STOCK INCENTIVE PLANS

12 Months Ended

Dec. 31, 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 1,438,195 and 1,266,821 restricted stock units during 2023 and 2022, respectively, including 293,296 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 December 31, 2023, we had 5,530,262 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 18.1


	2023			2022			2021
	Units	Weighted Average Grant Price per Share		Units	Weighted Average Grant Price per Share		Units	Weighted Average Grant Price per Share
Unvested units outstanding at beginning of year	4,821,182	$	10.30	4,680,786	$	9.71	4,322,115	$	9.46
Granted	1,438,195	12.71		1,266,821	13.07		1,113,314	12.65
Acquired	—	—		60,300	9.41		—	—
Net adjustment	191,021	—		575,264	9.58		527,975	10.79
Vested	(2,311,364)	7.03		(1,702,099)	10.57		(1,320,646)	12.07
Forfeited/expired/canceled	(636,436)	8.14		(243,062)	10.88		(143,238)	10.65
Dividend reinvestment	—	—		183,172	12.12		181,266	12.17
Unvested units outstanding at end of year	3,502,598	12.89		4,821,182	10.30		4,680,786	9.71

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

TABLE 18.2


Year Ended December 31	2023		2022		2021
(in millions)
Stock-based compensation expense	$	18	$	22	$	21
Tax benefit related to stock-based compensation expense	4		5		4
Fair value of units vested	18		21		16

As of December 31, 2023, there was $10.4 million of unrecognized compensation cost related to unvested restricted stock units.

The components of the restricted stock units as of December 31, 2023 are as follows:

TABLE 18.3


(dollars in millions)	Service- Based Units		Performance- Based Units		Total
Unvested restricted stock units	2,530,664		971,934		3,502,598
Unrecognized compensation expense	$	10	$	—	$	10
Intrinsic value	$	35	$	13	$	48
Weighted average remaining life (in years)	1.76		1.45		1.68

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.

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

TABLE 18.4


	2023	Weighted Average Exercise Price per Share		2022	Weighted Average Exercise Price per Share		2021	Weighted Average Exercise Price per Share
Options outstanding at beginning of year	138,381	$	9.32	167,327	$	8.83	196,086	$	8.61
Assumed from acquisitions	—	—		29,396	8.08		—	—
Exercised	(32,292)	7.34		(55,713)	7.23		(28,168)	7.38
Forfeited/expired	(2,399)	8.08		(2,629)	8.22		(591)	6.44
Options outstanding and exercisable at end of year	103,690	9.97		138,381	9.32		167,327	8.83

The stock options outstanding and exercisable at December 31, 2023 have exercise prices ranging from $8.24 to $11.37 and a weighted average remaining life of 0.84 years. The intrinsic value of outstanding and exercisable stock options at December 31, 2023 was $0.4 million. The aggregate intrinsic value represents the amount by which the fair value of underlying stock exceeds the option exercise price.