F.n.b. Corporation · NYSE:FNB
F.n.b — Non-Deal Roadshow (November 2016)
40 slides from F.n.b's roadshow presentation, Nov 1, 2016
Slide 1: F.N.B. Corporation Investor Presentation Fourth Quarter 2016
F.N.B. Corporation Investor Presentation Fourth Quarter 2016 November 1, 2016
Slide 2: Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Financial Information
Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Financial Information The presentation includes “snapshot” information about F.N.B. Corporation used by and of illustration and is not intended as a full business or financial review and should be viewed in the context of all th
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 presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act, relating to present or future trends or factors affecting the banking industry an
Slide 4: About F.N.B. Corporation
F.N.B. Corporation About F.N.B. Corporation Favorably Positioned for Long-Term Success 4
Slide 5: About F.N.B. Corporation – Pro Forma with Yadkin
About F.N.B. Corporation – Pro Forma with Yadkin High-Quality, • Headquarters: Pittsburgh, PA • Assets: $28.9 billion (1) Growing Regional Financial • Banking locations: 429 (1) • Loans: $20.0 billion (1) Institution • Pro-Forma Market Capitalization: $4.2 billion (2) • Deposits: $21.6 billion (1) •
Slide 6: Reposition and Reinvest – Long-Term Plan to Build Infrastructure for a Larger Organization
Reposition and Reinvest – Long-Term Plan to Build Infrastructure for a Larger Organization 2009-2011 2012 2013 2014 2015 2016 PEOPLE Talent Management Director of Data Enterprise Strengthened team Chief Technology & Management, Director of Chief Wholesale Banking through key hires; Chief Marketing O
Slide 7: Acquisition Strategy
Acquisition Strategy Acquisition-Related Expansion Enhances Organic Growth FNB Announces Agreement to Acquire Yadkin Financial 7
Slide 8: Disciplined Acquisition Strategy – Platform for Organic Growth
Disciplined Acquisition Strategy – Platform for Organic Growth Disciplined and Consistent Acquisition Strategy Strategy Disciplined identification and focus on markets that offer attractive consumer demographics and commercial opportunities Provides geographic & portfolio diversification throu
Slide 9: FNB’s Market Expansion Model has Delivered Strong Organic Growth
FNB’s Market Expansion Model has Delivered Strong Organic Growth… Total Assets (in $ billions) 2010 - 2015 Transaction Deposit Loans and Customer Repos 13 net YDKN Total Growth 14.9% 15.2% FITB Assets: (1) Branches $7.4 bn Organic Growth 9.2% 9.6% Parkview OBA Assets: Assets: METR $28.9 Omega $0.8 b
Slide 10: Enhanced Operating Leverage Resulting in Tangible Book Value Growth
… and Enhanced Operating Leverage Resulting in Tangible Book Value Growth Efficiency Ratio Operating Leverage – 2009 to 2015 (1) 22.5% 64% 64% 65% 63% 64% 58% 59% 57% 56% 56% 54% FNB Peer Median 2012Y 2013Y 2014Y 2015Y 1H16 3Q16 -2.0% FNB Peer Median (2) FNB Peer Median (2) Tangible Book Value per S
Slide 11: Yadkin: Compelling Strategic and Financial Rationale
Yadkin: Compelling Strategic and Financial Rationale Extends FNB’s footprint into attractive high-growth metro markets in the Southeast ‒ Transforms FNB’s growth profile with nearly half of pro forma franchise in large, attractive markets ‒ Top 10 deposit market share in five major metro markets w
Slide 12: Yadkin Extends FNB’s Distribution Network Into Faster Growing Southeastern Markets
Yadkin Extends FNB’s Distribution Network Into Faster Growing Southeastern Markets Yadkin has top 10 market share in North Carolina’s most attractive markets Population % of Pro Cleveland Population Growth ('10- Market Forma Scranton (mm) (1) '16) (2) Rank Deposits Total Yadkin Metro Akron Pittsburg
Slide 13: Significant Commercial Lending Opportunities Across FNB’s Footprint
Significant Commercial Lending Opportunities Across FNB’s Footprint Total Businesses (000s) Total C&I Businesses (000s) (1) 408 74 100 97 19 89 17 77 16 15 45 7 FNB Top Baltimore Pittsburgh Charlotte Cleveland Raleigh FNB Top Pittsburgh Baltimore Charlotte Cleveland Raleigh Markets MSA MSA MSA MSA M
Slide 14: Enhanced Product Offering Positions Company For Future Revenue Growth
Enhanced Product Offering Positions Company For Future Revenue Growth The combined company will have a broader suite of products and services to offer new and existing commercial, wealth management and retail customers Product / Service Corporate Banking Small Business Banking Investment Real Estate
Slide 15: Yadkin: Transaction Overview
Yadkin: Transaction Overview Fixed 2.16x exchange ratio; 100% stock (1) Consideration $27.35 per Yadkin share (2) Yadkin shareholders will own ~35% of FNB Deal Value Approximately $1.4 billion (2) 14.2x Price / 2017E EPS, based on Yadkin consensus estimates Key Pricing Ratios 11.2x Price
Slide 16: Maximizing Execution Certainty
Maximizing Execution Certainty Thorough Due Diligence Process Comprehensive due diligence process led by FNB’s cross-functional integration teams Constructed a detailed bottoms-up five year financial forecast model incorporating assumptions from business due diligence teams Extensive credit du
Slide 17: Yadkin: Tangible Book Value Per Share Earnback Approaches
Yadkin: Tangible Book Value Per Share Earnback Approaches Crossover Method Combined Earnings Static Method The amount of time until the projected TBV The amount of time until the projected TBV “Quick and dirty” estimate of earnback per share for the combined company per share for the combined
Slide 18: Operating Results
Operating Results 3Q16 Highlights and Trends 18
Slide 19: Full Year Financial Highlights – Annual Trends
Full Year Financial Highlights – Annual Trends 2015 2014 2013 2012 2011 Net income available to common shareholders Quality ($ millions) $153.7 $135.6 $123.5 $117.8 $90.3 Operating Earnings(1) Earnings per diluted common share $0.87 $0.80 $0.84 $0.84 $0.72 ROTCE(1) 14.52% 14.72% 17.35% 18.75% 16.32%
Slide 20: 3Q16 Operating Highlights
3Q16 Operating Highlights Continued Momentum and Positive Trends (All comparisons refer to the second quarter of 2016, except as noted) Operating(1) net income available to common shareholders of $50.4 million; operating(1) earnings per diluted common share of $0.24 Continued revenue growth and di
Slide 21: 3Q16 Operating Highlights (cont’d)
3Q16 Operating Highlights (cont’d) Continued Positive Trends (All comparisons refer to the second quarter of 2016, except as noted) Solid profitability performance Return on average tangible assets of 1.08%(1) Return on average tangible common equity of 15.5%(1) Core net interest margin(2) of
Slide 22: 3Q16 Financial Highlights – Quarterly Trends
3Q16 Financial Highlights – Quarterly Trends Current Previous Prior-Year Quarter Quarter Quarter 3Q16 2Q16 3Q15 Operating NI available to common shareholders ($ millions) $50.4 $46.1 $38.9 Earnings(1) Earnings per diluted common share $0.24 $0.22 $0.22 ROATCE(1) 15.5% 14.7% 14.6% ROATA(1) 1.08% 1.04
Slide 23: Asset Quality Results
Asset Quality Results(1) $ in Thousands 3Q16 2Q16 3Q15 3Q16 Highlights NPL’s+OREO/Total loans and Stable performance across the 1.08% 1.15% 0.99% leases+OREO portfolio with slight improvement in our credit metrics. Delinquency 1.00% 1.02% 0.89% Third quarter provision levels Provision for credit
Slide 24: Investment Thesis
Investment Thesis Long-Term Investment Thesis 24
Slide 25: Strengthens FNB’s Long Term Investment Thesis
Strengthens FNB’s Long Term Investment Thesis FNB’s long-term investment thesis remains unchanged with a commitment to efficient capital management and creating value for our combined shareholders Long-Term Investment Thesis: Targeted Annual Total Return for Shareholders of 9-12% Thesis Centered on
Slide 26: Creating a Top Performing Bank with Superior Returns
Creating a Top Performing Bank with Superior Returns Despite strong performance metrics, FNB currently trades at a discount to peers (1) 2Q16 Net Interest Margin 2Q16 Efficiency Ratio 3.55% 67.3% 3.40% 61.9% 59.3% 55.4% 3.24% 3.12% FNB Peer Upper Peer Median Peer Lower FNB Peer Upper Peer Median Pee
Slide 27: Pro Forma Capital Levels Position FNB for Future Growth
Pro Forma Capital Levels Position FNB for Future Growth FNB’s pro forma capital ratios are expected to exceed well-capitalized thresholds TCE / TA Tier 1 Common Ratio 9.2% 6.7% 6.9% 6.5% FNB FNB 9/30/16 6/30/16 Pro Forma Well-Capitalized Pro Forma at Close Requirement at Close Tier 1 Ratio Total Cap
Slide 28: Price/Tangible Book Value
Relative Valuation Compared to Banks of Similar Size Bank tangible book value valuation is highly correlated to returns on equity 3.00x y = 12.486x + 0.3129 R² = 0.5053 2.50x Price/Tangible Book Value 2.00x FNB with 3Q ROTCE 1.50x FNB with Projected Consensus Estimate 1.00x 0.50x 0.00x 0% 3% 6% 9% 1
Slide 29: Dividend Yield Trends Relative to Peers
Dividend Yield Trends Relative to Peers Dividend Yield as of Respective Period-End(1) 4.52% 3.80% 3.83% 3.90% 3.60% 3.60% 2.24% 2.32% 2.04% 1.97% 1.81% FNB Peer Median 2012 2013 2014 2015 2Q16 3Q16 FNB % 2012 2013 2014 2015 2Q16 Ranking(2) 91st 91st 87th 84th 92nd (1) Represents annualized dividend
Slide 30: Supplemental Information
Supplemental Information 30
Slide 31: Supplemental Information Index
Supplemental Information Index Yadkin Transaction Tangible Book Value per Share Dilution Diversified Loan Portfolio Loan Risk Profile Deposits and Customer Repurchase Agreements Investment Portfolio Regency Finance Company Profile Peer Group Listing GAAP to Non-GAAP Reconciliation 31
Slide 32: Yadkin: Tangible Book Value per Share Dilution Calculation
Yadkin: Tangible Book Value per Share Dilution Calculation Millions of $ millions shares $ per share 1. YDKN Standalone TBV Roll Forward YDKN TBV a s of June 30, 2016 $634 51.6 12.28 Three Qua rters of Cons ens us Medi a n Ea rni ngs Pri or to Cl os e 1.32 Three Qua rters of $0.10 Per Sha re Common
Slide 33: Diversified Loan Portfolio
Diversified Loan Portfolio 9/30/2016 CAGR % of Portfolio $14.8 Billion Loan Portfolio ($ in millions) September 30, 2016 12/31/11- Balance 9/30/2016 12/31/11 9/30/2016 Other 1% Regency 1% C&I $3,011 18.1% 20% 21% Indirect 8% Commercial Leases 2% CRE: Non-Owner Occupied 3,421 24.7% 17% 23% Residentia
Slide 34: Loan Risk Profile
Loan Risk Profile YTD Net Charge- Total Past (1) (1) (1) $ in millions 9/30/2016 % of Loans NPL's/Loans Offs/Loans Due/Loans Commercial and Industrial $3,011 20.4% 1.41% 0.60% 1.55% CRE: Non-Owner Occupied 3,421 23.2% 0.22% 0.09% 0.29% CRE: Owner Occupied 1,946 13.2% 1.06% 0.04% 1.36% Home Equity an
Slide 35: Deposits and Customer Repurchase Agreements
Deposits and Customer Repurchase Agreements 9/30/2016 CAGR(2) Mix % $16.3 Billion Deposits and ($ in millions) 12/31/11 Customer Repo Agreements Balance - 9/30/16 12/31/11 9/30/16 September 30, 2016 Savings, NOW, MMDA $9,332 20.9% 48% 57% Non-Interest Bearing 4,082 26.4% 17% 25% Non-Interest Time De
Slide 36: Investment Portfolio
Investment Portfolio % Ratings Highly Rated $4.3 Billion Investment Portfolio ($ in millions(1)) Portfolio Investment % September 30, 2016 Agency MBS $1,887 44% AAA 100% Ratings CMO Agency 1,342 31% AAA 100% Agency Senior Notes 657 15% AAA 100% AAA, 92.1% AAA 4% AA 77% Municipals 344 8% A 19% Commer
Slide 37: Regency Finance Company Profile
Regency Finance Company Profile Consumer finance business with over 80 years of consumer lending experience Credit quality: 3Q16 net charge-offs to average loans of 3.66% Returns: 3Q16: ROA 3.99%, ROE 45.86%, ROTE 51.33% Regency Finance Company $183 Million Loan Portfolio Pennsylvania 17% 1% O
Slide 38: Regional Peer Group
Regional Peer Group Ticker Institution Ticker Institution ASB Associated Bancorp PVTB Private Bancorp, Inc. BXS Bancorp South SBNY Signature Bank CBSH Commerce Bancshares, Inc. SNV Synovus Financial Corp. FCF First Commonwealth TCB TCF Financial Corp. FHN First Horizon National Corp. TRMK Trustmark
Slide 39: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Operating Return on Average Tangible Common Equity Operating Return on Average Tangible Assets For the Quarter Ended September 30, 2016 June 30, 2016 March 31, 2016 December 31, 2015 September 30, 2015 Operating net income Net income available to common shareholders $
Slide 40: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Total Operating Revenue For the Quarter Ended September 30, 2016 June 30, 2016 March 31, 2016 December 31, 2015 September 30, 2015 Total Revenue Net Interest Income (FTE) $ 160,401 $ 157,160 $ 142,817 $ 129,430 $ 127,151 Non-Interest Income 53,241 51,411 46,044 43,117