A year after detailing plans to expand its branch and automatic teller machine networks in the Washington metropolitan area, Pittsburgh-based F.N.B. Corp. has struck a deal to become sole provider of ATMs for Washington D.C.'s Metrorail subway system.
The agreement with the Washington Metropolitan Area Transit Authority was announced Friday. It allows the $44.8 billion-asset F.N.B. to install 120 ATMs throughout the 98-station Metrorail network, with the process expected to be complete by the start of 2024.
F.N.B. has used merger-and-acquisition deals to fuel its expansion in
"Our ATM partnerships enable us to expand our reach in a way that is cost effective and efficient," Delie wrote Friday in an email. "Our strategy is to couple our ATM delivery channel with our mobile eStore so that clients can perform most of their banking needs without visiting a branch."
Across its seven-state footprint, F.N.B. has grown its ATM network 150% since late 2020, pushing the number to just under 600, according to Delie. Earlier this year, advocates for the ATM industry said consumers
F.N.B.'s ATM growth accompanies a more modest expansion of its Washington-area branch network. The bank has received regulatory approval for branches in Arlington and Alexandria in the capital's northern Virginia suburbs, Delie noted. They would add to F.N.B.'s nine existing regional branches.
F.N.B. closed its most recent deal, for UB Bancorp in Greenville, North Carolina, in December. While Delie hasn't ruled out additional forays into the M&A market, the company is content with its de novo growth plans, he said on a recent conference call with analysts.
"We feel that's a better way for us to go in very cost-effectively," Delie said following the release of F.N.B.'s second-quarter earnings report July 20. "Bridge our physical delivery channel with the ATMs, branded ATMs, and then push our digital products to that customer base. We've had some good success doing that.
"I think the current M&A market is very challenging, still," Delie added. "There's a lot of banks that probably would like to sell themselves, but I don't know that the deal works from a mathematical perspective, financial perspective."
Analysts appear to be supportive of F.N.B.'s de novo focus. Indeed, Michael Perito, who covers F.N.B. for Keefe Bruyette & Woods, suggested M&A activity may have negatively impacted its share price. "Frankly, recent profitability performance and a continued focus on organic growth would suggest that there is room for this valuation gap to close if trends are sustainable," Perito wrote in a July 20 research note.
Janney Montgomery Scott analyst Brian Martin reiterated a buy rating on F.N.B. shares in a July 24 research note. "We remain positive on the FNB story and believe the discount valuation is unwarranted given its solid growth and profitability outlook," Martin wrote.
Perito currently rates F.N.B. as market perform. The company's shares closed at $12.73 Tuesday.
Metrorail's average daily entry count remains below pre-pandemic levels but has grown significantly over the past two years. As of July 25, the average daily entry count for 2023 stood at 276,336, up from 121,743 in 2021. Metrorail reported 255 million total boardings in 2022.
F.N.B. announced plans for a Richmond, Virginia, commercial loan production office in July 2022. At the same time, the company said it would expand branch and ATM service in the Washington region.
