The Bank Slate

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F.N.B. profit hampered by balance sheet moves, FDIC assessment

F.N.B. in Pittsburgh reported a decline in quarterly earnings after it sold underwater securities, set the stage for selling indirect auto loans and paid a special assessment to the Federal Deposit Insurance Corp.

The $46 billion-asset company said in a press release that its fourth-quarter profit fell by 65% from a year earlier, to $48.7 million.

F.N.B. sold $650 million of available-for-sale securities in mid-December at a $67.4 million pretax loss. The company reinvested the proceeds in higher-yielding securities.

The company also moved $355 million of indirect auto loans to held-for-sale status with plans to sell the loans in the first quarter. F.N.B., which recognized a $16.7 million negative valuation allowance from the move, said proceeds will be used to repay borrowings.

F.N.B. said it should take less than a year to earn back any dilution to its tangible book value.

“As part of our ongoing proactive balance sheet management strategy, we took several actions during the quarter to enhance our future profitability and capital positioning,” Vincent Delie, Jr., the company’s chairman, president and CEO, said in the release.

“These balance sheet actions are expected to generate additional net interest income and margin, modestly increase the tangible common equity to tangible asset ratio and improve capital generation as we enter 2024,” he added.

The fourth-quarter included a $29.9 million special assessment.

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