Filed by F.N.B. Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: PVF Capital Corp.
(SEC Registration Statement No. 333-189708)
The following slide presentation accompanied the Second Quarter 2013 Earnings Report and Conference Call of F.N.B. Corporation held on July 24, 2013:
|
|
F.N.B. Corporation
Second Quarter 2013 Earnings Presentation July 24, 2013
|
|
Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Financial Information
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 limitedto: (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) transaction risks associated with the pending mergers of PVF Capital Corp. and BCSB Bancorp, Inc., and integration challenges related to the recently completed merger with Annapolis Bancorp, Inc. and the 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 July 23, 2013 and in its periodic filings with the Securities and Exchange Commission.
| 2 |
|
|
|
Important Information About the Pending Mergers
Merger of F.N.B. and PVF Capital. In connection with the pending merger between F.N.B. and PVF Capital Corp., a definitive proxy statement of PVF Capital and prospectus of F.N.B. will be filed with the SEC. SHAREHOLDERS OF PVF CAPITAL CORP. ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
F.N.B. and PVF Capital and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from PVF Capital shareholders in connection with the proposed merger. Information concerning such participants’ ownership of PVF Capital common shares will be set forth in the definitive proxy statement/prospectus.
Merger of F.N.B. and BCSB Bancorp. In connection with the proposed merger between F.N.B. and BCSB Bancorp, a definitive proxy statement of BCSB Bancorp and prospectus of F.N.B. will be filed with the SEC. SHAREHOLDERS OF BCSB BANCORP, INC. ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
F.N.B. and BCSB Bancorp and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from BCSB Bancorp shareholders in connection with the proposed merger. Information concerning such participants’ ownership of BCSB Bancorp common stock will be set forth in the definitive proxy statement/prospectus.
Where to Find Additional Information. A free copy of the definitive proxy statement/prospectus for each pending merger (when it is available), as well as other documents containing information about F.N.B. Corporation, PVF Capital Corp. and BCSB Bancorp, Inc., may be obtained at the SEC’s Internet site (http://www.sec.gov). In addition, investors and security holders may obtain free copies of the documents that F.N.B., PVF Capital and BCSB Bancorp have filed with the SEC by contacting the following persons at each corporation:
F.N.B.: James G. Orie, Chief Legal Officer, F.N.B. Corporation, One F.N.B. Boulevard, Hermitage, PA 16148, telephone: (724) 983-3317
PVF Capital: Jeffrey N. Male, Secretary, PVF Capital Corp., 30000 Aurora Road, Solon, OH 44139, telephone: (440) 248-7171
BCSB Bancorp: Joseph J. Bouffard, President and Chief Executive Officer, BCSB Bancorp, Inc., 4111 East Joppa Road, Baltimore, MD 21236, telephone: (410) 256-5000
| 3 |
|
|
|
2Q13 Operating Results
2Q13 Operating Highlights Strong Operating Results
Consistent high-quality earnings
Operating net income(1) $30.1 million
High-quality earnings with provision for loan losses
Operating diluted EPS(1) $0.21 exceeding net charge-off levels
Year-to-date operating leverage achieved
ROTA(1) 1.08% Solid profitability results
ROTE(1) 17.33% Revenue growth and expense control
Net interest margin narrowing of three basis points
Net interest margin 3.63% primarily due to lower accretable yield
Annapolis Bancorp, Inc. (ANNB) acquisition closed and
Efficiency ratio 58.6% fully integrated April 6, 2013
Organic balance sheet growth continued
Total loan growth (organic, annualized) 5.6%
Organic growth in average total loans of 5.6%
Transaction deposit growth (organic, annualized) 7.4% Organic growth in average commercial loans of 5.8%
Organic growth in average consumer loans of 11.8%
Net charge-offs (originated portfolio, annualized) 0.33%
Organic growth in transaction deposits and customer
repurchase agreements of 7.4%
NPL’s+OREO/Total loans + OREO (originated portfolio) 1.59%
Asset quality reflects continued good results
| (1) |
|
Non-GAAP measure, refer to Appendix for GAAP to Non-GAAP Reconciliation details |
| 4 |
|
|
|
2Q13 Operating Highlights – Quarterly Trends
Prior
Current Prior Year Quarterly Trends
2Q13 1Q13 2Q12
Prior-year quarter benefited from higher accretable
yield of $1.7 million (net of tax) or $0.01 per diluted
Operating Net income $30,094 $28,767 $29,336 share
Earnings(1)
Accretable yield benefit included in net interest
Earnings per diluted share $0.21 $0.20 $0.21 margin:
2Q13: 2 bps
ROTE(1) 17.33% 17.46% 19.14% 1Q13: 4 bps
2Q12: 10 bps
ROTA(1) 1.08% 1.08% 1.13%
Profitability Continued strong organic growth in loans and
Performance transaction deposits and customer repurchase
Net interest margin 3.63% 3.66% 3.80% agreements
Organic growth in both commercial and
Efficiency ratio 58.6% 59.8% 57.7% consumer loans
Continued to strengthen deposit mix, with
lower-cost transaction deposits and customer
Total loan growth 5.6% 7.1% 2.8% repurchase agreements comprising 77% of
Strong total deposits and customer repurchase
Organic Commercial loan growth 5.8% 10.8% 4.2% agreements at June 30, 2013
Growth
Balance Sheet Annapolis Bancorp, Inc. acquisition completed
Trends(2) Consumer loan growth 11.8% 6.1% 8.3% 2Q13 (April 6, 2013)
Transaction deposits and
customer repo growth(3) 7.4% 2.6% 14.3%
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 ANNB acquisition;(3) Total deposits excluding time deposits
| 5 |
|
|
|
M&A Strategic Update – Progressing as Planned
Significant Progress Replicating Proven Success in Pittsburgh MSA to Expansion Markets of Baltimore MSA (ANNB And BCSB Acquisitions) and Cleveland MSA (PVFC Acquisition)
Strategies Pittsburgh Baltimore Cleveland
MSA MSA MSA
Markets with considerable
scale and growth Commercial Prospects(1) 59,240 65,169 52,149
Market Characteristics opportunities.
Density of commercial
Support Sustained Population 2.4 million 2.7 million 2.1 million
Organic Growth prospects, strong consumer,
wealth, private banking,
insurance opportunities Median Household Income $46,000 $63,000 $45,000
support FNB’s strategy.
Assemble strong regional Leadership
leadership with established
market connections.
Build experienced cross- Team
FNB Execution in Market functional team.
Instills FNB Culture Deploy proprietary sales In Process
management process Sales Management
immediately.
Create synergistic cross-
functional alignment. Cross-Functional Alignment
Achieve attractive
Market Position market position. Market Position(2) #3 #10 #14
Establishes Establish strong presence and
Scale and Presence FNB hub with a regional Regional Headquarters In Process
headquarters.
| (1) |
|
Data per U.S. Census Bureau;(2) Deposit market share, pro-forma, excludes custodial bank in Pittsburgh MSA |
| 6 |
|
|
|
Balance Sheet Highlights
Reported Organic
2Q13 Growth(1) Growth(2)
Average Balances,
$ in Millions Balance $ $ % 2Q13 Highlights
Continued strong organic growth in
Securities $2,296 $41.8 —— loans and transaction deposits and
customer repurchase agreements
Total loans $8,530 $373.5 $114.6 5.6% Organic total loan growth of 5.6%
annualized
Commercial loans $4,733 $264.2 $64.6 5.8% Total commercial loan growth
driven by C&I portfolio growth of
8.8% annualized
Consumer loans(3) $2,688 $117.6 $75.8 11.8%
Total consumer loan growth
driven by home-equity related
Residential mortgage loans $1,066 -$12.7 -$30.2 -11.2% portfolios
Earning assets $10,886 $413.1 —— Further enhanced attractive deposit
mix
Lower cost, relationship-focused
Total deposits and customer repos $10,334 $395.7 $37.4 1.5% transaction deposits and
Transaction deposits and customer customer repurchase agreements
repos(4) $7,873 $427.9 $136.6 7.4% represent 77% of total deposits
and customer repurchase
agreements compared to 73% at
Time deposits $2,461 -$32.2 -$99.2 -16.0% June 30, 2012(5)
(1) Reported linked-quarter growth represents total growth, including balances acquired via the ANNB acquisition;(2) Organic linked-quarter growth represents growth excluding balances acquired via the ANNB acquisition, % growth annualized;(3) Includes Direct Installment, Indirect Installment and Consumer LOC portfolios;(4) Excludes time deposits;(5) Period-end as of June 30, 2013
| 7 |
|
|
|
Asset Quality Results(1)
$ in Thousands 2Q13 1Q13 2Q12 2Q13 Highlights
Solid performance with demonstrated stability
compared to the prior quarter and improvement
NPL’s+OREO/Total loans+OREO 1.59% 1.59% 1.93% compared to the prior year
2Q13 provision for loan losses of $7.9 million
Total delinquency 1.44% 1.45% 1.78% exceeds net charge-offs
$6.6 million provision for the originated
Provision for loan losses(2) $ 7,903 $ 7,541 $ 7,027 portfolios
$1.25 million provision for the acquired
Net charge-offs (NCO’s)(2) $ 7,325 $ 4,213 $ 7,473 portfolios
Delinquency stable compared to the prior
NCO’s/Total average loans(2) 0.34% 0.21% 0.38% quarter and improved from the year-ago quarter
Reserve position directionally consistent with
performance
NCO’s/Total average originated loans 0.33% 0.22% 0.45%
ANNB acquisition completed April 6, 2013
Allowance for loan losses/
Total loans 1.35% 1.39% 1.49%
Allowance for loan losses/
Total non-performing loans 121.68% 124.80% 104.89%
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 |
| 8 |
|
|
|
Asset Quality Trends
Asset Quality Trends Compare Favorably to Peer Results
NPL’s+OREO/ NCO’s on Originated Loans/ Total Originated Loans+OREO(1)(2) Total Originated Loans(1)(3)
4.00%
1.20% 3.50% 1.00% 3.00% 2.74%
0.77%
2.50% 0.80%
2.15%
2.00%
0.60% 0.62%
1.60% 1.59% 1.59%
1.50% 0.41%
0.40% 0.33% 1.00%
0.22%
0.20% 0.50%
0.00% 0.00%
2010 2011 2012 1Q13 2Q13 FY 2010 FY 2011 FY 2012 1Q13 2Q13
FNB Peer Group Median FNB Peer Group Median
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. 9
|
|
Non-Interest Income
$ in Thousands 2Q13 1Q13 2Q12 2Q13 Highlights
Increase (linked-quarter) in non-interest income
Service charges $ 18,660 $ 16,531 $ 17,588 reflects increased service charges, consistent
results from fee-based lines of businesses and
the benefit of the ANNB acquisition
Insurance commissions and fees 4,101 4,430 3,882
Service charges increased linked-quarter given
Securities commissions 2,867 2,923 2,030 higher volume and the benefit of ANNB-related
volume
Trust income 4,167 4,085 3,842
Insurance commissions and fees reflects a
Gain on sale of loans 1,022 1,021 711 linked-quarter decline due to seasonal
contingent fee revenue in the first quarter;
increase seen year-over-year
Other 4,307 3,999 4,465
Non-interest income before Wealth management (securities commissions
one-time items $ 35,124 $ 32,989 $ 32,518 and trust income) increased 19.8% compared
to the prior year primarily due to revenue-
enhancing strategies and initiatives and
One-time items(1) 1,559 — — improved market conditions
Total non-interest income(2) $ 36,683 $ 32,989 $ 32,518
(1) $1.6 million gain realized on extinguishment of debt;(2) Excluding net securities gains/(losses) and OTTI of $68, $684, and $260 respectively.
10
|
|
Non-Interest Expense
$ in thousands 2Q13 1Q13 2Q12 2Q13 Highlights
? Overall non-interest expense results reflect
Salaries and employee benefits $ 43,201 $ 43,905 $ 41,070 continued efficiency focus and the addition of
ANNB operating expenses 2Q13
Occupancy and equipment 12,945 12,190 11,862
? Salaries and benefits decrease (linked-quarter)
reflect disciplined management of this expense
Amortization of intangibles 2,125 1,986 2,369 component partially offset by the addition of
ANNB-related expense
Other real estate owned 820 192 1,467
? One-time expense represents $2.9 million in
Other(1) 22,144 20,238 21,397 merger costs related to ANNB
Non-interest expense before ? The efficiency ratio improved from the prior
one-time items $ 81,235 $ 78,511 $ 78,165 quarter and reflects a good level given that
revenue synergies and cost savings related to
One-time items(2) 2,946 352 317 ANNB are in the early stages
Total non-interest expense $ 84,181 $ 78,863 $ 78,482
Efficiency ratio 58.6% 59.8% 57.7%
(1) Excluding one-time items;(2) Merger related expenses for each period of $2,946, $352, $317, respectively.
11
|
|
Net Interest Margin Trends
Net Interest Margin Trends
4.00%
3.80%
0.10% 3.70%
3.66% 3.66% 3.63% 0.05% 0.04% 0.10% 0.02% 3.70% 3.65% 3.62% 3.61%
3.56% 3.50%
3.00%
2.50%
2.00% 2Q12 3Q12 4Q12 1Q13 2Q13
Core Net Interest Margin Accretable Yield
12
|
|
Capital Position
Capital Position as of June 30, 2013(1)
March 31, 2013 June 30, 2013
14.0%
12.3%
11.9%
12.0% 10.7%
10.4%
10.0%
8.4% 8.3%
8.0%
6.2% 6.1%
6.0%
4.0%
2.0%
0.0%
Total Risk-Based Tier One Leverage Tangible Common Equity
2Q13 Capital Level Drivers
Capital levels at June 30, 2013 reflect initial impact of Annapolis Bancorp, Inc. acquisition.
Regulatory capital levels impacted by partial redemption of trust preferred securities ($15.0 million repurchased at a discount in June 2013).
Tangible common equity ratio impacted by changes in unrealized gains and losses included in other comprehensive income (OCI). Excluding the OCI change, the tangible common equity ratio would have been unchanged from the prior quarter.
(1) Regulatory risked-based ratios estimated as of June 30, 2013.
13
|
|
Summary
Consistent Strategy Delivers Sustainable Results
Strong 2Q13 Operating Results
High-quality earnings
Year-over-year operating leverage
Significant Progress Establishing FNB in Expansion Markets of Maryland and Cleveland
Consistent, proven strategy deployed
FNB expansion in Maryland and Cleveland markets progressing well with results at or exceeding targets
Delivering Results on Stated Strategic Focus
Evolution of delivery channels
Continuous reinvestment in people, processes and infrastructure
Keen focus on expense control and efficiency improvements
Leveraging cross-sell culture across lines of business and through M&A expansion markets
Pursuing M&A opportunities in attractive markets following consistent, disciplined approach
14
|
|
Appendix
15
|
|
Regional Peer Group Listing
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
16
|
|
GAAP to Non-GAAP Reconciliation
Operating: Earnings, Return on Avg Tangible Equity, Return on Avg Tangible Assets
For the Quarter Ended
June 30, 2013 March 31, 2013 June 30, 2012
Operating net income
Net income $29,192 $28,538 $29,130
Add: Merger and severance costs, net of tax 1,915 229 206
Less: Gain on extinguishment of debt, net of tax 1,013 — -
Operating net income $30,094 $28,767 $29,336
Operating diluted earnings per share
Diluted earnings per share $0.20 $0.20 $0.21
Add: Merger and severance costs, net of tax 0.01 0.00 0.00
Less: Gain on extinguishment of debt, net of tax (0.01) — -
Operating diluted earnings per share $0.21 $0.20 $0.21
Operating return on average tangible equity
Operating net income (annualized) $120,706 $116,668 $117,991
Amortization of intangibles, net of tax (annualized) 5,538 5,237 6,192
$126,244 $121,904 $124,182
Average shareholders’ equity $1,473,945 $1,410,827 $1,367,333
Less: Average intangible assets 745,458 712,466 718,507
Average tangible equity $728,487 $698,361 $648,826
Operating return on average tangible equity 17.33% 17.46% 19.14%
Operating returnet on average tangible assete s
Operating net income (annualized) $120,706 $116,668 $117,991
Amortization of intangibles, net of tax (annualized) 5,538 5,237 6,192
$126,244 $121,904 $124,182
Average total assets $12,470,029 $12,004,759 $11,734,221
Less: Average intangible assets 745,458 712,466 718,507
Average tangible assets $ 11,724,570 $ 11,292,292 $ 11,015,714
Operating return on average tangible assets 1.08% 1.08% 1.13%
17