F.n.b. Corporation · NYSE:FNB
F.n.b — Investor Presentation (November 2018)
52 slides from F.n.b's investor presentation, November 2018
Slide 1: Investor Presentation November 2018
Investor Presentation November 2018 F.N.B. Corporation
Slide 2: Table of Contents
Table of Contents Page Page Cautionary Statement 3 3Q18 Financial Highlights 15 Key Investment Considerations 4 Asset Quality 16 About FNB 5 Balance Sheet Highlights 17 An Infrastructure Built for Long‐Term Sustainable 6 Balance Sheet Yields/Rates 18 Growth Revenue Highlights 19 2018 Strategic Objec
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: $3.8 billion1 Growing Regional Financial Institution o Banking locations: Approximately 4001 o Total Assets: $33 Billion1 o Regional bank focused on serving consumer and wholesale banking clients • Adhere to
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 4Q17 1Q18 2Q18 3Q18 4Q17 1Q18 2Q18 3Q18 Residential Mortgage Indirect Installment 3.47% 5.51% 3.36% +12.6%1 3.31% $1,830 $1,625 $2,914 $1,441 3.27% $2,814 +3.6%1 $1,474 $2,723 $2,653 4.12% 4.20% 4.15% Average Balance Yield Average Balance Yield Consumer LOC Commercial 4.99% 5.
Slide 11: Key Fee-Based Businesses
Key Fee‐Based Businesses $ in millions 4Q17 1Q18 2Q18 3Q18 o Provides full range of consumer and commercial insurances Insurance $5.1 $5.0 $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 $4.5 individu
Slide 12: Capital Markets and Specialty Finance
Capital Markets and Specialty Finance $ in millions 4Q17 1Q18 2Q18 3Q18 o Realigned strategy supports FNB LOBs in our core footprint and nearby states Small Business $1.6 $1.6 Administration o Focus on credit quality, documentation $0.9 $0.6 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 Expectation Loans Mid‐single digit growth1 Balance Sheet Deposits Mid‐to‐high single digit growth1 Net interest income Low‐to‐mid single digit growth2 Provision expense ≤$70 million Income Statement Noninterest income Mid‐to‐high single digit grow
Slide 14: Operating Results
Operating Results 3Q18 Highlights 14
Slide 15: 3Q18 Financial Highlights
3Q18 Financial Highlights 3Q18 2Q18 3Q17 Net income available to common stockholders $98.8 $83.2 $75.7 Reported Results Earnings per diluted common share $0.30 $0.26 $0.23 Book value per common share $13.62 $13.47 $13.39 Operating net income available to common $94.7 $89.1 $76.6 stockholders (millio
Slide 16: Asset Quality
Asset Quality1 $ in thousands 3Q18 2Q18 3Q17 3Q18 Highlights NPLs+OREO/Total average originated 0.73% 0.71% 0.91% loans and leases + OREO o Solid overall credit quality, with consistent and steady performance Delinquency 0.79% 0.68% 0.91% across all portfolios Provision for credit losses2 $15,975 $1
Slide 17: Balance Sheet Highlights
Balance Sheet Highlights Average, $ in millions 3Q18 2Q18 3Q17 QoQ Δ YoY Δ 3Q18 Highlights Securities $6,341 $6,214 $5,725 2.1% 10.8% o Growth in commercial loans was driven by strong performance in the Cleveland Total Loans $21,775 $21,445 $20,654 1.5% 5.4% and Mid‐Atlantic regions and continued gr
Slide 18: Balance Sheet Yields/Rates
Balance Sheet Yields/Rates %, presented on an FTE basis 3Q18 2Q18 1Q18 4Q17 3Q17 Interest bearing deposits with banks 2.93 2.24 1.40 1.08 1.08 Investment securities 2.50 2.43 2.34 2.37 2.32 Assets Loans and leases 4.75 4.84 4.59 4.59 4.49 Total earning assets 4.24 4.30 4.08 4.09 4.01 Interest‐bearin
Slide 19: Revenue Highlights
Revenue Highlights $ in thousands 3Q18 2Q18 3Q17 QoQ Δ YoY Δ 3Q18 Highlights o Record revenue of $310 Total interest income $297,815 $294,117 $263,514 1.3% 13.0% million reflects continued loan and deposit growth Total interest expense 63,028 54,762 38,283 15.1% 64.6% and strong non‐interest income
Slide 20: Non-Interest Income
Non‐Interest Income $ in thousands 3Q18 2Q18 3Q17 QoQ Δ YoY Δ 3Q18 Highlights Service charges $31,922 $31,114 $32,211 2.6% (0.9%) Trust income 6,395 6,469 5,748 (1.2%) 11.2% Insurance commissions and fees 5,001 4,567 5,029 9.5% (0.6%) o Wealth management2 Securities commissions and fees 4,491 4,526
Slide 21: Non-Interest Expense
Non‐Interest Expense $ in thousands 3Q18 2Q18 3Q17 QoQ Δ YoY Δ 3Q18 Highlights Salaries and employee benefits1 $89,535 $97,752 $82,383 (8.4%) 8.7% Occupancy and equipment1 27,812 27,723 27,434 0.3% 1.4% FDIC insurance 8,821 9,167 9,183 (3.8%) (3.9%) o The primary driver in non‐ Amortization of intan
Slide 22: Historical Performance
Historical Performance 22
Slide 23: Total Assets ($ in Billions)
Total Assets ($ in Billions) Impact of crossing $10 Billion threshold o Durbin amendment and other revenue constraints o Incremental FDIC expense o Required capital actions for Basel III compliance $32.6 $31.4 o Incremental compliance costs o Lost Fed dividends $21.8 $17.6 $16.1 $13.6 $12.0 $9.8 $8.
Slide 24: Total Revenue ($ in Millions)
Total Revenue ($ in Millions) $1,218 $1,099 $813 $661 $625 $504 $532 $400 $433 $356 $379 1 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD (1) Annualized YTD results. 24
Slide 25: Net Income Available to Common Shareholders ($ in Millions)
Net Income Available to Common Shareholders ($ in Millions) $360 $281 $358 $187 $154 $144 $191 $123 $115 $163 $152 $90 $136 $75 $118 $110 $39 $36 $87 $75 $36 $33 2 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD Net Income Available to Common Shareholders Operating Net Income Available to
Slide 26: Earnings Per Share
Earnings Per Share $1.11 $0.87 $0.90 $0.93 $0.83 $0.84 $0.85 $0.73 $0.65 $0.48 $1.10 $0.32 $0.86 $0.79 $0.80 $0.80 $0.78 $0.65 $0.70 $0.63 $0.44 $0.32 2 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD 1 Earnings Per Share Operating Earnings Per Share Since 2008, FNB has returned nearly $1
Slide 27: Market Capitalization ($ in Millions)
Market Capitalization ($ in Millions) $4,497 $3,843 $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 9/30/2018 27
Slide 28: Peer Comparison
Peer Comparison 28
Slide 29: Peer Leading Profitability Results
Peer Leading Profitability Results Efficiency Ratio (%) 66.0 64.1 64.0 62.7 62.4 61.7 62.0 59.4 60.0 58.9 57.2 58.0 56.1 55.4 55.0 56.0 54.3 54.0 52.0 50.0 48.0 2013Y 2014Y 2015Y 2016Y 2017Y 2018YTD Peer Group Median FNB FNB % 2013 2014 2015 2016 2017 Ranking(1) 74th 74th 75th 70th 79th (1) Non‐GAAP
Slide 30: Return on Average Tangible Common Equity Trends (ROATCE)
Return on Average Tangible Common Equity Trends (ROATCE) ROATCE Trends (%) 20.00 19.00 18.17 18.34 18.00 17.00 15.56 15.74 16.00 14.65 14.75 15.00 14.00 13.00 12.45 12.00 11.31 11.51 11.11 11.09 11.00 10.00 2013Y 2014Y 2015Y 2016Y 2017Y 2018YTD FNB Peer Group Median FNB % 2013 2014 2015 2016 2017 Ra
Slide 31: Return on Average Assets Trends (ROAA)
Return on Average Assets Trends (ROAA) ROAA Trends (%) 1.20 1.10 1.15 1.02 0.99 0.97 0.97 1.00 0.95 0.98 0.90 0.93 0.92 0.91 0.88 0.80 0.70 0.60 0.50 2013Y 2014Y 2015Y 2016Y 2017Y 2018YTD FNB Peer Group Median FNB % 2013 2014 2015 2016 2017 Ranking(1) 61st 66th 55th 54th 54th (1) Non‐GAAP measure, r
Slide 32: Supplemental Information
Supplemental Information 32
Slide 33: Annual Operating Trends
Annual Operating Trends YTD18 2017 2016 2015 2014 Net income available to common Operating Earnings1 stockholders $268.6 $281.2 $187.7 $153.7 $143.6 (Non‐GAAP) Net income per diluted common share $0.82 $0.93 $0.90 $0.87 $0.85 Return on average assets 1.15% 0.99% 0.95% 0.97% 1.02% Profitability Retur
Slide 34: Diversified Loan Portfolio
Diversified Loan Portfolio $21.8 Billion Loan Portfolio % of September 30, 2018 09/30/2018 Portfolio ($ in millions) Balance 09/30/18 Commercial Real Estate $8,846 41% Commercial & Commercial & Industrial 4,363 20% Industrial 20% Direct Installment 9% Commercial Leases 346 2% Residential Other 35 <1
Slide 35: Loan Risk Profile
Loan Risk Profile YTD Net Charge‐ Total Past 1 ($ in millions) 9/30/2018 % of Loans NPL's/Loans Offs/Loans1 Due/Loans1 Commercial and Industrial 4,117 18.9% 0.84% 0.46% 0.86% CRE: Non‐Owner Occupied 5,775 26.4% 0.26% 0.03% 0.41% CRE: Owner Occupied 3,071 14.1% 0.73% 0.19% 0.77% Home Equity and Other
Slide 36: Deposits and Customer Repurchase Agreements
Deposits and Customer Repurchase Agreements $23.8 Billion Deposits and 09/30/18 09/30/18 Customer Repo Agreements ($ in millions) September 30, 2018 Balance Mix % Savings, NOW, MMDA $12,033 51% Non‐Interest Non‐Interest Bearing 6,019 25% Bearing 25% Transaction Deposits $18,052 Time Deposits 5,448 2
Slide 37: Investment Portfolio
Investment Portfolio Highly Rated $6.3 Billion Investment Portfolio % Ratings September 30, 2018 ($ 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, 85.8% AAA 9% AA 77% Municipals 1,023 16% A 14% AA, 12.0% Comme
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‐Sep‐18 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 Operating net income available to common stockholders Net income available to common stockholders $ 98,753 $ 83,196 $ 84,752 $ 22,115 $ 75,683 Gain on sale
Slide 40: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands except per share amounts 30‐Sep‐18 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 Operating net income available to common stockholders Net income available to common stockholders $ 98,753 $ 83,196 $ 84,752 $ 22,115 $ 75,683 Gain on sale
Slide 41: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30‐Sep‐18 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 Return on average tangible common equity (ROATCE) Net income available to common stockholders (annualized) $ 391,790 $ 333,699 $ 343,716 $ 87,740 $ 300,266 Amortization of intangibl
Slide 42: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30‐Sep‐18 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 Return on average tangible assets (ROATA) Net income (annualized) $ 399,766 $ 341,762 $ 351,867 $ 95,719 $ 308,237 Amortization of intangibles, net of tax (annualized) 11,926 12,077
Slide 43: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30‐Sep‐18 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 Operating net income Net income $ 100,763 $ 85,206 $ 86,762 $ 24,126 $ 77,693 Gain on sale of subsidiary (5,135) ‐ ‐ ‐ ‐ Tax expense of gain on sale of subsidiary 1,078 ‐ ‐ ‐ ‐ Merg
Slide 44: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands except per share amounts 30‐Sep‐18 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 Tangible book value per common share (at period‐end) Total stockholders' equity $ 4,524,864 $ 4,473,242 $ 4,433,453 $ 4,409,194 $ 4,435,921 Less: preferred
Slide 45: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30‐Sep‐18 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 Efficiency Ratio (FTE) Non‐interest expense $ 170,729 $ 183,013 $ 171,083 $ 166,529 $ 163,743 Less: amortization of intangibles 3,805 3,811 4,218 4,801 4,805 Less: OREO expense 1,49
Slide 46: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Quarter Ended $ in thousands 30‐Sep‐18 30‐Jun‐18 31‐Mar‐18 31‐Dec‐17 30‐Sep‐17 Components of net interest income Net interest income $ 234,787 $ 239,355 $ 226,105 $ 230,036 $ 225,231 Net interest margin (FTE)(1) 3.36% 3.51% 3.39% 3.49% 3.44% Incremental purcha
Slide 47: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts YTD 2017 2016 2015 2014 2013 Operating net income available to common stockholders Net Income available to common stockholders $ 266,701 $ 191,163 $ 162,850 $ 151,608 $ 135,698 $ 117,804 Merger‐related expens
Slide 48: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation $ in thousands except per share amounts 2012 2011 2010 2009 2008 Operating net income available to common stockholders Net Income available to common stockholders $ 110,410 $ 87,047 $ 74,652 $ 32,803 $ 35,615 Merger‐related expense, net of tax 5,203 3,238 402 ‐ 3,071
Slide 49: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts YTD3 2017 2016 2015 2014 2013 Return on average tangible common equity (ROATCE) Net income available to common stockholders $ 356,579 $ 191,163 $ 162,850 $ 151,608 $ 135,698 $ 117,804 Amortization of intangib
Slide 50: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands YTD 2017 2016 2015 2014 2013 Operating net income Net income $ 272,731 $ 199,204 $ 170,891 $ 159,649 $ 144,050 $ 117,804 Merger‐related expense, net of tax 37,667 24,889 2,084 7,897 5,337 Tax expense of merger‐related securities gain
Slide 51: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts YTD 2017 2016 2015 2014 2013 Tangible book value per common share (at‐period‐end) Total stockholders' equity $ 4,524,864 $ 4,409,194 $ 2,571,617 $ 2,096,182 $ 2,021,456 $ 1,774,383 Less: preferred stockholder
Slide 52: Non-GAAP to GAAP Reconciliation
Non‐GAAP to GAAP Reconciliation For The Fiscal Year $ in thousands except per share amounts YTD 2017 2016 2015 2014 2013 Efficiency Ratio Non‐interest expense $ 524,825 $ 681,542 $ 511,133 $ 390,549 $ 379,253 $ 338,170 Less: amortization of intangibles 11,834 17,517 11,210 8,305 9,717 8,407 Less: OR