Attached files
| file | filename |
|---|---|
| 8-K - 8-K - FNB CORP/PA/ | d427572d8k.htm |
| EX-99.1 - EX-99.1 - FNB CORP/PA/ | d427572dex991.htm |
 F.N.B. Corporation
Third Quarter 2012
Earnings Conference Call
October 23, 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; () 13) in connection with the
pending merger with Annapolis Bancorp, Inc., difficulties encountered in expanding into a new
market; or (14) 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 October 22, 2012 and in its periodic
filings with the Securities and Exchange Commission. |
 Additional Information About the
Merger
3
ADDITIONAL INFORMATION ABOUT THE PENDING MERGER WITH ANNAPOLIS BANCORP, INC.
SHAREHOLDERS OF ANNAPOLIS BANCORP, INC. ARE ADVISED TO READ THE PROXY STATEMENT/PROSPECTUS
WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL
AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. F.N.B. Corporation and Annapolis Bancorp, Inc. will file a proxy
statement/prospectus and other relevant documents with the SEC in connection with the
merger.
The proxy statement/prospectus and other relevant materials (when they become available), and
any other documents F.N.B. Corporation and Annapolis Bancorp, Inc. have filed with the
SEC, may be obtained free of charge at the SEC's website at www.sec.gov. In addition, investors and
security holders may obtain free copies of the documents F.N.B. Corporation has filed with the
SEC by contacting James Orie, F.N.B. Corporation, One F.N.B. Boulevard, Hermitage, PA
16148, telephone: (724) 983-3317 and free copies of the documents filed by Annapolis Bancorp, Inc. with the SEC by
contacting Edward Schneider, Treasurer and CFO, 1000 Bestgate Road, Suite 400, Annapolis, MD
21401, telephone: (410) 224-4455.
F.N.B. Corporation Annapolis Bancorp, Inc. and their directors and executive officers may be
deemed to be participants in the solicitation of proxies from Annapolis Bancorp, Inc.
shareholders in connection with the proposed merger. Information concerning such participants' ownership of
Annapolis Bancorp, Inc. common stock will be set forth in the proxy statement/prospectus
relating to the merger when it becomes available. This communication does not
constitute an offer of any securities for sale. |
 3Q12
Highlights Strong Operating Results and Sustained Momentum
Net income of $30.7 million and diluted earnings per share of $0.22
Net interest margin of 3.70%
Strong
loan
growth
-
13
consecutive
quarter
of
organic
growth
for
total
loans
Strong transaction deposit and customer repurchase growth
Good asset quality results reflecting consistency and stability in core portfolio
Lower operating expenses
Acquisition Announcement: Annapolis Bancorp, Inc.
4
th |
 3Q12
Operating Highlights 5
3Q12
2Q12
3Q11
Consistent
Earnings
Growth
Net income
$30,743
$29,130
$23,773
Earnings per diluted share
$0.22
$0.21
$0.19
Profitability
Performance
ROTE
19.10%
19.01%
16.23%
ROTA
1.03%
1.00%
0.95%
Net interest margin
3.70%
3.80%
3.79%
Efficiency ratio
56.8%
57.7%
59.0%
Strong
Organic
Balance Sheet
Growth
Trends
(1)
Total
loan
growth
(2)
6.9%
4.4%
8.1%
Commercial
loan
growth
(2)
8.9%
7.2%
8.7%
Consumer loan growth
12.0%
8.3%
9.1%
Transaction
deposits
and
customer
repo
growth
(3)
8.7%
14.3%
5.6%
(1)Average, annualized linked quarter organic growth results; (2)Excludes the Florida
commercial portfolio; (3)Excludes time deposits |
 Sustained Loan Growth
6
(1)
Average, linked-quarter organic growth results
(2)
Year-over-year (Y-o-Y) organic growth results by portfolio, $ in
millions (3)
The Florida portfolio is an exit-strategy portfolio, the residential portfolio has
experienced accelerated pre-payment speeds and expected declines following the
Parkvale acquisition. Linked
Quarter
and
Y-o-Y
Loan
Growth
(%)
(1)
Y-o-Y
Loan
Growth
($)
(2)
Positive loan growth results despite
declines in the Florida portfolio and the
residential
mortgage
portfolio
(3)
Strong year-over-year results for FNB’s
commercial and consumer portfolios |
 Positive Operating Trends: Pre-Provision Net Revenue Results
7
Pre-provision
net
revenue
(PPNR)
represents
net
interest
income
(FTE),
plus
non-interest
income
(excluding
securities
gains
and
losses
and
OTTI)
less
non-
interest expense. Non-interest income and non-interest expense have been
adjusted to exclude certain non-operating items, refer to appendix for
calculation.
9%
$147,993
$122,014
$
-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
3Q12 YTD
3Q11 YTD
21%
Year-over-Year
PPNR
Growth
$1.05
$0.96
$0.90
$0.92
$0.94
$0.96
$0.98
$1.00
$1.02
$1.04
$1.06
$1.08
3Q12 YTD
3Q11 YTD
9%
Year-over-Year
PPNR EPS
Growth
21%
Pre-Provision Net Revenue EPS
Pre-Provision Net Revenue |
 Natural
progression Consistent with stated expansion strategy
Market opportunity
Attractive demographics
Significant commercial banking opportunities
Excellent retail and wealth opportunities
Access to greater Baltimore and Washington
D.C. markets
Acquisition Announcement: Annapolis Bancorp, Inc.
8
Source:
Deposit
and
demographic
data
per
SNL
Financial;
deposits
as
of
June
30,
2012
(1) Includes branch opened October, 2012 in Waugh Chapel
County
Branches
Deposits in
Market ($000)
HH Income
($ -
2011)
Anne
Arundel,
MD
(1)
7
298,251
79,692
Queen Anne’s, MD
1
45,107
72,774
FNB Current Wtd Avg. by County
42,350
Attractive Market Entry Opportunity
F.N.B. (FNB) (266 branches)
Annapolis Bancorp (ANNB) (8 branches)
(1)
th
Attractive partner
ANNB is a relationship-focused bank with
strong community ties and presence
Execute FNB’s scalable, proven business
model and strong sales management culture
Establishes
a
5
FNB
region
Markets conducive to FNB’s model |
 Asset Quality Results
(1)
9
$ in thousands
3Q12
2Q12
3Q11
3Q12 Highlights
NPL’s+OREO/Total loans+OREO
1.69%
1.93%
2.48%
Overall results reflect the consistent,
solid performance of the core portfolios
(Pennsylvania and Regency portfolios,
representing 99.1% of total loans)
Non-performing loans plus OREO
declined $13.3 million or 10.1%
Provision for loan losses
$6.2 million for the originated
portfolios
$2.2 million for the acquired
portfolios
Continued positive trends seen in
delinquency levels
NCO’s remain at good levels
Total delinquency
1.66%
1.78%
2.35%
Provision for loan losses
(2)
$8,429
$7,027
$8,573
Net charge-offs (NCO’s)
(2)
$7,362
$7,473
$8,984
NCO’s/Total average loans
(2)
0.37%
0.38%
0.53%
NCO’s/Total average originated loans
0.42%
0.45%
0.56%
Allowance for loan losses/
Total loans
1.43%
1.49%
1.69%
Allowance for loan losses/
Total non-performing loans
120.23%
104.89%
86.75%
(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 |
 Balance Sheet Highlights
10
Average Balances, $ in millions
3Q12
3Q12-2Q12
Growth
(1)
3Q12 Highlights
Balance
$
%
Securities
$2,252
-$2.5
-0.4%
Strong overall loan and transaction
deposit growth
Sustained total loan growth
momentum:
13
th
consecutive
quarter
of total loan growth
Sustained commercial loan growth
momentum
:
14
th
consecutive
quarter
of PA commercial loan growth
Strong consumer loan growth
Attractive deposit mix: Lower cost,
relationship-focused transaction
deposits and customer repurchase
agreements = 74% of total deposits
and customer repurchase
agreements
(5)
Total loans
$7,928
$96.3
4.9%
Total PA loans
(2)
$7,850
$134.8
6.9%
PA Commercial loans
(2)
$4,194
$91.5
8.9%
Consumer loans
(3)
$2,460
$72.2
12.0%
Earning assets
$10,267
$103.2
4.0%
Total deposits and customer repos
$9,834
$83.3
3.4%
Transaction deposits and customer
repos
(4)
$7,182
$153.8
8.7%
Time Deposits
$2,653
-$70.5
-10.3%
1)% growth annualized; (2)Excludes the Florida portfolio; (3)Includes Direct Installment,
Indirect Installment and Consumer LOC portfolios;
(4)Excludes time deposits; (5) Period-end as of September 30, 2012
|
 Net
Interest Margin 11
Net Interest Margin Trend
Parkvale
Acquisition
1/1/2012 |
 Non-Interest Income
12
$ in thousands
3Q12
2Q12
3Q11
3Q12 Highlights
Service charges
$17,666
$17,588
$16,057
Consistent diverse fee revenue sources
and results
Insurance commissions and fees
benefited from seasonal commissions
Increase in other income reflects $1.4
million gain on the sale of a building
Insurance commissions and fees
4,578
3,882
4,002
Securities commissions
2,102
2,030
1,858
Trust income
3,783
3,842
3,565
Gain on sale of loans
1,176
711
657
Other
5,693
4,465
3,479
Total
non-interest
income
(1)
$34,998
$32,518
$29,618
(1) Excluding net securities gains/(losses) and OTTI of ($185), $260 and $12, respectively.
|
 Non-Interest Expense
13
$ in thousands
3Q12
2Q12
3Q11
3Q12 Highlights
Salaries and employee benefits
$41,579
$41,070
$37,149
Positive efficiency ratio trends
OREO expenses trending favorably
Operating leverage from Parkvale
acquisition -
cost savings fully phased in
beginning 3Q12
Occupancy and equipment
11,568
11,862
10,263
Amortization of intangibles
2,242
2,369
1,808
Other real estate owned
796
1,467
1,065
Other
(1)
20,809
21,397
18,650
Non-interest expense,
excluding merger costs
$76,994
$78,165
$68,935
Merger and severance costs
88
317
282
Total non-interest expense
$77,082
$78,482
$69,217
Efficiency ratio
56.8%
57.7%
59.0%
(1) Excluding merger costs |
 Capital Position
14
(1) September 30, 2012 Total Risk-Based and Tier One represent estimated ratios
12.0%
10.5%
8.1%
6.0%
12.3%
10.7%
8.2%
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
June 30, 2012
September 30, 2012
(1) |
 Concluding Remarks
15
Strong third quarter and year-to-date results
FNB is well-positioned
Significant
achievements
and
progress
on
initiatives
through
the
first
nine
months
of
2012
Integrated the Parkvale acquisition
E-delivery platform strategy execution
Branch optimization/efficiency enhancement plan announced
Deployed scorecard management tools to additional business units
Announced acquisition of Annapolis Bancorp |
 Appendix
16 |
 GAAP to Non-GAAP Reconciliation
17
Return on Average Tangible Equity
Return on Average Tangible Assets
September 30, 2012
June 30, 2012
September 30, 2011
2012
2011
Net income
$30,743
$29,130
$23,774
$81,455
$63,310
Return on average tangible equity
Net income, annualized
$122,304
$117,162
$94,319
$108,805
$84,646
Amortization of intangibles, net of tax, annualized
5,798
6,192
4,663
5,984
4,701
$128,102
$123,354
$98,982
$114,789
$89,347
Average shareholders' equity
$1,385,282
$1,367,333
$1,210,953
$1,368,457
$1,169,258
Less: Average intangible assets
714,501
718,507
601,010
717,390
600,020
Average tangible equity
$670,781
$648,826
$609,942
$651,066
$569,238
Return on average tangible equity
19.10%
19.01%
16.23%
17.63%
15.70%
Return on average tangible assets
Net income, annualized
$122,304
$117,162
$94,319
$108,805
$84,646
Amortization of intangibles, net of tax, annualized
5,798
6,192
4,663
5,984
4,701
$128,102
$123,354
$98,982
$114,789
$89,347
Average total assets
$11,842,204
$11,734,221
$9,971,847
$11,713,834
$9,845,310
Less: Average intangible assets
714,501
718,507
601,010
717,390
600,020
Average tangible assets
11,127,704
$
11,015,714
$
9,370,837
$
10,996,443
$
9,245,290
$
Return on average tangible assets
1.15%
1.12%
1.06%
1.04%
0.97%
For the Quarter Ended
September 30 Year-to-Date |
 GAAP to Non-GAAP Reconciliation
18
(1)
Represents gain on sale of building, net gain/(loss) on securities and OTTI
(2)
Represents merger and severance costs
Pre-Provision Net Revenue
2012
2011
Pre-Provision Net Revenue (PPNR)
Net interest income (FTE)
$284,518
$242,353
Non-interest income
99,336
87,320
Non-interest expense
242,237
212,143
Pre-Provision Net Revenue (GAAP)
$141,617
$117,529
Less:
Non-operating
non-interest
income
(1)
1,633
105
Add:
Non-operating
non-interest
expense
(2)
8,009
4,589
Operating Pre-Provision Net Revenue
$147,993
$122,014
PPNR Earnings per Diluted Share
$1.05
$0.96
September 30 Year-to-Date |