HERMITAGE, Pa., Jan. 18 /PRNewswire-FirstCall/ -- F.N.B. Corporation , a diversified financial services company, today reported fourth quarter 2006 net income of $17.6 million, or $.29 per diluted share. These results were equal to the third quarter of 2006 and compare to net income of $4.7 million, or $.08 per diluted share for the fourth quarter of 2005. The 2005 fourth quarter results included after-tax charges of $11.0 million, or $.19 per diluted share, related to the Corporation's balance sheet restructuring, efficiency initiatives and merger costs. Excluding these items from the fourth quarter of 2005 results in a 6.9% increase in diluted earnings per share for the fourth quarter of 2006. The Corporation's return on equity for the fourth quarter of 2006 was 12.9%, its return on tangible equity was 26.1% and its return on assets was 1.2%.
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"In the fourth quarter of 2006 we continued to benefit from our strategic initiatives to expand into higher growth markets. These initiatives made a significant contribution to our bottom line," stated Stephen Gurgovits, President and Chief Executive Officer of F.N.B. Corporation. "Among the benefits of these initiatives were strong year-over-year fourth quarter loan growth of 13% which, coupled with strong credit quality and focused expense control, resulted in continued strong performance."
For the full year 2006, the Corporation recorded net income of $67.6 million, or $1.14 per diluted share, compared to $55.3 million, or $.98 per diluted share for 2005. The Corporation's return on equity for the full year 2006 was 13.2%, its return on tangible equity was 26.3% and its return on assets was 1.2%.
"We worked diligently to overcome the many challenges inherent in an uncertain climate for financial services. By keeping focused on our goals, we were able to deliver on our targeted performance measures," noted Gurgovits.
Net interest income, on a fully tax equivalent basis, was down slightly in the fourth quarter of 2006 compared to the previous quarter due to lower balances of investment securities, but it surpassed net interest income for the same period in 2005 by 2.7%. While period-end total loans were relatively flat on a sequential quarter basis, commercial loans were up 9.2% annualized. The commercial loan growth was offset by seasonal declines in the consumer loan portfolios.
The yield on earning assets for the fourth quarter of 2006 increased 9 basis points compared to the previous quarter, which was matched by the same increase in the cost of funds. The net interest margin for the fourth quarter was 3.67%, an increase of 2 basis points over the third quarter. Of special significance, this increase reverses a trend of net interest margin declines experienced over the past three quarters.
For the full year 2006, net interest income on a fully tax equivalent basis increased 1.4% over 2005. Average earning asset growth of 5.1% more than offset the 15 basis point narrowing of the Corporation's net interest margin. The net interest margin for the year 2006 was 3.71%.
"Year-over-year average loan growth of 10.2% led our earning asset expansion, with commercial loans increasing a strong 21.8%," highlighted Gurgovits.
Non-interest income for the fourth quarter of 2006 was $19.3 million, a seasonal decrease of 3.6% from the prior quarter. On a full year basis, non- interest income totaled $79.3 million for 2006 compared to $57.8 million for 2005, an increase of 37.1%. Results for 2005 were negatively impacted by charges of $15.4 million related to balance sheet restructuring transactions and the write down of an equity security, which accounted for 28.6% of the year-over-year increase. Non-interest income was 29% of net revenue for 2006.
Non-interest expense for the fourth quarter of 2006 totaled $39.4 million, compared to $40.6 million in the previous quarter and $40.1 million for the same period last year. On a linked quarter basis the decrease was primarily due to lower self-insured medical benefit costs. In comparison to the fourth quarter of 2005, the Corporation benefited from lower costs associated with the modernization of its pension and postretirement plans. The efficiency ratio was 56.2% in the fourth quarter of 2006, an improvement from 56.9% for the third quarter of 2006.
For the full year 2006, non-interest expense was $160.5 million compared to $155.2 million for 2005, an increase of 3.4%. The increase is primarily attributable to the additional operating costs resulting from the merger with The Legacy Bank in the second quarter of 2006. The Corporation achieved excellent expense control in 2006 as it benefited from the fourth quarter 2005 efficiency initiatives, ongoing expense management and lower pension and post retirement benefit costs.
Asset quality continued at strong levels in the fourth quarter of 2006. Annualized net charge-offs for the fourth quarter of 2006 were 28 basis points of average loans, a 5 basis point increase from the historically low annualized net charge-offs in the third quarter of 2006. Non-performing loans to total loans were 66 basis points for the fourth quarter of 2006, improving from the 69 and 88 basis points in the third quarter of 2006 and the fourth quarter of 2005, respectively.
The Corporation's continued strong credit quality resulted in a provision for loan losses of $2.5 million in the fourth quarter of 2006, compared to $2.4 million in the third quarter of 2006. At December 31, 2006 the allowance for loan losses was 1.24% of total loans and 1.9 times non-performing loans.
Shareholders' equity at year end 2006 was $537 million. The Corporation's leverage capital ratio was 7.3% and the tangible capital ratio was 4.7% at the end of the year. The Corporation continues to exceed "well capitalized" ratios for federal bank regulatory purposes.
Dale Dignum, a long-time Tampa Bay, Florida-area bank executive, joined First National Bank recently as Executive Vice President for the Tampa Bay Region. He will oversee expansion of First National Bank's operations in the Tampa Bay market. First National Bank currently operates loan production offices in Orlando, Sarasota, Fort Myers and Naples, Florida.
The Corporation will host a conference call on Friday, January 19, 2007 at 11:00 a.m. (EST) to discuss fourth quarter 2006 results. Interested parties may access the conference call by dialing 1-800-346-7359 with the entry code 3044. Replays of the call will be available until January 26, 2007 by calling 1-800-332-6854 and using the above entry code, 3044. A transcript of the conference call will also be available on the Corporation's web site, http://www.fnbcorporation.com/.
About F.N.B. Corporation:
F.N.B. Corporation, headquartered in Hermitage, PA had total assets of $6.0 billion at December 31, 2006. F.N.B. is a leading provider of banking, wealth management, insurance, merchant banking and consumer finance services in Pennsylvania and Ohio, where it owns and operates First National Bank of Pennsylvania, including its Legacy Bank and Legacy Trust Company Divisions, First National Trust Company, First National Investment Services Company, LLC, F.N.B. Investment Advisors, Inc., First National Insurance Agency, LLC, F.N.B. Capital Corporation, LLC, and Regency Finance Company. It also operates consumer finance offices in Tennessee and loan production offices in Florida.
Mergent Inc., a leading provider of business and financial information about publicly traded companies, has recognized F.N.B. Corporation as a Dividend Achiever. This annual recognition is based on the Corporation's outstanding record of increased dividend performance. The Corporation has consistently increased dividend payments for 34 consecutive years.
The common stock of F.N.B. Corporation trades on the New York Stock Exchange under the symbol FNB. Investor information is available on F.N.B.'s website at http://www.fnbcorporation.com/.
This press release of F.N.B. Corporation 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 limited to: (1) a significant increase in competitive pressures among depository 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) less favorable than expected general economic conditions; (5) legislative or regulatory changes that may adversely affect the businesses in which F.N.B. Corporation is engaged; (6) changes in the securities markets; or (7) risk factors mentioned in the reports and registration statements F.N.B. Corporation files with the Securities and Exchange Commission. F.N.B. Corporation undertakes no obligation to release revisions to these forward- looking statements or to reflect events or circumstances after the date of this release.
DATA SHEETS FOLLOW
F.N.B. CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
4th Qtr 4th Qtr
2006- 2006-
3rd Qtr 4th Qtr
2006 2005 2006 2005
Fourth Third Fourth Percent Percent
Statement of earnings Quarter Quarter Quarter Variance Variance
Interest income $90,760 $90,576 $77,183 0.2 17.6
Interest expense 42,802 42,209 30,400 1.4 40.8
Net interest income 47,958 48,367 46,783 -0.8 2.5
Taxable equivalent
adjustment 1,036 981 912 5.6 13.5
Net interest income (FTE) 48,994 49,348 47,695 -0.7 2.7
Provision for loan
losses 2,529 2,428 3,711 4.2 -31.8
Net interest income
after provision (FTE) 46,465 46,920 43,984 -1.0 5.6
Service charges 9,940 10,235 9,980 -2.9 -0.4
Insurance commissions
and fees 3,237 3,412 2,808 -5.1 15.3
Securities commissions
and fees 1,287 1,329 971 -3.1 32.6
Trust income 2,064 2,013 1,712 2.5 20.5
Gain (loss) on sale of
securities 405 510 -13,305 -20.6 -103.0
Impairment loss on
equity security 0 0 -1,953 n/m n/m
Gain on sale of loans 444 465 342 -4.4 29.8
Other 1,919 2,048 1,882 -6.3 2.0
Total non-interest
income 19,296 20,012 2,437 -3.6 691.7
Salaries and employee
benefits 20,199 20,991 20,782 -3.8 -2.8
Occupancy and equipment 7,244 6,886 6,331 5.2 14.4
Amortization of
intangibles 1,008 1,180 1,014 -14.5 -0.6
Other 10,944 11,568 11,945 -5.4 -8.4
Total non-interest
expense 39,395 40,625 40,072 -3.0 -1.7
Income before income
taxes 26,366 26,307 6,349 0.2 315.3
Taxable equivalent
adjustment 1,036 981 912 5.6 13.5
Income taxes 7,737 7,707 716 0.4 980.4
Net income $17,593 $17,619 $4,721 -0.1 272.6
Earnings per share
Basic $0.29 $0.29 $0.08 0.0 262.5
Diluted $0.29 $0.29 $0.08 0.0 262.5
Performance ratios
Return on average equity 12.88% 13.01% 3.96%
Return on tangible
equity (1) 26.10% 26.99% 8.41%
Return on average assets 1.16% 1.15% 0.33%
Return on tangible
assets (2) 1.25% 1.25% 0.39%
Net interest margin (FTE) 3.67% 3.65% 3.78%
Yield on earning assets
(FTE) 6.84% 6.75% 6.18%
Cost of funds 3.55% 3.46% 2.69%
Efficiency ratio (FTE) (3) 56.21% 56.87% 77.91%
Common stock data
Average basic shares
outstanding 60,027,643 59,923,906 57,308,055 0.2 4.7
Average diluted shares
outstanding 60,626,455 60,527,788 58,016,749 0.2 4.5
Ending shares
outstanding 60,394,279 60,299,036 57,419,041 0.2 5.2
Book value per common
share $8.90 $8.94 $8.31 -0.5 7.1
Tangible book value per
common share $4.49 $4.54 $4.48 -1.2 0.1
Dividend payout ratio 80.65% 80.32% 285.28%
(1) Return on tangible equity is calculated by dividing net income less
amortization of intangibles by average equity less average
intangibles.
(2) Return on tangible assets is calculated by dividing net income less
amortization of intangibles by average assets less average
intangibles.
(3) The efficiency ratio is calculated by dividing non-interest expense
less amortization of intangibles by the sum of net interest income on
a fully taxable equivalent basis plus non-interest income.
(4) Certain prior period amounts have been reclassified to conform to the
current period presentation.
F.N.B. CORPORATION
(Unaudited)
(Dollars in thousands, except per
share data) For the Year
Ended December 31,
Percent
Statement of earnings 2006 2005 Variance
Interest income $342,422 $295,480 15.9
Interest expense 153,585 108,780 41.2
Net interest income 188,837 186,700 1.1
Taxable equivalent adjustment 3,934 3,462 13.6
Net interest income (FTE) 192,771 190,162 1.4
Provision for loan losses 10,412 12,176 -14.5
Net interest income after
provision (FTE) 182,359 177,986 2.5
Service charges 40,053 38,121 5.1
Insurance commissions and fees 13,988 12,794 9.3
Securities commissions and fees 4,871 4,490 8.5
Trust income 7,780 7,125 9.2
Gain (loss) on sale of securities 1,802 -11,703 -115.4
Impairment loss on equity security 0 -1,953 n/m
Gain on sale of loans 1,607 1,393 15.4
Other 9,174 7,540 21.7
Total non-interest income 79,275 57,807 37.1
Salaries and employee benefits 83,649 81,035 3.2
Occupancy and equipment 27,563 25,577 7.8
Amortization of intangibles 4,148 3,743 10.8
Other 45,154 44,871 0.6
Total non-interest expense 160,514 155,226 3.4
Income before income taxes 101,120 80,567 25.5
Taxable equivalent adjustment 3,934 3,462 13.6
Income taxes 29,537 21,847 35.2
Net income $67,649 $55,258 22.4
Earnings per share
Basic $1.15 $0.99 16.2
Diluted $1.14 $0.98 16.3
Performance ratios
Return on average equity 13.15% 12.44%
Return on tangible equity (1) 26.30% 23.62%
Return on average assets 1.15% 0.99%
Return on tangible assets (2) 1.25% 1.07%
Net interest margin (FTE) 3.71% 3.86%
Yield on earning assets (FTE) 6.67% 6.06%
Cost of funds 3.29% 2.47%
Efficiency ratio (FTE) (3) 57.48% 61.09%
Common stock data
Average basic shares outstanding 58,852,623 55,776,291 5.5
Average diluted shares outstanding 59,376,648 56,578,043 4.9
Ending shares outstanding 60,394,279 57,419,041 5.2
Book value per common share $8.90 $8.31 7.1
Tangible book value per common share $4.49 $4.48 0.1
Dividend payout ratio 81.84% 94.71%
(1) Return on tangible equity is calculated by dividing net income less
amortization of intangibles by average equity less average
intangibles.
(2) Return on tangible assets is calculated by dividing net income less
amortization of intangibles by average assets less average
intangibles.
(3) The efficiency ratio is calculated by dividing non-interest expense
less amortization of intangibles by the sum of net interest income on
a fully taxable equivalent basis plus non-interest income.
(4) Certain prior period amounts have been reclassified to conform to the
current period presentation.
F.N.B. CORPORATION
(Unaudited)
(Dollars in thousands)
4th Qtr 4th Qtr
2006- 2006-
3rd Qtr 4th Qtr
2006 2005 2006 2005
Fourth Third Fourth Percent Percent
Average balances Quarter Quarter Quarter Variance Variance
Total assets $6,040,889 $6,104,452 $5,688,093 -1.0 6.2
Earning assets 5,325,077 5,382,689 5,024,396 -1.1 6.0
Securities 1,072,857 1,101,558 1,211,224 -2.6 -11.4
Loans, net of unearned
income 4,238,382 4,229,049 3,777,630 0.2 12.2
Allowance for loan
losses 53,494 53,882 51,915 -0.7 3.0
Goodwill and intangibles 264,442 267,024 219,345 -1.0 20.6
Deposits and repurchase
agreements 4,621,942 4,656,840 4,225,437 -0.7 9.4
Short-term borrowings 127,142 130,067 220,011 -2.2 -42.2
Long-term debt 527,892 557,932 568,287 -5.4 -7.1
Trust preferred
securities 151,031 151,031 128,866 0.0 17.2
Shareholders' equity 541,782 537,254 473,023 0.8 14.5
Asset quality data
Non-accrual loans $24,636 $24,672 $28,100 -0.1 -12.3
Restructured loans 3,492 4,789 5,032 -27.1 -30.6
Non-performing loans 28,128 29,461 33,132 -4.5 -15.1
Other real estate owned 5,948 5,995 6,337 -0.8 -6.1
Non-performing assets $34,076 $35,456 $39,469 -3.9 -13.7
Net loan charge-offs $3,007 $2,405 $4,581 25.0 -34.4
Allowance for loan
losses 52,575 53,065 50,707 -0.9 3.7
Non-performing loans /
total loans 0.66% 0.69% 0.88%
Non-performing assets /
total assets 0.57% 0.59% 0.71%
Allowance for loan
losses / total loans 1.24% 1.25% 1.35%
Allowance for loan
losses /
non-performing loans 186.91% 180.12% 153.04%
Net loan charge-offs
(annualized) /
average loans 0.28% 0.23% 0.48%
Balances at period end
Total assets $6,007,592 $6,060,285 $5,590,326 -0.9 7.5
Earning assets 5,292,930 5,334,157 4,914,772 -0.8 7.7
Securities 1,034,358 1,084,735 1,160,358 -4.6 -10.9
Loans, net of unearned
income 4,253,144 4,244,584 3,749,047 0.2 13.4
Goodwill and intangibles 266,337 265,016 219,755 0.5 21.2
Deposits and repurchase
agreements 4,624,906 4,617,537 4,194,460 0.2 10.3
Short-term borrowings 111,846 155,148 196,461 -27.9 -43.1
Long-term debt 519,890 537,401 533,703 -3.3 -2.6
Trust preferred
securities 151,031 151,031 128,866 0.0 17.2
Shareholders' equity 537,372 538,968 477,202 -0.3 12.6
Capital ratios
Equity/assets (period
end) 8.94% 8.89% 8.54%
Leverage ratio 7.28% 7.16% 6.93%
Tangible equity/tangible
assets (period end) 4.72% 4.73% 4.79%
F.N.B. CORPORATION
(Unaudited) For the Year
(Dollars in thousands) Ended December 31,
Percent
Average balances 2006 2005 Variance
Total assets $5,889,925 $5,571,977 5.7
Earning assets 5,196,076 4,944,018 5.1
Securities 1,111,391 1,248,687 -11.0
Loans, net of unearned income 4,059,936 3,685,073 10.2
Allowance for loan losses 52,758 52,106 1.3
Goodwill and intangibles 246,884 199,973 23.5
Deposits and repurchase agreements 4,476,423 4,091,914 9.4
Short-term borrowings 145,063 266,839 -45.6
Long-term debt 542,208 566,757 -4.3
Trust preferred securities 142,286 128,866 10.4
Shareholders' equity 514,363 444,239 15.8
Asset quality data
Non-accrual loans $24,636 $28,100 -12.3
Restructured loans 3,492 5,032 -30.6
Non-performing loans 28,128 33,132 -15.1
Other real estate owned 5,948 6,337 -6.1
Non-performing assets $34,076 $39,469 -13.7
Net loan charge-offs $11,578 $16,874 -31.4
Allowance for loan losses 52,575 50,707 3.7
Non-performing loans / total loans 0.66% 0.88%
Non-performing assets / total assets 0.57% 0.71%
Allowance for loan losses / total
loans 1.24% 1.35%
Allowance for loan losses /
non-performing loans 186.91% 153.04%
Net loan charge-offs (annualized) /
average loans 0.29% 0.46%
Balances at period end
Total assets $6,007,592 $5,590,326 7.5
Earning assets 5,292,930 4,914,772 7.7
Securities 1,034,358 1,160,358 -10.9
Loans, net of unearned income 4,253,144 3,749,047 13.4
Goodwill and intangibles 266,337 219,755 21.2
Deposits and repurchase agreements 4,624,906 4,194,460 10.3
Short-term borrowings 111,846 196,461 -43.1
Long-term debt 519,890 533,703 -2.6
Trust preferred securities 151,031 128,866 17.2
Shareholders' equity 537,372 477,202 12.6
Capital ratios
Equity/assets (period end) 8.94% 8.54%
Leverage ratio 7.28% 6.93%
Tangible equity/tangible assets
(period end) 4.72% 4.79%
F.N.B. CORPORATION
(Unaudited)
(Dollars in thousands)
4th Qtr 4th Qtr
2006- 2006-
3rd Qtr 4th Qtr
2006 2005 2006 2005
Fourth Third Fourth Percent Percent
Average balances Quarter Quarter Quarter Variance Variance
Loans:
Commercial $2,067,673 $2,037,175 $1,616,429 1.5 27.9
Direct installment 931,290 933,059 891,509 -0.2 4.5
Consumer LOC 255,806 261,622 264,417 -2.2 -3.3
Residential mortgages 499,777 507,690 497,849 -1.6 0.4
Indirect installment 466,986 476,111 502,163 -1.9 -7.0
Other 16,850 13,392 5,263 25.8 220.1
Total loans $4,238,382 $4,229,049 $3,777,630 0.2 12.2
Deposits:
Non-interest bearing
deposits $646,844 $663,828 $670,699 -2.6 -3.6
Savings and NOW 1,946,040 1,978,788 1,700,976 -1.7 14.4
Certificates of
deposit and other
time deposits 1,782,184 1,794,657 1,651,199 -0.7 7.9
Total deposits 4,375,068 4,437,273 4,022,874 -1.4 8.8
Customer repurchase
agreements 246,874 219,567 202,563 12.4 21.9
Total deposits and
repurchase
agreements $4,621,942 $4,656,840 $4,225,437 -0.7 9.4
Balances at period end
Loans:
Commercial $2,111,752 $2,064,725 $1,613,960 2.3 30.8
Direct installment 926,766 934,072 890,288 -0.8 4.1
Consumer LOC 254,054 258,369 262,969 -1.7 -3.4
Residential mortgages 490,215 498,532 485,542 -1.7 1.0
Indirect installment 461,214 475,014 493,740 -2.9 -6.6
Other 9,143 13,872 2,548 -34.1 258.8
Total loans $4,253,144 $4,244,584 $3,749,047 0.2 13.4
Deposits:
Non-interest bearing
deposits $654,617 $665,606 $688,391 -1.7 -4.9
Savings and NOW 1,944,707 1,953,408 1,675,395 -0.4 16.1
Certificates of
deposit and other
time deposits 1,773,518 1,780,910 1,648,157 -0.4 7.6
Total deposits 4,372,842 4,399,924 4,011,943 -0.6 9.0
Customer repurchase
agreements 252,064 217,613 182,517 15.8 38.1
Total deposits and
repurchase
agreements $4,624,906 $4,617,537 $4,194,460 0.2 10.3
F.N.B. CORPORATION
(Unaudited) For the Year
(Dollars in thousands) Ended December 31,
Percent
Average balances 2006 2005 Variance
Loans:
Commercial $1,902,896 $1,561,942 21.8
Direct installment 917,009 874,688 4.8
Consumer LOC 258,429 259,172 -0.3
Residential mortgages 496,394 499,712 -0.7
Indirect installment 475,459 482,830 -1.5
Other 9,749 6,729 44.9
Total loans $4,059,936 $3,685,073 10.2
Deposits:
Non-interest bearing deposits $649,191 $661,668 -1.9
Savings and NOW 1,884,351 1,673,003 12.6
Certificates of deposit and
other time deposits 1,729,836 1,574,464 9.9
Total deposits 4,263,378 3,909,135 9.1
Customer repurchase agreements 213,045 182,779 16.6
Total deposits and repurchase
agreements $4,476,423 $4,091,914 9.4
Balances at period end
Loans:
Commercial $2,111,752 $1,613,960 30.8
Direct installment 926,766 890,288 4.1
Consumer LOC 254,054 262,969 -3.4
Residential mortgages 490,215 485,542 1.0
Indirect installment 461,214 493,740 -6.6
Other 9,143 2,548 258.8
Total loans $4,253,144 $3,749,047 13.4
Deposits:
Non-interest bearing deposits $654,617 $688,391 -4.9
Savings and NOW 1,944,707 1,675,395 16.1
Certificates of deposit and
other time deposits 1,773,518 1,648,157 7.6
Total deposits 4,372,842 4,011,943 9.0
Customer repurchase agreements 252,064 182,517 38.1
Total deposits and repurchase
agreements $4,624,906 $4,194,460 10.3
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