I will now turn the call over to Vince Delie, President and Chief Executive Officer.

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1 Transcript Second Quarter 2014 Earnings Call Cindy Christopher, Investor Relations Thank you. Good morning everyone and welcome to our earnings call. This conference call of F.N.B. Corporation and the reports it files with the Securities and Exchange Commission often contain forward-looking statements. Please refer to the forward-looking statement disclosure contained in our earnings release, related presentation materials and in our reports and registration statements filed with the Securities and Exchange Commission and available on our corporate website. A replay of this call will be available until July 31 and a transcript and the Webcast link will be posted to the Shareholder and Investor Relations section of our corporate website. I will now turn the call over to Vince Delie, President and Chief Executive Officer. Vince Delie, President and Chief Executive Officer Good morning and welcome to our earnings call. Joining me today are Vince Calabrese, our Chief Financial Officer, and Gary Guerrieri our Chief Credit Officer. I will be highlighting our operating performance and providing a strategic overview. Gary will review asset quality and Vince will provide further detail on our financial results along with an update on our expectations for the second half of the year. Vince will then open the call for any questions. Let s begin by looking at the quarter. This quarter includes continued high-quality earnings, with solid revenue growth, a stable net interest margin, stronger-than-expected loan and deposit growth, good asset quality and an improved efficiency ratio. These are all positive proof points that the underlying fundamentals of our company are performing exceptionally well.

2 Operating net income available to common shareholders was a record-high $33 million and resulted in $0.20 per diluted share, a penny increase from the prior quarter. This translates into a 107 basis point return on average tangible assets and nearly a 15% return on average tangible common equity. Average organic loan growth was strong at an annualized rate of 10%, led by 13% annualized growth in the commercial portfolio. Growth on a spot basis was higher at 16% annualized for total loans and 18.3% annualized for commercial. We experienced growth across all markets, with a heavier concentration from our metro markets of Pittsburgh, Baltimore and Cleveland. Our commercial success in FNB s new markets exceeds our expectations and demonstrates that we are realizing meaningful benefits from our acquisition strategy. Our business model is generating results in the larger metro markets and the teams we have assembled across our footprint, including our new markets, are performing very well. The consumer bank also delivered a solid quarter with 9% annualized loan growth and favorable results across the product lines, including indirect auto and the home equity portfolio. Organic growth in average non-interest bearing deposits continued at a strong annualized rate of 23%, and these balances accounted for 21% of total deposits and repos at quarter end. Our deposit mix and funding position remained strong with a loan-to-deposit ratio, including repos, of 88%. The core net interest margin remained stable and asset quality was good, both reflecting consistent, high-quality results. We continue to diligently manage expenses and our efficiency ratio was 57%, an improvement over the prior period and year ago results. We have managed to an efficiency ratio of under 60% for the last nine consecutive quarters, an accomplishment that reflects a combination of revenue growth, core expense savings and effectively managing acquisition-related cost savings. Looking specifically at revenue, linked quarter revenue growth was $12 million, or 8.5%, and $21 million, or 16%, compared to the year ago quarter. This is attributed to organic growth and the benefits of recent acquisitions. This revenue growth occurred despite significant regulatory and economic headwinds as our team successfully navigates a difficult environment for the industry. Page 2

3 Our metro market expansion strategy continues to progress successfully. OBA Financial is on track to close and convert in mid-september. This acquisition expands FNB into the highly attractive I-270 corridor, providing additional scale in the market and cost-effectively leveraging the leadership and infrastructure investment we have already made in Maryland. The market has a high concentration of commercial prospects, a key consideration for us. Given our success growing our commercial portfolio this will further strengthen FNB s ability to generate high-quality earning assets. I would also like to remind you that the transaction bolsters our capital levels and future EPS accretion. All expansion markets are fully staffed and completely integrated. As evidenced by our loan growth, we are beginning to realize the full benefits of our strategy which began with our entry into Annapolis in April of last year. In fact, I would characterize our position in these markets as currently exceeding initial expectations for talent acquisition and loan production. To put this in perspective, our commercial pipelines, which are currently at a record high, continue to escalate in part because of these markets. At the end of the second quarter, the total pipeline grew 65% from a year ago and the metro markets of Pittsburgh, Baltimore and Cleveland now represent nearly 70% of the total. Pittsburgh remains our largest contributor, and Baltimore and Cleveland are building momentum and comprise over a quarter of our total commercial pipeline. The expanded pool of diverse commercial prospects created through our expansion provides us with the ability to achieve high-quality growth as we maintain our disciplined underwriting standards in an increasingly competitive environment. Earlier this month we announced that Pittsburgh has officially become FNB s corporate headquarters, an action that reflects our transformation into a regional financial services company. It aligns how we have been managing the company for the past several years and we do not expect to incur incremental costs with this change, as we currently occupy 85,000 square feet of office space in downtown Pittsburgh. This space houses executive offices, the headquarters for several lines of business, including Wealth and Insurance, and over 260 professional non-branch personnel. Since 2010, our number of Pittsburghbased non-branch-related employees has grown 60%. In total, FNB s Pittsburgh region employs 800 people, or a quarter of our nearly 3,200 employees. Page 3

4 Our current operations, employees and branches in the Hermitage area will not be impacted. With its close proximity to Pittsburgh, Hermitage is an ideal location to maintain our operations center and other support personnel. We have invested in excess of $15 million in the Hermitage campus and have grown the employee base 20% over the past two years. We will continue to leverage our investment and support the Hermitage community through additional employment and investment opportunities. We have accomplished tremendous growth in Pittsburgh since 2004, rising to a top three position for both retail deposit and commercial middle market share, and are now the second largest bank holding company based in the market. Having FNB headquartered in Pittsburgh elevates our visibility nationally and is beneficial in the recruitment of talent as we continue to fulfill our strategy. On the talent front, we have recently filled two key positions. Rick Steiner joined us at the beginning of the year as Chief Marketing Officer. Rick has extensive marketing experience from both PNC and the global law firm, Reed Smith. In addition, Mark Shozda joined as Chief Technology Officer. Mark has over thirty years of experience in the financial services industry and was most recently with Bank of New York Mellon. The first half of 2014 has been very successful for FNB. We have delivered high-quality operating results and continued to make significant progress on many strategic initiatives that position FNB for sustained and profitable growth. Our balance sheet position is strong and we are maintaining capital levels that represent decade highs for FNB. Our tangible book value per share is growing consistently and has increased 15% year-over-year. We are beginning to realize the benefits from our recent acquisitions, and on behalf of the management team, I would like to reiterate that we believe FNB s current underlying fundamentals are exceptional. I am pleased to have shared several highlights this morning, including solid revenue growth, a stable net interest margin, strong loan and deposit growth and a top-quartile efficiency ratio. With that, I will turn the call over to Gary so he can share asset quality results. Page 4

5 Gary Guerrieri, Chief Credit Officer Thank you Vince and good morning everyone. We ended the first half of the year well-positioned, as our loan portfolio demonstrated consistent credit quality results across both the originated and acquired books. I would like to cover the highlights for the quarter as it relates to the originated portfolio, which as you ll recall is our primary book of business, followed by a few remarks on the acquired portfolio. Let s now look at the credit performance for the originated portfolio for the second quarter. Contributing to our favorable results, the level of originated NPL s and OREO further improved on a linked-quarter basis, down 10 basis points to end June at 1.36%, which was primarily attributable to commercial OREO sale activity during the quarter. Delinquency also trended positively during the second quarter to stand at 1.13%, a 4 basis point improvement over the March quarter. Net charge-offs totaled $4.8 million, or 23 basis points annualized, which was slightly better on both a linked-quarter and year-over-year basis. When measured for the first half of 2014, our year-to-date net charge-offs totaled 25 basis points annualized, and were 3 basis points better than the similar period a year ago, demonstrating the continued consistency in our portfolio. The originated provision for loan losses increased in the second quarter as expected to $8.9 million in support of solid loan growth during the quarter, resulting in an ending reserve position of 1.26%. The reserve is down 2 basis points when compared to the prior quarter, remaining directionally consistent with the performance of the portfolio. I d like to now turn your attention to our $1.6 billion acquired portfolio of loans carried at fair value. The acquired delinquency level improved $7MM during the second quarter, reflecting a 7% linkedquarter reduction to end June at $89MM. The improvement in the past due level reflects the successful exit of several problem credits. Next, I d like to shift your attention to the loan growth we experienced during the quarter, and share some insight with you about the consistency of our lending approach and underwriting philosophy. Our recent expansion into the Cleveland and Baltimore markets has provided us with numerous lending opportunities, which has strategically provided us with greater geographic and borrower diversity, and more importantly, allows us to be very selective in our credit decision-making process. We have hired very seasoned credit professionals to oversee these two markets and lead the decision-making process, with our overall credit officer group averaging 32 years of industry experience. We have also made Page 5

6 significant investments internally to develop and implement a proprietary credit underwriting system, which ensures consistent credit delivery across our entire footprint that is aligned with the Company s underwriting policies and philosophy. In summary, we had another successful quarter and finished out the first half of 2014 with both our originated and acquired portfolios performing well. We are very pleased with our credit quality results and the positive contribution this continues to provide to our high-quality earnings. As our loan portfolio continues to grow, we will manage it with the same careful and rigorous approach we have always employed, which focuses on our core strengths of prudent risk management and quality underwriting carried out by our seasoned and experienced banking team. I d now like to turn the call over to Vince Calabrese, our Chief Financial Officer, for his remarks. Vincent J. Calabrese, Jr., Chief Financial Officer Thanks Gary and good morning everyone. Today I will discuss the second quarter s operating performance and provide an update on guidance for the remainder of the year. Starting with balance sheet highlights on page 10, the quarter included strong organic growth in average loans of 10.5% annualized, driven by commercial loan growth of $181 million or 13.1% annualized. As Vince mentioned, annualized growth on a spot basis of 16% in total loans was even stronger. Even with the significant level of activity during the second quarter, we entered the third quarter with pipelines at a record high. Organic growth in average consumer loans was also good at $71 million or 9.1% annualized. This was led by a combination of organic growth of $36 million in indirect auto loans and $35 million in home equity-related loans. Average total deposits and customer repos increased $184 million, or 6.4% annualized, on an organic basis, and average transaction deposit and repos increased $264 million or 12.0% annualized. We continue to benefit from new account acquisition, particularly on the business side. Non-interest bearing deposit growth remained very strong at $130 million or 23.2% annualized. Page 6

7 The reported net interest margin was 3.60% and on a core basis was 3.59%, only a slight difference as accretable yield adjustments during the quarter were minimal. On a core basis, the net interest margin narrowed modestly by one basis point consistent with our prior guidance. We continue to execute a strategy of managing the net interest margin through pricing and balance sheet management. Consistently generating quality loan growth and low-cost deposits is a key element and we are pleased with the stability we have been able to achieve. Non-interest income, excluding securities gains, grew by $5.8 million or 17.8%, on a linked-quarter basis. Deposit service charges increased $2.2 million, or 14.2%, given the benefit of seasonally higher volume and a full quarter of BCSB activity. Despite the increase, transaction volumes in some service charge categories are tracking below expectations. Mortgage banking increased from a very low first quarter, and while we have seen originations pick up, the contribution from this line of business remains light and below where we were originally projecting. Swap fee revenue benefitted from the strong commercial loan volume and reached a record high of $2.6 million, increasing nearly $2 million from the prior quarter and driving the increase on the other non-interest income line. We also continue to see solid results from the fee-based affiliates, including Wealth and Insurance, as Wealth Management revenue in total increased 9.9%. Insurance commissions declined due to normal seasonality, including contingent fee revenue received in the first quarter. Non-interest expense, excluding merger and severance costs, increased $4.8 million, or 5.6%. This increase primarily reflected a full quarter of BCSB operating costs. Additionally, we had increased personnel costs due to higher performance-based compensation expense aligned with loan growth achieved during the second quarter. The quarter also included slightly higher FDIC insurance expense and seasonally higher marketing expense. The second quarter efficiency ratio was 57%, improved from 59% in both the prior and year-ago quarters. Slide 14 provides a view of our efficiency ratio trends since 2011 relative to peers. Over this time, we have gained efficiency, and for both the full year of 2013 and the first quarter of 2014, rank in the top quartile relative to our peers. Even with shares increasing 15% year-over-year, second quarter pre-provision net revenue EPS of $0.37 was the highest level over the past five quarters, as shown on slide 15. Over the time period shown, Page 7

8 results include the integration of three acquisitions, the Durbin impact and the 2013 capital raise to position us for Basel III requirements. While these events, other than Durbin, position FNB for sustained long-term success, they have also temporarily muted the strong fundamental drivers of the company. When looking at these results, it is important to keep in mind that beginning last quarter; the capital raise reduced PPNR EPS, and reported EPS, by over a penny per quarter. Turning to capital, the linked-quarter decline in the June 30 capital ratios reflect the quarter s strong growth, while the year-over-year comparisons show our strengthened capital position following the raise last fall, with stronger Tier 1 Common and TCE ratios and an increased tangible book value per share. In addition, the OBA transaction will come on board with excess capital that can be utilized to support our continued asset growth. Our outlook for the second half of 2014 reflects expectations for continued solid results across the key drivers, including strong organic balance sheet growth, a stable net interest margin and consistent asset quality. We are more optimistic about our loan growth, and expect that for the remainder of the year, we will perform at the upper-end of our previous mid-to-high single digit organic growth guidance. Quarterly organic growth in average total deposits and customer repos is expected to be in the midsingle digit annualized range, consistent with our previous expectations given normal seasonal trends. Additionally, we reaffirm our expectation for the core net interest margin to continue to narrow modestly during the last half of the year. Our fee income expectations for the remainder of the year are for continued growth from the fee-based units and other revenue sources, with overall results tempered by previously discussed environmental factors that we are managing through. As I mentioned, we continue to see lower transaction volumes in certain deposit service charge revenue categories, and, while mortgage banking volume is picking up slowly, we reaffirm last quarter s guidance for reduced revenue from this line of business translating into a penny a share reduction for the rest of the year. With these items in mind, and given seasonal influences, quarterly core non-interest income is expected to be in-line to slightly lower than the second quarter results; absent the benefit we will see in the fourth quarter from OBA. Quarterly core non-interest expense is expected to remain relatively consistent with Page 8

9 second quarter levels for the remainder of the year again, excluding the increase in the fourth quarter from the addition of OBA s operating expenses. As you can see, provision expense increased on a linked-quarter and year-over-year basis given the strong loan growth. Given our overall asset quality position, this should continue to track to loan growth and we expect provision for the last two quarters of the year to be similar to second quarter levels. For taxes, we expect an effective GAAP tax rate between 30% and 31% for the third and fourth quarters of As Vince mentioned, we are on target for a mid-september closing date for OBA and I would like to remind you of our previous guidance. We expect the transaction to be dilutive to earnings by approximately a penny in the fourth quarter, neutral in 2015 and accretive thereafter, while being accretive to capital. In closing, we are very pleased with results in the first half of 2014, and our team continues to meet the industry challenges successfully. We stand committed to deliver sustainable, long-term results that create value for our shareholders as we look forward to Now I would like to turn the call over to the operator for your questions. Page 9

I will now turn the call over to Vince Delie, President and Chief Executive Officer.

I will now turn the call over to Vince Delie, President and Chief Executive Officer. Transcript Fourth Quarter and Full Year 2014 Earnings Call January 22, 2015 Investor Relations Thank you. Good morning everyone and welcome to our earnings call. This conference call of F.N.B. Corporation