F.n.b. Corporation · NYSE:FNB
F.n.b — Investor Presentation (September 2011)
55 slides from F.n.b's investor presentation, Sep 13, 2011
Slide 1: Second Quarter 2011 Investor Presentation
Second Quarter 2011 Investor Presentation Dated: September 13, 2011 Exhibit 99.1 F.N.B. Corporation
Slide 2: Forward-Looking Statements
This presentation and the reports F.N.B. Corporation files with the Securities and Exchange Commission often contain “forward-looking statements” relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets and products of F.N.B.
Slide 3: Forward-Looking Statements: Additional Information About the Merger
3 ADDITIONAL INFORMATION ABOUT THE MERGER F.N.B. Corporation and Parkvale Financial Corporation will file a proxy statement/prospectus and other relevant documents with the SEC in connection with the merger. SHAREHOLDERS OF PARKVALE FINANCIAL CORPORATION ARE ADVISED TO READ THE PROXY STATEMENT/PROSP
Slide 4: Non-GAAP financial measures
4 To supplement its consolidated financial statements presented in accordance with Generally Accepted Accounting Principles (GAAP), the Corporation provides additional measures of operating results, net income and earnings per share (EPS) adjusted to exclude certain costs, expenses, and gains and lo
Slide 5: F.N.B. Corporation
Headquarters: Hermitage, PA Bank Charter: 1864 Assets: $9.9B (4th largest bank in PA) Market Capitalization: $1.1B at August 31, 2011 234 Banking: 223 (PA), 11 (OH) 65 Consumer Finance: 22 (PA), 19 (TN), 17 (OH), 7 (KY) Banking Wealth Management Insurance Consumer Finance Merchant Banking 5 F.N.B. C
Slide 6: Experienced Management Team
Steve Gurgovits Chief Executive Officer 50 Vince Delie President CEO, First National Bank of PA 24 Brian Lilly Chief Operating Officer Vice Chairman 30 Vince Calabrese Chief Financial Officer 23 Gary Guerrieri Chief Credit Officer 24 6 Experienced Management Team Name Position Years of Banking Exper
Slide 7: Board Leadership
Thirteen Independent Directors Seven Former Financial Services Executives Three Involved as Financial Services Investors 7 Board Leadership
Slide 8: Operating Strategy
Manage our business for profitability and growth Operate in markets we know and understand Maintain a low-risk profile Drive growth through relationship banking Fund loan growth through deposits Target neutral asset / liability position to manage interest rate risk Build fee income sources Maintain
Slide 9: Market Characteristics
Stable Markets Modest Growth #2 Ranking State College (1) #3 Ranking Pittsburgh (1) Regional Management Local Advisory Boards Marcellus Shale Exposure Pittsburgh $76.4B 3 rd 114 Northwest $25.5B 3 rd 54 Capital $45.8B 10 th 42 Central Mountain $11.8B 1 st 71 Source: SNL, company data; based on June
Slide 10: Banking Locations
Current First National Bank Locations As of September 1, 2011 10 Banking Locations
Slide 11: Organic Growth Opportunity
Source: SNL Financial Deposit data as of June 30, 2010; excludes custodian bank, pro-forma ownership as of September 1, 2011. Attractive market rank of #3 for counties of operation 11 Rank Institution Branch Count Total Deposits in Market ($000) Total Market Share (%) 1 PNC Financial Services Group
Slide 12: Winning Market Share: Total Organic Loan Growth
Total Organic Loan Growth (1) Eighth Consecutive Quarter of Organic Growth (1) Based on average balances; percentage organic growth annualized and as compared to the prior quarter. 12 Winning Market Share
Slide 13: Winning Market Share: Commercial Organic Loan Growth
Second Quarter 2011 Ninth consecutive linked- quarter organic growth for Pennsylvania commercial loans (2) Pennsylvania commercial loan organic growth of 8.7% (1) (2) Commercial line utilization rates remain historically low Commercial Organic Loan Growth (1) (1) Based on average balances; percentag
Slide 14: Winning Market Share: Transaction Deposit Growth
Transaction Deposit and Customer Repurchase Agreements Organic Growth (1) (1) Based on average balances; percentage organic growth annualized and as compared to the prior quarter; transaction deposits includes DDA, Savings, NOW and MMDA. 14 Winning Market Share
Slide 15: Loan Composition
Based on average balances for each period presented. 15 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 $6.0 $6.5 $7.0 2007 2008 2009 2010 2Q11 Other Commercial Leases Regency Indirect Residential Mortgage Consumer Home Equity Commercial Loan Composition
Slide 16: Funding
Based on average balances for each period presented. Loans to deposits and customer repurchase agreements ratio of 84% Deposits and Customer Repurchase Agreements – $8.0 Billion at June 30, 2011 16 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 2007 2008 2009 2010 2Q11 Transaction Deposits and Cu
Slide 17: Proven Merger Integrator
Proven Merger Integrator
Slide 18: Proven Merger Integrator
Proven significant acquisition and integration experience - since 2002, completed eight bank acquisitions ($6.1 billion in assets), four insurance acquisitions and one consumer finance acquisition. Pending - acquisition of Parkvale Financial ($1.8 billion in assets) announced June 15, 2011. Signific
Slide 19: Well Diversified Business
F.N.B. Corporation Well Diversified Business F.N.B. Corporation Banking Banking Wealth Wealth Management Management Merchant Merchant Banking Banking Consumer Consumer Finance Finance Insurance Insurance
Slide 20: Consumer Finance: Regency Finance Company
Regency Finance Company Over 80 years of consumer lending experience 65 Offices – 9 opened since October, 2010 High-Performing Affiliate • 2Q2011 YTD ROTCE 31.80% (1) • 2Q2011 YTD ROA 2.74% • 2Q2011 ROE 28.31% (1) Return on average tangible common equity (ROTCE) is calculated by dividing net income
Slide 21: Consumer Finance: Regency Loan Portfolio
Regency Finance Company Loan Portfolio $163 Million 87% of Real Estate Loans are First Mortgages 12% As of June 30, 2011 21 32% 56% Consumer Finance
Slide 22: Wealth Management and Insurance
Insurance Property, Casualty, Life and Employee Benefits Risk Management, Risk Transfer and Cost Containment Services Seven offices, located in Central and Western PA 80% Commercial; 20% Personal • 78% Property and Casualty • 22% Life and Benefits Annual premiums of $97 Million Wealth Management Tru
Slide 23: Merchant Banking
Junior capital provider offering flexible financing solutions •Mezzanine debt, subordinated notes, equity capital •Growth or expansion capital, buyouts and ownership transition financing •No early stage or real estate financing •Typical investment between $1 million and $7 million Total outstandings
Slide 24: Parkvale Financial Corporation Transaction Highlights
Parkvale Financial Corporation Transaction Highlights Announce Date: June 15, 2011
Slide 25: Compelling Strategic Rationale
Solidifies FNB’s leading status in the Pittsburgh market – Pittsburgh MSA market rank moves significantly from #7 to #3 Significantly enhances distribution capabilities and scale One of few meaningful opportunities left in the market In-market transaction Leverages experienced Pittsburgh-market mana
Slide 26: Leadership Position: Pittsburgh MSA
Strong # 3 pro forma market share position (FNB currently #7) (1) #1 community bank in the market Leverages existing strengths to build on momentum in market FNB/Parkvale branch overlap – 19 branches, or 40%, within 1 mile 26 Source: SNL Financial. (1) Excludes custodian banks. Pennsylvania Pittsbur
Slide 27: Attractive Pittsburgh Market
Source: PittsburghTODAY.org derived from Bureau of Labor Statistics, RealtyTrac and FHFA. 27 Source: SBA firms and employment by MSA 2008, Census.gov. 0 500 1,000 1,500 2,000 500+ Employees Middle Market and Corporate Pittsburgh MSA Pennsylvania MSA Average National MSA Average Pittsburgh Commercial
Slide 28: Transaction Overview
Consideration: $22.48 (1) per Parkvale Financial share Fixed 2.178x exchange ratio 100% stock Deal Value: Approximately $130 million (1) Detailed Due Diligence: Completed Required Approvals: Customary regulatory and Parkvale shareholders Expected Closing: Early January 2012 TARP Repayment: Parkvale
Slide 29: Pennsylvania Marcellus Shale
Pennsylvania Marcellus Shale
Slide 30: Pennsylvania Marcellus Shale
PA Marcellus Shale Formation (3) Sources: (1) “The Pennsylvania Marcellus Natural Gas Industry: Status, Economic Impacts and Future Potential”, July 20, 2011, Penn State; (2) “Banking on the Marcellus”, June 7, 2010, Sterne Agee Industry Report; (3) MarcellusCoalition.org Fully developed - Marcellus
Slide 31: Marcellus Shale Effect
Surveyors Real Estate Rocks and Quarries Utilities Drilling, Extraction, Support Activities Heavy Equipment Commodity Traders Other Gas Distribution Iron and Steel Construction Pipelines Machinery Manufacturers Gas Processors Rig Parts Cement Food and drink Utilities Travel Higher Education Housing
Slide 32: The Future: Economic Opportunity
2011 2015 2020 Economic Value: $12.8 Billion $17.2 Billion $20.2 Billion State/Local Taxes: $1.2 Billion $1.7 Billion $2.0 Billion Total Jobs: 156,695 215,979 256,420 Source: “The Pennsylvania Marcellus Shale Natural Gas Industry: Status, Economic Impacts and Future Potential “, July 20, 2011, Penn
Slide 33: Loan Composition & Credit Quality
LOAN COMPOSITION & CREDIT QUALITY
Slide 34: Diversified Loan Portfolio
$6.7 Billion Outstanding as of June 30, 2011 Shared National Credits • 3.6% of total loan portfolio • In-market customers and prospects Avoided subprime and Alt-A mortgages Construction and land development total only 3.4% and 0.7%, respectively, of FNB ’ s total loan portfolio 34 Diversified Loan P
Slide 35: Commercial Real Estate Portfolio
$1.2 Billion in CRE Non-Owner Occupied as of June 30, 2011 (excluding Florida) Diverse Portfolio Solid Credit Quality Results • 2.20% Total delinquency • 1.84% Non-performing loans + OREO/Total loans + OREO 35 Commercial Real Estate Portfolio
Slide 36: Credit Quality
(1) 2.02% when including credit mark in both reserve for loan losses and total loans, refer to non-GAAP reconciliation in Appendix 2.62% 2.84% 2.74% 2.54% 2.42% 0.94% 1.06% 1.51% 1.56% 1.51% 1.44% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 2007 2008 2009 2010 1Q11 2Q11 Dashed Line Excludes Florida
Slide 37: Florida Focus: Land-Related Exposure
Florida Land-Related Exposure • Loans of $53 million represent under 1% of total loan portfolio • OREO of $21 million • Year-over-year exposure reduction of $24 million, or 25% Total Florida Portfolio • Loans of $180 million represent only 2.7% of total loan portfolio • Year-over-year exposure reduc
Slide 38: Corporation
Corporation
Slide 39: Earning Assets - Investments
Investment Ratings By Investment - % Amount (1) (in $ millions) Agency – MBS AAA $999 Agency - Senior Notes AAA $338 CMO – Agency AAA $250 Municipals AAA – 2% AA – 93% A – 5% $198 CMO – Private Label AAA – 30% AA – 9% A - 4% BBB – 20% CCC – 36% $28 Short-Term AAA $17 Trust Preferred (2) BBB – 26% BB
Slide 40: Second Quarter Highlights
EPS of $0.18 per diluted share Seventh consecutive quarter of revenue growth Eighth consecutive quarter of total loan growth Continued strong transaction deposits and customer repo growth Continued good credit quality results Effective deployment of capital – EPS accretion of 6% – IRR 20% Solidifies
Slide 41: Second Quarter Results
(1) Calculated by dividing net income less amortization of intangibles by average common equity less average intangibles. (2) Calculated by dividing net income less amortization of intangibles by average assets less average intangibles. (3) Annualized linked-quarter organic growth data, based on ave
Slide 42: Net Interest Margin
Source: SNL Financial Regional peers include: CBCR, CBCYB, CBSH, CBU, CHFC, CRBC, CSE, FCF, FFBC, FINN, FMBI, FMER, FRME, FULT, MBFI, NBTB, NPBC, ONB, PRK, PVTB, SBNY, SRCE, STBA, SUSQ, TAYC, TCB, UBSI, UMBF, VLY, WSBC, and WTFC 42 Stable Net Interest Margin
Slide 43: Fee Income
Excludes securities gains. 43 -$20 -$10 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 2007 2008 2009 2010 2Q10 YTD 2Q11 YTD Gain-Sale of Residential Mtg Loans Bank-Owned Life Insurance Securities Commissions and Fees Other Trust Fees Insurance Commissions and Fees Service Charges OTTI Charge
Slide 44: Well Capitalized
Capital ratios at June 30, 2011 reflect the offering completed May 18, 2011 of 6.0 million shares of common stock with net proceeds of $63 million. 44 4% 6% 8% 10% 12% 14% Total Risk-Based Tier One Leverage Tangible Common Equity December 31, 2010 March 31, 2011 June 30, 2011 Regulatory “Well Capita
Slide 45: Investment Thesis
INVESTMENT THESIS
Slide 46: Long-Term Investment Thesis
Targeted EPS Growth 5-6% Expected Dividend Yield (Payout Ratio 60-70%) 4-6% = Total Shareholder Return 9-12% 46 Long-Term Investment Thesis
Slide 47: Relative Valuation Multiples
(1) Based on August 31, 2011 closing prices (F.N.B.=$8.97) (2) Represents total common equity less intangibles 47 Price (1) /Earnings Ratio FY11 Consensus EPS (F.N.B.=$0.69) 13.00x 14.03x 13.81x FY12 Consensus EPS (F.N.B.=$0.85) 10.55x 11.37x 11.40x Price (1) -to-Tangible Common Book Value (2) 1.90x
Slide 48: Summary
Leading market share among community banks in Central and Western PA Executing organic growth strategy and capitalizing on opportunities presented in markets of operation Experienced management team with proven ability to integrate acquisitions Diversified revenue stream 48 Summary
Slide 49: Appendix
APPENDIX Loan Risk Profile Established Board of Directors GAAP to Non-GAAP Reconciliations Second Quarter 2011 Earnings Release (July 25, 2011)
Slide 50: Loan Risk Profile
Appendix Balance (1) % of Loans YTD Net Charge- Offs/Loans (2) Total Past Due / Loans NPL/Loans CRE Owner Occupied 1,294,489 19% 0.18% 3.03% 2.13% CRE Non-Owner Occupied 1,189,744 18% 0.38% 2.20% 1.48% Commercial & Industrial 1,111,311 17% 0.37% 0.99% 0.78% Home Equity & Other Consumer 1,486,879 22%
Slide 51: Established Board of Directors
Director Name Age Since Biography Stephen J. Gurgovits 68 1981 President and Chief Executive Officer William B. Campbell 73 1975 Chairman of the Board Henry M. Ekker 72 1994 Partner with Ekker, Kuster, McConnell & Epstein, LLP Philip E. Gingerich 74 2008 Director of Omega from 1994 to 2008; Retired
Slide 52: GAAP to Non-GAAP Reconciliation
Appendix 2011 2010 Second First Second Quarter Quarter Quarter Return on average tangible equity (1): Net income (annualized) $89,695 $69,653 $71,886 Amortization of intangibles, net of tax (annualized) 4,707 4,734 4,376 94,402 74,387 76,262 Average total shareholders' equity 1,166,305 1,129,622 1,0
Slide 53: GAAP to Non-GAAP Reconciliation
Appendix 2011 2010 Second First Second Quarter Quarter Quarter Tangible book value per share: Total shareholders' equity $1,203,150 $1,128,414 $1,058,004 Less: intangibles (601,958) (601,475) (564,495) 601,192 526,939 493,509 Ending shares outstanding 127,024,899 120,871,383 114,532,890 Tangible boo
Slide 54: GAAP to Non-GAAP Reconciliation
Appendix 2011 Second First Quarter Quarter Allowance for loan losses + credit marks / total loans + credit marks: Allowance for loan losses $109,224 $107,612 Credit marks 26,622 26,919 135,846 134,531 Total loans 6,702,595 6,559,952 Credit marks 26,622 26,919 6,729,217 6,586,871 Allowance for loan l
Slide 55: GAAP to Non-GAAP Reconciliation
Appendix 2011 2011 First First Quarter Quarter Adjusted net income: Adjusted return on average tangible equity (1): Net income $17,175 Adjusted net income (annualized) $80,582 Merger-related costs, net of tax 2,695 Amortization of intangibles, net of tax (annualized) 4,734 Less: Pension credit, net