F.n.b. Corporation · NYSE:FNB
F.n.b — Investor Presentation (May 2018)
47 slides from F.n.b's investor presentation, May 2018
Slide 1: Investor Presentation May 2018
Investor Presentation May 2018 F.N.B. Corporation
Slide 2: Table of Contents
Table of Contents Page Page Cautionary Statement 3 1Q18 Financial Highlights 16 Key Investment Considerations 4 Asset Quality 17 About FNB 5 Balance Sheet Highlights 18 An Infrastructure Built for Long-Term 6 Balance Sheet Yields/Rates 19 Sustainable Growth Revenue Highlights 20 2018 Strategic Objec
Slide 3: Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Financial Information
Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Financial Information This document contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which contain F.N.B. Corporation’s (F.N.B.) expectations or predictions of futur
Slide 4: Key Investment Considerations
Key Investment Considerations o FNB’s business model is designed to deliver long-term shareholder value o Past infrastructure investments have positioned FNB well for sustainable growth o We intend to achieve consistent growth while adhering to our risk profile o We are committed to continued effici
Slide 5: About FNB Corporation
About FNB Corporation o Headquarters: Pittsburgh, PA High-Quality, o Market capitalization: $4.3 billion1 Growing Regional Financial Institution o Banking locations: Over 4001 o Total Assets: $32 Billion1 o Regional bank focused on serving consumer and wholesale banking clients • Adhere to a low-ris
Slide 6: An Infrastructure Built for Long-Term Sustainable Growth
An Infrastructure Built for Long-Term Sustainable Growth 2014 2015 2016 2017 2018 Talent Management Chief Technology & Chief Wholesale Strengthened team Chief Marketing Retention of support personnel, Hired EVP of Capital Banking and Chief Chief Information Security through key hires; Officer filled
Slide 7: Strategic Objectives 2018 and Beyond
Strategic Objectives 2018 and Beyond Consumer Commercial Fee-Based o Enhance analytics capabilities to better o Continue expansion of equipment o Develop a new SBA loan product understand customers’ needs and finance for middle market borrowers offering for smaller businesses increase share of walle
Slide 8: Becoming a Data-Driven Bank
Becoming a Data-Driven Bank Evolving Our Marketing Data Capabilities Front-Line Impact • Investments in proprietary data science and targeted • Internally generated leads incorporated into targeted marketing capabilities marketing campaigns • Leads shared with front line to initiate consultative • D
Slide 9: A Consistent Experience across Channels
A Consistent Experience across Channels Clicks-to-Bricks is the seamless integration of traditional and digital channels to create a consistent, exceptional customer experience whether in the branch, online, or mobile Channel Branch Experience aligned with Digital Experience o Solution Center featur
Slide 10: Select Loan Portfolios
Select Loan Portfolios 2Q17 3Q17 4Q17 1Q18 2Q17 3Q17 4Q17 1Q18 Residential Mortgage Indirect Installment 3.31% 3.26% 3.27% 3.16% 4.12% 4.20% 4.05% $2,723 4.00% +2.6%1 $1,406 $1,441 $1,474 +2.3%1 $1,311 $2,653 $2,535 $2,413 Average Balance Yield Average Balance Yield Consumer LOC Commercial 4.66% 4.6
Slide 11: Key Fee-Based Businesses
Key Fee-Based Businesses $ in millions 2Q17 3Q17 4Q17 1Q18 o Provides full range of consumer and commercial insurances Insurance $5.0 $5.1 $4.3 $4.5 o Focus on cross-sell, further development of personal lines Insurance Commissions and Fees o Provides solutions to businesses, $4.3 individuals, endow
Slide 12: Capital Markets and Specialty Finance
Capital Markets and Specialty Finance $ in millions 2Q17 3Q17 4Q17 1Q18 o Realigned strategy supports FNB LOBs in our core footprint and nearby states Small Business $1.6 Administration $1.3 $1.1 $0.9 o Focus on credit quality, documentation process, and mitigating “put-back” risk SBA Operations o F
Slide 13: Execution of FNB's Long-Term Growth Strategy
Execution of FNB’s Long-Term Growth Strategy Key Performance Indicators 1Q18 2-3 Year Target Key Strategy Originated net charge-offs Remain disciplined Maintain Low-Risk Profile 20 bps 25-50 bps /average loans through the cycle Drive Loan and Deposit Average loans 7%1 Mid-to-High Grow and deepen Gro
Slide 14: Full Year 2018 Financial Objectives
Full Year 2018 Financial Objectives Category FY 2018 Target Loans High-single digit growth1 Balance Sheet Deposits Mid-to-high-single digit growth1 Net interest income Mid-single digit growth2 Provision expense $70-$80 million Income Statement Noninterest income Mid-to-high single digit growth2 Noni
Slide 15: Operating Results
Operating Results 1Q18 Highlights 15
Slide 16: 1Q18 Financial Highlights
1Q18 Financial Highlights 1Q18 4Q17 1Q17 Net income available to common stockholders $84.8 $22.1 $21.0 Reported Results Earnings per diluted common share $0.26 $0.07 $0.09 Book value per common share $13.37 $13.30 $13.16 Operating net income available to common $84.8 $76.8 $54.4 stockholders (millio
Slide 17: Asset Quality
Asset Quality1 $ in thousands 1Q18 4Q17 1Q17 1Q18 Highlights NPLs+OREO/Total average originated 0.81% 0.81% 1.12% loans and leases + OREO Originated Delinquency 0.79% 0.88% 0.94% Provision for credit losses2 $14,495 $16,699 $10,850 o Consistent and stable credit quality Net charge-offs (NCOs)2 $10,6
Slide 18: Balance Sheet Highlights
Balance Sheet Highlights QoQ YoY Average, $ in millions 1Q18 4Q17 1Q17 QoQ Δ YoY Δ Organic1 Δ Organic1 Δ 1Q18 Highlights o Growth in commercial Securities $5,997 $5,855 $4,980 2.4% 20.4% loans was driven by strong performance in Total Loans $21,156 $20,812 $16,190 1.7% 30.7% 6.7% 5.5% our Central Pe
Slide 19: Balance Sheet Yields/Rates
Balance Sheet Yields/Rates %, presented on an FTE basis 1Q18 4Q17 3Q17 2Q17 1Q17 Interest bearing deposits with banks 1.40 1.08 1.08 0.74 0.85 Investment securities 2.34 2.37 2.32 2.30 2.22 Assets Loans and leases 4.59 4.59 4.49 4.37 4.26 Total earning assets 4.08 4.09 4.01 3.92 3.77 Interest-bearin
Slide 20: Revenue Highlights
Revenue Highlights $ in thousands 1Q18 4Q17 1Q17 QoQ Δ YoY Δ 1Q18 Highlights Total interest income $272,927 $271,085 $194,693 0.7% 40.2% o Interest income supported by continued loan growth and increase in average Total interest expense 46,822 41,049 21,941 14.1% 113.4% securities Net interest incom
Slide 21: Non-Interest Income
Non-Interest Income $ in thousands 1Q18 4Q17 1Q17 QoQ Δ YoY Δ 1Q18 Highlights Service charges $30,077 $31,550 $24,581 (4.7%) 22.4% o Wealth management1 benefitted from customer Trust income 6,448 5,911 5,747 9.1% 12.2% acquisition, increased brokerage activity, seasonal Insurance commissions and fee
Slide 22: Non-Interest Expense
Non-Interest Expense $ in thousands 1Q18 4Q17 1Q17 QoQ Δ YoY Δ 1Q18 Highlights Salaries and employee benefits $89,326 $86,033 $73,578 3.8% 21.4% Occupancy and equipment 30,033 28,255 20,979 6.3% 43.2% FDIC insurance 8,834 8,956 5,387 (1.4%) 64.0% o Salaries and benefits expense includes seasonally h
Slide 23: Historical Performance
ENB Corporation Historical Performance 23
Slide 24: Total Assets ($ in Billions)
Total Assets ($ in Billions) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Impact of crossing $10 Billion threshold o Durbin amendment and other revenue constraints o Incremental FDIC expense $31.4 o Required capital actions for Basel III compliance o Incremental compliance costs o Lost Fed divi
Slide 25: Total Revenue ($ in Millions)
Total Revenue ($ in Millions) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $1,099 $813 $661 $625 $532 $504 $433 $379 $400 $356 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 25
Slide 26: Market Capitalization ($ in Millions)
Market Capitalization ($ in Millions) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $4,497 $3,390 $2,318 $2,340 $2,006 $1,425 $1,486 $1,184 $1,127 $775 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 26
Slide 27: Net Income Available to Common Shareholders ($ in Millions)
Net Income Available to Common Shareholders ($ in Millions) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $281 $187 $154 $191 $144 $123 $163 $115 $152 $136 $90 $118 $75 $110 $87 $75 $39 $36 $36 $33 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1 Net Income Available to Common Shareholders Op
Slide 28: Earnings Per Share
Earnings Per Share 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $0.90 $0.93 $0.84 $0.85 $0.87 $0.83 $0.73 $0.65 $0.48 $0.86 $0.32 $0.79 $0.80 $0.80 $0.78 $0.65 $0.70 $0.63 $0.44 $0.32 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1 Earnings Per Share Operating Earnings Per Share Over the pa
Slide 29: Supplemental Information
Supplemental Information 29
Slide 30: Annual Operating Trends
Annual Operating Trends 2017 2016 2015 2014 2013 Net income available to common Operating Earnings1 stockholders $282.9 $187.7 $153.7 $143.6 $123.1 (Non-GAAP) Net income per diluted common share $0.93 $0.90 $0.87 $0.85 $0.84 Return on average assets 0.99% 0.95% 0.97% 1.02% 0.97% Profitability Return
Slide 31: Diversified Loan Portfolio
Diversified Loan Portfolio $21 Billion Loan Portfolio % of March 31, 2018 03/31/2018 Portfolio ($ in millions) Balance 03/31/18 Commercial & Industrial 20% Direct Commercial Real Estate $8,811 41% Installment 9% Commercial & Industrial 4,280 20% Residential Commercial Leases 280 1% Mortgage 13% Othe
Slide 32: Loan Risk Profile
Loan Risk Profile YTD Net Charge- Total Past 1 ($ in millions) % of Loans NPL's/Loans Offs/Loans1 Due/Loans1 Commercial and Industrial 19.2% 0.65% 0.75% 0.72% CRE: Non-Owner Occupied 26.9% 0.32% -0.04% 0.35% CRE: Owner Occupied 14.6% 1.24% 0.08% 1.28% Home Equity and Other Consumer 16.2% 0.73% 0.15%
Slide 33: Deposits and Customer Repurchase Agreements
Deposits and Customer Repurchase Agreements $22.8 Billion Deposits and 03/31/2018 Mix % Customer Repo Agreements ($ in millions) March 31, 2018 Balance 03/31/18 Savings, NOW, MMDA $12,007 53% Non-Interest Bearing 5,749 25% Non-Interest Bearing 25% Transaction Deposits $17,756 Time Deposits 4,741 21%
Slide 34: Investment Portfolio
Investment Portfolio Highly Rated $6.2 Billion Investment Portfolio % Ratings March 31, 2018 ($ in millions1) Portfolio Investment % Agency MBS $2,846 46% AAA 100% Agency CMO 1,616 26% AAA 100% AAA, 85.7% Agency Debentures 606 10% AAA 100% AAA 9% AA 76% AA, 12.0% Municipals 960 16% A 14% A, 2.2% Com
Slide 35: 2018 Peer Group Listing
2018 Peer Group Listing Ticker Institution Ticker Institution ASB Associated Banc-Corp PBCT People’s United Financial, Inc. CBSH Commerce Bancshares, Inc. PB Prosperity Bancshares, Inc. CMA Comerica, Inc. SNV Synovus Financial Corp. CFR Cullen/Frost Bankers, Inc. TCF TCF Financial Corp. EWBC East We
Slide 36: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands except per share amounts 31-Mar-18 31-Dec-17 30-Sep-17 30-Jun-17 31-Mar-17 Operating net income available to common stockholders Net income available to common stockholders $ 84,752 $ 22,115 $ 75,683 $ 72,396 $ 20,969 Merger-relate
Slide 37: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 31-Mar-18 31-Dec-17 30-Sep-17 30-Jun-17 31-Mar-17 Return on average tangible common equity (ROATCE) Net income available to common stockholders (annualized) $ 343,715 $ 87,740 $ 300,266 $ 290,381 $ 85,042 Amortization of intangible
Slide 38: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 31-Mar-18 31-Dec-17 30-Sep-17 30-Jun-17 31-Mar-17 Return on average tangible assets (ROATA) Net income (annualized) $ 351,867 $ 95,719 $ 308,237 $ 298,443 $ 93,191 Amortization of intangibles, net of tax (annualized) 13,513 12,381
Slide 39: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 31-Mar-18 31-Dec-17 30-Sep-17 30-Jun-17 31-Mar-17 Operating net income Net income $ 86,762 $ 24,126 $ 77,693 $ 74,406 $ 22,979 Merger-related expense - 1,054 1,381 1,354 52,724 Tax benefit of merger-related expense - (365) (483) (4
Slide 40: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands except per share amounts 31-Mar-18 31-Dec-17 30-Sep-17 30-Jun-17 31-Mar-17 Tangible book value per common share (at period-end) Total stockholders' equity $ 4,433,453 $ 4,409,194 $ 4,435,921 $ 4,392,438 $ 4,355,795 Less: preferred
Slide 41: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 31-Mar-18 31-Dec-17 30-Sep-17 30-Jun-17 31-Mar-17 Efficiency Ratio (FTE) Non-interest expense $ 171,083 $ 166,529 $ 163,743 $ 163,714 $ 187,555 Less: amortization of intangibles 4,218 4,801 4,805 4,813 3,098 Less: OREO expense 1,36
Slide 42: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 31-Mar-18 31-Dec-17 30-Sep-17 30-Jun-17 31-Mar-17 Components of net interest income Net interest income $ 226,105 $ 230,036 $ 225,231 $ 218,415 $ 172,752 Net interest margin (FTE)(1) 3.39% 3.49% 3.44% 3.42% 3.35% Incremental purcha
Slide 43: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts 2017 2016 2015 2014 2013 Operating net income available to common stockholders Net Income available to common stockholders $ 191,163 $ 162,850 $ 151,608 $ 135,698 $ 117,804 Merger-related expense, net of tax
Slide 44: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts 2017 2016 2015 2014 2013 Return on average tangible common equity (ROATCE) Net income available to common stockholders $ 191,163 $ 162,850 $ 151,608 $ 135,698 $ 117,804 Amortization of intangibles, net of tax
Slide 45: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands 2017 2016 2015 2014 2013 Operating net income Net income $ 199,204 $ 170,891 $ 159,649 $ 144,050 $ 117,804 Merger-related expense, net of tax 37,667 24,889 2,084 7,897 5,337 Tax expense of merger-related securities gains (1,696) - -
Slide 46: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts 2017 2016 2015 2014 2013 Tangible book value per common share (at-period-end) Total stockholders' equity $ 4,409,194 $ 2,571,617 $ 2,096,182 $ 2,021,456 $ 1,774,383 Less: preferred stockholders' equity 106,88
Slide 47: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts 2017 2016 2015 2014 2013 Efficiency Ratio Non-interest expense $ 681,542 $ 511,133 $ 390,549 $ 379,253 $ 338,170 Less: amortization of intangibles 17,517 11,210 8,305 9,717 8,407 Less: OREO expense 4,438 5,15