Finance

FNB's Net Interest Margin Expands After a Flat Quarter

The Tip Desk · October 22, 2026 · 4 min read

Net interest income hit a record $376.5 million as the FTE margin expanded 4 bps to 3.29% and period-end loans and deposits grew 8.5% and 8.9% annualized.

F.N.B. Corporation (FNB), a Pittsburgh-based diversified financial services company with $52 billion in assets, generated record net interest income of $376.5 million in the third quarter of 2026, up $10.8 million, or 3.0%, from the second quarter, as earning-asset growth, higher earning-asset yields and one extra day more than offset a slightly higher cost of funds.

The net interest margin on a fully taxable-equivalent, non-GAAP basis expanded 4 basis points to 3.29%, following a second quarter in which the margin was stable at 3.25%. The company said the latest expansion reflected stable interest-bearing deposit costs and higher yields on earning assets. The total yield on earning assets rose 5 bps to 5.18% and the total cost of funds rose 2 bps to 2.01%; the cost of interest-bearing deposits was essentially unchanged at 2.37%.

Average loans and leases were $36.1 billion, up $613.4 million, or 6.9% annualized, from the prior quarter, with average consumer loans up $550.7 million and average commercial loans and leases up $62.7 million. Period-end loans rose $768.0 million, or 8.5% annualized. Average commercial and industrial loans increased $237.4 million, more than offsetting a $175.2 million decline in average commercial real estate loans from expected payoffs. Average residential mortgages rose $403.9 million on seasonal origination growth, indirect auto loans rose $88.6 million and consumer lines of credit rose $52.0 million.

Average deposits totaled $38.8 billion, up $146.1 million from the prior quarter, led by average money market deposits of $133.2 million, non-interest-bearing demand of $97.0 million and interest-bearing demand of $57.0 million, more than offsetting a $151.6 million decline in average time deposits. Period-end deposits rose $870.6 million, or 8.9% annualized. The mix of non-interest-bearing demand deposits to total deposits was stable at 26% at September 30, 2026, matching June 30, 2026, and the loan-to-deposit ratio was 92.4% versus 92.5% at June 30, 2026.

Pre-provision net revenue (non-GAAP) was $212.2 million, a 1.3% increase from the prior quarter, driven by record net interest income. Non-interest income fell $4.4 million, or 4.5%, to $92.6 million. Service charges rose $0.8 million and interchange and card transaction fees rose $0.2 million, while capital markets income declined $1.6 million and other non-interest income declined $3.3 million.

Non-interest expense increased $3.7 million, or 1.5%, to $256.9 million. Salaries and employee benefits declined $2.8 million on lower variable compensation, outside services rose $1.8 million, net occupancy and equipment rose $1.3 million, and other non-interest expense rose $2.6 million largely on fraud losses. The efficiency ratio (non-GAAP) was 53.7%, stable to the prior quarter.

Net income was $152.9 million, or $0.43 a share, versus $148.7 million, or $0.42 a share, in the second quarter. There were no significant items in either 2026 quarter.

The provision for credit losses was $19.6 million, down $1.7 million from the prior quarter, with net charge-offs of $11.0 million, or 0.12% annualized of average loans, versus $17.0 million, or 0.19% annualized, in the second quarter. The ratio of non-performing loans and OREO to total loans and OREO increased 2 bps to 0.33% and total delinquency increased 4 bps to 0.75%. The ACL was $455.5 million, up $8.1 million, with the ACL-to-loans ratio stable at 1.25%.

The CET1 regulatory capital ratio ended the quarter at 11.3% (estimated), versus 11.4% at June 30, 2026. Tangible book value per common share (non-GAAP) was $12.28, up $0.04 from June 30, 2026, with AOCI reducing tangible book value by $0.53 versus $0.29 at June 30, 2026.

The company repurchased $51 million, or 2.7 million shares, of common stock in the third quarter at a weighted average price of $18.69. Year-to-date repurchases totaled $133 million, or 7.4 million shares, at a weighted average of $17.90, equal to 2.1% of shares outstanding at the beginning of the year.

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