EXHIBIT 99.1
FNB United Corp. Announces Second Quarter Results
ASHEBORO, N.C., July 29, 2010 (GLOBE NEWSWIRE) -- FNB United Corp. (Nasdaq:FNBN), the holding company for CommunityOne Bank, N.A., and its wholly owned subsidiary, Dover Mortgage Company, today reported a net loss of $25.7 million, or $(2.25) per diluted share, for the second quarter of 2010, compared to a net loss of $1.2 million, or $(0.11) per diluted share, for the second quarter a year ago. Second quarter 2010 results include a $27.4 million provision for loan losses. For the first six months of the year, following a $36.9 million provision for loan losses, FNB United reported a net loss of $30.1 million, or $(2.64) per diluted share, compared to a net loss of $7.4 million, or $(0.65) per diluted share, in the first six months of 2009.
"Our negative operating performance is attributable mainly to increased loan loss provisions, resulting from an intensified re-evaluation process directed toward our classified collateral-dependent real estate loans. In addition, an extensive third-party loan review in the second quarter resulted in some increase in classified loans, which carry higher reserves, and thus increased provisions. Our market continues to be adversely affected by the sluggish North Carolina and national economies, making it harder for some of our current loan customers to recover," said R. Larry Campbell, Interim President and CEO. "In light of market realities, we have continued to set aside significant reserves over the past several quarters, almost doubling our allowance for loan losses since June 2009," Mr. Campbell continued. He further commented, "During the past year we have been reducing our loan portfolio and building liquidity. We are also actively engaged with financial advisors to assist us in developing a capital raising plan over the coming months to stabilize our financial position."
Consent Order
The Bank signed a Consent Order with the Office of the Comptroller of the Currency on July 22, 2010, which mandates specific actions by the Bank to address certain findings from the OCC's examination and to address the Bank's current financial condition. The Consent Order contains various requirements, including a capital directive that requires the Bank to achieve and maintain minimum regulatory capital levels in excess of the statutory minimums to be well-capitalized, more controls on future extensions of credit, and the Bank's development of various programs and procedures to improve its asset quality. In anticipation of the Consent Order, the Bank has been developing a three-year strategic plan that establishes specific objectives, as outlined in the Consent Order.
The Order does not affect the Bank's FDIC coverage. The Bank's customer deposits remain fully insured by the FDIC to the maximum extent allowed by law. The standard deposit insurance amount is $250,000 per depositor for each account ownership category. In addition, the Bank participates in the FDIC's Transaction Account Guarantee program, under which the FDIC will fully guarantee until December 31, 2010, all noninterest-bearing transaction accounts, NOW accounts with interest rates of 0.25% or less and IOLTAs (lawyer trust accounts), without regard to the amount in the account. For calendar years 2011 and 2012, deposits held in noninterest-bearing transaction accounts will be fully insured, regardless of the amount in the account.
Asset Quality and Provision for Loan Losses
Nonperforming loans increased during the quarter to $230.4 million, or 15.14% of total loans, at June 30, 2010, compared to 8.48% at June 30, 2009. Construction and development loans were 52% of nonperforming loans for the quarter. Nonperforming loans were $200.6 million at the end of the preceding quarter and $135.0 million at June 30, 2009.
Provisions for loan losses were $27.4 million for the quarter ended June 30, 2010, compared to $5.5 million in the same period in 2009, with total net charge-offs of $13.6 million in the second quarter of 2010 versus $7.3 million for the same period a year ago. For the six months ended June 30, 2010, provision for loan losses totaled $36.9 million compared to $19.6 million for the prior year period, with 2010 year-to-date net charges-offs of $16.6 million, reduced from $17.5 million in the first half of 2009. FNB United's real estate owned and repossessed loan collateral was $42.1 million at June 30, 2010, compared to $41.4 million in the previous quarter, and $10.4 million at June 30, 2009.
Nonperforming assets were $272.5 million, or 13.47% of total assets at June 30, 2010, compared to $242.1 million, or 11.91% at the end of the preceding quarter, and $145.4 million, or 6.61% a year ago. Nonperforming assets include all nonaccrual loans, all loans over 90 days delinquent and still accruing, other real estate owned, and other repossessed loan collateral. The total allowance for loan losses was $69.8 million at June 30, 2010, equal to 4.58% of loans held for investment, compared to 3.61% at March 31, 2010 and 2.31% at June 30, 2009.
Loans that were delinquent 30-89 days totaled $19.0 million, or 1.25% of total loans at June 30, 2010, compared to $30.7 million, or 1.98% of total loans at March 31, 2010, and $19.0 million, or 1.20% of total loans at June 30, 2009. The Bank had loans 90 days or more past due and still accruing, totaling $5.1 million at June 30, 2010, $4.2 million at March 31, 2010 and $2.7 million at June 30, 2009.
Net Interest Income
Second quarter 2010 net interest income before the provision for loan losses was $14.0 million, compared to $15.7 million in the preceding quarter and $15.2 million in the second quarter a year ago. FNB United's net interest margin was 3.08% for the second quarter of 2010 compared to 3.35% in the immediate prior quarter and 3.13% in the second quarter a year ago. The reduction in the net interest margin in the second quarter 2010 of 27 basis points was primarily attributable to a reduction of 44 basis points in the average yield on commercial loans due to additional loans being put on non-accrual and the related reversal of interest income. The yield on interest earning assets declined 29 basis points compared to the previous quarter while the cost of interest-bearing liabilities decreased by five basis points. For the first six months of 2010, net interest income before the provision for loan losses was $29.7 million, compared to $29.4 million in the first six months of 2009.
Noninterest Income
Total noninterest income was $5.9 million for the second quarter 2010, compared to $5.6 million in the previous quarter and $5.5 million in the second quarter a year ago. Mortgage loan income was $1.2 million, compared to $2.6 million for the same period in 2009, primarily due to a reduction of loans sold into the secondary market from $195.6 million in the second quarter of 2009 to $107.1 million during the second quarter of 2010. The second quarter of 2009 incurred a $1.0 million OTTI charge on an investment security. Noninterest income was $11.6 million for the first half of 2010 compared to $11.1 million in the first half of 2009.
Noninterest Expense
Total noninterest expense was $20.3 million in the second quarter of 2010, compared to $14.8 million in the preceding quarter and $16.4 million in the second quarter a year ago. The increase in the second quarter 2010 versus the first quarter 2010 of $5.5 million is primarily due to an increase in expenses related to other real estate owned of $4.1 million. The second quarter of 2009 included a $1.0 million FDIC special assessment. Compensation and benefit expense for the second quarter 2010 was $762,000 lower than the same period a year ago due in part to the decrease in the number of full-time equivalent employees from an average of 525 in the second quarter 2009 to 512 in the second quarter 2010 and a reduction of the company contribution toward retirement plans.
For the first half of 2010, total noninterest expense increased to $35.1 million, compared to $32.0 million in the first half of 2009. Net of the increase in other real estate owned expenses, expenses declined $1.7 million, or 5.3%.
Loans Held for Investment
Loans held for investment were $1.52 billion at quarter-end 2010, compared to $1.59 billion a year earlier. Home equity loans increased $17.9 million, commercial loans decreased $123.1 million and residential loans were up $21.7 million at June 30, 2010, compared to a year ago. Assets decreased 8.0% to $2.02 billion at June 30, 2010, compared to $2.20 billion a year earlier.
Deposits
Total deposits increased 5.1% to $1.72 billion at June 30, 2010, compared to $1.64 billion twelve months earlier. Certificates of deposit increased 4.0% to $972 million, from $935 million a year ago while other deposits increased 6.6% to $752 million at quarter-end, compared to $705 million a year earlier.
Brokered certificates of deposits were $111.6 million at June 30, 2010, which was 6.5% of total deposits. As a result of the Consent Order described above, the Bank can no longer renew, roll-over or increase the amount of brokered deposits above the amount outstanding at the date of the Consent Order without obtaining a waiver from the OCC. The Bank can apply for a waiver of this rule, but such a waiver may or may not be granted.
Capital Levels and Shareholders' Equity
Shareholders' equity was $72.5 million at June 30, 2010, compared to $192.7 million a year earlier. Shareholders' equity includes the receipt of $51.5 million as a participant in the U.S. Treasury Department's Capital Purchase Program. Book value per common share was $1.76 at quarter-end 2010 compared to $12.33 a year earlier, and tangible book value per common share was $1.36 at quarter-end 2010, compared to $7.28 a year earlier. At June 30, 2010, the Bank is adequately capitalized.
About the Company
FNB United Corp. is the Asheboro, North Carolina based bank holding company for CommunityOne Bank, N.A., and the bank's subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne Bank (MyYesBank.com) operates 45 offices in 38 communities throughout central, southern and western North Carolina. Through these subsidiaries, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services.
This news release may contain forward-looking statements regarding future events. Forward-looking statements often address our expected future business and financial performance, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," or "will." These statements are only predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include risks of managing our growth, changes in financial markets, changes in real estate markets, regulatory changes, changes in interest rates, changes in economic conditions being less favorable than anticipated, and loss of deposits and loan demand to other financial institutions. Additional information concerning factors that could cause actual results to be materially different from those in the forward-looking statements is contained in FNB United's filings with the Securities and Exchange Commission. FNB United does not a ssume any obligation to update these forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.
| RESULTS OF OPERATIONS (Unaudited) | | | | | | |
| (In thousands except share and per share data) | | | | | | |
| | Quarter Ended | Percent Change From |
| | June 30, 2010 | March 31, 2010 | December 31, 2009 | June 30, 2009 | March 31, 2010 | June 30, 2009 |
| Interest Income | | | | | | |
| Interest and fees on loans | $ 18,137 | $ 19,405 | $ 20,157 | $ 21,264 | -6.5% | -14.7% |
| Interest and dividends on investments securities: | | | | | | |
| Taxable income | 3,120 | 3,825 | 4,392 | 4,108 | -18.4% | -24.1% |
| Non-taxable income | 395 | 435 | 500 | 594 | -9.2% | -33.5% |
| Other interest income | 107 | 86 | 117 | 87 | 24.4% | 23.0% |
| Total interest income | 21,759 | 23,751 | 25,166 | 26,053 | -8.4% | -16.5% |
| Interest Expense | | | | | | |
| Deposits | 6,215 | 6,402 | 7,042 | 8,605 | -2.9% | -27.8% |
| Borrowed funds | 1,534 | 1,648 | 1,831 | 2,202 | -6.9% | -30.3% |
| Total interest expense | 7,749 | 8,050 | 8,873 | 10,807 | -3.7% | -28.3% |
| Net Interest Income before Provision for Loan Losses | 14,010 | 15,701 | 16,293 | 15,246 | -10.8% | -8.1% |
| Provision for loan losses | 27,429 | 9,490 | 24,682 | 5,525 | 189.0% | 396.5% |
| Net Interest (Loss)/Income After Provision for Loan Losses | (13,419) | 6,211 | (8,389) | 9,721 | -316.1% | -238.0% |
| Noninterest Income | | | | | | |
| Service charges on deposit accounts | 1,981 | 1,938 | 2,316 | 2,173 | 2.2% | -8.8% |
| Mortgage loan income | 1,207 | 1,184 | 1,185 | 2,631 | 1.9% | -54.1% |
| Cardholder and merchant services income | 791 | 680 | 660 | 642 | 16.3% | 23.2% |
| Trust and investment services | 518 | 479 | 500 | 440 | 8.1% | 17.7% |
| Bank-owned life insurance | 257 | 241 | 236 | 241 | 6.6% | 6.6% |
| Other service charges, commissions and fees | 236 | 360 | 265 | 299 | -34.4% | -21.1% |
| Security gains/(losses) | 828 | 669 | 372 | 4 | 23.8% | NM |
| Fair value swap gains | 49 | 45 | 66 | -- | 8.9% | N/A |
| Total other-than-temporary impairment loss | -- | -- | -- | (4,367) | N/A | -100.0% |
| Portion of loss recognized in other comprehensive income | -- | -- | -- | 3,367 | N/A | -100.0% |
| Net impairment loss recognized in earnings | -- | -- | -- | (1,000) | N/A | -100.0% |
| Other income | 70 | 30 | 125 | 60 | 133.3% | 16.7% |
| Total noninterest income | 5,937 | 5,626 | 5,725 | 5,490 | 5.5% | 8.1% |
| Noninterest Expense | | | | | | |
| Personnel expense | 7,691 | 7,762 | 7,783 | 8,453 | -0.9% | -9.0% |
| Net occupancy expense | 1,238 | 1,301 | 1,349 | 1,286 | -4.8% | -3.7% |
| Furniture, equipment and data processing expense | 1,761 | 1,769 | 1,796 | 1,720 | -0.5% | 2.4% |
| Professional fees | 810 | 586 | 350 | 473 | 38.2% | 71.2% |
| Stationery, printing and supplies | 141 | 118 | 166 | 156 | 19.5% | -9.6% |
| Advertising and marketing | 387 | 483 | 519 | 469 | -19.9% | -17.5% |
| Other real estate owned | 4,615 | 471 | 1,440 | 187 | 879.8% | NM |
| Credit/debit card expense | 447 | 462 | 416 | 416 | -3.2% | 7.5% |
| FDIC assessment | 812 | 721 | 730 | 1,560 | 12.6% | -47.9% |
| Other expense | 2,369 | 1,155 | 1,819 | 1,636 | 105.1% | 44.8% |
| Total noninterest expense | 20,271 | 14,828 | 16,368 | 16,356 | 36.7% | 23.9% |
| Loss Before Income Taxes | (27,753) | (2,991) | (19,032) | (1,145) | 827.9% | NM |
| Income taxes (benefit)/expense | (2,828) | 586 | 9,000 | (742) | -582.6% | 281.1% |
| Net Loss | (24,925) | (3,577) | (28,032) | (403) | 596.8% | NM |
| Preferred stock dividends | (822) | (819) | (818) | (809) | 0.4% | 1.6% |
| Net Loss to Common Shareholders | $ (25,747) | $ (4,396) | $ (28,850) | $ (1,212) | 485.7% | NM |
| | | | | | | |
| Loss per common share: | | | | | | |
| Basic | $ (2.25) | $ (0.38) | $ (2.53) | $ (0.11) | 485.7% | NM |
| Diluted | $ (2.25) | $ (0.38) | $ (2.53) | $ (0.11) | 485.7% | NM |
| Cash dividends declared per common share | $ -- | $ -- | $ -- | $ 0.025 | N/A | -100.0% |
| Weighted average shares outstanding: | | | | | | |
| Basic | 11,424,435 | 11,424,159 | 11,423,058 | 11,413,735 | | |
| Diluted | 11,424,435 | 11,424,159 | 11,423,058 | 11,413,735 | | |
| | | | | | | |
| NM = Not Meaningful | | | | | | |
| | | | | | | |
| | |
| RESULTS OF OPERATIONS (Unaudited) | |
| (In thousands except share and per share data) | |
| | Year-to-Date | Percent |
| | June 30, 2010 | June 30, 2009 | Change |
| Interest Income | | | |
| Interest and fees on loans | $ 37,542 | $ 42,863 | -12.4% |
| Interest and dividends on investments securities: | | | |
| Taxable income | 6,945 | 7,175 | -3.2% |
| Non-taxable income | 830 | 1,194 | -30.5% |
| Other interest income | 193 | 167 | 15.6% |
| Total interest income | 45,510 | 51,399 | -11.5% |
| Interest Expense | | | |
| Deposits | 12,617 | 17,479 | -27.8% |
| Borrowed funds | 3,183 | 4,542 | -29.9% |
| Total interest expense | 15,800 | 22,021 | -28.3% |
| Net Interest Income Before Provision for Loan Losses | 29,710 | 29,378 | 1.1% |
| Provision for loan losses | 36,919 | 19,584 | 88.5% |
| Net Interest (Loss)/Income After Provision for Loan Losses | (7,209) | 9,794 | -173.6% |
| Noninterest Income | | | |
| Service charges on deposit accounts | 3,919 | 4,306 | -9.0% |
| Mortgage loan income | 2,391 | 4,547 | -47.4% |
| Cardholder and merchant services income | 1,470 | 1,204 | 22.1% |
| Trust and investment services | 996 | 781 | 27.5% |
| Bank owned life insurance | 498 | 470 | 6.0% |
| Other service charges, commissions and fees | 596 | 586 | 1.7% |
| Security gains/(losses) | 1,497 | (2) | N/M |
| Fair value swap gains | 95 | -- | N/A |
| Total other than temporary impairment loss | -- | (4,367) | -100.0% |
| Portion of loss recognized in other comprehensive income | -- | (3,367) | -100.0% |
| Net impairment loss recognized in earnings | -- | (1,000) | -100.0% |
| Other income | 99 | 241 | -58.9% |
| Total noninterest income | 11,561 | 11,133 | 3.8% |
| Noninterest Expense | | | |
| Personnel expense | 15,453 | 16,917 | -8.7% |
| Net occupancy expense | 2,538 | 2,808 | -9.6% |
| Furniture, equipment and data processing expense | 3,531 | 3,482 | 1.4% |
| Professional fees | 1,396 | 1,233 | 13.2% |
| Stationery, printing and supplies | 259 | 338 | -23.4% |
| Advertising and marketing | 869 | 1,056 | -17.7% |
| Other real estate owned | 5,086 | 245 | NM |
| Credit/debit card expense | 909 | 813 | 11.8% |
| FDIC assessment | 1,534 | 1,863 | -17.7% |
| Other expense | 3,521 | 3,208 | 9.8% |
| Total noninterest expense | 35,096 | 31,963 | 9.8% |
| Loss Before Income Taxes | (30,744) | (11,036) | 178.6% |
| Income taxes benefit | (2,242) | (4,866) | -53.9% |
| Net Loss | (28,502) | (6,170) | 361.9% |
| Preferred stock dividends | (1,641) | (1,240) | 32.3% |
| Net Loss to Common Shareholders | $ (30,143) | $ (7,410) | 306.8% |
| | | | |
| Loss per common share: | | | |
| Basic | $ (2.64) | $ (0.65) | 306.3% |
| Diluted | $ (2.64) | $ (0.65) | 306.3% |
| | | | |
| Cash dividends declared per common share | $ -- | $ 0.05 | -100.0% |
| | | | |
| Weighted average shares outstanding: | | | |
| Basic | 11,424,298 | 11,411,909 | |
| Diluted | 11,424,298 | 11,411,909 | |
| | | | |
| NM = Not Meaningful | | | |
| | | | |
| FINANCIAL CONDITION (Unaudited) | | | | |
| (In thousands except share and per share data) | | | | | |
| | As of | Percent Change From |
| | June 30,
2010 | March 31,
2010 | December 31, 2009 | June 30,
2009 | March 31, 2010 | June 30, 2009 |
| ASSETS | | | | | | |
| Cash and due from banks | $ 73,535 | $ 49,346 | $ 27,600 | $ 26,675 | 49.0% | 175.7% |
| Interest-bearing bank balances | 5,024 | 351 | 98 | 56 | NM | NM |
| Federal funds sold | -- | -- | -- | 42 | N/A | -100.0% |
| Securities available-for-sale | 280,120 | 183,192 | 237,630 | 254,826 | 52.9% | 9.9% |
| Securities held-to-maturity | -- | 84,853 | 88,559 | 100,475 | -100.0% | -100.0% |
| Loans held for sale | 31,559 | 42,956 | 58,219 | 65,084 | -26.5% | -51.5% |
| Loans held for investment | 1,521,965 | 1,548,405 | 1,563,021 | 1,591,686 | -1.7% | -4.4% |
| Less: Allowance for loan losses | (69,760) | (55,895) | (49,461) | (36,844) | 24.8% | 89.3% |
| Net loans held for investment | 1,452,205 | 1,492,510 | 1,513,560 | 1,554,842 | -2.7% | -6.6% |
| Premises and equipment, net | 46,858 | 47,490 | 48,115 | 49,430 | -1.3% | -5.2% |
| Other real estate owned | 42,002 | 41,359 | 35,170 | 10,264 | 1.6% | 309.2% |
| Goodwill | -- | -- | -- | 52,395 | N/A | -100.0% |
| Core deposit premiums | 4,570 | 4,769 | 4,968 | 5,365 | -4.2% | -14.8% |
| Bank-owned life insurance | 31,432 | 31,146 | 30,883 | 30,423 | 0.9% | 3.3% |
| Other assets | 55,152 | 54,572 | 56,494 | 49,049 | 1.1% | 12.4% |
| Total Assets | $ 2,022,457 | $ 2,032,544 | $ 2,101,296 | $ 2,198,926 | -0.5% | -8.0% |
| LIABILITIES | | | | | | |
| Deposits: | | | | | | |
| Noninterest-bearing demand deposits | $ 158,949 | $ 156,780 | $ 152,522 | $ 155,223 | 1.4% | 2.4% |
| Interest-bearing deposits: | | | | | | |
| Demand, savings, and money market deposits | 592,614 | 612,219 | 594,377 | 549,630 | -3.2% | 7.8% |
| Time deposits of $100,000 or more | 484,734 | 422,023 | 425,858 | 395,490 | 14.9% | 22.6% |
| Other time deposits | 487,463 | 492,259 | 549,371 | 539,412 | -1.0% | -9.6% |
| Total deposits | 1,723,760 | 1,683,281 | 1,722,128 | 1,639,755 | 2.4% | 5.1% |
| Retail repurchase agreements | 16,424 | 13,907 | 13,592 | 17,460 | 18.1% | -5.9% |
| Federal Home Loan Bank advances | 119,573 | 151,785 | 166,165 | 184,445 | -21.2% | -35.2% |
| Federal funds purchased | -- | -- | 10,000 | 80,000 | N/A | -100.0% |
| Subordinated debt | 15,000 | 15,000 | 15,000 | 15,000 | 0.0% | 0.0% |
| Junior subordinated debentures | 56,702 | 56,702 | 56,702 | 56,702 | 0.0% | 0.0% |
| Other liabilities | 18,464 | 17,769 | 19,350 | 12,837 | 3.9% | 43.8% |
| Total liabilities | 1,949,923 | 1,938,444 | 2,002,937 | 2,006,199 | 0.6% | -2.8% |
| SHAREHOLDERS' EQUITY | | | | | | |
| Series A preferred stock | 48,558 | 48,380 | 48,205 | 47,864 | 0.4% | 1.4% |
| Common stock warrants | 3,891 | 3,891 | 3,891 | 3,891 | 0.0% | 0.0% |
| Common stock | 28,561 | 28,566 | 28,566 | 28,573 | 0.0% | 0.0% |
| Surplus | 115,057 | 115,059 | 115,039 | 115,043 | 0.0% | 0.0% |
| Retained earnings/(accumulated deficit) | (126,376) | (101,330) | (96,234) | 920 | 24.7% | NM |
| Accumulated other comprehensive income/(loss ) | 2,843 | (466) | (1,108) | (3,564) | -710.1% | -179.8% |
| Total shareholders' equity | 72,534 | 94,100 | 98,359 | 192,727 | -22.9% | -62.4% |
| Total Liabilities and Shareholders' Equity | $ 2,022,457 | $ 2,032,544 | $ 2,101,296 | $ 2,198,926 | -0.5% | -8.0% |
| Shares outstanding at end of period | 11,424,390 | 11,426,413 | 11,426,413 | 11,429,203 | 0.0% | 0.0% |
| Book value per common share (1) | $ 1.76 | $ 3.66 | $ 4.05 | $ 12.33 | -52.0% | -85.7% |
| Tangible book value per common share (1)(2) | $ 1.36 | $ 3.24 | $ 3.61 | $ 7.28 | -58.1% | -81.3% |
| | | | | | | |
| NM = Not Meaningful | | | | | | |
| | | | | | | |
| (1) - Calculation is based on number of shares outstanding at the end of the period rather than weighted average shares outstanding and does not include preferred stock or stock warrants. |
| (2) - Calculation excludes goodwill and core deposit premiums. | |
| | | | | |
| ADDITIONAL FINANCIAL INFORMATION | | | | |
| (Dollars in thousands) | | | | |
| (Rates / Ratios Annualized) | | | | |
| | For the Quarters Ended |
| OPERATING PERFORMANCE: | June 30,
2010 | March 10,
2010 | December 31,
2009 | June 30,
2009 |
| Average securities | $ 266,316 | $ 309,766 | $ 348,158 | $ 341,381 |
| Average loans held for sale | 37,873 | 40,988 | 53,308 | 53,955 |
| Average loans | 1,538,220 | 1,555,865 | 1,572,025 | 1,585,440 |
| Average other interest-earning assets | 18,613 | 26,096 | 27,180 | 18,903 |
| Average noninterest-earning assets | 182,105 | 142,969 | 136,870 | 169,847 |
| Total average assets | $ 2,043,127 | $ 2,075,684 | $ 2,137,541 | $ 2,169,526 |
| | | | | |
| Average interest-bearing deposits | $ 1,534,462 | $ 1,554,539 | $ 1,574,068 | $ 1,470,461 |
| Average noninterest bearing deposits | 161,138 | 155,337 | 152,977 | 154,327 |
| Average borrowings | 234,865 | 250,274 | 275,625 | 339,948 |
| Average noninterest-earning liabilities | 16,765 | 16,792 | 7,556 | 11,809 |
| Total average liabilities | 1,947,230 | 1,976,942 | 2,010,226 | 1,976,545 |
| Total average shareholders' equity | 95,897 | 98,742 | 127,315 | 192,981 |
| Total average liabilities and shareholders' equity | $ 2,043,127 | $ 2,075,684 | $ 2,137,541 | $ 2,169,526 |
| | | | | |
| Interest rate yield on loans | 4.63% | 4.93% | 4.93% | 5.21% |
| Interest rate yield on securities | 5.61% | 5.88% | 5.88% | 5.90% |
| Interest rate yield on interest-earning assets | 4.75% | 5.04% | 5.05% | 5.30% |
| | | | | |
| Interest rate expense on deposits | 1.62% | 1.67% | 1.77% | 2.35% |
| Interest rate expense on borrowings | 2.62% | 2.67% | 2.64% | 2.60% |
| Interest rate expense on interest-bearing liabilities | 1.76% | 1.81% | 1.90% | 2.39% |
| | | | | |
| Interest rate spread | 2.99% | 3.23% | 3.15% | 2.90% |
| | | | | |
| Net interest margin | 3.08% | 3.35% | 3.29% | 3.13% |
| | | | | |
| Other operating income / Average assets | 1.17% | 1.10% | 1.06% | 1.01% |
| Other operating expense / Average assets | 3.98% | 2.90% | 3.04% | 3.02% |
| Efficiency ratio (other operating expense / revenue before provision) | 101.62% | 69.53% | 74.34% | 78.88% |
| Return on average assets | (4.89%) | (0.70%) | (5.20%) | (0.07%) |
| Return on average equity | (104.25%) | (14.69%) | (87.35%) | (0.84%) |
| Average equity / Average assets | 4.69% | 4.76% | 5.96% | 8.90% |
| | | | | |
| Tier 1 leverage | 4.03%* | 5.62% | 5.68% | 8.60% |
| Tier 1 risk-based capital | 4.96%* | 6.90% | 6.86% | 9.75% |
| Total risk-based capital | 9.13%* | 10.53% | 10.29% | 12.18% |
| | | | | |
| * Estimate | | | | |
| | | | | |
| ADDITIONAL FINANCIAL INFORMATION | | | | | | |
| (Dollars in thousands) | | | | | | |
| | As of / For the
Quarters Ended | As of / For the
Six Months Ended |
| NONPERFORMING ASSETS | June 30, 2010 | March 31, 2010 | December 31, 2009 | June 30, 2009 | June 30, 2010 | June 30, 2009 |
| Loans on nonaccrual status | $ 225,279 | $ 196,405 | $ 167,507 | $ 132,313 | $ 225,279 | $ 132,313 |
| Loans more than 90 days delinquent, still on accrual | 5,140 | 4,236 | 7,085 | 2,705 | 5,140 | 2,705 |
| Total nonperforming loans | 230,419 | 200,641 | 174,592 | 135,018 | 230,419 | 135,018 |
| Real estate owned (OREO)/Repossessed assets | 42,103 | 41,438 | 35,238 | 10,374 | 42,103 | 10,374 |
| Total nonperforming assets | $ 272,522 | $ 242,079 | $ 209,830 | $ 145,392 | $ 272,522 | $ 145,392 |
| Total nonperforming assets/Total assets | 13.47% | 11.91% | 9.99% | 6.61% | 13.47% | 6.61% |
| | | | | | | |
| | | | | | | |
CHANGE IN THE
ALLOWANCE FOR LOAN LOSSES | June 30, 2010 | March 31, 2010 | December 31, 2009 | June 30, 2009 | June 30, 2010 | June 30, 2009 |
| Balance, beginning of period | $ 55,895 | $ 49,461 | $ 42,349 | $ 38,573 | $ 49,461 | $ 34,720 |
| Provision | 27,429 | 9,490 | 24,657 | 5,525 | 36,919 | 19,584 |
| Recoveries of loans previously charged off | 503 | 451 | 414 | 372 | 954 | 978 |
| Loans charged-off | (14,067) | (3,507) | (17,959) | (7,626) | (17,574) | (18,438) |
| Net (charge-offs)/recoveries | (13,564) | (3,056) | (17,545) | (7,254) | (16,620) | (17,460) |
| Balance, end of period | $ 69,760 | $ 55,895 | $ 49,461 | $ 36,844 | $ 69,760 | $ 36,844 |
| Net chargeoffs/Average loans outstanding (annualized) | 3.54% | 0.80% | 2.97% | 1.83% | 2.17% | 1.10% |
| Allowance for loan losses/Loans held for investment | 4.58% | 3.61% | 3.16% | 2.31% | 4.58% | 2.31% |
| | | | | | | |
| | | | | | | |
| DEPOSITS | June 30, 2010 | March 31, 2010 | December 31, 2009 | June 30, 2009 | June 30, 2010 | June 30, 2009 |
| Noninterest-bearing | $ 158,949 | $ 156,780 | $ 152,522 | $ 155,223 | $ 158,949 | $ 155,223 |
| Interest-bearing transaction deposits: | | | | | | |
| Checking | 229,067 | 232,835 | 226,696 | 199,044 | 229,067 | 199,044 |
| Money Market | 319,777 | 335,602 | 326,958 | 310,036 | 319,777 | 310,036 |
| Savings | 43,770 | 43,782 | 40,723 | 40,550 | 43,770 | 40,550 |
| Total interest-bearing transaction deposits | 592,614 | 612,219 | 594,377 | 549,630 | 592,614 | 549,630 |
| Interest-bearing time deposits | 972,197 | 914,282 | 975,229 | 934,902 | 972,197 | 934,902 |
| Total deposits | $ 1,723,760 | $ 1,683,281 | $ 1,722,128 | $ 1,639,755 | $ 1,723,760 | $ 1,639,755 |
CONTACT: FNB United Corp.
Mark Severson, CFO
336.626.8351