☒ | Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 |
☐ | Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 |
Pennsylvania | 25-1255406 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
One North Shore Center, | 12 Federal Street, | Pittsburgh, | PA | 15212 | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | ||||||||
Non-accelerated Filer | ☐ | Smaller reporting company | ☐ | ||||||||
Emerging Growth Company | ☐ |
Title of Each Class | Trading Symbol(s) | Name of Exchange on which Registered | ||||||||||||
Common Stock, par value $0.01 per share | FNB | New York Stock Exchange | ||||||||||||
Depositary Shares each representing 1/40th interest in a share of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series E | FNBPrE | New York Stock Exchange |
Class | Outstanding at | October 31, 2022 | ||||||
Common Stock, $0.01 Par Value | 350,784,411 | Shares |
PAGE | ||||||||
PART I – FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements | |||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II – OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Acronym | Description | Acronym | Description | |||||||||||
ACL | Allowance for credit losses | Howard | Howard Bancorp, Inc. | |||||||||||
AFS | Available for sale | HTM | Held to maturity | |||||||||||
ALCO | Asset/Liability Committee | LGD | Loss given default | |||||||||||
AOCI | Accumulated other comprehensive income | LIBOR | London Inter-bank Offered Rate | |||||||||||
ASC | Accounting Standards Codification | LIHTC | Low income housing tax credit | |||||||||||
ASU | Accounting Standards Update | MD&A | Management's Discussion and Analysis of Financial Condition and Results of Operations | |||||||||||
AULC | Allowance for unfunded loan commitments | MSRs | Mortgage servicing rights | |||||||||||
BOLI | Bank owned life insurance | OCC | Office of the Comptroller of the Currency | |||||||||||
CARES Act | Coronavirus Aid, Relief and Economic Security Act | OREO | Other real estate owned | |||||||||||
CECL | Current expected credit losses | PCD | Purchased credit deteriorated | |||||||||||
CET1 | Common equity tier 1 | PPP | Paycheck Protection Program | |||||||||||
COVID-19 | Novel coronavirus disease of 2019 | R&S | Reasonable and Supportable | |||||||||||
EVE | Economic value of equity | RRR | Reference Rate Reform | |||||||||||
FASB | Financial Accounting Standards Board | SBA | Small Business Administration | |||||||||||
FDIC | Federal Deposit Insurance Corporation | SEC | Securities and Exchange Commission | |||||||||||
FHLB | Federal Home Loan Bank | SOFR | Secured Overnight Financing Rate | |||||||||||
FNB | F.N.B. Corporation | TDR | Troubled debt restructuring | |||||||||||
FNBPA | First National Bank of Pennsylvania | TPS | Trust preferred securities | |||||||||||
FOMC | Federal Open Market Committee | U.S. | United States of America | |||||||||||
FRB | Board of Governors of the Federal Reserve System | UST | U.S. Department of the Treasury | |||||||||||
FTE | Fully taxable equivalent | VIE | Variable interest entity | |||||||||||
GAAP | U.S. generally accepted accounting principles |
September 30, 2022 | December 31, 2021 | |||||||||||||
(Unaudited) | ||||||||||||||
Assets | ||||||||||||||
Cash and due from banks | $ | 458 | $ | 337 | ||||||||||
Interest-bearing deposits with banks | 1,818 | 3,156 | ||||||||||||
Cash and Cash Equivalents | 2,276 | 3,493 | ||||||||||||
Debt securities available for sale (amortized cost of $3,760 and $3,416; allowance for credit losses of $0 and $0) | 3,392 | 3,426 | ||||||||||||
Debt securities held to maturity (fair value of $3,349 and $3,506; allowance for credit losses of $0 and $0) | 3,820 | 3,463 | ||||||||||||
Loans held for sale (includes $117 and $269 measured at fair value) (1) | 149 | 295 | ||||||||||||
Loans and leases, net of unearned income of $13 and $36 | 28,780 | 24,968 | ||||||||||||
Allowance for credit losses on loans and leases | (385) | (344) | ||||||||||||
Net Loans and Leases | 28,395 | 24,624 | ||||||||||||
Premises and equipment, net | 421 | 345 | ||||||||||||
Goodwill | 2,435 | 2,262 | ||||||||||||
Core deposit and other intangible assets, net | 52 | 42 | ||||||||||||
Bank owned life insurance | 629 | 546 | ||||||||||||
Other assets | 1,021 | 1,017 | ||||||||||||
Total Assets | $ | 42,590 | $ | 39,513 | ||||||||||
Liabilities | ||||||||||||||
Deposits: | ||||||||||||||
Non-interest-bearing demand | $ | 11,752 | $ | 10,789 | ||||||||||
Interest-bearing demand | 15,251 | 14,409 | ||||||||||||
Savings | 3,991 | 3,669 | ||||||||||||
Certificates and other time deposits | 2,899 | 2,859 | ||||||||||||
Total Deposits | 33,893 | 31,726 | ||||||||||||
Short-term borrowings | 1,395 | 1,536 | ||||||||||||
Long-term borrowings | 1,059 | 682 | ||||||||||||
Other liabilities | 837 | 419 | ||||||||||||
Total Liabilities | 37,184 | 34,363 | ||||||||||||
Stockholders’ Equity | ||||||||||||||
Preferred stock - $0.01 par value; liquidation preference of $1,000 per share | ||||||||||||||
Authorized – 20,000,000 shares | ||||||||||||||
Issued – 110,877 shares | 107 | 107 | ||||||||||||
Common stock - $0.01 par value | ||||||||||||||
Authorized – 500,000,000 shares | ||||||||||||||
Issued – 365,205,655 and 329,464,669 shares | 4 | 3 | ||||||||||||
Additional paid-in capital | 4,565 | 4,109 | ||||||||||||
Retained earnings | 1,275 | 1,110 | ||||||||||||
Accumulated other comprehensive loss | (378) | (62) | ||||||||||||
Treasury stock – 14,449,500 and 10,531,177 shares at cost | (167) | (117) | ||||||||||||
Total Stockholders’ Equity | 5,406 | 5,150 | ||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 42,590 | $ | 39,513 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Interest Income | |||||||||||||||||||||||
Loans and leases, including fees | $ | 297 | $ | 226 | $ | 760 | $ | 671 | |||||||||||||||
Securities: | |||||||||||||||||||||||
Taxable | 31 | 22 | 82 | 65 | |||||||||||||||||||
Tax-exempt | 7 | 7 | 20 | 22 | |||||||||||||||||||
Other | 8 | 1 | 15 | 2 | |||||||||||||||||||
Total Interest Income | 343 | 256 | 877 | 760 | |||||||||||||||||||
Interest Expense | |||||||||||||||||||||||
Deposits | 31 | 11 | 54 | 38 | |||||||||||||||||||
Short-term borrowings | 6 | 7 | 17 | 21 | |||||||||||||||||||
Long-term borrowings | 9 | 6 | 21 | 18 | |||||||||||||||||||
Total Interest Expense | 46 | 24 | 92 | 77 | |||||||||||||||||||
Net Interest Income | 297 | 232 | 785 | 683 | |||||||||||||||||||
Provision for credit losses | 12 | (2) | 36 | 3 | |||||||||||||||||||
Net Interest Income After Provision for Credit Losses | 285 | 234 | 749 | 680 | |||||||||||||||||||
Non-Interest Income | |||||||||||||||||||||||
Service charges | 36 | 31 | 102 | 89 | |||||||||||||||||||
Trust services | 10 | 10 | 30 | 28 | |||||||||||||||||||
Insurance commissions and fees | 6 | 7 | 20 | 20 | |||||||||||||||||||
Securities commissions and fees | 6 | 5 | 18 | 17 | |||||||||||||||||||
Capital markets income | 10 | 12 | 25 | 27 | |||||||||||||||||||
Mortgage banking operations | 5 | 8 | 18 | 31 | |||||||||||||||||||
Dividends on non-marketable equity securities | 3 | 2 | 8 | 7 | |||||||||||||||||||
Bank owned life insurance | 2 | 3 | 9 | 11 | |||||||||||||||||||
Other | 5 | 10 | 13 | 21 | |||||||||||||||||||
Total Non-Interest Income | 83 | 88 | 243 | 251 | |||||||||||||||||||
Non-Interest Expense | |||||||||||||||||||||||
Salaries and employee benefits | 107 | 105 | 323 | 314 | |||||||||||||||||||
Net occupancy | 16 | 13 | 50 | 45 | |||||||||||||||||||
Equipment | 20 | 18 | 56 | 52 | |||||||||||||||||||
Amortization of intangibles | 3 | 3 | 10 | 9 | |||||||||||||||||||
Outside services | 19 | 18 | 53 | 54 | |||||||||||||||||||
Marketing | 3 | 4 | 11 | 11 | |||||||||||||||||||
FDIC insurance | 5 | 4 | 15 | 13 | |||||||||||||||||||
Bank shares and franchise taxes | 4 | 3 | 12 | 11 | |||||||||||||||||||
Merger-related | 2 | 1 | 33 | 1 | |||||||||||||||||||
Other | 16 | 15 | 52 | 41 | |||||||||||||||||||
Total Non-Interest Expense | 195 | 184 | 615 | 551 | |||||||||||||||||||
Income Before Income Taxes | 173 | 138 | 377 | 380 | |||||||||||||||||||
Income taxes | 35 | 27 | 77 | 74 | |||||||||||||||||||
Net Income | 138 | 111 | 300 | 306 | |||||||||||||||||||
Preferred stock dividends | 2 | 2 | 6 | 6 | |||||||||||||||||||
Net Income Available to Common Stockholders | $ | 136 | $ | 109 | $ | 294 | $ | 300 | |||||||||||||||
Earnings per Common Share | |||||||||||||||||||||||
Basic | $ | 0.39 | $ | 0.34 | $ | 0.84 | $ | 0.94 | |||||||||||||||
Diluted | 0.38 | 0.34 | 0.83 | 0.93 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income | $ | 138 | $ | 111 | $ | 300 | $ | 306 | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||||
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $(33), $(3), $(84) and $(8) | (116) | (10) | (294) | (29) | |||||||||||||||||||
Derivative instruments: | |||||||||||||||||||||||
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $(4), $0, $(9) and $1 | (13) | (1) | (30) | 3 | |||||||||||||||||||
Reclassification adjustment for gains included in net income, net of tax expense of $1, $1, $2 and $3 | 2 | 4 | 6 | 11 | |||||||||||||||||||
Pension and postretirement benefit obligations: | |||||||||||||||||||||||
Unrealized gains (losses) arising during the period, net of tax expense of $0, $1, $0 and $1 | 1 | 1 | 2 | 2 | |||||||||||||||||||
Other Comprehensive Income (Loss) | (126) | (6) | (316) | (13) | |||||||||||||||||||
Comprehensive Income (Loss) | $ | 12 | $ | 105 | $ | (16) | $ | 293 |
Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 107 | $ | 3 | $ | 4,101 | $ | 981 | $ | (46) | $ | (109) | $ | 5,037 | |||||||||||||||||||||||||||
Comprehensive income (loss) | 111 | (6) | 105 | ||||||||||||||||||||||||||||||||||||||
Dividends declared: | |||||||||||||||||||||||||||||||||||||||||
Preferred stock: $18.13/share | (2) | (2) | |||||||||||||||||||||||||||||||||||||||
Common stock: $0.12/share | (39) | (39) | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (7) | (7) | |||||||||||||||||||||||||||||||||||||||
Restricted stock compensation | 5 | 5 | |||||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | 107 | $ | 3 | $ | 4,106 | $ | 1,051 | $ | (52) | $ | (117) | $ | 5,098 | |||||||||||||||||||||||||||
Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 107 | $ | 4 | $ | 4,562 | $ | 1,182 | $ | (252) | $ | (167) | $ | 5,436 | |||||||||||||||||||||||||||
Comprehensive income (loss) | 138 | (126) | 12 | ||||||||||||||||||||||||||||||||||||||
Dividends declared: | |||||||||||||||||||||||||||||||||||||||||
Preferred stock: $18.13/share | (2) | (2) | |||||||||||||||||||||||||||||||||||||||
Common stock: $0.12/share | (43) | (43) | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | |||||||||||||||||||||||||||||||||||||||
Restricted stock compensation | 3 | 3 | |||||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | 107 | $ | 4 | $ | 4,565 | $ | 1,275 | $ | (378) | $ | (167) | $ | 5,406 | |||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 107 | $ | 3 | $ | 4,087 | $ | 869 | $ | (39) | $ | (68) | $ | 4,959 | |||||||||||||||||||||||||||
Comprehensive income (loss) | 306 | (13) | 293 | ||||||||||||||||||||||||||||||||||||||
Dividends declared: | |||||||||||||||||||||||||||||||||||||||||
Preferred stock: $54.39/share | (6) | (6) | |||||||||||||||||||||||||||||||||||||||
Common stock: $0.36/share | (117) | (117) | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | 3 | (1) | (6) | (4) | ||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (43) | (43) | |||||||||||||||||||||||||||||||||||||||
Restricted stock compensation | 16 | 16 | |||||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | 107 | $ | 3 | $ | 4,106 | $ | 1,051 | $ | (52) | $ | (117) | $ | 5,098 | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 107 | $ | 3 | $ | 4,109 | $ | 1,110 | $ | (62) | $ | (117) | $ | 5,150 | |||||||||||||||||||||||||||
Comprehensive income (loss) | 300 | (316) | (16) | ||||||||||||||||||||||||||||||||||||||
Dividends declared: | |||||||||||||||||||||||||||||||||||||||||
Preferred stock: $54.39/share | (6) | (6) | |||||||||||||||||||||||||||||||||||||||
Common stock: $0.36/share | (129) | (129) | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | 1 | (7) | (6) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock - acquisitions | 1 | 442 | 443 | ||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (43) | (43) | |||||||||||||||||||||||||||||||||||||||
Restricted stock compensation | 13 | 13 | |||||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | 107 | $ | 4 | $ | 4,565 | $ | 1,275 | $ | (378) | $ | (167) | $ | 5,406 |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Operating Activities | |||||||||||
Net income | $ | 300 | $ | 306 | |||||||
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: | |||||||||||
Depreciation, amortization and accretion | 54 | (1) | |||||||||
Provision for credit losses | 36 | 3 | |||||||||
Deferred tax expense (benefit) | 9 | 8 | |||||||||
Loans originated for sale | (836) | (1,593) | |||||||||
Loans sold | 1,011 | 1,533 | |||||||||
Net gain on sale of loans | (29) | (39) | |||||||||
Net change in: | |||||||||||
Interest receivable | (19) | 14 | |||||||||
Interest payable | 4 | (5) | |||||||||
Bank owned life insurance, excluding purchases | (4) | 4 | |||||||||
Other, net | 515 | 154 | |||||||||
Net cash flows provided by (used in) operating activities | 1,041 | 384 | |||||||||
Investing Activities | |||||||||||
Net change in loans and leases, excluding sales and transfers | (2,012) | 800 | |||||||||
Debt securities available for sale: | |||||||||||
Purchases | (919) | (1,207) | |||||||||
Sales | 287 | — | |||||||||
Maturities/payments | 598 | 1,415 | |||||||||
Debt securities held to maturity: | |||||||||||
Purchases | (845) | (993) | |||||||||
Maturities/payments | 481 | 652 | |||||||||
Increase in premises and equipment | (78) | (43) | |||||||||
Net cash received in business acquisition | 75 | — | |||||||||
Net cash flows provided by (used in) investing activities | (2,413) | 624 | |||||||||
Financing Activities | |||||||||||
Net change in: | |||||||||||
Demand (non-interest bearing and interest bearing) and savings accounts | 517 | 2,939 | |||||||||
Time deposits | (180) | (617) | |||||||||
Short-term borrowings | (155) | (240) | |||||||||
Proceeds from issuance of long-term borrowings | 367 | 18 | |||||||||
Repayment of long-term borrowings | (223) | (227) | |||||||||
Repurchases of common stock | (43) | (43) | |||||||||
Cash dividends paid: | |||||||||||
Preferred stock | (6) | (6) | |||||||||
Common stock | (129) | (117) | |||||||||
Other, net | 7 | 12 | |||||||||
Net cash flows provided by (used in) financing activities | 155 | 1,719 | |||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | (1,217) | 2,727 | |||||||||
Cash and cash equivalents at beginning of period | 3,493 | 1,383 | |||||||||
Cash and Cash Equivalents at End of Period | $ | 2,276 | $ | 4,110 |
Standard | Description | Financial Statements Impact | ||||||||||||
Troubled Debt Restructuring and Charge-offs | ||||||||||||||
ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures | This Update eliminates the recognition and measurement guidance on TDRs for creditors that have adopted ASC 326 and requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. This Update also requires public business entities to present current-period gross write-offs by year of origination in their vintage disclosures. | This Update is to be applied using a prospective method. For the transition method related to TDRs, an entity has the option to apply a modified retrospective transition method. Early adoption of this Update is permitted. An entity is allowed to early adopt the amendments about TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. We plan to adopt this Update on January 1, 2023. Adoption of this Update is not expected to have a material impact on our consolidated financial statements. |
(in millions) | Howard | ||||
Fair value of consideration paid | $ | 443 | |||
Fair value of identifiable assets acquired: | |||||
Cash and cash equivalents | 75 | ||||
Securities | 321 | ||||
Loans | 1,780 | ||||
Core deposit and other intangible assets | 19 | ||||
Fixed and other assets | 160 | ||||
Total identifiable assets acquired | 2,355 | ||||
Fair value of liabilities assumed: | |||||
Deposits | 1,831 | ||||
Borrowings | 247 | ||||
Other liabilities | 7 | ||||
Total liabilities assumed | 2,085 | ||||
Fair value of net identifiable assets acquired | 270 | ||||
Goodwill recognized | $ | 173 |
(in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
Debt Securities AFS: | |||||||||||||||||||||||
September 30, 2022 | |||||||||||||||||||||||
U.S. Treasury | $ | 279 | $ | — | $ | (23) | $ | 256 | |||||||||||||||
U.S. government agencies | 116 | 1 | — | 117 | |||||||||||||||||||
U.S. government-sponsored entities | 284 | — | (23) | 261 | |||||||||||||||||||
Residential mortgage-backed securities: | |||||||||||||||||||||||
Agency mortgage-backed securities | 1,427 | — | (147) | 1,280 | |||||||||||||||||||
Agency collateralized mortgage obligations | 1,158 | — | (136) | 1,022 | |||||||||||||||||||
Commercial mortgage-backed securities | 442 | — | (35) | 407 | |||||||||||||||||||
States of the U.S. and political subdivisions (municipals) | 33 | — | (4) | 29 | |||||||||||||||||||
Other debt securities | 21 | — | (1) | 20 | |||||||||||||||||||
Total debt securities AFS | $ | 3,760 | $ | 1 | $ | (369) | $ | 3,392 | |||||||||||||||
(in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
Debt Securities AFS: | |||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
U.S. Treasury | $ | 205 | $ | — | $ | (1) | $ | 204 | |||||||||||||||
U.S. government agencies | 154 | 1 | — | 155 | |||||||||||||||||||
U.S. government-sponsored entities | 194 | — | (2) | 192 | |||||||||||||||||||
Residential mortgage-backed securities: | |||||||||||||||||||||||
Agency mortgage-backed securities | 1,342 | 19 | (4) | 1,357 | |||||||||||||||||||
Agency collateralized mortgage obligations | 1,192 | 11 | (17) | 1,186 | |||||||||||||||||||
Commercial mortgage-backed securities | 294 | 5 | (2) | 297 | |||||||||||||||||||
States of the U.S. and political subdivisions (municipals) | 33 | — | — | 33 | |||||||||||||||||||
Other debt securities | 2 | — | — | 2 | |||||||||||||||||||
Total debt securities AFS | $ | 3,416 | $ | 36 | $ | (26) | $ | 3,426 |
(in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
Debt Securities HTM: | |||||||||||||||||||||||
September 30, 2022 | |||||||||||||||||||||||
U.S. government agencies | $ | 1 | $ | — | $ | — | $ | 1 | |||||||||||||||
Residential mortgage-backed securities: | |||||||||||||||||||||||
Agency mortgage-backed securities | 1,183 | — | (143) | 1,040 | |||||||||||||||||||
Agency collateralized mortgage obligations | 992 | — | (117) | 875 | |||||||||||||||||||
Commercial mortgage-backed securities | 668 | — | (50) | 618 | |||||||||||||||||||
States of the U.S. and political subdivisions (municipals) | 971 | — | (160) | 811 | |||||||||||||||||||
Other debt securities | 5 | — | (1) | 4 | |||||||||||||||||||
Total debt securities HTM | $ | 3,820 | $ | — | $ | (471) | $ | 3,349 |
(in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
Debt Securities HTM: | |||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
U.S. Treasury | $ | 1 | $ | — | $ | — | $ | 1 | |||||||||||||||
U.S. government agencies | 1 | — | — | 1 | |||||||||||||||||||
Residential mortgage-backed securities: | |||||||||||||||||||||||
Agency mortgage-backed securities | 1,191 | 15 | (5) | 1,201 | |||||||||||||||||||
Agency collateralized mortgage obligations | 930 | 5 | (12) | 923 | |||||||||||||||||||
Commercial mortgage-backed securities | 323 | 3 | (2) | 324 | |||||||||||||||||||
States of the U.S. and political subdivisions (municipals) | 1,017 | 39 | — | 1,056 | |||||||||||||||||||
Total debt securities HTM | $ | 3,463 | $ | 62 | $ | (19) | $ | 3,506 |
Available for Sale | Held to Maturity | ||||||||||||||||||||||
(in millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
Due in one year or less | $ | 14 | $ | 14 | $ | 1 | $ | 1 | |||||||||||||||
Due after one year but within five years | 577 | 530 | 31 | 29 | |||||||||||||||||||
Due after five years but within ten years | 96 | 94 | 152 | 136 | |||||||||||||||||||
Due after ten years | 46 | 45 | 793 | 650 | |||||||||||||||||||
733 | 683 | 977 | 816 | ||||||||||||||||||||
Residential mortgage-backed securities: | |||||||||||||||||||||||
Agency mortgage-backed securities | 1,427 | 1,280 | 1,183 | 1,040 | |||||||||||||||||||
Agency collateralized mortgage obligations | 1,158 | 1,022 | 992 | 875 | |||||||||||||||||||
Commercial mortgage-backed securities | 442 | 407 | 668 | 618 | |||||||||||||||||||
Total debt securities | $ | 3,760 | $ | 3,392 | $ | 3,820 | $ | 3,349 |
(dollars in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Securities pledged (carrying value): | |||||||||||
To secure public deposits, trust deposits and for other purposes as required by law | $ | 6,534 | $ | 5,660 | |||||||
As collateral for short-term borrowings | 363 | 392 | |||||||||
Securities pledged as a percent of total securities | 95.6 | % | 87.9 | % |
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury | 5 | $ | 212 | $ | (17) | 1 | $ | 44 | $ | (6) | 6 | $ | 256 | $ | (23) | ||||||||||||||||||||||||||||||||||||||
U.S. government agencies | 2 | 17 | — | 8 | 4 | — | 10 | 21 | — | ||||||||||||||||||||||||||||||||||||||||||||
U.S. government-sponsored entities | 11 | 195 | (14) | 3 | 66 | (9) | 14 | 261 | (23) | ||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | 112 | 961 | (94) | 9 | 315 | (53) | 121 | 1,276 | (147) | ||||||||||||||||||||||||||||||||||||||||||||
Agency collateralized mortgage obligations | 59 | 658 | (68) | 14 | 364 | (68) | 73 | 1,022 | (136) | ||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 18 | 345 | (26) | 3 | 62 | (9) | 21 | 407 | (35) | ||||||||||||||||||||||||||||||||||||||||||||
States of the U.S. and political subdivisions (municipals) | 9 | 20 | (2) | 5 | 9 | (2) | 14 | 29 | (4) | ||||||||||||||||||||||||||||||||||||||||||||
Other debt securities | 7 | 16 | (1) | 1 | 2 | — | 8 | 18 | (1) | ||||||||||||||||||||||||||||||||||||||||||||
Total | 223 | $ | 2,424 | $ | (222) | 44 | $ | 866 | $ | (147) | 267 | $ | 3,290 | $ | (369) | ||||||||||||||||||||||||||||||||||||||
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, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury | 3 | $ | 151 | $ | (1) | — | $ | — | $ | — | 3 | $ | 151 | $ | (1) | ||||||||||||||||||||||||||||||||||||||
U.S. government agencies | 3 | 22 | — | 9 | 8 | — | 12 | 30 | — | ||||||||||||||||||||||||||||||||||||||||||||
U.S. government-sponsored entities | 3 | 99 | (1) | 1 | 24 | (1) | 4 | 123 | (2) | ||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Agency mortgage-backed securities | 13 | 599 | (4) | — | — | — | 13 | 599 | (4) | ||||||||||||||||||||||||||||||||||||||||||||
Agency collateralized mortgage obligations | 23 | 659 | (15) | 3 | 68 | (2) | 26 | 727 | (17) | ||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 5 | 125 | (2) | — | — | — | 5 | 125 | (2) | ||||||||||||||||||||||||||||||||||||||||||||
States of the U.S. and political subdivisions (municipals) | 10 | 24 | — | — | — | — | 10 | 24 | — | ||||||||||||||||||||||||||||||||||||||||||||
Other debt securities | — | — | — | 1 | 2 | — | 1 | 2 | — | ||||||||||||||||||||||||||||||||||||||||||||
Total | 60 | $ | 1,679 | $ | (23) | 14 | $ | 102 | $ | (3) | 74 | $ | 1,781 | $ | (26) |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Commercial real estate | $ | 10,841 | $ | 9,899 | |||||||
Commercial and industrial | 6,709 | 5,977 | |||||||||
Commercial leases | 503 | 495 | |||||||||
Other | 127 | 94 | |||||||||
Total commercial loans and leases | 18,180 | 16,465 | |||||||||
Direct installment | 2,797 | 2,376 | |||||||||
Residential mortgages | 4,959 | 3,654 | |||||||||
Indirect installment | 1,529 | 1,227 | |||||||||
Consumer lines of credit | 1,315 | 1,246 | |||||||||
Total consumer loans | 10,600 | 8,503 | |||||||||
Total loans and leases, net of unearned income | $ | 28,780 | $ | 24,968 |
(dollars in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Commercial real estate: | |||||||||||
Percent owner-occupied | 29.9 | % | 28.8 | % | |||||||
Percent non-owner-occupied | 70.1 | 71.2 |
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 |
September 30, 2022 | 2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
COMMERCIAL | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate: | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | 1,400 | $ | 2,166 | $ | 1,628 | $ | 1,335 | $ | 713 | $ | 2,489 | $ | 253 | $ | 9,984 | |||||||||||||||||||||||||||||||
Special Mention | 35 | 34 | 61 | 75 | 130 | 232 | 6 | 573 | |||||||||||||||||||||||||||||||||||||||
Substandard | 4 | 16 | 12 | 36 | 29 | 167 | 20 | 284 | |||||||||||||||||||||||||||||||||||||||
Total commercial real estate | 1,439 | 2,216 | 1,701 | 1,446 | 872 | 2,888 | 279 | 10,841 | |||||||||||||||||||||||||||||||||||||||
Commercial and Industrial: | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | 1,270 | 1,232 | 714 | 530 | 346 | 439 | 1,810 | 6,341 | |||||||||||||||||||||||||||||||||||||||
Special Mention | 3 | 8 | 20 | 49 | 17 | 37 | 57 | 191 | |||||||||||||||||||||||||||||||||||||||
Substandard | 4 | 14 | 6 | 8 | 39 | 55 | 51 | 177 | |||||||||||||||||||||||||||||||||||||||
Total commercial and industrial | 1,277 | 1,254 | 740 | 587 | 402 | 531 | 1,918 | 6,709 | |||||||||||||||||||||||||||||||||||||||
Commercial Leases: | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | 111 | 153 | 76 | 73 | 41 | 33 | — | 487 | |||||||||||||||||||||||||||||||||||||||
Special Mention | 2 | 1 | — | — | 1 | — | — | 4 | |||||||||||||||||||||||||||||||||||||||
Substandard | 4 | 1 | 7 | — | — | — | — | 12 | |||||||||||||||||||||||||||||||||||||||
Total commercial leases | 117 | 155 | 83 | 73 | 42 | 33 | — | 503 | |||||||||||||||||||||||||||||||||||||||
Other Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | 59 | — | — | — | — | 13 | 55 | 127 | |||||||||||||||||||||||||||||||||||||||
Total other commercial | 59 | — | — | — | — | 13 | 55 | 127 | |||||||||||||||||||||||||||||||||||||||
Total commercial loans and leases | 2,892 | 3,625 | 2,524 | 2,106 | 1,316 | 3,465 | 2,252 | 18,180 | |||||||||||||||||||||||||||||||||||||||
CONSUMER | |||||||||||||||||||||||||||||||||||||||||||||||
Direct Installment: | |||||||||||||||||||||||||||||||||||||||||||||||
Current | 731 | 917 | 473 | 171 | 95 | 397 | — | 2,784 | |||||||||||||||||||||||||||||||||||||||
Past due | — | — | 1 | 1 | 1 | 10 | — | 13 | |||||||||||||||||||||||||||||||||||||||
Total direct installment | 731 | 917 | 474 | 172 | 96 | 407 | — | 2,797 | |||||||||||||||||||||||||||||||||||||||
Residential Mortgages: | |||||||||||||||||||||||||||||||||||||||||||||||
Current | 1,101 | 1,560 | 886 | 389 | 133 | 848 | — | 4,917 | |||||||||||||||||||||||||||||||||||||||
Past due | — | 3 | 3 | 2 | 3 | 31 | — | 42 | |||||||||||||||||||||||||||||||||||||||
Total residential mortgages | 1,101 | 1,563 | 889 | 391 | 136 | 879 | — | 4,959 | |||||||||||||||||||||||||||||||||||||||
Indirect Installment: | |||||||||||||||||||||||||||||||||||||||||||||||
Current | 683 | 394 | 186 | 102 | 100 | 49 | — | 1,514 | |||||||||||||||||||||||||||||||||||||||
Past due | 2 | 7 | 2 | 2 | 1 | 1 | — | 15 | |||||||||||||||||||||||||||||||||||||||
Total indirect installment | 685 | 401 | 188 | 104 | 101 | 50 | — | 1,529 | |||||||||||||||||||||||||||||||||||||||
Consumer Lines of Credit: | |||||||||||||||||||||||||||||||||||||||||||||||
Current | 63 | 18 | 2 | 3 | 4 | 132 | 1,078 | 1,300 | |||||||||||||||||||||||||||||||||||||||
Past due | — | — | — | — | 1 | 12 | 2 | 15 | |||||||||||||||||||||||||||||||||||||||
Total consumer lines of credit | 63 | 18 | 2 | 3 | 5 | 144 | 1,080 | 1,315 | |||||||||||||||||||||||||||||||||||||||
Total consumer loans | 2,580 | 2,899 | 1,553 | 670 | 338 | 1,480 | 1,080 | 10,600 | |||||||||||||||||||||||||||||||||||||||
Total loans and leases | $ | 5,472 | $ | 6,524 | $ | 4,077 | $ | 2,776 | $ | 1,654 | $ | 4,945 | $ | 3,332 | $ | 28,780 |
December 31, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
COMMERCIAL | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate: | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | 1,878 | $ | 1,782 | $ | 1,503 | $ | 830 | $ | 743 | $ | 2,171 | $ | 183 | $ | 9,090 | |||||||||||||||||||||||||||||||
Special Mention | 15 | 21 | 89 | 105 | 107 | 175 | 9 | 521 | |||||||||||||||||||||||||||||||||||||||
Substandard | — | 15 | 28 | 45 | 45 | 152 | 3 | 288 | |||||||||||||||||||||||||||||||||||||||
Total commercial real estate | 1,893 | 1,818 | 1,620 | 980 | 895 | 2,498 | 195 | 9,899 | |||||||||||||||||||||||||||||||||||||||
Commercial and Industrial: | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | 1,663 | 833 | 731 | 386 | 184 | 296 | 1,509 | 5,602 | |||||||||||||||||||||||||||||||||||||||
Special Mention | 8 | 12 | 18 | 7 | 37 | 42 | 52 | 176 | |||||||||||||||||||||||||||||||||||||||
Substandard | 1 | 4 | 14 | 57 | 42 | 17 | 64 | 199 | |||||||||||||||||||||||||||||||||||||||
Total commercial and industrial | 1,672 | 849 | 763 | 450 | 263 | 355 | 1,625 | 5,977 | |||||||||||||||||||||||||||||||||||||||
Commercial Leases: | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | 182 | 109 | 98 | 53 | 39 | 1 | — | 482 | |||||||||||||||||||||||||||||||||||||||
Special Mention | — | 1 | — | 2 | 3 | 1 | — | 7 | |||||||||||||||||||||||||||||||||||||||
Substandard | — | 2 | 3 | 1 | — | — | — | 6 | |||||||||||||||||||||||||||||||||||||||
Total commercial leases | 182 | 112 | 101 | 56 | 42 | 2 | — | 495 | |||||||||||||||||||||||||||||||||||||||
Other Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | 39 | — | — | — | — | 3 | 52 | 94 | |||||||||||||||||||||||||||||||||||||||
Total other commercial | 39 | — | — | — | — | 3 | 52 | 94 | |||||||||||||||||||||||||||||||||||||||
Total commercial loans and leases | 3,786 | 2,779 | 2,484 | 1,486 | 1,200 | 2,858 | 1,872 | 16,465 | |||||||||||||||||||||||||||||||||||||||
CONSUMER | |||||||||||||||||||||||||||||||||||||||||||||||
Direct Installment: | |||||||||||||||||||||||||||||||||||||||||||||||
Current | 978 | 538 | 215 | 125 | 96 | 412 | — | 2,364 | |||||||||||||||||||||||||||||||||||||||
Past due | — | — | 1 | 1 | — | 10 | — | 12 | |||||||||||||||||||||||||||||||||||||||
Total direct installment | 978 | 538 | 216 | 126 | 96 | 422 | — | 2,376 | |||||||||||||||||||||||||||||||||||||||
Residential Mortgages: | |||||||||||||||||||||||||||||||||||||||||||||||
Current | 1,280 | 932 | 392 | 152 | 212 | 652 | — | 3,620 | |||||||||||||||||||||||||||||||||||||||
Past due | 1 | 1 | 1 | 3 | 3 | 25 | — | 34 | |||||||||||||||||||||||||||||||||||||||
Total residential mortgages | 1,281 | 933 | 393 | 155 | 215 | 677 | — | 3,654 | |||||||||||||||||||||||||||||||||||||||
Indirect Installment: | |||||||||||||||||||||||||||||||||||||||||||||||
Current | 516 | 262 | 157 | 178 | 64 | 35 | — | 1,212 | |||||||||||||||||||||||||||||||||||||||
Past due | 6 | 3 | 2 | 2 | 1 | 1 | — | 15 | |||||||||||||||||||||||||||||||||||||||
Total indirect installment | 522 | 265 | 159 | 180 | 65 | 36 | — | 1,227 | |||||||||||||||||||||||||||||||||||||||
Consumer Lines of Credit: | |||||||||||||||||||||||||||||||||||||||||||||||
Current | 20 | 3 | 4 | 5 | 3 | 127 | 1,072 | 1,234 | |||||||||||||||||||||||||||||||||||||||
Past due | — | — | — | — | — | 10 | 2 | 12 | |||||||||||||||||||||||||||||||||||||||
Total consumer lines of credit | 20 | 3 | 4 | 5 | 3 | 137 | 1,074 | 1,246 | |||||||||||||||||||||||||||||||||||||||
Total consumer loans | 2,801 | 1,739 | 772 | 466 | 379 | 1,272 | 1,074 | 8,503 | |||||||||||||||||||||||||||||||||||||||
Total loans and leases | $ | 6,587 | $ | 4,518 | $ | 3,256 | $ | 1,952 | $ | 1,579 | $ | 4,130 | $ | 2,946 | $ | 24,968 |
(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 | ||||||||||||||||||||||||||||||||||
September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 11 | $ | — | $ | 46 | $ | 57 | $ | 10,784 | $ | 10,841 | $ | 25 | |||||||||||||||||||||||||||
Commercial and industrial | 14 | — | 11 | 25 | 6,684 | 6,709 | 1 | ||||||||||||||||||||||||||||||||||
Commercial leases | 1 | — | 1 | 2 | 501 | 503 | — | ||||||||||||||||||||||||||||||||||
Other | — | — | 1 | 1 | 126 | 127 | — | ||||||||||||||||||||||||||||||||||
Total commercial loans and leases | 26 | — | 59 | 85 | 18,095 | 18,180 | 26 | ||||||||||||||||||||||||||||||||||
Direct installment | 5 | 1 | 7 | 13 | 2,784 | 2,797 | — | ||||||||||||||||||||||||||||||||||
Residential mortgages | 22 | 6 | 14 | 42 | 4,917 | 4,959 | — | ||||||||||||||||||||||||||||||||||
Indirect installment | 12 | 1 | 2 | 15 | 1,514 | 1,529 | — | ||||||||||||||||||||||||||||||||||
Consumer lines of credit | 8 | 1 | 6 | 15 | 1,300 | 1,315 | — | ||||||||||||||||||||||||||||||||||
Total consumer loans | 47 | 9 | 29 | 85 | 10,515 | 10,600 | — | ||||||||||||||||||||||||||||||||||
Total loans and leases | $ | 73 | $ | 9 | $ | 88 | $ | 170 | $ | 28,610 | $ | 28,780 | $ | 26 | |||||||||||||||||||||||||||
(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, 2021 | |||||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 11 | $ | — | $ | 48 | $ | 59 | $ | 9,840 | $ | 9,899 | $ | 20 | |||||||||||||||||||||||||||
Commercial and industrial | 4 | — | 15 | 19 | 5,958 | 5,977 | 4 | ||||||||||||||||||||||||||||||||||
Commercial leases | 1 | — | 1 | 2 | 493 | 495 | — | ||||||||||||||||||||||||||||||||||
Other | — | — | — | — | 94 | 94 | — | ||||||||||||||||||||||||||||||||||
Total commercial loans and leases | 16 | — | 64 | 80 | 16,385 | 16,465 | 24 | ||||||||||||||||||||||||||||||||||
Direct installment | 5 | — | 7 | 12 | 2,364 | 2,376 | — | ||||||||||||||||||||||||||||||||||
Residential mortgages | 20 | 4 | 10 | 34 | 3,620 | 3,654 | — | ||||||||||||||||||||||||||||||||||
Indirect installment | 12 | 1 | 2 | 15 | 1,212 | 1,227 | — | ||||||||||||||||||||||||||||||||||
Consumer lines of credit | 6 | 1 | 5 | 12 | 1,234 | 1,246 | — | ||||||||||||||||||||||||||||||||||
Total consumer loans | 43 | 6 | 24 | 73 | 8,430 | 8,503 | — | ||||||||||||||||||||||||||||||||||
Total loans and leases | $ | 59 | $ | 6 | $ | 88 | $ | 153 | $ | 24,815 | $ | 24,968 | $ | 24 |
(dollars in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Non-accrual loans | $ | 88 | $ | 88 | |||||||
Total non-performing loans and leases | 88 | 88 | |||||||||
Other real estate owned | 6 | 8 | |||||||||
Total non-performing assets | $ | 94 | $ | 96 | |||||||
Asset quality ratios: | |||||||||||
Non-performing loans and leases / total loans and leases | 0.30 | % | 0.35 | % | |||||||
Non-performing assets + 90 days past due / total loans and leases + OREO | 0.36 | 0.41 |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Accruing | $ | 63 | $ | 60 | |||||||
Non-accrual | 30 | 32 | |||||||||
Total TDRs | $ | 93 | $ | 92 |
Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||
(dollars in millions) | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | |||||||||||||||||||||||||||||
Commercial real estate | 2 | $ | — | $ | — | 14 | $ | 5 | $ | 4 | |||||||||||||||||||||||||
Commercial and industrial | 3 | — | — | 10 | 1 | 1 | |||||||||||||||||||||||||||||
Total commercial loans | 5 | — | — | 24 | 6 | 5 | |||||||||||||||||||||||||||||
Direct installment | 8 | 1 | 1 | 33 | 1 | 1 | |||||||||||||||||||||||||||||
Residential mortgages | 14 | 2 | 2 | 34 | 5 | 5 | |||||||||||||||||||||||||||||
Consumer lines of credit | 6 | — | — | 12 | 1 | 1 | |||||||||||||||||||||||||||||
Total consumer loans | 28 | 3 | 3 | 79 | 7 | 7 | |||||||||||||||||||||||||||||
Total | 33 | $ | 3 | $ | 3 | 103 | $ | 13 | $ | 12 |
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||
(dollars in millions) | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | |||||||||||||||||||||||||||||
Commercial real estate | 5 | $ | 2 | $ | 2 | 21 | $ | 20 | $ | 20 | |||||||||||||||||||||||||
Commercial and industrial | 3 | — | — | 8 | 1 | — | |||||||||||||||||||||||||||||
Other | 1 | — | — | 1 | — | — | |||||||||||||||||||||||||||||
Total commercial loans | 9 | 2 | 2 | 30 | 21 | 20 | |||||||||||||||||||||||||||||
Direct installment | 8 | — | — | 26 | 1 | 1 | |||||||||||||||||||||||||||||
Residential mortgages | 12 | 2 | 2 | 15 | 2 | 2 | |||||||||||||||||||||||||||||
Consumer lines of credit | 7 | — | — | 31 | 2 | 2 | |||||||||||||||||||||||||||||
Total consumer loans | 27 | 2 | 2 | 72 | 5 | 5 | |||||||||||||||||||||||||||||
Total | 36 | $ | 4 | $ | 4 | 102 | $ | 26 | $ | 25 | |||||||||||||||||||||||||
Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | ||||||||||||||||||||||
(dollars in millions) | Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | |||||||||||||||||||
Commercial real estate | 7 | $ | 3 | 10 | $ | 3 | |||||||||||||||||
Commercial and industrial | 1 | — | 1 | — | |||||||||||||||||||
Total commercial loans | 8 | 3 | 11 | 3 | |||||||||||||||||||
Direct installment | 3 | — | 5 | — | |||||||||||||||||||
Residential mortgages | 5 | 1 | 8 | 1 | |||||||||||||||||||
Total consumer loans | 8 | 1 | 13 | 1 | |||||||||||||||||||
Total | 16 | $ | 4 | 24 | $ | 4 |
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | ||||||||||||||||||||||
(dollars in millions) | Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | |||||||||||||||||||
Commercial and industrial | — | $ | — | 1 | $ | — | |||||||||||||||||
Total commercial loans | — | — | 1 | — | |||||||||||||||||||
Direct installment | 1 | — | 1 | — | |||||||||||||||||||
Residential mortgages | — | — | 1 | — | |||||||||||||||||||
Total consumer loans | 1 | — | 2 | — | |||||||||||||||||||
Total | 1 | $ | — | 3 | $ | — |
(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 September 30, 2022 | |||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 157.9 | $ | (1.3) | $ | 0.5 | $ | (0.8) | $ | (1.8) | $ | 155.3 | |||||||||||||||||||||||
Commercial and industrial | 94.3 | (0.8) | 0.9 | 0.1 | 1.8 | 96.2 | |||||||||||||||||||||||||||||
Commercial leases | 13.7 | — | — | — | 0.5 | 14.2 | |||||||||||||||||||||||||||||
Other | 4.2 | (0.9) | 0.3 | (0.6) | 0.6 | 4.2 | |||||||||||||||||||||||||||||
Total commercial loans and leases | 270.1 | (3.0) | 1.7 | (1.3) | 1.1 | 269.9 | |||||||||||||||||||||||||||||
Direct installment | 34.2 | (0.2) | 0.1 | (0.1) | 2.0 | 36.1 | |||||||||||||||||||||||||||||
Residential mortgages | 47.2 | (0.3) | 0.2 | (0.1) | 4.3 | 51.4 | |||||||||||||||||||||||||||||
Indirect installment | 16.0 | (1.9) | 0.6 | (1.3) | 2.4 | 17.1 | |||||||||||||||||||||||||||||
Consumer lines of credit | 10.5 | (0.3) | 0.3 | — | 0.3 | 10.8 | |||||||||||||||||||||||||||||
Total consumer loans | 107.9 | (2.7) | 1.2 | (1.5) | 9.0 | 115.4 | |||||||||||||||||||||||||||||
Total allowance for credit losses on loans and leases | 378.0 | (5.7) | 2.9 | (2.8) | 10.1 | 385.3 | |||||||||||||||||||||||||||||
Allowance for unfunded loan commitments | 18.2 | — | — | — | 1.1 | 19.3 | |||||||||||||||||||||||||||||
Total allowance for credit losses on loans and leases and allowance for unfunded loan commitments | $ | 396.2 | $ | (5.7) | $ | 2.9 | $ | (2.8) | $ | 11.2 | $ | 404.6 | |||||||||||||||||||||||
(in millions) | Balance at Beginning of Period | Charge- Offs | Recoveries | Net (Charge- Offs) Recoveries | Provision for Credit Losses | Allowance for PCD Loans and Leases at Acquisition | Balance at End of Period | ||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 156.5 | $ | (2.9) | $ | 2.6 | $ | (0.3) | $ | (5.3) | $ | 4.4 | $ | 155.3 | |||||||||||||||||||||||||||
Commercial and industrial | 87.4 | (5.1) | 4.9 | (0.2) | 5.6 | 3.4 | 96.2 | ||||||||||||||||||||||||||||||||||
Commercial leases | 14.7 | (0.1) | — | (0.1) | (0.4) | — | 14.2 | ||||||||||||||||||||||||||||||||||
Other | 2.6 | (2.3) | 0.8 | (1.5) | 3.1 | — | 4.2 | ||||||||||||||||||||||||||||||||||
Total commercial loans and leases | 261.2 | (10.4) | 8.3 | (2.1) | 3.0 | 7.8 | 269.9 | ||||||||||||||||||||||||||||||||||
Direct installment | 26.4 | (0.4) | 0.5 | 0.1 | 9.1 | 0.5 | 36.1 | ||||||||||||||||||||||||||||||||||
Residential mortgages | 33.1 | (0.6) | 0.5 | (0.1) | 17.1 | 1.3 | 51.4 | ||||||||||||||||||||||||||||||||||
Indirect installment | 13.5 | (4.1) | 1.7 | (2.4) | 6.0 | — | 17.1 | ||||||||||||||||||||||||||||||||||
Consumer lines of credit | 10.1 | (0.7) | 0.9 | 0.2 | 0.1 | 0.4 | 10.8 | ||||||||||||||||||||||||||||||||||
Total consumer loans | 83.1 | (5.8) | 3.6 | (2.2) | 32.3 | 2.2 | 115.4 | ||||||||||||||||||||||||||||||||||
Total allowance for credit losses on loans and leases | 344.3 | (16.2) | 11.9 | (4.3) | 35.3 | 10.0 | 385.3 | ||||||||||||||||||||||||||||||||||
Allowance for unfunded loan commitments | 19.1 | — | — | — | 0.2 | — | 19.3 | ||||||||||||||||||||||||||||||||||
Total allowance for credit losses on loans and leases and allowance for unfunded loan commitments | $ | 363.4 | $ | (16.2) | $ | 11.9 | $ | (4.3) | $ | 35.5 | $ | 10.0 | $ | 404.6 |
(in millions) | Balance at Beginning of Period | Charge- Offs | Recoveries | Net Charge- Offs | Provision for Credit Losses | Balance at End of Period | |||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 176 | $ | (3) | $ | 2 | $ | (1) | $ | (14) | $ | 161 | |||||||||||||||||||||||
Commercial and industrial | 81 | (2) | 2 | — | 6 | 87 | |||||||||||||||||||||||||||||
Commercial leases | 16 | — | — | — | — | 16 | |||||||||||||||||||||||||||||
Other | 1 | — | — | — | 1 | 2 | |||||||||||||||||||||||||||||
Total commercial loans and leases | 274 | (5) | 4 | (1) | (7) | 266 | |||||||||||||||||||||||||||||
Direct installment | 27 | (1) | — | (1) | — | 26 | |||||||||||||||||||||||||||||
Residential mortgages | 33 | — | — | — | — | 33 | |||||||||||||||||||||||||||||
Indirect installment | 12 | — | — | — | 1 | 13 | |||||||||||||||||||||||||||||
Consumer lines of credit | 11 | (1) | 1 | — | — | 11 | |||||||||||||||||||||||||||||
Total consumer loans | 83 | (2) | 1 | (1) | 1 | 83 | |||||||||||||||||||||||||||||
Total allowance for credit losses on loans and leases | 357 | (7) | 5 | (2) | (6) | 349 | |||||||||||||||||||||||||||||
Allowance for unfunded loan commitments | 14 | — | — | — | 4 | 18 | |||||||||||||||||||||||||||||
Total allowance for credit losses on loans and leases and allowance for unfunded loan commitments | $ | 371 | $ | (7) | $ | 5 | $ | (2) | $ | (2) | $ | 367 | |||||||||||||||||||||||
Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 181 | $ | (9) | $ | 5 | $ | (4) | $ | (16) | $ | 161 | |||||||||||||||||||||||
Commercial and industrial | 81 | (11) | 4 | (7) | 13 | 87 | |||||||||||||||||||||||||||||
Commercial leases | 17 | — | 1 | 1 | (2) | 16 | |||||||||||||||||||||||||||||
Other | 1 | (2) | 1 | (1) | 2 | 2 | |||||||||||||||||||||||||||||
Total commercial loans and leases | 280 | (22) | 11 | (11) | (3) | 266 | |||||||||||||||||||||||||||||
Direct installment | 26 | (1) | — | (1) | 1 | 26 | |||||||||||||||||||||||||||||
Residential mortgages | 34 | — | — | — | (1) | 33 | |||||||||||||||||||||||||||||
Indirect installment | 11 | (3) | 2 | (1) | 3 | 13 | |||||||||||||||||||||||||||||
Consumer lines of credit | 12 | (1) | 1 | — | (1) | 11 | |||||||||||||||||||||||||||||
Total consumer loans | 83 | (5) | 3 | (2) | 2 | 83 | |||||||||||||||||||||||||||||
Total allowance for credit losses on loans and leases | 363 | (27) | 14 | (13) | (1) | 349 | |||||||||||||||||||||||||||||
Allowance for unfunded loan commitments | 14 | — | — | — | 4 | 18 | |||||||||||||||||||||||||||||
Total allowance for credit losses on loans and leases and allowance for unfunded loan commitments | $ | 377 | $ | (27) | $ | 14 | $ | (13) | $ | 3 | $ | 367 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Balance at beginning of period | $ | 18 | $ | 14 | $ | 19 | $ | 14 | |||||||||||||||
Provision for unfunded loan commitments and letters of credit: | |||||||||||||||||||||||
Commercial portfolio | 1 | 4 | — | 4 | |||||||||||||||||||
Consumer portfolio | — | — | — | — | |||||||||||||||||||
Balance at end of period | $ | 19 | $ | 18 | $ | 19 | $ | 18 |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Mortgage loans sold with servicing retained | $ | 5,160 | $ | 4,855 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Mortgage loans sold with servicing retained | $ | 204 | $ | 382 | $ | 870 | $ | 1,406 | |||||||||||||||
Pre-tax net (losses) gains resulting from above loan sales (1) | (2) | 10 | (9) | 36 | |||||||||||||||||||
Mortgage servicing fees (1) | 3 | 3 | 9 | 9 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Balance at beginning of period | $ | 50.7 | $ | 40.5 | $ | 44.4 | $ | 35.6 | |||||||||||||||
Additions | 2.4 | 4.4 | 10.5 | 15.3 | |||||||||||||||||||
Payoffs and curtailments | (0.8) | (2.8) | (3.8) | (10.4) | |||||||||||||||||||
(Impairment charge) / recovery | — | 1.0 | 2.5 | 3.8 | |||||||||||||||||||
Amortization | (0.6) | (0.6) | (1.9) | (1.8) | |||||||||||||||||||
Balance at end of period | $ | 51.7 | $ | 42.5 | $ | 51.7 | $ | 42.5 | |||||||||||||||
Fair value, beginning of period | $ | 64.1 | $ | 40.8 | $ | 46.0 | $ | 35.6 | |||||||||||||||
Fair value, end of period | 69.6 | 43.2 | 69.6 | 43.2 |
(dollars in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Weighted average life (months) | 96.8 | 76.6 | |||||||||
Constant prepayment rate (annualized) | 7.1 | % | 11.2 | % | |||||||
Discount rate | 9.5 | % | 9.5 | % | |||||||
Effect on fair value due to change in interest rates: | |||||||||||
+2.00% | $ | 8 | $ | 15 | |||||||
+1.00% | 4 | 9 | |||||||||
+0.50% | 2 | 5 | |||||||||
+0.25% | 1 | 3 | |||||||||
-0.25% | (1) | (3) | |||||||||
-0.50% | (2) | (7) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(dollars in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Operating lease cost | $ | 8 | $ | 7 | $ | 24 | $ | 21 | |||||||||||||||
Variable lease cost | 1 | 1 | 3 | 3 | |||||||||||||||||||
Total lease cost | $ | 9 | $ | 8 | $ | 27 | $ | 24 |
Nine Months Ended September 30, | |||||||||||
(dollars in millions) | 2022 | 2021 | |||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | 7 | $ | 7 | |||||||
Operating cash flows from finance leases | $ | — | $ | — | |||||||
Right-of-use assets obtained in exchange for lease obligations: | |||||||||||
Operating leases | $ | — | $ | 7 | |||||||
Finance leases | $ | — | $ | — | |||||||
Weighted average remaining lease term (years): | |||||||||||
Operating leases | 9.51 | 9.05 | |||||||||
Finance leases | 21.23 | 24.13 | |||||||||
Weighted average discount rate: | |||||||||||
Operating leases | 2.4 | % | 2.5 | % | |||||||
Finance leases | 2.6 | % | 1.9 | % |
(in millions) | Operating Leases | Finance Leases | Total Leases | ||||||||||||||
September 30, 2022 | |||||||||||||||||
2022 | $ | 7 | $ | — | $ | 7 | |||||||||||
2023 | 25 | 1 | 26 | ||||||||||||||
2024 | 23 | 1 | 24 | ||||||||||||||
2025 | 16 | 1 | 17 | ||||||||||||||
2026 | 14 | 2 | 16 | ||||||||||||||
Later years | 79 | 25 | 104 | ||||||||||||||
Total lease payments | 164 | 30 | 194 | ||||||||||||||
Less: imputed interest | (19) | (7) | (26) | ||||||||||||||
Present value of lease liabilities | $ | 145 | $ | 23 | $ | 168 |
(in millions) | Total Assets | Total Liabilities | Maximum Exposure to Loss | ||||||||||||||
September 30, 2022 | |||||||||||||||||
Trust preferred securities (1) | $ | 1 | $ | 72 | $ | — | |||||||||||
Affordable housing tax credit partnerships | 121 | 35 | 121 | ||||||||||||||
Other investments | 29 | 5 | 29 | ||||||||||||||
Total | $ | 151 | $ | 112 | $ | 150 | |||||||||||
December 31, 2021 | |||||||||||||||||
Trust preferred securities (1) | $ | 1 | $ | 67 | $ | — | |||||||||||
Affordable housing tax credit partnerships | 121 | 34 | 121 | ||||||||||||||
Other investments | 28 | 6 | 28 | ||||||||||||||
Total | $ | 150 | $ | 107 | $ | 149 | |||||||||||
(1) Represents our investment in unconsolidated subsidiaries. |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
LIHTC investments included in other assets | $ | 86 | $ | 87 | |||||||
Unfunded LIHTC commitments | 35 | 34 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Provision for income taxes: | |||||||||||||||||||||||
Amortization of LIHTC investments under proportional method | $ | 4 | $ | 3 | $ | 11 | $ | 10 | |||||||||||||||
Low-income housing tax credits | (3) | (4) | (11) | (11) | |||||||||||||||||||
Other tax benefits related to tax credit investments | (1) | — | (2) | (2) | |||||||||||||||||||
Total impact on provision for income taxes | $ | — | $ | (1) | $ | (2) | $ | (3) |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Securities sold under repurchase agreements | $ | 333 | $ | 376 | |||||||
Federal Home Loan Bank advances | 930 | 1,030 | |||||||||
Subordinated notes | 132 | 130 | |||||||||
Total short-term borrowings | $ | 1,395 | $ | 1,536 |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Senior notes | $ | 647 | $ | 299 | |||||||
Subordinated notes | 66 | 68 | |||||||||
Junior subordinated debt | 72 | 67 | |||||||||
Other subordinated debt | 274 | 248 | |||||||||
Total long-term borrowings | $ | 1,059 | $ | 682 |
(dollars in millions) | Aggregate Principal Amount Issued | Net Proceeds (4) | Carrying Value | Stated Maturity Date | Interest Rate | ||||||||||||||||||||||||
2.200% Senior Notes due February 24, 2023 | $ | 300 | $ | 298 | $ | 300 | 2/24/2023 | 2.200 | % | ||||||||||||||||||||
5.150% Senior Notes due August 25, 2025 | 350 | 347 | 347 | 8/25/2025 | 5.150 | % | |||||||||||||||||||||||
4.950% Fixed-To-Floating Rate Subordinated Notes due 2029 (1) | 120 | 118 | 119 | 2/14/2029 | 4.950 | % | |||||||||||||||||||||||
4.875% Subordinated Notes due 2025 | 100 | 98 | 99 | 10/2/2025 | 4.875 | % | |||||||||||||||||||||||
7.625% Subordinated Notes due August 12, 2023 (3) | 38 | 46 | 30 | 8/12/2023 | 7.625 | % | |||||||||||||||||||||||
6.00% Fixed-To-Floating Rate Subordinated Notes due December 6, 2028 (2) (3) | 25 | 26 | 26 | 12/6/2028 | 6.00 | % | |||||||||||||||||||||||
Total | $ | 933 | $ | 933 | $ | 921 |
(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 | $ | 22 | $ | 1 | $ | 22 | 6/15/2036 | 4.94 | % | LIBOR + 165 bps | |||||||||||||||||||||||||
Yadkin Valley Statutory Trust I | 25 | 1 | 22 | 12/15/2037 | 4.61 | % | LIBOR + 132 bps | ||||||||||||||||||||||||||||
FNB Financial Services Capital Trust I | 25 | 1 | 23 | 9/30/2035 | 5.13 | % | LIBOR + 146 bps | ||||||||||||||||||||||||||||
Patapsco Statutory Trust I | 5 | — | 5 | 12/15/2035 | 4.77 | % | LIBOR + 148 bps | ||||||||||||||||||||||||||||
Total | $ | 77 | $ | 3 | $ | 72 |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
Notional | Fair Value | Notional | Fair Value | ||||||||||||||||||||||||||||||||
(in millions) | Amount | Asset | Liability | Amount | Asset | Liability | |||||||||||||||||||||||||||||
Gross Derivatives | |||||||||||||||||||||||||||||||||||
Subject to master netting arrangements: | |||||||||||||||||||||||||||||||||||
Interest rate contracts – designated | $ | 1,980 | $ | — | $ | 1 | $ | 2,080 | $ | 1 | $ | — | |||||||||||||||||||||||
Interest rate swaps – not designated | 5,318 | 83 | 1 | 5,547 | 2 | 20 | |||||||||||||||||||||||||||||
Total subject to master netting arrangements | 7,298 | 83 | 2 | 7,627 | 3 | 20 | |||||||||||||||||||||||||||||
Not subject to master netting arrangements: | |||||||||||||||||||||||||||||||||||
Interest rate swaps – not designated | 5,318 | 1 | 418 | 5,547 | 172 | 24 | |||||||||||||||||||||||||||||
Interest rate lock commitments – not designated | 195 | — | 19 | 482 | 9 | — | |||||||||||||||||||||||||||||
Forward delivery commitments – not designated | 263 | 3 | — | 502 | 1 | 1 | |||||||||||||||||||||||||||||
Credit risk contracts – not designated | 442 | — | — | 368 | — | — | |||||||||||||||||||||||||||||
Total not subject to master netting arrangements | 6,218 | 4 | 437 | 6,899 | 182 | 25 | |||||||||||||||||||||||||||||
Total | $ | 13,516 | $ | 87 | $ | 439 | $ | 14,526 | $ | 185 | $ | 45 |
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 | |||||||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||||||||||||||
Interest rate contracts | $ | (39) | $ | 3 | Interest income (expense) | $ | (8) | $ | (14) | ||||||||||||||||||||
Other income | — | — |
Nine months ended September 30, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(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) | $ | 760 | $ | 17 | $ | 671 | $ | 21 | |||||||||||||||
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 | (1) | (7) | 1 | (15) | |||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||
(in millions) | Consolidated Statements of Income Location | 2022 | 2021 | ||||||||||||||
Interest rate swaps | Non-interest income - other | $ | — | $ | — | ||||||||||||
Interest rate lock commitments | Mortgage banking operations | — | — | ||||||||||||||
Forward delivery contracts | Mortgage banking operations | 2 | 2 | ||||||||||||||
Credit risk contracts | Non-interest income - other | — | — |
Amount Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||
(in millions) | Net Amount Presented in the Consolidated Balance Sheets | Financial Instruments | Cash Collateral | Net Amount | |||||||||||||||||||
September 30, 2022 | |||||||||||||||||||||||
Derivative Assets | |||||||||||||||||||||||
Interest rate contracts: | |||||||||||||||||||||||
Not designated | $ | 83 | $ | — | $ | 79 | $ | 4 | |||||||||||||||
Total | $ | 83 | $ | — | $ | 79 | $ | 4 |
Derivative Liabilities | |||||||||||||||||||||||
Interest rate contracts: | |||||||||||||||||||||||
Designated | $ | 1 | $ | — | $ | 1 | $ | — | |||||||||||||||
Not designated | 1 | — | 1 | — | |||||||||||||||||||
Total | $ | 2 | $ | — | $ | 2 | $ | — |
December 31, 2021 | |||||||||||||||||||||||
Derivative Assets | |||||||||||||||||||||||
Interest rate contracts: | |||||||||||||||||||||||
Designated | $ | 1 | $ | — | $ | 1 | $ | — | |||||||||||||||
Not designated | 2 | — | 2 | — | |||||||||||||||||||
Total | $ | 3 | $ | — | $ | 3 | $ | — |
Derivative Liabilities | |||||||||||||||||||||||
Interest rate contracts: | |||||||||||||||||||||||
Not designated | $ | 20 | $ | — | $ | 20 | $ | — | |||||||||||||||
Total | $ | 20 | $ | — | $ | 20 | $ | — |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Commitments to extend credit | $ | 12,920 | $ | 11,228 | |||||||
Standby letters of credit | 210 | 194 |
Nine Months Ended September 30, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Units | Weighted Average Grant Price per Share | Units | Weighted Average Grant Price per Share | ||||||||||||||||||||
Unvested units outstanding at beginning of period | 4,680,786 | $ | 9.71 | 4,322,115 | $ | 9.46 | |||||||||||||||||
Granted | 1,266,821 | 13.07 | 1,113,314 | 12.65 | |||||||||||||||||||
Acquired | 60,300 | 9.41 | — | — | |||||||||||||||||||
Net adjustment due to performance | 244,258 | 9.34 | 412,540 | 11.72 | |||||||||||||||||||
Vested | (1,683,372) | 10.58 | (1,309,476) | 12.10 | |||||||||||||||||||
Forfeited/expired/canceled | (219,058) | 10.95 | (112,002) | 10.94 | |||||||||||||||||||
Dividend reinvestment | 137,976 | 11.91 | 134,600 | 12.26 | |||||||||||||||||||
Unvested units outstanding at end of period | 4,487,711 | 10.31 | 4,561,091 | 9.74 |
(in millions) | Nine Months Ended September 30, | ||||||||||
2022 | 2021 | ||||||||||
Stock-based compensation expense | $ | 15 | $ | 17 | |||||||
Tax benefit related to stock-based compensation expense | 3 | 4 | |||||||||
Fair value of units vested | 21 | 16 |
(dollars in millions) | Service- Based Units | Performance- Based Units | Total | ||||||||||||||
Unvested restricted stock units | 2,858,668 | 1,629,043 | 4,487,711 | ||||||||||||||
Unrecognized compensation expense | $ | 11 | $ | 1 | $ | 12 | |||||||||||
Intrinsic value | $ | 33 | $ | 19 | $ | 52 | |||||||||||
Weighted average remaining life (in years) | 1.91 | 1.30 | 1.69 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(dollars in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Current income taxes: | |||||||||||||||||||||||
Federal taxes | $ | 32 | $ | 22 | $ | 61 | $ | 62 | |||||||||||||||
State taxes | 2 | 1 | 7 | 4 | |||||||||||||||||||
Total current income taxes | 34 | 23 | 68 | 66 | |||||||||||||||||||
Deferred income taxes: | |||||||||||||||||||||||
Federal taxes | — | 4 | 8 | 7 | |||||||||||||||||||
State taxes | 1 | — | 1 | 1 | |||||||||||||||||||
Total deferred income taxes | 1 | 4 | 9 | 8 | |||||||||||||||||||
Total income taxes | $ | 35 | $ | 27 | $ | 77 | $ | 74 | |||||||||||||||
Statutory tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | |||||||||||||||
Effective tax rate | 20.7 | 19.7 | 20.5 | 19.5 |
(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 | |||||||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||
Balance at beginning of period | $ | 8 | $ | (22) | $ | (48) | $ | (62) | |||||||||||||||
Other comprehensive (loss) income before reclassifications | (294) | (30) | 2 | (322) | |||||||||||||||||||
Amounts reclassified from AOCI | — | 6 | — | 6 | |||||||||||||||||||
Net current period other comprehensive (loss) income | (294) | (24) | 2 | (316) | |||||||||||||||||||
Balance at end of period | $ | (286) | $ | (46) | $ | (46) | $ | (378) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(dollars in millions, except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net income | $ | 138 | $ | 111 | $ | 300 | $ | 306 | |||||||||||||||
Less: Preferred stock dividends | 2 | 2 | 6 | 6 | |||||||||||||||||||
Net income available to common stockholders | $ | 136 | $ | 109 | $ | 294 | $ | 300 | |||||||||||||||
Basic weighted average common shares outstanding | 350,910,562 | 319,512,598 | 348,868,423 | 320,023,695 | |||||||||||||||||||
Net effect of dilutive stock options, warrants and restricted stock | 3,743,917 | 3,348,329 | 3,917,702 | 3,611,960 | |||||||||||||||||||
Diluted weighted average common shares outstanding | 354,654,479 | 322,860,927 | 352,786,125 | 323,635,655 | |||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic | $ | 0.39 | $ | 0.34 | $ | 0.84 | $ | 0.94 | |||||||||||||||
Diluted | $ | 0.38 | $ | 0.34 | $ | 0.83 | $ | 0.93 |
Nine Months Ended September 30, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Interest paid on deposits and other borrowings | $ | 88 | $ | 82 | |||||||
Income taxes paid | 56 | 53 | |||||||||
Transfers of loans to other real estate owned | 1 | 3 | |||||||||
(in millions) | Community Banking | Wealth Management | Insurance | Parent and Other | Consolidated | ||||||||||||||||||||||||
At or for the Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
Interest income | $ | 342 | $ | — | $ | — | $ | 1 | $ | 343 | |||||||||||||||||||
Interest expense | 41 | — | — | 5 | 46 | ||||||||||||||||||||||||
Net interest income | 301 | — | — | (4) | 297 | ||||||||||||||||||||||||
Provision for credit losses | 12 | — | — | — | 12 | ||||||||||||||||||||||||
Non-interest income | 62 | 16 | 7 | (2) | 83 | ||||||||||||||||||||||||
Non-interest expense (1) | 174 | 11 | 5 | 2 | 192 | ||||||||||||||||||||||||
Amortization of intangibles | 3 | — | — | — | 3 | ||||||||||||||||||||||||
Income tax expense (benefit) | 36 | 1 | — | (2) | 35 | ||||||||||||||||||||||||
Net income (loss) | 138 | 4 | 2 | (6) | 138 | ||||||||||||||||||||||||
Total assets | 42,458 | 37 | 33 | 62 | 42,590 | ||||||||||||||||||||||||
Total intangibles | 2,451 | 9 | 27 | — | 2,487 | ||||||||||||||||||||||||
At or for the Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||
Interest income | $ | 255 | $ | — | $ | — | $ | 1 | $ | 256 | |||||||||||||||||||
Interest expense | 20 | — | — | 4 | 24 | ||||||||||||||||||||||||
Net interest income | 235 | — | — | (3) | 232 | ||||||||||||||||||||||||
Provision for credit losses | (2) | — | — | — | (2) | ||||||||||||||||||||||||
Non-interest income | 68 | 15 | 6 | (1) | 88 | ||||||||||||||||||||||||
Non-interest expense (1) | 164 | 10 | 5 | 2 | 181 | ||||||||||||||||||||||||
Amortization of intangibles | 3 | — | — | — | 3 | ||||||||||||||||||||||||
Income tax expense (benefit) | 27 | 1 | — | (1) | 27 | ||||||||||||||||||||||||
Net income (loss) | 111 | 4 | 1 | (5) | 111 | ||||||||||||||||||||||||
Total assets | 39,238 | 43 | 34 | 46 | 39,361 | ||||||||||||||||||||||||
Total intangibles | 2,271 | 9 | 27 | — | 2,307 | ||||||||||||||||||||||||
(1) Excludes amortization of intangibles, which is presented separately. |
(in millions) | Community Banking | Wealth Management | Insurance | Parent and Other | Consolidated | ||||||||||||||||||||||||
At or for the Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
Interest income | $ | 874 | $ | — | $ | — | $ | 3 | $ | 877 | |||||||||||||||||||
Interest expense | 82 | — | — | 10 | 92 | ||||||||||||||||||||||||
Net interest income | 792 | — | — | (7) | 785 | ||||||||||||||||||||||||
Provision for credit losses | 35 | — | — | 1 | 36 | ||||||||||||||||||||||||
Non-interest income | 179 | 48 | 20 | (4) | 243 | ||||||||||||||||||||||||
Non-interest expense (1) | 554 | 32 | 14 | 5 | 605 | ||||||||||||||||||||||||
Amortization of intangibles | 9 | — | 1 | — | 10 | ||||||||||||||||||||||||
Income tax expense (benefit) | 78 | 3 | 1 | (5) | 77 | ||||||||||||||||||||||||
Net income (loss) | 295 | 13 | 4 | (12) | 300 | ||||||||||||||||||||||||
Total assets | 42,458 | 37 | 33 | 62 | 42,590 | ||||||||||||||||||||||||
Total intangibles | 2,451 | 9 | 27 | — | 2,487 | ||||||||||||||||||||||||
At or for the Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||
Interest income | $ | 759 | $ | — | $ | — | $ | 1 | $ | 760 | |||||||||||||||||||
Interest expense | 67 | — | — | 10 | 77 | ||||||||||||||||||||||||
Net interest income | 692 | — | — | (9) | 683 | ||||||||||||||||||||||||
Provision for credit losses | 2 | — | — | 1 | 3 | ||||||||||||||||||||||||
Non-interest income | 191 | 45 | 19 | (4) | 251 | ||||||||||||||||||||||||
Non-interest expense (1) | 491 | 30 | 15 | 6 | 542 | ||||||||||||||||||||||||
Amortization of intangibles | 8 | — | 1 | — | 9 | ||||||||||||||||||||||||
Income tax expense (benefit) | 75 | 3 | 1 | (5) | 74 | ||||||||||||||||||||||||
Net income (loss) | 307 | 12 | 2 | (15) | 306 | ||||||||||||||||||||||||
Total assets | 39,238 | 43 | 34 | 46 | 39,361 | ||||||||||||||||||||||||
Total intangibles | 2,271 | 9 | 27 | — | 2,307 |
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
September 30, 2022 | |||||||||||||||||||||||
Assets Measured at Fair Value | |||||||||||||||||||||||
Debt securities available for sale | |||||||||||||||||||||||
U.S. Treasury | $ | 256 | $ | — | $ | — | $ | 256 | |||||||||||||||
U.S. government agencies | — | 117 | — | 117 | |||||||||||||||||||
U.S. government-sponsored entities | — | 261 | — | 261 | |||||||||||||||||||
Residential mortgage-backed securities: | |||||||||||||||||||||||
Agency mortgage-backed securities | — | 1,280 | — | 1,280 | |||||||||||||||||||
Agency collateralized mortgage obligations | — | 1,022 | — | 1,022 | |||||||||||||||||||
Commercial mortgage-backed securities | — | 407 | — | 407 | |||||||||||||||||||
States of the U.S. and political subdivisions (municipals) | — | 29 | — | 29 | |||||||||||||||||||
Other debt securities | — | 19 | 1 | 20 | |||||||||||||||||||
Total debt securities available for sale | 256 | 3,135 | 1 | 3,392 | |||||||||||||||||||
Loans held for sale | — | 117 | — | 117 | |||||||||||||||||||
Derivative financial instruments | |||||||||||||||||||||||
Trading | — | 84 | — | 84 | |||||||||||||||||||
Not for trading | — | 3 | — | 3 | |||||||||||||||||||
Total derivative financial instruments | — | 87 | — | 87 | |||||||||||||||||||
Total assets measured at fair value on a recurring basis | $ | 256 | $ | 3,339 | $ | 1 | $ | 3,596 | |||||||||||||||
Liabilities Measured at Fair Value | |||||||||||||||||||||||
Derivative financial instruments | |||||||||||||||||||||||
Trading | $ | — | $ | 419 | $ | — | $ | 419 | |||||||||||||||
Not for trading | — | 1 | 19 | 20 | |||||||||||||||||||
Total derivative financial instruments | — | 420 | 19 | 439 | |||||||||||||||||||
Total liabilities measured at fair value on a recurring basis | $ | — | $ | 420 | $ | 19 | $ | 439 |
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
Assets Measured at Fair Value | |||||||||||||||||||||||
Debt securities available for sale | |||||||||||||||||||||||
U.S. Treasury | $ | 204 | $ | — | $ | — | $ | 204 | |||||||||||||||
U.S. government agencies | — | 155 | — | 155 | |||||||||||||||||||
U.S. government-sponsored entities | — | 192 | — | 192 | |||||||||||||||||||
Residential mortgage-backed securities: | |||||||||||||||||||||||
Agency mortgage-backed securities | — | 1,357 | — | 1,357 | |||||||||||||||||||
Agency collateralized mortgage obligations | — | 1,186 | — | 1,186 | |||||||||||||||||||
Commercial mortgage-backed securities | — | 297 | — | 297 | |||||||||||||||||||
States of the U.S. and political subdivisions (municipals) | — | 33 | — | 33 | |||||||||||||||||||
Other debt securities | — | 2 | — | 2 | |||||||||||||||||||
Total debt securities available for sale | 204 | 3,222 | — | 3,426 | |||||||||||||||||||
Loans held for sale | — | 269 | — | 269 | |||||||||||||||||||
Derivative financial instruments | |||||||||||||||||||||||
Trading | — | 174 | — | 174 | |||||||||||||||||||
Not for trading | — | 2 | 9 | 11 | |||||||||||||||||||
Total derivative financial instruments | — | 176 | 9 | 185 | |||||||||||||||||||
Total assets measured at fair value on a recurring basis | $ | 204 | $ | 3,667 | $ | 9 | $ | 3,880 | |||||||||||||||
Liabilities Measured at Fair Value | |||||||||||||||||||||||
Derivative financial instruments | |||||||||||||||||||||||
Trading | $ | — | $ | 44 | $ | — | $ | 44 | |||||||||||||||
Not for trading | — | 1 | — | 1 | |||||||||||||||||||
Total derivative financial instruments | — | 45 | — | 45 | |||||||||||||||||||
Total liabilities measured at fair value on a recurring basis | $ | — | $ | 45 | $ | — | $ | 45 |
(in millions) | Other Debt Securities | Interest Rate Lock Commitments | Total | ||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||
Balance at beginning of period | $ | — | $ | 9 | $ | 9 | |||||||||||
Purchases, issuances, sales and settlements: | |||||||||||||||||
Purchases | 2 | — | 2 | ||||||||||||||
Issuances | — | — | — | ||||||||||||||
Settlements | (1) | (9) | (10) | ||||||||||||||
Balance at end of period | $ | 1 | $ | — | $ | 1 | |||||||||||
Year Ended December 31, 2021 | |||||||||||||||||
Balance at beginning of period | $ | — | $ | 24 | $ | 24 | |||||||||||
Purchases, issuances, sales and settlements: | |||||||||||||||||
Issuances | — | 9 | 9 | ||||||||||||||
Settlements | — | (24) | (24) | ||||||||||||||
Balance at end of period | $ | — | $ | 9 | $ | 9 |
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
September 30, 2022 | |||||||||||||||||||||||
Collateral dependent loans | $ | — | $ | — | $ | 17 | $ | 17 | |||||||||||||||
Other assets - MSRs | — | — | — | — | |||||||||||||||||||
Other assets - SBA servicing asset | — | — | 2 | 2 | |||||||||||||||||||
Other real estate owned | — | — | 3 | 3 | |||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
Collateral dependent loans | $ | — | $ | — | $ | 20 | $ | 20 | |||||||||||||||
Other assets - MSRs | — | — | 10 | 10 | |||||||||||||||||||
Other assets - SBA servicing asset | — | — | 3 | 3 | |||||||||||||||||||
Other real estate owned | — | — | 2 | 2 |
Fair Value Measurements | |||||||||||||||||||||||||||||
(in millions) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
September 30, 2022 | |||||||||||||||||||||||||||||
Financial Assets | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 2,276 | $ | 2,276 | $ | 2,276 | $ | — | $ | — | |||||||||||||||||||
Debt securities available for sale | 3,392 | 3,392 | 256 | 3,135 | 1 | ||||||||||||||||||||||||
Debt securities held to maturity | 3,820 | 3,349 | — | 3,349 | — | ||||||||||||||||||||||||
Net loans and leases, including loans held for sale | 28,544 | 26,768 | — | 117 | 26,651 | ||||||||||||||||||||||||
Loan servicing rights | 54 | 72 | — | — | 72 | ||||||||||||||||||||||||
Derivative assets | 87 | 87 | — | 87 | — | ||||||||||||||||||||||||
Accrued interest receivable | 101 | 101 | 101 | — | — | ||||||||||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||||||||
Deposits | 33,893 | 33,804 | 30,994 | 2,810 | — | ||||||||||||||||||||||||
Short-term borrowings | 1,395 | 1,386 | 1,386 | — | — | ||||||||||||||||||||||||
Long-term borrowings | 1,059 | 1,034 | — | — | 1,034 | ||||||||||||||||||||||||
Derivative liabilities | 439 | 439 | — | 420 | 19 | ||||||||||||||||||||||||
Accrued interest payable | 14 | 14 | 14 | — | — | ||||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||
Financial Assets | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 3,493 | $ | 3,493 | $ | 3,493 | $ | — | $ | — | |||||||||||||||||||
Debt securities available for sale | 3,426 | 3,426 | 204 | 3,222 | — | ||||||||||||||||||||||||
Debt securities held to maturity | 3,463 | 3,506 | — | 3,506 | — | ||||||||||||||||||||||||
Net loans and leases, including loans held for sale | 24,919 | 24,518 | — | 269 | 24,249 | ||||||||||||||||||||||||
Loan servicing rights | 47 | 49 | — | — | 49 | ||||||||||||||||||||||||
Derivative assets | 185 | 185 | — | 176 | 9 | ||||||||||||||||||||||||
Accrued interest receivable | 76 | 76 | 76 | — | — | ||||||||||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||||||||
Deposits | 31,726 | 31,725 | 28,867 | 2,858 | — | ||||||||||||||||||||||||
Short-term borrowings | 1,536 | 1,536 | 1,536 | — | — | ||||||||||||||||||||||||
Long-term borrowings | 682 | 704 | — | — | 704 | ||||||||||||||||||||||||
Derivative liabilities | 45 | 45 | — | 45 | — | ||||||||||||||||||||||||
Accrued interest payable | 10 | 10 | 10 | — | — |
Three Months Ended September 30, | |||||||||||
Quarterly Results Summary | 2022 | 2021 | |||||||||
Reported results | |||||||||||
Net income available to common stockholders (millions) | $ | 135.5 | $ | 109.5 | |||||||
Net income per diluted common share | 0.38 | 0.34 | |||||||||
Book value per common share (period-end) | 15.11 | 15.65 | |||||||||
Common equity tier 1 capital ratio | 9.7 | % | 9.9 | % | |||||||
Operating results (non-GAAP) | |||||||||||
Operating net income available to common stockholders (millions) | $ | 137.2 | $ | 110.2 | |||||||
Operating net income per diluted common share | 0.39 | 0.34 | |||||||||
Average diluted common shares outstanding (thousands) | 354,654 | 322,861 | |||||||||
Significant items impacting earnings(1) (millions) | |||||||||||
Pre-tax merger-related expenses | $ | (2.1) | $ | (0.9) | |||||||
After-tax impact of merger-related expenses | (1.7) | (0.7) | |||||||||
Total significant items pre-tax | $ | (2.1) | $ | (0.9) | |||||||
Total significant items after-tax | $ | (1.7) | $ | (0.7) | |||||||
Capital measures (non-GAAP) | |||||||||||
Tangible common equity to tangible assets (period-end) | 7.02 | % | 7.24 | % | |||||||
Tangible book value per common share (period-end) | $ | 8.02 | $ | 8.42 | |||||||
Nine Months Ended September 30, | |||||||||||
Year-to-Date Results Summary | 2022 | 2021 | |||||||||
Reported results | |||||||||||
Net income available to common stockholders (millions) | $ | 293.6 | $ | 300.1 | |||||||
Net income per diluted common share | 0.83 | 0.93 | |||||||||
Operating results (non-GAAP) | |||||||||||
Operating net income available to common stockholders (millions) | 337.9 | 302.9 | |||||||||
Operating net income per diluted common share | 0.96 | 0.94 | |||||||||
Average diluted common shares outstanding (thousands) | 352,786 | 323,636 | |||||||||
Significant items impacting earnings(1) (millions) | |||||||||||
Pre-tax merger-related expenses | $ | (32.8) | $ | (0.9) | |||||||
After-tax impact of merger-related expenses | (25.9) | (0.7) | |||||||||
Pre-tax provision expense related to acquisition | (19.1) | — | |||||||||
After-tax impact of provision expense related to acquisition | (15.1) | — | |||||||||
Pre-tax branch consolidation costs | (4.2) | (2.6) | |||||||||
After-tax impact of branch consolidation costs | (3.3) | (2.1) | |||||||||
Total significant items pre-tax | $ | (56.1) | $ | (3.5) | |||||||
Total significant items after-tax | $ | (44.3) | $ | (2.8) | |||||||
(1) Favorable (unfavorable) impact on earnings |
Three Months Ended September 30, | $ | % | |||||||||||||||||||||
(in thousands, except per share data) | 2022 | 2021 | Change | Change | |||||||||||||||||||
Net interest income | $ | 297,125 | $ | 232,406 | $ | 64,719 | 27.8 | % | |||||||||||||||
Provision for credit losses | 11,188 | (1,806) | 12,994 | 719.5 | |||||||||||||||||||
Non-interest income | 82,464 | 88,854 | (6,390) | (7.2) | |||||||||||||||||||
Non-interest expense | 195,057 | 184,226 | 10,831 | 5.9 | |||||||||||||||||||
Income taxes | 35,846 | 27,327 | 8,519 | 31.2 | |||||||||||||||||||
Net income | 137,498 | 111,513 | 25,985 | 23.3 | |||||||||||||||||||
Less: Preferred stock dividends | 2,010 | 2,010 | — | — | |||||||||||||||||||
Net income available to common stockholders | $ | 135,488 | $ | 109,503 | $ | 25,985 | 23.7 | % | |||||||||||||||
Earnings per common share – Basic | $ | 0.39 | $ | 0.34 | $ | 0.05 | 14.7 | % | |||||||||||||||
Earnings per common share – Diluted | 0.38 | 0.34 | 0.04 | 11.8 | |||||||||||||||||||
Cash dividends per common share | 0.12 | 0.12 | — | — |
Three Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Return on average equity | 9.91 | % | 8.74 | % | |||||||
Return on average tangible common equity (2) | 18.84 | 16.77 | |||||||||
Return on average assets | 1.30 | 1.14 | |||||||||
Return on average tangible assets (2) | 1.41 | 1.24 | |||||||||
Book value per common share (1) | $ | 15.11 | $ | 15.65 | |||||||
Tangible book value per common share (1) (2) | 8.02 | 8.42 | |||||||||
Equity to assets (1) | 12.69 | % | 12.95 | % | |||||||
Average equity to average assets | 13.10 | 13.08 | |||||||||
Common equity to assets (1) | 12.44 | 12.68 | |||||||||
Tangible equity to tangible assets (1) (2) | 7.28 | 7.53 | |||||||||
Tangible common equity to tangible assets (1) (2) | 7.02 | 7.24 | |||||||||
Common equity tier 1 capital ratio (1) | 9.7 | 9.9 | |||||||||
Dividend payout ratio | 31.43 | 35.43 |
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(dollars in thousands) | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||
Interest-bearing deposits with banks | $ | 1,570,094 | $ | 8,197 | 2.07 | % | $ | 3,186,841 | $ | 1,228 | 0.15 | % | |||||||||||||||||||||||
Taxable investment securities (1) | 6,245,951 | 30,662 | 1.96 | 5,109,559 | 20,746 | 1.62 | |||||||||||||||||||||||||||||
Tax-exempt investment securities (1)(2) | 999,718 | 8,523 | 3.41 | 1,078,906 | 9,230 | 3.42 | |||||||||||||||||||||||||||||
Loans held for sale | 158,356 | 1,778 | 4.48 | 257,909 | 2,381 | 3.69 | |||||||||||||||||||||||||||||
Loans and leases (2)(3) | 28,431,137 | 296,470 | 4.14 | 24,729,254 | 224,675 | 3.61 | |||||||||||||||||||||||||||||
Total interest-earning assets (2) | 37,405,256 | 345,630 | 3.67 | 34,362,469 | 258,260 | 2.99 | |||||||||||||||||||||||||||||
Cash and due from banks | 435,258 | 389,659 | |||||||||||||||||||||||||||||||||
Allowance for credit losses | (381,120) | (362,592) | |||||||||||||||||||||||||||||||||
Premises and equipment | 411,306 | 343,070 | |||||||||||||||||||||||||||||||||
Other assets | 4,169,232 | 3,985,793 | |||||||||||||||||||||||||||||||||
Total assets | $ | 42,039,932 | $ | 38,718,399 | |||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Interest-bearing demand | $ | 14,905,755 | 24,044 | 0.64 | $ | 13,888,928 | 4,487 | 0.13 | |||||||||||||||||||||||||||
Savings | 3,986,090 | 2,366 | 0.24 | 3,509,325 | 164 | 0.02 | |||||||||||||||||||||||||||||
Certificates and other time | 2,966,630 | 4,725 | 0.63 | 3,111,424 | 5,999 | 0.76 | |||||||||||||||||||||||||||||
Total interest-bearing deposits | 21,858,475 | 31,135 | 0.57 | 20,509,677 | 10,650 | 0.21 | |||||||||||||||||||||||||||||
Short-term borrowings | 1,389,747 | 6,135 | 1.75 | 1,549,353 | 6,539 | 1.67 | |||||||||||||||||||||||||||||
Long-term borrowings | 851,432 | 8,319 | 3.88 | 886,637 | 6,045 | 2.70 | |||||||||||||||||||||||||||||
Total interest-bearing liabilities | 24,099,654 | 45,589 | 0.75 | 22,945,667 | 23,234 | 0.40 | |||||||||||||||||||||||||||||
Non-interest-bearing demand | 11,779,069 | 10,338,713 | |||||||||||||||||||||||||||||||||
Total deposits and borrowings | 35,878,723 | 0.50 | 33,284,380 | 0.28 | |||||||||||||||||||||||||||||||
Other liabilities | 654,260 | 370,587 | |||||||||||||||||||||||||||||||||
Total liabilities | 36,532,983 | 33,654,967 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 5,506,949 | 5,063,432 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 42,039,932 | $ | 38,718,399 | |||||||||||||||||||||||||||||||
Net interest-earning assets | $ | 13,305,602 | $ | 11,416,802 | |||||||||||||||||||||||||||||||
Net interest income (FTE) (2) | 300,041 | 235,026 | |||||||||||||||||||||||||||||||||
Tax-equivalent adjustment | (2,916) | (2,620) | |||||||||||||||||||||||||||||||||
Net interest income | $ | 297,125 | $ | 232,406 | |||||||||||||||||||||||||||||||
Net interest spread | 2.92 | % | 2.59 | % | |||||||||||||||||||||||||||||||
Net interest margin (2) | 3.19 | % | 2.72 | % |
(in thousands) | Volume | Rate | Net | ||||||||||||||
Interest Income (1) | |||||||||||||||||
Interest-bearing deposits with banks | $ | (623) | $ | 7,592 | $ | 6,969 | |||||||||||
Securities (2) | 4,544 | 4,665 | 9,209 | ||||||||||||||
Loans held for sale | (852) | 249 | (603) | ||||||||||||||
Loans and leases (2) | 32,983 | 38,812 | 71,795 | ||||||||||||||
Total interest income (2) | 36,052 | 51,318 | 87,370 | ||||||||||||||
Interest Expense (1) | |||||||||||||||||
Deposits: | |||||||||||||||||
Interest-bearing demand | 233 | 19,324 | 19,557 | ||||||||||||||
Savings | 17 | 2,185 | 2,202 | ||||||||||||||
Certificates and other time | (182) | (1,092) | (1,274) | ||||||||||||||
Short-term borrowings | (542) | 138 | (404) | ||||||||||||||
Long-term borrowings | (243) | 2,517 | 2,274 | ||||||||||||||
Total interest expense | (717) | 23,072 | 22,355 | ||||||||||||||
Net change (2) | $ | 36,769 | $ | 28,246 | $ | 65,015 |
Three Months Ended September 30, | $ | % | |||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | Change | Change | |||||||||||||||||||
Provision for credit losses (on loans and leases) | $ | 10,069 | $ | (5,668) | $ | 15,737 | 277.6 | % | |||||||||||||||
Provision for unfunded loan commitments | 1,125 | 3,847 | (2,722) | (70.8) | |||||||||||||||||||
Provision for credit losses | $ | 11,194 | $ | (1,821) | $ | 13,015 | 714.7 | % | |||||||||||||||
Net loan charge-offs | 2,812 | 1,591 | 1,221 | 76.7 | |||||||||||||||||||
Net loan charge-offs (annualized) / total average loans and leases | 0.04 | % | 0.03 | % |
Three Months Ended September 30, | $ | % | |||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | Change | Change | |||||||||||||||||||
Service charges | $ | 35,954 | $ | 31,716 | $ | 4,238 | 13.4 | % | |||||||||||||||
Trust services | 9,600 | 9,471 | 129 | 1.4 | |||||||||||||||||||
Insurance commissions and fees | 5,790 | 6,776 | (986) | (14.6) | |||||||||||||||||||
Securities commissions and fees | 5,747 | 5,465 | 282 | 5.2 | |||||||||||||||||||
Capital markets income | 9,605 | 12,541 | (2,936) | (23.4) | |||||||||||||||||||
Mortgage banking operations | 5,148 | 8,245 | (3,097) | (37.6) | |||||||||||||||||||
Dividends on non-marketable equity securities | 3,258 | 1,857 | 1,401 | 75.4 | |||||||||||||||||||
Bank owned life insurance | 2,645 | 3,279 | (634) | (19.3) | |||||||||||||||||||
Net securities gains | — | 65 | (65) | (100.0) | |||||||||||||||||||
Other | 4,717 | 9,439 | (4,722) | (50.0) | |||||||||||||||||||
Total non-interest income | $ | 82,464 | $ | 88,854 | $ | (6,390) | (7.2) | % |
Three Months Ended September 30, | $ | % | |||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | Change | Change | |||||||||||||||||||
Salaries and employee benefits | $ | 106,620 | $ | 104,899 | $ | 1,721 | 1.6 | % | |||||||||||||||
Net occupancy | 15,597 | 12,913 | 2,684 | 20.8 | |||||||||||||||||||
Equipment | 19,242 | 17,664 | 1,578 | 8.9 | |||||||||||||||||||
Amortization of intangibles | 3,547 | 3,022 | 525 | 17.4 | |||||||||||||||||||
Outside services | 19,008 | 17,839 | 1,169 | 6.6 | |||||||||||||||||||
Marketing | 3,196 | 3,760 | (564) | (15.0) | |||||||||||||||||||
FDIC insurance | 5,221 | 4,380 | 841 | 19.2 | |||||||||||||||||||
Bank shares and franchise taxes | 3,991 | 3,584 | 407 | 11.4 | |||||||||||||||||||
Merger-related | 2,105 | 940 | 1,165 | 123.9 | |||||||||||||||||||
Other | 16,530 | 15,225 | 1,305 | 8.6 | |||||||||||||||||||
Total non-interest expense | $ | 195,057 | $ | 184,226 | $ | 10,831 | 5.9 | % |
Three Months Ended September 30, | $ | % | |||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | Change | Change | |||||||||||||||||||
Total non-interest expense, as reported | $ | 195,057 | $ | 184,226 | $ | 10,831 | 5.9 | % | |||||||||||||||
Significant items: | |||||||||||||||||||||||
Merger-related | (2,105) | (940) | (1,165) | ||||||||||||||||||||
Total non-interest expense, excluding significant items (1) | $ | 192,952 | $ | 183,286 | $ | 9,666 | 5.3 | % |
Three Months Ended September 30, | |||||||||||
(dollars in thousands) | 2022 | 2021 | |||||||||
Income tax expense | $ | 35,846 | $ | 27,327 | |||||||
Effective tax rate | 20.7 | % | 19.7 | % | |||||||
Statutory federal tax rate | 21.0 | 21.0 |
Nine Months Ended September 30, | $ | % | |||||||||||||||||||||
(in thousands, except per share data) | 2022 | 2021 | Change | Change | |||||||||||||||||||
Net interest income | $ | 784,891 | $ | 683,200 | $ | 101,691 | 14.9 | % | |||||||||||||||
Provision for credit losses | 35,569 | 2,979 | 32,590 | 1,094.0 | |||||||||||||||||||
Non-interest income | 242,940 | 251,431 | (8,491) | (3.4) | |||||||||||||||||||
Non-interest expense | 615,257 | 551,588 | 63,669 | 11.5 | |||||||||||||||||||
Income taxes | 77,367 | 73,929 | 3,438 | 4.7 | |||||||||||||||||||
Net income | 299,638 | 306,135 | (6,497) | (2.1) | |||||||||||||||||||
Less: Preferred stock dividends | 6,030 | 6,030 | — | — | |||||||||||||||||||
Net income available to common stockholders | $ | 293,608 | $ | 300,105 | $ | (6,497) | (2.2) | % | |||||||||||||||
Earnings per common share – Basic | $ | 0.84 | $ | 0.94 | $ | (0.10) | (10.6) | % | |||||||||||||||
Earnings per common share – Diluted | 0.83 | 0.93 | (0.10) | (10.8) | |||||||||||||||||||
Cash dividends per common share | 0.36 | 0.36 | — | — |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Return on average equity | 7.33 | % | 8.17 | % | |||||||
Return on average tangible common equity (2) | 13.99 | 15.87 | |||||||||
Return on average assets | 0.96 | 1.07 | |||||||||
Return on average tangible assets (2) | 1.05 | 1.16 | |||||||||
Book value per common share (1) | $ | 15.11 | $ | 15.65 | |||||||
Tangible book value per common share (1) (2) | 8.02 | 8.42 | |||||||||
Equity to assets (1) | 12.69 | % | 12.95 | % | |||||||
Average equity to average assets | 13.11 | 13.07 | |||||||||
Common equity to assets (1) | 12.44 | 12.68 | |||||||||
Tangible equity to tangible assets (1) (2) | 7.28 | 7.53 | |||||||||
Tangible common equity to tangible assets (1) (2) | 7.02 | 7.24 | |||||||||
Common equity tier 1 capital ratio (1) | 9.7 | 9.9 | |||||||||
Dividend payout ratio | 43.55 | 38.88 |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(dollars in thousands) | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||
Interest-bearing deposits with banks | $ | 2,465,800 | $ | 14,737 | 0.80 | % | $ | 2,399,683 | $ | 2,310 | 0.13 | % | |||||||||||||||||||||||
Taxable investment securities (1) | 6,083,200 | 81,359 | 1.78 | 5,033,410 | 63,958 | 1.69 | |||||||||||||||||||||||||||||
Tax-exempt investment securities (1)(2) | 1,008,438 | 25,779 | 3.41 | 1,100,120 | 28,337 | 3.43 | |||||||||||||||||||||||||||||
Loans held for sale | 208,718 | 6,234 | 3.99 | 206,589 | 5,739 | 3.70 | |||||||||||||||||||||||||||||
Loans and leases (2) (3) | 27,313,051 | 757,133 | 3.70 | 25,190,510 | 667,835 | 3.54 | |||||||||||||||||||||||||||||
Total interest-earning assets (2) | 37,079,207 | 885,242 | 3.19 | 33,930,312 | 768,179 | 3.02 | |||||||||||||||||||||||||||||
Cash and due from banks | 427,118 | 376,276 | |||||||||||||||||||||||||||||||||
Allowance for credit losses | (372,163) | (366,849) | |||||||||||||||||||||||||||||||||
Premises and equipment | 396,804 | 337,262 | |||||||||||||||||||||||||||||||||
Other assets | 4,155,280 | 4,017,431 | |||||||||||||||||||||||||||||||||
Total assets | $ | 41,686,246 | $ | 38,294,432 | |||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Interest-bearing demand | $ | 14,946,096 | 37,915 | 0.34 | $ | 13,683,402 | 14,927 | 0.15 | |||||||||||||||||||||||||||
Savings | 3,940,100 | 3,106 | 0.11 | 3,394,718 | 510 | 0.02 | |||||||||||||||||||||||||||||
Certificates and other time | 2,961,870 | 12,889 | 0.58 | 3,294,084 | 22,623 | 0.92 | |||||||||||||||||||||||||||||
Total interest-bearing deposits | 21,848,066 | 53,910 | 0.33 | 20,372,204 | 38,060 | 0.25 | |||||||||||||||||||||||||||||
Short-term borrowings | 1,440,034 | 17,697 | 1.64 | 1,688,999 | 20,255 | 1.60 | |||||||||||||||||||||||||||||
Long-term borrowings | 758,373 | 20,574 | 3.63 | 977,269 | 18,443 | 2.52 | |||||||||||||||||||||||||||||
Total interest-bearing liabilities | 24,046,473 | 92,181 | 0.51 | 23,038,472 | 76,758 | 0.45 | |||||||||||||||||||||||||||||
Non-interest-bearing demand | 11,600,639 | 9,874,148 | |||||||||||||||||||||||||||||||||
Total deposits and borrowings | 35,647,112 | 0.35 | 32,912,620 | 0.31 | |||||||||||||||||||||||||||||||
Other liabilities | 574,336 | 374,898 | |||||||||||||||||||||||||||||||||
Total liabilities | 36,221,448 | 33,287,518 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 5,464,798 | 5,006,914 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 41,686,246 | $ | 38,294,432 | |||||||||||||||||||||||||||||||
Net interest-earning assets | $ | 13,032,734 | $ | 10,891,840 | |||||||||||||||||||||||||||||||
Net interest income (FTE) (2) | 793,061 | 691,421 | |||||||||||||||||||||||||||||||||
Tax-equivalent adjustment | (8,170) | (8,221) | |||||||||||||||||||||||||||||||||
Net interest income | $ | 784,891 | $ | 683,200 | |||||||||||||||||||||||||||||||
Net interest spread | 2.68 | % | 2.57 | % | |||||||||||||||||||||||||||||||
Net interest margin (2) | 2.86 | % | 2.72 | % |
(in thousands) | Volume | Rate | Net | ||||||||||||||
Interest Income (1) | |||||||||||||||||
Interest-bearing deposits with banks | $ | 65 | $ | 12,362 | $ | 12,427 | |||||||||||
Securities (2) | 10,772 | 4,071 | 14,843 | ||||||||||||||
Loans held for sale | 339 | 156 | 495 | ||||||||||||||
Loans and leases (2) | 44,665 | 44,633 | 89,298 | ||||||||||||||
Total interest income (2) | 55,841 | 61,222 | 117,063 | ||||||||||||||
Interest Expense (1) | |||||||||||||||||
Deposits: | |||||||||||||||||
Interest-bearing demand | 981 | 22,007 | 22,988 | ||||||||||||||
Savings | 58 | 2,538 | 2,596 | ||||||||||||||
Certificates and other time | (1,553) | (8,181) | (9,734) | ||||||||||||||
Short-term borrowings | (3,167) | 609 | (2,558) | ||||||||||||||
Long-term borrowings | (4,127) | 6,258 | 2,131 | ||||||||||||||
Total interest expense | (7,808) | 23,231 | 15,423 | ||||||||||||||
Net change (2) | $ | 63,649 | $ | 37,991 | $ | 101,640 |
Nine Months Ended September 30, | $ | % | |||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | Change | Change | |||||||||||||||||||
Provision for credit losses (on loans and leases) | $ | 35,294 | $ | (1,309) | $ | 36,603 | 2,796.3 | % | |||||||||||||||
Provision for unfunded loan commitments | 206 | 4,275 | (4,069) | (95.2) | |||||||||||||||||||
Provision for credit losses | $ | 35,500 | $ | 2,966 | $ | 32,534 | 1,096.9 | % | |||||||||||||||
Net loan charge-offs | 4,319 | 12,548 | (8,229) | (65.6) | |||||||||||||||||||
Net loan charge-offs (annualized) / total average loans and leases | 0.02 | % | 0.07 | % |
Nine Months Ended September 30, | $ | % | |||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | Change | Change | |||||||||||||||||||
Service charges | $ | 102,162 | $ | 89,273 | $ | 12,889 | 14.4 | % | |||||||||||||||
Trust services | 29,662 | 27,836 | 1,826 | 6.6 | |||||||||||||||||||
Insurance commissions and fees | 19,747 | 20,188 | (441) | (2.2) | |||||||||||||||||||
Securities commissions and fees | 17,490 | 16,830 | 660 | 3.9 | |||||||||||||||||||
Capital markets income | 25,279 | 27,265 | (1,986) | (7.3) | |||||||||||||||||||
Mortgage banking operations | 17,935 | 31,400 | (13,465) | (42.9) | |||||||||||||||||||
Dividends on non-marketable equity securities | 8,178 | 6,516 | 1,662 | 25.5 | |||||||||||||||||||
Bank owned life insurance | 9,330 | 10,993 | (1,663) | (15.1) | |||||||||||||||||||
Net securities gains | 48 | 193 | (145) | (75.1) | |||||||||||||||||||
Other | 13,109 | 20,937 | (7,828) | (37.4) | |||||||||||||||||||
Total non-interest income | $ | 242,940 | $ | 251,431 | $ | (8,491) | (3.4) | % |
Nine Months Ended September 30, | $ | % | |||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | Change | Change | |||||||||||||||||||
Salaries and employee benefits | $ | 322,679 | $ | 314,275 | $ | 8,404 | 2.7 | % | |||||||||||||||
Net occupancy | 49,554 | 45,372 | 4,182 | 9.2 | |||||||||||||||||||
Equipment | 55,934 | 51,854 | 4,080 | 7.9 | |||||||||||||||||||
Amortization of intangibles | 10,323 | 9,096 | 1,227 | 13.5 | |||||||||||||||||||
Outside services | 53,306 | 53,463 | (157) | (0.3) | |||||||||||||||||||
Marketing | 11,080 | 10,593 | 487 | 4.6 | |||||||||||||||||||
FDIC insurance | 15,090 | 13,432 | 1,658 | 12.3 | |||||||||||||||||||
Bank shares and franchise taxes | 11,923 | 10,939 | 984 | 9.0 | |||||||||||||||||||
Merger-related | 32,761 | 940 | 31,821 | 3,385.2 | |||||||||||||||||||
Other | 52,607 | 41,624 | 10,983 | 26.4 | |||||||||||||||||||
Total non-interest expense | $ | 615,257 | $ | 551,588 | $ | 63,669 | 11.5 | % |
Nine Months Ended September 30, | $ | % | |||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | Change | Change | |||||||||||||||||||
Total non-interest expense, as reported | $ | 615,257 | $ | 551,588 | $ | 63,669 | 11.5 | % | |||||||||||||||
Significant items: | |||||||||||||||||||||||
Branch consolidations | (4,178) | (2,644) | (1,534) | ||||||||||||||||||||
Merger-related | (32,761) | (940) | (31,821) | ||||||||||||||||||||
Total non-interest expense, excluding significant items (1) | $ | 578,318 | $ | 548,004 | $ | 30,314 | 5.5 | % |
Nine Months Ended September 30, | |||||||||||
(dollars in thousands) | 2022 | 2021 | |||||||||
Income tax expense | $ | 77,367 | $ | 73,929 | |||||||
Effective tax rate | 20.5 | % | 19.5 | % | |||||||
Statutory federal tax rate | 21.0 | 21.0 |
(dollars in millions) | September 30, 2022 | December 31, 2021 | $ Change | % Change | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | $ | 2,276 | $ | 3,493 | $ | (1,217) | (34.8) | % | |||||||||||||||
Securities | 7,212 | 6,889 | 323 | 4.7 | |||||||||||||||||||
Loans held for sale | 149 | 295 | (146) | (49.5) | |||||||||||||||||||
Loans and leases, net | 28,395 | 24,624 | 3,771 | 15.3 | |||||||||||||||||||
Goodwill and other intangibles | 2,487 | 2,304 | 183 | 7.9 | |||||||||||||||||||
Other assets | 2,071 | 1,908 | 163 | 8.5 | |||||||||||||||||||
Total Assets | $ | 42,590 | $ | 39,513 | $ | 3,077 | 7.8 | % | |||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||
Deposits | $ | 33,893 | $ | 31,726 | $ | 2,167 | 6.8 | % | |||||||||||||||
Borrowings | 2,454 | 2,218 | 236 | 10.6 | |||||||||||||||||||
Other liabilities | 837 | 419 | 418 | 99.8 | |||||||||||||||||||
Total Liabilities | 37,184 | 34,363 | 2,821 | 8.2 | |||||||||||||||||||
Stockholders’ Equity | 5,406 | 5,150 | 256 | 5.0 | |||||||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 42,590 | $ | 39,513 | $ | 3,077 | 7.8 | % |
September 30, 2022 | December 31, 2021 | $ Change | % Change | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Commercial real estate | $ | 10,841 | $ | 9,899 | $ | 942 | 9.5 | % | |||||||||||||||
Commercial and industrial | 6,709 | 5,977 | 732 | 12.2 | |||||||||||||||||||
Commercial leases | 503 | 495 | 8 | 1.6 | |||||||||||||||||||
Other | 127 | 94 | 33 | 35.1 | |||||||||||||||||||
Total commercial loans and leases | 18,180 | 16,465 | 1,715 | 10.4 | |||||||||||||||||||
Direct installment | 2,797 | 2,376 | 421 | 17.7 | |||||||||||||||||||
Residential mortgages | 4,959 | 3,654 | 1,305 | 35.7 | |||||||||||||||||||
Indirect installment | 1,529 | 1,227 | 302 | 24.6 | |||||||||||||||||||
Consumer lines of credit | 1,315 | 1,246 | 69 | 5.5 | |||||||||||||||||||
Total consumer loans | 10,600 | 8,503 | 2,097 | 24.7 | |||||||||||||||||||
Total loans and leases | $ | 28,780 | $ | 24,968 | $ | 3,812 | 15.3 | % |
(in millions) | September 30, 2022 | December 31, 2021 | $ Change | % Change | |||||||||||||||||||
Commercial real estate | $ | 46 | $ | 48 | $ | (2) | (4.2) | % | |||||||||||||||
Commercial and industrial | 11 | 15 | (4) | (26.7) | |||||||||||||||||||
Commercial leases | 1 | 1 | — | — | |||||||||||||||||||
Other | 1 | — | 1 | — | |||||||||||||||||||
Total commercial loans and leases | 59 | 64 | (5) | (7.8) | |||||||||||||||||||
Direct installment | 7 | 7 | — | — | |||||||||||||||||||
Residential mortgages | 14 | 10 | 4 | 40.0 | |||||||||||||||||||
Indirect installment | 2 | 2 | — | — | |||||||||||||||||||
Consumer lines of credit | 6 | 5 | 1 | 20.0 | |||||||||||||||||||
Total consumer loans | 29 | 24 | 5 | 20.8 | |||||||||||||||||||
Total non-performing loans and leases | 88 | 88 | — | — | |||||||||||||||||||
Other real estate owned | 6 | 8 | (2) | (25.0) | |||||||||||||||||||
Non-performing assets | $ | 94 | $ | 96 | $ | (2) | (2.1) | % |
(in millions) | Accruing | Non- Accrual | Total | ||||||||||||||
September 30, 2022 | |||||||||||||||||
Commercial real estate | $ | 5 | $ | 21 | $ | 26 | |||||||||||
Commercial and industrial | — | 1 | 1 | ||||||||||||||
Total commercial loans | 5 | 22 | 27 | ||||||||||||||
Direct installment | 20 | 3 | 23 | ||||||||||||||
Residential mortgages | 32 | 4 | 36 | ||||||||||||||
Consumer lines of credit | 6 | 1 | 7 | ||||||||||||||
Total consumer loans | 58 | 8 | 66 | ||||||||||||||
Total TDRs | $ | 63 | $ | 30 | $ | 93 | |||||||||||
December 31, 2021 | |||||||||||||||||
Commercial real estate | $ | 6 | $ | 21 | $ | 27 | |||||||||||
Commercial and industrial | — | 1 | 1 | ||||||||||||||
Total commercial loans | 6 | 22 | 28 | ||||||||||||||
Direct installment | 21 | 4 | 25 | ||||||||||||||
Residential mortgages | 27 | 5 | 32 | ||||||||||||||
Consumer lines of credit | 6 | 1 | 7 | ||||||||||||||
Total consumer loans | 54 | 10 | 64 | ||||||||||||||
Total TDRs | $ | 60 | $ | 32 | $ | 92 |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Net loan charge-offs (annualized) by category to average loans: | |||||||||||
Commercial real estate | — | % | 0.02 | % | |||||||
Commercial and industrial | — | 0.04 | |||||||||
Other commercial | 0.01 | — | |||||||||
Direct installment | — | 0.01 | |||||||||
Indirect installment | 0.01 | — | |||||||||
Net loan charge-offs (annualized)/average loans | 0.02 | % | 0.07 | % | |||||||
Allowance for credit losses/total loans and leases | 1.34 | % | 1.41 | % | |||||||
Allowance for credit losses/non-performing loans | 439.94 | % | 317.04 | % |
(in millions) | September 30, 2022 | December 31, 2021 | $ Change | % Change | |||||||||||||||||||
Non-interest-bearing demand | $ | 11,752 | $ | 10,789 | $ | 963 | 8.9 | % | |||||||||||||||
Interest-bearing demand | 15,251 | 14,409 | 842 | 5.8 | |||||||||||||||||||
Savings | 3,991 | 3,669 | 322 | 8.8 | |||||||||||||||||||
Certificates and other time deposits | 2,899 | 2,859 | 40 | 1.4 | |||||||||||||||||||
Total deposits | $ | 33,893 | $ | 31,726 | $ | 2,167 | 6.8 | % |
Actual | Well-Capitalized Requirements (1) | Minimum Capital Requirements plus Capital Conservation Buffer | |||||||||||||||||||||||||||||||||
(dollars in millions) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||
As of September 30, 2022 | |||||||||||||||||||||||||||||||||||
F.N.B. Corporation | |||||||||||||||||||||||||||||||||||
Total capital | $ | 3,998 | 11.96 | % | $ | 3,342 | 10.00 | % | $ | 3,510 | 10.50 | % | |||||||||||||||||||||||
Tier 1 capital | 3,357 | 10.04 | 2,005 | 6.00 | 2,841 | 8.50 | |||||||||||||||||||||||||||||
Common equity tier 1 | 3,250 | 9.72 | n/a | n/a | 2,340 | 7.00 | |||||||||||||||||||||||||||||
Leverage | 3,357 | 8.42 | n/a | n/a | 1,594 | 4.00 | |||||||||||||||||||||||||||||
Risk-weighted assets | 33,424 | ||||||||||||||||||||||||||||||||||
FNBPA | |||||||||||||||||||||||||||||||||||
Total capital | 4,160 | 12.48 | % | 3,335 | 10.00 | % | 3,502 | 10.50 | % | ||||||||||||||||||||||||||
Tier 1 capital | 3,497 | 10.49 | 2,668 | 8.00 | 2,835 | 8.50 | |||||||||||||||||||||||||||||
Common equity tier 1 | 3,417 | 10.25 | 2,168 | 6.50 | 2,334 | 7.00 | |||||||||||||||||||||||||||||
Leverage | 3,497 | 8.79 | 1,989 | 5.00 | 1,591 | 4.00 | |||||||||||||||||||||||||||||
Risk-weighted assets | 33,348 | ||||||||||||||||||||||||||||||||||
As of December 31, 2021 | |||||||||||||||||||||||||||||||||||
F.N.B. Corporation | |||||||||||||||||||||||||||||||||||
Total capital | $ | 3,531 | 12.18 | % | $ | 2,899 | 10.00 | % | $ | 3,044 | 10.50 | % | |||||||||||||||||||||||
Tier 1 capital | 2,984 | 10.29 | 1,739 | 6.00 | 2,464 | 8.50 | |||||||||||||||||||||||||||||
Common equity tier 1 | 2,877 | 9.92 | n/a | n/a | 2,029 | 7.00 | |||||||||||||||||||||||||||||
Leverage | 2,984 | 7.99 | n/a | n/a | 1,493 | 4.00 | |||||||||||||||||||||||||||||
Risk-weighted assets | 28,991 | ||||||||||||||||||||||||||||||||||
FNBPA | |||||||||||||||||||||||||||||||||||
Total capital | 3,695 | 12.77 | % | 2,893 | 10.00 | % | 3,038 | 10.50 | % | ||||||||||||||||||||||||||
Tier 1 capital | 3,098 | 10.71 | 2,314 | 8.00 | 2,459 | 8.50 | |||||||||||||||||||||||||||||
Common equity tier 1 | 3,018 | 10.43 | 1,880 | 6.50 | 2,025 | 7.00 | |||||||||||||||||||||||||||||
Leverage | 3,098 | 8.31 | 1,864 | 5.00 | 1,491 | 4.00 | |||||||||||||||||||||||||||||
Risk-weighted assets | 28,930 |
September 30, 2022 | December 31, 2021 | Internal Limit | |||||||||||||||
Liquidity coverage ratio | 1.6 times | 2.4 times | > 1 time | ||||||||||||||
Months of cash on hand | 13.3 months | 16.9 months | > 12 months |
(dollars in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Unused wholesale credit availability | $ | 15,893 | $ | 14,681 | |||||||
Unused wholesale credit availability as a % of FNBPA assets | 37.4 | % | 37.2 | % | |||||||
Salable unpledged government and agency securities | $ | 306 | $ | 836 | |||||||
Salable unpledged government and agency securities as a % of FNBPA assets | 0.7 | % | 2.1 | % | |||||||
Cash and salable unpledged government and agency securities as a % of FNBPA assets | 4.8 | % | 9.8 | % |
(dollars in millions) | Within 1 Month | 2-3 Months | 4-6 Months | 7-12 Months | Total 1 Year | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Loans | $ | 678 | $ | 1,321 | $ | 1,614 | $ | 3,013 | $ | 6,626 | |||||||||||||||||||
Investments | 1,891 | 147 | 224 | 450 | 2,712 | ||||||||||||||||||||||||
2,569 | 1,468 | 1,838 | 3,463 | 9,338 | |||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Non-maturity deposits | 312 | 625 | 938 | 1,877 | 3,752 | ||||||||||||||||||||||||
Time deposits | 205 | 426 | 624 | 915 | 2,170 | ||||||||||||||||||||||||
Borrowings | 186 | 18 | 324 | 276 | 804 | ||||||||||||||||||||||||
703 | 1,069 | 1,886 | 3,068 | 6,726 | |||||||||||||||||||||||||
Period Gap (Assets - Liabilities) | $ | 1,866 | $ | 399 | $ | (48) | $ | 395 | $ | 2,612 | |||||||||||||||||||
Cumulative Gap | $ | 1,866 | $ | 2,265 | $ | 2,217 | $ | 2,612 | |||||||||||||||||||||
Cumulative Gap to Total Assets | 4.4 | % | 5.3 | % | 5.2 | % | 6.1 | % |
(dollars in millions) | Within 1 Month | 2-3 Months | 4-6 Months | 7-12 Months | Total 1 Year | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Loans | $ | 12,303 | $ | 950 | $ | 945 | $ | 1,756 | $ | 15,954 | |||||||||||||||||||
Investments | 1,901 | 154 | 324 | 440 | 2,819 | ||||||||||||||||||||||||
14,204 | 1,104 | 1,269 | 2,196 | 18,773 | |||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Non-maturity deposits | 10,125 | — | — | — | 10,125 | ||||||||||||||||||||||||
Time deposits | 331 | 425 | 622 | 911 | 2,289 | ||||||||||||||||||||||||
Borrowings | 692 | 334 | 305 | 37 | 1,368 | ||||||||||||||||||||||||
11,148 | 759 | 927 | 948 | 13,782 | |||||||||||||||||||||||||
Off-balance sheet | (650) | 530 | (130) | (150) | (400) | ||||||||||||||||||||||||
Period Gap (assets – liabilities + off-balance sheet) | $ | 2,406 | $ | 875 | $ | 212 | $ | 1,098 | $ | 4,591 | |||||||||||||||||||
Cumulative Gap | $ | 2,406 | $ | 3,281 | $ | 3,493 | $ | 4,591 | |||||||||||||||||||||
Cumulative Gap to Assets | 6.3 | % | 8.6 | % | 9.2 | % | 12.1 | % |
September 30, 2022 | December 31, 2021 | ALCO Limits | |||||||||||||||
Net interest income change (12 months): | |||||||||||||||||
+ 300 basis points | 9.4 | % | 21.6 | % | n/a | ||||||||||||
+ 200 basis points | 6.2 | 14.4 | (5.0) | % | |||||||||||||
+ 100 basis points | 3.0 | 7.0 | (5.0) | ||||||||||||||
- 100 basis points | (0.4) | (2.4) | (5.0) | ||||||||||||||
Economic value of equity: | |||||||||||||||||
+ 300 basis points | (5.4) | 6.6 | (25.0) | ||||||||||||||
+ 200 basis points | (2.4) | 5.8 | (15.0) | ||||||||||||||
+ 100 basis points | (1.0) | 3.8 | (10.0) | ||||||||||||||
- 100 basis points | (3.2) | (9.5) | (10.0) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net income available to common stockholders | $ | 135,488 | $ | 109,503 | $ | 293,608 | $ | 300,105 | |||||||||||||||
Merger-related expense | 2,105 | 940 | 32,761 | 940 | |||||||||||||||||||
Tax benefit of merger-related expense | (442) | (197) | (6,880) | (197) | |||||||||||||||||||
Provision expense related to acquisition | — | — | 19,127 | — | |||||||||||||||||||
Tax benefit of provision expense related to acquisition | — | — | (4,017) | — | |||||||||||||||||||
Branch consolidation costs | — | — | 4,178 | 2,644 | |||||||||||||||||||
Tax benefit of branch consolidation costs | — | — | (877) | (555) | |||||||||||||||||||
Operating net income available to common stockholders (non-GAAP) | $ | 137,151 | $ | 110,246 | $ | 337,900 | $ | 302,937 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income per diluted common share | $ | 0.38 | $ | 0.34 | $ | 0.83 | $ | 0.93 | |||||||||||||||
Merger-related expense | 0.01 | — | 0.09 | — | |||||||||||||||||||
Tax benefit of merger-related expense | — | — | (0.02) | — | |||||||||||||||||||
Provision expense related to acquisition | — | — | 0.05 | — | |||||||||||||||||||
Tax benefit of provision expense related to acquisition | — | — | (0.01) | — | |||||||||||||||||||
Branch consolidation costs | — | — | 0.01 | 0.01 | |||||||||||||||||||
Tax benefit of branch consolidation costs | — | — | — | — | |||||||||||||||||||
Operating earnings per diluted common share (non-GAAP) | $ | 0.39 | $ | 0.34 | $ | 0.96 | $ | 0.94 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net income available to common stockholders (annualized) | $ | 537,532 | $ | 434,443 | $ | 392,552 | $ | 401,239 | |||||||||||||||
Amortization of intangibles, net of tax (annualized) | 11,119 | 9,471 | 10,903 | 9,607 | |||||||||||||||||||
Tangible net income available to common stockholders (annualized) (non-GAAP) | $ | 548,651 | $ | 443,914 | $ | 403,455 | $ | 410,846 | |||||||||||||||
Average total stockholders’ equity | $ | 5,506,949 | $ | 5,063,432 | $ | 5,464,798 | $ | 5,006,914 | |||||||||||||||
Less: Average preferred stockholders' equity | (106,882) | (106,882) | (106,882) | (106,882) | |||||||||||||||||||
Less: Average intangible assets (1) | (2,487,434) | (2,308,922) | (2,474,401) | (2,311,940) | |||||||||||||||||||
Average tangible common equity (non-GAAP) | $ | 2,912,633 | $ | 2,647,628 | $ | 2,883,515 | $ | 2,588,092 | |||||||||||||||
Return on average tangible common equity (non-GAAP) | 18.84 | % | 16.77 | % | 13.99 | % | 15.87 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net income (annualized) | $ | 545,507 | $ | 442,414 | $ | 400,615 | $ | 409,302 | |||||||||||||||
Amortization of intangibles, net of tax (annualized) | 11,119 | 9,471 | 10,903 | 9,607 | |||||||||||||||||||
Tangible net income (annualized) (non-GAAP) | $ | 556,626 | $ | 451,885 | $ | 411,518 | $ | 418,909 | |||||||||||||||
Average total assets | $ | 42,039,932 | $ | 38,718,399 | $ | 41,686,246 | $ | 38,294,432 | |||||||||||||||
Less: Average intangible assets (1) | (2,487,434) | (2,308,922) | (2,474,401) | (2,311,940) | |||||||||||||||||||
Average tangible assets (non-GAAP) | $ | 39,552,498 | $ | 36,409,477 | $ | 39,211,845 | $ | 35,982,492 | |||||||||||||||
Return on average tangible assets (non-GAAP) | 1.41 | % | 1.24 | % | 1.05 | % | 1.16 | % |
September 30, 2022 | September 30, 2021 | ||||||||||
(dollars in thousands, except per share data) | |||||||||||
Total stockholders’ equity | $ | 5,406,485 | $ | 5,098,407 | |||||||
Less: Preferred stockholders’ equity | (106,882) | (106,882) | |||||||||
Less: Intangible assets (1) | (2,486,183) | (2,307,432) | |||||||||
Tangible common equity (non-GAAP) | $ | 2,813,420 | $ | 2,684,093 | |||||||
Ending common shares outstanding | 350,756,155 | 318,921,616 | |||||||||
Tangible book value per common share (non-GAAP) | $ | 8.02 | $ | 8.42 |
September 30, 2022 | September 30, 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Total stockholders' equity | $ | 5,406,485 | $ | 5,098,407 | |||||||
Less: Intangible assets (1) | (2,486,183) | (2,307,432) | |||||||||
Tangible equity (non-GAAP) | $ | 2,920,302 | $ | 2,790,975 | |||||||
Total assets | $ | 42,590,050 | $ | 39,361,110 | |||||||
Less: Intangible assets (1) | (2,486,183) | (2,307,432) | |||||||||
Tangible assets (non-GAAP) | $ | 40,103,867 | $ | 37,053,678 | |||||||
Tangible equity / tangible assets (period-end) (non-GAAP) | 7.28 | % | 7.53 | % |
September 30, 2022 | September 30, 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Total stockholders' equity | $ | 5,406,485 | $ | 5,098,407 | |||||||
Less: Preferred stockholders' equity | (106,882) | (106,882) | |||||||||
Less: Intangible assets (1) | (2,486,183) | (2,307,432) | |||||||||
Tangible common equity (non-GAAP) | $ | 2,813,420 | $ | 2,684,093 | |||||||
Total assets | $ | 42,590,050 | $ | 39,361,110 | |||||||
Less: Intangible assets (1) | (2,486,183) | (2,307,432) | |||||||||
Tangible assets (non-GAAP) | $ | 40,103,867 | $ | 37,053,678 | |||||||
Tangible common equity / tangible assets (period-end) (non-GAAP) | 7.02 | % | 7.24 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Non-interest expense | $ | 195,057 | $ | 184,226 | $ | 615,257 | $ | 551,588 | |||||||||||||||
Less: Amortization of intangibles | (3,547) | (3,022) | (10,323) | (9,096) | |||||||||||||||||||
Less: OREO expense | (485) | (781) | (1,233) | (2,066) | |||||||||||||||||||
Less: Merger-related expense | (2,105) | (940) | (32,761) | (940) | |||||||||||||||||||
Less: Branch consolidation costs | — | — | (4,178) | (2,644) | |||||||||||||||||||
Adjusted non-interest expense | $ | 188,920 | $ | 179,483 | $ | 566,762 | $ | 536,842 | |||||||||||||||
Net interest income | $ | 297,125 | $ | 232,406 | $ | 784,891 | $ | 683,200 | |||||||||||||||
Taxable equivalent adjustment | 2,916 | 2,620 | 8,170 | 8,221 | |||||||||||||||||||
Non-interest income | 82,464 | 88,854 | 242,940 | 251,431 | |||||||||||||||||||
Less: Net securities gains | — | (65) | (48) | (193) | |||||||||||||||||||
Adjusted net interest income (FTE) + non-interest income | $ | 382,505 | $ | 323,815 | $ | 1,035,953 | $ | 942,659 | |||||||||||||||
Efficiency ratio (FTE) (non-GAAP) | 49.39 | % | 55.43 | % | 54.71 | % | 56.95 | % |
Exhibit Number | Description | |||||||
10.1 | ||||||||
31.1. | ||||||||
31.2. | ||||||||
32.1. | ||||||||
32.2. | ||||||||
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). |
F.N.B. Corporation | |||||||||||||||||
Dated: | November 4, 2022 | /s/ Vincent J. Delie, Jr. | |||||||||||||||
Vincent J. Delie, Jr. | |||||||||||||||||
Chairman, President and Chief Executive Officer | |||||||||||||||||
(Principal Executive Officer) | |||||||||||||||||
Dated: | November 4, 2022 | /s/ Vincent J. Calabrese, Jr. | |||||||||||||||
Vincent J. Calabrese, Jr. | |||||||||||||||||
Chief Financial Officer | |||||||||||||||||
(Principal Financial Officer) | |||||||||||||||||
Dated: | November 4, 2022 | /s/ James L. Dutey | |||||||||||||||
James L. Dutey | |||||||||||||||||
Corporate Controller | |||||||||||||||||
(Principal Accounting Officer) |
A. | The Company will annually provide the Executive with compensation as an inducement for the Executive’s continued employment in the future; |
B. | The Company and the Executive desire to have the terms and conditions of the compensation and the criteria pursuant to which such compensation will be paid reduced to a written agreement, with capitalized terms included herein defined in Article III hereof. | ||||
1.1 | Payment of Compensation. In addition to any other compensation paid by the Company to the Executive for services rendered, during the term of this Agreement the Company agrees to: (i) remit a Premium to the Insurer, on the Executive’s behalf, at the beginning of any Policy Year on the specified due date for the Premium, provided that Executive remains continuously employed by the Company through such date and has not provided or is otherwise on notice of termination on such date; provided, that the Company shall be obligated to remit the Premium with respect to the Policy Year beginning in 2023 if the Executive remains continuously employed by the Company at any time in 2023 and, provided further, that if the Executive is continuously employed by the Company through December 31, 2027, the Company shall be obligated to remit the Premiums with respect to each Policy Year, on the specified due dates, through the end of the Policy Year in which the Executive attains age sixty-eight (68) regardless of whether Executive voluntarily terminates his employment prior to the attainment of age sixty-eight (68), unless Executive violates any restrictive covenants contained in that certain Employment Agreement by and between Executive and the Company dated December 15, 2010, or successor agreement (the “Employment Agreement”). Notwithstanding the foregoing, if either (i) the Company terminates Executive’s employment without Cause prior to termination of this Agreement or (ii) the Executive terminates his employment for Good Reason upon or following a Change in Control, as each are defined the Employment Agreement, prior to the termination of this Agreement, the Company shall be obligated to remit to the Insurer an additional premium amount needed for the Policy to become fully paid-up, such that all the premium payments are complete and the Executive is free of all payment obligations and the Policy will remain intact and fully paid until the Executive’s death. Such additional premium amount shall be paid to the Insurer within thirty (30) days following the Company’s termination of Executive’s employment (i) without Cause or (ii) for Good Reason upon or following a Change in Control, in each case during the term of this Agreement. |
1.2 | Withholding. The Company may withhold applicable taxes due from the compensation payment in Section 1.1 from any other compensation due to the Executive, or may require Executive to remit the applicable taxes directly to the Company as a condition of payment of the Premium. |
1.3 | Policy. The Executive shall be the owner of the Policy, and may exercise all ownership rights granted to the Executive by the terms of the Policy. Notwithstanding any other provisions of this Agreement or any form of policy assignment executed by Executive in connection with this Agreement, it is the express intention of the parties to reserve to the Executive all rights in and to the Policy granted to the Executive by its terms, including, but not limited to, the right to assign the Executive’s interest in the Policy, the right to change the beneficiary of the Policy, the right to exercise settlement options, the right to borrow against the cash value of the Policy, the right to continue making Premium payments following the cessation of the Company’s obligations under this Agreement, and the right to surrender or cancel the Policy, in whole or in part. |
2.1 | Term of Agreement. The term of this Agreement shall commence on the Effective Date and shall continue in effect until the end of the Policy Year in which the Executive attains age sixty-eight (68). Notwithstanding the foregoing, this Agreement shall automatically terminate, and the Company’s obligation to make further payments hereunder shall thereby cease, upon: (i) the Executive’s death, (ii) the date the Executive voluntarily terminates employment prior to attaining age sixty-eight (68), (iii) the date the Executive is terminated for Cause, and/or (iv) the date the Executive violates any restrictive covenants contained in that certain Employment Agreement. |
2.2 | Administration. The Company shall be responsible for administering this Agreement and for payment of any Premiums, provided that Executive shall notify the Company of correspondence with the Insurer for the purposes of facilitating administration of its obligations. |
2.3 | Successors and Assigns. This Agreement shall bind the Company, its successors and assigns, and the Executive and his heirs, executors, administrators and transferees, and any Policy beneficiary. In connection with any merger or consolidation, the Company shall require any succeeding or continuing employer, corporation or other organization to expressly assume the rights and obligations of the Company set forth in this Agreement. |
2.4 | Effect on Employment. This Agreement shall not be deemed to constitute a contract of employment between the parties, nor shall any provision restrict the right of the Company to terminate Executive’s employment for any reason or Executive to terminate his employment, at any time. | ||||
2.5 | Insurer. The Insurer shall be bound only by the provisions of and endorsements on the Policy, and any payments made or action taken by it in accordance with the Policy shall fully discharge it from all claims, suits and demands of all persons whatsoever. Except as specifically provided by endorsement on the Policy and as provided in the Assignment, the Insurer shall in no way be bound by the provisions of this Agreement. | ||||
2.6 | Miscellaneous. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified other than by a written agreement executed by the parties hereto or their respective successors and legal representatives. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: |
3.1 | Definitions. For purposes of this Agreement, unless otherwise clearly apparent from the context, the following phrases or items shall have the following indicated meanings: |
(a) | “Cause” shall mean the Executive’s (A) willful and continued failure substantially to perform the Executive’s material duties with the Company other than due to physical or mental impairment or illness, (B) fraud or breach of fiduciary duty involving the Executive’s attainment of a personal advantage, misappropriation or other willful actions that cause material damage to the property or business of the Company, or (C) admission or conviction of, or plea of nolo contendere to, any felony or any other crime referenced in Section 19 of the Federal Deposit Insurance Act that, in the reasonable judgment of the Board, adversely affects the Company’s reputation or the Executive’s ability to carry out the Executive’s obligations. The Company must provide written notice to the Executive within ninety (90) days of the initial occurrence of an event set forth in clause (A) of this subsection alleged to constitute “Cause” under this Agreement. Upon such notice the Executive shall have a period of thirty (30) days during which he may remedy the condition. |
(b) | “Effective Date” shall mean the date the Insurer issues the Executive’s Policy. |
(c) | “Insurer” shall mean the carrier of the Policy for purposes of remitting the Premium. |
(d) | “Policy” shall mean the life insurance policy by the Insurer and owned by the Executive or the Executive’s designee, for which the Company shall remit Premium to the Insurer on the Executive’s behalf. |
(e) | “Policy Year” shall mean the twelve (12) month period commencing on the Effective Date, and every twelve (12) month period commencing thereafter. |
(f) | “Premium” shall mean the amount required to fund the Policy for a given Policy Year, which shall be remitted to the Insurer on the Executive’s behalf, for the Policy. |
3.2 | Construction. The singular shall include the plural, unless the context clearly indicates to the contrary. Headings and subheadings are for the purpose of reference only and are not to be considered in construction of this Agreement. If any provision of this Agreement is determined to be for any reason invalid or unenforceable, the remaining provisions shall continue in full force and effect. |
COMPANY | EXECUTIVE | |||||||||||||||||||
By: | /s/ Charles C. Casalnova | /s/ Vincent J. Delie, Jr. | ||||||||||||||||||
Its: | SVP and Director Human Resources and Corporate Services | Chairman, President and CEO |
Date: November 4, 2022 | /s/ Vincent J. Delie, Jr. | ||||
Vincent J Delie, Jr. Chairman, President and Chief Executive Officer |
Date: November 4, 2022 | /s/ Vincent J. Calabrese, Jr. | ||||
Vincent J. Calabrese, Jr. Chief Financial Officer |
Date: November 4, 2022 | /s/ Vincent J. Delie, Jr. | ||||
Vincent J Delie, Jr. Chairman, President and Chief Executive Officer |
Date: November 4, 2022 | /s/ Vincent J. Calabrese, Jr. | ||||
Vincent J. Calabrese, Jr. Chief Financial Officer |