F.n.b. Corporation · NYSE:FNB
F.n.b — Investor Presentation (September 2019)
38 slides from F.n.b's investor presentation, September 2019
Slide 1: Investor Presentation September 2019
Investor Presentation September 2019 F.N.B. Corporation
Slide 2: 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 3: Who is F.N.B. Corporation?
Who is F.N.B. Corporation? Top 50 U.S. Bank Holding Company o 2nd largest bank headquartered in Pennsylvania Premier Mid-Atlantic Regional Bank operating in 7 states and Washington D.C. o $34 billion in total assets at 6/30/2019 2.5 million customers o ~380 branches and loan production offices in 7
Slide 4: Where does FNB stand today?
Where does FNB stand today? Positioned for Diversification and Growth o Significant presence in 7 major metropolitan Erie markets with population over 1 million and Cleveland Hermitage State Scranton numerous secondary markets College o FNB grew deposits in every major metropolitan Columbus Harrisbu
Slide 5: Our History
Our History Growth Strategy Achieved Key Objectives of Gaining Scale to Absorb Regulatory Costs and Entering Faster-Growing Markets 13 net FITB branches Average Annualized Organic Growth 2014-2Q19(1) YDKN METR $7.4B Commercial Loans 7% $2.9B $33.9 $33.1 Consumer Loans 10% $31.4 Transaction Deposits
Slide 6: Capital Actions and Tangible Book Value Growth
Capital Actions and Tangible Book Value Growth FNB TBVPS + Cumulative Dividends, $ YDKN BCSB $7.4B METR $0.6B OBAF 11.83 $2.9B $0.4B 11.48 11.12 PVFC 10.82 10.58 $0.8B 10.2510.37 10.3210.38 PVSA 10.00 10.08 9.60 9.74 9.84 9.82 $1.8B 9.34 ANNB 9.18 4.92 $0.4B 8.87 4.80 8.67 CB&T 8.37 4.68 4.56 $0.6B
Slide 7: 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 8: 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 30.7% CAGR $400 $433 $372 $367 $281 $305 $154 $188 $115 $123 $144 $68 $87 $95 $33 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 9: Peer Leading Profitability Results
Peer Leading Profitability Results Efficiency Ratio (%) 63.9 63.6 63.7 62.2 60.2 59.2 57.6 57.4 57.0 56.1 55.2 54.2 54.9 54.0 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y 2019YTD Peer Group Median FNB FNB % 2014 2015 2016 2017 2018 2019YTD Ranking(1) 80th 85th 80th 80th 80h 70th (1) Non-GAAP measure, refer t
Slide 10: Return on Average Tangible Common Equity Trends (ROATCE)
Return on Average Tangible Common Equity Trends (ROATCE) ROATCE Trends (%) 18.17 18.50 17.62 15.74 15.96 15.56 15.19 14.65 14.75 12.42 11.31 11.51 11.08 11.09 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y 2019YTD FNB Peer Group Median FNB % 2014 2015 2016 2017 2018 2019YTD Ranking(1) 100th 89th 89th 95th 89th
Slide 11: Operating Return on Average Tangible Asset Trends (ROATA)
Operating Return on Average Tangible Asset Trends (ROATA) ROATA Trends (%) 1.40 1.34 1.28 1.30 1.20 1.15 1.30 1.09 1.09 1.07 1.28 1.10 1.00 0.99 1.00 0.90 0.96 0.95 0.80 0.70 0.60 0.50 2014Y 2015Y 2016Y 2017Y 2018Y 2019YTD FNB Peer Group Median FNB % 2014 2015 2016 2017 2018 2019YTD Ranking(1) 59th
Slide 12: Proof Points – Fee Income Growth
Proof Points – Fee Income Growth Core Fee-Based Businesses ($ in thousands) 104,981 94,050 o 42% of total growth in Non- 80,546 interest income FY 2018 / FY 69,711 2014 is a result of growth in core businesses of Capital Markets, Wealth, Mortgage, 51,281 and Insurance which is primarily organic o Ca
Slide 13: 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 $7.11 7.32 $6.68 7.05 $6.44 6.89 $6.26 6.78 6.79 $6.14 3/31/2018 6/30/2018 9/30/2018 12/31/2018 6/30/2019 3/31/2018 6/30/2018 9/30/2018 12/31/2018 6/30/2019
Slide 14: 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 $12.15 $11.48 $10.37 $10.38 TBVPS CAGR Since 12/31/20081 $9.74 $8.87 $5.04 $4.80 FNB Peer $9.00 $3.84 $4.32 $3.36 Media
Slide 15: Five Key Opportunities for 2019
Five Key Opportunities for 2019 •Positioned for solid performance in multiple markets Disciplined loan growth •Continued focus on underwriting •Portfolio diversification •Continue to gain traction in fee-based businesses in newer markets Diverse revenue growth •Significant opportunity in low relativ
Slide 16: 2Q19 Earnings Call Recap
2Q19 Earnings Call Recap 16
Slide 17: 2Q19 Financial Highlights
2Q19 Financial Highlights 2Q19 1Q19 2Q18 Net income available to common stockholders $93.2 $92.1 $83.2 (millions) Reported Results Earnings per diluted common share $0.29 $0.28 $0.26 Book value per common share $14.30 $14.09 $13.47 Operating net income available to common $95.4 $93.4 $89.1 stockhold
Slide 18: Asset Quality
Asset Quality1 $ in thousands 2Q19 1Q19 2Q18 2Q19 Highlights NPLs+OREO/Total average originated o Favorable overall credit quality, with 0.61% 0.59% 0.71% consistent and steady performance loans and leases + OREO across all portfolios Delinquency 0.66% 0.63% 0.68% o Provision for loan losses support
Slide 19: Balance Sheet Highlights
Balance Sheet Highlights Average, $ in millions 2Q19 1Q19 2Q18 QoQ Δ3 YoY Δ 2Q19 Highlights Securities $6,418 $6,553 $6,214 (2.1%) 3.3% o Strong growth in commercial loans was driven by footprint Total Loans 22,760 22,380 21,445 1.7% 6.1% wide origination activity, with strong performance in the Mid
Slide 20: Revenue Highlights
Revenue Highlights $ in thousands 2Q19 1Q19 2Q18 QoQ Δ3 YoY Δ 2Q19 Highlights Total interest income $316,234 $310,310 $294,117 1.9% 7.5% Total interest expense 85,827 79,717 54,762 7.7% 56.7% o Interest expense increase Net interest income $230,407 $230,593 $239,355 (0.1%) (3.7%) driven by higher ra
Slide 21: Non-Interest Income
Non-Interest Income $ in thousands 2Q19 1Q19 2Q18 QoQ Δ1 YoY Δ 2Q19 Highlights Service charges $32,068 $30,217 $31,114 6.1% 3.1% Trust income 7,018 6,784 6,469 3.4% 8.5% Insurance commissions and fees 4,411 4,897 4,567 (9.9%) (3.4%) o Record capital markets income due to strong Securities commission
Slide 22: Non-Interest Expense
Non-Interest Expense $ in thousands 2Q19 1Q19 2Q18 QoQ Δ YoY Δ 2Q19 Highlights Salaries and employee benefits1 $94,188 $90,865 $97,752 3.7% (3.6%) Occupancy and equipment1 28,875 29,907 27,723 (3.5%) 4.2% o Increase in salaries and employee benefits was Amortization of intangibles 3,479 3,479 3,811
Slide 23: Supplemental Information
Supplemental Information 23
Slide 24: Annual and YTD 2019 Operating Trends
Annual and YTD 2019 Operating Trends YTD 2019 2018 2017 2016 2015 Net income available to common Operating Earnings1 stockholders $188.9 $366.7 $281.2 $187.7 $153.7 (Non-GAAP) Net income per diluted common share $0.58 $1.13 $0.93 $0.90 $0.87 Return on average assets 1.16% 1.17% 0.99% 0.95% 0.97% Pro
Slide 25: Investment Portfolio
Investment Portfolio % Ratings Highly Rated $6.4 Billion Investment Portfolio ($ in millions1) 6/30/19 Portfolio Investment % June 30, 2019 Agency MBS $2,267 36% AAA 100% Agency CMO 1,970 31% AAA 100% Agency Debentures 665 10% AAA 100% AAA, 84.5% AAA 12% AA 75% Municipals 1,121 17% A 13% AA, 13.2% C
Slide 26: Loan Risk Profile
Loan Risk Profile $22.5 Billion Loan Portfolio June 30, 2019 YTD Net Charge- Total Past 1 1 1 ($ in millions) 6/30/2019 % of Loans NPL's/Loans Offs/Loans Due/Loans Commercial and Industrial 4,724 21.0% 0.35% 0.09% 0.43% Commercial & Residential Industrial 22% Mortgage 13% CRE: Non-Owner Occupied 6,0
Slide 27: Select Loan Portfolios
Select Loan Portfolios 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 Residential Mortgage Indirect Installment 5.51% 3.56% 3.47% 3.57% $3,270 +3.2%1 $1,942 $1,964 +1.1%1 $3,169 $1,830 3.36% $1,908 $3,046 $1,625 $2,814 $2,914 3.27% 4.20% 4.15% 4.19% 4.16% Average Balance Yield Average Balance Yie
Slide 28: Key Fee-Based Businesses
Key Fee-Based Businesses $ in millions 2Q18 3Q18 4Q18 1Q19 2Q19 o Provides full range of consumer and commercial insurances Insurance $4.6 $5.0 $4.9 $4.4 $3.6 o Focus on cross-sell, further development of personal lines Insurance Commissions and Fees o Provides solutions to businesses, $4.3 $4.7 ind
Slide 29: Capital Markets and Specialty Finance
Capital Markets and Specialty Finance $ in millions 2Q18 3Q18 4Q18 1Q19 2Q19 o Realigned strategy supports FNB LOBs in our core footprint and nearby states Small Business $1.6 Administration o Focus on credit quality, documentation $1.0 $0.8 $0.6 $0.6 process, and mitigating “put-back” risk SBA Oper
Slide 30: Deposits and Customer Repurchase Agreements
Deposits and Customer Repurchase Agreements $23.9 Billion Deposits and 06/30/2019 Mix % Customer Repo Agreements ($ in millions) June 30, 2019 Balance 06/30/19 Savings, NOW, MMDA $12,108 50% Non-Interest Non-Interest Bearing 6,139 26% Bearing 26% Transaction Deposits $18,247 Time Deposits 5,484 23%
Slide 31: 2019 Peer Group Listing
2019 Peer Group Listing Ticker Institution Ticker Institution ASB Associated Banc-Corp NYCB New York Community Bancorp CHFC Chemical Financial Corp. PBCT People’s United Financial, Inc. CBSH Commerce Bancshares, Inc. PNFP Pinnacle Financial Partners CFR Cullen/Frost Bankers, Inc. SNV Synovus Financi
Slide 32: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions except per share amounts 30-Jun-19 31-Mar-19 31-Dec-18 30-Sep-18 30-Jun-18 Operating net income available to common stockholders Net income available to common stockholders $ 93.2 $ 92.1 $ 98.1 $ 98.8 $ 83.2 Gain on sale of subsidia
Slide 33: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions 30-Jun-19 31-Mar-19 31-Dec-18 30-Sep-18 30-Jun-18 Return on average tangible common equity (ROATCE) Net income available to common stockholders (annualized) $ 373.7 $ 373.6 $ 389.3 $ 391.8 $ 333.7 Amortization of intangibles, net of
Slide 34: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions 30-Jun-19 31-Mar-19 31-Dec-18 30-Sep-18 30-Jun-18 Return on average tangible assets (ROATA) Net income (annualized) $ 381.8 $ 381.8 $ 397.2 $ 399.8 $ 341.7 Amortization of intangibles, net of tax (annualized) 11.0 11.1 12.0 11.9 12.
Slide 35: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions 30-Jun-19 31-Mar-19 31-Dec-18 30-Sep-18 30-Jun-18 Operating net income Net income $ 95.2 $ 94.1 $ 100.1 $ 100.8 $ 85.2 Gain on sale of subsidiary - - - (5.1) - Tax expense of gain on sale of subsidiary - - - 1.1 - Branch consolidati
Slide 36: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions except per share amounts 30-Jun-19 31-Mar-19 31-Dec-18 30-Sep-18 30-Jun-18 Tangible book value per common share (at period-end) Total stockholders' equity $ 4,753 $ 4,680 $ 4,608 $ 4,525 $ 4,473 Less: preferred stockholders' equity
Slide 37: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in millions 30-Jun-19 31-Mar-19 31-Dec-18 30-Sep-18 30-Jun-18 Efficiency Ratio (FTE) Non-interest expense $ 175.2 $ 165.7 $ 169.7 $ 170.7 $ 183.0 Less: amortization of intangibles 3.5 3.5 3.8 3.8 3.8 Less: OREO expense 1.0 1.1 1.3 1.5 2.2 Less:
Slide 38: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30-Jun-19 31-Mar-19 31-Dec-18 30-Sep-18 30-Jun-18 Components of net interest income Net interest income $ 230,407 $ 230,593 $ 232,242 $ 234,787 $ 239,355 Net interest margin (FTE)(1) 3.20% 3.26% 3.29% 3.36% 3.51% Incremental purcha