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FNBF Fnb Financial Services Corp (MM)

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Share Name Share Symbol Market Type
Fnb Financial Services Corp (MM) NASDAQ:FNBF NASDAQ Common Stock
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FNB Financial Services Corporation Reports Third Quarter Results

17/10/2006 10:43pm

Business Wire


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FNB Financial Services Corporation (NASDAQ: FNBF)(“FNB”), parent of FNB Southeast (the “Bank”), today reported third quarter 2006 net income of $2.33 million and net income for the first nine months of $7.09 million. This represents 2006 earnings per diluted share of $0.32 and $0.98, respectively. FNB earned $2.22 million in the third quarter of 2005 and $6.40 million for the first nine months a year ago. Third quarter results rose 4.8% in 2006 and year to date earnings increased 10.9%. Interest income was $18.57 million and $16.49 million for the three months ended September 30, 2006 and 2005, respectively. On a year-to-date basis, interest income amounted to $54.48 million in 2006 and $44.93 million in 2005. Interest expense totaled $9.19 million in the 2006 third quarter, an increase of $2.50 million from one year earlier. Interest expense on deposits was $7.77 million in the current quarter, compared to $5.84 million for the same quarter a year ago. As a result of anticipated run-off of higher risk grade credits in the loan portfolio, FNB recorded no provision for credit losses in the third quarter of 2006, compared to $1.19 million for the three months ended September 30, 2005. 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 loan portfolio. Noninterest income totaled $1.41 million in the third quarter of 2006, compared with $1.73 million for the same period a year ago. Noninterest expense totaled $7.31 million for the third quarter of 2006, compared with $6.99 million for the same period in 2005. Expense items significantly contributing to this increase include personnel expense and telecommunications expense. “We are continuing to focus on our previously disclosed credit-related issues while building toward the future,” stated Pressley A. Ridgill, President and Chief Executive Officer. “Our new branch office in the Mayfaire area of Wilmington opened for business on October 10. We are excited about the opportunities this location presents to serve both new and existing customers.” Assets as of September 30, 2006 and December 31, 2005 were $1.01 billion. Outstanding loans totaled $722.5 million at the end of the current quarter, compared to $758.0 million at December 31, 2005. Net credit losses for the third quarter of 2006 amounted to $2.58 million, or 1.40% of average outstanding loans on an annualized basis, compared to 0.22% recorded in the 2005 third quarter. Nonperforming assets were $16.3 million at September 30, 2006 and $5.6 million a year ago. The allowance for credit losses to outstanding loans was 2.17% at September 30, 2006, compared to 1.21% one year earlier. Deposits at September 30, 2006 were $834.1 million, compared with $829.8 million one year earlier. Total purchased funds were $95.5 million and $98.0 million at September 30, 2006 and 2005, respectively. Shareholders’ equity totaled $73.2 million at September 30, 2006, compared to $74.6 million at September 30, 2005. During 2006, FNB repurchased 80,877 shares of its common stock at an average cost of $15.11. FNB Financial Services Corporation is a financial holding company with one subsidiary, FNB Southeast; a North Carolina chartered commercial bank. FNB Southeast currently operates 18 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. FINANCIAL SUMMARY     Third Quarter 2006-2005 Nine Months Ended September 30 2006  2005    Third Second First Fourth Third Percent Percent Quarter Quarter Quarter Quarter Quarter Variance 2006  2005  Variance   Average Balances (Dollars in thousands)   Assets $1,031,364  $1,022,267  $1,015,797  $1,011,103  $996,274  3.5  % $1,023,200  $950,406  7.7  % Loans 736,365  759,948  760,026  764,331  767,524  (4.1) 752,027  732,426  2.7  Investment securities 212,884  209,041  204,468  181,222  162,760  30.8  208,829  152,778  36.7  Earning assets 976,797  977,031  974,586  953,263  939,458  4.0  976,146  895,167  9.0  Noninterest-bearing deposits 86,741  89,311  87,174  89,999  87,335  (0.7) 87,740  84,257  4.1  Interest-bearing deposits 755,221  734,631  741,104  733,000  729,740  3.5  743,704  694,945  7.0  Interest-bearing liabilities 859,476  853,536  850,713  831,665  821,369  4.6  854,607  780,007  9.6  Shareholders' equity 70,573  68,897  68,203  74,153  73,592  (4.1) 69,233  72,199  (4.1)   Period-End Balances (Dollars in thousands)   Assets $1,013,671  $1,027,827  $1,019,878  $1,007,406  $1,011,778  0.2  % Loans 722,494  750,725  754,921  757,967  771,359  (6.3) Investment securities 218,641  211,871  203,824  201,890  178,422  22.5  Earning assets 954,471  968,126  965,004  964,431  954,139  0.0  Noninterest-bearing deposits 89,204  90,116  89,996  92,884  88,809  0.4  Interest-bearing deposits 744,924  756,668  746,422  731,746  741,021  0.5  Interest-bearing liabilities 840,403  864,769  855,611  839,826  839,032  0.2  Shareholders' equity 73,153  69,363  68,986  67,233  74,605  (1.9)   Asset Quality Data (Dollars in thousands)   Nonperforming loans $14,498  $14,490  $8,966  $10,386  $4,108  $14,498  $4,108  Other nonperforming assets 1,786  1,609  1,527  1,483  1,485  1,786  1,485  Net credit losses 2,583  791  1,232  3,629  422  4,606  713  Allowance for credit losses 15,656  18,239  18,665  19,142  9,333  15,656  9,333  Nonperforming loans to outstanding loans 2.01  % 1.93  % 1.19  % 1.37  % 0.53  % 2.01  % 0.53  % Annualized net credit losses to average loans 1.40  0.42  0.65  1.90  0.22  0.82  0.13  Allowance for credit losses to outstanding loans 2.17  2.43  2.47  2.53  1.21  2.17  1.21  Allowance for credit losses to nonperforming loans 107.99  X 125.87  X 208.18  X 184.31  X 227.19  X 1.08  X 2.27  X FINANCIAL SUMMARY     Third Quarter 2006-2005 Nine Months Ended September 30 2006  2005    Third Second First Fourth Third Percent Percent Quarter Quarter Quarter Quarter Quarter Variance 2006  2005  Variance   Income Statement Data (Dollars in thousands, except share data)   Interest income: Loans $15,972  $15,814  $15,757  $15,363  $14,917  7.1  % $47,543  $40,649  17.0  % Other 2,600  2,204  2,131  1,819  1,575  65.1  6,935  4,282  62.0  Total interest income 18,572  18,018  17,888  17,182  16,492  12.6  54,478  44,931  21.2  Interest expense 9,185  8,479  7,786  7,181  6,690  37.3  25,450  17,529  45.2  Net interest income 9,387  9,539  10,102  10,001  9,802  (4.2) 29,028  27,402  5.9  Provision for credit losses 0  365  755  13,627  1,187  (100.0) 1,120  2,505  (55.3) Net interest income after provision for credit losses 9,387  9,174  9,347  (3,626) 8,615  9.0  27,908  24,897  12.1  Noninterest income 1,406  1,311  1,332  1,696  1,734  (18.9) 4,049  5,687  (28.8) Noninterest expense 7,305  6,846  7,057  7,276  6,993  4.5  21,208  20,930  1.3  Income before income tax expense 3,488  3,639  3,622  (9,206) 3,356  3.9  10,749  9,654  11.3  Income tax expense 1,163  1,249  1,244  (3,601) 1,138  2.2  3,656  3,257  12.3  Net income $2,325  $2,390  $2,378  ($5,605) $2,218  4.8  $7,093  $6,397  10.9    Net income per share: Basic $0.33  $0.34  $0.34  ($0.80) $0.32  3.1  % $1.01  $0.92  9.8  % Diluted $0.32  $0.33  $0.33  ($0.80) $0.31  3.2  % $0.98  $0.89  10.1  % Cash dividends per share $0.12  $0.12  $0.12  $0.12  $0.11  9.1  % $0.36  $0.33  9.1  %   Other Data   Return on average assets 0.89  % 0.94  % 0.95  % (2.20) % 0.88  % 0.93  % 0.90  % Return on average equity 13.07  13.91  14.14  (29.99) 11.96  13.70  11.85  Net yield on earning assets 3.91  4.00  4.28  4.24  4.21  4.06  4.16  Efficiency 66.21  61.87  60.70  61.23  59.77  62.90  62.33  Equity to assets 6.84  6.74  6.71  7.33  7.39  6.77  7.60  Loans to assets 71.40  74.34  74.82  75.59  77.04  73.50  77.06  Loans to deposits 87.46  92.23  91.76  92.87  93.94  90.45  94.00  Noninterest - bearing deposits to total deposits 10.30  10.84  10.52  10.94  10.69  10.55  10.81  COMMON STOCK DATA     2006  2005  Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter   Market value: End of period $14.75  $15.16  $16.05  $16.40  $17.58  High 15.50  15.67  16.46  17.89  18.52  Low 13.04  14.70  14.00  14.40  16.56  Book value 10.34  9.81  9.79  9.55  10.60  Dividend 0.12  0.12  0.12  0.12  0.11  Shares outstanding at period-end 7,077,691  7,048,976  7,045,335  7,038,110  7,036,148  Average shares outstanding 7,053,509  7,074,254  7,040,964  7,036,704  7,003,950  Shares traded 493,900  544,000  474,471  282,011  194,165  FNB Financial Services Corporation (NASDAQ: FNBF)("FNB"), parent of FNB Southeast (the "Bank"), today reported third quarter 2006 net income of $2.33 million and net income for the first nine months of $7.09 million. This represents 2006 earnings per diluted share of $0.32 and $0.98, respectively. FNB earned $2.22 million in the third quarter of 2005 and $6.40 million for the first nine months a year ago. Third quarter results rose 4.8% in 2006 and year to date earnings increased 10.9%. Interest income was $18.57 million and $16.49 million for the three months ended September 30, 2006 and 2005, respectively. On a year-to-date basis, interest income amounted to $54.48 million in 2006 and $44.93 million in 2005. Interest expense totaled $9.19 million in the 2006 third quarter, an increase of $2.50 million from one year earlier. Interest expense on deposits was $7.77 million in the current quarter, compared to $5.84 million for the same quarter a year ago. As a result of anticipated run-off of higher risk grade credits in the loan portfolio, FNB recorded no provision for credit losses in the third quarter of 2006, compared to $1.19 million for the three months ended September 30, 2005. 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 loan portfolio. Noninterest income totaled $1.41 million in the third quarter of 2006, compared with $1.73 million for the same period a year ago. Noninterest expense totaled $7.31 million for the third quarter of 2006, compared with $6.99 million for the same period in 2005. Expense items significantly contributing to this increase include personnel expense and telecommunications expense. "We are continuing to focus on our previously disclosed credit-related issues while building toward the future," stated Pressley A. Ridgill, President and Chief Executive Officer. "Our new branch office in the Mayfaire area of Wilmington opened for business on October 10. We are excited about the opportunities this location presents to serve both new and existing customers." Assets as of September 30, 2006 and December 31, 2005 were $1.01 billion. Outstanding loans totaled $722.5 million at the end of the current quarter, compared to $758.0 million at December 31, 2005. Net credit losses for the third quarter of 2006 amounted to $2.58 million, or 1.40% of average outstanding loans on an annualized basis, compared to 0.22% recorded in the 2005 third quarter. Nonperforming assets were $16.3 million at September 30, 2006 and $5.6 million a year ago. The allowance for credit losses to outstanding loans was 2.17% at September 30, 2006, compared to 1.21% one year earlier. Deposits at September 30, 2006 were $834.1 million, compared with $829.8 million one year earlier. Total purchased funds were $95.5 million and $98.0 million at September 30, 2006 and 2005, respectively. Shareholders' equity totaled $73.2 million at September 30, 2006, compared to $74.6 million at September 30, 2005. During 2006, FNB repurchased 80,877 shares of its common stock at an average cost of $15.11. FNB Financial Services Corporation is a financial holding company with one subsidiary, FNB Southeast; a North Carolina chartered commercial bank. FNB Southeast currently operates 18 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. -0- *T FINANCIAL SUMMARY ----------------------------------------------------- 2006 ----------------------------------- Third Second First Quarter Quarter Quarter ----------- ----------- ----------- Average Balances (Dollars in thousands) Assets $1,031,364 $1,022,267 $1,015,797 Loans 736,365 759,948 760,026 Investment securities 212,884 209,041 204,468 Earning assets 976,797 977,031 974,586 Noninterest-bearing deposits 86,741 89,311 87,174 Interest-bearing deposits 755,221 734,631 741,104 Interest-bearing liabilities 859,476 853,536 850,713 Shareholders' equity 70,573 68,897 68,203 Period-End Balances (Dollars in thousands) Assets $1,013,671 $1,027,827 $1,019,878 Loans 722,494 750,725 754,921 Investment securities 218,641 211,871 203,824 Earning assets 954,471 968,126 965,004 Noninterest-bearing deposits 89,204 90,116 89,996 Interest-bearing deposits 744,924 756,668 746,422 Interest-bearing liabilities 840,403 864,769 855,611 Shareholders' equity 73,153 69,363 68,986 Asset Quality Data (Dollars in thousands) Nonperforming loans $14,498 $14,490 $8,966 Other nonperforming assets 1,786 1,609 1,527 Net credit losses 2,583 791 1,232 Allowance for credit losses 15,656 18,239 18,665 Nonperforming loans to outstanding loans 2.01 % 1.93 % 1.19 % Annualized net credit losses to average loans 1.40 0.42 0.65 Allowance for credit losses to outstanding loans 2.17 2.43 2.47 Allowance for credit losses to nonperforming loans 107.99 X 125.87 X 208.18 X Third Quarter 2005 2006-2005 ------------------------ Fourth Third Percent Quarter Quarter Variance ----------- ----------- ------------- Average Balances (Dollars in thousands) Assets $1,011,103 $996,274 3.5 % Loans 764,331 767,524 (4.1) Investment securities 181,222 162,760 30.8 Earning assets 953,263 939,458 4.0 Noninterest-bearing deposits 89,999 87,335 (0.7) Interest-bearing deposits 733,000 729,740 3.5 Interest-bearing liabilities 831,665 821,369 4.6 Shareholders' equity 74,153 73,592 (4.1) Period-End Balances (Dollars in thousands) Assets $1,007,406 $1,011,778 0.2 % Loans 757,967 771,359 (6.3) Investment securities 201,890 178,422 22.5 Earning assets 964,431 954,139 0.0 Noninterest-bearing deposits 92,884 88,809 0.4 Interest-bearing deposits 731,746 741,021 0.5 Interest-bearing liabilities 839,826 839,032 0.2 Shareholders' equity 67,233 74,605 (1.9) Asset Quality Data (Dollars in thousands) Nonperforming loans $10,386 $4,108 Other nonperforming assets 1,483 1,485 Net credit losses 3,629 422 Allowance for credit losses 19,142 9,333 Nonperforming loans to outstanding loans 1.37 % 0.53 % Annualized net credit losses to average loans 1.90 0.22 Allowance for credit losses to outstanding loans 2.53 1.21 Allowance for credit losses to nonperforming loans 184.31 X 227.19 X Nine Months Ended September 30 ------------------------------ Percent 2006 2005 Variance ----------- --------- -------- Average Balances (Dollars in thousands) Assets $1,023,200 $950,406 7.7 % Loans 752,027 732,426 2.7 Investment securities 208,829 152,778 36.7 Earning assets 976,146 895,167 9.0 Noninterest-bearing deposits 87,740 84,257 4.1 Interest-bearing deposits 743,704 694,945 7.0 Interest-bearing liabilities 854,607 780,007 9.6 Shareholders' equity 69,233 72,199 (4.1) Period-End Balances (Dollars in thousands) Assets Loans Investment securities Earning assets Noninterest-bearing deposits Interest-bearing deposits Interest-bearing liabilities Shareholders' equity Asset Quality Data (Dollars in thousands) Nonperforming loans $14,498 $4,108 Other nonperforming assets 1,786 1,485 Net credit losses 4,606 713 Allowance for credit losses 15,656 9,333 Nonperforming loans to outstanding loans 2.01 % 0.53 % Annualized net credit losses to average loans 0.82 0.13 Allowance for credit losses to outstanding loans 2.17 1.21 Allowance for credit losses to nonperforming loans 1.08 X 2.27 X *T -0- *T FINANCIAL SUMMARY ------------------------------------------------------- 2006 2005 -------------------------- ------------------ Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter -------- -------- -------- -------- -------- Income Statement Data (Dollars in thousands, except share data) Interest income: Loans $15,972 $15,814 $15,757 $15,363 $14,917 Other 2,600 2,204 2,131 1,819 1,575 -------- -------- -------- -------- -------- Total interest income 18,572 18,018 17,888 17,182 16,492 Interest expense 9,185 8,479 7,786 7,181 6,690 -------- -------- -------- -------- -------- Net interest income 9,387 9,539 10,102 10,001 9,802 Provision for credit losses 0 365 755 13,627 1,187 -------- -------- -------- -------- -------- Net interest income after provision for credit losses 9,387 9,174 9,347 (3,626) 8,615 Noninterest income 1,406 1,311 1,332 1,696 1,734 Noninterest expense 7,305 6,846 7,057 7,276 6,993 -------- -------- -------- -------- -------- Income before income tax expense 3,488 3,639 3,622 (9,206) 3,356 Income tax expense 1,163 1,249 1,244 (3,601) 1,138 -------- -------- -------- -------- -------- Net income $2,325 $2,390 $2,378 ($5,605) $2,218 ======== ======== ======== ======== ======== Net income per share: Basic $0.33 $0.34 $0.34 ($0.80) $0.32 Diluted $0.32 $0.33 $0.33 ($0.80) $0.31 Cash dividends per share $0.12 $0.12 $0.12 $0.12 $0.11 Other Data Return on average assets 0.89 % 0.94 % 0.95 % (2.20)% 0.88 % Return on average equity 13.07 13.91 14.14 (29.99) 11.96 Net yield on earning assets 3.91 4.00 4.28 4.24 4.21 Efficiency 66.21 61.87 60.70 61.23 59.77 Equity to assets 6.84 6.74 6.71 7.33 7.39 Loans to assets 71.40 74.34 74.82 75.59 77.04 Loans to deposits 87.46 92.23 91.76 92.87 93.94 Noninterest - bearing deposits to total deposits 10.30 10.84 10.52 10.94 10.69 Third Quarter Nine Months Ended 2006-2005 September 30 -------------------------- Percent Percent Variance 2006 2005 Variance ------------ -------- -------- -------- Income Statement Data (Dollars in thousands, except share data) Interest income: Loans 7.1 %$47,543 $40,649 17.0 % Other 65.1 6,935 4,282 62.0 -------- -------- Total interest income 12.6 54,478 44,931 21.2 Interest expense 37.3 25,450 17,529 45.2 -------- -------- Net interest income (4.2) 29,028 27,402 5.9 Provision for credit losses (100.0) 1,120 2,505 (55.3) -------- -------- Net interest income after provision for credit losses 9.0 27,908 24,897 12.1 Noninterest income (18.9) 4,049 5,687 (28.8) Noninterest expense 4.5 21,208 20,930 1.3 -------- -------- Income before income tax expense 3.9 10,749 9,654 11.3 Income tax expense 2.2 3,656 3,257 12.3 -------- -------- Net income 4.8 $7,093 $6,397 10.9 ======== ======== Net income per share: Basic 3.1 % $1.01 $0.92 9.8 % Diluted 3.2 % $0.98 $0.89 10.1 % Cash dividends per share 9.1 % $0.36 $0.33 9.1 % Other Data Return on average assets 0.93 % 0.90 % Return on average equity 13.70 11.85 Net yield on earning assets 4.06 4.16 Efficiency 62.90 62.33 Equity to assets 6.77 7.60 Loans to assets 73.50 77.06 Loans to deposits 90.45 94.00 Noninterest - bearing deposits to total deposits 10.55 10.81 *T -0- *T COMMON STOCK DATA -------------------------- 2006 2005 -------------------------------- --------------------- Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter ---------- ---------- ---------- ---------- ---------- Market value: End of period $14.75 $15.16 $16.05 $16.40 $17.58 High 15.50 15.67 16.46 17.89 18.52 Low 13.04 14.70 14.00 14.40 16.56 Book value 10.34 9.81 9.79 9.55 10.60 Dividend 0.12 0.12 0.12 0.12 0.11 Shares outstanding at period-end 7,077,691 7,048,976 7,045,335 7,038,110 7,036,148 Average shares outstanding 7,053,509 7,074,254 7,040,964 7,036,704 7,003,950 Shares traded 493,900 544,000 474,471 282,011 194,165 *T

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