F.n.b. Corporation · NYSE:FNB
F.n.b — Q3 2020 Earnings Presentation
63 slides from F.n.b's earnings presentation, 2020
Slide 1: Third Quarter 2020 Investor Presentation
Third Quarter 2020 Investor Presentation F.N.B. Corporation 1
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 may contain statements regarding F.N.B. Corporation’s outlook for earnings, revenues, expenses, tax rates, capital and liquidity levels and ratios, asset quality levels, financial position and
Slide 3: Corporate Profile and Overview
Corporate Profile and Overview 3
Slide 4: Who is F.N.B. Corporation?
Who is F.N.B. Corporation? Top 50 U.S. Bank Holding Company 2nd largest bank headquartered in Pennsylvania Premier Mid-Atlantic Regional Bank operating in 7 states and Washington D.C. Nearly $38 billion in total assets at 6/30/2020 2.5 Million Customers ~350 branches and loan production offices thro
Slide 5: Where does FNB stand today?
Where does FNB stand today? Positioned for Diversification and Erie Growth State Scranton Cleveland Hermitage College o Significant presence in 7 major Pittsburgh Johnstown Harrisburg Reading metropolitan markets with population Columbus York Lancaster Philadelphia over 1 million and numerous second
Slide 6: Major Metro Market
Where FNB stands today: Deposit Share Position(2) Population (millions) Total Businesses(1) 2.3 115K Pittsburgh - 3 2.1 109K Cleveland - 12 Major Metro Market Baltimore - 7 2.8 139K 2.6 106K Charlotte - 8 Raleigh - 9 1.9 101K 1.4 72K Piedmont Triad – 6(3) 6.3 353K Washington, D.C. (1) Data per the N
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 Drive Organic Optimize the Retail Build a Strong, Growth Bank Differentiated Brand Maintain Efficiency Build a Durable, and Expense Control Scalable Infrastructure 7
Slide 8: COVID-19 Response & Paycheck Protection Program
COVID-19 Response & Paycheck Protection Program 8
Slide 9: FNB Named as Standout Bank for COVID-19 Response
FNB Named as Standout Bank for COVID-19 Response ✓ FNB was recently named a Q2 2020 Standout Commercial Bank Amid Crisis by Greenwich Associates. ✓ Our Company was one of only ten banks in the country to be recognized for its response to the COVID-19 pandemic. ✓ The “Standout” banks were identified
Slide 10: Timeline of COVID-19 and Management Actions
Timeline of COVID-19 and Management Actions FNB has taken proactive & aggressive action to stay ahead of the escalating COVID-19 pandemic 1/21 – First confirmed case of COVID-19 in US [1] 4/3 – SBA Announces PPP Loans [10] 5/26 – NYSE Trading Floor Reopens [19] World Events 1/30 – WHO declares a Glo
Slide 11: FNB's Response to COVID-19
FNB’s Response to COVID-19 Employee Protection Operational Response Customer and Risk Management & Assistance & Preparedness Community Support ✓ ~2,000 employees ✓ Activated Contagious ✓ Developed a structured ✓ Highest capital levels in working from home Disease & Pandemic deferral program for two
Slide 12: FNB Funded $2.6 Billion of PPP Loans
FNB Funded $2.6 Billion of PPP Loans PPP Funded PPP as % of ($B) Total Loans Peer 1 $3.2 17.8% PPP Funded as a Percent of Total Loans (1) 25% Peer 2 $6.7 12.3% Peer 3 $1.9 10.5% Peer 4 $3.3 10.5% 20% PPP Loans as % of Total Loans Peer 5 $2.3 10.1% Peer 6 $2.2 10.0% FNB $2.5 9.6% 15% Peer 7 $1.5 9.3%
Slide 13: $2.6 Billion in Relief Funds for Paycheck Protection Program
$2.6 Billion in Relief Funds for Paycheck Protection Program Paycheck Protection Program • Overseen by SBA; loans originated by banks • Eligible businesses <500 employees • Size: 2.5x average monthly payroll, capped at $10mm Originated nearly 20,000 SBA PPP • Rate: 1% loans totaling $2.6 billion • T
Slide 14: Second Quarter 2020 Financial Results
Second Quarter 2020 Financial Results 14
Slide 15: 2Q20 Financial Highlights
2Q20 Financial Highlights 2Q20 1Q20 2Q19 Net income available to common stockholders $81.6 $45.4 $93.2 (millions) Reported Results Earnings per diluted common share $0.25 $0.14 $0.29 Book value per common share $14.82 $14.67 $14.30 Operating net income available to common $83.2 $53.5 $95.4 stockhold
Slide 16: Balance Sheet Highlights
Balance Sheet Highlights Average, $ in millions 2Q20 1Q20 2Q19 QoQ Δ3 YoY Δ 2Q20 Highlights Securities $6,199 $6,423 $6,418 (3.5%) (3.4%) o Lower securities balances reflect limited reinvestment Total Loans 25,602 23,509 22,760 8.9% 12.5% activity given available returns o Average total loan growth
Slide 17: Revenue Highlights
Revenue Highlights $ in thousands 2Q20 1Q20 2Q19 QoQ Δ YoY Δ 2Q20 Highlights Total interest income $280,846 $306,140 $316,234 (8.3%) (11.2%) Total interest expense 52,885 73,509 85,827 (28.1%) (38.4%) o Net interest income reflects benchmark interest rate Net interest income $227,961 $232,631 $230,4
Slide 18: Non-Interest Income
Non-Interest Income $ in thousands 2Q20 1Q20 2Q19 QoQ Δ YoY Δ 2Q20 Highlights Service charges $23,938 $30,128 $32,068 (20.5%) (25.4%) o Year-over-year growth of 27% in capital markets Trust income 7,350 7,962 7,018 (7.7%) 4.7% income was due to strong Insurance commissions and fees 5,835 6,552 4,411
Slide 19: Non-Interest Expense
Non-Interest Expense $ in thousands 2Q20 1Q20 2Q19 QoQ Δ YoY Δ 2Q20 Highlights Salaries and employee benefits1 $93,380 $97,113 $94,188 (3.8%) (0.9%) o Non-interest expense decreased 2.9% from 1Q20 Occupancy and equipment1 29,071 30,308 28,875 (4.1%) 0.7% when excluding significant, unusual or outsiz
Slide 20: Third Quarter 2020 Financial Objectives
Third Quarter 2020 Financial Objectives Category 3Q20 Target Comments Increase low-single-digits, o Impact from PPP activity is included Spot Loans assuming no PPP forgiveness in for all Q3 targets and no PPP Balance Sheet 3Q20 forgiveness expected until 4Q20 due Continued focus on increasing to exp
Slide 21: Asset Quality
Asset Quality ENB. Corporation 21
Slide 22: Asset Quality
Asset Quality1 $ in millions 2Q20 2Q202 1Q20 2Q19 2Q20 Highlights o Provision for loan losses under Delinquency 0.92% 1.02% 1.13% 0.66% CECL reflects an estimated $17.1 million of incremental provision NPLs+OREO/Total loans and leases due to the COVID-19 related 0.72% 0.80% 0.64% 0.76% impacts on ou
Slide 23: Credit: Drivers of Change Under CECL – 1H2020
Credit: Drivers of Change Under CECL – 1H2020 Allowance for Credit Losses 1.54% Economic Ex. PPP Forecast 1.40% Growth & +$55 NCOs million Day 1 +$9 million 1.29% • Changes to +$105 • New loan macroeconomic 0.84% million originations conditions $365 • Charge-offs and million recoveries • CECL Day 1
Slide 24: FNB Performed Well During the Financial Crisis
FNB Performed Well During the Financial Crisis Peak Annual NCO over Average Loans(1) (%) 2008 - 2012 5.76 FNB continues to improve the position of our balance sheet 5.16 exiting $700 million of loans since 1Q16 4.13 3.69 3.21 2.38 1.88 1.64 1.67 1.55 1.29 1.15 1.17 0.58 0.58 0.36 0.41 0.45 0.34 NYCB
Slide 25: Loan Risk Profile – 2Q20
Loan Risk Profile – 2Q20 Non- Accruals YTD NCO (annual Total Deliquency 6/30/2020 ($ in millions) % of Loans (% Loans) % Avg Loans) (% Loans) Deferrals Commercial and Industrial 4,692 19.8% 0.52% 0.23% 1.23% 6.87% CRE: Non-Owner Occupied 6,604 27.9% 0.31% -0.07% 0.46% 13.02% CRE: Owner Occupied 2,71
Slide 26: COVID-19 Sensitive Industries
COVID-19 Sensitive Industries Hotels, Lodging Restaurants $000's Balance % CML % Corp DQ $ % DQ ACL % ACL Hotels, Lodging $000's Balance % CML % Corp DQ $ % DQ ACL % ACL Restaurants PA 165,978 1.2% 0.7% 274 0.17% 3,180 1.92% VA, DC Other Full Svc 147,838 1.1% 0.6% 4,901 3.32% 5,114 3.46% 3.0% 4.2% O
Slide 27: COVID-19 Sensitive Industries: Retail Portfolio
COVID-19 Sensitive Industries: Retail Portfolio Retail – C&I Related (incl. OO) Retail - C&I Nonstore Other $000's Balance % CML % Corp DQ $ % DQ ACL % ACL 3.5% 5.6% Grocery 56,931 0.4% 0.2% 780 1.37% 1,383 2.43% Specialty Gas Station 125,892 0.9% 0.5% 345 0.27% 1,704 1.35% 3.7% Grocery Automotive 1
Slide 28: Supplemental Asset Quality – Consumer DTI and FICO
Supplemental Asset Quality – Consumer DTI and FICO DTI Ratio Averages by Portfolio (based on Fully Funded $) Current Month Prior Month Prior Year Rolling 13 Avg Mortgage 33.5% 33.6% 34.2% 34.0% Home Equity 30.7% 30.8% 30.6% 30.7% HELOC 31.6% 31.6% 31.5% 31.6% Direct Other 32.2% 32.2% 32.4% 32.3% Ind
Slide 29: Capital Management
Capital Management ENB. Corporation 29
Slide 30: F.N.B. Corporation Risk-Based Capital Position
F.N.B. Corporation Risk-Based Capital Position • Year-to-date PPNR (non-GAAP) of $236 million more than supports incremental 1H20 credit reserve build • Ample internal capital generation for YTD common & preferred dividends of $83 million • Consistent estimated CET1 levels compared to 4Q19 at 9.4% e
Slide 31: Capital Management Philosophy
Capital Management Philosophy Goal: Maintain a comfortable cushion above well-capitalized levels, utilizing internal guidelines to create an appropriate buffer Developed capital matrices for holding company and bank to monitor and manage over 50 variables that impact capital management Utilizing int
Slide 32: Capital Planning
Capital Planning Item Status Comment Capital Contingency Plan • Corp: Level 1 - Normality Activation Status (March ‘19) • Bank: Level 1 – Normality • All regulatory ratios > well-capitalized and Current Capital Ratios (March ‘20) internal guidelines. • All regulatory ratios > well-capitalized and 20
Slide 33: 2019 Capital Stress Test: Capital Ratio Results Summary
2019 Capital Stress Test: Capital Ratio Results Summary Capital Ratios Under Severely Adverse Scenario Actual -Stress Forecast- (%) 12/31/2018 Minimum(1) Well-Capitalized Requirements F.N.B. Corporation Tier 1 Common Equity 9.19 8.83 6.50 Tier 1 Capital 9.62 9.26 8.00 Total Risk-Based Capital 11.54
Slide 34: Focus on Capital Optimization - FNB Corporation (through 2Q20)
Focus on Capital Optimization - FNB Corporation (through 2Q20) FNB has maintained consistent capital levels with a lower risk balance sheet over the last decade Leverage Ratio CET1 Ratio 8.1% 7.9% 8.2% 9.4% 9.2% 8.9% 9.2% 9.4% 9.4% 7.7% 7.6% 7.8% 5.0% 6.5% 2015Y 2016Y 2017Y 2018Y 2019Y 2Q20 2015Y 20
Slide 35: Focus on Capital Optimization – FNBPA
Focus on Capital Optimization – FNBPA FNBPA has maintained consistent capital levels with a lower risk balance sheet over the last decade Leverage Ratio CET1 Ratio 9.9% 10.3% 10.3% 8.4% 8.9% 8.5% 9.6% 9.7% 9.7% 8.0% 7.9% 8.1% 5.0% 6.5% 2015Y 2016Y 2017Y 2018Y 2019Y 2Q20 2015Y 2016Y 2017Y 2018Y 2019Y
Slide 36: Supplemental Information
Supplemental Information 36
Slide 37: Additional Financial Data
Additional Financial Data 37
Slide 38: Deposits and Customer Repurchase Agreements
Deposits and Customer Repurchase Agreements $28.7 Billion Deposits and 06/30/2020 Mix % Customer Repo Agreements ($ in millions) June 30, 2020 Balance 06/30/20 Time Deposits, Savings, NOW, MMDA $15,479 54% 19% Customer Non-Interest Non-Interest Bearing 8,650 30% Repos, 1% Bearing, 25% Transaction De
Slide 39: Investment Portfolio
Investment Portfolio % Ratings Highly Rated $6.4 Billion Investment Portfolio ($ in millions1) 06/30/20 Portfolio Investment % June 30, 2020 Agency MBS $2,093 33% AAA 100% BBB,BB,B Agency CMO 1,712 27% AAA 100% > 1% A Agency Debentures 470 7% AAA 100% 2% AA AAA 13% 13% AA 74% Municipals 1,111 18% A
Slide 40: Deposit Composition
Deposit Composition Strong deposit growth with improving NIB demand over time $30 Total Deposits 2009 - 2020 $25 2009 2020 Δ 30% NIB Deposits 16% 30% 15% 26% $20 26% Time Deposits 35% 15% (20%) 26% $15 26% 52% 55% 55% 24% 54% $10 23% 22% 19% 18% 58% 16% 16% 54% 56% $5 53% 53% 50% 52% 52% 21% 22% 19%
Slide 41: 2019 Review and Annual Results
2019 Review and Annual Results 41
Slide 42: Metrics of our Long-Term Strategy
Metrics of our Long-Term Strategy Key performance measures, 2019 results YoY EPS Efficiency Growth Ratio of 4% 54.5% ROATCE1 17.1% Build a Build a Maintain Strong, Durable, Optimize Drive Efficiency and Differentiated Scalable the Retail Organic Expense 5 Brand Infrastructure Control Bank 4 Growth 3
Slide 43: Annual and 2019 Operating Trends
Annual and 2019 Operating Trends 2019 2018 2017 2016 2015 Net income available to common Operating Earnings1 stockholders $386.1 $366.7 $281.2 $187.7 $153.7 (Non-GAAP) Net income per diluted common share $1.18 $1.13 $0.93 $0.90 $0.87 Return on average assets 1.14% 1.17% 0.99% 0.95% 0.97% Profitabili
Slide 44: Continuous Growth in Revenue and Net Income
Continuous Growth in Revenue and Net Income Total Revenue and Operating Net Income Available to Common Shareholders (in millions) CAGR Since 2009 $1,208 $1,212 Revenue 12.5% $1,098 Net Income 27.9% $813 $660 $624 $504 $532 $433 $372 $400 $386 $367 $281 $154 $188 $115 $123 $144 $68 $90 $33 2009 2010
Slide 45: Strong Fee Income Growth
Strong Fee Income Growth Income Fee Growth 2015-2019 o 53% of total growth in 130,349 Non-interest income FY 2019 / FY 2015 is a result of growth in core 104,981 businesses of Capital 94,050 Markets, Wealth, 80,546 Mortgage, and Insurance 69,711 which is primarily organic o Capital Markets provides
Slide 46: Delivering a balance of earnings growth, dividends, tangible book value growth
Delivering a balance of earnings growth, dividends, tangible book value growth $12.81 $11.48 $10.37 $10.38 $9.74 $5.28 $8.87 TBVPS CAGR Since 12/31/20081 $4.80 $9.00 $3.84 $4.32 $3.36 $6.85 $2.88 FNB Peer $6.25 $2.40 Median $5.36 $1.92 TBVPS $1.44 6.1% 3.2% $4.65 TBVPS + 10.7% 7.8% $7.53 Cumulative
Slide 47: History of Peer Leading Profitability
History of Peer Leading Profitability Return on Average Tangible Common Equity (%) Return on Average Tangible Assets (%) 18.4 1.35 1.28 17.2 1.07 1.05 1.29 14.7 14.3 0.91 0.93 1.21 12.8 15.0 0.97 10.9 14.2 0.89 0.78 0.84 10.8 11.3 10.6 10.0 2014 2015 2016 2017 2018 3Q19 2014 2015 2016 2017 2018 3Q19
Slide 48: Clicks-to-Bricks
Clicks-to-Bricks ENB. Corporation 48
Slide 49: Optimizing Online and Physical Delivery Channels
Optimizing Online and Physical Delivery Channels A website that creates an interactive Leveraging data analytics to provide digital experience in sync with the insights branch State-of-the-art technology design, Industry-leading mobile capabilities creating a educational and including mobile payment
Slide 50: Website Deployment: Clicks-to-Bricks
Website Deployment: Clicks-to-Bricks • Filtering by product features to help • Shopping for products based on specific find the right solutions financial goals • Shopping and opening accounts online • Researching financial topics in the with a new check out process Knowledge Center • Browsing produc
Slide 51: Customer Support and Programs – Appointments in the Branch
Customer Support and Programs – Appointments in the Branch o FNB is well prepared to offer assistance to help meet the financial needs of those who may be impacted. Individuals and businesses in need of banking support can contact their local FNB office or our Customer Service Center at 1-800-555-54
Slide 52: Customer Support and Programs – Clicks-To-Bricks Investment
Customer Support and Programs – Clicks-To-Bricks Investment ATM/ITM and Digital Channels and Call Centers Debit Cards Payments Number of ATMs and ITMs Enrolled Mobile Banking Users Monthly Average Call Center 100,000 600 500,000 90,000 450,000 500 80,000 400,000 350,000 70,000 400 300,000 60,000 300
Slide 53: 2020 Peer Group Listing
2020 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 54: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation 54
Slide 55: Non-GAAP to GAAP Reconciliation
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Slide 56: Non-GAAP to GAAP Reconciliation
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Slide 57: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation 57
Slide 58: Non-GAAP to GAAP Reconciliation
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Slide 59: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation 59
Slide 60: Non-GAAP to GAAP Reconciliation
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Slide 61: Non-GAAP to GAAP Reconciliation
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Slide 62: Non-GAAP to GAAP Reconciliation
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Slide 63: Non-GAAP to GAAP Reconciliation
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