2013 annual shareholders meeting - first national of nebraska€¦ · –we paid a $25 per share...
TRANSCRIPT
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© FIRST NATIONAL BANK
2013 Annual Shareholders Meeting
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© FIRST NATIONAL BANK
2012 Highlights
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© FIRST NATIONAL BANK
2012 Highlights
• Net Income of $166.6 million our second best year in history
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© FIRST NATIONAL BANK
2010 2011 2012
Total Revenue $1,206.3 $1,104.4 $1,171.4
Provision Expense 418.5 66.7 140.7
Expenses 742.4 741.2 771.7
Taxes 10.6 106.0 92.4
Adjusted Net Income $34.8 $190.5 $166.6
One-time items (net of tax):
Merchant Gain 179.3 15.8 -
Visa Litigation - (26.4) -
Restructuring/Other (7.0) (20.9) -
Reported Net Income $207.1 $158.9 $166.6
Full Year Net Income
Dollars in millions
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© FIRST NATIONAL BANK
2012 Highlights
• Net Income of $166.6 million our second best year in history
• Return on Equity 11.4%
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Shareholder Return Trend
Dollars in millions 2007* 2008* 2009 2010 2011 2012
Shareholders' Equity $1,191.7 $1,168.7 $1,184.2 $1,245.4 $1,389.4 $1,487.4
Managed Assets $18,629.3 $19,027.2 $17,359.1 $14,969.4 $15,274.6 $16,407.4
% Shareholders' Equity 6.4% 6.1% 6.8% 8.3% 9.1% 9.1%
Return on Assets 1.0% 0.2% 0.2% 1.3% 1.1% 1.1%
Return on Equity 12.1% 2.9% 2.8% 17.3% 11.7% 11.4%
*2007 and 2008 exclude the impact of the Visa IPO and related litigation
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© FIRST NATIONAL BANK
Shareholder Return Trend
Dollars in millions 2007* 2008* 2009 2010 2011 2012
Shareholders' Equity $1,191.7 $1,168.7 $1,184.2 $1,245.4 $1,389.4 $1,487.4
Managed Assets $18,629.3 $19,027.2 $17,359.1 $14,969.4 $15,274.6 $16,407.4
% Shareholders' Equity 6.4% 6.1% 6.8% 8.3% 9.1% 9.1%
Return on Assets 1.0% 0.2% 0.2% 1.3% 1.1% 1.1%
Return on Equity 12.1% 2.9% 2.8% 17.3% 11.7% 11.4%
*2007 and 2008 exclude the impact of the Visa IPO and related litigation
Peer Group Median1
Total Assets $16,528.1
Return on Assets 0.9%
Return on Equity 8.9%
1 Federal Reserve peer group of 21
banks, as of December 31, 2012
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© FIRST NATIONAL BANK
2012 Highlights
• Net Income of $166.6 million our second best year in history
• Return on Equity 11.4%
• Regulatory climate continues to pose challenges
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© FIRST NATIONAL BANK
• Dodd Frank Act calls for 398 total rulemaking requirements
– As of May 1, 2013, only 153, or 38%, have been implemented by
regulators
Capital
• Industry capital standards significantly increased
• New stress testing requirements
• New Basel III standards remain pending
Revenue • CFPB, Dodd Frank impact on customer base and fees
Overhead • Cost of complying with new regulations
• Fines and penalties being assessed
Regulatory Environment
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© FIRST NATIONAL BANK
2012 Highlights
• Net Income of $166.6 million our second best year in history
• Return on Equity 11.4%
• Regulatory climate continues to pose challenges
• Bankcard, Commercial and Agricultural loans all experienced growth
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© FIRST NATIONAL BANK
Loan Composition (in millions)
December 31, 2011 $10,389
December 31, 2012 $11,169 (+ 8%)
Bankcard
Commercial & Industrial
Consumer $202
Agriculture Other $144
+ 9%
- 5%
+ 8%
+ 138%
+ 14%
+ 38%
$1,165
Real Estate
$3,631
$1,143
$4,642 $1,260
$3,445
$4,247
$1,000
Total Loans
-3.3% +7.5%
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© FIRST NATIONAL BANK
2012 Highlights
• Net Income of $166.6 million our second best year in history
• Return on Equity 11.4%
• Regulatory climate continues to pose challenges
• Bankcard, Commercial and Agricultural loans all experienced growth
• Deposits grew by $1.8 billion, nearly 15%
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© FIRST NATIONAL BANK
Deposits
December 31, 2011 $12.3 Billion
December 31, 2012 $14.1 Billion (+ 14%)
Demand
Savings
Time + 39%
+ 4%
+ 22 %
On-line
- 3%
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© FIRST NATIONAL BANK
Deposits
April 30, 2012 $12.2 Billion
April 30, 2013 $12.8 Billion (+ 5%)
Demand
Savings
Time + 14%
+ 1%
+ 1%
+ 7%
On-line
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© FIRST NATIONAL BANK
2012 Highlights
• Net Income of $166.6 million our second best year in history
• Return on Equity 11.4%
• Regulatory climate continues to pose challenges
• Bankcard, Commercial and Agricultural loans all experienced growth
• Deposits grew by $1.8 billion, nearly 15%
• First National credit card customers charged a record $10.5 billion
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© FIRST NATIONAL BANK
Credit Card Spending
$10.5
$8.9
$8.0 $7.8
Annual
$4.6
$4.1
Year-to-Date May
+ 11%
Dollars in billions
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© FIRST NATIONAL BANK
2012 Highlights
• Net Income of $166.6 million our second best year in history
• Return on Equity 11.4%
• Regulatory climate continues to pose challenges
• Bankcard, Commercial and Agricultural loans all experienced growth
• Deposits grew by $1.8 billion, nearly 15%
• First National credit card customers charged a record $10.5 billion
• Credit card charge-offs reached a record low of 3.8%
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© FIRST NATIONAL BANK
Bankcard Loss Rate
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© FIRST NATIONAL BANK
2012 Highlights
• Net Income of $166.6 million our second best year in history
• Return on Equity 11.4%
• Regulatory climate continues to pose challenges
• Bankcard, Commercial and Agricultural loans all experienced growth
• Deposits grew by $1.8 billion, nearly 15%
• First National credit card customers charged a record $10.5 billion
• Credit card charge-offs reached a record low of 3.8%
• Problem loans continue to trend lower
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© FIRST NATIONAL BANK
Classified Assets
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© FIRST NATIONAL BANK
2012 Highlights
• Net Income of $166.6 million our second best year in history
• Return on Equity 11.4%
• Regulatory climate continues to pose challenges
• Bankcard, Commercial and Agricultural loans all experienced growth
• Deposits grew by $1.8 billion, nearly 15%
• First National credit card customers charged a record $10.5 billion
• Credit card charge-offs reached a record low of 3.8%
• Problem loans continue to trend lower
• Customers took advantage of historically low interest rates to
purchase or refinance their homes
– Closed a record $1.15 billion in residential mortgage loans
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© FIRST NATIONAL BANK
Loans Closed
Mortgage Lending
Gain on Sales
$43.7
$15.3
$29.8
Dollars in millions
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© FIRST NATIONAL BANK
2012 Highlights
• Net Income of $166.6 million our second best year in history
• Return on Equity 11.4%
• Regulatory climate continues to pose challenges
• Bankcard, Commercial and Agricultural loans all experienced growth
• Deposits grew by $1.8 billion, nearly 15%
• First National credit card customers charged a record $10.5 billion
• Credit card charge-offs reached a record low of 3.8%
• Problem loans continue to trend lower
• Customers took advantage of historically low interest rates to
purchase or refinance their homes
– Closed a record $1.15 billion in residential mortgage loans
• Opened a new branch in Council Bluffs, Iowa and recently opened a
branch in Lincoln, our 106th branch
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© FIRST NATIONAL BANK
Investing for Growth: New Branches
84th and Holdrege Lincoln 25th and Broadway Council Bluffs
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© FIRST NATIONAL BANK
2012 Highlights - Continued
• After nearly three years we reinstated dividends paying out
$130 per share in 2012
– We paid a $25 per share dividend in May 2013
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© FIRST NATIONAL BANK
Dividends
Year Dividend Per Share
2012 $130
2011 $ -
2010 $ -
2009 $ 25
2008 $100
2007 $100
2006 $100
2005 $ 75
2004 $125
2003 $ 80
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© FIRST NATIONAL BANK
2012 Highlights - Continued
• After nearly three years we reinstated dividends paying out
$130 per share in 2012
– We paid a $25 per share dividend in May 2013
• Even with paying a dividend, First National of Nebraska does not owe
any short-term debt and has accumulated cash of $91 million
(May 2013) to serve as a source of strength for the Company
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© FIRST NATIONAL BANK
Holding Company Liquidity
• No borrowing under $100 million
contingent bank facility
• Commenced FNBO and FNN
dividends in 2012
Bank Note Cash
Dollars in millions
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© FIRST NATIONAL BANK
2012 Highlights - Continued
• After nearly three years we reinstated dividends paying out
$130 per share in 2012
– We paid a $25 per share dividend in May 2013
• Even with paying a dividend, First National of Nebraska does not owe
any short-term debt and has accumulated cash of $91 million
(May 2013) to serve as a source of strength for the Company
• Forbes Magazine recognized First National of Nebraska for the second
year in a row as one of its “Best Banks in America”
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© FIRST NATIONAL BANK
Forbes Recognition
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© FIRST NATIONAL BANK
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Questions