F.N.B. Corp (NYSE: FNB) reported Q1 EPS of $0.29, $0.02 better than the analyst estimate of $0.27.

First Quarter 2019 Highlights(All comparisons refer to the first quarter of 2018, except as noted)

• Growth in total average loans was $1.2 billion, or 5.8%, with average commercial loan growth of $602 million, or 4.5%, and average consumer loan growth of $622 million, or 8.0%. Compared to the fourth quarter of 2018, total average loans grew $440 million, or 8.1% annualized.
• Total average deposits grew $1.2 billion, or 5.6%, including an increase in average non-interest-bearing deposits of $285 million, or 5.1%, an increase in interest-bearing demand deposits of $263 million, or 2.8%, and an increase in average time deposits of $711 million, or 15.3%.
• The loan to deposit ratio was 94.7% at March 31, 2019, compared to 94.5%.
• The net interest margin (FTE) (non-GAAP) declined 13 basis points to 3.26% from 3.39%, primarily due to the sale of Regency Finance Company (Regency) in the third quarter of 2018. Regency contributed 12 basis points to net interest margin in the first quarter of 2018. The decline also reflected higher funding costs caused by four increases in benchmark interest rates during 2018 and increased deposit pricing competition, partially offset by a 4 basis point increase in the contribution from incremental purchase accounting accretion.
• The company issued $120 million of 4.950% fixed-to-floating rate subordinated notes due 2029.
• Total revenue increased 0.8% to $296.0 million, reflecting a 2.0% increase in net interest income partially offset by a 3.1% decrease in non-interest income.
• Non-interest income decreased $2.1 million, or 3.1%, including a $1.2 million loss on fixed assets related to branch consolidations. Capital markets income grew 15.8%, reflecting strong interest rate swap and international banking activity, while trust income grew 5.2%. Dividends on non-marketable equity securities increased $1.0 million to $5.0 million due to an increase in the FHLB dividend rate, while mortgage banking operations income declined primarily due to a $1.3 million interest rate-related valuation adjustment of mortgage servicing rights.
• The efficiency ratio (non-GAAP) improved to 53.4%, compared to 55.8% in the first quarter of 2018 and 54.1% in the fourth quarter of 2018.
• The annualized net charge-offs to total average loans ratio decreased to 0.14% from 0.20%, reflective of continued strong credit quality results.
• The ratio of the allowance for credit losses to total loans and leases decreased to 0.82%, compared to 0.84%. The provision for credit losses of $13.6 million supported strong loan growth and exceeded net charge-offs of $7.6 million. The low level of net charge-offs reflects previous actions taken to reduce credit risk, including the sale of Regency.
• The ratio of tangible common equity to tangible assets (non-GAAP) increased 37 basis points to 7.15%. Tangible book value per common share (non-GAAP) increased $0.77, or 12.5%, to $6.91.

"We are very pleased to report another strong quarter. Operating earnings per share grew 12% year-over-year to $0.29, benefiting from continued positive operating leverage. Operating return on tangible common equity was again peer-leading at nearly 18%, and the efficiency ratio improved by more than 200 basis points to 53%," commented Chairman, President, and Chief Executive Officer, Vincent J. Delie, Jr. "We are off to a great start in 2019 as total loans grew 8% annualized with contributions from across the footprint, including our newer southeastern markets. We established good momentum in the first quarter and we are excited about executing our business plan throughout the rest of the year."

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