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 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