![]() F.N.B. Corporation Second Quarter 2012 Earnings Conference Call July 24, 2012 Exhibit 99.2 |
![]() 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 or (13) the effects of current, pending and future legislation, regulation and regulatory actions. 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 required presentations and reconciliations are contained herein and can be found at our website, www.fnbcorporation.com, under “Shareholder and Investor Relations” by clicking on “Non-GAAP Reconciliation.” 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 July 23, 2012 and in its periodic filings with the Securities and Exchange Commission. |
![]() 2Q12 Highlights 2Q12 operating results – Positive trends in profitability metrics Financial results driven by continued positive trends in key drivers Net income of $29.1 million and diluted earnings per share of $0.21 Net interest margin of 3.80% Strong loan growth - 12 consecutive quarter of organic growth for total loans Strong transaction deposit and customer repurchase growth Good asset quality results reflecting consistent stability in core portfolios Solid non-interest income results Lower operating expenses reflecting continuing expense control and success executing Parkvale Financial acquisition and related cost savings realization Branch optimization/efficiency enhancement plan Continued progress executing e-delivery strategy 3 th |
![]() 2Q12 Operating Highlights 4 2Q12 1Q12 2Q11 Consistent Earnings Growth Operating net income $29,336 $26,524 $22,467 Operating earnings per diluted share $0.21 $0.19 $0.18 Solid Performance Operating ROTE 19.14% 17.78% 16.85% Operating ROTA 1.13% 1.04% 1.02% Net interest margin 3.80% 3.74% 3.78% Efficiency ratio 57.74% 60.42% 62.31% Strong Organic Growth (1) Total loan growth (2) 4.4% 2.6% 5.1% Commercial loan growth (2) 7.2% 5.9% 9.2% Consumer loan growth 8.3% 1.3% 9.3% Transaction deposits and customer repo growth (3) 14.3% 8.9% 10.8% Operating net income, EPS, ROTE and ROTA excludes merger and severance costs, refer to Non-GAAP Reconciliation included in Appendix (1)Average, annualized linked quarter organic growth results; (2)Excludes the Florida commercial portfolio; (3)Excludes time deposits |
![]() Profitability Trends 5 18.47% 16.32% 14.71% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 2Q12 YTD 2011 2010 FNB Peer Group Median 1.08% 1.02% 0.87% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 2Q12 YTD 2011 2010 FNB Peer Group Median Return on Average Tangible Equity (1) Return on Average Tangible Assets (1) Peer data per SNL Financial, refer to Appendix for peer listing (1) Operating ROTE and ROTA for FNB, excludes merger and severance costs and certain other one-time items (2010), refer to Non-GAAP Reconciliation included in Appendix |
![]() Optimizing Delivery Channel 6 Summary Expected # of locations consolidated 20 Expected # of locations with drive-up services only 3 Banking locations post-consolidation 246 Target date 4Q12 Projected cost savings, pre-tax $4.0 million Projected one-time costs, pre-tax $2.5 million As part of ongoing delivery channel optimization, FNB announces plans to consolidate 20 locations and reduce services at 3 locations Consolidation expected to take place mid-4Q12 This action provides the opportunity to: Enhance operating efficiency and profitability Focus resources in attractive markets Leverage investment in upgraded e-delivery channels |
![]() E-Delivery Strategy Update 7 Delivery Method Status Description Online Bill Pay Completed : October 2011 Online bill pay, person-to-person payments, eBills, and the ability to transfer funds between financial institutions. Mobile Banking Completed : June 2012 Mobile banking services via text banking, mobile browser, and downloadable app for smart phones. 15% of online banking customers enrolled since introduction in early June, 2012. Phase 2: Online Banking/ Mobile Banking Scheduled: 4Q12 Online Phase 2: Personalized marketing campaigns and Money Management tool. 90% of the most commonly used features will be available on the home page. Mobile Phase 2: Remote Deposit Capture and mobile banking alerts among advanced features. |
![]() Asset Quality Results (1) 8 $ in thousands 2Q12 1Q12 2Q11 2Q12 Highlights NPL’s+OREO/Total loans+OREO 1.93% 2.22% 2.57% Overall asset quality results reflect the continued solid performance of the Pennsylvania and Regency portfolios and significant reductions in the Florida portfolio Continued positive trends seen in delinquency and non-performing loans plus OREO levels NCO’s remain at good levels Florida exposure declined $49.9 million, or 33%, primarily as a result of principal payoffs on performing and non- performing credits Total delinquency 1.78% 2.03% 2.34% Provision for loan losses $7,027 $6,572 $8,551 Net charge-offs (NCO’s) $7,473 $5,141 $6,939 NCO’s/Total average loans 0.38% 0.27% 0.42% NCO’s/Total average originated loans 0.45% 0.32% 0.45% Allowance for loan losses/ Total loans 1.49% 1.55% 1.73% Allowance for loan losses/ Total non-performing loans 104.89% 92.95% 85.84% (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 (2) (2) (2) |
![]() Asset Quality Trends 9 NPL’s+OREO to Originated Loans+OREO (1) 2.74% 2.15% 1.93% 1.56% 1.29% 1.32% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 2010 2011 2Q12 FNB FNB Excluding Florida Portfolio Peer Group Median (2) 0.44% 0.39% 0.36% 0.33% 0.23% 0.77% 0.62% 0.38% 2010 2011 2Q12 YTD 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% FNB excluding Florida Florida Peer Group Median NCO’s to Average Originated Loans (1) Peer data per SNL Financial, refer to Appendix for peer listing; (1) Based on balances at year-end and quarter-end for each period presented. “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) Slight increase in NPL+OREO to Originated Loans+OREO for the excluding Florida metric reflects the addition of $6.1 million in OREO from the Parkvale acquisition completed January 1, 2012. |
![]() Balance Sheet Highlights 10 Average Balances, $ in millions 2Q12 2Q12-1Q12 Growth 2Q12 Highlights Balance $ % Securities $2,255 $160.5 7.7% Growth in average securities primarily reflects timing of reinvestment activity in 1Q12 12 consecutive quarter of total loan growth 13 consecutive quarter of PA commercial loan growth Continued expected decline in time deposits reflects focus on growing lower cost, relationship-based transaction deposits and customer repurchase agreements Strong transaction deposit and customer repurchase agreement growth Total loans (1) $7,832 $54.1 2.8% Total PA loans (1)(2) $7,716 $82.8 4.4% PA Commercial loans (1)(2) $4,102 $72.3 7.2% Consumer loans (1)(3) $2,388 $48.4 8.3% Earning assets $10,164 $193.3 1.9% Total deposits and customer repos (1) $9,751 $150.6 6.3% Transaction deposits and customer repos (1)(4) $7,028 $241.3 14.3% Time Deposits (1) $2,723 -$90.7 -13.0% th th (1)% growth annualized; (2)Excludes the Florida portfolio; (3)Includes Direct Installment, Indirect Installment and Consumer LOC portfolios; (4)Excludes time deposits |
![]() Net Interest Margin 11 2Q12 margin includes $2.5 million in net accretable yield on acquired loans Net Interest Margin Trend 3.80% 3.74% 3.79% 3.79% 3.78% 3.81% 3.77% 3.78% 3.81% 3.00% 3.20% 3.40% 3.60% 3.80% 4.00% 2Q12 1Q12 4Q11 3Q11 2Q11 1Q11 4Q10 3Q10 2Q10 Parkvale Acquisition 1/1/2012 |
![]() Non-Interest Income 12 $ in thousands 2Q12 1Q12 2Q11 2Q12 Highlights Service charges $17,588 $17,165 $15,666 Higher service charges on deposit accounts reflects seasonally higher volume Lower insurance commissions and fees due to the seasonal decrease in contingent revenue Increase in other income reflects higher swap-related revenue generated in our commercial lending activities Insurance commissions and fees 3,882 4,172 3,664 Securities commissions 2,030 2,011 2,130 Trust income 3,842 3,734 3,947 Gain on sale of loans 711 809 376 Other 4,465 3,746 3,437 Total non-interest income (1) $32,518 $31,637 $29,220 (1) Excluding securities gains of $260, $108 and $38, respectively. |
![]() Non-Interest Expense 13 $ in thousands 2Q12 1Q12 2Q11 2Q12 Highlights Salaries and employee benefits (1) $41,070 $43,996 $36,528 Efficiency ratio improved to 57.7% Lower salaries and benefits primarily due to benefit of Parkvale cost savings realization Parkvale cost savings expected to be fully phased in beginning 3Q12 OREO expenses trending favorably Occupancy and equipment 11,862 11,792 9,985 Amortization of intangibles 2,369 2,281 1,805 Other real estate owned 1,467 1,636 2,342 Other (2) 21,397 19,364 17,547 Non-interest expense, excluding merger costs $78,165 $79,069 $68,207 Merger and severance costs 317 7,604 162 Total non-interest expense $78,482 $86,673 $68,369 Efficiency ratio 57.7% 60.4% 58.3% (1) Excluding net severance costs of $610 1Q12; (2) Excluding merger costs |
![]() Capital Position 14 12.0% 10.5% 8.1% 5.8% 12.1% 10.5% 8.1% 6.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Total Risk-Based Tier One Leverage Tangible Common Equity March 31, 2012 June 30, 2012 (1) (1) June 30, 2012 Total Risk-Based and Tier One represent estimated ratios |
![]() Outlook Summary 15 Item Action Relative to Prior Guidance (1) Management Expectations Loans Re-affirm Mid-teens (full-year average balance growth) Deposits Re-affirm High-teens (full-year average balance growth) Net interest margin Re-affirm Mid 360’s for the second half of the year Non-interest income Re-affirm Mid-teens (full-year increase) Non-interest expense Re-affirm Full-year efficiency ratio in the high 50% area Non-interest expense trending down towards $76 million range by year-end (quarterly run-rate) Provision for loan losses Modify – Slightly Better $7 - $8 million per quarter for remainder of year Note: All guidance is inclusive of the Parkvale acquisition completed January 1, 2012 (1) Refers to guidance provided on the 1Q12 earnings call of April 24, 2012 |
![]() Concluding Remarks Solid performance 2Q12 and first six months of 2012 Positive expectations for remainder of 2012 Proactively reinvest and reposition Position for revenue growth Focused and disciplined expense control Maintain a low risk profile 16 |
![]() Appendix 17 |
![]() Peer Group Listing 18 ASBC Associated Bancorp NPBC National Penn Bancshares, Inc. CBSH Commerce Bancshares, Inc. ONB Old National Bancorp CBU Community Bank Systems, Inc. PRK Park National Corp CHFC Chemical Financial Corp. PVTB Private Bancorp, Inc. CRBC Citizens Republic Bancorp, Inc. SBNY Signature Bank CSE CapitalSource, Inc. SUSQ Susquehanna Bancshares, Inc. FCF First Commonwealth Financial TCB TCF Financial Corp. FFBC First Financial Bancorp, Inc. UBSI United Bankshares, inc. FMBI First Midwest Bancorp, Inc. UMBF UMB Financial Corp. FMER First Merit Corp. VLY Valley National Bancorp FULT Fulton Financial WSBC WesBanco, Inc. MBFI MB Financial, Inc. WTFC Wintrust Financial Corp. NBTB NBT Bancorp, Inc. |
![]() GAAP to Non-GAAP Reconciliation 19 June 30, 2012 March 31, 2012 June 30, 2011 2012 2011 Operating net income Net income $29,130 $21,582 $22,362 $50,712 $39,537 Merger and severance costs, net of tax 206 4,943 105 7,921 4,307 Operating net income $29,336 $26,524 $22,467 $58,633 $43,844 Operating diluted earnings per share Diluted earnings per share $0.21 $0.15 $0.18 $0.36 $0.32 Effect of merger and severance costs, net of tax 0.00 0.04 0.00 0.04 0.02 Operating diluted earnings per share $0.21 $0.19 $0.18 $0.40 $0.34 Operating return on average tangible equity Operating net income (annualized) $117,991 $106,681 $90,115 $112,336 $85,375 Amortization of intangibles, net of tax (annualized) 6,192 5,964 4,707 6,078 4,720 $124,182 $112,645 $94,822 $118,414 $90,096 Average shareholders' equity $1,367,333 $1,352,569 $1,166,305 $1,359,951 $1,148,065 Less: Average intangible assets 718,507 719,195 603,552 718,851 599,516 Average tangible equity $648,826 $633,375 $562,753 $641,100 $548,549 Operating return on average tangible equity 19.14% 17.78% 16.85% 18.47% 16.42% Operating return on average tangible assets Operating net income (annualized) $117,991 $106,681 $90,115 $112,336 $85,375 Amortization of intangibles, net of tax (annualized) 6,192 5,964 4,707 6,078 4,720 $124,182 $112,645 $94,822 $118,414 $90,096 Average total assets $11,734,263 $11,563,665 $9,866,025 $11,648,964 $9,780,993 Less: Average intangible assets 718,507 719,195 603,552 718,851 599,516 Average tangible assets 11,015,756 $ 10,844,470 $ 9,262,473 $ 10,930,113 $ 9,181,476 $ Operating return on average tangible assets 1.13% 1.04% 1.02% 1.08% 0.98% June 30 Year-to-Date For the Quarter Ended |
![]() GAAP to Non-GAAP Reconciliation 20 2011 2010 Operating net income Net income $87,047 $74,652 Merger and severance costs, net of tax 3,238 402 One-time pension credit (6,853) Operating net income $90,285 $68,201 Operating return on average tangible equity Operating net income $90,285 $68,201 Amortization of intangibles, net of tax 4,698 4,364 $94,983 $72,565 Average shareholders' equity $1,181,941 $1,057,732 Less: Average intangible assets 599,851 564,448 Average tangible equity $582,090 $493,284 Operating return on average tangible equity 16.32% 14.71% Operating return on average tangible assets Operating net income (annualized) $90,285 $68,201 Amortization of intangibles, net of tax (annualized) 4,698 4,364 $94,983 $72,565 Average total assets $9,871,164 $8,906,734 Less: Average intangible assets 599,851 564,448 Average tangible assets 9,271,313 $ 8,342,286 $ Operating return on average tangible assets 1.02% 0.87% |