As part of its capital action plan to be well positioned for
Basel III capital rule implementation,
) announced the sale of its entire trust preferred securities
(TruPS) portfolio. The company had announced its balance sheet
restructuring plan in Oct 2013.
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F.N.B. Corp. sold TruPS portfolio comprising 23 pooled securities
for a net gain of $13.8 million on the present amortized value of
$37.8 million. Of the total pooled securities sold, one did not
comply with the recently finalized Volcker Rule.
Apart from the above-mentioned gain, the redemption of TruPS will
not have any impact on F.N.B. Corp.'s operating earnings.
However, the company's capital ratios will marginally benefit
from the transaction, similar to what was seen in 2013.
During 2013, F.N.B. Corp. redeemed $130 million worth of TruPS,
which led to an improvement in capital ratios. As of Dec
31, 2013, Tier 1 capital ratio was 11.1%, up from 10.8% as of Dec
31, 2012. Further, leverage ratio grew from 8.3% at the end of
2012 to 8.8% in 2013.
Additionally, F.N.B. Corp. plans to utilize part of the gain from
the aforesaid restructuring to redeem low-yielding securities so
as to further increase net interest income (NII). The company's
NII has been growing at a 3-year CAGR of 7.8% (2011-2013), driven
by opportunistic acquisitions.
In the past three years, F.N.B. Corp. has grown significantly
through acquisitions. Since 2011, the company completed the
acquisition of Comm Bancorp, Inc., Parkvale Financial
Corporation, Annapolis Bancorp, Inc. and PVF Capital Corp.
We believe that given its strong balance sheet and capital
position, F.N.B. Corp. will continue to grow inorganically.
Further, the company aims to consolidate branches and rationalize
Currently, F.N.B. Corp. carries a Zacks Rank #3 (Hold). Some
better-ranked banks in the same region include
Access National Corporation
Pinnacle Financial Partners Inc.
SY Bancorp Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).