Commission income and credit quality improve the ETF

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Growth in fee income and a release of reserves supported FNB Corp., with assets of $ 38.4 billion, amid relatively flat second-quarter lending and income.

The Pittsburgh-based company reported second-quarter net income available to common shareholders of $ 99.4 million, up nearly 22% from a year earlier. Its earnings per share of 31 cents were 3 cents higher than the analysts’ average estimate compiled by FactSet Research Systems.

Total revenue increased less than 1% to $ 307.6 million. Total loans declined 0.8% to $ 25.4 billion despite a 2.5% increase in commercial loans; the year-over-year loan comparison was affected by the sale of $ 500 million in indirect auto loans in the fall.

ETFs freed up $ 1.1 million in reserves against an allowance for credit losses of $ 30.2 million a year earlier. The company made the move on “generally improving economic activity and positive credit quality results through June,” chief credit officer Gary Guerrieri told analysts on Tuesday on a conference call.

Non-interest income increased 2.8% to $ 79.8 million, largely due to higher service fees and commissions from two wealth management lines.

Service fees increased 24.2% to $ 29.7 million due to increased customer transaction activity as the economy improved and premium income from Small Business Administration loans had increased, according to the company.

Trust income rose 26% to $ 9.3 million, while commissions and fees on securities jumped 52% to $ 5.7 million. “Many of these areas have continued to benefit from our expansion into higher growth markets,” said spokesperson Jennifer Reel.

This type of expansion is expected to continue as an ETF agreed last week to buy Howard Bancorp in Baltimore for $ 418 million.

Meanwhile, non-interest expenses rose 3.7% from the second quarter of 2020 to $ 182.5 million, largely due to a 9.3% increase in salaries and fringe benefits stemming in large part from commission increases and merit increases. Other factors pushed up costs, including $ 2.6 million in branch consolidation expenses and $ 2 million in expenses attributed to COVID-19.


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