F.N.B. Corporation Reports Full Year and Fourth Quarter 2013 Results

HERMITAGE, Pa., Jan. 21, 2014 /PRNewswire/ -- F.N.B. Corporation (NYSE: FNB) today reported full year and fourth quarter of 2013 results.  Net income available to common shareholders for the full year of 2013 totaled $117.8 million, or $0.80 per diluted common share, compared to net income of $110.4 million, or $0.79 per diluted common share in 2012.  On an operating basis[1], net income available to common shareholders for the full year of 2013 totaled $123.5 million, or $0.84 per diluted common share, compared to full year 2012 net income of $117.8 million, or $0.84 per diluted common share. 

Fourth quarter of 2013 net income available to common shareholders totaled $28.4 million, or $0.18 per diluted common share, compared to third quarter of 2013 net income of $31.6 million, or $0.22 per diluted common share and fourth quarter of 2012 net income of $29.0 million, or $0.21 per diluted common share.  On an operating basis1, fourth quarter of 2013 operating net income available to common shareholders was $32.5 million, or $0.21 per diluted common share, compared to third quarter of 2013 operating net income of $32.2 million, or $0.22 per diluted common share, and fourth quarter of 2012 operating net income of $32.1 million or $0.23 per diluted common share.

Vincent J. Delie, President and Chief Executive Officer, commented, "FNB has completed another year highlighted by growth and success.  We maintained a high-quality earnings stream, despite significant regulatory-related revenue impacts and expense burden, and achieved several strategic company milestones.  These accomplishments will mark 2013 as a transformational year.  As we enter 2014, we have an expanded footprint in Baltimore, Maryland and Cleveland, Ohio and we are excited about our future potential in these dynamic markets.  We are also very optimistic about our prospects across our core markets.  Our capital structure is strengthened following the actions undertaken during the year and we continue to attract some of the most talented bankers in our markets.  We believe FNB is better positioned than ever for the future." 

 

Full Year Results Summary

2013

2012

Reported Results



Net income available to common shareholders ($ in millions)

$117.8

$110.4

Net income per diluted common share

$0.80

$0.79

Operating Results (Non-GAAP)1



Net income available to common shareholders ($ in millions)

$123.5

$117.8

Net income per diluted common share

$0.84

$0.84

Average Diluted Shares Outstanding (in 000's)

147,810

140,640

 

Quarterly Results Summary

4Q13

3Q13

4Q12

Reported Results




Net income available to common shareholders ($ in millions)

$28.4

$31.6

$29.0

Net income per diluted common share

$0.18

$0.22

$0.21

Operating Results (Non-GAAP)1




Net income available to common shareholders ($ in millions)

$32.5

$32.2

$32.1

Net income per diluted common share

$0.21

$0.22

$0.23

Average Diluted Shares Outstanding (in 000's)

157,858

146,446

140,923

 

Fourth Quarter 2013 Highlights

  • Loan growth momentum continued, with annualized average organic loan growth on a linked-quarter basis of $129 million or 5.9% annualized.  
  • Average transaction deposits and customer repurchase agreements grew organically on a linked-quarter basis by $138 million or 6.8% annualized.  Transaction deposits and customer repurchase agreements improved to 76% of total deposits and customer repurchase agreements at December 31, 2013, up from 74% at December 31, 2012.
  • The net interest margin expanded to 3.67% from 3.64% in the prior quarter. 
  • Credit quality metrics improved and reflect continued solid performance.  For the originated portfolio, non-performing loans and OREO to total loans and OREO improved 5 basis points to 1.44%, reflecting a $6.7 million, or 10.2%, reduction in non-accrual loan levels.  Net charge-offs were 0.30% annualized of total average originated loans, compared to 0.26% annualized in the prior quarter.
  • The PVF Capital Corp. (PVFC) acquisition was completed on October 12, 2013.
  • F.N.B. Corporation completed a capital offering, raising net proceeds of $161.3 million by issuing preferred and common equity through a comprehensive capital action plan to proactively position F.N.B. for Basel III implementation, including the redemption of certain trust preferred securities, and to support future growth opportunities.

Fourth Quarter 2013 Results – Comparison to Prior Quarter
(All comparisons refer to the third quarter of 2013, except as noted)

Net Interest Income/Loans/Deposits
Net interest income on a fully taxable equivalent basis totaled $108.7 million, increasing $7.6 million or 7.5%.  The net interest margin of 3.67% improved 3 basis points from the prior quarter and included a $1.7 million, or 6 basis point, benefit from additional accretable yield resulting from better than expected cash flows on acquired loans.  The October 2013 capital raise resulted in a temporary increase in short-term interest bearing cash balances, narrowing the fourth quarter net interest margin by 3 basis points.  The majority of these cash balances were deployed by December 31, 2013 for the redemption of $115 million in trust preferred securities.

Average loans totaled $9.3 billion and increased $593 million, or 6.8%, reflecting loans acquired from the PVFC acquisition ($463 million) and annualized organic loan growth of $129 million or 5.9%.  The fourth quarter marks the eighteenth consecutive linked-quarter of organic growth in total loans.  Organic growth in average loans reflects continued positive results in both the commercial and consumer portfolios, with organic growth in the commercial portfolio of $52.6 million, or 4.4% annualized, and consumer loan organic growth (consisting of direct, consumer lines of credit and indirect loans) of $99.6 million or 13.8% annualized.  The primary contributor to the organic consumer loan growth was $74.4 million of growth in home equity-related loans (direct and consumer lines of credit loans), of which 69% of the new loan volume represents a first lien position.

Average deposits and customer repurchase agreements totaled $11.1 billion and increased $710 million, or 6.8%, due to deposits acquired from the PVFC acquisition ($639 million) and annualized organic growth of $71.3 million or 2.7%.  Organic growth in lower-cost transaction deposit accounts and customer repurchase agreements continued as these average balances grew $137.7 million or 6.8% annualized.  Partially offsetting the transaction deposit growth was a continuation of the planned decline in time deposits due to FNB's liquidity position.  In addition, FNB's funding remains predominantly customer-based, with total customer-based funding representing 97% of total deposits and borrowings.  Loans as a percentage of total deposits and customer repurchase agreements were 86%.

Non-Interest Income
Non-interest income totaled $32.7 million, decreasing $0.2 million, or 0.5%, reflecting consistent results across most fee income categories which was offset by lower mortgage banking income.  Wealth management revenues increased $0.5 million, or 7.3%, due to continued organic growth given heightened cross-selling efforts and improved market conditions.  Non-interest income was 23% of total revenue.

Non-Interest Expense
Non-interest expense totaled $92.1 million, and included merger-related costs of $4.0 million and a loss on the early extinguishment of debt with trust preferred securities redemption costs of $2.2 million.  When excluding these non-operating costs and the $0.9 million in merger costs in the prior quarter, non-interest expense increased $3.6 million or 4.4%.  The increase primarily reflects the additional operating costs of PVFC during the fourth quarter.  In addition, salaries and employee benefits included higher employee medical insurance of $1.1 million due to elevated claims experienced during the quarter, other real estate owned (OREO) expense was elevated by $1.7 million primarily due to the write-down of one property and amortization of intangibles increased following the addition of PVFC.  The efficiency ratio was improved to 57.8% from 59.7%.

Credit Quality
Overall credit quality metrics improved and reflect continued solid performance.  The ratio of non-performing loans and OREO to total loans and OREO improved 9 basis points to 1.24%. For the originated portfolio, the ratio of non-performing loans and OREO to total loans and OREO was 1.44%, a 5 basis point improvement reflecting a $6.7 million, or 10.2%, reduction of non-accrual loans.  The positive movement in non-accrual levels contributed to a $9.6 million, or 16 basis point, improvement in total originated delinquency (total past due and non-accrual loans) to total originated loans, which was 1.28% at December 31, 2013.

The provision for loan losses totaled $8.4 million, compared to $7.3 million in the prior quarter.  The increase reflects lower provision for loan losses for the originated portfolio given the continued improvement in credit quality offset by an increased provision in the acquired portfolio related to certain small business pools and the exit of lower-quality credits.  Net charge-offs for the fourth quarter totaled $7.6 million, or 0.32% annualized, compared to $5.5 million or 0.25% annualized. For the originated portfolio, net charge-offs were 0.30% annualized compared to 0.26% annualized of average originated loans.  Full year 2013 net charges-offs improved 7 basis points to 0.28% of total average loans for the full year of 2012.  The ratio of the allowance for loan losses to total originated loans was 1.29% at December 31, 2013, compared to 1.34% at September 30, 2013, with the change directionally consistent with the improved performance of the originated portfolio.  The ratio of the allowance for loan losses to total non-performing loans was 135.42%, compared to 127.37%.

Fourth Quarter 2013 Results – Comparison to Prior-Year Quarter
(All comparisons refer to the fourth quarter of 2012, except as noted)

Fourth quarter of 2013 results include the impact from the Annapolis Bancorp, Inc. (ANNB) and PVFC acquisitions completed on April 6, 2013 and October 12, 2013, respectively.

Net Interest Income/Loans/Deposits
Net interest income on a fully taxable equivalent basis totaled $108.7 million, increasing $12.9 million or 13.5%. The net interest margin expanded 1 basis point to 3.67%, reflecting solid loan and lower-cost transaction deposit growth.  Average earning assets grew $1.4 billion, or 13.0%, through solid organic loan growth and the addition of ANNB and PVFC.

Average loans totaled $9.3 billion and increased $1.3 billion, or 16.1%, reflecting organic loan growth of $572 million, or 7.1%, and loans added in the ANNB and PVFC acquisitions.  Growth in the commercial portfolio continued, with these average balances increasing organically $282.7 million or 6.5%. Average organic consumer loan growth (consisting of direct, consumer lines of credit and indirect loans) was also strong with these balances increasing $384.8 million, or 15.2%, driven by growth in home equity-related loans originated across FNB's footprint.

Total average deposits and customer repurchase agreements totaled $11.1 billion and increased $1.1 billion, or 11.4%, reflecting organic growth of $141.3, or 1.4%, and balances added in the ANNB and PVFC acquisitions.  Organic growth in lower cost transaction deposit accounts and customer repurchase agreements was strong, growing $461.1 million, or 6.2%, through new account acquisition and customers maintaining higher average balances.  Average non-interest bearing deposits grew organically $259.5 million or 14.9%.

Non-Interest Income
Non-interest income totaled $32.7 million, increasing $0.6 million, or 1.8%, reflecting the benefit of the ANNB and PVFC acquisitions and solid organic growth in fee-based business units. Securities commissions and fees increased $0.7 million, or 29.7%, and trust income increased $0.4 million or 11.4%.  The fourth quarter of 2013 was negatively impacted by $2.7 million in lower customer-related interchange service charges due to the Durbin Amendment restrictions.  The prior-year quarter included a $1.7 million non-recurring accrual for expected losses on asset disposals related to branch consolidations. 

Non-Interest Expense
Non-interest expense totaled $92.1 million, increasing $15.5 million or 20.3%.  The fourth quarter of 2013 included merger-related costs of $4.0 million and trust preferred securities redemption costs of $2.2 million.  The fourth quarter of 2012 included $3.0 million in litigation costs to establish a settlement fund.  Absent these items, the year-over-year increase in non-interest expense primarily reflects the additional operating costs related to the ANNB and PVFC acquisitions.

Credit Quality
Credit quality results reflect improvement over the prior-year quarter.  The ratio of non-performing loans and OREO to total loans and OREO improved 18 basis points to 1.24%.  For the originated portfolio, the ratio of non-performing loans and OREO to total loans and OREO was 1.44%, a 16 basis point improvement, reflecting the 11.0% reduction in non-accrual loans.  Total delinquency (total past due and non-accrual loans) improved $14.8 million or 36 basis points to 1.28% at December 31, 2013.

The provision for loan losses totaled $8.4 million, compared to $9.3 million in the prior-year quarter.  Net charge-offs for the fourth quarter totaled $7.6 million, or 0.32% annualized of total average loans, compared to $7.6 million or 0.38% annualized.  For the originated portfolio, net charge-offs of $6.1 million improved by $1.6 million, or 15 basis points, to 0.30% annualized of total average originated loans.  The ratio of the allowance for loan losses to total originated loans was 1.29% at December 31, 2013, compared to 1.38% at December 31, 2012, with the change directionally consistent with the improved performance of the portfolio.

Full Year 2013 Results
(All comparisons refer to the prior full year, except as noted)

Full year 2013 results include the impact from the ANNB and PVFC acquisitions completed on April 6, 2013 and October 12, 2013, respectively

Net interest income on a fully taxable equivalent basis totaled $403.0 million and grew $22.8 million or 6.0%.  The net interest margin of 3.65% compares to 3.73%, with 3 basis points of the narrowing due to $2.6 million higher additional accretable yield on acquired loans in the prior year.  The remaining narrowing primarily reflects lower yields on earning assets in response to the extended low interest rate environment.  This is partially offset by the benefits to the net interest margin from strong growth in average loans, as well as lower cost transaction deposits and customer repurchase agreements and a lower cost of funds.  Average earning assets grew $842.5 million, or 8.3%, reflecting strong organic loan growth and the ANNB and PVFC acquisitions.

Average loans totaled $8.7 billion and increased $807.8 million, or 10.3%, reflecting solid organic loan growth of $498.9 million, or 6.3%, and loans added in the ANNB and PVFC acquisitions.  Total average deposits and customer repurchase agreements totaled $10.5 billion and increased $659.7 million, or 6.7%, reflecting organic growth and balances added in the ANNB and PVFC acquisitions.  Organic growth in lower cost transaction deposit accounts and customer repurchase agreements was strong, growing $562.2 million or 7.9%.  Growth in non-interest bearing deposits was a significant contributor, with average organic growth of $273.2 million or 16.9%.

Non-interest income totaled $135.8 million, increasing $4.5 million or 3.4%.  Full-year 2013 non-interest income was negatively impacted by the $5.3 million in lower customer-related service charges attributable to the Durbin Amendment restrictions that became effective for FNB on July 1, 2013.  Non-interest income benefited from the acquisitions and positive results from improved organic revenue growth results across several business lines, including wealth management and insurance, due to the implementation of revenue-enhancing strategies and initiatives.  Wealth management revenue increased $4.4 million, or 18.6%, driven by cross-selling efforts with internal business partners, added sales professionals and improved market conditions.  The 2013 fiscal year also included a $1.6 million gain on the extinguishment of debt, while the 2012 fiscal year included a $1.4 million gain on the sale of a building.

Non-interest expense totaled $338.2 million, an increase of $19.6 million, or 6.1%, primarily due to adding ANNB and PVFC operating costs and higher FDIC insurance expense of $2.1 million or 26.2%.

Credit quality results for full year of 2013 continued to trend positively resulting in year-over-year improvements.  Full year net charge-offs totaled $24.7 million, or 0.28% annualized, improved from $27.6 million or 0.35% annualized.  The full year provision for loan losses of $31.1 million was consistent with the prior-year level.

Income Taxes
The effective tax rate for the full year 2013 reflects the benefit of $1.4 million of tax credits realized on the prior-year income tax return.

Capital Position
Capital levels at December 31, 2013 are strengthened following the capital actions during the fourth quarter of 2013.  During the fourth quarter, the Corporation raised $161.3 million in capital, through the issuance of 4.7 million shares of common stock ($54.4 million in net proceeds) and 4.4 million depository shares of non-cumulative perpetual preferred stock ($106.9 million in net proceeds).  A portion of the proceeds were deployed during the quarter to redeem $115.0 million in trust preferred securities, with an additional $16.5 million expected to be redeemed in the first quarter of 2014.

The Corporation's capital levels at December 31, 2013 continue to exceed federal bank regulatory agency "well capitalized" thresholds. At December 31, 2013, the estimated total risk-based capital ratio was 12.2%, the estimated tier 1 risk-based capital ratio was 10.8% and the estimated leverage ratio was 8.8%.

At December 31, 2013, the tangible common equity to tangible assets ratio (non-GAAP measure) increased to 6.71% compared to 6.09% at September 30, 2013 and the tangible common book value per share (non-GAAP measure) increased to $5.38 from $5.04 at September 30, 2013.  The dividend payout ratios for the fourth quarter of 2013 and full year of 2013 were 68% and 60%, respectively.

Conference Call
F.N.B. Corporation will host its quarterly conference call to discuss fourth quarter and full year 2013 financial results on Wednesday, January 22, 2014 at 10:00 a.m. Eastern Time. Participating callers may access the call by dialing (888) 500-6950 or (719) 325-2491 for international callers; the confirmation number is 3658778.  The Webcast and presentation materials may be accessed through the "Shareholder and Investor Relations" section of the Corporation's Web site at www.fnbcorporation.com.

A replay of the call will be available from 1:00 p.m. Eastern Time the day of the call until midnight Eastern Time on Wednesday, January 29, 2014.  The replay is accessible by dialing (877) 870-5176 or (858) 384-5517 for international callers; the confirmation number is 3658778. The call transcript and Webcast will be available on the "Shareholder and Investor Relations" section of F.N.B. Corporation's Web site at www.fnbcorporation.com.

About F.N.B. Corporation
F.N.B. Corporation (NYSE: FNB), headquartered in Hermitage, Pennsylvania, is a regional diversified financial services company operating in six states and three major metropolitan areas including Pittsburgh, PA, where it holds the number three retail deposit market share, Baltimore, MD and Cleveland, OH. The Company has total assets of $13.6 billion and more than 265 banking offices throughout Pennsylvania, Ohio, West Virginia and Maryland. F.N.B. provides a full range of commercial banking, consumer banking and wealth management solutions through its subsidiary network, which is led by its largest affiliate, First National Bank of Pennsylvania. Commercial banking solutions include corporate banking, small business banking, investment real estate financing, asset based lending, capital markets and lease financing. The consumer banking segment provides a full line of consumer banking products and services including deposit products, mortgage lending, consumer lending and a complete suite of mobile and online banking services. F.N.B.'s wealth management services include asset management, private banking and insurance. The Company also operates Regency Finance Company, which has more than 70 consumer finance offices in Pennsylvania, Ohio, Kentucky and Tennessee.

The common stock of F.N.B. Corporation trades on the New York Stock Exchange under the symbol "FNB" and is included in Standard & Poor's SmallCap 600 Index with the Global Industry Classification Standard (GICS) Regional Banks Sub-Industry Index. Customers, shareholders and investors can learn more about this regional financial institution by visiting the F.N.B. Corporation web site at www.fnbcorporation.com.

Cautionary Statement Regarding Forward-looking Information
We make statements in this press release and related conference call, and may from time to time make other statements, regarding our outlook for earnings, revenues, expenses, capital levels, liquidity levels, asset levels, asset quality and other matters regarding or affecting F.N.B. Corporation and its future business and operations that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act.  Forward-looking statements are typically identified by words such as "believe," "plan," "expect," "anticipate," "see," "look," "intend," "outlook," "project," "forecast," "estimate," "goal," "will," "should" and other similar words and expressions.  Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. 

Forward-looking statements speak only as of the date made.  We do not assume any duty and do not undertake to update forward-looking statements.  Actual results or future events could differ, possibly materially, from those anticipated in forward-looking statements, as well as from historical performance.

Our forward-looking statements are subject to the following principal risks and uncertainties:

  • Our businesses, financial results and balance sheet values are affected by business and economic conditions, including the following:
    • Changes in interest rates and valuations in debt, equity and other financial markets.
    • Disruptions in the liquidity and other functioning of U.S. and global financial markets.
    • The impact on federal regulated agencies that have oversight or review of F.N.B. Corporation's business and securities activities.
    • Actions by the Federal Reserve, U.S. Treasury and other government agencies, including those that impact money supply and market interest rates.
    • Changes in customers', suppliers' and other counterparties' performance and creditworthiness which adversely affect loan utilization rates, delinquencies, defaults and counterparty ability to meet credit and other obligations.
    • Slowing or reversal of the current moderate economic recovery and persistence or worsening levels of unemployment.
    • Changes in customer preferences and behavior, whether due to changing business and economic conditions, legislative and regulatory initiatives, or other factors. 
  • Legal and regulatory developments could affect our ability to operate our businesses, financial condition, results of operations, competitive position, reputation, or pursuit of attractive acquisition opportunities.  Reputational impacts could affect matters such as business generation and retention, liquidity, funding, and ability to attract and retain management.  These developments could include:
    • Changes resulting from legislative and regulatory reforms, including broad-based restructuring of financial industry regulation; changes to laws and regulations involving tax, pension, bankruptcy, consumer protection, and other industry aspects; and changes in accounting policies and principles.  We will continue to be impacted by extensive reforms provided for in the Dodd-Frank Wall Street Reform and Consumer Protection Act and otherwise growing out of the recent financial crisis, the precise nature, extent and timing of which, and their impact on us, remains uncertain. 
    • The impact on fee income opportunities resulting from the limit imposed under the Durbin Amendment of the Dodd-Frank Act on the maximum permissible interchange fee that banks may collect from merchants for debit card transactions and federal court determinations that may impose further restrictions on interchange fee opportunities.
    • Changes to regulations governing bank capital and liquidity standards, including due to the Dodd-Frank Act, Volcker rule and Basel III initiatives. 
    • Impact on business and operating results of any costs associated with obtaining rights in intellectual property, the adequacy of our intellectual property protection in general and rapid technological developments and changes. Our ability to anticipate and respond to technological changes can also impact our ability to respond to customer needs and meet competitive demands.
  • Business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through effective use of third-party insurance, derivatives, swaps, and capital management techniques, and to meet evolving regulatory capital standards.
  • Increased competition, whether due to consolidation among financial institutions; realignments or consolidation of branch offices, legal and regulatory developments, industry restructuring or other causes, can have an impact on customer acquisition, growth and retention and on credit spreads and product pricing, which can affect market share, deposits and revenues.
  • As demonstrated by our Annapolis Bancorp, Inc. and PVF Capital Corp. acquisitions and the pending acquisition of BCSB Bancorp, Inc., we grow our business in part by acquiring from time to time other financial services companies, financial services assets and related deposits.  These acquisitions often present risks and uncertainties, including, the possibility that the transaction cannot be consummated; regulatory issues; cost, or difficulties, involved in integration and conversion of the acquired businesses after closing; inability to realize expected cost savings, efficiencies and strategic advantages; the extent of credit losses in acquired loan portfolios and extent of deposit attrition; and the potential dilutive effect to our current shareholders.  In addition, with respect to the acquisition of Annapolis Bancorp, Inc. and PVF Capital Corp., and the pending acquisition of and BCSB Bancorp, Inc., F.N.B. Corporation may experience difficulties in expanding into a new market area, including retention of customers and key personnel of Annapolis Bancorp, Inc., PVF Capital Corp., Inc. and BCSB Bancorp, Inc.
  • Competition can have an impact on customer acquisition, growth and retention and on credit spreads and product pricing, which can affect market share, deposits and revenues.  Industry restructuring in the current environment could also impact our business and financial performance through changes in counterparty creditworthiness and performance and the competitive and regulatory landscape.  Our ability to anticipate and respond to technological changes can also impact our ability to respond to customer needs and meet competitive demands.
  • Business and operating results can also be affected by widespread disasters, dislocations, terrorist activities, cyber-attacks or international hostilities through their impacts on the economy and financial markets.

We provide greater detail regarding some of these factors in our 2012 Form 10-K and 2013 Form 10-Qs, including the Risk Factors section of those reports, and our subsequent SEC filings.  Our forward-looking statements may also be subject to other risks and uncertainties, including those we may discuss elsewhere in this news release or in SEC filings, accessible on the SEC's website at www.sec.gov and on our corporate website at www.fnbcorporation.com.  We have included these web addresses as inactive textual references only.  Information on these websites is not part of this document.

1 Non-GAAP measures, refer to Non-GAAP Disclosures and detail in the accompanying data tables.

DATA SHEETS FOLLOW

F.N.B. CORPORATION






(Unaudited)





(Dollars in thousands, except per share data)














4Q13 -


4Q13 -






2013


2012


3Q13


4Q12






Fourth


Third


Fourth


Percent


Percent

Statement of earnings


Quarter


Quarter


Quarter


Variance


Variance

Interest income 


$117,637


$109,790


$107,578


7.1


9.4

Interest expense


10,691


10,536


13,660


1.5


-21.7

   Net interest income


106,946


99,254


93,918


7.8


13.9

Taxable equivalent adjustment


1,704


1,781


1,798


-4.3


-5.2

   Net interest income (FTE) (1)


108,650


101,035


95,716


7.5


13.5

Provision for loan losses


8,366


7,280


9,274


14.9


-9.8

   Net interest income after provision (FTE)


100,284


93,755


86,442


7.0


16.0















Impairment losses on securities


(27)


0


(186)


n/m


n/m

Non-credit related losses on securities not











   expected to be sold (recognized in other











   comprehensive income)


0


0


93


n/m


n/m

Net impairment losses on securities


(27)


0


(93)


n/m


n/m















Service charges


16,805


16,427


17,517


2.3


-4.1

Trust income


4,323


4,176


3,880


3.5


11.4

Insurance commissions and fees


3,979


4,088


3,794


-2.7


4.9

Securities commissions and fees


2,921


2,575


2,252


13.4


29.7

Mortgage banking


370


885


1,257


-58.2


-70.6

Gain (loss) on sale of securities


51


5


3


n/m


n/m

Other


4,237


4,654


3,457


-9.0


22.5

   Total non-interest income


32,659


32,810


32,067


-0.5


1.8















Salaries and employee benefits


47,710


45,155


40,964


5.7


16.5

Occupancy and equipment


14,006


12,547


11,676


11.6


20.0

FDIC insurance


1,995


3,161


1,905


-36.9


4.7

Amortization of intangibles


2,344


2,067


2,183


13.4


7.4

Other real estate owned


1,927


277


(631)


596.8


-405.1

Merger-related


3,999


913


(5)


n/m


n/m

Other


20,087


19,053


20,440


5.4


-1.7

   Total non-interest expense


92,068


83,173


76,532


10.7


20.3















Income before income taxes


40,875


43,392


41,977


-5.8


-2.6

Taxable equivalent adjustment


1,704


1,781


1,798


-4.3


-5.2

Income taxes


10,732


9,977


11,224


7.6


-4.4

   Net income


28,439


31,634


28,955


-10.1


-1.8

   Preferred stock dividends


0


0


0





   Net income available to common stockholders


$28,439


$31,634


$28,955


-10.1


-1.8















Earnings per common share:











   Basic


$0.18


$0.22


$0.21


-18.2


-14.3

   Diluted


$0.18


$0.22


$0.21


-18.2


-14.3















Non-GAAP Operating Results











Operating net income available to common stockholders:











  Net income available to common stockholders


$28,439


$31,634


$28,955





  (Gain) loss on extinguishment of debt, net of tax


1,412


0


0





  Gain on sale of acquired building, net of tax


0


0


0





  Branch consolidation costs, net of tax


0


0


1,214





  Litigation settlement accrual, net of tax


0


0


1,950





  Merger and severance costs, net of tax


2,599


594


(3)





  Operating net income available to common stockholders


$32,450


$32,228


$32,116


0.7


1.0















Operating diluted earnings per common share:











  Diluted earnings per common share


$0.18


$0.22


$0.21





  Effect of (gain) loss on extinguishment of debt, net of tax


0.01


0.00


0.00





  Effect of gain on sale of acquired building, net of tax


0.00


0.00


0.00





  Effect of branch consolidation costs, net of tax


0.00


0.00


0.01





  Effect of litigation settlement accrual, net of tax


0.00


0.00


0.01





  Effect of merger and severance costs, net of tax


0.02


0.00


(0.00)





  Operating diluted earnings per common share


$0.21


$0.22


$0.23


-4.5


-8.7















 

F.N.B. CORPORATION








(Unaudited)








(Dollars in thousands, except per share data)
























For the Year Ended









December 31,


Percent


Statement of earnings


2013


2012


Variance


Interest income 


$440,386


$431,906


2.0


Interest expense


44,344


59,055


-24.9


   Net interest income


396,042


372,851


6.2


Taxable equivalent adjustment


6,969


7,382


-5.6


   Net interest income (FTE) (1)


403,011


380,233


6.0


Provision for loan losses


31,090


31,302


-0.7


   Net interest income after provision (FTE)


371,921


348,931


6.6













Impairment losses on securities


(27)


(626)


n/m


Non-credit related losses on securities not








   expected to be sold (recognized in other








   comprehensive income)


0


414


n/m


Net impairment losses on securities


(27)


(212)


n/m













Service charges


68,221


69,546


-1.9


Trust income


16,751


15,239


9.9


Insurance commissions and fees


16,598


16,426


1.0


Securities commissions and fees


11,286


8,395


34.4


Mortgage banking


3,452


4,153


-16.9


Gain (loss) on sale of securities


808


305


n/m


Other


18,689


17,400


7.4


   Total non-interest income


135,778


131,252


3.4













Salaries and employee benefits


179,971


168,219


7.0


Occupancy and equipment


51,688


46,898


10.2


FDIC insurance


10,192


8,077


26.2


Amortization of intangibles


8,407


8,924


-5.8


Other real estate owned


3,215


3,268


-1.6


Merger-related


8,210


7,394


11.0


Other


76,487


75,838


0.9


   Total non-interest expense


338,170


318,618


6.1













Income before income taxes


169,529


161,565


4.9


Taxable equivalent adjustment


6,969


7,382


-5.6


Income taxes


44,756


43,773


2.2


   Net income


117,804


110,410


6.7


   Preferred stock dividends


0


0




   Net income available to common stockholders


$117,804


$110,410


6.7













Earnings per common share:








   Basic


$0.81


$0.79


2.5


   Diluted


$0.80


$0.79


1.3













Non-GAAP Operating Results








Operating net income available to common stockholders:








  Net income available to common stockholders


$117,804


$110,410




  (Gain) loss on extinguishment of debt, net of tax


399


0




  Gain on sale of acquired building, net of tax


0


(942)




  Branch consolidation costs, net of tax


0


1,214




  Litigation settlement accrual, net of tax


0


1,950




  Merger and severance costs, net of tax


5,337


5,203




  Operating net income available to common stockholders


$123,540


$117,835


4.8













Operating diluted earnings per common share:








  Diluted earnings per common share


$0.80


$0.79




  Effect of (gain) loss on extinguishment of debt, net of tax


0.00


0.00




  Effect of gain on sale of acquired building, net of tax


0.00


(0.01)




  Effect of branch consolidation costs, net of tax


0.00


0.01




  Effect of litigation settlement accrual, net of tax


0.00


0.01




  Effect of merger and severance costs, net of tax


0.04


0.04




  Operating diluted earnings per common share


$0.84


$0.84


0.0













 

F.N.B. CORPORATION







(Unaudited)








(Dollars in thousands)


















4Q13 -


4Q13 -






2013


2012


3Q13


4Q12






Fourth


Third


Fourth


Percent


Percent

Balance Sheet (at period end)


Quarter


Quarter


Quarter


Variance


Variance

Assets













Cash and due from banks


$197,534


$234,746


$216,233


-15.9


-8.6

Interest bearing deposits with banks


16,447


48,763


22,811


-66.3


-27.9

   Cash and cash equivalents


213,981


283,509


239,044


-24.5


-10.5

Securities available for sale


1,141,650


1,115,558


1,172,683


2.3


-2.6

Securities held to maturity


1,199,169


1,180,992


1,106,563


1.5


8.4

Residential mortgage loans held for sale


7,138


8,105


27,751


-11.9


-74.3

Loans, net of unearned income


9,506,094


8,836,905


8,137,719


7.6


16.8

Allowance for loan losses


(110,784)


(110,052)


(104,374)


0.7


6.1

   Net loans




9,395,310


8,726,853


8,033,345


7.7


17.0

Premises and equipment, net


154,032


147,406


140,367


4.5


9.7

Goodwill




764,248


713,509


675,555


7.1


13.1

Core deposit and other intangible assets, net


47,608


35,400


37,851


34.5


25.8

Bank owned life insurance


289,402


263,781


246,088


9.7


17.6

Other assets




350,867


315,166


344,729


11.3


1.8

Total Assets




$13,563,405


$12,790,279


$12,023,976


6.0


12.8















Liabilities













Deposits:













   Non-interest bearing demand


$2,200,081


$2,115,813


$1,738,195


4.0


26.6

   Savings and NOW



5,392,078


5,247,922


4,808,121


2.7


12.1

   Certificates and other time deposits


2,606,073


2,359,636


2,535,858


10.4


2.8

      Total Deposits



10,198,232


9,723,371


9,082,174


4.9


12.3

Other liabilities




130,418


133,061


163,151


-2.0


-20.1

Short-term borrowings



1,241,239


1,166,180


1,083,138


6.4


14.6

Long-term debt


143,928


91,807


89,425


56.8


60.9

Junior subordinated debt


75,205


194,213


204,019


-61.3


-63.1

   Total Liabilities


11,789,022


11,308,632


10,621,907


4.2


11.0















Stockholders' Equity












Preferred stock


106,882


0


0


    n/m


   n/m

Common stock




1,592


1,455


1,398


9.4


13.9

Additional paid-in capital



1,608,117


1,440,779


1,376,601


11.6


16.8

Retained earnings



121,870


112,649


75,312


8.2


61.8

Accumulated other comprehensive income


(56,924)


(66,171)


(46,224)


-14.0


23.1

Treasury stock


(7,154)


(7,065)


(5,018)


1.2


42.6

   Total Stockholders' Equity


1,774,383


1,481,647


1,402,069


19.8


26.6

Total Liabilities and Stockholders' Equity


$13,563,405


$12,790,279


$12,023,976


6.0


12.8















Selected average balances











Total assets




$13,456,936


$12,615,338


$11,988,283


6.7


12.3

Earning assets 


11,774,690


11,047,767


10,420,397


6.6


13.0

Interest bearing deposits with banks


130,027


30,224


116,885


330.2


11.2

Securities




2,315,793


2,275,473


2,255,702


1.8


2.7

Residential mortgage loans held for sale


6,128


12,060


18,945


-49.2


-67.7

Loans, net of unearned income


9,322,742


8,730,010


8,028,865


6.8


16.1

Allowance for loan losses


111,654


110,463


104,453


1.1


6.9

Goodwill and intangibles


804,098


748,592


715,962


7.4


12.3

Deposits and customer repurchase agreements (6)


11,113,386


10,402,935


9,974,646


6.8


11.4

Short-term borrowings



173,405


318,023


156,197


-45.5


11.0

Long-term debt


138,631


91,659


88,956


51.2


55.8

Trust preferred securities


192,533


194,206


204,012


-0.9


-5.6

Total stockholders' equity 


1,694,669


1,475,751


1,400,430


14.8


21.0

Preferred stockholders' equity


71,126


0


0


   n/m


   n/m















Common stock data












Average diluted shares outstanding


157,858,351


146,446,442


140,923,088


7.8


12.0

Period end shares outstanding


158,967,211


145,263,435


139,929,242


9.4


13.6

Book value per common share


$10.49


$10.20


$10.02


2.8


4.7

Tangible book value per common share (4)


$5.38


$5.04


$4.92


6.7


9.4

Dividend payout ratio (common)


67.58%


55.51%


58.51%





 

F.N.B. CORPORATION








(Unaudited)









(Dollars in thousands)























For the Year Ended








December 31,


Percent

Balance Sheet (at period end)


2013


2012


Variance

Assets









Cash and due from banks



$197,534


$216,233


-8.6

Interest bearing deposits with banks


16,447


22,811


-27.9

   Cash and cash equivalents



213,981


239,044


-10.5

Securities available for sale



1,141,650


1,172,683


-2.6

Securities held to maturity



1,199,169


1,106,563


8.4

Residential mortgage loans held for sale


7,138


27,751


-74.3

Loans, net of unearned income



9,506,094


8,137,719


16.8

Allowance for loan losses



(110,784)


(104,374)


6.1

   Net loans




9,395,310


8,033,345


17.0

Premises and equipment, net



154,032


140,367


9.7

Goodwill




764,248


675,555


13.1

Core deposit and other intangible assets, net


47,608


37,851


25.8

Bank owned life insurance



289,402


246,088


17.6

Other assets




350,867


344,729


1.8

Total Assets




$13,563,405


$12,023,976


12.8











Liabilities









Deposits:









   Non-interest bearing demand



$2,200,081


$1,738,195


26.6

   Savings and NOW



5,392,078


4,808,121


12.1

   Certificates and other time deposits


2,606,073


2,535,858


2.8

      Total Deposits



10,198,232


9,082,174


12.3

Other liabilities




130,418


163,151


-20.1

Short-term borrowings



1,241,239


1,083,138


14.6

Long-term debt




143,928


89,425


60.9

Junior subordinated debt



75,205


204,019


-63.1

   Total Liabilities




11,789,022


10,621,907


11.0











Stockholders' Equity








Preferred stock




106,882


0


   n/m

Common stock




1,592


1,398


13.9

Additional paid-in capital



1,608,117


1,376,601


16.8

Retained earnings



121,870


75,312


61.8

Accumulated other comprehensive income


(56,924)


(46,224)


23.1

Treasury stock




(7,154)


(5,018)


42.6

   Total Stockholders' Equity



1,774,383


1,402,069


26.6

Total Liabilities and Stockholders' Equity


$13,563,405


$12,023,976


12.8











Selected average balances








Total assets




$12,640,685


$11,782,821


7.3

Earning assets 




11,049,009


10,206,464


8.3

Interest bearing deposits with banks


57,605


94,719


-39.2

Securities




2,285,602


2,214,846


3.2

Residential mortgage loans held for sale


17,772


16,645


6.8

Loans, net of unearned income



8,688,030


7,880,254


10.3

Allowance for loan losses



109,050


103,589


5.3

Goodwill and intangibles



752,894


717,031


5.0

Deposits and customer repurchase agreements (6)


10,450,247


9,790,571


6.7

Short-term borrowings



231,326


158,875


45.6

Long-term debt




103,772


90,652


14.5

Trust preferred securities



199,296


203,471


-2.1

Total stockholders' equity 



1,514,471


1,376,493


10.0

Preferred stockholders' equity



17,928


0


   n/m











Common stock data








Average diluted shares outstanding


147,809,504


140,640,165


5.1

Period end shares outstanding



158,967,211


139,929,242


13.6

Book value per common share



$10.49


$10.02


4.7

Tangible book value per common share (4)


$5.38


$4.92


9.4

Dividend payout ratio (common)



60.48%


61.27%



 

F.N.B. CORPORATION








(Unaudited)










(Dollars in thousands)



















4Q13 -


4Q13 -






2013


2012


3Q13


4Q12






Fourth


Third


Fourth


Percent


Percent






Quarter


Quarter


Quarter


Variance


Variance

Performance ratios











Return on average equity


6.66%


8.50%


8.23%





Return on average tangible equity (2) (4)


13.35%


17.99%


17.65%





Return on average tangible common equity (2) (4)


14.51%


17.99%


17.65%





Return on average assets


0.84%


0.99%


0.96%





Return on average tangible assets (3) (4)


0.94%


1.10%


1.07%





Net interest margin (FTE) (1) 


3.67%


3.64%


3.66%





Yield on earning assets (FTE) (1)


4.03%


4.01%


4.18%





Cost of funds


0.45%


0.47%


0.63%





Efficiency ratio (FTE) (1) (5)


57.77%


59.71%


55.43%





Effective tax rate


27.40%


23.98%


27.94%



















Capital ratios











Equity / assets (period end)


13.08%


11.58%


11.66%





Leverage ratio


8.80%


8.42%


8.29%





Tangible equity / tangible assets (period end) (4)


7.55%


6.09%


6.09%





Tangible common equity / tangible assets (period end) (4)


6.71%


6.09%


6.09%





Tangible common equity, excluding AOCI / tangible











   assets (period end) (4) (7)


7.16%


6.63%


6.50%



















Balances at period end











Loans:











Commercial real estate 


$3,245,209


$2,920,808


$2,707,046


11.1


19.9

Commercial and industrial


1,881,474


1,755,235


1,602,314


7.2


17.4

Commercial leases


158,895


141,714


130,133


12.1


22.1

   Commercial loans and leases


5,285,578


4,817,757


4,439,493


9.7


19.1

Direct installment


1,467,236


1,408,539


1,178,530


4.2


24.5

Residential mortgages


1,086,739


1,031,805


1,092,228


5.3


-0.5

Indirect installment


655,587


638,312


582,037


2.7


12.6

Consumer LOC


965,771


887,981


805,494


8.8


19.9

Other


45,183


52,511


39,937


-14.0


13.1

   Total loans


$9,506,094


$8,836,905


$8,137,719


7.6


16.8















Deposits:











Non-interest bearing deposits


$2,200,081


$2,115,813


$1,738,195


4.0


26.6

Savings and NOW


5,392,078


5,247,922


4,808,121


2.7


12.1

Certificates of deposit and other time deposits


2,606,073


2,359,636


2,535,858


10.4


2.8

   Total deposits


10,198,232


9,723,371


9,082,174


4.9


12.3

Customer repurchase agreements (6)


841,741


834,610


807,820


0.9


4.2

   Total deposits and customer repurchase agreements (6)


$11,039,973


$10,557,981


$9,889,994


4.6


11.6















Average balances











Loans:











Commercial real estate 


$3,184,720


$2,891,354


$2,657,325


10.1


19.8

Commercial and industrial


1,818,355


1,753,053


1,567,340


3.7


16.0

Commercial leases


150,308


138,441


128,535


8.6


16.9

   Commercial loans and leases


5,153,383


4,782,848


4,353,200


7.7


18.4

Direct installment


1,452,597


1,362,881


1,157,480


6.6


25.5

Residential mortgages


1,085,465


1,043,349


1,103,713


4.0


-1.7

Indirect installment


646,876


621,705


581,748


4.0


11.2

Consumer LOC


939,646


875,239


793,496


7.4


18.4

Other


44,775


43,988


39,228


1.8


14.1

   Total loans


$9,322,742


$8,730,010


$8,028,865


6.8


16.1















Deposits:











Non-interest bearing deposits


$2,168,847


$2,033,370


$1,742,328


6.7


24.5

Savings and NOW


5,468,290


5,229,488


4,786,688


4.6


14.2

Certificates of deposit and other time deposits


2,609,294


2,391,828


2,578,226


9.1


1.2

   Total deposits


10,246,431


9,654,686


9,107,242


6.1


12.5

Customer repurchase agreements (6)


866,955


748,249


867,404


15.9


-0.1

   Total deposits and customer repurchase agreements (6)


$11,113,386


$10,402,935


$9,974,646


6.8


11.4















 

F.N.B. CORPORATION








(Unaudited)









(Dollars in thousands)























For the Year Ended








December 31,


Percent






2013


2012


Variance

Performance ratios








Return on average equity



7.78%


8.02%



Return on average tangible equity (2) (4)


16.19%


17.62%



Return on average tangible common equity (2) (4)


16.58%


17.62%



Return on average assets



0.93%


0.94%



Return on average tangible assets (3) (4)


1.04%


1.05%



Net interest margin (FTE) (1) 



3.65%


3.73%



Yield on earning assets (FTE) (1)


4.05%


4.30%



Cost of funds




0.49%


0.68%



Efficiency ratio (FTE) (1) (5)



58.94%


58.32%



Effective tax rate




27.53%


28.39%













Capital ratios









Equity / assets (period end)



13.08%


11.66%



Leverage ratio




8.80%


8.29%



Tangible equity / tangible assets (period end) (4)


7.55%


6.09%



Tangible common equity / tangible assets (period end) (4)


6.71%


6.09%



Tangible common equity, excluding AOCI / tangible







   assets (period end) (4) (7)



7.16%


6.50%













Balances at period end








Loans:









Commercial real estate 



$3,245,209


$2,707,046


19.9

Commercial and industrial



1,881,474


1,602,314


17.4

Commercial leases



158,895


130,133


22.1

   Commercial loans and leases



5,285,578


4,439,493


19.1

Direct installment




1,467,236


1,178,530


24.5

Residential mortgages



1,086,739


1,092,228


-0.5

Indirect installment



655,587


582,037


12.6

Consumer LOC




965,771


805,494


19.9

Other




45,183


39,937


13.1

   Total loans




$9,506,094


$8,137,719


16.8











Deposits:









Non-interest bearing deposits



$2,200,081


$1,738,195


26.6

Savings and NOW



5,392,078


4,808,121


12.1

Certificates of deposit and other time deposits


2,606,073


2,535,858


2.8

   Total deposits




10,198,232


9,082,174


12.3

Customer repurchase agreements (6)


841,741


807,820


4.2

   Total deposits and customer repurchase agreements (6)


$11,039,973


$9,889,993


11.6











Average balances








Loans:









Commercial real estate 



$2,908,164


$2,643,867


10.0

Commercial and industrial



1,740,138


1,488,579


16.9

Commercial leases



138,214


122,129


13.2

   Commercial loans and leases



4,786,516


4,254,575


12.5

Direct installment




1,311,441


1,115,355


17.6

Residential mortgages



1,068,130


1,154,837


-7.5

Indirect installment



608,430


571,844


6.4

Consumer LOC




871,083


743,214


17.2

Other




42,430


40,429


4.9

   Total loans




$8,688,030


$7,880,254


10.3











Deposits:









Non-interest bearing deposits



$1,963,431


$1,615,419


21.5

Savings and NOW



5,203,251


4,691,424


10.9

Certificates of deposit and other time deposits


2,489,129


2,691,597


-7.5

   Total deposits




9,655,811


8,998,440


7.3

Customer repurchase agreements (6)


794,436


792,131


0.3

   Total deposits and customer repurchase agreements (6)


$10,450,247


$9,790,571


6.7











 

F.N.B. CORPORATION









(Unaudited)













(Dollars in thousands)




















4Q13 -


4Q13 -






2013


2012


3Q13


4Q12






Fourth


Third


Fourth


Percent


Percent

Asset Quality Data


Quarter


Quarter


Quarter


Variance


Variance

Non-Performing Assets











Non-performing loans (8)











   Non-accrual loans


$58,755


$65,451


$66,004


-10.2


-11.0

   Restructured loans


18,698


17,252


14,876


8.4


25.7

      Non-performing loans


77,453


82,703


80,880


-6.3


-4.2

Other real estate owned (9)


40,681


35,144


35,257


15.8


15.4

   Non-performing loans and OREO


118,134


117,847


116,137


0.2


1.7

Non-performing investments 


797


733


2,809


8.7


-71.6

   Total non-performing assets


$118,931


$118,580


$118,946


0.3


0.0















Non-performing loans / total loans


0.81%


0.94%


0.99%





Non-performing loans / total originated loans (10)


0.95%


1.05%


1.12%





Non-performing loans + OREO / total loans + OREO


1.24%


1.33%


1.42%





Non-performing loans + OREO / total originated 











   loans + OREO (10)


1.44%


1.49%


1.60%





Non-performing assets / total assets


0.88%


0.93%


0.99%



















Allowance Rollforward











Allowance for loan losses (originated portfolio) (10)











   Balance at beginning of period


$105,336


$102,849


$99,725


2.4


5.6

   Provision for loan losses


5,653


7,505


8,144


-24.7


-30.6

   Net loan charge-offs


(6,105)


(5,018)


(7,675)


21.7


-20.5

   Allowance for loan losses (originated portfolio) (10)


104,884


105,336


100,194


-0.4


4.7















Allowance for loan losses (acquired portfolio) (11)











   Balance at beginning of period


4,716


5,431


2,989





   Provision for loan losses 


2,713


(226)


1,130





   Net loan charge-offs


(1,529)


(489)


61





   Allowance for loan losses (acquired portfolio) (11)


5,900


4,716


4,180


25.1


41.1















      Total allowance for loan losses


$110,784


$110,052


$104,374


0.7


6.1















Allowance for loan losses / total loans


1.17%


1.25%


1.28%





Allowance for loan losses (originated loans) / total











   originated loans (10)


1.29%


1.34%


1.38%





Allowance for loan losses (originated loans) / total











   non-performing loans  (8)


135.42%


127.37%


123.88%



















Net loan charge-offs (annualized) / total average loans


0.32%


0.25%


0.38%





Net loan charge-offs on originated loans (annualized) / 











   total average originated loans (10)


0.30%


0.26%


0.45%



















Delinquency - Originated Portfolio (10)











Loans 30-89 days past due


$37,342


$41,212


$46,205


-9.4


-19.2

Loans 90+ days past due


7,971


7,018


6,706


13.6


18.9

Non-accrual loans


58,755


65,451


66,004


-10.2


-11.0

   Total past due and non-accrual loans


$104,068


$113,681


$118,915


-8.5


-12.5















Total past due and non-accrual loans / total originated loans


1.28%


1.44%


1.64%



















Memo item:













Delinquency - Acquired Portfolio (11) (12)











Loans 30-89 days past due


$30,205


$16,968


$22,799


78.0


32.5

Loans 90+ days past due


45,823


41,458


36,585


10.5


25.3

Non-accrual loans


0


0


0


0.0


0.0

   Total past due and non-accrual loans


$76,028


$58,426


$59,384


30.1


28.0