HERMITAGE, Pa., April 17 /PRNewswire-FirstCall/ -- F.N.B. Corporation , a diversified financial services company, today reported financial results for the first quarter of 2008. First quarter 2008 net income was $16.5 million, or $0.27 per diluted share, compared to $17.1 million, or $0.28 per diluted share for the fourth quarter of 2007 and $17.4 million, or $0.29 per diluted share for the first quarter of 2007. The Corporation's return on average tangible equity for the first quarter of 2008 was a strong 24.2%, its return on average equity was 12.1%, its return on average tangible assets was 1.18% and its return on average assets was 1.09%.
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"We are off to a good start in 2008 with our first quarter results in line with our expectations," commented Robert V. New, President and Chief Executive Officer of F.N.B. Corporation. "Strong commercial loan growth, increased fee revenue, a stable net interest margin and continued good asset quality were positive factors contributing to our results," Mr. New added.
First Quarter 2008 Results
Total average loans increased 4.0% annualized compared to the fourth quarter of 2007 and 3.6% compared to the first quarter of 2007. Commercial loans led the growth, with average balances increasing 10.4% annualized over the fourth quarter of 2007. This increase was partially offset by seasonally lower balances of direct installment and indirect auto loans. The Corporation's average earning assets were essentially unchanged relative to the prior period, as proceeds from repayments and maturities of investment securities were used to partially fund the quarter's loan growth.
Compared to the fourth quarter of 2007, average deposits and treasury management balances decreased 1.9% annualized as business demand balances were seasonally lower. Year over year, average deposits and treasury management balances increased 1.7%.
Net interest income, on a fully taxable equivalent basis, decreased slightly in the first quarter of 2008 compared to the prior quarter, reflecting a stable net interest margin of 3.73% and one less day during the first quarter with which to receive net interest income. Although the lower interest rate environment drove the yield on earning assets down 24 basis points to 6.66%, when compared to the fourth quarter of 2007, the margin was maintained by actively managing the rates paid on deposits and borrowings, which declined 29 basis points to 3.25%. The first quarter of 2007 net interest margin was 3.73%.
Continued solid revenue growth from the Corporation's primary businesses, including seasonal and organic increases in insurance and trust revenues, and a $0.7 million gain from the VISA, Inc. initial public offering, drove a $1.5 million increase in non-interest income compared to the prior quarter. These increases were partially offset by seasonally lower bank service charges. The increase in other non-interest income compared to the prior quarter reflects growth in swap fees earned from commercial customers. When compared to the first quarter of 2007, non-interest income increased 6.0% driven by organic growth in bank service charges, securities commissions and fees, trust revenue and other non-interest income, which were partially offset by lower insurance contingency fee income. Non-interest income represented 31% of net revenue for the first quarter of 2008.
The start of a new year includes the effect of annual merit increases, which partially contributed to the $2.5 million increase in non-interest expense for the first quarter of 2008 relative to the first quarter of 2007. In addition, the first quarter of 2008 included costs related to the transition of the Corporation's senior leadership and higher accrual expense for the Corporation's long-term restricted stock program, while the first quarter of 2007 benefited from the 2006 restructuring of the pension and post-retirement benefit plans.
Asset quality was stable in the first quarter of 2008. Annualized net loan charge-offs for the first quarter of 2008 were 27 basis points of average loans, representing a decline from 41 basis points in the fourth quarter of 2007 and a 4 basis point increase over the first quarter of 2007. The ratio of non-performing assets to total loans and OREO was 95 basis points at March 31, 2008, compared to 94 basis points at December 31, 2007 and 76 basis points at March 31, 2007.
The $3.6 million loan loss provision for the first quarter of 2008 was influenced by the current quarter's loan growth and net charge-offs. At March 31, 2008, the allowance for loan losses was 1.20% of total loans, representing a 2 basis point decline from December 31, 2007, and 1.6 times total non-performing loans.
Capital Position
Shareholders' equity at March 31, 2008, was $543.6 million, or $8.97 per common share. Tangible book value was $4.67 per common share at the end of the first quarter of 2008. The Corporation's leverage and tangible capital ratios were 7.51% and 4.80%, respectively, at March 31, 2008. The Corporation's capital ratios continue to exceed federal bank regulatory agency "well capitalized" thresholds.
Conference Call
Management will host a quarterly conference call to discuss results for the first quarter of 2008, tomorrow, Friday, April 18, 2008, at 11:00 AM Eastern Daylight Time. Hosting the call will be Stephen J. Gurgovits, Chairman, Robert V. New, President and Chief Executive Officer, and Brian F. Lilly, Chief Financial Officer.
The call can be accessed via the telephone by dialing (888) 726-2459 or (913) 312-1414 for international callers; the confirmation number is 2944152.
A replay of the call will be available from 2:00 PM Eastern Daylight Time on the day of the call until midnight Eastern Daylight Time on May 2, 2008. The replay can be accessed by dialing (888) 203-1112 or (719) 457-0820 for international callers; the confirmation number is 2944152. A transcript of the call will be posted to the "Shareholder and Investor Relations" section of F.N.B. Corporation's Web site at http://www.fnbcorporation.com/.
About F.N.B. Corporation
F.N.B. Corporation, headquartered in Hermitage, PA, is a diversified financial services company with total assets, including the recently acquired Omega Financial Corporation, of approximately $8.0 billion. F.N.B. Corporation is a leading provider of commercial and retail banking, leasing, wealth management, insurance, merchant banking and consumer finance services in Pennsylvania and Ohio, where it owns and operates First National Bank of Pennsylvania, 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, Regency Finance Company and Bank Capital Services. It also operates consumer finance offices in Tennessee and loan production offices in Pennsylvania, Ohio, Tennessee and 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 35 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. Corporation's Web site at http://www.fnbcorporation.com/.
Forward-looking Statements
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 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) 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) technological issues which may adversely affect F.N.B. Corporation's financial operations or customers; (7) changes in the securities markets; or (8) 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 press release.
F.N.B. CORPORATION (Unaudited) (Dollars in thousands, except per share data) 2008 2007 Percent Variance 1st Qtr 1st Qtr 2008- 2008- First Fourth First 4th Qtr 1st Qtr Statement of earnings Quarter Quarter Quarter 2007 2007 Interest income $88,525 $92,834 $90,487 -4.6 -2.2 Interest expense 39,560 43,424 42,567 -8.9 -7.1 Net interest income 48,965 49,410 47,920 -0.9 2.2 Taxable equivalent adjustment 1,263 1,202 1,117 5.0 13.1 Net interest income (FTE) 50,228 50,612 49,037 -0.8 2.4 Provision for loan losses 3,583 5,232 1,847 -31.5 94.0 Net interest income after provision (FTE) 46,645 45,380 47,190 2.8 -1.2 Service charges 10,186 10,711 9,618 -4.9 5.9 Insurance commissions and fees 3,922 3,044 4,419 28.8 -11.2 Securities commissions and fees 1,520 1,805 1,276 -15.8 19.1 Trust income 2,224 2,188 2,162 1.7 2.9 Gain (loss) on sale of securities 744 0 740 n/m 0.6 Gain on sale of loans 451 534 367 -15.6 23.0 Other 3,121 2,354 2,334 32.6 33.7 Total non-interest income 22,168 20,636 20,916 7.4 6.0 Salaries and employee benefits 25,256 21,448 22,266 17.8 13.4 Occupancy and equipment 6,931 6,741 7,165 2.8 -3.3 Amortization of intangibles 1,073 1,101 1,103 -2.5 -2.7 Other 11,103 11,328 11,362 -2.0 -2.3 Total non-interest expense 44,363 40,618 41,896 9.2 5.9 Income before income taxes 24,450 25,398 26,210 -3.7 -6.7 Taxable equivalent adjustment 1,263 1,202 1,117 5.0 13.1 Income taxes 6,696 7,134 7,723 -6.1 -13.3 Net income $16,491 $17,062 $17,370 -3.3 -5.1 Earnings per share Basic $0.27 $0.28 $0.29 -3.6 -6.9 Diluted $0.27 $0.28 $0.29 -3.6 -6.9 Performance ratios Return on average equity 12.14% 12.45% 13.06% Return on tangible equity(1) 24.24% 25.04% 26.79% Return on average assets 1.09% 1.11% 1.17% Return on tangible assets(2) 1.18% 1.21% 1.28% Net interest margin (FTE) 3.73% 3.72% 3.73% Yield on earning assets (FTE) 6.66% 6.90% 6.98% Cost of funds 3.25% 3.54% 3.61% Efficiency ratio (FTE)(3) 59.79% 55.46% 58.31% Common stock data Average basic shares outstanding 60,219,800 60,155,781 60,105,023 0.1 0.2 Average diluted shares outstanding 60,592,172 60,622,494 60,633,903 -0.1 -0.1 Ending shares outstanding 60,613,702 60,554,248 60,391,407 0.1 0.4 Book value per common share $8.97 $8.99 $8.91 -0.2 0.6 Tangible book value per common share $4.67 $4.67 $4.52 0.0 3.3 Dividend payout ratio 88.44% 85.17% 81.71% (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) Treasury management accounts are included in short-term borrowings on the balance sheet. (5) Certain prior period amounts have been reclassified to conform to the current period presentation. F.N.B. CORPORATION (Unaudited) (Dollars in thousands) 2008 2007 Percent Variance 1st Qtr 1st Qtr 2008- 2008- First Fourth First 4th Qtr 1st Qtr Average balances Quarter Quarter Quarter 2007 2007 Total assets $6,104,160 $6,109,593 $6,006,899 -0.1 1.6 Earning assets 5,417,023 5,418,770 5,304,427 0.0 2.1 Securities 1,007,583 1,053,081 1,043,321 -4.3 -3.4 Loans, net of unearned income 4,407,703 4,363,982 4,255,063 1.0 3.6 Allowance for loan losses 53,330 52,729 52,856 1.1 0.9 Goodwill and intangibles 260,996 262,077 265,609 -0.4 -1.7 Deposits and treasury management accounts(4) 4,684,241 4,706,626 4,607,887 -0.5 1.7 Other short-term borrowings 171,081 170,884 138,898 0.1 23.2 Long-term debt 476,916 462,787 497,948 3.1 -4.2 Trust preferred securities 151,031 151,031 151,031 0.0 0.0 Shareholders' equity 546,198 543,743 539,392 0.5 1.3 Asset quality data Non-accrual loans $29,949 $29,211 $23,050 2.5 29.9 Restructured loans 3,628 3,468 3,591 4.6 1.0 Non-performing loans 33,577 32,679 26,641 2.7 26.0 Other real estate owned (OREO) 8,538 8,052 5,659 6.0 50.9 Non-performing assets $42,115 $40,731 $32,300 3.4 30.4 Net loan charge-offs $2,992 $4,548 $2,459 -34.2 21.7 Allowance for loan losses 53,396 52,806 51,964 1.1 2.8 Non-performing loans / total loans 0.76% 0.75% 0.63% Non-performing assets / total loans + OREO 0.95% 0.94% 0.76% Allowance for loan losses / total loans 1.20% 1.22% 1.22% Allowance for loan losses / non-performing loans 159.03% 161.59% 195.05% Net loan charge-offs (annualized) / average loans 0.27% 0.41% 0.23% Balances at period end Total assets $6,164,590 $6,088,021 $6,015,804 1.3 2.5 Earning assets 5,465,223 5,376,328 5,302,013 1.7 3.1 Securities 1,014,882 1,025,974 1,038,985 -1.1 -2.3 Loans, net of unearned income 4,440,037 4,344,235 4,259,121 2.2 4.2 Goodwill and intangibles 260,484 261,559 265,272 -0.4 -1.8 Deposits and treasury management accounts(4) 4,728,898 4,674,236 4,648,827 1.2 1.7 Other short-term borrowings 173,346 173,271 110,460 0.0 56.9 Long-term debt 496,445 481,366 500,676 3.1 -0.8 Trust preferred securities 151,031 151,031 151,031 0.0 0.0 Shareholders' equity 543,622 544,357 538,292 -0.1 1.0 Capital ratios Equity/assets (period end) 8.82% 8.94% 8.95% Leverage ratio 7.51% 7.47% 7.38% Tangible equity/tangible assets (period end) 4.80% 4.85% 4.75% F.N.B. CORPORATION (Unaudited) (Dollars in thousands) 2008 2007 Percent Variance 1st Qtr 1st Qtr 2008- 2008- First Fourth First 4th Qtr 1st Qtr Average balances Quarter Quarter Quarter 2007 2007 Loans: Commercial $2,299,366 $2,241,272 $2,128,261 2.6 8.0 Direct installment 933,092 945,539 916,693 -1.3 1.8 Consumer LOC 251,846 247,913 252,770 1.6 -0.4 Residential mortgages 470,173 475,346 489,298 -1.1 -3.9 Indirect installment 427,518 432,477 449,241 -1.1 -4.8 Other 25,708 21,435 18,800 19.9 36.7 Total loans $4,407,703 $4,363,982 $4,255,063 1.0 3.6 Deposits: Non-interest bearing deposits $602,527 $628,766 $622,048 -4.2 -3.1 Savings and NOW 2,046,236 2,066,390 1,965,627 -1.0 4.1 Certificates of deposit and other time deposits 1,741,920 1,725,646 1,762,630 0.9 -1.2 Total deposits 4,390,683 4,420,802 4,350,305 -0.7 0.9 Treasury management accounts(4) 293,558 285,824 257,582 2.7 14.0 Total deposits and treasury management accounts(4) $4,684,241 $4,706,626 $4,607,887 -0.5 1.7 Balances at period end Loans: Commercial $2,338,110 $2,232,860 $2,153,697 4.7 8.6 Direct installment 928,513 941,249 910,531 -1.4 2.0 Consumer LOC 254,663 251,100 251,472 1.4 1.3 Residential mortgages 458,406 465,881 485,341 -1.6 -5.5 Indirect installment 429,140 427,663 438,938 0.3 -2.2 Other 31,205 25,482 19,142 22.5 63.0 Total loans $4,440,037 $4,344,235 $4,259,121 2.2 4.2 Deposits: Non-interest bearing deposits $634,831 $626,141 $650,926 1.4 -2.5 Savings and NOW 2,058,147 2,037,160 1,982,325 1.0 3.8 Certificates of deposit and other time deposits 1,743,676 1,734,383 1,761,778 0.5 -1.0 Total deposits 4,436,654 4,397,684 4,395,029 0.9 0.9 Treasury management accounts(4) 292,244 276,552 253,798 5.7 15.1 Total deposits and treasury management accounts(4) $4,728,898 $4,674,236 $4,648,827 1.2 1.7
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