Fnb Financial Services (NASDAQ:FNBF)
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FNB Financial Services Corporation (NASDAQ:FNBF)("FNB"),
parent of FNB Southeast (the "Bank"), today reported third quarter
2005 net income of $2.22 million and earnings for the first nine
months of $6.40 million. This represents 2005 earnings per diluted
share of $0.31 and $0.89, respectively. FNB earned $1.91 million in
the third quarter of 2004 and $6.32 million for the first nine months
a year ago. Excluding a one-time after-tax gain of $548,000 from the
sale of a banking operation in the second quarter of 2004, year to
date earnings for 2005 increased 10.8%. FNB's third quarter 2005
results produced an annualized return on average assets of 0.88% and
an annualized return on average equity of 11.96%, compared with prior
year results of 0.92% and 11.28%, respectively.
"We are excited about achieving our billion dollar goal," noted
Ernest J. Sewell, Vice Chairman, President and Chief Executive
Officer. "Begun in 1910 as a rural bank, FNB has built strong
relationships with its customers and has evolved into a highly
successful financial services company."
Interest income was $16.49 million and $11.28 million for the
three months ended September 30, 2005 and 2004, respectively. On a
year-to-date basis, interest income amounted to $44.93 million in 2005
and $32.15 million in 2004. Interest expense totaled $6.69 million in
the 2005 third quarter, an increase of $2.80 million from one year
earlier. Interest expense on deposits was $5.84 million in the current
quarter, compared to $3.54 million for the same quarter a year ago.
The current rising interest rate environment, combined with a 17.5%
increase in average interest-bearing deposits over the third quarter
of 2004, is the principal source of this increase in deposit interest
expense.
FNB recorded provisions for credit losses of $1.19 million and
$285,000 for the three months ended September 30, 2005 and 2004,
respectively. The provision for the third quarter of 2005 included
special provisions of approximately $900,000 related to the
reclassification of risk grades of certain loans in the Bank's
Harrisonburg, VA Region loan portfolio, as previously announced in a
press release dated September 16, 2005.
Excluding a one-time pre-tax gain of $825,000 from the sale of a
banking operation in the second quarter of 2004, noninterest income
year to date for 2005 increased 7.0% over the same period a year ago.
Noninterest income totaled $1.73 million in the third quarter of 2005,
compared with $1.70 million for the same period a year ago.
Noninterest expense totaled $6.99 million for the third quarter of
2005, compared with $5.97 million for the same period in 2004. Expense
items significantly contributing to this increase include personnel
expense, occupancy and equipment expense, and other items related to
FNB's continued growth and expansion.
Pressley A. Ridgill, President and Chief Operating Officer of FNB
Southeast, commented: "FNB is now in an elite group of community
banks. We have assembled a team of talented individuals who give us
confidence about future growth and we look forward to continuing the
tradition of service to our customers."
As of September 30, 2005 assets were $1.01 billion, a $146.4
million, or 16.9%, increase during the first nine months of 2005.
Outstanding loans totaled $771.4 million at the end of the current
quarter compared to $663.4 million at December 31, 2004. Net credit
losses for the third quarter of 2005 amounted to $422,000, or 0.22% of
average outstanding loans on an annualized basis, compared to 0.08%
recorded in the 2004 third quarter. Nonperforming assets continue to
trend downward, declining to $5.59 million at September 30, 2005 and
represents a 40.0% decrease from a year ago. The allowance for credit
losses to outstanding loans was 1.21% at September 30, 2005, compared
to 1.15% one year earlier.
Deposits at September 30, 2005 were $829.8 million, compared with
$723.9 million one year earlier. Other borrowings were $72.2 million
and $47.8 million at September 30, 2005 and 2004, respectively.
Shareholders' equity increased 7.7%, from $69.3 million at September
30, 2004 to $74.6 million at the end of the current period. During
2005, FNB repurchased 44,920 shares of its common stock at an average
cost of $17.99. In May 2005, FNB completed a five-for-four common
stock split effected in the form of a 25 percent stock dividend.
Relevant information has been restated to reflect this action.
FNB Financial Services Corporation is a financial holding company
with one subsidiary, FNB Southeast, a North Carolina chartered
commercial bank. FNB Southeast currently operates 17 banking offices
located in North Carolina and Virginia. FNB Southeast Mortgage
Corporation and FNB Southeast Investment Services, Inc. are operating
subsidiaries of FNB Southeast.
Information in this press release may contain "forward-looking
statements." These statements involve risks and uncertainties that
could cause actual results to differ materially, including without
limitation, the effects of future economic conditions, governmental
fiscal and monetary policies, legislative and regulatory changes, the
risks of changes in interest rates and the effects of competition.
Additional factors that could cause actual results to differ
materially are discussed in FNB's recent filings with the Securities
and Exchange Commission, including, but not limited to, its Annual
Report on Form 10-K and its other periodic reports.
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FINANCIAL SUMMARY
-----------------------------------------------------
2005 2004
------------------------------ -------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
----------- --------- --------- --------- ---------
Average Balances
(Dollars in
thousands)
Assets $ 996,274 $954,786 $899,083 $851,696 $830,732
Loans 767,524 737,735 691,180 646,078 619,178
Investment
securities 162,760 153,411 141,963 142,290 138,554
Earning assets 939,458 899,522 842,142 797,623 776,481
Noninterest-
bearing deposits 87,335 86,656 78,685 78,260 77,690
Interest-bearing
deposits 729,740 694,494 659,834 649,198 621,170
Interest-bearing
liabilities 821,369 781,663 736,051 695,436 675,685
Shareholders'
equity 73,592 72,154 70,820 69,666 67,827
Period-End
Balances
(Dollars in
thousands)
Assets $1,011,778 $979,446 $920,520 $865,335 $844,646
Loans 771,359 763,255 713,310 663,425 641,057
Investment
securities 178,422 155,568 144,666 141,603 145,800
Earning assets 954,139 924,506 860,575 807,482 789,233
Noninterest-
bearing deposits 88,809 95,335 84,707 78,810 75,614
Interest-bearing
deposits 741,021 716,031 682,792 645,475 648,281
Interest-bearing
liabilities 839,032 805,184 758,375 712,009 696,079
Shareholders'
equity 74,605 73,360 71,386 70,430 69,273
Asset Quality Data
(Dollars in
thousands)
Nonperforming
loans $ 4,108 $ 4,002 $ 2,613 $ 3,515 $ 4,354
Other
nonperforming
assets 1,485 2,554 5,357 5,559 4,966
Net credit losses 422 102 189 318 127
Allowance for
credit losses 9,333 8,380 7,843 7,352 7,341
Nonperforming
loans to
outstanding loans 0.53 % 0.52 % 0.37 % 0.53 % 0.68 %
Annualized net
credit losses
to average loans 0.22 0.06 0.11 0.20 0.08
Allowance for
credit losses
to outstanding
loans 1.21 1.10 1.10 1.11 1.15
Allowance for
credit losses
to nonperforming
loans 2.27 X 2.09 X 3.00 X 2.09 X 1.69 X
FINANCIAL SUMMARY
-----------------------------------------------------
Third Nine Months Ended
Quarter September 30
2005-2004 -------------------------------
Percent Percent
Variance 2005 2004 Variance
-------------- ---------- -------- --------
Average Balances
(Dollars in thousands)
Assets 19.9 % $ 950,406 $803,455 18.3 %
Loans 24.0 732,426 602,591 21.5
Investment securities 17.5 152,778 139,151 9.8
Earning assets 21.0 895,167 752,852 18.9
Noninterest-bearing
deposits 12.4 84,257 74,856 12.6
Interest-bearing
deposits 17.5 694,945 581,771 19.5
Interest-bearing
liabilities 21.6 780,007 651,922 19.6
Shareholders' equity 8.5 72,199 67,288 7.3
Period-End Balances
(Dollars in thousands)
Assets 19.8 %
Loans 20.3
Investment securities 22.4
Earning assets 20.9
Noninterest-bearing
deposits 17.5
Interest-bearing
deposits 14.3
Interest-bearing
liabilities 20.5
Shareholders' equity 7.7
Asset Quality Data
(Dollars in thousands)
Nonperforming loans $ 4,108 $ 4,354
Other nonperforming
assets 1,485 4,966
Net credit losses 713 728
Allowance for credit
losses 9,333 7,341
Nonperforming loans
to outstanding loans 0.53 % 0.68 %
Annualized net credit
losses to average
loans 0.29 0.16
Allowance for credit
losses to outstanding
loans 1.21 1.15
Allowance for credit
losses to
nonperforming loans 2.27 X 1.69 X
FINANCIAL SUMMARY
----------------------------------------------------
2005 2004
--------------------------- -----------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
--------- -------- -------- -------- --------
Income Statement Data
(Dollars in thousands,
except share data)
Interest income:
Loans $14,917 $13,630 $12,102 $11,081 $10,030
Other 1,575 1,431 1,275 1,236 1,245
------- ------- ------- ------- -------
Total interest
income 16,492 15,061 13,377 12,317 11,275
Interest expense 6,690 5,975 4,864 4,211 3,891
------- ------- ------- ------- -------
Net interest income 9,802 9,086 8,513 8,106 7,384
Provision for credit
losses 1,187 638 680 330 285
------- ------- ------- ------- -------
Net interest income
after provision for
credit losses 8,615 8,448 7,833 7,776 7,099
Noninterest income 1,734 1,815 2,138 1,945 1,695
Noninterest expense 6,993 7,045 6,892 6,760 5,969
------- ------- ------- ------- -------
Income before income tax
expense 3,356 3,218 3,079 2,961 2,825
Income tax expense 1,138 1,083 1,036 941 913
------- ------- ------- ------- -------
Net income $ 2,218 $ 2,135 $ 2,043 $ 2,020 $ 1,912
======= ======= ======= ======= =======
Net income per share:
Basic $ 0.32 $ 0.30 $ 0.30 $ 0.30 $ 0.28
Diluted $ 0.31 $ 0.29 $ 0.29 $ 0.28 $ 0.27
Cash dividends per share $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.10
Other Data
Return on average assets 0.88 % 0.90 % 0.92 % 0.95 % 0.92 %
Return on average equity 11.96 11.87 11.71 11.60 11.28
Net yield on earning
assets 4.21 4.12 4.18 4.15 3.90
Efficiency 59.77 63.67 63.73 66.17 64.48
Net interest position
to total assets(a) 11.85 12.34 11.80 12.00 12.13
Equity to assets 7.39 7.56 7.88 8.18 8.16
Loans to assets 77.04 77.27 76.88 75.86 74.53
Loans to deposits 93.94 94.44 93.59 88.81 88.60
Noninterest - bearing
deposits to total
deposits 10.69 11.09 10.65 10.76 11.12
(a)Net interest position is average earning assets less
average interest-bearing liabilities.
NOTE: Per share data have been adjusted for the five-for-
four (5:4) stock split, effected as a 25% stock dividend,
effective May 31, 2005.
FINANCIAL SUMMARY
----------------------------------------------------
Third Nine Months Ended
Quarter September 30
2005-2004 --------------------------------
Percent Percent
Variance 2005 2004 Variance
------------- ------------ ---------- --------
Income Statement Data
(Dollars in thousands,
except share data)
Interest income:
Loans 48.7 % $ 40,649 $ 28,528 42.5 %
Other 26.5 4,282 3,626 18.1
---------- ---------
Total interest
income 46.3 44,931 32,154 39.7
Interest expense 71.9 17,529 10,876 61.2
---------- ---------
Net interest income 32.7 27,402 21,278 28.8
Provision for credit
losses 316.5 2,505 945 165.1
---------- ---------
Net interest income
after provision for
credit losses 21.4 24,897 20,333 22.4
Noninterest income 2.3 5,687 6,140 (7.4)
Noninterest expense 17.2 20,930 17,005 23.1
---------- ---------
Income before income
tax expense 18.8 9,654 9,468 2.0
Income tax expense 24.6 3,257 3,148 3.5
---------- ---------
Net income 16.0 $ 6,397 $ 6,320 1.2
========== =========
Net income per share:
Basic 14.3 % $ 0.92 $ 0.92 0.0 %
Diluted 14.8 % $ 0.89 $ 0.89 0.0 %
Cash dividends per
share 10.0 % $ 0.33 $ 0.30 10.0 %
Other Data
Return on average
assets 0.90 % 1.05 %
Return on average
equity 11.85 12.52
Net yield on earning
assets 4.16 3.86
Efficiency 62.33 60.86
Net interest position
to total assets(a) 12.12 12.56
Equity to assets 7.60 8.37
Loans to assets 77.06 75.00
Loans to deposits 94.00 91.77
Noninterest - bearing
deposits to total
deposits 10.81 11.40
(a)Net interest position is average earning assets less
average interest-bearing liabilities.
NOTE: Per share data have been adjusted for the five-for-
four (5:4) stock split, effected as a 25% stock dividend,
effective May 31, 2005.
COMMON STOCK - PER SHARE
----------------------------------------------------
2005 2004
------------------------------- ----------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
-------------------------------- -----------------
Market value:
End of period $ 17.58 $ 18.39 $ 18.00 $ 22.80 $ 19.25
High 18.52 20.25 18.74 23.35 19.47
Low 16.56 16.82 16.66 18.79 16.38
Book value 10.60 10.49 10.22 10.15 10.12
Dividend 0.11 0.11 0.11 0.10 0.10
Shares traded 194,165 263,966 504,388 663,392 552,764
NOTE: Per share data have been adjusted for the five-for-
four (5:4) stock split, effected as a 25% stock dividend,
effective May 31, 2005.
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