F.n.b. Corporation · NYSE:FNB
F.n.b — Investor Presentation (August 2018)
47 slides from F.n.b's investor presentation, August 2018
Slide 1: Investor Presentation August 2018
Investor Presentation August 2018 F.N.B. Corporation
Slide 2: Table of Contents
Table of Contents Page Page Cautionary Statement 3 2Q18 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: $4.5 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 3Q17 4Q17 1Q18 2Q18 3Q17 4Q17 1Q18 2Q18 Residential Mortgage Indirect Installment 5.51% 3.36% 3.31% 3.26% $2,814 +3.3%1 $1,474 3.27% $1,625 $1,406 $1,441 +10.3%1 $2,723 4.20% $2,535 4.05% $2,653 4.12% Average Balance Yield Average Balance Yield Consumer LOC Commercial 4.79% 5.
Slide 11: Key Fee-Based Businesses
Key Fee‐Based Businesses $ in millions 3Q17 4Q17 1Q18 2Q18 o Provides full range of consumer and commercial insurances $5.0 $5.1 Insurance $4.5 $4.6 o Focus on cross‐sell, further development of personal lines Insurance Commissions and Fees o Provides solutions to businesses, $4.3 $4.5 individuals,
Slide 12: Capital Markets and Specialty Finance
Capital Markets and Specialty Finance $ in millions 3Q17 4Q17 1Q18 2Q18 o Realigned strategy supports FNB LOBs in our core footprint and nearby states Small Business $1.6 $1.6 Administration $1.3 $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 2Q18 2‐3 Year Target Key Strategy Originated net charge‐offs Remain disciplined Maintain Low‐Risk Profile 36 bps 25‐50 bps /average loans through the cycle Drive Loan and Deposit Average loans 6%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 2Q18 Highlights 15
Slide 16: 2Q18 Financial Highlights
2Q18 Financial Highlights 2Q18 1Q18 2Q17 Net income available to common stockholders $83.2 $84.8 $72.4 Reported Results Earnings per diluted common share $0.26 $0.26 $0.22 Book value per common share $13.47 $13.37 $13.26 Operating net income available to common $89.1 $84.8 $73.3 stockholders (millio
Slide 17: Asset Quality
Asset Quality1 $ in thousands 2Q18 1Q18 2Q17 2Q18 Highlights NPLs+OREO/Total average originated 0.71% 0.81% 1.08% loans and leases + OREO o Consistent and stable credit quality Delinquency 0.68% 0.79% 0.99% results across the portfolio Provision for credit losses2 $15,554 $14,495 $16,756 o Improved
Slide 18: Balance Sheet Highlights
Balance Sheet Highlights QoQ YoY Average, $ in millions 2Q18 1Q18 2Q17 QoQ Δ YoY Δ Organic1 Δ Organic1 Δ 2Q18 Highlights Securities $6,214 $5,997 $5,607 3.6% 10.8% o Growth in commercial loans was driven by Total Loans $21,445 $21,156 $20,361 1.4% 5.3% 5.5% 5.3% strong performance in Cleveland, Grea
Slide 19: Balance Sheet Yields/Rates
Balance Sheet Yields/Rates %, presented on an FTE basis 2Q18 1Q18 4Q17 3Q17 2Q17 Interest bearing deposits with banks 2.24 1.40 1.08 1.08 0.74 Investment securities 2.43 2.34 2.37 2.32 2.30 Assets Loans and leases 4.84 4.59 4.59 4.49 4.37 Total earning assets 4.30 4.08 4.09 4.01 3.92 Interest‐bearin
Slide 20: Revenue Highlights
Revenue Highlights $ in thousands 2Q18 1Q18 2Q17 QoQ Δ YoY Δ 2Q18 Highlights Total interest income $294,117 $272,927 $251,034 7.8% 17.2% o 2Q18 net interest income reflects higher cash Total interest expense 54,762 46,822 32,619 17.0% 67.9% recoveries Net interest income $239,355 $226,105 $218,415 5
Slide 21: Non-Interest Income
Non‐Interest Income $ in thousands 2Q18 1Q18 2Q17 QoQ Δ YoY Δ 2Q18 Highlights Service charges $31,114 $30,077 $32,090 3.5% (3.0%) Trust income 6,469 6,448 5,715 0.3% 13.2% o Wealth management1 benefitted from growth in Insurance commissions and fees 4,567 5,135 4,347 (11.1%) 5.1% the Carolinas Secur
Slide 22: Non-Interest Expense
Non‐Interest Expense $ in thousands 2Q18 1Q18 2Q17 QoQ Δ YoY Δ 2Q18 Highlights Salaries and employee benefits1 $97,752 $89,326 $84,899 9.4% 15.1% Occupancy and equipment1 27,723 30,033 26,480 (7.7%) 4.7% FDIC insurance 9,167 8,834 9,376 3.8% (2.2%) Amortization of intangibles 3,811 4,218 4,813 (9.6%
Slide 23: Historical Performance
ENB Corporation Historical Performance 23
Slide 24: Total Assets ($ 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 $22 Billion Loan Portfolio % of June 30, 2018 06/30/2018 Portfolio ($ in millions) Balance 06/30/18 Commercial Real Estate $8,834 41% Commercial & Industrial 20% Direct Commercial & Industrial 4,301 20% Installment 9% Commercial Leases 337 2% Residential Other 43 <1% Mortg
Slide 32: Loan Risk Profile
Loan Risk Profile YTD Net Charge‐ Total Past 1 1 ($ in millions) 6/30/2018 % of Loans NPL's/Loans Offs/Loans Due/Loans1 Commercial and Industrial 4,077 18.8% 0.74% 0.59% 0.72% CRE: Non‐Owner Occupied 5,744 26.5% 0.19% 0.04% 0.29% CRE: Owner Occupied 3,091 14.3% 0.73% 0.29% 0.77% Home Equity and Othe
Slide 33: Deposits and Customer Repurchase Agreements
Deposits and Customer Repurchase Agreements $22.8 Billion Deposits and 06/30/2018 Mix % Customer Repo Agreements ($ in millions) June 30, 2018 Balance 03/31/18 Savings, NOW, MMDA $11,742 52% Non‐Interest Non‐Interest Bearing 5,926 26% Bearing 26% Transaction Deposits $17,669 Time Deposits 4,871 21%
Slide 34: Investment Portfolio
Investment Portfolio Highly Rated $6.3 Billion Investment Portfolio % Ratings June 30, 2018 ($ in millions1) Portfolio Investment % Agency MBS $2,704 46% AAA 100% Agency CMO 1,682 27% AAA 100% Agency Debentures 650 10% AAA 100% AAA, 85.1% AAA 9% AA 77% Municipals 1023 16% A 14% AA, 12.5% Commercial
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 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 30‐Jun‐17 Operating net income available to common stockholders Net income available to common stockholders $ 83,196 $ 84,752 $ 22,115 $ 75,683 $ 72,396 Merger‐relate
Slide 37: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 30‐Jun‐17 Return on average tangible common equity (ROATCE) Net income available to common stockholders (annualized) $ 333,699 $ 343,715 $ 87,740 $ 300,266 $ 290,381 Amortization of intangibl
Slide 38: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 30‐Jun‐17 Return on average tangible assets (ROATA) Net income (annualized) $ 341,762 $ 351,867 $ 95,719 $ 308,237 $ 298,443 Amortization of intangibles, net of tax (annualized) 12,077 13,513
Slide 39: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 30‐Jun‐17 Operating net income Net income $ 85,206 $ 86,762 $ 24,126 $ 77,693 $ 74,406 Merger‐related expense ‐ ‐ 1,054 1,381 1,354 Tax benefit of merger‐related expense ‐ ‐ (365) (483) (419)
Slide 40: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands except per share amounts 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 30‐Jun‐17 Tangible book value per common share (at period‐end) Total stockholders' equity $ 4,473,242 $ 4,433,453 $ 4,409,194 $ 4,435,921 $ 4,392,438 Less: preferred
Slide 41: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 30‐Jun‐17 Efficiency Ratio (FTE) Non‐interest expense $ 183,013 $ 171,083 $ 166,529 $ 163,743 $ 163,714 Less: amortization of intangibles 3,811 4,218 4,801 4,805 4,813 Less: OREO expense 2,23
Slide 42: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 30‐Jun‐17 Components of net interest income Net interest income $ 239,355 $ 226,105 $ 230,036 $ 225,231 $ 218,415 Net interest margin (FTE)(1) 3.51% 3.39% 3.49% 3.44% 3.42% 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