LONG-TERM BORROWINGS

12 Months Ended

Dec. 31, 2023

Following is a summary of long-term borrowings:

TABLE 15.1


December 31	2023		2022
(in millions)
Federal Home Loan Bank advances	$	1,200	$	—
Senior notes	349		648
Subordinated notes	82		70
Junior subordinated debt	73		72
Other subordinated debt	267		303
Total long-term borrowings	$	1,971	$	1,093

Scheduled annual maturities for the long-term borrowings for the years following December 31, 2023 are as follows:

TABLE 15.2


(in millions)
2024	$	320
2025	1,264
2026	8
2027	109
2028	27
Later years	243
Total	$	1,971

Federal Home Loan Bank advances

Our banking affiliate has available credit with the FHLB of $11.0 billion, of which $3.1 billion was utilized and included in short-term and long-term borrowings and $450.0 million was utilized for a letter of credit for pledging of public funds as of December 31, 2023. These advances are secured by loans collateralized by residential mortgages, home equity lines of credit, commercial real estate and FHLB stock. The short-term borrowings are scheduled to mature in various amounts periodically during 2024 while the long-term borrowings are scheduled to mature periodically through 2027, with the majority maturing in 2025. Effective interest rates paid on the long-term FHLB advances held during 2023 ranged from 4.23% to 4.88%. There were no long-term FHLB borrowings during 2022, or for the year ended December 31, 2022.

Subordinated notes

Subordinated notes are unsecured and subordinated to our other indebtedness. The subordinated notes mature in various amounts periodically through the year 2033. At December 31, 2023, all of the subordinated notes are redeemable by the holders prior to maturity at a discount equal to three to 12 months of interest, depending on the term of the note. We may require the holder to give 30 days prior written notice. No sinking fund is required and none has been established to retire the notes. The weighted average interest rates on the subordinated notes are presented in the following table:

TABLE 15.3


December 31	2023		2022		2021
Subordinated notes weighted average interest rate	4.10	%	3.36	%	3.12	%

Junior subordinated debt

The junior subordinated debt is comprised of the debt securities issued by FNB, or companies we acquired, in relation to our four unconsolidated subsidiary trusts (collectively, the Trusts), which are unconsolidated VIEs and are included on the Consolidated Balance Sheets in long-term borrowings. One hundred percent of the common equity of each Trust is owned by FNB. The Trusts were formed for the purpose of issuing FNB-obligated mandatorily redeemable capital securities, or TPS to third-party investors. The proceeds from the sale of TPS and the issuance of common equity by the Trusts were invested in junior subordinated debt securities issued by FNB, which are the sole assets of each Trust. Since third-party investors are the primary beneficiaries, the Trusts are not consolidated in our Financial Statements. The Trusts pay dividends on the TPS at the same rate as the distributions paid by us on the junior subordinated debt held by the Trusts. F.N.B. Statutory Trust II was formed by us, and the other three statutory trusts were assumed through acquisitions. The acquired statutory trusts were adjusted to fair value in conjunction with the various acquisitions.

We record the distributions on the junior subordinated debt issued to the Trusts as interest expense. The TPS are subject to mandatory redemption, in whole or in part, upon repayment of the junior subordinated debt. The TPS are eligible for redemption, at any time, at our discretion. Under capital guidelines, the junior subordinated debt, net of our investments in the Trusts, is included in tier 2 capital. We have entered into agreements which, when taken collectively, fully and unconditionally guarantee the obligations under the TPS subject to the terms of each of the guarantees.

The following table provides information relating to the Trusts as of December 31, 2023:

TABLE 15.4


(dollars in millions)	Trust Preferred Securities		Common Securities		Junior Subordinated Debt		Stated Maturity Date	Interest Rate		Rate Reset Factor
F.N.B. Statutory Trust II	$	22	$	1	$	22	6/15/2036	7.30	%	SOFR + 165 bps

Yadkin Valley Statutory Trust I	25		1		23		12/15/2037	6.97	%	SOFR + 132 bps
FNB Financial Services Capital Trust I	25		1		23		9/30/2035	7.05	%	SOFR + 146 bps
Patapsco Statutory Trust I	5		—		5		12/15/2035	7.13	%	SOFR + 148 bps

Total	$	77	$	3	$	73

The SOFR rate used for the rate reset factors in the above table is the Benchmark Replacement (three-month CME term SOFR plus a tenor spread adjustment of 26 basis points).

Senior and other subordinated debt

The following table provides information relating to our senior notes and other subordinated debt as of December 31, 2023. The subordinated notes are eligible for treatment as tier 2 capital for regulatory capital purposes.

TABLE 15.5


(dollars in millions)	Aggregate Principal Amount Issued		Net Proceeds (5)		Carrying Value		Stated Maturity Date	Interest Rate
Senior Notes:
5.150% Senior Notes due August 25, 2025	$	350	$	347	$	349	8/25/2025	5.150	%
Total senior notes	350		347		349
Other Subordinated Debt:
4.950% Fixed-To-Floating Rate Subordinated Notes due 2029 (1)	120		118		119		2/14/2029	4.950	%
4.875% Subordinated Notes due 2025	100		98		100		10/2/2025	4.875	%
Fixed-To-Floating Rate Subordinated Notes due December 6, 2028 (2) (4)	25		26		24		12/6/2028	8.645	%
5.000% Fixed-To-Floating Rate Subordinated Note due May 29, 2030 (3) (4)	25		24		24		5/29/2030	5.000	%

Total other subordinated debt	270		266		267
Total	$	620	$	613	$	616

(1) Fixed rate until February 14, 2024, at which time it converts to a floating rate determined by the Benchmark Replacement (three-month CME term SOFR plus a tenor spread adjustment of 26 basis points) plus 240 basis points.

(2) Floating rate effective December 6, 2023, determined by the Benchmark Replacement (three-month CME term SOFR plus a tenor spread adjustment of 26 basis points) plus 302 basis points.

(3) Fixed until May 29, 2025, at which time it converts to a floating rate determined by the three-month SOFR plus 464 basis points.

(4) Assumed from an acquisition and adjusted to fair value at the time of acquisition.

(5) After deducting underwriting discounts and commissions and offering costs. For the debt assumed from acquisitions, this is the fair value of the debt at the time of the acquisition.

Other Credit Availability

Our banking affiliate has additional unused other wholesale credit availability of $8.3 billion as of December 31, 2023.

Borrowing Activity

During the third quarter of 2022, we completed a debt offering in which we issued $350 million aggregate principal amount of 5.150% fixed-rate senior notes due in 2025. The net proceeds of the debt offering after deducting underwriting discounts and commissions and offering costs were $347.4 million. These proceeds were used for general corporate purposes, which included the repayment of $300 million in 2.200% Senior Notes that matured in February 2023, and may also include investments at the holding company level, capital to support the growth of FNBPA and refinancing of outstanding indebtedness.

During the second quarter of 2023, we called $6 million in other subordinated debt acquired from the Union acquisition and we repurchased and retired $15 million in other subordinated debt assumed in a previous acquisition. Additionally, during the third quarter of 2023, $13.6 million in other subordinated debt assumed in a previous acquisition matured and we repurchased and retired $1 million in other subordinated debt acquired from the Howard acquisition. During 2022, we assumed $25 million of other subordinated debt and $5 million of junior subordinated debt from the Howard acquisition and $31 million of other subordinated debt from the Union acquisition.