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F.N.B.'s Q3 net interest margin down YOY on higher funding costs

Pittsburgh-based F.N.B. Corp. reported third-quarter net income available to common shareholders of $100.7 million, or 31 cents per share, an increase from $98.8 million, or 30 cents per share, in the year-ago period.

The S&P Global Market Intelligence consensus GAAP EPS estimate for the quarter was 29 cents.

Net interest margin for the third quarter stood at 3.17%, representing decreases from 3.20% in the previous quarter and 3.36% in the year-ago period. F.N.B said the quarter-over-quarter decrease was due to lower asset yields given the decline in benchmark interest rates, which were partially offset by lower funding costs. On a year-over-year basis, the decline was due to higher cost of funds and a one-time gain from the sale of Regency Finance Co. that boosted NIM in the third quarter of 2018 by 8 basis points.

Net interest income for the quarter was $229.8 million, a decrease from $234.8 million in the same period last year. The company said the decline was due to higher funding costs and the sale of Regency.

However, noninterest income increased on a year-over-year basis to $80.0 million from $74.8 million. The increase was due to higher incomes from the capital markets and mortgage banking operations segments together with an increase in insurance commissions and fees.

Provision for credit losses was $11.9 million, a decrease from $16.0 million in the year-ago period. Net loan charge-offs sharply decreased on a year-over-year basis to $5 million from $15 million.

Average loans totaled $22.72 billion, up 4.4% year over year due to solid growth in the commercial and consumer portfolios. Average deposits totaled $24.1 billion, up 4.2% year over year, the company said.