LOANS AND LEASES

6 Months Ended

Jun. 30, 2025

Accrued interest receivable on loans and leases, which totaled $124.7 million at June 30, 2025 and $128.4 million at December 31, 2024, is excluded from the estimate of credit losses and assessed separately in other assets in the Consolidated Balance Sheets for both periods and is not included in the following tables.

Loans and Leases by Portfolio Segment

Following is a summary of total loans and leases, net of unearned income:

TABLE 4.1


(in millions)	June 30, 2025		December 31, 2024
Commercial real estate	$	12,686	$	12,705
Commercial and industrial	7,556		7,550
Commercial leases	774		765
Other	182		144
Total commercial loans and leases	21,198		21,164
Direct installment	2,671		2,676
Residential mortgages	8,595		7,986
Indirect installment	780		739
Consumer lines of credit	1,435		1,374
Total consumer loans	13,481		12,775
Total loans and leases, net of unearned income	$	34,679	$	33,939

The remaining accretable discount included in the amortized cost of acquired loans was $25.4 million and $31.6 million at June 30, 2025 and December 31, 2024, respectively.

The loans and leases portfolio categories are comprised of the following types of loans, where in each case the LGD is dependent on the nature and value of the respective collateral:

•Commercial real estate includes both owner-occupied and non-owner-occupied loans, including construction loans, secured by commercial properties where operational cash flows on owner-occupied properties, including rents paid by stand-alone business customers, or rents received by our borrowers from their tenant(s) on both a property and global basis are the primary default risk drivers;

•Commercial and industrial includes loans to businesses that are not secured by real estate where the borrower's leverage and cash flows from operations are the primary default risk drivers;

•Commercial leases consist of leases for new or used equipment where the borrower's cash flow from operations is the primary default risk driver;

•Other is comprised primarily of credit cards and mezzanine loans where the borrower's cash flow from operations is the primary default risk driver;

•Direct installment is comprised of fixed-rate, closed-end consumer loans for personal, family or household use, such as home equity loans and automobile loans where the primary default risk driver is the borrower's employment status and income;

•Residential mortgages consist of conventional and jumbo mortgage loans, including construction loans, for 1-4 family properties where the primary default risk driver is the borrower's employment status and income;

•Indirect installment is comprised of loans originated by approved third parties and underwritten by us, primarily automobile loans where the primary default risk driver is the borrower's employment status and income; and

•Consumer lines of credit include home equity lines of credit and consumer lines of credit that are either unsecured or secured by collateral other than home equity where the primary default risk driver is the borrower's employment status and income.

The loans and leases portfolio consists principally of loans to individuals and small- and medium-sized businesses within our primary market in seven states and the District of Columbia. Our primary 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 following table shows occupancy information relating to commercial real estate loans:

TABLE 4.2


	June 30, 2025		December 31, 2024
Commercial real estate:
Percent owner-occupied	30.0	%	29.0	%
Percent non-owner-occupied	70.0		71.0

Credit Quality

We monitor the credit quality of our loan portfolio using several performance measures based on payment activity and borrower performance. We use an internal risk rating assigned to a commercial loan or lease at origination, summarized below.

TABLE 4.3


Rating Category			Definition
Pass			in general, the condition of the borrower and the performance of the loan is satisfactory or better

Special Mention			in general, the condition of the borrower has deteriorated, requiring an increased level of monitoring

Substandard			in general, the condition of the borrower has significantly deteriorated and the performance of the loan could further deteriorate if deficiencies are not corrected

Doubtful			in general, the condition of the borrower has significantly deteriorated and the collection in full of both principal and interest is highly questionable or improbable

The use of these internally assigned credit quality categories within the commercial loan and lease portfolio permits our use of transition matrices to establish a basis which is then impacted by quantitative inputs from our econometric model forecasts over the R&S period. Our internal credit risk grading system is based on past experiences with similarly graded loans and leases and conforms to regulatory categories. In general, loan and lease risk ratings within each category are reviewed on an ongoing basis according to our policy for each class of loans and leases. Each quarter, we analyze the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the commercial loan and lease portfolio. Loans and leases within the Pass credit category or that migrate toward the Pass credit category generally have a lower risk of loss compared to loans and leases that migrate toward the Substandard or Doubtful credit categories. Accordingly, we apply higher risk factors to Substandard and Doubtful credit categories.

The following table summarizes the designated loan rating category by loan class including term loans on an amortized cost basis by origination year and year-to-date gross charge-offs by originating year:

TABLE 4.4


(in millions)	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Total
June 30, 2025
COMMERCIAL
Commercial Real Estate:
Risk Rating:
Pass	$	634	$	1,373	$	1,714	$	1,948	$	1,749	$	4,099	$	196	$	11,713
Special Mention	53		13		18		194		129		219		3		629
Substandard	—		2		8		58		52		221		3		344

Total commercial real estate	687		1,388		1,740		2,200		1,930		4,539		202		12,686
Commercial real estate gross charge-offs	—		—		0.1		3.9		3.6		3.0		—		10.6
Commercial and Industrial:
Risk Rating:
Pass	813		1,144		927		925		509		1,015		1,719		7,052
Special Mention	9		6		24		25		32		74		129		299
Substandard	1		7		50		12		18		43		74		205

Total commercial and industrial	823		1,157		1,001		962		559		1,132		1,922		7,556
Commercial and industrial gross charge-offs	0.1		0.5		0.3		3.1		0.7		17.7		—		22.4
Commercial Leases:
Risk Rating:
Pass	169		234		160		88		50		46		—		747
Special Mention	1		5		6		—		—		5		—		17
Substandard	—		—		5		2		3		—		—		10

Total commercial leases	170		239		171		90		53		51		—		774
Commercial leases gross charge-offs	—		—		—		—		—		0.2		—		0.2
Other Commercial:
Risk Rating:
Pass	11		—		63		—		—		5		103		182



Total other commercial	11		—		63		—		—		5		103		182
Other commercial gross charge-offs	—		—		—		—		—		2.2		—		2.2
Total commercial loans and leases	1,691		2,784		2,975		3,252		2,542		5,727		2,227		21,198


(in millions)	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Total
June 30, 2025
CONSUMER
Direct Installment:
Current	216		312		247		580		638		669		—		2,662
Past due	—		1		1		1		1		5		—		9
Total direct installment	216		313		248		581		639		674		—		2,671
Direct installment gross charge-offs	—		0.1		0.2		0.1		—		0.2		—		0.6
Residential Mortgages:
Current	872		1,691		1,391		1,542		1,369		1,677		—		8,542
Past due	2		7		10		5		5		24		—		53
Total residential mortgages	874		1,698		1,401		1,547		1,374		1,701		—		8,595
Residential mortgages gross charge-offs	—		0.2		0.3		0.1		0.2		1.0		—		1.8
Indirect Installment:
Current	193		332		21		54		103		63		—		766
Past due	1		2		1		5		4		1		—		14
Total indirect installment	194		334		22		59		107		64		—		780
Indirect installment gross charge-offs	—		0.4		0.6		1.2		1.2		0.5		—		3.9
Consumer Lines of Credit:
Current	4		7		24		46		12		133		1,198		1,424
Past due	—		—		—		1		1		7		2		11
Total consumer lines of credit	4		7		24		47		13		140		1,200		1,435
Consumer lines of credit gross charge-offs	—		—		—		—		—		0.6		—		0.6
Total consumer loans	1,288		2,352		1,695		2,234		2,133		2,579		1,200		13,481
Total loans and leases	$	2,979	$	5,136	$	4,670	$	5,486	$	4,675	$	8,306	$	3,427	$	34,679
Total charge-offs	$	0.1	$	1.2	$	1.5	$	8.4	$	5.7	$	25.4	$	—	$	42.3


(in millions)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Total
December 31, 2024
COMMERCIAL
Commercial Real Estate:
Risk Rating:
Pass	$	1,405	$	1,661	$	2,025	$	1,984	$	1,200	$	3,235	$	197	$	11,707
Special Mention	1		10		177		52		107		181		37		565
Substandard	2		16		119		43		55		195		3		433

Total commercial real estate	1,408		1,687		2,321		2,079		1,362		3,611		237		12,705
Commercial real estate gross charge-offs	—		0.8		1.0		15.0		10.5		11.3		—		38.6
Commercial and Industrial:
Risk Rating:
Pass	1,241		1,079		1,074		647		461		669		1,861		7,032
Special Mention	6		20		57		74		12		63		41		273
Substandard	4		50		11		33		8		59		80		245

Total commercial and industrial	1,251		1,149		1,142		754		481		791		1,982		7,550
Commercial and industrial gross charge-offs	0.1		3.9		1.5		1.8		6.0		7.6		—		20.9
Commercial Leases:
Risk Rating:
Pass	331		184		106		60		26		39		—		746
Special Mention	—		1		—		—		—		1		—		2
Substandard	—		6		2		4		5		—		—		17

Total commercial leases	331		191		108		64		31		40		—		765
Commercial leases gross charge-offs	—		—		—		—		—		0.3		—		0.3
Other Commercial:
Risk Rating:
Pass	12		62		—		—		—		5		65		144



Total other commercial	12		62		—		—		—		5		65		144
Other commercial gross charge-offs	—		—		—		—		—		4.2		—		4.2
Total commercial loans and leases	3,002		3,089		3,571		2,897		1,874		4,447		2,284		21,164


(in millions)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Total
December 31, 2024
CONSUMER
Direct Installment:
Current	346		277		621		683		341		396		—		2,664
Past due	—		1		3		1		1		6		—		12
Total direct installment	346		278		624		684		342		402		—		2,676
Direct installment gross charge-offs	—		0.2		0.3		0.2		—		1.1		—		1.8
Residential Mortgages:
Current	1,663		1,478		1,598		1,417		728		1,048		—		7,932
Past due	2		15		6		5		1		25		—		54
Total residential mortgages	1,665		1,493		1,604		1,422		729		1,073		—		7,986
Residential mortgages gross charge-offs	0.1		0.6		0.3		0.2		—		1.4		—		2.6
Indirect Installment:
Current	396		24		67		142		49		42		—		720
Past due	1		3		6		6		2		1		—		19
Total indirect installment	397		27		73		148		51		43		—		739
Indirect installment gross charge-offs	0.2		1.8		4.5		3.2		0.5		1.6		—		11.8
Consumer Lines of Credit:
Current	8		29		51		13		1		117		1,141		1,360
Past due	—		—		1		1		—		10		2		14
Total consumer lines of credit	8		29		52		14		1		127		1,143		1,374
Consumer lines of credit gross charge-offs	—		0.1		0.1		0.1		—		1.3		—		1.6
Total consumer loans	2,416		1,827		2,353		2,268		1,123		1,645		1,143		12,775
Total loans and leases	$	5,418	$	4,916	$	5,924	$	5,165	$	2,997	$	6,092	$	3,427	$	33,939
Total charge-offs	$	0.4	$	7.4	$	7.7	$	20.5	$	17.0	$	28.8	$	—	$	81.8

We use delinquency transition matrices within the consumer and other loan classes to establish the basis for the R&S forecast portion of the credit risk. Each month, management analyzes payment and volume activity, FICO scores and Debt-to-Income (DTI) scores and other external factors such as unemployment, to determine how consumer loans are performing.

Non-Performing and Past Due

The following table provides an analysis of the aging of loans by class.

TABLE 4.5


(in millions)	30-89 Days Past Due		> 90 Days Past Due and Still Accruing		Non- Accrual		Total Past Due		Current		Total Loans and Leases		Non-accrual with No ACL
June 30, 2025
Commercial real estate	$	8	$	—	$	47	$	55	$	12,631	$	12,686	$	15
Commercial and industrial	14		—		53		67		7,489		7,556		20
Commercial leases	—		—		3		3		771		774		—
Other	1		1		2		4		178		182		—
Total commercial loans and leases	23		1		105		129		21,069		21,198		35
Direct installment	6		1		2		9		2,662		2,671		—
Residential mortgages	39		10		4		53		8,542		8,595		1
Indirect installment	12		—		2		14		766		780		—
Consumer lines of credit	6		1		4		11		1,424		1,435		—
Total consumer loans	63		12		12		87		13,394		13,481		1
Total loans and leases	$	86	$	13	$	117	$	216	$	34,463	$	34,679	$	36


(in millions)	30-89 Days Past Due		> 90 Days Past Due and Still Accruing		Non- Accrual		Total Past Due		Current		Total Loans and Leases		Non-accrual with No ACL
December 31, 2024
Commercial real estate	$	26	$	—	$	88	$	114	$	12,591	$	12,705	$	24
Commercial and industrial	10		—		52		62		7,488		7,550		19
Commercial leases	1		—		2		3		762		765		—
Other	1		—		2		3		141		144		—
Total commercial loans and leases	38		—		144		182		20,982		21,164		43
Direct installment	8		2		2		12		2,664		2,676		—
Residential mortgages	38		9		7		54		7,932		7,986		—
Indirect installment	16		1		2		19		720		739		—
Consumer lines of credit	8		2		4		14		1,360		1,374		—
Total consumer loans	70		14		15		99		12,676		12,775		—
Total loans and leases	$	108	$	14	$	159	$	281	$	33,658	$	33,939	$	43

Following is a summary of non-performing assets:

TABLE 4.6


(dollars in millions)	June 30, 2025			December 31, 2024
Non-accrual loans	$	117		$	159
Total non-performing loans and leases	117			159
Other real estate owned	2			3
Total non-performing assets	$	119		$	162
Asset quality ratios:
Non-performing loans and leases / total loans and leases	0.34		%	0.47		%
Non-performing assets plus 90 days or more past due / total loans and leases plus OREO	0.38			0.52

The carrying value of residential-secured consumer OREO held as a result of obtaining physical possession upon completion of a foreclosure or through completion of a deed in lieu of foreclosure amounted to $1.1 million at June 30, 2025 and $1.2 million at December 31, 2024. The recorded investment of residential-secured consumer OREO for which formal foreclosure proceedings are in process at June 30, 2025 and December 31, 2024 totaled $17.1 million and $10.6 million, respectively.

Approximately $178.3 million of commercial loans are collateral dependent at June 30, 2025. Repayment is expected to be substantially made through the operation or sale of the collateral on the loan. These loans are primarily secured by business assets or commercial real estate.

Loan Modifications

During the period, there are loans whose contractual terms have been modified in a manner that grants a concession to a borrower experiencing financial difficulties. These modifications typically result from loss mitigation activities and could include a term extension, interest rate reduction, principal forgiveness and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral. Accrued interest receivable on loan modifications totaled $0.04 million and $0.05 million at June 30, 2025 and June 30, 2024, respectively, and is excluded from the amortized cost of loan modifications in the tables that follow.

The following table shows the amortized cost basis at the end of the reporting period of the loans modified during the period to borrowers experiencing financial difficulty, disaggregated by class of financing receivable, type of concession granted and the financial effect of the modifications made to borrowers experiencing financial difficulty:

TABLE 4.7


(dollars in millions)	Amortized Cost Basis		% of Total Class of Financing Receivable		Financial Effect

Three Months Ended June 30, 2025
Term Extension

Commercial and industrial	$	0.8	0.01	%	The modified loans had an average increase in term of 29 months, extending the maturity date.


Direct installment	1.0		0.04		The modified loans had an average increase in term of 26 months extending the maturity date.
Residential mortgages	0.8		0.01		The modified loans had an average increase in term of 26 months extending the maturity date.

Consumer lines of credit	0.3		0.02		The modified loans had an average increase in term of 170 months extending the maturity date.
Total	2.9






































































Other
Commercial real estate	1.3		0.01		The majority resulted in a 3-month deferral on principal payments.
Commercial and industrial	0.9		0.01		The majority resulted in a 3-month deferral on principal payments.






Total	2.2
Total Outstanding Modified	$	5.1

Six Months Ended June 30, 2025
Term Extension
Commercial real estate	$	1.5	0.01	%	The modified loans had an average increase in term of 2 months, extending the maturity date.
Commercial and industrial	0.8		0.01		The modified loans had an average increase in term of 29 months, extending the maturity date.


Direct installment	1.5		0.06		The modified loans had an average increase in term of 21 months, extending the maturity date.
Residential mortgages	2.9		0.03		The modified loans had an average increase in term of 27 months, extending the maturity date.

Consumer lines of credit	0.4		0.03		The modified loans had an average increase in term of 181 months, extending the maturity date.
Total	7.1




















Term Extension and Rate Reduction





Residential mortgages	1.3		0.02		The term was extended, with weighted average yield reductions of 100 basis points to 450 basis points with extensions up to 27 years.


Total	1.3








































Other
Commercial real estate	1.3		0.01		The majority resulted in a 3-month deferral on principal payments.
Commercial and industrial	1.0		0.01		The majority resulted in a 3-month deferral on principal payments.






Total	2.3
Total Outstanding Modified	$	10.7


(dollars in millions)	Amortized Cost Basis		% of Total Class of Financing Receivable		Financial Effect
Three Months Ended June 30, 2024
Term Extension




Direct installment	$	0.7	0.03	%	The modified loans had an average increase in term of 41 months, extending the maturity date.
Residential mortgages	3.4		0.05		The modified loans had an average increase in term of 24 months, extending the maturity date.

Consumer lines of credit	0.5		0.04		The modified loans had an average increase in term of 162 months extending the maturity date.
Total	4.6




















Term Extension and Rate Reduction





Residential mortgages	0.2		—		Multiple modifications were made with no material financial effect.

Consumer lines of credit	0.2		0.02		Multiple modifications were made with no material financial effect.
Total	0.4








































Other
Commercial real estate	0.1		—		3 to 9 month payment deferrals with no income being earned on these loans.







Total	0.1
Total Outstanding Modified	$	5.1

Six Months Ended June 30, 2024
Term Extension




Direct installment	$	0.8	0.03	%	The modified loans had an average increase in term of 61 months, extending the maturity date.
Residential mortgages	4.1		0.05		The modified loans had an average increase in term of 28 months, extending the maturity date.

Consumer lines of credit	1.0		0.08		The modified loans had an average increase in term of 208 months, extending the maturity date.
Total	5.9
Rate Reduction





Residential mortgages	0.1		—		The term was extended, with a weighted average yield reduction of 100 basis points.


Total	0.1










Term Extension and Rate Reduction
Commercial real estate	0.9		0.01		Multiple modifications were made with no material financial effect.




Residential mortgages	0.8		0.01		Multiple modifications were made with no material financial effect.

Consumer lines of credit	0.2		0.02		Multiple modifications were made with no material financial effect.
Total	1.9






























Balloon Payment
Commercial real estate	0.6		—		Multiple modifications were made with no material financial effect.







Total	0.6
Other
Commercial real estate	4.2		0.03		3 to 12 month payment deferrals with no income being earned on these loans
Commercial and industrial	0.6		0.01		Multiple modifications were made with no material financial effect.






Total	4.8
Total Outstanding Modified	$	13.3

Some loan modifications may not ultimately result in the full collection of principal and interest, as modified, and may result in potential incremental losses which are factored into the ACL. There were no additional funds committed to borrowers whose loans were modified during the first six months of 2025.

Commercial loans over $1.0 million whose terms have been modified may be placed on non-accrual, individually analyzed and measured based on the fair value of the underlying collateral. Our ACL includes specific reserves for commercial loans modified. There were $2.6 million and $8.1 million in specific reserves for commercial loans modified at June 30, 2025 and December 31, 2024, respectively, and pooled reserves for individual loans of $1.3 million and $1.8 million for those same periods, respectively, based on loan segment LGD. Upon default, the amount of the recorded investment of the modified loan balance in excess of the fair value of the collateral, less estimated selling costs, is generally considered a confirmed loss and is charged-off against the ACL.

All other classes of loans whose terms have been modified are pooled and measured based on the loan segment LGD. Our ACL included pooled reserves for these classes of loans of $1.1 million and $3.4 million as of June 30, 2025 and December 31, 2024, respectively. Upon default of an individual loan, our charge-off policy is followed for that class of loan.

Following is a summary of loans modified in a manner that grants a concession to a borrower experiencing financial difficulties, by class, for which there was a payment default, excluding loans that have been paid off and/or sold. Default occurs when a loan is 90 days or more past due or in non-accrual and is within 12 months of restructuring.

TABLE 4.8


Amortized cost basis of modified financing receivables that subsequently defaulted:
(in millions)	Term Extension		Term Extension and Rate Reduction		Balloon Payment		Other		Total Outstanding Modified
Three Months Ended June 30, 2025








Consumer lines of credit	$	0.1	$	—	$	—	$	—	$	0.1
Total consumer loans	0.1		—		—		—		0.1
Total	$	0.1	$	—	$	—	$	—	$	0.1

Six Months Ended June 30, 2025
Commercial real estate	$	0.6	$	—	$	—	$	1.7	$	2.3
Commercial and industrial	0.2		3.0		—		3.3		6.5


Total commercial loans and leases	0.8		3.0		—		5.0		8.8
Direct installment	0.2		—		—		—		0.2
Residential mortgages	2.0		0.8		—		—		2.8

Consumer lines of credit	0.1		—		—		—		0.1
Total consumer loans	2.3		0.8		—		—		3.1
Total	$	3.1	$	3.8	$	—	$	5.0	$	11.9


(in millions)	Term Extension		Term Extension and Rate Reduction		Balloon Payment		Other		Total Outstanding Modified
Three Months Ended June 30, 2024
Commercial real estate	$	0.4	$	—	$	—	$	0.2	$	0.6
Commercial and industrial	—		—		—		0.9		0.9


Total commercial loans and leases	0.4		—		—		1.1		1.5

Residential mortgages	1.5		—		—		—		1.5


Total consumer loans	1.5		—		—		—		1.5
Total	$	1.9	$	—	$	—	$	1.1	$	3.0

Six Months Ended June 30, 2024
Commercial real estate	$	0.7	$	0.9	$	0.6	$	8.8	$	11.0
Commercial and industrial	20.3		0.2		—		1.6		22.1


Total commercial loans and leases	21.0		1.1		0.6		10.4		33.1

Residential mortgages	1.7		—		—		—		1.7


Total consumer loans	1.7		—		—		—		1.7
Total	$	22.7	$	1.1	$	0.6	$	10.4	$	34.8

We closely monitor the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of our modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months:

TABLE 4.9


Payment status - amortization cost basis:
(in millions)	Current		30-89 Days Past Due		90+ Days Past Due
June 30, 2025
Commercial real estate	$	20.6	$	—	$	—
Commercial and industrial	7.2		—		—


Total commercial loans and leases	27.8		—		—
Direct installment	1.7		0.4		—
Residential mortgages	6.1		0.7		0.2

Consumer lines of credit	0.9		0.1		0.1
Total consumer loans	8.7		1.2		0.3
Total	$	36.5	$	1.2	$	0.3

(in millions)	Current		30-89 Days Past Due		90+ Days Past Due
June 30, 2024
Commercial real estate	$	14.8	$	—	$	—
Commercial and industrial	18.5		—		—


Total commercial loans and leases	33.3		—		—
Direct installment	1.3		0.8		—
Residential mortgages	3.3		2.9		1.2

Consumer lines of credit	1.6		0.4		—
Total consumer loans	6.2		4.1		1.2
Total	$	39.5	$	4.1	$	1.2

FNB CORP/PA/ 10-Q