is calculated without changing any other assumptions, while, in reality, changes in one factor may result in changing another, which may magnify or contract the effect of the change.
| | |||||||||||
| | |||||||||||||||||||||||
| | |||||||||||||||||||||||
| | |||||||||||
NOTE 7. LEASES
We have operating leases primarily for certain branches, office space, land and office equipment. We have finance leases for certain branches. Our operating leases expire at various dates through the year 2046 and generally include one or more options to renew. Our finance leases expire at various dates through the year 2051 and generally include one or more options to renew. The exercise of lease renewal options is at our sole discretion. As of March 31, 2026, we had operating lease right-of-use assets and operating lease liabilities of $206.7 million and $247.8 million, respectively, including $69.9 million in operating right-of-use assets and $100.1 million in operating lease liabilities with a related party. As of March 31, 2026, we had finance lease right-of-use assets and finance lease liabilities of $35.4 million and $38.7 million, respectively.
Our operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of March 31, 2026, we have certain operating lease agreements, primarily for administrative office space, that are expected to commence in 2026 with lease terms of up to 20 years. At commencement, it is expected that these leases will add approximately $4.7 million in right-of-use assets and $4.7 million in other liabilities. The Pittsburgh headquarters building is a related party operating lease accounted for in a manner consistent with all other leases on the basis of the legally enforceable terms and conditions of the lease and the related party represents a VIE for which we are not the primary beneficiary.
32
The components of lease expense were as follows:
TABLE 7.1
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||||
| Operating lease cost | $ | $ | |||||||||||||||||||||
| Variable lease cost | |||||||||||||||||||||||
| Finance lease cost | |||||||||||||||||||||||
| Total lease cost | $ | $ | |||||||||||||||||||||
Other information related to leases is as follows:
TABLE 7.2
| Three Months Ended March 31, | |||||||||||
| (dollars in millions) | 2026 | 2025 | |||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | $ | |||||||||
| Operating cash flows from finance leases | $ | $ | |||||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||
| Operating leases | $ | $ | |||||||||
| Finance leases | $ | $ | |||||||||
| Weighted average remaining lease term (years): | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted average discount rate: | |||||||||||
| Operating leases | % | % | |||||||||
| Finance leases | % | % | |||||||||
Future cash flows of lease liabilities are as follows:
TABLE 7.3
| (in millions) | Operating Leases | Finance Leases | Total Leases | ||||||||||||||
| March 31, 2026 | |||||||||||||||||
| 0 - 12 months | $ | $ | $ | ||||||||||||||
| 13 - 24 months | |||||||||||||||||
| 25 - 36 months | |||||||||||||||||
| 37 - 48 months | |||||||||||||||||
| 49 - 60 months | |||||||||||||||||
| Later years | |||||||||||||||||
| Total lease payments | |||||||||||||||||
| Less: imputed interest | ( | ( | ( | ||||||||||||||
| Present value of lease liabilities | $ | $ | $ | ||||||||||||||
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As a lessor we offer commercial leasing services to customers in need of new or used equipment primarily within our market areas of Pennsylvania, Ohio, Maryland, North Carolina, South Carolina and West Virginia. Additional information relating to commercial leasing is provided in Note 4, “Loans and Leases” in the Notes to Consolidated Financial Statements.
NOTE 8. VARIABLE INTEREST ENTITIES
We evaluate our interest in certain entities to determine if these entities meet the definition of a VIE and whether we are the primary beneficiary and required to consolidate the entity based on the variable interest we held both at inception and when there is a change in circumstances that requires a reconsideration.
Unconsolidated VIEs
The following table provides a summary of the assets and liabilities included in our Consolidated Financial Statements, as well as the maximum exposure to losses, associated with our interests related to VIEs for which we hold an interest, but are not the primary beneficiary. Additionally, we have an operating lease with a related party and a maximum exposure to loss of approximately $70 million and FNBPA made a construction loan to the same related party. For further information about this unconsolidated VIE, please see Note 7, "Leases."
TABLE 8.1
| (in millions) | Total Assets | Total Liabilities | Maximum Exposure to Loss | ||||||||||||||
| March 31, 2026 | |||||||||||||||||
Trust preferred securities (1) | $ | $ | $ | ||||||||||||||
| Tax credit partnerships | |||||||||||||||||
| Other investments | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
| December 31, 2025 | |||||||||||||||||
Trust preferred securities (1) | $ | $ | $ | ||||||||||||||
| Tax credit partnerships | |||||||||||||||||
| Other investments | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
| (1) Represents our investment in unconsolidated subsidiaries. | |||||||||||||||||
Trust-Preferred Securities
We have certain wholly-owned trusts whose assets, liabilities, equity, income and expenses are not included within our Consolidated Financial Statements. These trusts have been formed for the sole purpose of issuing TPS, from which the proceeds are then invested in our junior subordinated debentures, which are reflected in our Consolidated Balance Sheets as junior subordinated debt. The TPS are the obligations of the trusts, and as such, are not consolidated within our Consolidated Financial Statements. For additional information relating to our TPS, see Note 10, “Borrowings” in the Notes to Consolidated Financial Statements.
Each issue of the junior subordinated debentures has an interest rate equal to the corresponding TPS distribution rate. We have the right to defer payment of interest on the debentures at any time, or from time-to-time for a period not exceeding five years provided that no extension period may extend beyond the stated maturity of the related debentures. During any such extension period, distributions to the TPS will also be deferred and our ability to pay dividends on our common stock will be restricted. Periodic cash payments and payments upon liquidation or redemption with respect to TPS are guaranteed by us to the extent of funds held by the trusts. The guarantee ranks subordinate and junior in right of payment to all our indebtedness to the same extent as the junior subordinated debt. The guarantee does not place a limitation on the amount of additional indebtedness that may be incurred by us.
34
Affordable Housing, Historic and New Market Tax Credit Partnerships
We make equity investments as a limited partner in various partnerships of affordable housing (LIHTC), historic tax credit (HTC) and new market tax credit (NMTC) programs pursuant to Sections 42, 47 and 45d of the Internal Revenue Code, respectively. The purpose of many of these investments is to support initiatives associated with the Community Reinvestment Act while earning a satisfactory return. The activities of the LIHTC partnerships include the development and operation of multi-family housing that is leased to qualifying residential tenants. HTC partnerships allow us to make investments in projects that involve the rehabilitation of historic structures, often combining our investments with bank financing. NMTC partnerships are designed to channel investments into distressed communities, fostering community development and stimulating economic growth. These tax credit partnerships are generally located in communities where we have a banking presence and meet the definition of a VIE; however, we are not the primary beneficiary of the entities, as the general partner or managing member has both the power to direct the activities that most significantly impact the economic performance of the entities and the obligation to absorb losses beyond our own equity investment.
We apply the proportional amortization method of accounting for our investments in LIHTC, HTC and NMTC partnerships. We record our investment in tax credit partnerships as a component of other assets.
The following table presents the balances of our LIHTC, HTC and NMTC investments and related unfunded commitments:
TABLE 8.2
| (in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Tax credit investments included in other assets | $ | $ | |||||||||
| Unfunded tax credit investments | |||||||||||
The following table summarizes the impact of these tax credit investments on the provision for income taxes in our Consolidated Statements of Income:
TABLE 8.3
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||||
| Provision for income taxes: | |||||||||||||||||||||||
| Amortization of tax credit investments under proportional method | $ | $ | |||||||||||||||||||||
| Tax credits from tax credit investments | ( | ( | |||||||||||||||||||||
| Other tax benefits related to tax credit investments | ( | ( | |||||||||||||||||||||
| Total impact on provision for income taxes | $ | ( | $ | ( | |||||||||||||||||||
Other Investments
Other investments we also consider to be unconsolidated VIEs include investments in Small Business Investment Companies and other equity method investments.
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NOTE 9. DEPOSITS
Following is a summary of deposits:
TABLE 9.1
| (in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Non-interest-bearing demand | $ | $ | |||||||||
| Interest-bearing demand | |||||||||||
| Money market | |||||||||||
| Savings | |||||||||||
| Certificates and other time deposits | |||||||||||
| Total deposits | $ | $ | |||||||||
NOTE 10. BORROWINGS
Following is a summary of short-term borrowings:
TABLE 10.1
| (in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Securities sold under repurchase agreements | $ | $ | |||||||||
| Federal Home Loan Bank advances | |||||||||||
| Federal funds purchased | |||||||||||
| Subordinated notes | |||||||||||
| Total short-term borrowings | $ | $ | |||||||||
Borrowings with original maturities of one year or less are classified as short-term. Securities sold under repurchase agreements are comprised of customer repurchase agreements, which are sweep accounts with next-day maturities utilized by larger commercial customers to earn interest on their funds. Securities are pledged to these customers in an amount at least equal to the outstanding balance. Of the total short-term FHLB advances, $350.0 million, or 35.0 %, had overnight maturities as of March 31, 2026, compared to $530.0 million, or 50.2 %, as of December 31, 2025. At March 31, 2026 and December 31, 2025, none one year .
Following is a summary of long-term borrowings:
TABLE 10.2
| (in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Federal Home Loan Bank advances | $ | $ | |||||||||
| Senior notes | |||||||||||
| Subordinated notes | |||||||||||
| Junior subordinated debt | |||||||||||
| Other subordinated debt | |||||||||||
| Total long-term borrowings | $ | $ | |||||||||
Our banking affiliate has available credit with the FHLB of $12.0 billion, of which $9.4 billion was available for borrowing as of March 31, 2026. The outstanding FHLB advances (including both short-term and long-term borrowings) are secured by
36
$16.6 billion of loans collateralized by residential mortgages, home equity lines of credit and commercial real estate. The short-term borrowings are scheduled to mature in various amounts periodically through 2026 while the long-term borrowings are scheduled to mature periodically through 2028. Weighted average interest rates paid on long-term FHLB advances held during the three months ended March 31, 2026 and 2025 were 3.95 % and 4.46 %, respectively.
The following table provides information relating to our senior notes and other subordinated debt as of March 31, 2026. The subordinated notes are eligible for treatment as tier 2 capital for regulatory capital purposes.
TABLE 10.3
| (dollars in millions) | Aggregate Principal Amount Issued | Net Proceeds (5) | Carrying Value | Stated Maturity Date | Interest Rate | ||||||||||||||||||||||||
| Senior Notes: | |||||||||||||||||||||||||||||
Fixed-To-Floating Rate Senior Notes due December 11, 2030 (1) | $ | $ | $ | 12/11/2030 | % | ||||||||||||||||||||||||
| Total senior notes | |||||||||||||||||||||||||||||
| Other Subordinated Debt: | |||||||||||||||||||||||||||||
Fixed-To-Floating Rate Subordinated Notes due 2029 (2) | 2/14/2029 | % | |||||||||||||||||||||||||||
Fixed-To-Floating Rate Subordinated Notes due December 6, 2028 (3) (4) | 12/6/2028 | % | |||||||||||||||||||||||||||
| Total other subordinated debt | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||||||||||||||
(1) Fixed rate until December 11, 2029, at which time it converts to a floating rate determined by the Compounded SOFR plus 193 basis points.
(2) Floating rate effective February 14, 2024, determined by the Benchmark Replacement (three-month Chicago Mercantile Exchange (CME) term SOFR plus a tenor spread adjustment of 26 basis points) plus 240 basis points.
(3) Floating rate effective December 6, 2023, determined by the Benchmark Replacement (three-month CME term SOFR plus a tenor spread adjustment of 26 basis points) plus 302 basis points.
(4) Assumed from an acquisition and adjusted to fair value at the time of acquisition.
(5) After deducting underwriting discounts and commissions and offering costs. For the debt assumed from acquisitions, this is the fair value of the debt at the time of the acquisition.
The junior subordinated debt is comprised of the debt securities issued by FNB, or companies we acquired, in relation to our four unconsolidated subsidiary trusts (collectively, the Trusts), which are unconsolidated VIEs, and are included on the Consolidated Balance Sheets in long-term borrowings. Since third-party investors are the primary beneficiaries, the Trusts are not consolidated in our Financial Statements. We record the distributions on the junior subordinated debt issued to the Trusts as interest expense.
The following table provides information relating to the Trusts as of March 31, 2026:
TABLE 10.4
| (dollars in millions) | Trust Preferred Securities | Common Securities | Junior Subordinated Debt | Stated Maturity Date | Interest Rate | Rate Reset Factor | |||||||||||||||||||||||||||||
| F.N.B. Statutory Trust II | $ | $ | $ | 6/15/2036 | % | SOFR + | |||||||||||||||||||||||||||||
| Yadkin Valley Statutory Trust I | 12/15/2037 | % | SOFR + | ||||||||||||||||||||||||||||||||
| FNB Financial Services Capital Trust I | 9/30/2035 | % | SOFR + | ||||||||||||||||||||||||||||||||
| Patapsco Statutory Trust I | 12/15/2035 | % | SOFR + | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||||||||||||||||||||
The SOFR rate used for the rate reset factors in the above table is the Benchmark Replacement (three-month CME term SOFR plus a tenor spread adjustment of 26 basis points).
Other Credit Availability
Excluding FHLB availability, our banking affiliate has additional unused other wholesale credit availability of $9.5 billion as of March 31, 2026.
37
NOTE 11. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate risk, primarily by managing the amount, source, and duration of our assets and liabilities, and through the use of derivative instruments. Derivative instruments are used to reduce the effects that changes in interest rates may have on net income and cash flows. We also use derivative instruments to facilitate transactions on behalf of our customers.
All derivatives are carried on the Consolidated Balance Sheets at fair value and do not take into account the effects of master netting arrangements we have with other financial institutions. Credit risk is included in the determination of the estimated fair value of derivatives. Derivative assets are reported in the Consolidated Balance Sheets in other assets while derivative liabilities are reported in other liabilities. Cash flow activity relating to derivative assets and derivative liabilities is reported in the other, net line in operating activities on the Consolidated Statements of Cash Flows. Changes in fair value are recognized in earnings except for certain changes related to derivative instruments designated as part of a cash flow hedging relationship, which are recognized in other comprehensive income.
The following table presents notional amounts and gross fair values of our derivative assets and derivative liabilities which are not offset in the Consolidated Balance Sheets:
TABLE 11.1
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Notional | Fair Value | Notional | Fair Value | ||||||||||||||||||||||||||||||||
| (in millions) | Amount | Assets | Liabilities | Amount | Assets | Liabilities | |||||||||||||||||||||||||||||
| Gross Derivatives | |||||||||||||||||||||||||||||||||||
| Subject to master netting arrangements: | |||||||||||||||||||||||||||||||||||
| Interest rate contracts – designated | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Interest rate swaps – not designated | |||||||||||||||||||||||||||||||||||
| Total subject to master netting arrangements | |||||||||||||||||||||||||||||||||||
| Not subject to master netting arrangements: | |||||||||||||||||||||||||||||||||||
| Interest rate swaps – not designated | |||||||||||||||||||||||||||||||||||
| Interest rate lock commitments – not designated | |||||||||||||||||||||||||||||||||||
| Forward delivery commitments – not designated | |||||||||||||||||||||||||||||||||||
| Credit risk contracts – not designated | |||||||||||||||||||||||||||||||||||
| Total not subject to master netting arrangements | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Certain derivative exchanges have enacted a rule change which in effect results in the legal characterization of variation margin payments for certain derivative contracts as settlement of the derivatives mark-to-market exposure and not collateral. Accordingly, we have changed our reporting of certain derivatives to record variation margin on trades cleared through these exchanges as settled. The daily settlement of the derivative exposure does not change or reset the contractual terms of the instrument.
Derivatives Designated as Hedging Instruments under GAAP
Interest Rate Contracts. We entered into interest rate derivative agreements to modify the interest rate characteristics of certain commercial loans and certain of our FHLB advances from variable rate to fixed rate in order to reduce the impact of changes in future cash flows due to market interest rate changes. These agreements are designated as cash flow hedges, in the form of interest rate swaps and collars, hedging the exposure to variability in expected future cash flows. The derivative’s gain or loss,
38
including any ineffectiveness, is initially reported as a component of other comprehensive income and subsequently reclassified into earnings in the same line item associated with the forecasted transaction when the forecasted transaction affects earnings.
The following table shows amounts reclassified from AOCI:
TABLE 11.2
| Amount of Gain (Loss) Recognized in OCI on Derivatives | Location of Gain (Loss) Reclassified from AOCI into Income | Amount of Gain (Loss) Reclassified from AOCI into Income | |||||||||||||||||||||||||||
| Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Derivatives in cash flow hedging relationships: | |||||||||||||||||||||||||||||
| Interest rate contracts | $ | ( | $ | Interest income (expense) | $ | $ | ( | ||||||||||||||||||||||
The following table represents gains (losses) recognized in the Consolidated Statements of Income on cash flow hedging relationships:
TABLE 11.3
| Three months ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| (in millions) | Interest Income - Loans and Leases | Interest Expense - Short-Term Borrowings | Interest Income - Loans and Leases | Interest Expense - Short-Term Borrowings | |||||||||||||||||||
| Total amounts of income and expense line items presented in the Consolidated Statements of Income (the effects of cash flow hedges are included in these line items) | $ | $ | $ | $ | |||||||||||||||||||
| The effects of cash flow hedging: | |||||||||||||||||||||||
| Gain (loss) on cash flow hedging relationships: | |||||||||||||||||||||||
| Interest rate contracts: | |||||||||||||||||||||||
| Amount of gain (loss) reclassified from AOCI into net income | ( | ||||||||||||||||||||||
As of March 31, 2026, the maximum length of time over which forecasted interest cash flows are hedged is 3.8 years. In the twelve months that follow March 31, 2026, we expect to reclassify from the amount currently reported in AOCI net derivative gains of $2.1 million ($1.6 million net of tax), in association with interest on the hedged loans. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to March 31, 2026.
There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness related to these cash flow hedges. Also, during the three months ended March 31, 2026 and 2025, there were no
Derivatives Not Designated as Hedging Instruments under GAAP
A description of interest rate swaps, interest rate lock commitments, forward delivery commitments and credit risk contracts can be found in Note 15, "Derivative Instruments and Hedging Activities" in the Consolidated Financial Statements included in our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026.
Interest rate swap agreements with loan customers and with the offsetting counterparties are reported at fair value in other assets and other liabilities on the Consolidated Balance Sheets with any resulting gain or loss recorded in current period earnings as other income or other expense.
39
Risk participation agreements sold with notional amounts totaling $614 million as of March 31, 2026 have remaining terms ranging from two months to 15 years. Under these agreements, our maximum exposure assuming a customer defaults on their obligation to perform under certain derivative swap contracts with third parties would be $0 0.1 million and $0.1 million, respectively, at March 31, 2026, and $0.1 million and $0.1 million, respectively, at December 31, 2025.
The following table presents the effect of certain derivative financial instruments on the Consolidated Statements of Income:
TABLE 11.4
| Three Months Ended March 31, | |||||||||||||||||
| (in millions) | Consolidated Statements of Income Location | 2026 | 2025 | ||||||||||||||
| Interest rate swaps | Non-interest income - other | $ | $ | ||||||||||||||
| Mortgage banking contracts | Mortgage banking operations | ( | |||||||||||||||
| Credit risk contracts | Non-interest income - other | ||||||||||||||||
Counterparty Credit Risk
We are party to master netting arrangements with most of our swap derivative dealer counterparties. Collateral, usually marketable securities and/or cash, is exchanged between FNB and our counterparties, and is generally subject to thresholds and transfer minimums. For swap transactions that require central clearing, we post cash and securities to our clearing agency. Collateral positions are settled or valued daily, and adjustments to amounts received and pledged by us are made as appropriate to maintain proper collateralization for these transactions.
Certain master netting agreements contain provisions that, if violated, could cause the counterparties to request immediate settlement or demand full collateralization under the derivative instrument. If we had breached our agreements with our derivative counterparties we would be required to settle our obligations under the agreements at the termination value and would be required to pay $0.0 million as of March 31, 2026 and $0.1 million as of December 31, 2025, in excess of amounts previously posted as collateral with the respective counterparty.
40
The following table presents a reconciliation of the net amounts of derivative assets and derivative liabilities presented in the Consolidated Balance Sheets to the net amounts that would result in the event of offset: Swap derivative transactions with customers are generally secured by rights to non-financial collateral, such as real and personal property, which is not shown in the table below.
TABLE 11.5
| Gross Amounts Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
| (in millions) | Gross Amount Recognized | Gross Amount Offset in the Consolidated Balance Sheets | Net Amount Presented in the Consolidated Balance Sheets | Financial Instruments Available for Offset | Collateral Received/Pledged | Net Amount | |||||||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Derivative Assets | |||||||||||||||||||||||||||||||||||
| Subject to master netting arrangement | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Not subject to master netting arrangement | — | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Subject to master netting arrangement | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Not subject to master netting arrangement | — | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Derivative Assets | |||||||||||||||||||||||||||||||||||
| Subject to master netting arrangement | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Not subject to master netting arrangement | — | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Subject to master netting arrangement | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Not subject to master netting arrangement | — | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||||||||||||||||||||
NOTE 12. COMMITMENTS, CREDIT RISK AND CONTINGENCIES
We have commitments to extend credit and standby letters of credit that involve certain elements of credit risk in excess of the amount stated in the Consolidated Balance Sheets. Our exposure to credit loss in the event of non-performance by the customer is represented by the contractual amount of those instruments. The credit risk associated with commitments to extend credit and standby letters of credit is essentially the same as that involved in extending loans and leases to customers and is subject to normal credit policies. Since many of these commitments expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements.
41
Following is a summary of off-balance sheet credit risk information:
TABLE 12.1
| (in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Commitments to extend credit | $ | $ | |||||||||
| Standby letters of credit | |||||||||||
At March 31, 2026, funding of 82.0 % of the commitments to extend credit was dependent on the financial condition of the customer. We have the ability to withdraw such commitments at our discretion. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Based on management’s credit evaluation of the customer, collateral may be deemed necessary. Collateral requirements vary and may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.
Standby letters of credit are conditional commitments issued by us that may require payment at a future date. The credit risk involved in issuing letters of credit is actively monitored through review of the historical performance of our portfolios.
Our AULC for commitments that are not unconditionally cancellable, which is included in other liabilities on the Consolidated Balance Sheets, was $19.2 million at March 31, 2026 and $20.1 million at December 31, 2025. Additional information relating to the AULC is provided in Note 5, "Allowance for Credit Losses on Loans and Leases" in the Notes to Consolidated Financial Statements.
In addition to the above commitments, subordinated notes issued by FNB Financial Services, LP, a wholly-owned finance subsidiary, are fully and unconditionally guaranteed by FNB. These subordinated notes are included in the summaries of short-term borrowings and long-term borrowings in Note 10, “Borrowings” in the Notes to Consolidated Financial Statements.
Other Legal Proceedings
In the ordinary course of business, we may assert claims in legal proceedings against another party or parties, and likewise may be named as defendants in, or made parties to, pending and potential legal actions. Also, as regulated entities, we are subject to governmental and regulatory examinations, information-gathering requests, and may be subject to investigations and proceedings (both formal and informal). Such asserted or threatened claims, litigation, investigations, inquiries, regulatory and administrative proceedings typically entail matters that are considered incidental to the normal conduct of business. Claims for significant monetary damages may be asserted in many of these types of legal actions, while claims for disgorgement, reimbursement, restitution, penalties and/or other remedial actions or sanctions may be sought in regulatory matters. In these instances, if we determine that we have meritorious defenses, we will engage in an aggressive defense. However, if management determines, in consultation with counsel, that settlement of a matter is in the best interest of FNB and our shareholders, we may do so. It is inherently difficult to predict the eventual outcomes of such matters given their complexity and the particular facts and circumstances at issue in each of these matters. However, on the basis of our current knowledge and understanding, and advice of counsel, we do not believe that judgments, sanctions, settlement resolutions, regulatory actions, investigations, inquiries, settlements or orders, if any, that have arisen or may arise from these matters (either individually or in the aggregate, after giving effect to applicable reserves and insurance coverage) will have a material adverse effect on our financial position or liquidity, although they could potentially have a material effect on net income in a given period.
In view of the inherent unpredictability of outcomes in litigation and governmental and regulatory matters, particularly where (i) the damages sought are indeterminate, (ii) the proceedings are in the early stages, or (iii) the matters involve novel legal theories or a large number of parties, as a matter of course, there is considerable uncertainty surrounding the timing or ultimate resolution of litigation and governmental and regulatory matters, including a possible eventual loss, financial or other commitments, fine, restitution, penalty, business or adverse reputational impact, if any, associated with each such matter. In accordance with applicable accounting guidance, we establish accruals for litigation and governmental and regulatory matters when those matters proceed to a stage where they present loss contingencies that are both probable and reasonably estimable. In such cases, there may be a possible exposure to loss in excess of any amounts accrued. We will continue to monitor such matters, including ongoing reviews, examinations, and investigations by banking regulatory agencies and other government authorities, for developments that could affect the amount of the accrual, and will adjust the accrual amount as appropriate. If the loss contingency in question is not both probable and reasonably estimable, we do not establish an accrual and the matter will continue to be monitored for any developments that would make the loss contingency both probable and reasonably
42
estimable. We believe that our accruals for legal proceedings are appropriate and, in the aggregate, are not material to our consolidated financial position, although future accruals could have a material effect on net income in a given period.
On February 5, 2024, we announced that Yadkin Bank and its successor by merger, FNBPA, reached a settlement with the DOJ and the State of North Carolina to resolve their fair lending concerns, which FNBPA disputed, related to the assessment of mortgage lending activities during a four-year period in the Winston-Salem and Charlotte, North Carolina markets that began prior to Yadkin’s merger with FNBPA in March 2017. The settlement included FNBPA's commitment to provide $11.75 million in subsidies on mortgages and home equity loans originated in the Charlotte and Winston-Salem, North Carolina markets beginning in 2024 continuing until the full amount has been deployed. This subsidy amount is part of our existing, previously announced commitment to underserved communities, including the Winston-Salem and Charlotte markets. Importantly, the settlement was not initiated through a referral by a federal bank regulatory agency or consumer complaint, and included no civil money penalties levied against FNBPA. Effective January 2026, FNBPA had fully deployed the $11.75 million mortgage subsidy in the Charlotte and Winson Salem MBHCTs and is in compliance with all material terms of the settlement.
NOTE 13. STOCK INCENTIVE PLANS
Restricted Stock
We issue restricted stock unit awards to key employees under our Incentive Compensation Plan (Plan). We issue time-based awards and performance-based awards under this Plan, both of which are based on a three-year vesting period. The grant date fair value of the time-based awards is equal to the price of our common stock on the grant date. The fair value of the performance-based awards is based on a Monte-Carlo simulation valuation of our common stock as of the grant date. The assumptions used for this valuation include stock price volatility, risk-free interest rate and dividend yield. We granted 437,283 and 518,654 restricted stock units during the three months ended March 31, 2026 and 2025, respectively, including 262,372 and 311,194 performance-based restricted stock units during those same periods, respectively. We have shareholder approval under the Plan to issue up to 14,000,000 shares of common stock. As of March 31, 2026, we had 6,889,360 remaining shares available for awards under the Plan.
The unvested restricted stock unit awards are eligible to receive cash dividends or dividend equivalents which are ultimately used to purchase additional shares of stock and are subject to forfeiture if the requisite service period is not completed or the specified performance criteria are not met. These awards are subject to certain accelerated vesting provisions upon retirement, death, disability or in the event of a change in control as defined in the award agreements.
The following table summarizes the activity relating to restricted stock units during the periods indicated:
TABLE 13.1
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Units | Weighted Average Grant Price per Share | Units | Weighted Average Grant Price per Share | ||||||||||||||||||||
| Unvested units outstanding at beginning of period | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Net adjustment | |||||||||||||||||||||||
| Vested | ( | ( | |||||||||||||||||||||
| Forfeited/expired/canceled | ( | ( | |||||||||||||||||||||
| Unvested units outstanding at end of period | |||||||||||||||||||||||
43
The following table provides certain information related to restricted stock units:
TABLE 13.2
| Three Months Ended March 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Stock-based compensation expense | $ | $ | |||||||||
| Tax benefit related to stock-based compensation expense | |||||||||||
| Fair value of units vested | |||||||||||
The components of the restricted stock units as of March 31, 2026 are as follows:
TABLE 13.3
| (dollars in millions) | Service- Based Units | Performance- Based Units | Total | ||||||||||||||
| Unvested restricted stock units | |||||||||||||||||
| Unrecognized compensation expense | $ | $ | $ | ||||||||||||||
| Intrinsic value | $ | $ | $ | ||||||||||||||
| Weighted average remaining life (in years) | |||||||||||||||||
NOTE 14. INCOME TAXES
Income Tax Expense
Federal and state income tax expense and the statutory tax rate and the actual effective tax rate consist of the following:
TABLE 14.1
| Three Months Ended March 31, | |||||||||||||||||||||||
| (dollars in millions) | 2026 | 2025 | |||||||||||||||||||||
| Current income taxes: | |||||||||||||||||||||||
| Federal taxes | $ | $ | |||||||||||||||||||||
| State taxes | |||||||||||||||||||||||
| Total current income taxes | |||||||||||||||||||||||
| Deferred income taxes: | |||||||||||||||||||||||
| Federal taxes | |||||||||||||||||||||||
| State taxes | |||||||||||||||||||||||
| Total deferred income taxes | |||||||||||||||||||||||
| Total income taxes | $ | $ | |||||||||||||||||||||
| Statutory federal tax rate | % | % | |||||||||||||||||||||
| Effective tax rate | |||||||||||||||||||||||
Income tax expense was higher for the three months ended March 31, 2026, primarily due to higher pre-tax income.
44
Deferred Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax purposes. Deferred tax assets and liabilities are measured based on the enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Net deferred tax liabilities were $17.3 million and $17.1 million at March 31, 2026 and December 31, 2025, respectively.
NOTE 15. OTHER COMPREHENSIVE INCOME (LOSS)
The following table presents changes in AOCI, net of tax, by component:
TABLE 15.1
| (in millions) | Unrealized Net Gains (Losses) on Debt Securities Available for Sale | Unrealized Net Gains (Losses) on Derivative Instruments | Unrecognized Pension and Postretirement Obligations | Total | |||||||||||||||||||
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||
| Balance at beginning of period | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
| Balance at end of period | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
The amounts reclassified from AOCI related to debt securities AFS are included in net securities gains (losses) on the Consolidated Statements of Income, while the amounts reclassified from AOCI related to derivative instruments in cash flow hedge programs are generally included in interest income on loans and leases on the Consolidated Statements of Income. The tax (benefit) expense amounts reclassified from AOCI in connection with the debt securities AFS and derivative instruments reclassifications are included in income taxes on the Consolidated Statements of Income.
NOTE 16. EARNINGS PER COMMON SHARE
Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding net of unvested shares of restricted stock.
Diluted earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding, adjusted for the dilutive effect of potential common shares issuable for restricted shares, as calculated using the treasury stock method. Adjustments to the weighted average number of shares of common stock outstanding are made only when such adjustments dilute earnings per common share.
The following table sets forth the computation of basic and diluted earnings per common share:
TABLE 16.1
| Three Months Ended March 31, | |||||||||||||||||||||||
(dollars in millions, except per share data) | 2026 | 2025 | |||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Basic weighted average common shares outstanding | |||||||||||||||||||||||
| Net effect of dilutive stock options and restricted stock | |||||||||||||||||||||||
| Diluted weighted average common shares outstanding | |||||||||||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||
| Basic | $ | $ | |||||||||||||||||||||
| Diluted | $ | $ | |||||||||||||||||||||
45
| | |||||||||||||||||||||||
NOTE 17. CASH FLOW INFORMATION
Following is a summary of supplemental cash flow information:
TABLE 17.1
| Three Months Ended March 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Interest paid on deposits and other borrowings | $ | $ | |||||||||
| Income taxes (refunded) paid | |||||||||||
| Transfers of loans to other real estate owned | |||||||||||
| Loans transferred to portfolio from held for sale | |||||||||||
We did no
NOTE 18. BUSINESS SEGMENTS
We operate in three reportable segments: Community Banking, Wealth Management and Insurance.
•The Community Banking segment provides commercial and consumer banking services. Commercial banking solutions include corporate banking, small business banking, investment real estate financing, business credit, capital markets and equipment financing. Consumer banking products and services include deposit products, mortgage lending, consumer lending and a complete suite of mobile and online banking services.
•The Wealth Management segment provides a broad range of personal and corporate fiduciary services including the administration of decedent and trust estates. In addition, it offers various alternative products, including securities brokerage (under a third-party arrangement) and investment advisory services, mutual funds and annuities.
•The Insurance segment includes a full-service insurance brokerage service offering all lines of commercial and personal insurance through major carriers. The Insurance segment also includes a reinsurer.
The interim segmentation and measurement basis for segment profit and loss as of March 31, 2026 is consistent with December 31, 2025.
46
The following table provides financial information for these segments of FNB. The information provided under the caption “Parent and Other” represents operations not considered to be reportable segments and/or general operating expenses of FNB, and includes the parent company, other non-bank subsidiaries and eliminations and adjustments to reconcile to the Consolidated Financial Statements.
TABLE 18.1
| | |||||||||||||||||||||||||||||
| (in millions) | Community Banking | Wealth Management | Insurance | Parent and Other | Consolidated | ||||||||||||||||||||||||
| At or for the Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||
| Interest income | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Net interest income (loss) | ( | ||||||||||||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||||
| Service charges | |||||||||||||||||||||||||||||
| Interchange and card transaction fees | |||||||||||||||||||||||||||||
| Trust services | |||||||||||||||||||||||||||||
| Insurance commissions and fees | |||||||||||||||||||||||||||||
| Securities commissions and fees | |||||||||||||||||||||||||||||
| Capital markets income | |||||||||||||||||||||||||||||
| Mortgage banking operations | |||||||||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||||||||
| Total non-interest income | ( | ||||||||||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Total non-interest expense | |||||||||||||||||||||||||||||
| Income tax expense (benefit) | ( | ||||||||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total loans and leases | |||||||||||||||||||||||||||||
| Total deposits | ( | ||||||||||||||||||||||||||||
Market value of assets under administration - FNTC and FNIS (1) | |||||||||||||||||||||||||||||
47
| (in millions) | Community Banking | Wealth Management | Insurance | Parent and Other | Consolidated | ||||||||||||||||||||||||
| At or for the Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||
| Interest income | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Net interest income (loss) | ( | ||||||||||||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||||
| Service charges | |||||||||||||||||||||||||||||
| Interchange and card transaction fees | |||||||||||||||||||||||||||||
| Trust services | |||||||||||||||||||||||||||||
| Insurance commissions and fees | |||||||||||||||||||||||||||||
| Securities commissions and fees | |||||||||||||||||||||||||||||
| Capital markets income | |||||||||||||||||||||||||||||
| Mortgage banking operations | |||||||||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||||||||
| Total non-interest income | ( | ||||||||||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Total non-interest expense | |||||||||||||||||||||||||||||
| Income tax expense (benefit) | ( | ||||||||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total loans and leases | |||||||||||||||||||||||||||||
| Total deposits | ( | ||||||||||||||||||||||||||||
Market value of assets under administration - FNBIA, FNTC and FNIS (1) | |||||||||||||||||||||||||||||
(1) The assets under administration are not held on our Consolidated Balance Sheets.
48
NOTE 19. FAIR VALUE MEASUREMENTS
Refer to Note 25, "Fair Value Measurements" to the Consolidated Financial Statements included in our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026 for a description of additional valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis.
The following table presents the balances of assets and liabilities measured at fair value on a recurring basis:
TABLE 19.1
| (in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
| Assets Measured at Fair Value | |||||||||||||||||||||||
| Debt securities available for sale | |||||||||||||||||||||||
| U.S. Treasury | $ | $ | $ | $ | |||||||||||||||||||
| U.S. government agencies | |||||||||||||||||||||||
| U.S. GSE | |||||||||||||||||||||||
| Residential MBS: | |||||||||||||||||||||||
| Agency MBS | |||||||||||||||||||||||
| Agency CMO | |||||||||||||||||||||||
| Agency commercial MBS | |||||||||||||||||||||||
| States of the U.S. and political subdivisions (municipals) | |||||||||||||||||||||||
| Other debt securities | |||||||||||||||||||||||
| Total debt securities available for sale | |||||||||||||||||||||||
| Loans held for sale | |||||||||||||||||||||||
| Loans receivable | |||||||||||||||||||||||
| Derivative financial instruments | |||||||||||||||||||||||
| Trading | |||||||||||||||||||||||
| Not for trading | |||||||||||||||||||||||
| Total derivative financial instruments | |||||||||||||||||||||||
| Total assets measured at fair value on a recurring basis | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities Measured at Fair Value | |||||||||||||||||||||||
| Derivative financial instruments | |||||||||||||||||||||||
| Trading | $ | $ | $ | $ | |||||||||||||||||||
| Not for trading | |||||||||||||||||||||||
| Total derivative financial instruments | |||||||||||||||||||||||
| Total liabilities measured at fair value on a recurring basis | $ | $ | $ | $ | |||||||||||||||||||
49
| (in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Assets Measured at Fair Value | |||||||||||||||||||||||
| Debt securities available for sale | |||||||||||||||||||||||
| U.S. Treasury | $ | $ | $ | $ | |||||||||||||||||||
| U.S. government agencies | |||||||||||||||||||||||
| U.S. GSE | |||||||||||||||||||||||
| Residential MBS: | |||||||||||||||||||||||
| Agency MBS | |||||||||||||||||||||||
| Agency CMO | |||||||||||||||||||||||
| Agency commercial MBS | |||||||||||||||||||||||
| States of the U.S. and political subdivisions (municipals) | |||||||||||||||||||||||
| Other debt securities | |||||||||||||||||||||||
| Total debt securities available for sale | |||||||||||||||||||||||
| Loans held for sale | |||||||||||||||||||||||
| Loans receivable | |||||||||||||||||||||||
| Derivative financial instruments | |||||||||||||||||||||||
| Trading | |||||||||||||||||||||||
| Not for trading | |||||||||||||||||||||||
| Total derivative financial instruments | |||||||||||||||||||||||
| Total assets measured at fair value on a recurring basis | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities Measured at Fair Value | |||||||||||||||||||||||
| Derivative financial instruments | |||||||||||||||||||||||
| Trading | $ | $ | $ | $ | |||||||||||||||||||
| Not for trading | |||||||||||||||||||||||
| Total derivative financial instruments | |||||||||||||||||||||||
| Total liabilities measured at fair value on a recurring basis | $ | $ | $ | $ | |||||||||||||||||||
50
The following table presents additional information about assets measured at fair value on a recurring basis and for which we have utilized Level 3 inputs to determine fair value:
TABLE 19.2
| (in millions) | Loans Receivable | Interest Rate Lock Commitments | Total | ||||||||||||||||||||||||||
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | ||||||||||||||||||||||||||
| Purchases, issuances, sales and settlements: | |||||||||||||||||||||||||||||
| Issuances | |||||||||||||||||||||||||||||
| Settlements | ( | ( | |||||||||||||||||||||||||||
| Transfers into Level 3 | |||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | ||||||||||||||||||||||||||
| Year Ended December 31, 2025 | |||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | ||||||||||||||||||||||||||
| Purchases, issuances, sales and settlements: | |||||||||||||||||||||||||||||
| Issuances | |||||||||||||||||||||||||||||
| Settlements | ( | ( | |||||||||||||||||||||||||||
| Transfers into Level 3 | |||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | ||||||||||||||||||||||||||
We review fair value hierarchy classifications on a quarterly basis. Changes in the observability of the valuation attributes may result in reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in/out of Level 3 at fair value at the beginning of the period in which the changes occur. During the first three months of 2026, $6.9 million was transferred to loans receivable measured using the fair value option at Level 3, compared to $5.6 million during the first three months of 2025.
From time to time, we measure certain assets at fair value on a non-recurring basis. These adjustments to fair value usually result from the application of the lower of cost or fair value accounting or write-downs of individual assets. Valuation methodologies used to measure these fair value adjustments were described in Note 25, "Fair Value Measurements" to the Consolidated Financial Statements included in our 2025 Annual Report on Form 10-K. For assets measured at fair value on a non-recurring basis still held at the Balance Sheet date, the following table provides the hierarchy level and the fair value of the related assets or portfolios:
TABLE 19.3
| (in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
| Collateral dependent loans | $ | $ | $ | $ | |||||||||||||||||||
| Other assets - SBA servicing asset | |||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Collateral dependent loans | $ | $ | $ | $ | |||||||||||||||||||
| Other assets - MSRs | |||||||||||||||||||||||
| Other assets - SBA servicing asset | |||||||||||||||||||||||
| Other real estate owned | |||||||||||||||||||||||
The fair value amounts for collateral dependent loans and OREO in the table above were estimated at a date during the three months or twelve months ended March 31, 2026 and December 31, 2025, respectively. Consequently, the fair value information presented is not necessarily as of the period’s end. Collateral dependent loans measured or re-measured at fair value on a non-recurring basis during the three months ended March 31, 2026 had a carrying amount of $92.3 million, which includes an
51
allocated ACL of $20.5 million. The ACL includes a provision applicable to the current period fair value measurements of $2.8 million, which was included in provision for credit losses for the three months ended March 31, 2026.
Fair Value of Financial Instruments
Refer to Note 25, "Fair Value Measurements" to the Consolidated Financial Statements included in our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026 for a description of methods and assumptions that were used to estimate the fair value of each financial instrument.
The fair values of our financial instruments are as follows:
TABLE 19.4
| Fair Value Measurements | |||||||||||||||||||||||||||||
| (in millions) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||
| Financial Assets | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Debt securities available for sale | |||||||||||||||||||||||||||||
| Debt securities held to maturity | |||||||||||||||||||||||||||||
| Net loans and leases, including loans held for sale | |||||||||||||||||||||||||||||
| Loan servicing rights | |||||||||||||||||||||||||||||
| Derivative assets | |||||||||||||||||||||||||||||
| Accrued interest receivable | |||||||||||||||||||||||||||||
| Financial Liabilities | |||||||||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||||||||
| Long-term borrowings | |||||||||||||||||||||||||||||
| Derivative liabilities | |||||||||||||||||||||||||||||
| Accrued interest payable | |||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||
| Financial Assets | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Debt securities available for sale | |||||||||||||||||||||||||||||
| Debt securities held to maturity | |||||||||||||||||||||||||||||
| Net loans and leases, including loans held for sale | |||||||||||||||||||||||||||||
| Loan servicing rights | |||||||||||||||||||||||||||||
| Derivative assets | |||||||||||||||||||||||||||||
| Accrued interest receivable | |||||||||||||||||||||||||||||
| Financial Liabilities | |||||||||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||||||||
| Long-term borrowings | |||||||||||||||||||||||||||||
| Derivative liabilities | |||||||||||||||||||||||||||||
| Accrued interest payable | |||||||||||||||||||||||||||||
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ITEM 2. 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 three-month periods ended March 31, 2026 and 2025. This MD&A should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained herein and our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026. Our results of operations for the three months ended March 31, 2026 are not necessarily indicative of results expected for the full year.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward‑looking statements are those that do not relate to historical facts and that are based on current assumptions, beliefs, estimates, expectations and projections, many of which, by their nature, are inherently uncertain and beyond our control. Forward-looking statements may relate to various matters, including our financial condition, results of operations, plans, objectives, future performance, business or industry, and usually can be identified by the use of forward-looking words, such as “anticipates,” “assumes,” “believes,” “can,” “continues,” “could,” “enable,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “likely,” “may,” “might,” “objective,” “plans,” “positioned,” “potential,” “projects,” “remains,” “should,” “target,” “trend,” “will,” “would,” or similar words or expressions or variations thereof, and the negative thereof, but these terms are not the exclusive means of identifying such statements. You should not place undue reliance on forward-looking statements, as they are subject to risks and uncertainties, including, but not limited to, those described below. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make.
There are various important factors that could cause future results to differ materially from historical performance and any forward-looking statements. Factors that might cause such differences, include, but are not limited to:
•the credit risk associated with the substantial amount of commercial loans and leases in our loan portfolio;
•the volatility of the mortgage banking business;
•changes in market interest rates, U.S. federal government shutdowns and the unpredictability of monetary, tax and other policies of government agencies, including tariffs or the imposition and enforceability of tariffs, trade wars, barriers or restrictions, threats of such actions or related uncertainties;
•the impact of changes in interest rates on the value of our investment securities portfolios;
•changes in our ability to obtain liquidity as and when needed to fund our obligations as they come due, including as a result of adverse changes to our credit ratings;
•the risk associated with uninsured deposit account balances;
•regulatory limits on our ability to receive dividends from our subsidiaries and pay dividends to our shareholders;
•our ability to recruit and retain qualified banking professionals;
•the financial soundness of other financial institutions and the impact of volatility in the banking sector on us;
•changes and instability in economic conditions and financial markets, in the regions in which we operate or otherwise, including a contraction of economic activity, economic downturn or uncertainty and international conflict, including in the Middle East, disruption of supply chain and energy supply markets and capital markets, changes to inflation expectations and other related uncertainties;
•our ability to continue to invest in technological improvements 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;
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•our ability to comply with the consent orders entered into by FNBPA with the DOJ and the North Carolina State Department of Justice, and related costs and potential reputational harm;
•changes in federal, state or local tax rules and regulations or interpretations, or accounting policies, standards and interpretations;
•the effects of climate change and related legislative and regulatory initiatives; and
•any reputation, credit, interest rate, market, operational, litigation, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above.
We caution that the risks identified here are not exhaustive of the types of risks that may adversely impact us and actual results may differ materially from those expressed or implied as a result of these risks and uncertainties, including, but not limited to, the risk factors and other uncertainties described under Item 1A. Risk Factors and the Risk Management sections of our 2025 Annual Report on Form 10-K (including the MD&A section) and our other 2026 filings with the SEC, which are available on our corporate website at https://www.fnb-online.com/about-us/investor-information/reports-and-filings or the SEC's website at www.sec.gov. We have included our web address as an inactive textual reference only. Information on our website is not part of our SEC filings.
You should treat forward-looking statements as speaking only as of the date they are made and based only on information then actually known to us. We do not undertake, and specifically disclaims any obligation, to update or revise any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
A description of our critical accounting policies is included in the MD&A section of our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026 under the heading “Application of Critical Accounting Policies”. There have been no significant changes in critical accounting policies or the assumptions and judgments utilized in applying these policies since December 31, 2025.
USE OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE INDICATORS
To supplement our Consolidated Financial Statements presented in accordance with GAAP, we use certain non-GAAP financial measures, such as return on average tangible common equity, return on average tangible assets, tangible book value per common share, the ratio of tangible common equity to tangible assets, pre-provision net revenue (reported), 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”.
To facilitate peer comparisons of net interest margin and efficiency ratio, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets (loans and investments) to make it fully equivalent to interest income earned on taxable investments (this adjustment is not permitted under GAAP). Taxable-equivalent amounts for 2026 and 2025 were calculated using a federal statutory income tax rate of 21%.
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FINANCIAL SUMMARY
Net income for the first quarter of 2026 was $137.0 million, or $0.38 per diluted common share. Comparatively, first quarter of 2025 net income totaled $116.5 million, or $0.32 per diluted common share. On an operating basis, there were no significant items impacting earnings for the first quarters of 2026 and 2025.
First quarter earnings per diluted common share increased 19% from the year-ago quarter and pre-provision net revenue (non-GAAP) increased 17% as we generated significant positive operating leverage with continued solid non-interest income generation and growth in net interest income. Asset quality metrics remained at solid levels with net charge-offs of 0.18% annualized of total average loans, compared to 0.15% for the first quarter of 2025. Our key performance metrics and capital ratios remained strong with return on average tangible common equity (non-GAAP) equaling 13.20% and tangible book value per common share (non-GAAP) of $12.06, an increase of 11% from the year-ago-quarter. Our continued strong financial performance, investments in a resilient risk management framework and a strong balance sheet have provided us with flexibility to efficiently deploy capital to benefit our shareholders. In April 2026, we increased our quarterly cash dividend 8% to $0.13 per share and authorized a new share repurchase program with a total of approximately $300 million available for repurchase, including the authority remaining under the previous program, as of April 15, 2026.
Income Statement Highlights
•Net interest income totaled $359.3 million, an increase of $35.4 million, or 10.9%, from the year-ago quarter, reflecting growth in average earning assets and lower interest-bearing deposit costs, partially offset by lower yields on earning assets.
•The net interest margin (FTE) (non-GAAP) increased 22 basis points to 3.25% from the year-ago quarter primarily driven by a decrease in cost of funds by 31 basis points, partially offset by a decrease of 9 basis points in the yield on earning assets.
•Total revenue totaled $450.3 million, a 9.4% increase from the year-ago quarter, driven by continued solid non-interest income generation and growth in net interest income.
•The provision for credit losses was $18.5 million, an increase of 5.6% from the year-ago quarter, with net charge-offs of $15.9 million, or 0.18% annualized of total average loans, compared to $12.5 million, or 0.15% annualized, in the year-ago quarter, reflecting continued proactive management of the loan portfolio.
•Non-interest income totaled $91.0 million, an increase of $3.2 million, or 3.7%, from the year-ago quarter.
•Non-interest expense totaled $257.9 million, an increase of $11.1 million, or 4.5%, compared to the year-ago quarter.
Balance Sheet Highlights
•For the quarter ending March 31, 2026, average loans and leases totaled $34.9 billion, an increase of $849.4 million, or 2.5%, over the quarter ending March 31, 2025, primarily driven by average consumer loan growth of $1.1 billion, partially offset by a decrease of $219.0 million in average commercial loans and leases. In December 2025, we transferred approximately $200 million of performing residential mortgage loans to held-for-sale in anticipation of a loan sale that closed in February 2026 as part of balance sheet management actions.
•On a linked-quarter basis, period-end total consumer loans and commercial loans and leases increased $198.2 million and $136.0 million, respectively, as loan activity began to accelerate late in the first quarter of 2026.
•Average deposits totaled $38.4 billion, an increase of $1.4 billion, or 3.8%, from the year-ago quarter as the growth in average money market deposits of $1.0 billion, average interest-bearing demand deposits of $241.0 million and average non-interest-bearing demand deposits of $180.3 million more than offset the declines in average savings deposits of $42.0 million and average time deposits of $30.7 million.
•On a linked-quarter basis, period-end total deposits increased $141.8 million, with deposit growth more than offsetting seasonal outflows during the quarter.
•The loan-to-deposit ratio was 90.3% at March 31, 2026, compared to 89.7% at December 31, 2025 and 91.9% at March 31, 2025.
•The ratio of non-performing loans plus OREO to total loans and leases plus OREO increased 3 basis points from the
55
prior quarter to 0.34%. Compared to March 31, 2025, the ratio decreased 14 basis points. Total delinquency decreased 1 basis point to 0.74%, compared to 0.75% at March 31, 2025, 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 $443.0 million, an increase of $14.2 million compared to March 31, 2025, driven primarily by loan growth, with the ratio of the ACL to total loans and leases increasing 1 basis point to 1.26%.
•Tangible book value per common share (non-GAAP) of $12.06 increased 11.4% compared to March 31, 2025, and 1.6% compared to December 31, 2025. Reflecting the impact of unrealized losses on AFS securities. AOCI reduced the tangible book value per common share (non-GAAP) by $0.24 as of March 31, 2026, compared to a reduction of $0.34 as of March 31, 2025, and $0.18 as of December 31, 2025.
•The CET1 capital ratio was 11.4%, compared to 10.7% at March 31, 2025 and 11.4% at December 31, 2025. The tangible common equity to tangible assets ratio (non-GAAP) was 8.9%, compared to 8.4% at March 31, 2025 and 8.9% at December 31, 2025.
•During the first quarter of 2026, we repurchased $35 million, or 2.0 million shares, of our common stock at a weighted average share price of $17.41. In April 2026, we announced that our Board of Directors authorized a new share repurchase program. Including the authority remaining under the previous program, total repurchase capacity is approximately $300 million at April 15, 2026.
•In April 2026, our Board of Directors declared a quarterly common stock cash dividend of $0.13, an 8% increase, beginning with the common dividend payable on June 15, 2026 as part of our strategic actions to deploy capital, resulting from sustained exceptional financial performance to continue to benefit FNB shareholders.
TABLE 1
| Three Months Ended March 31, | |||||||||||
| Quarterly Results Summary | 2026 | 2025 | |||||||||
Reported results (1) | |||||||||||
| Net income available to common shareholders (millions) | $ | 137.0 | $ | 116.5 | |||||||
| Earnings per diluted common share | 0.38 | 0.32 | |||||||||
| Book value per common share | 19.12 | 17.86 | |||||||||
| Average diluted common shares outstanding (thousands) | 360,235 | 363,069 | |||||||||
| Capital measures | |||||||||||
| CET1 capital ratio | 11.41 | % | 10.70 | % | |||||||
| Tangible common equity to tangible assets (non-GAAP) | 8.91 | 8.37 | |||||||||
| Tangible book value per common share (non-GAAP) | $ | 12.06 | $ | 10.83 | |||||||
| (1) Operating results equaled reported results as there were no significant items impacting earnings for the first quarters of 2026 and 2025. | |||||||||||
RESULTS OF OPERATIONS
Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025
Net income for the first three months of 2026 was $137.0 million, or $0.38 per diluted common share, compared to $116.5 million, or $0.32 per diluted common share for the first three months of 2025. On an operating basis, there were no significant items impacting earnings for the first quarters of 2026 and 2025.
Net interest income totaled $359.3 million, an increase of $35.4 million, or 10.9%, compared to $323.8 million, reflecting growth in average earning assets and lower interest-bearing deposit costs, partially offset by balance growth in higher yielding deposit products. The net interest margin (FTE) (non-GAAP) increased 22 basis points to 3.25%. Total cost of funds decreased 31 basis points to 2.01% with a 36 basis point decrease in interest-bearing deposit costs to 2.40% and a 57 basis point decrease in total borrowing costs. The yield on earning assets (non-GAAP) declined 9 basis points to 5.14%, driven by a 12 basis point decline in yields on loans to 5.56%, offset by a 13 basis point increase in yields on investment securities to 3.54%. The FOMC has lowered the target federal funds rate by 175 basis points since August 2024. The provision for credit losses for the first three months of 2026 totaled $18.5 million, compared to $17.5 million. Net charge-offs for the first three months of 2026
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totaled $15.9 million, or 0.18% annualized of total average loans, compared to $12.5 million, or 0.15% annualized. Non-interest income totaled $91.0 million, compared to $87.8 million, reflecting increased capital markets income, wealth management revenue and other non-interest income. Non-interest expense totaled $257.9 million, increasing $11.1 million, or 4.5%. Net occupancy and equipment expense increased $5.1 million, or 11.1%, primarily due to technology-related investments and higher occupancy costs, which included unusually high seasonal snow removal costs.
Financial highlights are summarized below:
TABLE 2
| Three Months Ended March 31, | $ | % | |||||||||||||||||||||
| (dollars in thousands, except per share data) | 2026 | 2025 | Change | Change | |||||||||||||||||||
| Net interest income | $ | 359,278 | $ | 323,845 | $ | 35,433 | 10.9 | % | |||||||||||||||
| Provision for credit losses | 18,462 | 17,489 | 973 | 5.6 | |||||||||||||||||||
| Non-interest income | 90,985 | 87,766 | 3,219 | 3.7 | |||||||||||||||||||
| Non-interest expense | 257,865 | 246,811 | 11,054 | 4.5 | |||||||||||||||||||
| Income taxes | 36,890 | 30,796 | 6,094 | 19.8 | |||||||||||||||||||
| Net income | $ | 137,046 | $ | 116,515 | $ | 20,531 | 17.6 | % | |||||||||||||||
| Earnings per common share – Basic | $ | 0.38 | $ | 0.32 | $ | 0.06 | 18.8 | % | |||||||||||||||
| Earnings per common share – Diluted | 0.38 | 0.32 | 0.06 | 18.8 | |||||||||||||||||||
| 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 March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Return on average equity | 8.16 | % | 7.42 | % | |||||||
Return on average tangible common equity (1) | 13.20 | 12.62 | |||||||||
| Return on average assets | 1.11 | 0.97 | |||||||||
Return on average tangible assets (1) | 1.19 | 1.06 | |||||||||
| Equity to assets | 13.43 | 13.09 | |||||||||
| Average equity to average assets | 13.63 | 13.14 | |||||||||
Tangible common equity to tangible assets (1) | 8.91 | 8.37 | |||||||||
| CET1 capital ratio | 11.41 | 10.70 | |||||||||
| Dividend payout ratio | 31.71 | 37.75 | |||||||||
| Book value per common share | $ | 19.12 | $ | 17.86 | |||||||
Tangible book value per common share (1) | 12.06 | 10.83 | |||||||||
(1) Non-GAAP
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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 March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits with banks | $ | 1,748,445 | $ | 15,325 | 3.55 | % | $ | 1,741,006 | $ | 17,073 | 3.98 | % | |||||||||||||||||||||||
Taxable investment securities (1) | 6,876,738 | 60,936 | 3.55 | 6,437,681 | 54,635 | 3.40 | |||||||||||||||||||||||||||||
Tax-exempt investment securities (1)(2) | 991,913 | 8,735 | 3.52 | 1,010,117 | 8,764 | 3.47 | |||||||||||||||||||||||||||||
| Loans held for sale | 437,086 | 7,572 | 6.93 | 203,579 | 3,884 | 7.63 | |||||||||||||||||||||||||||||
Loans and leases (2) (3) | 34,900,157 | 479,857 | 5.56 | 34,050,781 | 478,065 | 5.68 | |||||||||||||||||||||||||||||
Total interest-earning assets (2) | 44,954,339 | 572,425 | 5.14 | 43,443,164 | 562,421 | 5.23 | |||||||||||||||||||||||||||||
| Cash and due from banks | 373,240 | 393,846 | |||||||||||||||||||||||||||||||||
| Allowance for credit losses | (446,932) | (428,903) | |||||||||||||||||||||||||||||||||
| Premises and equipment | 567,938 | 538,394 | |||||||||||||||||||||||||||||||||
| Other assets | 4,505,350 | 4,535,697 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 49,953,935 | $ | 48,482,198 | |||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 6,541,455 | 18,173 | 1.13 | $ | 6,300,423 | 18,826 | 1.21 | |||||||||||||||||||||||||||
| Money market | 11,700,669 | 85,030 | 2.95 | 10,652,531 | 90,025 | 3.43 | |||||||||||||||||||||||||||||
| Savings | 3,102,399 | 6,787 | 0.89 | 3,144,432 | 8,110 | 1.05 | |||||||||||||||||||||||||||||
| Certificates and other time | 7,193,173 | 58,690 | 3.31 | 7,223,878 | 68,867 | 3.87 | |||||||||||||||||||||||||||||
| Total interest-bearing deposits | 28,537,696 | 168,680 | 2.40 | 27,321,264 | 185,828 | 2.76 | |||||||||||||||||||||||||||||
| Short-term borrowings | 1,978,660 | 17,934 | 3.67 | 1,374,269 | 14,103 | 4.14 | |||||||||||||||||||||||||||||
| Long-term borrowings | 1,984,936 | 23,388 | 4.78 | 2,828,002 | 35,662 | 5.11 | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 32,501,292 | 210,002 | 2.62 | 31,523,535 | 235,593 | 3.03 | |||||||||||||||||||||||||||||
| Non-interest-bearing demand deposits | 9,828,293 | 9,647,959 | |||||||||||||||||||||||||||||||||
| Total deposits and borrowings | 42,329,585 | 2.01 | 41,171,494 | 2.32 | |||||||||||||||||||||||||||||||
| Other liabilities | 816,738 | 938,559 | |||||||||||||||||||||||||||||||||
| Total liabilities | 43,146,323 | 42,110,053 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity | 6,807,612 | 6,372,145 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 49,953,935 | $ | 48,482,198 | |||||||||||||||||||||||||||||||
| Net interest-earning assets | $ | 12,453,047 | $ | 11,919,629 | |||||||||||||||||||||||||||||||
Net interest income (FTE) (2) | 362,423 | 326,828 | |||||||||||||||||||||||||||||||||
| Tax-equivalent adjustment | (3,145) | (2,983) | |||||||||||||||||||||||||||||||||
| Net interest income | $ | 359,278 | $ | 323,845 | |||||||||||||||||||||||||||||||
| Net interest spread | 2.52 | % | 2.20 | % | |||||||||||||||||||||||||||||||
Net interest margin (2) | 3.25 | % | 3.03 | % | |||||||||||||||||||||||||||||||
(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.
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Net Interest Income
Net interest income on an FTE basis (non-GAAP) totaled $362.4 million, increasing $35.6 million, or 10.9%, reflecting growth in average earning assets and lower interest-bearing deposit costs, partially offset by lower yields on earning assets. The net interest margin (FTE) (non-GAAP) increased 22 basis points to 3.25%. The yield on earning assets (non-GAAP) decreased 9 basis points to 5.14%, driven by a 12 basis point decline in yields on loans to 5.56%, partially offset by a 13 basis point increase in yields on investment securities to 3.54%. Total cost of funds decreased 31 basis points to 2.01%, with a 36 basis point decrease in interest-bearing deposit costs to 2.40% and a 57 basis point decrease in total borrowing costs. The FOMC has lowered the target federal funds rate by 175 basis points since August 2024.
The following table provides certain information regarding changes in net interest income on an FTE basis (non-GAAP) attributable to changes in the average volumes and yields earned on average interest-earning assets and the average volume and rates paid for average interest-bearing liabilities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025:
TABLE 5
| (in thousands) | Volume | Rate | Net | ||||||||||||||
Interest Income (1) | |||||||||||||||||
| Interest-bearing deposits with banks | $ | 66 | $ | (1,814) | $ | (1,748) | |||||||||||
Investment securities (2) | 4,703 | 1,569 | 6,272 | ||||||||||||||
| Loans held for sale | 4,033 | (346) | 3,687 | ||||||||||||||
Loans and leases (2) | 9,255 | (7,462) | 1,793 | ||||||||||||||
Total interest income (2) | 18,057 | (8,053) | 10,004 | ||||||||||||||
Interest Expense (1) | |||||||||||||||||
| Deposits: | |||||||||||||||||
| Interest-bearing demand | 1,352 | (2,006) | (654) | ||||||||||||||
| Money market | 7,683 | (12,677) | (4,994) | ||||||||||||||
| Savings | (24) | (1,300) | (1,324) | ||||||||||||||
| Certificates and other time | 68 | (10,245) | (10,177) | ||||||||||||||
| Short-term borrowings | 6,127 | (2,296) | 3,831 | ||||||||||||||
| Long-term borrowings | (10,419) | (1,854) | (12,273) | ||||||||||||||
| Total interest expense | 4,787 | (30,378) | (25,591) | ||||||||||||||
Net change (2) | $ | 13,270 | $ | 22,325 | $ | 35,595 | |||||||||||
(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 $572.4 million, increased $10.0 million, or 1.8%, resulting from growth in average earning assets of $1.5 billion. The increase in average earning assets was primarily driven by an $849.4 million, or 2.5%, increase in average loans and leases and an increase of $420.9 million in average investment securities, partially offset by a reduction in yield of 9 basis points of interest earning assets.
Interest expense of $210.0 million decreased $25.6 million primarily due to a 31 basis point reduction in the cost of funds, partially offset by the growth in average interest-bearing deposits. Average total deposits increased $1.4 billion, or 3.8%, reflecting robust organic growth in new and existing customer relationships. The funding mix was stable with non-interest-bearing demand deposits comprising 26% of total deposits at both March 31, 2026 and March 31, 2025. Average short-term borrowings increased $604.4 million, or 44.0%, at lower yields while our average long-term borrowings decreased $843.1 million, or 29.8%, which included the maturity of $350 million in senior notes in August 2025 and $100 million in subordinated notes in October 2025, combined with a decline in average long-term FHLB borrowings. The decrease in total cost of funds is comprised of a 57 basis point decrease in total borrowing costs and a 36 basis point decrease in interest-bearing deposit costs to 2.40%.
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Provision for Credit Losses
The following table presents information regarding the provision for credit loss expense and net charge-offs:
TABLE 6
| Three Months Ended March 31, | $ | % | |||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | Change | Change | |||||||||||||||||||
| Provision for credit losses on loans and leases | $ | 19,350 | $ | 18,619 | $ | 731 | 3.9 | % | |||||||||||||||
| Provision for unfunded loan commitments | (933) | (1,125) | 192 | (17.1) | |||||||||||||||||||
| Total provision for credit losses on loans and leases | 18,417 | 17,494 | 923 | 5.3 | |||||||||||||||||||
| Provision for investment securities | 45 | (5) | 50 | 1,000.0 | |||||||||||||||||||
| Total provision for credit losses | $ | 18,462 | $ | 17,489 | $ | 973 | 5.6 | % | |||||||||||||||
| Net loan charge-offs | $ | 15,851 | $ | 12,539 | $ | 3,312 | 26.4 | % | |||||||||||||||
| Net loan charge-offs (annualized) / total average loans and leases | 0.18 | % | 0.15 | % | |||||||||||||||||||
The provision for credit losses on loans and leases was $18.4 million, compared to $17.5 million for the first three months of 2025. The first three months of 2026 included net charge-offs of $15.9 million, or 0.18% annualized of total average loans, compared to $12.5 million, or 0.15% annualized, in the first three months of 2025, reflecting continued proactive management of the loan portfolio. The ACL on loans and leases was $443.0 million, an increase of $14.2 million, with the ratio of the ACL to total loans and leases increasing 1 basis point to 1.26%.
Non-Interest Income
The breakdown of non-interest income for the three months ended March 31, 2026 and 2025 is presented in the following table:
TABLE 7
| Three Months Ended March 31, | $ | % | |||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | Change | Change | |||||||||||||||||||
| Service charges | $ | 22,770 | $ | 22,355 | $ | 415 | 1.9 | % | |||||||||||||||
| Interchange and card transaction fees | 12,487 | 12,370 | 117 | 0.9 | |||||||||||||||||||
| Trust services | 12,831 | 12,400 | 431 | 3.5 | |||||||||||||||||||
| Insurance commissions and fees | 6,224 | 5,793 | 431 | 7.4 | |||||||||||||||||||
| Securities commissions and fees | 8,982 | 8,820 | 162 | 1.8 | |||||||||||||||||||
| Capital markets income | 6,801 | 5,323 | 1,478 | 27.8 | |||||||||||||||||||
| Mortgage banking operations | 6,345 | 6,993 | (648) | (9.3) | |||||||||||||||||||
| Dividends on non-marketable equity securities | 6,245 | 5,560 | 685 | 12.3 | |||||||||||||||||||
| Bank owned life insurance | 4,110 | 5,350 | (1,240) | (23.2) | |||||||||||||||||||
| Net securities gains (losses) | 2 | — | 2 | — | |||||||||||||||||||
| Other | 4,188 | 2,802 | 1,386 | 49.5 | |||||||||||||||||||
| Total non-interest income | $ | 90,985 | $ | 87,766 | $ | 3,219 | 3.7 | % | |||||||||||||||
Total non-interest income increased $3.2 million, or 3.7%. The variances in significant individual non-interest income items are explained in the following paragraphs.
Wealth management revenues increased $0.6 million, or 2.8%, as trust services income and securities commissions and fees increased 3.5% and 1.8%, respectively, through continued strong contributions across the geographic footprint.
Capital markets income increased $1.5 million, or 27.8%, reflecting solid contributions from debt capital markets, swap fees and international banking income.
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Bank-owned life insurance decreased $1.2 million, or 23.2%, due to higher life insurance claims in the year-ago quarter.
Other non-interest income was $4.2 million and $2.8 million for the first three months of 2026 and 2025, respectively, with the first three months of 2026 higher due to miscellaneous gains.
| | |||||||||||||||||||||||
Non-Interest Expense
The breakdown of non-interest expense for the three months ended March 31, 2026 and 2025 is presented in the following table:
TABLE 8
| Three Months Ended March 31, | $ | % | |||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | Change | Change | |||||||||||||||||||
| Salaries and employee benefits | $ | 135,707 | $ | 135,135 | $ | 572 | 0.4 | % | |||||||||||||||
| Net occupancy | 22,637 | 19,758 | 2,879 | 14.6 | |||||||||||||||||||
| Equipment | 28,091 | 25,885 | 2,206 | 8.5 | |||||||||||||||||||
| Outside services | 26,461 | 26,341 | 120 | 0.5 | |||||||||||||||||||
| Marketing | 3,601 | 4,573 | (972) | (21.3) | |||||||||||||||||||
| FDIC insurance | 7,450 | 8,483 | (1,033) | (12.2) | |||||||||||||||||||
| Bank shares tax | 4,577 | 4,136 | 441 | 10.7 | |||||||||||||||||||
| Other | 29,341 | 22,500 | 6,841 | 30.4 | |||||||||||||||||||
| Total non-interest expense | $ | 257,865 | $ | 246,811 | $ | 11,054 | 4.5 | % | |||||||||||||||
Total non-interest expense of $257.9 million for the first three months of 2026 increased $11.1 million, a 4.5% increase from the same period of 2025. The variances in the individual non-interest expense items are further explained in the following paragraphs.
Net occupancy and equipment expense of $50.7 million increased $5.1 million, or 11.1%, primarily due to technology-related investments and higher occupancy costs, which included unusually high seasonal snow removal costs.
Marketing decreased $1.0 million, or 21.3%, primarily due to the timing of certain marketing campaigns.
FDIC insurance decreased $1.0 million, or 12.2%, primarily due to improved credit quality, which has led to a lower FDIC assessment rate.
Other non-interest expense was $29.3 million and $22.5 million for the first three months of 2026 and 2025, respectively, with the increase due to higher fraud losses, various litigation-related expenses and the impact of Community Uplift, an affordable mortgage down payment assistance program.
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Income Taxes
The following table presents information regarding income tax expense and certain tax rates:
TABLE 9
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Income tax expense | $ | 36,890 | $ | 30,796 | |||||||
| Effective tax rate | 21.2 | % | 20.9 | % | |||||||
| Statutory federal tax rate | 21.0 | 21.0 | |||||||||
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Income tax expense was higher for the three months ended March 31, 2026, primarily due to higher pre-tax income.
FINANCIAL CONDITION
The following table presents our condensed Consolidated Balance Sheets:
TABLE 10
| (dollars in millions) | March 31, 2026 | December 31, 2025 | $ Change | % Change | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 2,659 | $ | 2,498 | $ | 161 | 6.4 | % | |||||||||||||||
| Investment securities | 7,958 | 7,844 | 114 | 1.5 | |||||||||||||||||||
| Loans held for sale | 321 | 515 | (194) | (37.7) | |||||||||||||||||||
| Loans and leases, net | 34,669 | 34,338 | 331 | 1.0 | |||||||||||||||||||
| Goodwill and other intangibles | 2,513 | 2,516 | (3) | (0.1) | |||||||||||||||||||
| Other assets | 2,508 | 2,518 | (10) | (0.4) | |||||||||||||||||||
| Total Assets | $ | 50,628 | $ | 50,229 | $ | 399 | 0.8 | % | |||||||||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||||||||
| Deposits | $ | 38,901 | $ | 38,759 | $ | 142 | 0.4 | % | |||||||||||||||
| Borrowings | 4,158 | 3,918 | 240 | 6.1 | |||||||||||||||||||
| Other liabilities | 768 | 793 | (25) | (3.2) | |||||||||||||||||||
| Total Liabilities | 43,827 | 43,470 | 357 | 0.8 | |||||||||||||||||||
| Shareholders’ Equity | 6,801 | 6,759 | 42 | 0.6 | |||||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 50,628 | $ | 50,229 | $ | 399 | 0.8 | % | |||||||||||||||
Lending Activity
The loan and lease portfolio consists principally of loans and leases to individuals and small- and medium-sized businesses within our primary markets in seven states and the District of Columbia. Our market coverage spans several major metropolitan areas including: Pittsburgh, Pennsylvania; Baltimore, Maryland; Cleveland, Ohio; Washington, D.C.; Charlotte, Raleigh, Durham and the Piedmont Triad (Winston-Salem, Greensboro and High Point) in North Carolina; and Charleston, South Carolina. In December 2025, we transferred approximately $200 million of performing residential mortgage loans to held-for-sale in anticipation of a loan sale that closed in February 2026 as part of balance sheet management actions.
Following is a summary of loans and leases:
TABLE 11
| (dollars in millions) | March 31, 2026 | December 31, 2025 | $ Change | % Change | |||||||||||||||||||
| Commercial real estate | $ | 12,164 | $ | 12,274 | $ | (110) | (0.9) | % | |||||||||||||||
| Commercial and industrial | 8,032 | 7,718 | 314 | 4.1 | |||||||||||||||||||
| Commercial leases | 778 | 791 | (13) | (1.6) | |||||||||||||||||||
| Other | 87 | 141 | (54) | (38.3) | |||||||||||||||||||
| Total commercial loans and leases | 21,061 | 20,924 | 137 | 0.7 | |||||||||||||||||||
| Direct installment | 2,655 | 2,678 | (23) | (0.9) | |||||||||||||||||||
| Residential mortgages | 9,038 | 8,882 | 156 | 1.8 | |||||||||||||||||||
| Indirect installment | 805 | 767 | 38 | 5.0 | |||||||||||||||||||
| Consumer lines of credit | 1,553 | 1,526 | 27 | 1.8 | |||||||||||||||||||
| Total consumer loans | 14,051 | 13,853 | 198 | 1.4 | |||||||||||||||||||
| Total loans and leases | $ | 35,112 | $ | 34,777 | $ | 335 | 1.0 | % | |||||||||||||||
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Our commercial real estate portfolio included $8.3 billion of non-owner-occupied loans of which 17.4% represented office loans. Our top 25 non-owner-occupied commercial real estate loans averaged approximately $22 million per exposure with the office component primarily made up of mid-sized offices located outside of central business districts with an average office loan size of $1.6 million. Additionally, we have a continued focus on core commercial and industrial lending activity with traditional middle market customers. Our minimal non-depository financial institution (NDFI) balances at 1.4% of total loans is well below peer and industry median levels with the large majority of FNB’s NDFI portfolio in the FNBPA Call Report’s “Other Loans” category which supports firm’s working capital and acquisition growth strategies, not lending activities. For consumer lending, residential mortgages increased $156.0 million, compared to December 31, 2025, largely due to the continued successful execution in key markets and long-standing strategy of serving the purchase market.
Non-Performing Assets
Following is a summary of non-performing assets:
TABLE 12
| (dollars in millions) | March 31, 2026 | December 31, 2025 | $ Change | % Change | |||||||||||||||||||
| Commercial real estate | $ | 57 | $ | 45 | $ | 12 | 26.7 | % | |||||||||||||||
| Commercial and industrial | 35 | 35 | — | — | |||||||||||||||||||
| Commercial leases | 4 | 3 | 1 | 33.3 | |||||||||||||||||||
| Other | — | 2 | (2) | (100.0) | |||||||||||||||||||
| Total commercial loans and leases | 96 | 85 | 11 | 12.9 | |||||||||||||||||||
| Direct installment | 4 | 4 | — | — | |||||||||||||||||||
| Residential mortgages | 14 | 12 | 2 | 16.7 | |||||||||||||||||||
| Indirect installment | 1 | 1 | — | — | |||||||||||||||||||
| Consumer lines of credit | 3 | 3 | — | — | |||||||||||||||||||
| Total consumer loans | 22 | 20 | 2 | 10.0 | |||||||||||||||||||
| Total non-performing loans and leases | 118 | 105 | 13 | 12.4 | |||||||||||||||||||
| Other real estate owned | 3 | 3 | — | — | |||||||||||||||||||
| Total non-performing assets | $ | 121 | $ | 108 | $ | 13 | 12.0 | % | |||||||||||||||
Non-performing assets increased $12.2 million, from $108.4 million at December 31, 2025 to $120.5 million at March 31, 2026, with the ratio of non-performing loans and OREO to total loans and leases and OREO increasing 3 basis points to 0.34% and levels remaining at or near historically low levels.
Allowance for Credit Losses on Loans and Leases
The CECL model takes into consideration the expected credit losses over the life of the loan at the time the loan is originated. The model used to calculate the ACL is dependent on the portfolio composition and credit quality, as well as historical experience, current conditions and forecasts of economic conditions and interest rates. Specifically, the following considerations are incorporated into the ACL calculation:
•a third-party macroeconomic forecast scenario;
•a 24-month R&S forecast period for macroeconomic factors with a reversion to the historical mean on a straight-line basis over a 12-month period; and
•the historical through-the-cycle default mean calculated using an expanded period to include a prior recessionary period.
At March 31, 2026 and December 31, 2025, we utilized a third-party consensus macroeconomic forecast reflecting the current and projected macroeconomic environment. For our ACL calculation at March 31, 2026, the macroeconomic variables that we utilized included, but were not limited to: (i) the purchase only Housing Price Index, which increases 4.0% over our R&S forecast period, (ii) a CRE Price Index, which increases 1.3% over our R&S forecast period, (iii) S&P Volatility, which
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increases 17.5% in 2026 and decreases 4.6% in 2027 and (iv) personal and business bankruptcies, which increase and decrease, respectively, over the R&S forecast period but average below the historical through-the-cycle period. Macroeconomic variables that we utilized for our ACL calculation as of December 31, 2025 included, but were not limited to: (i) the purchase only Housing Price Index, which increases 4.3% over our R&S forecast period, (ii) a Commercial Real Estate Price Index, which decreases 0.5% over our R&S forecast period, (iii) S&P Volatility, which decreases 2.2% in 2026 and 7.9% in 2027 and (iv) personal and business bankruptcies, which increase steadily over the R&S forecast period but average below the historical through-the-cycle period.
Following is a summary of certain data related to the ACL and loans and leases:
TABLE 13
| Net Loan Charge-Offs | Net Loan Charge-Offs to Average Loans | ACL at | |||||||||||||||||||||||||||
| Three Months Ended March 31, | Three Months Ended March 31, | March 31, | |||||||||||||||||||||||||||
| (dollars in millions) | 2026 | 2025 | 2026 | 2025 | 2026 | ||||||||||||||||||||||||
| Commercial real estate | $ | 8.1 | $ | 7.2 | 0.10 | % | 0.09 | % | $ | 165.7 | |||||||||||||||||||
| Commercial and industrial | 3.3 | 1.8 | 0.04 | 0.02 | 109.7 | ||||||||||||||||||||||||
| Commercial leases | 2.0 | 0.1 | 0.02 | — | 26.3 | ||||||||||||||||||||||||
| Other commercial | 0.8 | 0.8 | 0.01 | 0.01 | 4.5 | ||||||||||||||||||||||||
| Direct installment | 0.1 | 0.3 | — | — | 25.8 | ||||||||||||||||||||||||
| Residential mortgages | 0.4 | 0.3 | — | — | 95.0 | ||||||||||||||||||||||||
| Indirect installment | 1.1 | 1.8 | 0.01 | 0.02 | 9.0 | ||||||||||||||||||||||||
| Consumer lines of credit | 0.1 | 0.2 | — | — | 7.0 | ||||||||||||||||||||||||
| Total net loan charge-offs on loans and leases, net loan charge-offs (annualized)/average loans | $ | 15.9 | $ | 12.5 | 0.18 | % | 0.15 | % | $ | 443.0 | |||||||||||||||||||
| Allowance for credit losses/total loans and leases | 1.26 | % | 1.25 | % | |||||||||||||||||||||||||
| Allowance for credit losses/non-performing loans | 376.84 | % | 266.93 | % | |||||||||||||||||||||||||
The ACL on loans and leases of $443.0 million at March 31, 2026 increased $3.5 million, or 0.8%, from December 31, 2025 with our ending ACL coverage ratio stable at 1.26%. The ACL as a percentage of non-performing loans for the total portfolio decreased to 377% as of March 31, 2026, compared to 418% as of December 31, 2025, with coverage levels remaining at historically high levels.
Total provision for credit losses for the three months ended March 31, 2026 was $18.5 million, compared to $17.5 million for the same period in 2025. Net charge-offs were $15.9 million for the three months ended March 31, 2026, compared to $12.5 million for the first three months of 2025.
Deposits
Our primary source of funds is deposits. Our diversified and granular deposit base is comprised of business, consumer and municipal customers who we serve within our footprint.
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Following is a summary of deposits:
TABLE 14
| (dollars in millions) | March 31, 2026 | December 31, 2025 | $ Change | % Change | |||||||||||||||||||
| Non-interest-bearing demand | $ | 10,003 | $ | 9,914 | $ | 89 | 0.9 | % | |||||||||||||||
| Interest-bearing demand | 6,662 | 6,740 | (78) | (1.2) | |||||||||||||||||||
| Money market | 11,699 | 11,707 | (8) | (0.1) | |||||||||||||||||||
| Savings | 3,130 | 3,090 | 40 | 1.3 | |||||||||||||||||||
| Certificates and other time deposits | 7,407 | 7,308 | 99 | 1.4 | |||||||||||||||||||
| Total deposits | $ | 38,901 | $ | 38,759 | $ | 142 | 0.4 | % | |||||||||||||||
Total deposits increased $141.8 million, or 0.4%, from December 31, 2025, due to growth in new and existing customer relationships. We ended the quarter with approximately 76% of all deposits insured by the FDIC or collateralized.
Capital Resources and Regulatory Matters
Our capital position depends in part on the access to, and cost of, funding for new business initiatives, the ability to engage in expanded business activities, the ability to pay dividends and the level and nature of regulatory oversight.
The assessment of capital adequacy depends on a number of factors such as expected organic growth in the Consolidated Balance Sheet, asset quality, liquidity, earnings performance and sustainability, changing competitive conditions, regulatory changes or actions, and economic forces. We seek to maintain a strong capital base to support our growth and expansion activities, to provide stability to current operations and to promote public confidence.
Pursuant to and in compliance with applicable SEC laws, rules and regulations, we may, from time to time, issue and sell in one or more offerings any combination of common stock, preferred stock, debt securities, depositary shares, warrants, stock purchase contracts or units.
During the first quarter of 2026, we repurchased $35.3 million, or 2.0 million shares, of common stock at a weighted average share price of $17.41. In April 2026, we announced that our Board of Directors authorized a new share repurchase program. Including the authority remaining under the previous program, total repurchase capacity is $300 million. The repurchases will be made from time to time on the open market at prevailing market prices or in privately negotiated transactions. The purchases will be funded from available working capital. There is no guarantee as to the exact number of shares that will be repurchased and we may discontinue purchases at any time.
Capital management is a continuous process, with capital plans and stress testing for FNB and FNBPA updated at least annually. These capital plans include assessing the adequacy of expected capital levels assuming various scenarios by projecting capital needs for a forecast period of two to three years beyond the current year. From time to time, we issue shares initially acquired by us as treasury stock under our various benefit plans. We may issue additional preferred or common stock to maintain our well-capitalized status.
FNB and FNBPA are subject to various regulatory capital requirements administered by the federal banking agencies. Quantitative measures established by regulators to ensure capital adequacy require FNB and FNBPA to maintain minimum amounts and ratios of total, tier 1 and CET1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of leverage ratio (as defined). Failure to meet minimum capital requirements could lead to initiation of certain mandatory, and possibly additional discretionary actions, by regulators that, if undertaken, could have a direct material effect on our Consolidated Financial Statements, dividends and future business and corporate strategies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, FNB and FNBPA must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. FNB’s and FNBPA’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
At March 31, 2026, the capital levels of both FNB and FNBPA exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered “well-capitalized” for regulatory purposes.
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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 15
| Actual | Well-Capitalized Requirements (1) | Minimum Capital Requirements plus Capital Conservation Buffer | |||||||||||||||||||||||||||||||||
| (dollars in millions) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||
| As of March 31, 2026 | |||||||||||||||||||||||||||||||||||
| F.N.B. Corporation | |||||||||||||||||||||||||||||||||||
| Total capital | $ | 5,017 | 13.06 | % | $ | 3,843 | 10.00 | % | $ | 4,305 | 10.50 | % | |||||||||||||||||||||||
| Tier 1 capital | 4,384 | 11.41 | 2,306 | 6.00 | 3,266 | 8.50 | |||||||||||||||||||||||||||||
| CET1 | 4,384 | 11.41 | n/a | n/a | 2,690 | 7.00 | |||||||||||||||||||||||||||||
| Leverage | 4,384 | 9.22 | n/a | n/a | 1,903 | 4.00 | |||||||||||||||||||||||||||||
| Risk-weighted assets | 38,427 | ||||||||||||||||||||||||||||||||||
| FNBPA | |||||||||||||||||||||||||||||||||||
| Total capital | $ | 5,264 | 13.80 | % | $ | 3,815 | 10.00 | % | $ | 4,006 | 10.50 | % | |||||||||||||||||||||||
| Tier 1 capital | 4,444 | 11.65 | 3,052 | 8.00 | 3,243 | 8.50 | |||||||||||||||||||||||||||||
| CET1 | 4,364 | 11.44 | 2,480 | 6.50 | 2,670 | 7.00 | |||||||||||||||||||||||||||||
| Leverage | 4,444 | 9.39 | 2,365 | 5.00 | 1,892 | 4.00 | |||||||||||||||||||||||||||||
| Risk-weighted assets | 38,148 | ||||||||||||||||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||||||||||||||
| F.N.B. Corporation | |||||||||||||||||||||||||||||||||||
| Total capital | $ | 4,971 | 13.08 | % | $ | 3,799 | 10.00 | % | $ | 3,989 | 10.50 | % | |||||||||||||||||||||||
| Tier 1 capital | 4,317 | 11.36 | 2,279 | 6.00 | 3,229 | 8.50 | |||||||||||||||||||||||||||||
| CET1 | 4,317 | 11.36 | n/a | n/a | 2,659 | 7.00 | |||||||||||||||||||||||||||||
| Leverage | 4,317 | 9.11 | n/a | n/a | 1,896 | 4.00 | |||||||||||||||||||||||||||||
| Risk-weighted assets | 37,991 | ||||||||||||||||||||||||||||||||||
| FNBPA | |||||||||||||||||||||||||||||||||||
| Total capital | $ | 5,188 | 13.75 | % | $ | 3,774 | 10.00 | % | $ | 3,963 | 10.50 | % | |||||||||||||||||||||||
| Tier 1 capital | 4,371 | 11.58 | 3,019 | 8.00 | 3,208 | 8.50 | |||||||||||||||||||||||||||||
| CET1 | 4,291 | 11.37 | 2,453 | 6.50 | 2,642 | 7.00 | |||||||||||||||||||||||||||||
| Leverage | 4,371 | 9.27 | 2,357 | 5.00 | 1,885 | 4.00 | |||||||||||||||||||||||||||||
| Risk-weighted assets | 37,743 | ||||||||||||||||||||||||||||||||||
(1) Reflects the well-capitalized standard under Regulation Y for F.N.B. Corporation and the prompt corrective action framework for FNBPA.
In accordance with Basel III Capital Rules, the minimum capital requirements plus capital conservation buffer, which are presented for each period above, represent the minimum requirements needed to avoid limitations on distributions of dividends and certain discretionary bonus payments.
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act)
The Dodd-Frank Act broadly affects the financial services industry by establishing a framework for systemic risk oversight, creating a resolution authority for institutions determined to be systemically important, mandating higher capital and liquidity requirements, requiring banks to pay increased fees to regulatory agencies and containing numerous other provisions aimed at strengthening the sound operation of the financial services sector that significantly change the system of regulatory oversight as
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described in more detail under Part I, Item 1, “Business - Government Supervision and Regulation” included in our 2025 Annual Report on Form 10-K as filed with the SEC on February 24, 2026.
LIQUIDITY
Our primary liquidity management goal is to satisfy the cash flow requirements of customers and the operating cash needs of FNB with cost-effective funding. Our Board of Directors has established an Asset/Liability Management Policy to guide management in achieving and maintaining earnings performance consistent with long-term goals, while maintaining acceptable levels of interest rate risk, a “well-capitalized” Balance Sheet and appropriate levels of liquidity. Our Board of Directors has also established Liquidity and Contingency Funding Policies to guide management in addressing the ability to identify, measure, monitor and control both normal and stressed liquidity conditions. These policies designate our ALCO as the body responsible for meeting these objectives. The ALCO, which is comprised of members of executive management, reviews liquidity on a continuous basis and approves significant changes in strategies that affect Balance Sheet or cash flow positions. Liquidity is centrally managed daily by our Treasury Department.
Parent Company Liquidity
The parent company’s funding requirements primarily consist of shareholder dividends, debt service, income taxes, operating expenses, funding of non-bank subsidiaries, and stock repurchases. The parent company’s funding sources primarily consist of dividends and interest received from FNBPA and other direct subsidiaries, net taxes collected from subsidiaries included in the consolidated tax returns, fees for services provided to subsidiaries and the issuance of debt instruments. The dividends received from FNBPA and other direct subsidiaries may be impacted by the parent’s or its subsidiaries’ capital and liquidity needs, statutory laws and regulations, corporate policies, contractual restrictions, profitability and other factors. In addition, through one of our subsidiaries, we regularly issue subordinated notes, which are guaranteed by FNB.
Management utilizes various strategies to ensure sufficient cash on hand is available to meet the parent company's funding needs. Significant funding sources for the parent company include dividends from subsidiaries, other operating income and access to the capital markets. During the first quarter of 2026, FNBPA paid dividends to the parent of $75 million, an increase of $20 million when compared to the fourth quarter of 2025, and within the regulatory capacity to pay dividends to FNB. The Board of Directors regularly reviews appropriate levels of dividends from subsidiaries. In addition, we repurchased $35.3 million, or 2.0 million shares, of FNB stock at an average cost of $17.41. In April 2026, we announced that our Board of Directors authorized a new share repurchase program. Including the authority remaining under the previous program, total repurchase capacity is approximately $300 million as of April 15, 2026. The parent company's cash position at March 31, 2026 was $277.0 million. We have historically been opportunistic when accessing the capital markets, and we expect to continue with that strategy. Additionally, in April 2026, our Board of Directors declared a quarterly common stock cash dividend of $0.13, an 8% increase, beginning with the common dividend payable on June 15, 2026.
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 16
| March 31, 2026 | December 31, 2025 | Internal Limit | |||||||||||||||
| Liquidity coverage ratio | 2.1 times | 2.3 times | > 1 time | ||||||||||||||
| Months of cash on hand | 12.2 months | 14.0 months | > 12 months | ||||||||||||||
| Parent company cash on hand (millions) | $ | 277.0 | $ | 288.3 | n/a | ||||||||||||
The LCR at March 31, 2026 decreased primarily due to the timing of stock repurchases and dividends from the bank subsidiary. In 2026, there are no scheduled debt maturities, a positive for the ratio. Management has concluded that our cash levels remain appropriate given the current market environment.
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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 successful strategies resulted in total deposit growth of $141.8 million, or 0.4%, compared to December 31, 2025, with interest-bearing deposits and non-interest-bearing demand deposits increasing $52.9 million and $88.9 million, respectively. The mix of non-interest-bearing demand deposits to total deposits remained stable with both the prior quarter and year-ago quarter at 26%. Our loan to deposit ratio stood at 90.3% at March 31, 2026, compared to 89.7% at December 31, 2025.
At March 31, 2026, approximately 76% of our deposits were insured by the FDIC or collateralized, consistent with December 31, 2025 levels. Our cash balances held at the FRB were $2.2 billion at March 31, 2026 and $2.1 billion at December 31, 2025. 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 17
| (dollars in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Unused wholesale credit availability | $ | 18,973 | $ | 18,345 | |||||||
| Unused wholesale credit availability as a % of FNBPA assets | 37.7 | % | 36.7 | % | |||||||
| Salable unpledged government and agency securities | $ | 1,323 | $ | 1,183 | |||||||
| Salable unpledged government and agency securities as a % of FNBPA assets | 2.6 | % | 2.4 | % | |||||||
| Cash and salable unpledged government and agency securities as a % of FNBPA assets | 7.0 | % | 6.5 | % | |||||||
| Uninsured Deposit Coverage Ratio | 142.3 | % | 139.1 | % | |||||||
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 actively manage our liquidity. A portion of our available borrowing capacity includes capacity at the FRB's Discount Window. Through various actions, management increased availability from this source to $3.4 billion. 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 March 31, 2026, FNBPA has $3.5 billion of cash and salable unpledged government and agency securities representing 7.0% of total assets, compared to $3.3 million and 6.5% at December 31, 2025. This compares to a policy minimum of 3.0%. The Uninsured Deposit Coverage Ratio is designed to determine the amount of funding sources available to cover uninsured deposit outflows. This ratio has improved from December 31, 2025 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 March 31, 2026 compares the difference between our cash flows from existing earning assets and interest-bearing liabilities over future time intervals. Management calculates this ratio at least quarterly and it is reviewed regularly by ALCO. Management monitors the size of the liquidity gaps so that sources and uses of funds are reasonably matched in the normal course of business and in relation to implied forward rate expectations. A reasonably matched position lays a 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.
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TABLE 18
| (dollars in millions) | Within 1 Month | 2-3 Months | 4-6 Months | 7-12 Months | Total 1 Year | ||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Loans | $ | 1,129 | $ | 1,791 | $ | 2,126 | $ | 3,625 | $ | 8,671 | |||||||||||||||||||
| Investments | 2,321 | 198 | 300 | 556 | 3,375 | ||||||||||||||||||||||||
| 3,450 | 1,989 | 2,426 | 4,181 | 12,046 | |||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Non-maturity deposits | 341 | 682 | 1,023 | 2,047 | 4,093 | ||||||||||||||||||||||||
| Time deposits | 1,114 | 2,176 | 2,448 | 1,268 | 7,006 | ||||||||||||||||||||||||
| Borrowings | 1,527 | 12 | 522 | 430 | 2,491 | ||||||||||||||||||||||||
| 2,982 | 2,870 | 3,993 | 3,745 | 13,590 | |||||||||||||||||||||||||
| Period Gap (Assets - Liabilities) | $ | 468 | $ | (881) | $ | (1,567) | $ | 436 | $ | (1,544) | |||||||||||||||||||
| Cumulative Gap | $ | 468 | $ | (413) | $ | (1,980) | $ | (1,544) | |||||||||||||||||||||
| Cumulative Gap to Total Assets | 0.9 | % | (0.8) | % | (3.9) | % | (3.0) | % | |||||||||||||||||||||
The twelve-month cumulative gap to total assets ratio was (3.0)% as of March 31, 2026, compared to (2.2)% as of December 31, 2025. The change in the twelve-month cumulative gap to total assets was primarily related to lower prepayment estimates, decreased investment securities maturities and decreased loans held for sale. 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.
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The following repricing gap analysis as of March 31, 2026 compares the difference between the amount of interest-earning assets and interest-bearing liabilities subject to repricing. The allocation of non-maturity deposits and customer repurchase agreements to the one-month maturity category below is based on the estimated sensitivity of each product to changes in market rates. For example, if a product’s rate is estimated to increase by 50% as much as the market rates, then 50% of the account balance was placed in this category.
TABLE 19
| (dollars in millions) | Within 1 Month | 2-3 Months | 4-6 Months | 7-12 Months | Total 1 Year | ||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Loans | $ | 15,814 | $ | 1,277 | $ | 1,006 | $ | 1,769 | $ | 19,866 | |||||||||||||||||||
| Investments | 2,354 | 203 | 326 | 633 | 3,516 | ||||||||||||||||||||||||
| 18,168 | 1,480 | 1,332 | 2,402 | 23,382 | |||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Non-maturity deposits | 11,133 | — | — | — | 11,133 | ||||||||||||||||||||||||
| Time deposits | 1,203 | 2,175 | 2,446 | 1,263 | 7,087 | ||||||||||||||||||||||||
| Borrowings | 1,598 | 428 | 415 | 116 | 2,557 | ||||||||||||||||||||||||
| 13,934 | 2,603 | 2,861 | 1,379 | 20,777 | |||||||||||||||||||||||||
| Off-balance sheet | (1,450) | 200 | (250) | 250 | (1,250) | ||||||||||||||||||||||||
| Period Gap (Assets – Liabilities + Off-balance sheet) | $ | 2,784 | $ | (923) | $ | (1,779) | $ | 1,273 | $ | 1,355 | |||||||||||||||||||
| Cumulative Gap | $ | 2,784 | $ | 1,861 | $ | 82 | $ | 1,355 | |||||||||||||||||||||
| Cumulative Gap to Earning Assets | 6.1 | % | 4.1 | % | 0.2 | % | 3.0 | % | |||||||||||||||||||||
Management utilizes the repricing gap analysis as a diagnostic tool in managing net interest income and EVE risk measures. Repricing gap analysis, while useful, has some limitations in measuring interest rate risk. The positive cumulative gap positions indicate that we have a greater amount of repricing earning assets than repricing interest-bearing liabilities over the subsequent twelve months, resulting in our slightly asset sensitive position. As a result of management's strategies to reduce its asset sensitive position, the twelve-month cumulative repricing gap to total assets was 3.0% as of March 31, 2026, down from 3.2% at December 31, 2025. Specific pricing actions included an emphasis on originating shorter-term time deposits and borrowings 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 March 31, 2026. The calculated results do not reflect management's potential actions.
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TABLE 20
| March 31, 2026 | December 31, 2025 | ALCO Limits | |||||||||||||||
| Net interest income change over 12 months (Rate Ramps): | |||||||||||||||||
| + 200 basis points | 1.5 | % | 1.6 | % | (10.0) | % | |||||||||||
| + 100 basis points | 0.8 | 0.8 | (10.0) | ||||||||||||||
| - 100 basis points | (0.9) | (0.9) | (10.0) | ||||||||||||||
| - 200 basis points | (1.9) | (1.9) | (10.0) | ||||||||||||||
| Net interest income change over 12 months (Rate Shocks): | |||||||||||||||||
| + 200 basis points | 2.4 | 2.5 | (10.0) | ||||||||||||||
| + 100 basis points | 1.3 | 1.4 | (10.0) | ||||||||||||||
| - 100 basis points | (1.7) | (1.8) | (10.0) | ||||||||||||||
| - 200 basis points | (3.8) | (4.2) | (10.0) | ||||||||||||||
| Economic value of equity (Rate Shocks): | |||||||||||||||||
| + 300 basis points | 5.0 | 5.6 | (25.0) | ||||||||||||||
| + 200 basis points | 3.8 | 4.2 | (15.0) | ||||||||||||||
| + 100 basis points | 2.4 | 2.7 | (10.0) | ||||||||||||||
| - 100 basis points | (3.6) | (3.9) | (10.0) | ||||||||||||||
| - 200 basis points | (8.6) | (9.5) | (15.0) | ||||||||||||||
There are multiple factors that influence our interest rate risk position and impact on net interest income, including external factors such as the shape of the yield curve, the competitive landscape and expectations regarding future interest rates, as well as internal factors regarding product offerings, product mix and pricing and re-pricing of loans and deposits. Our current interest rate risk position is slightly asset sensitive. A key driver of this position resulted from the origination of consumer and commercial loans with short-term repricing characteristics, some of which have been swapped to a fixed rate. Total variable and adjustable-rate loans were 63.1% and 63.4% of total net loans and leases at March 31, 2026 and December 31, 2025, respectively. 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 maintain exposures near the current neutral levels. During the first three months of 2026, management adjusted the IRR position by purchasing investment securities with an average duration of 4.5 years, originating adjustable-rate mortgage loans with longer-duration fixed-rate reset periods, 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 percentage 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, 2025.
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.
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 March 31, 2026, the commercial customer-related interest rate swaps totaled $5.9 billion (notional), down from $6.1 billion (notional) at December 31, 2025. For additional information regarding interest rate swaps, see Note 11, "Derivative Instruments and Hedging Activities" in the Notes to Consolidated Financial Statements in this Report.
We recognize that all asset/liability models have some inherent shortcomings. Asset/liability models require certain assumptions to be made, such as prepayment rates on interest-earning assets and repricing impact on non-maturity deposits,
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which may differ from actual experience. These business assumptions are based upon our experience, business plans, economic and market trends and available industry data. While management believes that its methodology for developing such assumptions is reasonable, there can be no assurance that modeled results will be achieved. Furthermore, the metrics are based upon the static Balance Sheet structure as of the valuation date and do not reflect planned growth or management actions that could be taken.
CREDIT RATINGS
Credit ratings are subject to ongoing review by rating agencies, which consider a number of factors, including our financial strength, performance, prospects and operations as well as other factors not under our control. Other factors that influence our credit ratings include changes to the rating agencies’ methodologies for our industry or certain security types; the rating agencies’ assessment of the general operating environment for financial services companies; our relative positions in the markets in which we compete; our various risk exposures 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. Our credit ratings affect the cost and availability of short- and long-term funding and collateral requirements for certain derivative instruments. Credit rating downgrades or negative watch warnings could negatively impact our reputation with lenders, investors and other third parties, which could also impair our ability to compete in certain markets or engage in certain transactions.
The following table presents the credit ratings for FNB and FNBPA as of March 31, 2026:
TABLE 21
| Moody's | Standard & Poor's | Kroll | |||||||||||||||
| F.N.B. Corporation | |||||||||||||||||
| Issuer credit rating | Baa2 | BBB- | A- | ||||||||||||||
| Senior debt | Baa2 | BBB- | A- | ||||||||||||||
| Subordinated debt | Baa2 | n/a | BBB+ | ||||||||||||||
| First National Bank of Pennsylvania | |||||||||||||||||
| Baseline credit assessment | Baa1 | n/a | n/a | ||||||||||||||
| Issuer credit rating | Baa1 | BBB | A | ||||||||||||||
| Senior debt | n/a | n/a | A | ||||||||||||||
| Subordinated debt | n/a | n/a | A- | ||||||||||||||
| Bank deposits | A2/P-1 | n/a | A | ||||||||||||||
| Short-term borrowings | n/a | A-2 | K1 | ||||||||||||||
| Outlook for F.N.B. Corporation and First National Bank of Pennsylvania | Stable | Stable | Stable | ||||||||||||||
| n/a - not applicable | |||||||||||||||||
RISK MANAGEMENT
As a financial institution, we take on a certain amount of risk in every business decision, transaction and activity. Accordingly, we have designed an ERM Framework in accordance with applicable regulatory guidelines which includes risk management practices designed to identify, assess, monitor and report the material risks known throughout the organization in pursuit of our business strategies. Our Board of Directors and senior management have identified six major categories of risk: credit risk, market risk, liquidity risk, operational risk, compliance risk and strategic risk. Reputation risk is considered across all six major risk categories as a consequential risk. In its oversight role of our risk management function, the Board of Directors focuses on the strategies, analyses and conclusions of management relating to identifying, understanding and managing risks to optimize total shareholder value, while balancing prudent business and safety and soundness considerations to safeguard our reputation.
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We support our risk management processes and business oversight through a three lines model and a governance structure at the Board of Directors and management levels.
The three lines model consists of:
•First Line - consists of our businesses and enterprise support areas that engage in risk-taking activities and are principally responsible for owning and managing the day-to-day operational activities in accordance with the risk frameworks.
•Second Line - consists of the Risk Management Department responsible for developing risk frameworks and identifying, assessing, overseeing and controlling enterprise aggregate risks independent from the First Line.
•Third Line - consists of the Internal Audit Department, responsible for developing and executing a risk-based audit plan to provide assurance on the compliance and effectiveness of controls and risk management practices throughout the organization independent from the First and Second Lines.
Our Board of Directors is responsible for the oversight of management on behalf of our shareholders. The Board of Directors has assistance in carrying out its duties and may delegate authority through the following standing Board Committees which are also more fully described in our 2026 proxy statement:
•Audit Committee - provides oversight of our internal and external audit processes. In addition, monitors the integrity of the Consolidated Financial Statements, internal controls over financial reporting, qualifications and independence of our audit function.
•Nominating and Corporate Governance Committee - responsible for oversight of our governance policies and practices, shareholder engagement and selecting and recommending nominees for election to the FNB and FNBPA Boards of Directors.
•Compensation Committee - reviews and approves compensation and incentive compensation performance metrics of our SEC Section 16 reporting officers, and reviews and implements compensation and benefit matters having corporate-wide significance.
•Executive Committee - joint session of the FNB and FNBPA Board of Directors to cover special matters, as deemed necessary, in between regularly scheduled board meetings.
•Risk Committee - provides oversight and approves the ERM Framework including the review and approval of risk appetite and tolerances and risk management policies and practices, to identify, assess, monitor and report material risks.
•Credit Risk, Fair Lending and Community Reinvestment Act Committee - responsible for providing oversight of credit and lending risk management strategies and objectives of FNB and FNBPA, providing oversight of FNBPA's CRA program, policy and practices, and performing reviews of fair lending strategies, analysis and results to assist with its credit oversight responsibilities.
The Board Risk Committee serves as the primary point of contact between our Board of Directors and the Risk Management Council (RMC), which is the senior management level committee responsible for identifying, assessing, monitoring and reporting on material enterprise-wide risks. The Risk Committee and RMC are supported by other risk management committees, including Credit Risk Committees, the Operational Risk Committee, the Compliance Risk Committee and the ALCO.
Risk appetite is an integral element of our ERM Framework and of our business and capital planning processes through our Board Risk Committee and RMC. We use our risk appetite processes to promote appropriate alignment of risk, capital and performance tactics, while also considering risk appetite constraints from both financial and non-financial perspectives. The Board of Directors adopted an enterprise risk appetite that defines acceptable risk limits under which we seek to operate in pursuit of optimizing returns. As such, we monitor a series of Key Risk Indicators for various business lines and operations units to measure performance alignment with our stated risk appetite. Our top-down risk appetite process serves as a mitigant for undue risk-taking for bottom-up planning from our various business functions. Our Board Risk Committee, in collaboration with our RMC, approves our risk appetite on an annual basis, or more frequently, as needed to reflect changes in the risk, regulatory, economic and strategic plan environments, with the goal of ensuring that our strategic plans and business operations
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remain consistent with our risk appetite given the current economic and regulatory environments, as well as shareholders' expectations.
Our ERM Framework provides the standards by which we will identify, assess, control, monitor and report on material risks across the organization. Reports relating to our risk appetite and strategic plans, and our ongoing monitoring thereof, and our aggregate risk profile, are regularly presented to our various management level risk oversight committees and reported up through our Board Risk Committee.
We continue to assess our risk management practices on an ongoing basis and are making investments as necessary to position ourselves for continued growth through sound risk management practices.
The Board of Directors believes that our enterprise-wide risk management process is effective and enables the Board of Directors to:
•assess the quality of the information they receive;
•understand our businesses and investments and risk-related financial, accounting, legal, regulatory and strategic considerations necessary to assess the material risks that FNB faces;
•oversee and assess how senior management evaluates material risk; and
•assess appropriately the effectiveness of our enterprise-wide risk management processes.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE INDICATORS TO GAAP
Reconciliations of non-GAAP 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 22
Return on average tangible common equity
| Three Months Ended March 31, | |||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Net income available to common shareholders (annualized) | $ | 555,798 | $ | 472,534 | |||||||||||||||||||
| Amortization of intangibles, net of tax (annualized) | 10,733 | 12,620 | |||||||||||||||||||||
| Tangible net income available to common shareholders (annualized) (non-GAAP) | $ | 566,531 | $ | 485,154 | |||||||||||||||||||
| Average total shareholders’ equity | $ | 6,807,612 | $ | 6,372,145 | |||||||||||||||||||
Less: Average intangible assets (1) | (2,514,310) | (2,527,636) | |||||||||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 4,293,302 | $ | 3,844,509 | |||||||||||||||||||
| Return on average tangible common equity (non-GAAP) | 13.20 | % | 12.62 | % | |||||||||||||||||||
| | |||||||||||||||||||||||
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TABLE 23
Return on average tangible assets
| Three Months Ended March 31, | |||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Net income (annualized) | $ | 555,798 | $ | 472,534 | |||||||||||||||||||
| Amortization of intangibles, net of tax (annualized) | 10,733 | 12,620 | |||||||||||||||||||||
| Tangible net income (annualized) (non-GAAP) | $ | 566,531 | $ | 485,154 | |||||||||||||||||||
| Average total assets | $ | 49,953,935 | $ | 48,482,198 | |||||||||||||||||||
Less: Average intangible assets (1) | (2,514,310) | (2,527,636) | |||||||||||||||||||||
| Average tangible assets (non-GAAP) | $ | 47,439,625 | $ | 45,954,562 | |||||||||||||||||||
| Return on average tangible assets (non-GAAP) | 1.19 | % | 1.06 | % | |||||||||||||||||||
TABLE 24
Tangible book value per common share
| (dollars in thousands, except per share data) | March 31, 2026 | March 31, 2025 | |||||||||
| Total shareholders’ equity | $ | 6,800,671 | $ | 6,418,012 | |||||||
Less: Intangible assets (1) | (2,512,732) | (2,525,619) | |||||||||
| Tangible common equity (non-GAAP) | $ | 4,287,939 | $ | 3,892,393 | |||||||
| Common shares outstanding | 355,670,905 | 359,364,784 | |||||||||
| Tangible book value per common share (non-GAAP) | $ | 12.06 | $ | 10.83 | |||||||
(1) Excludes loan servicing rights.
TABLE 25
Tangible common equity to tangible assets
| (dollars in thousands) | March 31, 2026 | March 31, 2025 | |||||||||
| Total shareholders' equity | $ | 6,800,671 | $ | 6,418,012 | |||||||
Less: Intangible assets (1) | (2,512,732) | (2,525,619) | |||||||||
| Tangible common equity (non-GAAP) | $ | 4,287,939 | $ | 3,892,393 | |||||||
| Total assets | $ | 50,628,037 | $ | 49,019,742 | |||||||
Less: Intangible assets (1) | (2,512,732) | (2,525,619) | |||||||||
| Tangible assets (non-GAAP) | $ | 48,115,305 | $ | 46,494,123 | |||||||
| Tangible common equity to tangible assets (non-GAAP) | 8.91 | % | 8.37 | % | |||||||
(1) Excludes loan servicing rights.
| | |||||||||||||||||||||||||||||
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TABLE 26
Pre-provision net revenue
| Three Months Ended March 31, | |||||||||||||||||
| (in thousands) | 2026 | 2025 | |||||||||||||||
| Net interest income | $ | 359,278 | $ | 323,845 | |||||||||||||
| Non-interest income | 90,985 | 87,766 | |||||||||||||||
| Less: Non-interest expense | (257,865) | (246,811) | |||||||||||||||
| Pre-provision net revenue (reported) (non-GAAP) | $ | 192,398 | $ | 164,800 | |||||||||||||
| Pre-provision net revenue (reported) (annualized) (non-GAAP) | $ | 780,281 | $ | 668,357 | |||||||||||||
TABLE 27
Efficiency ratio
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||||||||||||||||||||
| Non-interest expense | $ | 257,865 | $ | 246,811 | |||||||||||||||||||||||||
| Less: Amortization of intangibles | (3,350) | (3,939) | |||||||||||||||||||||||||||
| Less: OREO expense | (236) | (315) | |||||||||||||||||||||||||||
| Adjusted non-interest expense | $ | 254,279 | $ | 242,557 | |||||||||||||||||||||||||
| Net interest income | $ | 359,278 | $ | 323,845 | |||||||||||||||||||||||||
| Taxable equivalent adjustment | 3,145 | 2,983 | |||||||||||||||||||||||||||
| Non-interest income | 90,985 | 87,766 | |||||||||||||||||||||||||||
| Less: Net securities (gains) losses | (2) | — | |||||||||||||||||||||||||||
| Adjusted net interest income (FTE) + non-interest income | $ | 453,406 | $ | 414,594 | |||||||||||||||||||||||||
| Efficiency ratio (FTE) (non-GAAP) | 56.08 | % | 58.50 | % | |||||||||||||||||||||||||
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information called for by this item is provided in the Market Risk section of "MD&A," which is included in Item 2 of this Report, and is incorporated herein by reference.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. FNB’s management, with the participation of our principal executive and financial officers, evaluated our disclosure controls and procedures (as defined in Rules 13a–15(e) and 15d–15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on this evaluation, our management, including the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), concluded that, as of the end of the period covered by this Report, our disclosure controls and procedures were effective as of such date at the reasonable assurance level as discussed below to ensure that information required to be disclosed by us in the reports we file under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS. FNB’s management, including the CEO and the CFO, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within FNB have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. In addition, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING. The CEO and the CFO have evaluated the changes to our internal control over financial reporting that occurred during our fiscal quarter ended March 31, 2026, as required by paragraph (d) of Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended, and have concluded that there were no such changes that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information required by this Item is set forth in the “Other Legal Proceedings” discussion in Note 12, "Commitments, Credit Risk and Contingencies" of the Notes to Consolidated Financial Statements, which is incorporated herein by reference in response to this Item.
ITEM 1A. RISK FACTORS
For more information regarding risk factors that could affect our results of operations, financial condition and liquidity, see the risk factors disclosed in the “Risk Factors” section of our 2025 Annual Report on Form 10-K. As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors described in our 2025 Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information regarding FNB's purchases of our common stock during the quarter ended March 31, 2026. In April 2026, we announced that our Board of Directors authorized a new share repurchase program, not included in the totals below. | ||||||||||||||||||||||||||
| Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs (1) | ||||||||||||||||||||||
| January 1 - January 31, 2026 | — | $ | — | — | $ | 84,950,770 | ||||||||||||||||||||
| February 1 - February 28, 2026 | 1,084,142 | $ | 17.73 | 1,084,142 | $ | 65,526,705 | ||||||||||||||||||||
| March 1 - March 31, 2026 | 925,000 | $ | 17.03 | 925,000 | $ | 49,604,891 | ||||||||||||||||||||
| Total | 2,009,142 | $ | 17.41 | 2,009,142 | ||||||||||||||||||||||
(1) The amounts do not reflect the additional $250 million authorization that was approved subsequent to March 31, 2026.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
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ITEM 5. OTHER INFORMATION
During the three months ended March 31, 2026, no director or officer (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended) of FNB adopted terminated
ITEM 6. EXHIBITS
Exhibit Index
| Exhibit Number | Description | |||||||
| 31.1. | Certification of Chief Executive Officer Pursuant to Sarbanes-Oxley Act Section 302. (filed herewith). | |||||||
| 31.2. | Certification of Chief Financial Officer Pursuant to Sarbanes-Oxley Act Section 302. (filed herewith). | |||||||
| 32.1. | Certification of Chief Executive Officer Pursuant to Sarbanes-Oxley Act Section 906. (furnished herewith). | |||||||
| 32.2. | Certification of Chief Financial Officer Pursuant to Sarbanes-Oxley Act Section 906. (furnished herewith). | |||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document (filed herewith). | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith). | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith). | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith). | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith). | |||||||
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| F.N.B. CORPORATION | |||||||||||||||||
| Dated: | May 6, 2026 | /s/ Vincent J. Delie, Jr. | |||||||||||||||
| Vincent J. Delie, Jr. | |||||||||||||||||
| Chairman, President and Chief Executive Officer | |||||||||||||||||
| (Principal Executive Officer) | |||||||||||||||||
| Dated: | May 6, 2026 | /s/ Vincent J. Calabrese, Jr. | |||||||||||||||
| Vincent J. Calabrese, Jr. | |||||||||||||||||
| Chief Financial Officer | |||||||||||||||||
| (Principal Financial Officer) | |||||||||||||||||
| Dated: | May 6, 2026 | /s/ James L. Dutey | |||||||||||||||
| James L. Dutey | |||||||||||||||||
| Corporate Controller | |||||||||||||||||
| (Principal Accounting Officer) | |||||||||||||||||
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FAQ
How much did F.N.B. Corporation (FNB) earn in Q1 2026?
F.N.B. Corporation earned $137 million in net income in Q1 2026, up from $117 million a year earlier. This performance reflects higher net interest income of $359 million and stable credit costs, with a $18 million provision for credit losses in the quarter.
What were F.N.B. Corporation’s earnings per share for Q1 2026?
F.N.B. Corporation reported diluted EPS of $0.38 for Q1 2026, compared with $0.32 in Q1 2025. The increase was driven by higher net income, while the common dividend remained $0.12 per share during the period, as shown in the equity rollforward.
What is the size of F.N.B. Corporation’s loan and deposit portfolios?
At March 31, 2026, F.N.B. Corporation had $35.1 billion in loans and leases, net of unearned income, and $38.9 billion in total deposits. Loans are diversified across commercial real estate, commercial and industrial, consumer installment, residential mortgages and other consumer credit lines.
How strong is asset quality at F.N.B. Corporation as of March 31, 2026?
Asset quality indicators remain controlled, with non-performing loans of $118 million, or 0.33% of total loans and leases. Total non-performing assets were $121 million. The allowance for credit losses on loans and leases was $443 million, maintaining a 1.26% coverage ratio.
What allowance for credit losses does F.N.B. Corporation hold on loans and leases?
F.N.B. Corporation reported an allowance for credit losses on loans and leases of $443.0 million at March 31, 2026, up from $439.5 million at year-end 2025. Including the $19.2 million allowance for unfunded commitments, total credit loss reserves reached $462.2 million.
How did non-interest income contribute to F.N.B. Corporation’s Q1 2026 results?
Non-interest income totaled $91 million in Q1 2026, slightly above $88 million a year earlier. Key contributors included service charges of $23 million, trust services at $13 million, securities and insurance fees, and $6 million from mortgage banking operations plus $6 million of dividends on non-marketable equity securities.
What is F.N.B. Corporation’s total asset base and capital position?
F.N.B. Corporation reported total assets of $50.6 billion and shareholders’ equity of $6.8 billion at March 31, 2026. Equity reflects retained earnings of $2.44 billion and accumulated other comprehensive loss of $86 million, alongside common stock and additional paid-in capital.