STOCK INCENTIVE PLANS

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Restricted Stock

We issue restricted stock awards to key employees under our Incentive Compensation Plan (Plan). We issue time-based awards and performance-based awards under this Plan, both of which are based on a three-year vesting period. The grant date fair value of the time-based awards is equal to the price of our common stock on the grant date. The fair value of the performance-based awards is based on a Monte-Carlo simulation valuation of our common stock as of the grant date. The assumptions used for this valuation include stock price volatility, risk-free interest rate and dividend yield. We granted 1,426,146 and 1,266,821 restricted stock units during the nine months ended September 30, 2023 and 2022, respectively, including 290,764 and 297,508

performance-based restricted stock units during those same periods, respectively. We have shareholder approval under the Plan to issue up to 7,397,956 shares of common stock. As of September 30, 2023, we had 5,529,405 remaining shares available for awards under the Plan.

The unvested restricted stock unit awards are eligible to receive cash dividends or dividend equivalents which are ultimately used to purchase additional shares of stock and are subject to forfeiture if the requisite service period is not completed or the specified performance criteria are not met. These awards are subject to certain accelerated vesting provisions upon retirement, death, disability or in the event of a change of control as defined in the award agreements.

The following table summarizes the activity relating to restricted stock units during the periods indicated:

TABLE 13.1


	Nine Months Ended September 30,
	2023			2022
	Units	Weighted Average Grant Price per Share		Units	Weighted Average Grant Price per Share
Unvested units outstanding at beginning of period	4,821,182	$	10.30	4,680,786	$	9.71
Granted	1,426,146	12.71		1,266,821	13.07
Acquired	—	—		60,300	9.41
Net adjustment	172,874	—		244,258	9.34
Vested	(2,310,042)	7.03		(1,683,372)	10.58
Forfeited/expired/canceled	(605,383)	7.93		(219,058)	10.95
Dividend reinvestment	—	—		137,976	11.91
Unvested units outstanding at end of period	3,504,777	12.88		4,487,711	10.31

The following table provides certain information related to restricted stock units:

TABLE 13.2


(in millions)	Nine Months Ended September 30,
	2023		2022
Stock-based compensation expense	$	15	$	15
Tax benefit related to stock-based compensation expense	3		3
Fair value of units vested	18		21

As of September 30, 2023, there was $13.0 million of unrecognized compensation cost related to unvested restricted stock units.

The components of the restricted stock units as of September 30, 2023 are as follows:

TABLE 13.3


(dollars in millions)	Service- Based Units		Performance- Based Units		Total
Unvested restricted stock units	2,541,229		963,548		3,504,777
Unrecognized compensation expense	$	13	$	—	$	13
Intrinsic value	$	27	$	10	$	37
Weighted average remaining life (in years)	1.90		1.61		1.82

Stock Options

All outstanding stock options were assumed from acquisitions and are fully vested. Upon consummation of our acquisitions, all outstanding stock options issued by the acquired companies were converted into equivalent FNB stock options. We issue shares of treasury stock or authorized but unissued shares to satisfy stock options exercised.

As of September 30, 2023, we had 104,223 stock options outstanding and exercisable at a weighted average exercise price per share of $9.96, compared to 167,948 stock options outstanding and exercisable at a weighted average exercise price per share of $9.03 as of September 30, 2022.

The intrinsic value of outstanding and exercisable stock options at September 30, 2023 was $0.1 million. The aggregate intrinsic value represents the amount by which the fair value of underlying stock exceeds the option exercise price.