F.N.B. Corporation Reports Significant Revenue Growth and Record 2014 Net Income

PRESS RELEASE

January 22, 2015 - PITTSBURGH, PA

F.N.B. Corporation (NYSE: FNB) today reported fourth quarter and full year 2014 results. Net income available to common shareholders for the fourth quarter of 2014 totaled $37.3 million or $0.21 per diluted common share. Comparatively, third quarter of 2014 net income totaled $33.4 million, or $0.20 per diluted common share, and fourth quarter of 2013 net income totaled $28.4 million or $0.18 per diluted common share. Net income available to common shareholders for the full year of 2014 totaled $135.7 million, or $0.80 per diluted common share, compared to net income of $117.8 million, or $0.80 per diluted common share in 2013. Operating¹ results are presented in the tables below.

Vincent J. Delie, Jr., President and Chief Executive Officer, commented, “We are pleased to report another great quarter and year, achieving significant revenue growth of 15% and record net income of $136 million for 2014. Through the efforts of our entire team of talented bankers, we continue to deliver high-quality earnings with consistent growth in loans and low-cost deposits, excellent asset quality and operating efficiency. As we enter 2015 we are well-positioned to realize the benefits of our organic and acquisition-related growth strategy, and I am confident in our ability to deliver long-term success for our employees, clients and shareholders.”

Quarterly Results Summary	4Q14	3Q14	4Q13
Reported Results
Net income available to common shareholders ($ in millions)	$37.3	$33.4	$28.4
Net income per diluted common share	$0.21	$0.20	$0.18
Operating Results (Non-GAAP)*
Operating net income available to common shareholders ($ in millions)	$36.4	$35.0	$32.5
Operating net income per diluted common share	$0.21	$0.21	$0.21
Average Diluted Shares Outstanding (in 000's)	175,630	168,884	157,858
Full Year Results Summary		2014	2013
Reported Results
Net income available to common shareholders ($ in millions)		$135.7	$117.8
Net income per diluted common share		$0.80	$0.80
Operating Results (Non-GAAP)*
Operating net income available to common shareholders ($ in millions)		$135.6	$123.5
Operating net income per diluted common share		$0.80	$0.84
Average Diluted Shares Outstanding (in 000's)		169,079	147,810

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

Fourth Quarter 2014 Highlights
(All comparisons to the prior quarter, except as noted; Organic growth in loans and deposits refers to growth excluding the benefit of initial balances acquired via an acquisition.)

• Organic growth in total average loans was $280 million, or 10.3% annualized, with average commercial loan growth of $93 million, or 6.0% annualized, average consumer loan growth of $93 million, or 14.1% annualized, and average indirect auto loan growth of $82 million.
• On an organic basis, average total deposits and customer repurchase agreements grew $197 million or 6.4% annualized. Average transaction deposits and customer repurchase agreements grew organically $286 million, or 12.0% annualized.
• The net interest margin was 3.54%, compared to 3.63% in the prior quarter, mainly reflecting lower benefit from accretable yield adjustments.
• The efficiency ratio improved to 56.1%, from 56.7% in the prior quarter and 57.8% in the year-ago quarter.
• Credit quality results reflect improved non-performing loan and delinquency levels. For the originated portfolio, non-performing loans and other real estate owned (OREO) to total loans and OREO improved 12 basis points to 1.13% and total originated delinquency improved 7 basis points to 0.99% at December 31, 2014. Net originated charge-offs were 0.17% annualized of total average originated loans, compared to 0.29% annualized in third quarter of 2014 and 0.30% annualized in the year-ago quarter.
• The tangible common equity to tangible assets ratio was 6.83% at December 31, 2014. The tangible book value per share increased $0.08 to $5.99 at December 31, 2014.

Fourth Quarter 2014 Results – Comparison to Prior Quarter
(All comparisons refer to the third quarter of 2014, except as noted)

Net Interest Income/Loans/Deposits
Net interest income on a fully taxable equivalent basis totaled $125.4 million, increasing $2.9 million, or 2.4%, reflecting average earning asset growth of $690 million, or 5.1%, partially offset by lower accretable yield adjustments of $2.1 million compared to prior quarter. The net interest margin was 3.54%, compared to 3.63% in the prior quarter, with six basis points of the narrowing due to the lower accretable yield adjustments. Excluding accretable yield adjustments, the fourth quarter net interest margin was 3.49%, compared to 3.52% in the third quarter of 2014.

Average loans totaled $11.1 billion and increased $545 million, or 20.5% annualized, as a result of the acquisition that was completed late in the third quarter of 2014 and average organic loan growth of $280 million or 10.3% annualized. Organic growth in average commercial loans totaled $93 million, or 6.0% annualized, and growth in average consumer loans (consisting of direct loans and consumer lines of credit) was strong at $93 million or 14.1% annualized. Commercial and consumer loan growth continues to significantly benefit from the lending opportunities presented in FNB’s three metropolitan markets. Average indirect auto loans increased $82 million, reflecting continued increased volume and demand.

Average deposits and customer repurchase agreements totaled $12.4 billion and increased $467 million, or 15.5% annualized, and included average organic growth of $197 million or 6.4% annualized. Consistent with prior quarters, growth in transaction deposits and customer repurchase agreements was partially offset by a decline in time deposits. On an organic basis, average total transaction deposits and customer repurchase agreements increased $286 million or 12.0% annualized. Organic growth in average non-interest bearing deposits was $94 million or 14.6% annualized, primarily reflecting growth in non-interest bearing business accounts and the benefit of seasonally higher balances. Total loans as a percentage of deposits and customer repurchase agreements was 92% at December 31, 2014.

Non-Interest Income
Non-interest income totaled $39.5 million, increasing $1.9 million or 5.1%, and included a non-recurring $2.7 million gain, which was partially offset by $0.9 million lower gain on sale of securities. Adjusting for these items, non-interest income was consistent with the prior quarter, with continued solid results in service charges, wealth management and insurance. Mortgage banking revenue improved slightly due to higher origination volume. Non-interest income represents 24% of total revenue.

Non-Interest Expense
Non-interest expense totaled $96.7 million, increasing $0.8 million, or 0.8%, and included $1.6 million of merger and severance costs, compared to $2.5 million of merger and severance costs in the third quarter. Excluding merger and severance costs, non-interest expense increased $1.8 million, or 1.9%, primarily due to increased OREO expense of $1.1 million related to the disposition of non-strategic properties. The efficiency ratio improved to 56.1%, compared to 56.7% in the third quarter of 2014.

Credit Quality
Credit quality metrics reflect an improvement in the ratio of non-performing loans and OREO to total loans and OREO of 8 basis points to 0.97% at December 31, 2014, and 12 basis points for the originated portfolio to 1.13%. Delinquency, defined as total originated past due and non-accrual loans as a percentage of total originated loans, improved 7 basis points to 0.99% at December 31, 2014.

Net charge-offs for the fourth quarter totaled $4.7 million, or 0.17% annualized of total average loans, compared to $7.3 million or 0.28% annualized in the prior quarter. For the originated portfolio, net charge-offs as a percentage of average originated loans were 0.17% annualized, compared to 0.29% annualized in the prior quarter. For the originated portfolio, the allowance for loan losses to total originated loans was 1.22%, compared to 1.24% at September 30, 2014, with the slight decline directionally consistent with the quarter’s credit quality performance. The ratio of the allowance for loan losses to total loans increased slightly to 1.12%, compared to 1.10%. The provision for loan losses decreased $1.2 million to $10.0 million. The ratio of the allowance for loan losses to total non-performing loans increased to 172.1%, compared to 149.0%, through a combination of the increased allowance and reduced levels of total non-performing loans.

Full Year 2014 Results – Comparison to Prior Year
(All comparisons refer to full year 2013, except as noted)

Results include the impact from the completion of the OBA Financial Services, Inc. (OBAF) acquisition completed on September 19, 2014, BCSB Bancorp, Inc. (BCSB) acquisition completed on February 15, 2014, PVF Capital Corp. (PVFC) on October 12, 2013 and Annapolis Bancorp, Inc. (ANNB) on April 6, 2013.

Net Interest Income/Loans/Deposits
Net interest income on a fully taxable equivalent basis totaled $473.2 million, increasing $70.2 million or 17.4%. The net interest margin was 3.59%, compared to 3.65%. Average earning assets grew $2.1 billion, or 19.2%, through consistent organic loan growth and the benefit of acquisition-related growth.

Average loans totaled $10.4 billion and increased $1.7 billion, or 19.3%, reflecting strong organic average loan growth of $824 million, or 9.0%, and loans added in the acquisitions. Growth in the commercial portfolio continued throughout 2014, with average balances growing organically $466 million or 9.1%. Average organic consumer loan growth (consisting of direct loans and consumer lines of credit) was $259 million or 11.4%. Average indirect auto loans increased $137 million or 22.5%. Organic growth results reflect the benefit of the increased number of prospects from expansion markets and successful sales management.

Total average deposits and customer repurchase agreements totaled $11.9 billion and increased $1.4 billion or 13.5%, including average organic growth of $209 million or 1.9%. Organic growth in low-cost transaction deposit accounts and customer repurchase agreements was $526 million, or 6.3%, and was largely driven by organic growth in average non-interest bearing deposits of $334 million or 16.2%.

Non-Interest Income
Non-interest income totaled $158.3 million, increasing $22.5 million, or 16.6%, with 2014 including higher gains on the sale of securities of $10.9 million. Organic and acquisition-related growth in service charges was offset by $5.1 million in lower customer-related interchange service charges due to the Durbin Amendment that went into effect for FNB on July 1, 2013. Wealth management revenue (trust income and securities commissions) increased $2.8 million, or 9.9%, reflecting organic growth, the benefit from the recent expansion into the Cleveland and Maryland markets, and improved market conditions. Higher customer swap fee revenue of $2.9 million reflects strong organic commercial loan growth in 2014 and demand for these products given the interest rate environment. Also included in other non-interest income was a non-recurring $2.7 million gain during the fourth quarter of 2014.

Non-Interest Expense
Non-interest expense totaled $379.3 million, increasing $41.1 million, or 12.1%, and included merger and severance costs of $12.2 million, compared to $8.2 million in 2013. Absent these merger and severance costs, non-interest expense increased $37.1 million, or 11.3%, primarily attributable to the additional operating costs related to the expanded operations from recent acquisitions. The efficiency ratio improved to 57.2% from 58.9%.

Credit Quality
Credit quality results reflect improvement over the prior year. The ratio of non-performing loans and OREO to total loans and OREO improved 27 basis points to 0.97%, and for the originated portfolio, the ratio of non-performing loans and OREO to total loans and OREO improved 31 basis points to 1.13%. Total originated delinquency, defined as total past due and non-accrual originated loans as a percentage of total originated loans, improved 29 basis points to 0.99% at December 31, 2014, reflecting an $8.4 million, or 8.1%, reduction in total delinquency.

Net charge-offs totaled $23.5 million, or 0.23% annualized of total average loans, compared to $24.7 million or 0.28% annualized. For the originated portfolio, net charge-offs were $21.0 million or 0.24% annualized of total average originated loans, compared to $21.5 million or 0.28% annualized. The ratio of the allowance for loan losses to total originated loans was 1.22% at December 31, 2014, compared to 1.29% at December 31, 2013, with the change directionally consistent with the performance of the portfolio. The provision for loan losses totaled $38.6 million, compared to $31.1 million in the prior-year period primarily due to the strong organic loan growth.

Capital Position
The tangible common equity to tangible assets ratio (non-GAAP measure) was 6.83%, compared to 6.89% and 6.71% at September 30, 2014 and December 31, 2013, respectively. The tangible book value per common share (non-GAAP measure) increased to $5.99, from $5.91 and $5.38 at September 30, 2014 and December 31, 2013, respectively. The common dividend payout ratio for the full year of 2014 was 59.9%.

The Corporation’s capital levels at December 31, 2014, continue to exceed federal bank regulatory agency “well capitalized” thresholds as the estimated total risk-based capital ratio was 12.3%, the estimated tier 1 risk-based capital ratio was 11.0% and the estimated leverage ratio was 8.4%.

Conference Call
F.N.B. Corporation will host a conference call to discuss fourth quarter and full year 2014 financial results on Thursday, January 22, 2015, at 10:00 a.m. Eastern Time. Participating callers may access the call by dialing (866) 652-5200 or (412) 317-6060 for international callers. 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 shortly after the completion of the call on the day of the call until midnight ET on Thursday, January 29, 2015. The replay can be accessed by dialing (877) 344-7529 or (412) 317-0088 for international callers; the conference replay access code is 10058502. 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.