‘Best Position in Our History,’ FNB CEO Tells Shareholders

CRANBERRY TOWNSHIP, Pa. — The question-and-answer period – shareholders posed two routine questions — lasted longer Wednesday than it took F.N.B. Corp. to conduct its annual meeting that had an agenda of four items, all passed overwhelmingly.

F.N.B., which transferred its headquarters last years to Pittsburgh from Hermitage, is the parent of First National Bank of Pennsylvania.

The business portion of the meeting concluded at 3:08 p.m. with adjournment declared at 3:17.

The president and CEO of the holding company, Vincent J. Delie Jr., informed the few shareholders present in the Great Room of the Regional Learning Alliance here, “I think we’re in the best position we’ve been in in our history,” as he showed slides of the growth and profitability F.N.B. has enjoyed over the last five years.

“We’re in a great position,” Delie said, to achieve more growth, whether generated internally, through more acquisitions, or both.

Through acquisitions since 2010, F.N.B. has entered Maryland, enlarged its presence in northeastern Ohio by entering Greater Cleveland and raised its profile in the Pittsburgh region.

“It’s up to us to deliver results,” Delie stated.

Will the company pause to consolidate or seek more acquisitions? a shareholder asked.

“We look at acquisitions opportunistically,” Delie responded. “Deals must be aligned with our strategic objectives. … We look at things very strategically.” His immediate focus, he said, is organic growth, that is, growth generated internally, and increasing efficiencies.

By nearly every measure, F.N.B. has achieved considerable success since 2010. Its net income in 2014, $135.7 million available to holders of its common stock, was the highest in its history. In 2013, that figure was $118 million, and in 2010, $75 million.

Total assets exceed $16 billion, an increase of 19% from year-end 2013. The loan portfolio was $11.2 billion at Dec. 31, 2014, $1.7 billion higher than at year-end 2013. Loan production in 2014 was nearly $4 billion, almost double the loans originated in 2010.

Even with new regulations taking effect in the wake of the Great Recession, “We overcame a 10-cent a share deficit in our earnings,” Delie reported. Earnings per common share were 65 cents for 2010 and 80 cents in both 2013 and 2014.

Total revenues have risen 55% since 2010 from both organic growth and “our M&A strategy,” Delie noted.

Total shareholder return, 3.6%, places F.N.B. in the upper quartile of all U.S. banks, Delie noted, and 10th highest among the 100 largest in the nation.

Its efficiency ratio, how much the company spends to generate a dollar of revenue, has remained below 60% the last five years, falling to 57.21% in 2014 from 58.94% in 2013.

These results prompted the owners of the 80% of the 175.45 million common shares issued who voted:

• To re-elect the 15 directors to one-year terms.
• Adopt an advisory resolution (“say on pay”) to approve the 2014 compensation of the named executive officers (Delie, Vincent J. Calabreze Jr., chief financial officer, John C. Williams Jr., president of First National Bank, Gary L. Guerrieri, chief credit officer, and Timothy G. Rubritz, corporate controller and principal accounting officer).
• Ratify the re-appointment of Ernest & Young LP as independent outside auditor for 2015.
• Approve an amendment to the 2007 incentive compensation plan. The amendment increases the number of shares reserved for awards to 1.5 million.

All items passed with more than 96% approval, the corporate secretary, James G. Orie, said.

Pictured: F.N.B’s corporate headquarters building on Pittsburgh’s North Shore.

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