FNB Corp issues $500 million in senior notes

In a strategic financial move, FNB Corporation (NYSE:FNB), a $5.88 billion market cap financial institution, has entered into a significant agreement, issuing $500 million in senior notes, as per a recent SEC filing.

The Pennsylvania-based national commercial bank, which according to InvestingPro has maintained dividend payments for 50 consecutive years, announced the completion of its offering on Wednesday, with the notes set to mature on December 11, 2030. Trading at $16.29, the stock currently appears slightly undervalued based on InvestingPro's Fair Value analysis.

The 5.722% Fixed Rate / Floating Rate Senior Notes were sold at par, generating net proceeds of approximately $498.25 million, before transaction costs. This capital raise is in line with the company's shelf registration statement and will be utilized for general corporate purposes, which may include investment, supporting growth, or refinancing existing debt. The company's strong financial position is reflected in its moderate debt-to-equity ratio of 0.74 and attractive P/E ratio of 14.87.

The notes will initially bear a fixed interest rate of 5.722% per annum until December 11, 2029, after which the rate will switch to a floating rate based on the Compounded SOFR plus 1.93%. Interest payments are scheduled semi-annually until the fixed rate period ends, transitioning to quarterly payments during the floating rate period.

FNB Corporation reserves the right to redeem the notes, in whole or in part, prior to December 11, 2029, at a price greater of the specified formula or 100% of their principal amount. On or after November 11, 2030, redemption can occur at 100% of their principal amount.

The issuance was facilitated under an indenture agreement with Wilmington Trust, National Association, serving as the trustee. The decision to issue these notes reflects FNB Corporation's strategic approach to financial management and capital allocation. With a remarkable 28.49% price return over the past six months, FNB continues to demonstrate strong market performance.

For deeper insights into FNB's financial health and growth prospects, investors can access comprehensive analysis through InvestingPro, which offers exclusive ProTips and detailed research reports covering over 1,400 US stocks.

Investors interested in the detailed terms and conditions of the notes and the indenture can refer to the exhibits filed with the SEC, including opinions from legal counsel Reed Smith LLP. This financial maneuver is based on information disclosed in the company's SEC filing and represents a key development in FNB Corporation's financial strategy.

In other recent news, F.N.B. (NYSE:FNB) Corporation reported an operating net income of $122 million and earnings per share of $0.34 for the third quarter. The company also recorded a record non-interest income of $90 million. Total (EPA:TTEF) loans and deposits saw an increase of 4.6% and 5.1% respectively. On the personnel front, F.N.B. Corporation has appointed Kelly Trombetta as its new Chief Operational Risk Officer.

Analysts from Piper Sandler and Stephens maintained their Overweight rating on F.N.B. Corporation, despite Stephens lowering their EPS estimates for 2025 and 2026 due to elevated non-interest expenses. Both firms expressed positive outlooks for the company's future performance.

In terms of strategic moves, F.N.B. Corporation management has also expressed openness to mergers and acquisitions, focusing on smaller, accretive deals. These are recent developments that investors should be aware of. The company has also recently announced the pricing of its $500 million senior notes offering, which is scheduled to close in December 2024. The proceeds from this offering are intended for general corporate purposes.

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