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| 8-K - FORM 8-K - FNB CORP/PA/ | d680798d8k.htm |
 F.N.B. Corporation
Investor Presentation
Keefe,
Bruyette
&
Woods
–
Boston
Bank
Conference
February 26, 2014
Exhibit 99.1 |
 Cautionary Statement Regarding Forward-Looking Information
and Non-GAAP Financial Information
2
This presentation and the reports F.N.B. Corporation files with the Securities and Exchange Commission
often contain “forward-looking statements” relating to present or future trends
or factors affecting the banking industry and, specifically, the financial operations, markets and products of F.N.B.
Corporation. These forward-looking statements involve certain risks and uncertainties. There are a
number of important factors that could cause F.N.B. Corporation’s future results to differ
materially from historical performance or projected performance. These factors include, but are not limited to: (1) a
significant increase in competitive pressures among financial institutions; (2) changes in the
interest rate environment that may reduce interest margins; (3) changes in prepayment speeds,
loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions; (5) various monetary and
fiscal policies and regulations of the U.S. government that may adversely affect the businesses in
which F.N.B. Corporation is engaged; (6) technological issues which may adversely affect F.N.B.
Corporation’s financial operations or customers; (7) changes in the securities markets; (8) risk
factors mentioned in the reports and registration statements F.N.B. Corporation files with the
Securities and Exchange Commission; (9) housing prices; (10) job market; (11) consumer
confidence and spending habits; (12) estimates of fair value of certain F.N.B. Corporation assets and liabilities; (13)
integration challenges related to the recently completed mergers with BCSB Bancorp, Inc. and PVF
Capital Corp. and the difficulties encountered in expanding into a new market; (14) the effects
of current, pending and future legislation, regulation and regulatory actions, or (15) the impact on federal
regulated agencies that have oversight or review of F.N.B. Corporation’s business and securities
activities. F.N.B. Corporation undertakes no obligation to revise these forward-looking
statements or to reflect events or circumstances after the date of this presentation. To
supplement its consolidated financial statements presented in accordance with Generally Accepted Accounting Principles (GAAP), the Corporation
provides additional measures of operating results, net income and earnings per share (EPS) adjusted to
exclude certain costs, expenses, and gains and losses. The Corporation believes that
these non-GAAP financial measures are appropriate to enhance the understanding of its past performance as
well as prospects for its future performance. In the event of such a disclosure or release, the
Securities and Exchange Commission’s Regulation G requires: (i) the presentation of the
most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a
reconciliation of the differences between the non-GAAP financial measure presented and the most
directly comparable financial measure calculated and presented in accordance with
GAAP. The Appendix to this presentation contains non-GAAP financial measures
used by the Corporation to provide information useful to investors in understanding the
Corporation's operating performance and trends, and facilitate comparisons with the performance of the Corporation's peers. While
the Corporation believes that these non-GAAP financial measures are useful in evaluating the
Corporation, the information should be considered supplemental in nature and not as a
substitute for or superior to the relevant financial information prepared in accordance with GAAP. The non-GAAP
financial measures used by the Corporation may differ from the non-GAAP financial measures other
financial institutions use to measure their results of operations. This information
should be reviewed in conjunction with the Corporation’s financial results disclosed on January 21, 2014 and in its periodic
filings with the Securities and Exchange Commission. |
 3
F.N.B. Corporation
About F.N.B. Corporation
Experienced Leadership Team
Favorably Positioned for Long-Term Success
Strong Operating Trends |
 About F.N.B. Corporation
4
•
Assets: $14.2 billion
(1)
•
Loans: $9.8 billion
(1)
•
Deposits: $11.6 billion
(1)
•
Banking locations: 282
(1)
•
Consumer finance locations: 72
Fourth Largest
Pennsylvania-Based Bank
•
Attractive and expanding footprint: PA/OH/MD/WV: Banking locations span
56
counties and four states
(1)
•
Leading market position
(2)
•
#3 market share in the Pittsburgh MSA
•
#10 market share in the Baltimore MSA
•
#6 overall market position for all counties of operation
Positioned for Sustained Growth
•
Top quartile profitability performance
•
Deliver consistent, solid results
•
Industry-leading, consistent loan growth through recent economic cycle
•
Strong performance: 3-year total shareholder return of 30%
(3)
Consistent, Strong Operating Results
•
Reposition and reinvest for sustained growth; maintain low risk profile
•
Reposition and reinvest for sustained growth
•
Maintain disciplined expense control
•
Expanding market share potential and growth opportunities
•
Maintain low-risk profile
Operating Strategy
(1) Pro-forma for the recently completed acquisition of BCSB Bancorp, which closed
on February 15, 2014, with assets of approximately $0.6 billion, loans of $0.3 billion,
deposits of $0.5 billion and 16 banking locations; (2) SNL Financial, excludes custodian bank; (3) As of February 11, 2014 |
 Years of
Banking
Experience
Joined FNB
Prior Experience
President and CEO
Vincent J. Delie, Jr.
27
2005
National City
President, First National Bank
John C. Williams, Jr.
43
2008
Huntington
National City
Mellon Bank
Chief Financial Officer
Vincent J. Calabrese, Jr.
26
2007
People’s United
Chief Credit Officer
Gary L. Guerrieri
28
2002
FNB
Promistar
Experienced Leadership Team
5
Experienced and respected executive management team has guided FNB through the cycle
|
 High-Quality
Earnings
–
2013
Highlights
Operating
ROATCE
of
17.35%
-
continued
top
decile
performance
relative
to
peers
Record net income
Record loan production of $3.3 billion, increasing 11% over the prior year
Organic growth in total loans for 18 consecutive quarters at an average annualized rate of
5% Continued enhancements to funding mix with transaction deposits and customer repos
representing 76% of total deposits and customer repos at December 31, 2013
Solid
and
consistent
asset
quality
results
-
provision
for
loan
losses
continued
to
exceed
net
charge-offs
to
support
loan
growth
Consistent loan and low-cost deposit growth supports stability in the net interest
margin Full-year efficiency ratio of 58.9%
Expanded Footprint and Growth Potential
Recent acquisitions in dynamic markets enhance organic growth opportunities
Repositioned and Enhanced Delivery Channel
Full suite of online and mobile banking products, 46k customers currently enrolled, with
continued growth expected Branch optimization strategy has resulted in 52
consolidations and 9 de-novo expansions since 2010 Significant Talent
Acquisition Leadership and team build-outs over past several years in existing
markets Leadership and team build in expansion markets essentially complete
Sales Management Process and Culture
Developed and implemented proprietary systems, processes and strong culture over the past
several years Deployed across FNB business units
Consistent Investments in Enterprise-Wide Risk Management Infrastructure
Well-positioned to continue successfully navigating regulatory environment
Recent Capital Actions Strengthen Capital Structure, Support Growth Objectives and Address Basel
III Provisions Favorably Positioned for Long-Term Success
6 |
 High-Quality Earnings
7
(1) At respective period-end. FNB levels represents allowance for loan losses to
total originated loans. Peer data per SNL Financial. FNB Continues to
Deliver High-Quality Earnings Provision for Loan Losses as % of Net
Charge-Offs ($) FNB provision for loan losses exceeds net charge-offs
to support consistent, solid loan growth results
Allowance for Loan Losses/Total Loans (%)
(1)
FNB allowance for loan losses to total loans (originated
portfolio) has remained relatively stable
126%
133%
134%
113%
57%
56%
66%
44%
FY 2013
9/30/2013 YTD
6/30/2013 YTD
2012
FNB
Peer Group Median |
 Full
Year Financial Highlights – Annual Trends
8
2013
2012
2011
2010
Quality Operating
Earnings
Net income available to common shareholders ($ millions)
$123.5
$117.8
$90.3
$68.2
Earnings per diluted common share
$0.84
$0.84
$0.72
$0.60
Profitability
Performance
ROTCE
(1)
17.35%
18.75%
16.32%
14.71%
ROTA
(1)
1.09%
1.12%
1.02%
0.87%
Net interest margin
3.65%
3.73%
3.79%
3.77%
Efficiency ratio
58.9%
58.3%
59.7%
60.7%
Strong
Balance Sheet
Organic Growth
Trends
Total loan growth
6.3%
4.3%
5.2%
2.5%
Commercial loan growth
7.1%
5.4%
5.8%
3.5%
Consumer loan growth excluding Residential
12.8%
7.4%
4.4%
2.2%
Transaction
deposits
and
customer
repo
growth
7.9%
9.6%
8.0%
11.2%
(1) Non-GAAP
measure,
refer
to
Appendix
for
GAAP
to
Non-GAAP
Reconciliation
details;
(2)
Full year
average
organic
growth
results.
Organic
growth
results
exclude
balances
acquired
in
the
following
acquisitions;
PVFC
4Q13,
ANNB
2Q13,
PVSA
1Q12,
CB&T
1Q11
(3)
Total
deposits
excluding
time
deposits
(1)
(3)
(2) |
 Annual Earnings Trends
9
(1) On an operating basis, a Non-GAAP measure, refer to Appendix for GAAP to
Non-GAAP Reconciliation for details; (2) $, in millions; (3) Consists of wealth
management, trust, brokerage and insurance units.
Full Year Net Income and EPS Trends
(1)
Solid earnings growth trajectory
muted in 2013 by headwinds
$68.2
$90.3
$117.8
$123.5
$0.60
$0.72
$0.84
$0.84
$-
$-
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
Net
Income
Available
to
Common
Shareholders
Earnings
per
Diluted
Common
Share
(1)
Earnings Benefit of Full Year of 2013 Accomplishments:
Full-year average organic loan growth of 6.3%
18 consecutive quarters of linked-quarter growth
Record loan production of $3.3 billion
Full-year average organic transaction deposit and customer
repurchase agreement growth of 7.9%
Organic growth in average non-interest bearing deposits of
16.9%
Wealth Group
(3)
revenue totaled $45 million, increasing 11%,
compared to 2012
Relatively stable net interest margin and solid asset quality
Branch optimization continued
Consolidated additional 7 locations, 3 de-novo expansions;
bringing total consolidations to 52 since 2010 and de-novo
expansions to 9 locations
Mobile and online banking strategy solidified
Three acquisitions, expanded into two additional dynamic
metropolitan markets, Baltimore, Maryland and Cleveland, Ohio
Strengthened capital structure under Basel III rules
Initial year of Durbin-related and other revenue loss, and
increased regulatory-related costs negatively impact 2013
earnings by an estimated $0.05 per diluted common share
(1)(2)
Muted by 2013 Regulatory-Related Headwinds: |
 Consistent Loan and Transaction Deposit Growth
10
(1) Organic balances exclude initial respective balances acquired upon transaction close for
PVFC (10/2013), ANNB (4/2013), PVSA (1/2012) and CBT (1/2011) Consistent
Growth in Loans and Transaction Deposits Loans
(Quarterly, In Billions)
Transaction Deposits and Customer Repos
(Quarterly, In Billions)
$8.5
$7.4
$5.8
$5.2
$6.7
$6.3
$5.5
4Q13
4Q12
4Q11
4Q10
Total
Organic
$9.3
$8.0
$6.8
$6.0
$7.3
$6.7
$6.4
4Q13
4Q12
4Q11
4Q10
Total
Organic
CAGR 4Q10 –
4Q13
Total
18.1%
Organic
(1)
9.1%
CAGR 4Q10
–
4Q13
Total
15.6%
Organic
(1)
6.4% |
 Transaction
Deposit
Growth
-
Strengthened
Funding
Mix
11
(1) Based on period-end balances
Consistent
Transaction
Deposit
Growth
Results
in
Strengthened
Deposit
Mix
Total Transaction Deposits and Customer Repos Mix
Transaction deposits
and customer repos
= 76% of total
deposits and
customer repos at
12/31/2013
Strong growth in
non-interest bearing
deposits of $461.9
million, or 26.6%,
resulted in
strengthened funding
mix compared to
prior year-end
2013
12/31/2013
12/31/2012
12/31/2011
12/31/2010
Transaction Deposits and Customer Repos
Time Deposits |
 Reposition
and
Reinvest
–
Actions
Drive
Long-Term
Performance
12
2009
2010
2011
2012
2013
PEOPLE
Talent Management
Strengthened team through key
hires; Continuous team
development
Attract, retain, develop best talent
Geographic Segmentation
Regional model
Regional
Realignment
Created
5
th
&
6
th
Regions
PROCESS
Sales Management/Cross Sell
Proprietary sales management
system developed and
implemented: Balanced
scorecards, cross-functional
alignment
Consumer
Banking
Scorecards
Consumer Banking Refinement/Daily Monitoring
Continued
Utilization
Commercial
Banking Sales
Management
Expansion to additional lines of
business
Private Banking,
Insurance,
Wealth
Management
PRODUCT
Product Development
Deepened product set and niche
areas allow FNB to successfully
compete with larger banks and
gain share
Private Banking
Capital Markets
Online and mobile banking investment
/implementation –
Online banking enhancements, mobile
banking and app
Online/mobile
banking
infrastructure
complete with
mobile remote
deposit capture
and online
budgeting tools
Asset Based
Lending
Small Business
Realignment
Treasury
Management
PRODUCTIVITY
Branch Optimization
Continuous evolution of branch
network to optimize profitability
and growth prospects
De-Novo Expansion 9 Locations
Consolidate 2
Locations
Consolidate 6
Locations
Consolidate 37
Locations
Consolidate 7
Locations
Acquisitions
Opportunistically expand
presence in attractive markets
CB&T
Parkvale
ANNB Closed 4/13
PVFC Closed 10/13
BCSB Closed 2/14 |
 Market Position
Top Overall Market Position
Regional Alignment
Presence in Major Markets
Acquisition-Related Expansion Strengthens Position
13 |
 Top
Overall Market Position 14
Source: SNL Financial, deposit data as of June 30, 2013, pro-forma as of February
10, 2014, excludes custodial bank. FNB Pennsylvania Counties of Operation
Rank
Institution
Branch
Count
Total Market
Deposits
($ 000)
Total
Market
Share
(%)
1
PNC Financial Services
290
55,855,363
35.3
2
Royal Bank of Scotland
201
10,073,477
6.4
3
F.N.B. Corporation
223
8,884,922
5.6
4
M&T Bank Corp.
141
7,393,569
4.7
5
Wells Fargo & Co.
64
4,905,156
3.1
6
First Commonwealth
99
4,225,821
2.7
7
Banco Santander
72
4,056,694
2.6
8
Dollar Bank
37
3,556,646
2.2
9
Susquehanna Bancshares
79
3,105,908
2.0
10
First Niagara Financial
73
3,060,621
1.9
Total (1-135)
2,432
158,109,555
100.0
FNB All Counties of Operation
Rank
Institution
Branch
Count
Total Market
Deposits
($ 000)
Total
Market
Share
(%)
1
PNC Financial Services
501
70,806,498
24.2
2
M&T Bank Corp.
246
21,368,411
7..3
3
Bank of America
90
15,886,192
5.4
4
Royal Bank of Scotland
288
14,902,081
5.1
5
KeyCorp
98
12,538,370
4.3
6
F.N.B. Corporation
282
10,995,883
3.8
7
Wells Fargo & Co
122
10,776,383
3.7
8
Huntington
222
10,569,758
3.6
9
FirstMerit Corp.
98
6,941,093
2.4
10
TFS Financial
22
5,950,561
2.0
Total (1-242)
4,309
292,676,461
100.0
FNB holds the #3 overall retail market position for Pennsylvania counties of operation and #6
position for all counties |
 FNB’s model utilizes six regions, including three in top 30 MSA markets,
with each having a regional headquarters housing cross-functional teams.
FNB
Banking
Footprint
-
Regional
Alignment
15
Source: SNL Financial
Baltimore MSA
Pittsburgh MSA
Cleveland MSA
PVFC Completed
October 2013
ANNB Completed
April 2013 &
BCSB Completed
February 2014
Top 30 MSA Presence
MSA
Population
Baltimore,
MD
2.7 million
#20 MSA
Pittsburgh,
PA
2.4 million
#22 MSA
Cleveland,
OH
2.1 million
#29 MSA |
 MSA
Market Share - Proven Success, Opportunity For Growth
16
Source: SNL Financial, deposit data as of June 30, 2013, pro-forma as of February
11, 2014, excludes custodial bank (Pittsburgh MSA). All Other MSAs represent MSA’s
with FNB presence excluding Pittsburgh, Cleveland and Baltimore MSAs. Established
MSA
Markets
–
Proven
Success,
Leading
Share
Position
Achieved
Recent
Expansion
MSA
Markets
–
Opportunity
for
Growth
Pittsburgh, PA MSA
Rank
Institution
Total Deposits
($000)
Market
Share (%)
1
PNC Financial Services Group Inc.
47,062,720
56.5
2
Royal Bank of Scotland Group Plc
7,129,530
8.6
3
F.N.B. Corp.
3,867,847
4.6
4
Dollar Bank Federal Savings Bank
3,556,646
4.3
5
First Niagara Financial Group Inc.
2,762,262
3.3
6
Huntington Bancshares Inc.
2,512,422
3.0
7
First Commonwealth Financial Corp.
2,465,101
3.0
8
TriState Capital Holdings Inc.
1,940,243
2.3
9
S&T Bancorp Inc.
1,685,131
2.0
10
Northwest Bancshares Inc.
1,045,914
1.3
Baltimore-Towson, MD MSA
Rank
Institution
Total Deposits
($000)
Market
Share (%)
1
Bank of America Corp.
16,078,490
25.1
2
M&T Bank Corp.
14,292,887
22.3
3
PNC Financial Services Group Inc.
6,789,660
10.6
4
Wells Fargo & Co.
6,049,235
9.5
5
BB&T Corp.
3,909,353
6.1
6
SunTrust Banks Inc.
2,094,589
3.3
7
Susquehanna Bancshares Inc.
1,258,598
2.0
8
First Mariner Bancorp
1,109,454
1.7
9
Capital One Financial Corp.
976,432
1.5
10
F.N.B. Corp.
914,733
1.4
Cleveland-Elyria-Mentor, OH MSA
Rank
Institution
Total Deposits
($000)
Market
Share (%)
1
KeyCorp
11,363,682
21.8
2
PNC Financial Services Group Inc.
6,382,510
12.2
3
TFS Financial Corp. (MHC)
5,425,587
10.4
4
Huntington Bancshares Inc.
4,261,126
8.2
5
Royal Bank of Scotland Group Plc
4,104,874
7.9
6
FirstMerit Corp.
3,522,009
6.8
7
Fifth Third Bancorp
3,384,743
6.5
8
JPMorgan Chase & Co.
2,939,452
5.6
9
U.S. Bancorp
2,032,321
3.9
10
Dollar Bank Federal Savings Bank
1,701,264
3.3
14
F.N.B. Corp.
623,947
1.2
All Other FNB MSA's (excludes Pittsburgh, Baltimore, Cleveland)
Rank
Institution
Total Deposits
($000)
Market
Share (%)
1
PNC Financial Services Group Inc.
11,180,309
11.7
2
M&T Bank Corp.
7,288,461
7.6
3
F.N.B. Corp.
5,175,196
5.4
4
Wells Fargo & Co.
4,861,113
5.1
5
Banco Santander SA
4,056,694
4.2
6
Huntington Bancshares Inc.
3,875,653
4.0
7
Royal Bank of Scotland Group Plc
3,667,677
3.8
8
FirstMerit Corp.
3,419,084
3.6
9
Susquehanna Bancshares Inc.
2,947,480
3.1
10
JPMorgan Chase & Co.
2,631,476
2.7 |
 Acquisition Strategy
17
Disciplined and Consistent Acquisition Strategy
Strategy
Disciplined identification and focus on markets that offer potential to
leverage core competencies and growth opportunities
Criteria
Create shareholder value
Meet strategic vision
Fit culturally
Evaluation
Targeted financial and capital recoupment hurdles
Proficient and experienced due diligence team
Extensive and detailed due diligence process
Execution
Superior post-acquisition execution
Execute FNB’s proven, scalable, business model
Proven success assimilating FNB’s strong sales culture
12th bank acquisition since 2002 closed February 2014 (BCSB)
Fourth consecutive acquisition in a major MSA
Five acquisitions since 2010
Ten acquisitions since 2005
Execution
Criteria
Evaluation
Strategy
Experienced Acquirer |
 Recent
Acquisitions
–
Positioning
for
Sustained
Organic
Growth
18
Baltimore, MD MSA
Annapolis Bancorp, Inc -
Closed April 6, 2013
BCSB
Bancorp,
Inc.
–
Closed
February
15,
2014
Talent established
Team and leadership in place
Presence anchored
Downtown Baltimore headquarters
Performance tracking well
Loan production on target, pipelines healthy
Sales management processes fully deployed
Cleveland, Ohio MSA
PVF
Capital
Corp.
–
Closed
October
12,
2013
Team and leadership in place
Downtown Cleveland headquarters
Loan production on target, pipelines healthy
Sales management process deployed
FNB Locations (including ANNB)
Continued Success Integrating Acquisitions
Team and Leadership Established
Regional Headquarters in Both Markets
Results Tracking Well
BCSB Locations
PVFC Locations
Presence anchored
Performance goals established
Talent established |
 Significant Commercial Prospects
19
Note: Above metrics at the MSA level
(1)
Data per U.S. Census Bureau
(2)
Data per Hoover’s as of February 7, 2014
Strong Concentration of Commercial Prospects
Over 175,000 Total Businesses
(1)
Significant Commercial Prospects Concentrated in Pittsburgh, Baltimore & Cleveland Opportunity to
Leverage Core Competency and Drive Sustained Organic Growth
|
 Expanded Franchise = Enhanced Organic Growth Prospects
20
Note: Market population and market businesses represent current metrics based on respective
FNB MSA presence Data per FNB, SNL Financial and/or U.S. Census Bureau
(Businesses) Acquisition-
Related
Expansion in
Higher Growth
Markets
Enhances
Organic Growth
Opportunities |
 21
Strong Operating Results
4Q13 Highlights and Trends |
 4Q13 Financial Highlights
22
Solid Operating Results and Strategic Accomplishments
Operating Result Highlights
Return on average tangible assets of 1.07%
(1)
Return on average tangible common equity of 16.45%
(1)
Net interest margin of 3.67%, expanded 3 basis points
Efficiency ratio of 58%
Linked-quarter operating leverage; revenue growth of 5.6% compared to the
prior quarter Absorbed second quarter of Durbin impact of $2.7 million
(pre-tax) Total average organic loan growth of $129.4 million or 5.9%
annualized Transaction deposit and customer repurchase agreement average
organic growth of $137.7 million or 6.8% annualized
Primarily driven by growth in non-interest bearing deposits and customer
repurchase agreements Non-performing loans and OREO to total originated
loans and OREO improved 5 basis points 1.44% Total delinquency for the
originated portfolio improved 16 basis points to 1.28%
Strategic Accomplishments
(1) Operating results, a non-GAAP measure, refer to Appendix for GAAP to Non-GAAP
Reconciliation details 4Q13
operating
(1)
net
income
available
to
common
shareholders
of
$32.5
million;
earnings
per
diluted
common
share
of
$0.21
Solid profitability performance and continued high-quality earnings
Strong balance sheet growth
Continued good asset quality results
Secured an investment grade rating from Moody’s Investor’s Services on
October 3, 2013 Completed the PVF Capital Corp. (PVFC) acquisition on October
12, 2013 Completed a capital offering in late October 2013, raising $161.3
million in net proceeds, strengthening capital structure under Basel III and
enhancing ability to execute organic growth strategy |
 4Q13
Financial
Highlights
–
Quarterly
Trends
23
Current
Quarter
4Q13
Prior
Quarter
3Q13
Prior Year
Quarter
4Q12
Operating
Earnings
(1)
Net income available to common shareholders ($ millions)
$32.5
$32.2
$32.1
Earnings per diluted common share
$0.21
$0.22
$0.23
Profitability
Performance
ROTCE
(1)
16.45%
18.32%
19.49%
ROTA
(1)
1.07%
1.12%
1.18%
Net interest margin
3.67%
3.64%
3.66%
Efficiency ratio
57.8%
59.7%
55.4%
Strong
Balance Sheet
Organic Growth
Trends
(2)
Total loan growth
5.9%
9.3%
6.0%
Commercial loan growth
4.4%
4.2%
7.6%
Consumer loan growth
13.8%
25.3%
11.7%
Transaction
deposits
and
customer
repo
growth
(3)
6.8%
7.0%
11.9%
(1) Non-GAAP measure, refer to Appendix for GAAP to Non-GAAP Reconciliation details;
(2) Average, annualized linked quarter organic growth results. Organic growth
results exclude balances acquired in the PVFC acquisition (4Q13); (3) Total deposits excluding time deposits |
 Balance Sheet Highlights
24
(1) Linked-quarter growth, organic growth % is annualized and excludes balances acquired
from the PVFC acquisition completed October 12, 2013; (2) Includes Direct Installment,
Indirect Installment and Consumer LOC portfolios; (3) Excludes time deposits; (4) Period-end as of December 31, 2013
Average Balances,
$ in Millions
4Q13
Reported
Growth
(1)
Organic
Growth
(1)
4Q13 Highlights
Balance
$
$
%
Securities
$2,316
$40.3
-
-
Strong balance sheet growth, with
continued momentum organically
growing loans and transaction
deposits
Total reported growth reflects the
benefit from the completion of the
PVFC acquisition on October 12,
2013
Organic growth in average total loans
of $129.4 million or 5.9% annualized
Organic growth in average
transaction deposits and customer
repurchase agreements of $137.7
million or 6.8% annualized
Lower cost, relationship-based
transaction deposits and
customer repurchase
agreements represent 76% of
total transaction deposits and
customer repurchase
agreements
(4)
Total loans
$9,323
$592.7
$129.4
5.9%
Commercial loans
$5,154
$370.5
$52.6
4.4%
Consumer
loans
(2)
$3,039
$179.3
$99.6
13.8%
Residential mortgage loans
$1,085
$42.1
-$23.5
-8.9%
Earning assets
$11,775
$726.9
-
-
Total deposits and customer repos
$11,113
$710.5
$71.3
2.7%
Transaction deposits and customer
repos
(3)
$8,504
$493.0
$137.7
6.8%
Time deposits
$2,609
$217.5
-$66.3
-11.0% |
 Net
Interest Margin Trends 25
Net Interest Margin Trends
The 4Q13 net interest margin was stable compared to the prior quarter when
adjusting for: The benefit of 6 basis points from $1.7 million additional
accretable yield which was partially offset by, The 3 basis points narrowing
due to the temporary increase in short-term interest bearing cash balances from the capital raise.
4Q13 net interest income (FTE) totaled $108.7 million, growing $7.6 million,
or 7.5%, linked quarter, and $12.9 million, or 13.5%, compared to the prior
year quarter |
 Asset Quality Results
(1)
26
$ in Thousands
4Q13
3Q13
4Q12
4Q13 Highlights
NPL’s+OREO/Total loans+OREO
1.44%
1.49%
1.60%
Total delinquency
1.28%
1.44%
1.64%
Provision
for
loan
losses
(2)
$8,366
$7,280
$9,274
Net charge-offs (NCO’s)
(2)
$7,364
$5,507
$7,614
NCO’s/Total average loans
(2)
0.32%
0.25%
0.38%
NCO’s/Total average originated loans
0.30%
0.26%
0.45%
Allowance for loan losses/
Total loans
1.29%
1.34%
1.39%
Allowance for loan losses/
Total non-performing loans
135.42%
127.37%
123.88%
Solid performance with continued positive
movement
Net charge-off results were at good levels and
reflect year-over-year improvement
Total provision continues to exceed net-
charge-offs
Reserve position reflects favorable credit
migration in the portfolio, pay-downs and
improved non-performing loan levels
NPL’s+OREO/Total loans +OREO improved
from the prior quarter and the year-ago quarter
Delinquency improved compared to the prior
quarter and the year-ago quarter
(1)
Metrics shown are originated portfolio metrics unless noted as a total portfolio metric.
“Originated portfolio” or “Originated loans” excludes loans
acquired at fair value and accounted for in accordance with ASC 805 (effective January 1, 2009), as the risk of credit loss has been
considered by virtue of the Corporation’s estimate of fair value.
(2)
Total portfolio metric |
 Asset Quality Trends
27
Asset Quality Trending Positively and Compares Favorably to Peer Results NPL’s+OREO/ Total Originated Loans+OREO
(1)(2)
NCO’s Originated Loans/ Total
Originated Loans (1)(3)
Peer data per SNL Financial, refer to Appendix for peer listing; (1) Metrics shown are
originated portfolio. “Originated portfolio” or “Originated loans” excludes
loans acquired at fair value and accounted for in accordance with ASC 805 (effective January
1, 2009), as the risk of credit loss has been considered by virtue of the
Corporation’s estimate of fair value; (2) Based on balances at quarter end for each period presented; (3) Full year or quarterly results annualized.
|
 Capital Position
28
Capital Position as of December 31, 2013
12.1%
10.6%
8.6%
8.4%
6.1%
12.5%
11.1%
9.3%
8.8%
6.7%
Total Risk-Based
Tier One
Tier One
Common
Leverage
Tangible
Common Equity
September 30, 2013
December 31, 2013
Capital levels at December 31, 2013 reflect the benefit of the fourth quarter of
2013 capital actions. Raised $161.3 million in net proceeds through the issuance of 4.7 million
shares of common stock ($54.4 million in proceeds) and 4.4 million depository shares of
non-cumulative perpetual preferred stock ($106.9 million in net proceeds).
Redeemed $115 million in trust preferred securities, with an additional $16.5 million expected to be
redeemed in the first quarter of 2014.
Capital structure strengthened under Basel III rules, with trust preferred securities representing 7%
of Tier 1 capital at December 31, 2013 compared to 19% at September 30, 2013.
Tier 1 common ratio improves to 9.3% and the tangible common equity improves to 6.7% at December 31,
2013. |
 29
Investment Thesis
Long-Term Investment Thesis |
 Long-Term
Investment
Thesis
-
Return
Focused
30
FNB’s long-term investment thesis reflects a commitment to efficient capital management
and creating value for our shareholders
Long-Term Investment Thesis
Targeted EPS Growth
5-6%
Targeted Dividend Yield
(Targeted Payout Ratio 60-70%)
4-6%
Implied Total Shareholder Return
9-12% |
 Operating Results Outperform Peers
31
The
above
represents
full-year
2011,
2012,
2013
and/or
quarterly,
year-to-date
results
where
noted.
Refer
to
Supplemental
Information
for
peer
group
listing.
(1) Operating results, refer to Supplemental Information for details
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
2013
2012
2011
ROTCE
(1)
FNB
Peer Group Median
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
60.0%
65.0%
70.0%
4Q13
3Q13
2Q13
1Q13
2013
2012
2011
Efficiency Ratio
FNB
Peer Group Median
2.50%
2.70%
2.90%
3.10%
3.30%
3.50%
3.70%
3.90%
4Q13
3Q13
2Q13
1Q13
4Q12
Net Interest Margin
FNB
Peer Group Median
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
0.90%
1.00%
2013
2012
2011
Net Charge-Offs to Average Loans
FNB
Peer Group Median |
 Consistent Operating Results
32
FNB = 87% Percentile
FNB = 89% Percentile
Data per FNB and/or SNL Financial
Refer to Supplemental Information for peer listing
FNB’s ability to deliver consistent operating results exceeds peer results
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
2013 Peer Median
FNB
ROAA Volatility
0.000%
0.010%
0.020%
0.030%
0.040%
0.050%
0.060%
2013 Peer Median
FNB
Revenue/Avg Assets Volatility
FNB and Peer Volatility (Standard Deviation 1Q10 – 4Q13)
|
 Attractive P/E Valuation Highlights Potential Upside
33
Consistent premium to peers based on price
to tangible book value per share
FNB currently reflects an attractive valuation
based on future earnings
12.73x
14.11x
8.00x
9.00x
10.00x
11.00x
12.00x
13.00x
14.00x
15.00x
FNB
2013 Peer Median
0.00x
0.50x
1.00x
1.50x
2.00x
2.50x
3.00x
3.50x
4.00x
02/10/11
02/10/12
02/10/13
02/10/14
FNB
2013 Group Peer Median
Historical Price / TBV Per Share (x)
Price / 2015 EPS Estimate (x)
Market data per SNL Financial as of February 11, 2014. Refer to Supplemental
Information for regional peer listing. |
 34
Supplemental Information |
 35
Supplemental Information Index
Diversified Loan Portfolio
Deposits and Customer Repurchase Agreements
Investment Portfolio
Loan Risk Profile
Regency Finance Company Profile
Regional Peer Group Listing
GAAP to Non-GAAP Reconciliation |
 Diversified Loan Portfolio
36
Note: Balance, CAGR and % of Portfolio based on period-end balances
12/31/2013
5 YR CAGR
% of Portfolio
($ in millions)
Balance
12/31/08-
12/31/13
12/31/08
12/31/13
C&I
$1,881
14.7%
16%
20%
CRE: Non-Owner Occupied
1,809
14.2%
16%
19%
CRE: Owner Occupied
1,397
6.9%
17%
15%
Commercial Leases
159
33.9%
1%
1%
Total Commercial
$5,246
12.5%
50%
55%
Consumer Home Equity
2,170
12.4%
21%
23%
Residential Mortgage
1,043
12.6%
10%
11%
Indirect
642
4.8%
9%
7%
Other
186
3.6%
3%
2%
Regency
180
2.6%
2%
2%
Florida
39
-33.2%
5%
<1%
Total Loan Portfolio
$9,506
10.3%
100%
100%
Well diversified portfolio
Strong growth results driven by commercial loan growth
$9.5 Billion Loan Portfolio
December 31, 2013
C&I + Owner Occupied CRE =
35% of Total Loan Portfolio
Other 2%
Regency 2%
Florida 0%
Commercial
Leases 1%
Commercial &
Industrial 20%
Consumer
Home Equity
23%
Residential
Mortgage 11%
Indirect 7%
CRE: Non
Owner
Occupied 19%
CRE: Owner
Occupied 15%
- |
 Deposits and Customer Repurchase Agreements
37
Note: Balance, CAGR and % of Portfolio based on period-end balances; (1) Transaction
deposits include savings, NOW, MMDA and non-interest bearing deposits; (2) December
31, 2008 through December 31, 2013 12/31/2013
5 YR CAGR
Mix %
($ in millions)
Balance
12/31/08-
12/31/13
12/31/08
12/31/13
Savings, NOW, MMDA
$5,142
12.8%
44%
47%
Time Deposits
2,606
2.4%
36%
23%
Non-Interest Bearing
2,200
19.1%
14%
20%
Customer Repos
1,092
21.4%
6%
10%
Total Deposits and
Customer Repo Agreements
$11,040
11.3%
100%
100%
Transaction
Deposits
(1)
and
Customer Repo Agreements
$8,434
15.2%
64%
76%
Loans to Deposits and Customer Repo Agreements Ratio =
86% at December 31, 2013
New client acquisition and relationship-based focus reflected in favorable deposit
mix –
15.2% average growth for transaction deposits and customer repo agreements
(2)
–
76% of total deposits and customer repo agreements are transaction-based deposits
(1)
$11.0 Billion Deposits and
Customer Repo Agreements
December 31, 2013 |
 Investment Portfolio
38
(1) Amounts reflect GAAP; (2) Original cost of $ 104 million, adjusted cost of $44 million,
fair value of $38 million Highly Rated $2.4 Billion Investment Portfolio
December 31, 2013
Ratings
Composition
%
Ratings
($ in millions
(1)
)
Portfolio
Investment %
Agency MBS
$880
37%
AAA
100%
CMO Agency
877
37%
AAA
100%
Agency Senior Notes
374
16%
AAA
100%
Municipals
149
6%
AAA
AA
A
BBB
11%
53%
35%
1%
Trust Preferred
(2)
38
2%
BBB
BB
B
CCC
Ca
C
4%
12%
12%
8%
2%
62%
Short Term
16
1%
AAA
100%
CMO Private Label
9
<1%
AA
A
BBB
BB 31%
23%
12%
34%
Corporate
10
<1%
A
BBB
51%
49%
Bank Stocks
2
-
Non-Rated
Commercial MBS
2
-
AAA
100%
US Treasury
1
-
AAA
100%
Total Investment Portfolio
$2,358
100%
95% of total portfolio rated AA or better, 98% rated A or
better
Relatively low duration of 3.3
Portfolio comprised of 49% AFS and 51% HTM
Municipal bond portfolio
Highly rated with an average rating of AA and 99% of
the portfolio rated A or better
General obligation bonds = 98.9% of portfolio
79.0% from municipalities located throughout
Pennsylvania |
 39
Loan Risk Profile
(1)
Originated portfolio metric
$ in millions
Balance
12/31/2013
% of Loans
NPL's/Loans
(1)
YTD Net Charge-
Offs/Loans
(1)
Total Past
Due/Loans
(1)
Commercial and Industrial
$1,881
19.8%
0.38%
0.13%
0.49%
CRE: Non-Owner Occupied
1,809
19.0%
0.80%
0.20%
0.90%
CRE: Owner Occupied
1,397
14.7%
1.92%
0.09%
2.06%
Home Equity and Other Consumer
2,311
24.3%
0.46%
0.21%
0.76%
Residential Mortgage
1,043
11.0%
1.35%
0.18%
2.84%
Indirect Consumer
642
6.8%
0.17%
0.37%
1.10%
Regency Finance
180
1.9%
3.94%
3.74%
3.53%
Commercial Leases
159
1.7%
0.46%
0.18%
0.91%
Florida
39
0.4%
24.07%
0.75%
24.07%
Other
45
0.5%
0.00%
2.27%
0.08%
Total
$9,506
100.0%
0.95%
0.28%
1.28% |
 Consumer
finance
business
with
over
80
years
of
consumer
lending
experience
Credit quality: 2013 Full Year net charge-offs to average loans of 3.74%
Returns: 2013 Full Year: ROA 3.98%, ROE 42.64%, ROTE 47.79%
Regency Finance Company Profile
(1)
Return on average tangible common equity (ROTCE) is calculated by dividing net
income less amortization of intangibles by average common equity less
average intangibles. 40
Regency Finance Company
$180 Million Loan Portfolio
85% of Real Estate Loans are First Mortgages
61%
24%
15%
Direct
Real Estate
Sales Finance
Ohio
Pennsylvania
Kentucky
72 Locations
Spanning Four
States
Tennessee |
 Regional Peer Group Listing
41
Ticker
Institution
Ticker
Institution
ASBC
Associated Bancorp
ONB
Old National Bancorp
AF
Astoria Financial Corporation
PVTB
Private Bancorp, Inc.
CBSH
Commerce Bancshares, Inc.
SUSQ
Susquehanna Bancshares, Inc.
FMER
First Merit Corp.
UMBF
UMB Financial Corp.
FULT
Fulton Financial Corporation
VLY
Valley National Bancorp
MBFI
MB Financial, Inc
WBS
Webster Financial Corporation
NPBC
National Penn Bancshares, Inc.
WTFC
Wintrust Financial Corporation |
 GAAP to Non-GAAP Reconciliation
42
Quarterly and Full Year
Non-GAAP Reconciliation
December 31, 2013
September 30, 2013
December 31, 2012
2013
2012
2011
2010
Operating net income
Net income
$28,439
$31,634
$28,955
$117,804
$110,410
$87,047
$74,652
Add: Merger and severance costs, net of tax
2,599
593
(3)
5,336
5,203
3,238
402
Add: Litigation settlement accrual, net of tax
-
-
1,950
-
1,950
-
-
Add: Branch consolidation costs, net of tax
-
-
1,214
-
1,214
-
-
Add: Debt redemption costs, net of tax
1,412
-
-
1,412
-
-
-
Less: Gain on extinguishment of debt, net of tax
-
-
-
(1,013)
-
-
-
Less: Gain on sale of building, net of tax
-
-
-
-
(942)
-
-
Less: One-time pension expense credit, next of tax
-
-
-
-
-
-
(6,853)
Operating net income
$32,450
$32,228
$32,116
$123,540
$117,835
$90,285
$68,201
Operating diluted earnings per share
Diluted earnings per share
$0.18
$0.22
$0.21
$0.80
$0.79
$0.70
$0.65
Add: Merger and severance costs, net of tax
0.02
0.00
(0.00)
0.04
0.04
0.02
0.00
Add: Litigation settlement accrual, net of tax
-
-
0.01
-
0.01
-
-
Add: Branch consolidation costs, net of tax
-
-
0.01
-
0.01
-
-
Add: Debt redemption costs, net of tax
0.01
-
-
0.01
-
-
-
Less: Gain on extinguishment of debt, net of tax
-
-
-
(0.01)
-
-
-
Less: Gain on sale of building, net of tax
-
-
-
-
(0.01)
-
-
Less: One-time pension expense credit, next of tax
-
-
-
-
-
-
(0.05)
Operating diluted earnings per share
$0.21
$0.22
$0.23
$0.84
$0.84
$0.72
$0.60
Operating return on average tangible common equity
Operating net income (annualized)
$128,744
$127,859
$127,763
$123,539
$117,835
$90,285
$68,201
Amortization of intangibles, net of tax (annualized)
6,045
5,330
5,645
5,465
5,801
4,698
4,364
$134,789
$133,189
$133,408
$129,004
$123,635
$94,983
$72,565
Average shareholders' common equity
$1,623,543
$1,475,751
$1,400,429
$1,496,544
$1,376,493
$1,181,941
$1,057,732
Less: Average intangible assets
804,098
748,592
715,962
752,894
717,031
599,851
564,448
Average tangible common equity
$819,446
$727,159
$684,467
$743,651
$659,462
$582,089
$493,284
Operating return on average tangible common equity
16.45%
18.32%
19.49%
17.35%
18.75%
16.32%
14.71%
Operating return on average tangible assets
Operating net income (annualized)
$128,744
$127,859
$127,763
$123,539
$117,835
$90,285
$68,201
Amortization of intangibles, net of tax (annualized)
6,045
5,330
5,645
5,465
5,801
4,698
4,364
$134,789
$133,189
$133,408
$129,004
$123,635
$94,983
$72,565
Average total assets
$13,456,936
$12,615,338
$11,988,283
$12,640,685
$11,782,821
$9,871,164
$8,906,734
Less: Average intangible assets
804,098
748,592
715,962
752,894
717,031
599,851
564,448
Average tangible assets
12,652,838
$
11,866,746
$
11,272,320
$
11,887,792
$
11,065,789
$
9,271,313
$
8,342,286
$
Operating return on average tangible assets
1.07%
1.12%
1.18%
1.09%
1.12%
1.02%
0.87%
For the Quarter Ended
Year Ended December 31, |