Fnb Financial Services (NASDAQ:FNBF)
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FNB Financial Services Corporation (NASDAQ:FNBF)
("FNB"), parent of FNB Southeast, today reported first quarter 2006
net income of $2.38 million, compared to $2.04 million for the same
period a year ago, representing a 16.4% increase. On a per diluted
share basis, FNB earned $0.33 in the quarter ended March 31, 2006, an
increase of 13.8% over $0.29 earned in 2005.
"Regaining earnings momentum, with solid results for the first
quarter of 2006, is very encouraging. The dedication of our banking
professionals to provide quality service to our loyal customer base
enabled this achievement while management remained focused on our
commitment to resolve previously disclosed asset quality issues,"
stated Pressley A. Ridgill, President and Chief Executive Officer.
Net interest income totaled $10.10 million in the first quarter of
2006, an increase of $1.59 million or 18.7%, compared to $8.51 million
in 2005. Noninterest income was $1.33 million in the first quarter of
2006, compared to $2.14 million in the first quarter of 2005. This
decrease is primarily attributable to lower mortgage banking fees.
Noninterest expense for the quarters ended March 31, 2005 and 2006 was
$7.06 million and $6.89 million, respectively, a 2.4% increase.
Assets at March 31, 2006 totaled $1.02 billion, an increase of
$99.4 million, or 10.8%, over one year earlier. Outstanding loans grew
$41.6 million during the past four quarters, from $713.3 million at
March 31, 2005 to $754.9 million at the end of the first quarter 2006,
a 5.8% increase. Net credit losses for the first quarter of 2006
amounted to $1.2 million, or 0.65% of average outstanding loans on an
annualized basis, compared to $189,000, or 0.11%, for the same period
a year ago. FNB recorded provisions for credit losses of $755,000 and
$680,000 for the quarters ended March 31, 2006 and 2005, respectively.
The quarter end allowance for credit losses to outstanding loans was
2.47% for 2006 and 1.10% for 2005.
During the first quarter of 2006, FNB continued working to resolve
loan portfolio issues. At March 31, 2006 nonperforming loans totaled
$9.0 million, a decrease of $1.4 million, compared to $10.4 million at
the prior year end. While the balance of risk grade loans classified
special mention, substandard, doubtful or loss increased to $86.3
million from $78.5 million at yearend 2005, the reserve requirement
for these categories of loans decreased to $11.6 million from $11.8
million. Retail loans past due 90 days or more decreased from $3.1
million at December 31, 2005 to $1.2 million at March 31, 2006. The
required reserve for retail loans past due 90 days or more decreased
from $787,000 to $294,000.
During the past year, deposits increased $69.0 million, or 9.0%,
to $836.4 million at March 31, 2006. While the net interest margin for
the first quarter 2006 improved to 4.28%, the current deposit pricing
environment will likely impede further margin expansion. Shareholders'
equity was $68.9 million at March 31, 2006, compared to $71.4 million
a year ago.
FNB Financial Services Corporation is a bank 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.
Forward Looking Statements
This news release contains forward looking statements with respect
to the financial conditions and results of operations of FNB Financial
Services Corporation ("FNB"). These forward looking statements involve
certain risks and uncertainties. Factors that may cause actual results
to differ materially from those contemplated by such forward looking
statements include, among others, the following possibilities: (1)
projected results in connection with the implementation of our
business plan are lower than expected; (2) competitive pressure among
financial services companies increases significantly; (3) costs or
difficulties related to the integration of acquisitions or expenses in
general are greater than expected; (4) general economic conditions, in
the markets in which FNB does business, are less favorable than
expected; (5) risks inherent in making loans, including repayment
risks and risks associated with collateral values, are greater than
expected; (6) changes in the interest rate environment reduce interest
margins and affect funding sources; (7) changes in market rates and
prices may adversely affect the value of financial products; (8)
legislation or regulatory requirements or changes thereto adversely
affect the businesses in which FNB is engaged; (9) regulatory
compliance cost increases are greater than expected; and (10)
decisions to change the business mix of FNB. For further information
and other factors which could affect the accuracy of forward looking
statements, please see FNB's reports filed with the Securities and
Exchange Commission ("SEC") pursuant to the Securities Exchange Act of
1934 which are available at the SEC's website (www.sec.gov) or at
FNB's website (www.fnbsoutheast.com). Readers are cautioned not to
place undue reliance on these forward looking statements, which
reflect management's judgments only as of the date hereof. FNB
undertakes no obligation to publicly revise those forward looking
statements to reflect events and circumstances that arise after the
date hereof.
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FINANCIAL SUMMARY
-----------------
2006 2005
----------- ------------------------
First Fourth Third
Quarter Quarter Quarter
----------- ----------- ------------
Average Balances
(Dollars in thousands)
Assets $1,015,797 $1,011,103 $996,274
Loans 760,026 764,331 767,524
Investment securities 204,468 181,222 162,760
Earning assets 974,586 953,263 939,458
Noninterest-bearing deposits 87,174 89,999 87,335
Interest-bearing deposits 741,104 733,000 729,740
Interest-bearing liabilities 850,713 831,665 821,369
Shareholders' equity 68,203 74,153 73,592
Period-End Balances
(Dollars in thousands)
Assets $1,019,878 $1,007,406 $1,011,778
Loans 754,921 757,967 771,359
Investment securities 203,824 201,890 178,422
Earning assets 965,004 964,431 954,139
Noninterest-bearing deposits 89,996 92,884 88,809
Interest-bearing deposits 746,422 731,746 741,021
Interest-bearing liabilities 855,611 839,826 839,032
Shareholders' equity 68,986 67,233 74,605
Asset Quality Data
(Dollars in thousands)
Nonperforming loans $8,966 $10,386 $4,108
Other nonperforming assets 1,527 1,483 1,485
Net credit losses 1,232 3,629 422
Allowance for credit losses 18,665 19,142 9,333
Nonperforming loans
to outstanding loans 1.19 % 1.37 0.53 %
Annualized net credit losses
to average loans 0.65 1.90 0.22
Allowance for credit losses
to outstanding loans 2.47 2.53 1.21
Allowance for credit losses
to nonperforming loans 208.18 X 184.31 227.19 X
First
2005 Quarter
------------------------- 2006-2005
Second First Percent
Quarter Quarter Variance
-------------- ---------- ----------
Average Balances
(Dollars in thousands)
Assets $954,786 $899,083 13.0 %
Loans 737,735 691,180 10.0
Investment securities 153,411 141,963 44.0
Earning assets 899,522 842,142 15.7
Noninterest-bearing deposits 86,656 78,685 10.8
Interest-bearing deposits 694,494 659,834 12.3
Interest-bearing liabilities 781,663 736,051 15.6
Shareholders' equity 72,154 70,820 (3.7)
Period-End Balances
(Dollars in thousands)
Assets $979,446 $920,520 10.8 %
Loans 763,255 713,310 5.8
Investment securities 155,568 144,666 40.9
Earning assets 924,506 860,575 12.1
Noninterest-bearing deposits 95,335 84,707 6.2
Interest-bearing deposits 716,031 682,792 9.3
Interest-bearing liabilities 805,184 758,375 12.8
Shareholders' equity 73,360 71,386 (3.4)
Asset Quality Data
(Dollars in thousands)
Nonperforming loans $4,002 $2,613
Other nonperforming assets 2,554 5,357
Net credit losses 102 189
Allowance for credit losses 8,380 7,843
Nonperforming loans
to outstanding loans 0.52 % 0.37 %
Annualized net credit losses
to average loans 0.06 0.11
Allowance for credit losses
to outstanding loans 1.10 1.10
Allowance for credit losses
to nonperforming loans 209.40 X 300.15 X
2006 2005
----------- -----------------------
First Fourth Third
Quarter Quarter Quarter
----------- ----------- -----------
Income Statement Data
(Dollars in thousands, except share data)
Interest income:
Loans $15,757 $15,363 $14,917
Other 2,131 1,819 1,575
----------- ----------- -----------
Total interest income 17,888 17,182 16,492
Interest expense 7,786 7,181 6,690
----------- ----------- -----------
Net interest income 10,102 10,001 9,802
Provision for credit losses 755 13,627 1,187
----------- ----------- -----------
Net interest income after
provision for credit losses 9,347 (3,626) 8,615
Noninterest income 1,332 1,696 1,734
Noninterest expense 7,057 7,276 6,993
----------- ----------- -----------
Income before income tax expense 3,622 (9,206) 3,356
Income tax expense 1,244 (3,601) 1,138
----------- ----------- -----------
Net income $2,378 ($5,605) $2,218
=========== =========== ===========
Net income per share:
Basic $0.34 ($0.80) $0.32
Diluted $0.33 ($0.80) $0.31
Cash dividends per share $0.12 $0.12 $0.11
Other Data
Return on average assets 0.95 % (2.20) 0.88 %
Return on average equity 14.14 (29.99) 11.96
Net yield on earning assets 4.28 4.24 4.21
Efficiency 60.70 61.23 59.77
Equity to assets 6.71 7.33 7.39
Loans to assets 74.82 75.59 77.04
Loans to deposits 91.76 92.87 93.94
Noninterest - bearing deposits
to total deposits 10.52 10.94 10.69
First
2005 Quarter
------------------------- 2006-2005
Second First Percent
Quarter Quarter Variance
-------------- ---------- ----------
Income Statement Data
(Dollars in thousands, except share data)
Interest income:
Loans $13,630 $12,102 30.2 %
Other 1,431 1,275 67.1
-------------- ----------
Total interest income 15,061 13,377 33.7
Interest expense 5,975 4,864 60.1
-------------- ----------
Net interest income 9,086 8,513 18.7
Provision for credit losses 638 680 11.0
-------------- ----------
Net interest income after
provision for credit losses 8,448 7,833 19.3
Noninterest income 1,815 2,138 (37.7)
Noninterest expense 7,045 6,892 2.4
-------------- ----------
Income before income tax expense 3,218 3,079 17.6
Income tax expense 1,083 1,036 20.1
-------------- ----------
Net income $2,135 $2,043 16.4
============== ==========
Net income per share:
Basic $0.30 $0.30 13.3 %
Diluted $0.29 $0.29 13.8 %
Cash dividends per share $0.11 $0.11 9.1 %
Other Data
Return on average assets 0.90 % 0.92 %
Return on average equity 11.87 11.71
Net yield on earning assets 4.12 4.18
Efficiency 63.67 63.73
Equity to assets 7.56 7.88
Loans to assets 77.27 76.88
Loans to deposits 94.44 93.59
Noninterest - bearing deposits
to total deposits 11.09 10.65
COMMON STOCK DATA
---------------------------------
2006 2005
----------- ------------------------
First Fourth Third
Quarter Quarter Quarter
----------- ----------- -----------
Market value:
End of period $16.05 $16.40 $17.58
High 16.46 17.89 18.52
Low 14.00 14.40 16.56
Book value 9.79 9.55 10.60
Dividend 0.12 0.12 0.11
Shares outstanding at period-end 7,045,335 7,038,110 7,036,148
Average shares outstanding 7,040,964 7,036,704 7,003,950
Shares traded 474,471 282,011 194,165
2005
-------------------------
Second First
Quarter Quarter
------------ ------------
Market value:
End of period $18.39 $18.00
High 20.25 18.74
Low 16.82 16.66
Book value 10.49 10.22
Dividend 0.11 0.11
Shares outstanding at period-end 6,995,029 6,987,821
Average shares outstanding 6,991,912 6,956,646
Shares traded 263,966 504,388
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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