F.n.b. Corporation · NYSE:FNB
F.n.b — Investor Presentation (March 2019)
49 slides from F.n.b's investor presentation, March 2019
Slide 1: Investor Presentation March 2019
Investor Presentation March 2019 F.N.B. Corporation
Slide 2: Table of Contents
Table of Contents Page Page Cautionary Statement 3 Capital Ratios 15 Who is F.N.B. Corporation? 4 Value Proposition 16 Where does FNB Stand today? 5 Key Opportunities for 2019 17 Our History 6 Earnings Call Recap 18-25 Capital Actions and Tangible Book Value Growth 7 Supplemental Information 26-36 C
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: Who is F.N.B. Corporation?
Who is F.N.B. Corporation? Top 40 U.S. Bank Holding Company o 2nd largest bank headquartered in Pennsylvania Premier Mid-Atlantic Regional Bank operating in 7 states o Substantial growth from $7 Billion in assets in 2002 to $33 billion at 12/31/2018 2.5 million customers o 400 offices in 7 states an
Slide 5: Where does FNB stand today?
Where does FNB stand today? Positioned for Diversification and Growth o Significant presence in 6 major metropolitan markets with population over 1 million Cleveland o FNB gained deposit market share in 16 of its top 20 markets by deposits from 6/30/17-6/30/18 Pittsburgh o Greater number of prospect
Slide 6: Our History
Our History Growth Strategy Achieved Key Objectives of Gaining Scale to Absorb Regulatory Costs and Entering Faster-Growing Markets YDKN Average Annual Organic Growth 2014-2018 $7.4B $33.1 Commercial Loans 6.6% $31.4 13 net Consumer Loans 10.3% FITB branches Transaction 6.7% METR Deposits $2.9B OBAF
Slide 7: Capital Actions and Tangible Book Value Growth
Capital Actions and Tangible Book Value Growth FNB TBVPS + Cumulative Dividends, $ YDKN METR BCSB OBAF $7.4B $2.9B $0.6B $0.4B 11.48 11.12 PVFC 10.82 10.58 $0.8B 10.25 10.37 10.32 10.38 10.00 10.08 9.74 9.84 9.82 PVSA 9.60 ANNB 9.34 $1.8B 9.18 $0.4B 8.87 8.67 4.80 8.37 4.68 4.56 CB&T 7.83 8.10 3.60
Slide 8: FNB's Commercial Operating Model – Deep Relationship Focus
FNB’s Commercial Operating Model – Deep Relationship Focus FNB Business Model Performance and Results ➢ Gain foothold in an attractive growth markets ✓ Steady loan and deposit growth with 10 consecutive years of organic loan growth ➢ Develop local brand credibility and presence by hiring local talen
Slide 9: FNB's Consumer Operating Model - A Consistent Experience across Channels
FNB’s Consumer Operating Model - 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 Ex
Slide 10: The Five Pillars of our Long-Term Strategy
The Five Pillars of our Long-Term Strategy FNB drives performance to further improve on long-term strategic planning metrics YoY EPS Growth Efficiency of 22% Ratio ROATCE 54.8% 18.5% Build a Strong, Build a Differentiated Durable, Brand Optimize the Scalable Retail Bank Infrastructure Maintain Effic
Slide 11: Proof Points – Total Revenue and Net Income Growth
Proof Points – Total Revenue and Net Income Growth Total Revenue and Operating Net Income Available to Common Shareholders (millions) $1,208 $1,098 $813 $624 $660 $504 $532 $433 30.7% CAGR $372 $400 $367 $281 $154 $188 $115 $123 $144 $68 $87 $33 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tota
Slide 12: Proof Points – Efficiency
Proof Points – Efficiency Efficiency Ratio (%) 66.0 64.1 64.0 62.7 62.4 61.7 62.0 59.4 60.0 58.9 57.8 57.2 58.0 56.1 55.4 56.0 54.8 54.3 54.0 52.0 50.0 48.0 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y Peer Group Median FNB FNB % 2013 2014 2015 2016 2017 2018 Ranking(1) 74th 74th 75th 70th 79th 71st (1) Non-
Slide 13: Proof Points – Return on Average Tangible Common Equity (ROATCE)
Proof Points – Return on Average Tangible Common Equity (ROATCE) ROATCE Trends (%) 20.00 19.00 18.50 18.17 18.00 17.00 16.24 15.56 15.74 16.00 14.65 14.75 15.00 14.00 13.00 12.45 12.00 11.31 11.51 11.11 11.09 11.00 10.00 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y FNB Peer Group Median FNB % 2013 2014 2015
Slide 14: Proof Points – Fee Income Growth
Proof Points – Fee Income Growth Core Fee-Based Businesses ($ in thousands) 104,981 94,050 o 42% of total growth in Non- interest income since 2014 is a 80,546 result of growth in core 69,711 businesses of Capital Markets, Wealth, Mortgage, and Insurance which is primarily 51,281 organic o Capital M
Slide 15: Proof Points – Accelerating Capital Generation Supports Organic Growth
Proof Points – Accelerating Capital Generation Supports Organic Growth Tangible Common Equity/Tangible Assets (%) Tangible Book Value per Share 7.05 $6.68 $6.44 6.89 $6.26 6.78 6.79 $6.14 6.74 $6.06 12/31/2017 3/31/2018 6/30/2018 9/30/2018 12/31/2018 12/31/2017 3/31/2018 6/30/2018 9/30/2018 12/31/20
Slide 16: FNB's Value Proposition
FNB’s Value Proposition FNB seeks to deliver a balance of earnings growth, dividends, and tangible book value growth Tangible Book Value per Share + Cumulative Dividends 11.3% CAGR $11.48 $10.37 $10.38 $9.74 TBVPS CAGR Since 12/31/2008 $8.87 $4.80 $7.83 $3.84 FNB Peer $3.36 $4.32 Median $6.85 $2.88
Slide 17: Five Key Opportunities for 2019
Five Key Opportunities for 2019 •Positioned for solid performance in multiple markets Disciplined loan growth •Continued focus on underwriting •Continue to gain traction in fee-based businesses in newer markets Diverse revenue growth •Significant opportunity in low relative share markets •Focus on r
Slide 18: 4Q Earnings Call Recap
4Q Earnings Call Recap 18
Slide 19: 4Q18 Financial Highlights
4Q18 Financial Highlights 4Q18 3Q18 4Q17 FY 2018 FY 2017 Net income available to common stockholders $98.1 $98.8 $22.1 $364.8 $191.2 (millions) Reported Results Earnings per diluted common share $0.30 $0.30 $0.07 $1.12 $0.63 Book value per common share $13.88 $13.62 $13.30 Operating net income avail
Slide 20: Asset Quality
Asset Quality1 $ in millions 4Q18 3Q18 4Q17 4Q18 Highlights o Solid overall credit quality, with NPLs+OREO/Total average originated 0.61% 0.73% 0.81% consistent and steady performance loans and leases + OREO across all portfolios Delinquency 0.64% 0.79% 0.88% o Provision for loan losses exceeds net
Slide 21: Balance Sheet Highlights
Balance Sheet Highlights Average, $ in millions 4Q18 3Q18 4Q17 QoQ Δ YoY Δ 4Q18 Highlights Securities $6,466 $6,341 $5,855 2.0% 10.4% Total Loans $21,940 $21,775 $20,812 0.8% 5.4% o Growth in commercial loans was driven by strong Commercial Loans $13,625 $13,545 $13,043 0.6% 4.5% performance in the
Slide 22: Revenue Highlights
Revenue Highlights $ in thousands 4Q18 3Q18 4Q17 QoQ Δ YoY Δ 4Q18 Highlights Total interest income $305,340 $297,815 $271,085 2.5% 12.6% o Interest expense increase driven by higher rates on Total interest expense 73,098 63,028 41,049 16.0% 78.1% interest-bearing deposits, which included higher muni
Slide 23: Non-Interest Income
Non-Interest Income $ in thousands 4Q18 3Q18 4Q17 QoQ Δ YoY Δ 4Q18 Highlights Service charges $32,363 $31,922 $31,549 1.4% 2.6% o Wealth management2 continues to benefit from Trust income 6,506 6,395 5,911 1.7% 10.1% growth in the Carolinas Insurance commissions and fees 3,609 5,001 4,546 (27.8) (20
Slide 24: Non-Interest Expense
Non-Interest Expense $ in thousands 4Q18 3Q18 4Q17 QoQ Δ YoY Δ 4Q18 Highlights o Increase in salaries and Salaries and employee benefits $92,098 $89,535 $86,033 2.9% 7.0% employee benefits expense driven by seasonal incentive Occupancy and equipment 27,932 27,812 28,255 0.4% (1.1%) accruals and high
Slide 25: Full Year 2019 Financial Objectives
Full Year 2019 Financial Objectives Category FY 2019 Target Comments Loans Mid-to-high-single digit growth1 Balance Sheet Deposits Mid-to-high-single digit growth1 Net interest income Low-single digit growth2,3 o FY 2019 total incremental purchase accounting accretion and excess recoveries Provision
Slide 26: Supplemental Information
Supplemental Information 26
Slide 27: Annual Operating Trends
Annual Operating Trends 2018 2017 2016 2015 2014 Net income available to common Operating Earnings1 stockholders $366.7 $281.2 $187.7 $153.7 $143.6 (Non-GAAP) Net income per diluted common share $1.13 $0.93 $0.90 $0.87 $0.85 Return on average assets 1.17% 0.99% 0.95% 0.97% 1.02% Profitability Return
Slide 28: Investment Portfolio
Investment Portfolio Highly Rated $6.6 Billion Investment Portfolio % Ratings December 31, 2018 ($ in millions1) 12/31/18 Portfolio Investment % Agency MBS $2,466 37% AAA 100% Agency CMO 1,955 30% AAA 100% Agency Debentures 717 11% AAA 100% AAA, 85.4% AAA 12% AA 74% Municipals 1,101 17% A 14% AA, 12
Slide 29: Diversified Loan Portfolio
Diversified Loan Portfolio $22.2 Billion Loan Portfolio % of December 31, 2018 12/31/2018 Portfolio ($ in millions) Balance 12/31/18 Commercial Real Estate $8,786 40% Commercial & Direct Industrial 21% Installment 9% Commercial & Industrial 4,556 21% Commercial Leases 373 2% Residential Other 46 <1%
Slide 30: Loan Risk Profile
Loan Risk Profile YTD Net Charge- Total Past 1 1 1 ($ in millions) 12/31/2018 % of Loans NPL's/Loans Offs/Loans Due/Loans Commercial and Industrial 4,283 19.3% 0.92% 0.46% 0.58% CRE: Non-Owner Occupied 5,702 25.7% 0.21% 0.03% 0.21% CRE: Owner Occupied 3,084 13.9% 0.72% 0.17% 0.76% Home Equity and Ot
Slide 31: Net Interest Income
Net Interest Income $238.2mm (FTE) 3Q18 3.36% +9.9 Loans +0.10 Net Interest Income (FTE) +$7.4mm higher rates +2.4 higher balances $242,674 $238,187 +2.1 Investments +0.02 $235,632 $235,689 $229,208 +1.0 higher rates +1.1 higher balances 3.49% 3.51% +1.9 Purchase Accounting +0.03 3.39% 3.36% +2.5 in
Slide 32: Select Loan Portfolios
Select Loan Portfolios 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 Residential Mortgage Indirect Installment 5.51% 3.47% 3.56% $3,046 3.31% $1,830 $1,908 +4.2%1 $2,914 +4.5%1 $1,625 3.36% $2,814 $1,441 3.27% $2,653 4.19% $2,723 4.20% 4.15% $1,474 4.12% Average Balance Yield Average Balance Yie
Slide 33: Key Fee-Based Businesses
Key Fee-Based Businesses $ in millions 4Q17 1Q18 2Q18 3Q18 4Q18 o Provides full range of consumer and commercial insurances $5.1 $5.0 Insurance $4.5 $4.6 $3.6 o Focus on cross-sell, further development of personal lines Insurance Commissions and Fees o Provides solutions to businesses, $4.3 $4.5 $4.
Slide 34: Capital Markets and Specialty Finance
Capital Markets and Specialty Finance $ in millions 4Q17 1Q18 2Q18 3Q18 4Q18 o Realigned strategy supports FNB LOBs in our core footprint and nearby states Small Business $1.6 $1.6 Administration o Focus on credit quality, documentation $0.9 $1.0 $0.6 process, and mitigating “put-back” risk SBA Oper
Slide 35: Deposits and Customer Repurchase Agreements
Deposits and Customer Repurchase Agreements $23.7 Billion Deposits and 12/31/18 12/31/18 Customer Repo Agreements ($ in millions) December 31, 2018 Balance Mix % Savings, NOW, MMDA $12,186 51% Non-Interest Bearing 6,000 25% Non-Interest Bearing 25% Transaction Deposits $18,186 Time Deposits 5,269 22
Slide 36: 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 37: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions except per share amounts 31-Dec-18 30-Sep-18 30-Jun-18 31-Mar-18 31-Dec-17 Operating net income available to common stockholders Net income available to common stockholders $ 98.1 $ 98.8 $ 83.2 $ 84.8 $ 22.1 Gain on sale of subsidia
Slide 38: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions 31-Dec-18 30-Sep-18 30-Jun-18 31-Mar-18 31-Dec-17 Return on average tangible common equity (ROATCE) Net income available to common stockholders (annualized) $ 389.3 $ 391.8 $ 333.7 $ 343.7 $ 87.7 Amortization of intangibles, net of
Slide 39: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions 31-Dec-18 30-Sep-18 30-Jun-18 31-Mar-18 31-Dec-17 Return on average tangible assets (ROATA) Net income (annualized) $ 397.2 $ 399.8 $ 341.8 $ 351.9 $ 95.7 Amortization of intangibles, net of tax (annualized) 12.0 11.9 12.1 13.5 12.4
Slide 40: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions 31-Dec-18 30-Sep-18 30-Jun-18 31-Mar-18 31-Dec-17 Operating net income Net income $ 100.1 $ 100.8 $ 85.2 $ 86.8 $ 24.1 Gain on sale of subsidiary - (5.1) - - - Tax expense of gain on sale of subsidiary - 1.1 - - - Merger-related exp
Slide 41: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions except per share amounts 31-Dec-18 30-Sep-18 30-Jun-18 31-Mar-18 31-Dec-17 Tangible book value per common share (at period-end) Total stockholders' equity $ 4,608 $ 4,525 $ 4,473 $ 4,433 $ 4,409 Less: preferred stockholders' equity
Slide 42: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions 31-Dec-18 30-Sep-18 30-Jun-18 31-Mar-18 31-Dec-17 Efficiency Ratio (FTE) Non-interest expense $ 169.7 $ 170.7 $ 183.0 $ 171.1 $ 166.5 Less: amortization of intangibles 3.8 3.8 3.8 4.2 4.8 Less: OREO expense 1.3 1.5 2.2 1.4 1.0 Less:
Slide 43: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 31-Dec-18 30-Sep-18 30-Jun-18 31-Mar-18 31-Dec-17 Components of net interest income Net interest income $ 232,242 $ 234,787 $ 239,355 $ 226,105 $ 230,036 Net interest margin (FTE)(1) 3.29% 3.36% 3.51% 3.39% 3.49% Incremental purcha
Slide 44: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts 2018 2017 2016 2015 2014 Operating net income available to common stockholders Net Income available to common stockholders $ 364,817 $ 191,163 $ 162,850 $ 151,608 $ 135,698 Merger-related expense, net of tax
Slide 45: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts 2013 2012 2011 2010 2009 Operating net income available to common stockholders Net Income available to common stockholders $ 117,804 $ 110,410 $ 87,047 $ 74,652 $ 32,803 Merger-related expense, net of tax 5,3
Slide 46: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts 2018 2017 2016 2015 2014 Return on average tangible common equity (ROATCE) Net income available to common stockholders $ 364,817 $ 191,163 $ 162,850 $ 151,608 $ 135,698 Amortization of intangibles, net of tax
Slide 47: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts 2018 2017 2016 2015 2014 Efficiency Ratio Non-interest expense $ 694,532 $ 681,542 $ 511,133 $ 390,549 $ 379,253 Less: amortization of intangibles 15,652 17,517 11,210 8,305 9,717 Less: OREO expense 6,359 4,4
Slide 48: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands 2018 2017 2016 2015 2014 Operating net income Net income $ 374,717 $ 199,204 $ 170,891 $ 159,649 $ 144,050 Merger-related expense, net of tax 37,667 24,889 2,084 7,897 Tax expense of merger-related securities gains - (1,696) - - - Br
Slide 49: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts 2018 2017 2016 2015 2014 Tangible book value per common share (at-period-end) Total stockholders' equity $ 4,608,285 $ 4,409,194 $ 2,571,617 $ 2,096,182 $ 2,021,456 Less: preferred stockholders' equity 106,88