F.n.b. Corporation · NYSE:FNB
F.n.b — Investor Presentation (August 2018)
50 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 Operating Results 14 Key Investment Considerations 4 2Q18 Financial Highlights 15 About FNB 5 Asset Quality 16 An Infrastructure Built for Long-Term 6 Balance Sheet Highlights 17 Sustainable Growth Balance Sheet Yields/Rates 18 2018 Strategic Object
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: 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 14: Operating Results
Operating Results 2Q18 Highlights 14
Slide 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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 21: 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 $84,899 9.4% 15.1% Occupancy and equipment1 27,723 30,033 26,480 (7.7%) 4.7% FDIC insurance 9,167 8,834 9,376 3.8% (2.2%) Amortization of intangibles 3,811 4,218 4,813 (9.6%
Slide 22: Historical Performance
Historical Performance 22
Slide 23: Total Assets ($ in Billions)
Total Assets ($ in Billions) 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 dividends $21.8 $17.6 $16.1 $13.6 $12.0 $9.8 $8.4 $8.7
Slide 24: Total Revenue ($ in Millions)
Total Revenue ($ in Millions) $1,188 $1,099 $813 $661 $625 $504 $532 $433 $379 $400 $356 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2Q18 TTM 24
Slide 25: Net Income Available to Common Shareholders ($ in Millions)
Net Income Available to Common Shareholders ($ in Millions) $327 $281 $266 $187 $154 $144 $191 $123 $163 $115 $152 $90 $136 $75 $118 $110 $39 $36 $87 $75 $36 $33 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2Q18 TTM 1 Net Income Available to Common Shareholders Operating Net Income Available to
Slide 26: Earnings Per Share
Earnings Per Share $1.01 $0.90 $0.93 $0.87 $0.83 $0.84 $0.85 $0.73 $0.65 $0.48 $0.32 $0.86 $0.79 $0.80 $0.80 $0.78 $0.82 $0.65 $0.70 $0.63 $0.44 $0.32 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2Q18 TTM 1 Earnings Per Share Operating Earnings Per Share Since 2008, FNB has returned nearly $900
Slide 27: Market Capitalization ($ in Millions)
Market Capitalization ($ in Millions) $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 27
Slide 28: Peer Comparison
Peer Comparison 28
Slide 29: Peer Leading Profitability Results
Peer Leading Profitability Results Efficiency Ratio (%) FNB % 2013 2014 2015 2016 2017 2018YTD Ranking(1) 74th 74th 75th 70th 79th 76th (1) Non-GAAP measure, refer to Appendix for GAAP to Non-GAAP Reconciliation details; Percentile ranking relative to peer median results for each period shown; Peer
Slide 30: Return on Average Tangible Common Equity Trends (ROATCE)
Return on Average Tangible Common Equity Trends (ROATCE) ROATCE Trends (%) FNB % 2013 2014 2015 2016 2017 2018YTD Ranking(1) 96th 91st 87th 92nd 100th 95th (1) Non-GAAP measure, refer to Appendix for GAAP to Non-GAAP Reconciliation details; Percentile ranking relative to peer median results for each
Slide 31: Return on Average Assets Trends (ROAA)
Return on Average Assets Trends (ROAA) ROAA Trends (%) FNB % 2013 2014 2015 2016 2017 2018YTD Ranking(1) 61st 66th 55th 54th 54th 31st (1) Non-GAAP measure, refer to Appendix for GAAP to Non-GAAP Reconciliation details; Percentile ranking relative to peer median results for each period shown; Peer d
Slide 32: Supplemental Information
Supplemental Information 32
Slide 33: Annual Operating Trends
Annual Operating Trends TTM 2017 2016 2015 2014 Net income available to common Operating Earnings1 stockholders $327.3 $281.2 $187.7 $153.7 $143.6 (Non-GAAP) Net income per diluted common share $1.01 $0.93 $0.90 $0.87 $0.85 Return on average assets 1.04% 0.99% 0.95% 0.97% 1.02% Profitability Return
Slide 34: 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 $8,834 41% Commercial & Industrial 20% Direct Commercial & Industrial 4,301 20% Installment 9% Commercial Leases 337 2% Residential Other 43 <1% Mortg
Slide 35: Loan Risk Profile
Loan Risk Profile YTD Net Charge- Total Past 1 1 1 ($ in millions) 6/30/2018 % of Loans NPL's/Loans Offs/Loans Due/Loans 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 Oth
Slide 36: 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 37: 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 38: 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 39: 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 40: 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 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 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 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 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 43: 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 44: 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 45: 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 46: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation 46
Slide 47: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation (1) Excludes loan servicing rights. (2) A non-GAAP measure, refer to page 46 in Appendix for more information. 47
Slide 48: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation (1) A non-GAAP measure, refer to reconciliation above for more information. 48
Slide 49: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation (1) Excludes loan servicing rights. 49
Slide 50: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation 50