F.N.B. Corporation Declares Redemption and Cash Dividend on Non-Cumulative Perpetual Preferred Stock, Series E

Rhea-AI Summary

F.N.B. Corporation (NYSE: FNB) announces the redemption of all $110 million aggregate liquidation preference of the Depositary Shares representing interests in its 7.25% Fixed Rate / Floating Rate Non-Cumulative Perpetual Preferred Stock, Series E (NYSE: FNB PRE). The quarterly cash dividend of $18.13 per share on the Series E Preferred Stock will be paid on February 15, 2024, to shareholders of record as of January 31, 2024.

Insights

Financial Analyst

The redemption of F.N.B. Corporation's Series E Preferred Stock represents a significant capital management activity that could influence the company's capital structure and cost of capital. By redeeming these preferred shares, F.N.B. Corporation is effectively reducing its fixed financial obligations, which could be indicative of a strategic move to optimize its balance sheet. The fixed to floating rate nature of this preferred stock suggests that the initial rate was potentially higher than current market rates, hence the redemption could be a cost-saving measure.

The impact on the stock market will likely be an assessment of the company's financial health and strategic focus. Investors and analysts will monitor how the freed-up capital will be redeployed, which could signal future growth initiatives or debt reduction. This redemption could also be a response to shareholder feedback for more efficient capital allocation or a proactive adjustment due to anticipated changes in interest rates.

Market Research Analyst

Redeeming preferred stock can signal to the market that a company is confident in its liquidity and financial stability. It often results in an improved perception among investors, as the action suggests a strong cash position and a proactive approach to managing liabilities. For stakeholders, this could be seen as a positive move, indicating that F.N.B. Corporation is taking steps to increase shareholder value.

However, for preferred shareholders, the redemption means that they will no longer receive the steady dividends associated with these securities. This could lead to a reallocation of their investment into other income-generating assets, which might affect the demand and pricing of similar financial instruments in the market.

Economist

The redemption of preferred stock has broader economic implications, particularly in the context of the current interest rate environment. If the redemption is occurring in a low-interest-rate environment, it suggests that the company is taking advantage of cheaper borrowing costs to retire more expensive capital. Conversely, if rates are expected to rise, the company might be aiming to lock in lower costs before such an increase.

In the long term, these capital structure decisions can influence the company's resilience to economic cycles. By reducing higher-cost capital during periods of low rates, companies like F.N.B. Corporation could be better positioned to weather potential economic downturns or capitalize on growth opportunities with a more flexible financial footing.

PITTSBURGH, Jan. 12, 2024 /PRNewswire/ -- F.N.B. Corporation (NYSE: FNB) today announced that its Board of Directors declared the redemption of all $110 million aggregate liquidation preference of the Depositary Shares representing interests in its 7.25% Fixed Rate / Floating Rate Non-Cumulative Perpetual Preferred Stock, Series E (the "Series E Preferred Stock") (NYSE: FNB PRE). Each Depositary Share represents a 1/40^th interest in a share of the Series E Preferred Stock. The quarterly cash dividend of $18.13 per share (equivalent to $0.45325 per depositary share or 1/40^th interest per share) on the Series E Preferred Stock will be paid on February 15, 2024, to shareholders of record as of the close of business on January 31, 2024.

The redemption date for the Preferred Stock and related Depositary Shares is February 15, 2024 (the "Redemption Date"). The cash redemption price, payable on the Redemption Date for each share of Series E Preferred Stock, will equal One Thousand Dollars ($1,000.00), and therefore, for each Depositary Share, will equal Twenty-Five Dollars ($25.00). Any quarterly dividend declared but not paid prior to the Redemption Date will be paid as described above.

Beginning on the Redemption Date, the Depositary Shares representing the redeemed Preferred Stock will no longer be outstanding and dividends will no longer accrue on such securities. All Depositary Shares are held in book-entry form through The Depository Trust Company ("DTC") and will be redeemed in accordance with the procedures of DTC. Payment to DTC will be made by The Bank of New York Mellon, the Depositary, in accordance with the Deposit Agreement governing the Depositary Shares.

The Depositary's address is BNY Mellon, Attn: Corporate Trust, 240 Greenwich Street 7E, New York, NY 10286. Questions relating to the notice of redemption and related materials should be directed to Elizabeth Modero via telephone at (212) 298-1372.

About F.N.B. Corporation

F.N.B. Corporation (NYSE: FNB), headquartered in Pittsburgh, Pennsylvania, is a diversified financial services company operating in seven states and the District of Columbia. FNB's market coverage spans several major metropolitan areas including: Pittsburgh, Pennsylvania; Baltimore, Maryland; Cleveland, Ohio; Washington, D.C.; Charlotte, Raleigh, Durham and the Piedmont Triad (Winston-Salem, Greensboro and High Point) in North Carolina; and Charleston, South Carolina. The Company has total assets of over $45 billion and approximately 350 banking offices throughout Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington, D.C. and Virginia.

FNB provides a full range of commercial banking, consumer banking and wealth management solutions through its subsidiary network which is led by its largest affiliate, First National Bank of Pennsylvania, founded in 1864. Commercial banking solutions include corporate banking, small business banking, investment real estate financing, government banking, business credit, capital markets and lease financing. The consumer banking segment provides a full line of consumer banking products and services, including deposit products, mortgage lending, consumer lending and a complete suite of mobile and online banking services. FNB's wealth management services include asset management, private banking and insurance.

The common stock of F.N.B. Corporation trades on the New York Stock Exchange under the symbol "FNB" and is included in Standard & Poor's MidCap 400 Index with the Global Industry Classification Standard (GICS) Regional Banks Sub-Industry Index. Customers, shareholders and investors can learn more about this regional financial institution by visiting the F.N.B. Corporation website at www.fnbcorporation.com.

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SOURCE F.N.B. Corporation

FAQ

What is the announcement made by F.N.B. Corporation (NYSE: FNB)?

F.N.B. Corporation (NYSE: FNB) has announced the redemption of all $110 million aggregate liquidation preference of the Depositary Shares representing interests in its 7.25% Fixed Rate / Floating Rate Non-Cumulative Perpetual Preferred Stock, Series E (NYSE: FNB PRE).

When will the quarterly cash dividend be paid on the Series E Preferred Stock?

The quarterly cash dividend of $18.13 per share on the Series E Preferred Stock will be paid on February 15, 2024, to shareholders of record as of January 31, 2024.

What is the cash redemption price for each share of Series E Preferred Stock?

The cash redemption price for each share of Series E Preferred Stock will be One Thousand Dollars ($1,000.00), and for each Depositary Share, it will be Twenty-Five Dollars ($25.00).

How will the Depositary Shares representing the redeemed Preferred Stock be handled?

Beginning on the Redemption Date, the Depositary Shares representing the redeemed Preferred Stock will no longer be outstanding and dividends will no longer accrue on such securities. All Depositary Shares are held in book-entry form through The Depository Trust Company ("DTC") and will be redeemed in accordance with the procedures of DTC.

Who should be contacted for questions relating to the notice of redemption and related materials?

Questions relating to the notice of redemption and related materials should be directed to Elizabeth Modero via telephone at (212) 298-1372.