Exhibit 99.1
FOR RELEASE JULY 21, 2004 AT 5:00 P.M.
F.N.B. CORPORATION REPORTS EARNINGS FOR SECOND QUARTER 2004
HERMITAGE, PA, July 21, 2004 - F.N.B. Corporation (NYSE:FNB), a diversified
financial services company, today reported second quarter 2004 net income of
$15.1 million or $.32 per diluted share. This compares to net income from
continuing operations of $14.1 million or $.30 per diluted share for the second
quarter of 2003, a 6.7% increase per diluted share, and $16.2 million or $.34
per diluted share for the first quarter of 2004. This year's first quarter
earnings included a gain on the sale of two branches totaling $2.7 million after
tax, $.05 per diluted share.
Net income for the first half of 2004 increased $2.6 million over the same
period in 2003, $28.7 million or $.61 per diluted share from continuing
operations in 2003 to $31.3 million or $.66 per diluted share in 2004. During
the first half of 2004, the Corporation realized an after tax gain of $2.7
million or $.05 per diluted share from the sale of two branch offices.
"We have worked very hard to deliver the kind of solid performance our
shareholders expect of us," said Stephen Gurgovits, President and Chief
Executive Officer of F.N.B. Corporation. "These improved earnings reflect that
extra effort on the part of the entire F.N.B. team."
Second quarter results reflect good loan and deposit growth, a slight decline in
net interest income which was more than offset by solid asset quality, fee
income increases and lower non-interest expense in comparison to the first
quarter of 2004. Results for the second quarter equate to a return on average
equity of 25.3% and a return on average assets of 1.3%.
Net interest income declined $0.7 million, or 1.7%, from the first quarter of
2004, principally due to a decrease of 6 basis points in the Corporation's net
interest margin to 3.98% in the second quarter of 2004.
Net interest income was impacted by a planned reduction of $53.3 million in the
Corporation's indirect installment, auto leasing, and residential mortgage
portfolios. Somewhat offsetting these tactical reductions were increases in the
more desirable segments of the loan portfolio. Average commercial loans grew
$9.1 million, or .7%. Average consumer lines of credit and average home equity
loans increased $14.5 million, or 1.5%, from the first quarter.
Net interest income was further impacted by an increase in interest expense
associated with customer preferences for higher rate deposits. Average deposits
and customer
F.N.B. Corporation Page 2 of 4
repurchase agreements increased $22.3 million, .6%, over the prior quarter. The
growth was realized in both core deposit and time deposit accounts.
Non-interest income for the second quarter was $17.4 million, down $3.4 million
from the first quarter which included a $4.1 million pre-tax gain on the sale of
two branches. The Corporation realized an increase of $0.5 million in service
charges and $0.5 million in the gain on sale of mortgage and certain educational
and consumer finance loans in the second quarter versus the first quarter of
2004.
Non-interest expense totaled $33.5 million for the second quarter 2004, a
reduction of $1.2 million on a sequential quarter basis. The lower expenses were
primarily driven by lower employee taxes and accruals for long-term compensation
programs. The efficiency ratio was 55.4% at the end of the second quarter -
meeting the Corporation's goal for the year.
Credit quality remained solid. Non-performing assets to total assets was .66% in
the second quarter versus .72% last quarter. Annualized net charge-offs were
..46% of average loans in the second quarter compared to .56% in the first
quarter 2004. The strong asset quality allowed for the planned reduction in the
provision for loan losses on a linked quarter basis while maintaining the loan
loss allowance constant at 1.43% of total loans.
"Maintaining our strong asset quality is an important element in our continued
excellent earnings performance," noted Gurgovits.
Shareholders' equity at the end of the quarter decreased $17.5 million from
March 31, 2004 primarily due to the after tax decline in the fair market value
of investment securities. Tangible capital was also affected by this decline
and, as of June 30, 2004, was 4.1%. These reductions have no impact on
regulatory capital ratios. The Corporation maintains capital ratios in excess of
the regulatory "well capitalized" measures and, in fact, improved the leverage
capital ratio from 6.0% as of March 31, 2004 to 6.1% at June 30, 2004.
Several other events of significance occurred during the second quarter. On May
12, 2004 the Corporation held its Annual Meeting of Shareholders at Thiel
College, where shareholders elected the director nominees by an overwhelming
majority vote. In addition, the Board of Directors declared a $.23 per share
cash dividend paid to shareholders of record June 1, 2004.
On May 6, the Corporation announced the execution of a definitive agreement
whereby Slippery Rock Financial Corporation, the parent company of First
National Bank of Slippery Rock, will merge with the Corporation. This in-market
merger will give First National Bank of Pennsylvania an expanded presence in
Butler County - one of the
F.N.B. Corporation Page 3 of 4
fastest growing regions in Southwestern Pennsylvania. The transaction is
expected to close in the fourth quarter of 2004 and to have a positive impact on
earnings in 2005.
The Corporation will host a conference call on Thursday July 22, 2004 at 11:00
a.m. (EDT) to discuss the second quarter 2004 results. Interested parties may
access the conference call by dialing 1-800-346-7359 with the entry code 3044.
Replays of the call will be available until July 29, 2004 by calling
1-800-332-6854 and using the above entry code, 3044. A transcript of the
conference call will also be available on the Corporation's web site
www.fnbcorporation.com.
ABOUT F.N.B. CORPORATION:
F.N.B. Corporation, headquartered in Hermitage, PA has total assets of $4.8
billion. F.N.B. is a leading provider of banking, wealth management, insurance,
and consumer finance services in Western Pennsylvania and Eastern Ohio, where it
owns and operates First National Bank of Pennsylvania, First National Trust
Company, First National Investment Services Company, F.N.B. Investment Advisors,
Inc., First National Insurance Agency, Inc., and Regency Finance Company. It
also operates consumer finance offices in Tennessee.
Mergent Inc., a leading provider of business and financial information on
publicly traded companies, has recognized F.N.B. as a Dividend Achiever. This
annual recognition is based on the Corporation's outstanding record of increased
dividend performance. The Company has increased dividend payments for 30
consecutive years.
On January 1, 2004, F.N.B. completed a previously announced spin-off of its
Florida operations into a new publicly traded company.
The common stock of F.N.B. Corporation trades on the New York Stock Exchange
(NYSE) under the symbol FNB.
This document contains "forward-looking statements" relating to present or
future trends or factors affecting the banking industry and specifically the
financial operations, markets and products of F.N.B. Corporation. These
forward-looking statements involve certain risks and uncertainties. There are a
number of important factors that could cause future results to differ materially
from historical performance or the results projected. These factors include, but
are not limited to: (1) a significant increase in competitive pressures among
depository institutions; (2) changes in the interest rate environment that may
reduce interest margins; (3) changes in prepayment speeds, loan sale volumes,
charge-offs and loan loss provisions; (4) less favorable than expected general
economic conditions; (5) legislative or regulatory changes that may adversely
affect the businesses in which F.N.B. is engaged; and (6) changes in the
securities markets. F.N.B. undertakes no obligation to release revisions to
these forward-looking statements or to reflect events or circumstances after the
date of this release.
# # #
FINANCIAL STATEMENTS FOLLOW
F.N.B. Corporation Page 4 of 4
CONTACTS:
MEDIA -
Kathryn Lima
(724) 981-4318
(724) 301-6984 (cell)
ANALYSTS/INSTITUTIONAL INVESTORS -
John Waters
239-514-2643
239-272-6495 (cell)
INDIVIDUAL SHAREHOLDERS -
Shareholder Services, 888-441-4362
www.fnbcorporation.com
F.N.B. CORPORATION
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 2ND QTR 2004 - 2ND QTR 2004 -
2004 2003 1ST QTR 2004 2ND QTR 2003
------------------- -------
SECOND First Second PERCENT PERCENT
STATEMENT OF EARNINGS QUARTER Quarter Quarter VARIANCE VARIANCE
- --------------------- ------- ------- ------- -------------- --------------
Interest income - taxable equivalent basis $62,113 $62,573 $65,781 -0.7 -5.6
Interest income $61,516 $61,976 $65,096 -0.7 -5.5
Interest expense 20,048 19,771 23,075 1.4 -13.1
---------- ---------- ----------
Net interest income 41,468 42,205 42,021 -1.7 -1.3
Provision for loan losses 3,620 4,622 3,903 -21.7 -7.3
---------- ---------- ----------
Net interest income after provision 37,848 37,583 38,118 0.7 -0.7
Service charges 8,507 8,056 8,607 5.6 -1.2
Insurance commissions and fees 2,498 2,406 2,426 3.8 3.0
Securities commissions and fees 1,191 1,341 1,084 -11.2 9.9
Trust income 1,676 1,873 1,994 -10.5 -15.9
Gain on sale of securities 522 445 772 17.3 -32.4
Gain on sale of loans 815 267 818 205.2 -0.4
Gain on sale of branches -- 4,135 -- * *
Other 2,171 2,246 2,136 -3.3 1.6
---------- ---------- ----------
Total non-interest income 17,380 20,769 17,837 -16.3 -2.6
Salaries and employee benefits 17,040 18,254 18,987 -6.7 -10.3
Occupancy and equipment 5,960 5,732 6,700 4.0 -11.0
Amortization of intangibles 519 519 543 0.0 -4.4
Other 9,938 10,106 10,081 -1.7 -1.4
---------- ---------- ----------
Total non-interest expense 33,457 34,611 36,311 -3.3 -7.9
Income before income taxes 21,771 23,741 19,644 -8.3 10.8
Income taxes 6,706 7,519 5,574 -10.8 20.3
---------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 15,065 16,222 14,070 -7.1 7.1
Net income from discontinuing operations -- -- 10,586 * *
---------- ---------- ----------
NET INCOME $15,065 $16,222 $24,656 -7.1 -38.9
========== ========== ==========
Basic earnings per share
Continuing operations $0.33 $0.35 $0.31 -5.7 6.7
Discontinued operations -- -- 0.23 * *
Net income 0.33 0.35 0.54 -5.7 -39.1
Diluted earnings per share
Continuing operations $0.32 $0.34 $0.30 -5.9 6.7
Discontinued operations -- -- 0.23 * *
Net income 0.32 0.34 0.53 -5.9 -39.1
Average basic shares outstanding 46,265,852 46,173,243 46,067,008 0.2 0.4
Average diluted shares outstanding 47,043,011 47,067,603 46,887,760 -0.1 0.3
PERFORMANCE RATIOS
Return on average shareholders' equity (1) 25.28% 26.77% 16.13%
Return on average assets (1) 1.31% 1.41% 1.20%
Net interest margin (FTE) 3.98% 4.04% 4.10%
Yield on earning assets (FTE) 5.87% 5.91% 6.32%
Efficiency ratio (FTE) 55.41% 53.63% 59.08%
PERFORMANCE RATIOS, EXCLUDING GAIN ON SALE OF BRANCHES
Return on average shareholders' equity (1) 25.28% 22.33% 16.13%
Return on average assets (1) 1.31% 1.18% 1.20%
Efficiency ratio (FTE) 55.41% 57.36% 59.08%
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) FOR THE SIX MONTHS
ENDED JUNE 30,
---------------------------------------------
PERCENT
STATEMENT OF EARNINGS 2004 2003 VARIANCE
- --------------------- -------- ---------- --------
Interest income - taxable equivalent basis $124,686 $133,043 -6.3
Interest income $123,492 $131,643 -6.2
Interest expense 39,819 44,469 -10.5
---------- ----------
Net interest income 83,673 87,174 -4.0
Provision for loan losses 8,242 8,030 2.6
---------- ----------
Net interest income after provision 75,431 79,144 -4.7
Service charges 16,563 17,032 -2.8
Insurance commissions and fees 4,904 4,812 1.9
Securities commissions and fees 2,532 2,125 19.2
Trust income 3,549 3,763 -5.7
Gain on sale of securities 967 1,154 -16.2
Gain on sale of loans 1,082 1,600 -32.4
Gain on sale of branches 4,135 -- *
Other 4,417 4,283 3.1
---------- ----------
Total non-interest income 38,149 34,769 9.7
Salaries and employee benefits 35,294 38,988 -9.5
Occupancy and equipment 11,692 13,236 -11.7
Amortization of intangibles 1,038 1,086 -4.4
Other 20,044 20,290 -1.2
---------- ----------
Total non-interest expense 68,068 73,600 -7.5
Income before income taxes 45,512 40,313 12.9
Income taxes 14,225 11,634 22.3
---------- ----------
INCOME FROM CONTINUING OPERATIONS 31,287 28,679 9.1
Net income from discontinuing operations -- 19,305 *
---------- ----------
NET INCOME $31,287 $47,984 -34.8
========== ==========
Basic earnings per share
Continuing operations $0.68 $0.62 6.3
Discontinued operations -- 0.42 *
Net income 0.68 1.04 -35.8
Diluted earnings per share
Continuing operations $0.66 $0.61 8.2
Discontinued operations -- 0.41 *
Net income 0.66 1.02 -35.3
Average basic shares outstanding 46,219,548 46,052,374 0.4
Average diluted shares outstanding 47,055,031 46,888,288 0.4
PERFORMANCE RATIOS
Return on average shareholders' equity (1) 26.03% 15.85%
Return on average assets (1) 1.36% 1.26%
Net interest margin (FTE) 4.01% 4.41%
Yield on earning assets (FTE) 5.90% 6.62%
Efficiency ratio (FTE) 54.49% 58.79%
PERFORMANCE RATIOS, EXCLUDING GAIN ON SALE OF BRANCHES
Return on average shareholders' equity (1) 23.79% 15.85%
Return on average assets (1) 1.24% 1.26%
Efficiency ratio (FTE) 56.38% 58.79%
(1) Effective January 1, 2004, F.N.B. Corporation spun-off its Florida
operations into a separate, independent public company. As a result of the
spin-off, the Florida operations' 2003 earnings have been classified as
discontinued operations on the consolidated income statement and assets and
liabilities related to these discontinued operations have been disclosed
separately on the consolidated balance sheets for 2003. In addition, note
that the return on average equity, return on average assets, shareholders'
equity and tangible equity for 2003 are based on F.N.B. Corporation
including discontinued operations.
Per share amounts and shares outstanding for the quarter ending March 31, 2003
have been restated for the 5% stock dividend declared on April 28, 2003.
*Percent variance not meaningful
F.N.B. CORPORATION
(UNAUDITED)
(DOLLARS IN THOUSANDS) 2ND QTR 2004 - 2ND QTR 2004 -
2004 1ST QTR 2004 2ND QTR 2003
-------------------------- -------
SECOND First Second PERCENT PERCENT
AVERAGE BALANCES QUARTER Quarter Quarter VARIANCE VARIANCE
- ---------------- ------- ------- ------- -------------- --------------
Total assets $4,637,230 $4,631,044 $8,209,473 0.1 -43.5
Assets of discontinued operations -- -- 3,666,530 * *
Earning assets 4,252,429 4,249,915 4,175,236 0.1 1.8
Securities 1,018,001 986,621 938,692 3.2 8.4
Loans, net of unearned 3,232,935 3,262,547 3,227,472 -0.9 0.2
Allowance for loan losses 47,336 47,190 47,161 0.3 0.4
Intangibles 38,651 37,527 41,918 3.0 -7.8
Deposits and repos 3,488,836 3,466,522 3,455,295 0.6 1.0
Short-term borrowings 235,144 265,481 289,649 -11.4 -18.8
Long-term debt 476,183 457,520 430,211 4.1 10.7
Trust preferred securities 128,866 128,866 125,000 * *
Liabilities of discontinued operations -- -- 3,235,309 * *
Shareholders' equity (1) 239,667 243,738 613,262 -1.7 -60.9
ASSET QUALITY DATA (CONTINUING OPERATIONS)
Non-accrual loans $22,353 $24,158 $23,605 -7.5 -5.3
Restructured loans 5,753 5,823 6,099 -1.2 -5.7
------- ------- -------
Non-performing loans 28,106 29,981 29,704 -6.3 -5.4
Other real estate owned 3,399 3,354 2,951 1.3 15.2
------- ------- -------
Non-performing assets $31,505 $33,335 $32,655 -5.5 -3.5
======= ======= =======
Net loan charge-offs $3,694 $4,534 $4,198 -18.5 -12.0
Allowance for loan losses 46,099 46,227 46,330 -0.3 -0.5
Non-performing loans / total loans 0.87% 0.93% 0.92%
Non-performing assets / total assets 0.66% 0.72% 0.71%
Allowance for loan losses / total loans 1.43% 1.43% 1.43%
Allowance for loan losses /
non-performing loans 164.02% 154.19% 155.97%
Net loan charge-offs (annualized) /
average loans 0.46% 0.56% 0.52%
BALANCES AT PERIOD END
Total assets $4,771,095 $4,635,436 $8,266,396 2.9 -42.3
Assets of discontinued operations -- -- 3,652,219 * *
Earning assets 4,378,213 4,261,553 4,207,076 2.7 4.1
Securities 1,147,023 1,018,183 939,658 12.7 22.1
Mortgage loans held for sale 3,893 2,865 26,250 35.9 -85.2
Loans, net of unearned 3,226,889 3,240,065 3,236,283 -0.4 -0.3
Goodwill 28,940 28,940 27,893 0.0 3.8
Deposits and repos 3,479,920 3,437,776 3,477,796 1.2 0.1
Short-term borrowings 295,807 279,943 348,498 5.7 -15.1
Long-term debt 571,379 473,645 415,828 20.6 37.4
Trust preferred securities 128,866 128,866 125,000 * *
Liabilities of discontinued operations -- -- 3,213,796 * *
Shareholders' equity (1) 232,508 250,044 630,875 -7.0 -63.1
Book value per common share (1) $5.02 $5.40 $13.68 -7.0 -63.3
Tangible book value per common share (1) 4.19 4.56 9.10 -8.1 -54.0
(DOLLARS IN THOUSANDS) FOR THE SIX MONTHS
ENDED JUNE 30,
------------------------------------------------
PERCENT
AVERAGE BALANCES 2004 2003 VARIANCE
- ---------------- ---------- ---------- --------
Total assets $4,634,137 $7,667,129 -39.6
Assets of discontinued operations -- 3,241,899 *
Earning assets 4,251,172 4,051,843 4.9
Securities 1,002,311 821,729 22.0
Loans, net of unearned 3,247,741 3,224,844 0.7
Allowance for loan losses 47,263 47,281 0.0
Intangibles 38,089 40,262 -5.4
Deposits and repos 3,477,679 3,397,148 2.4
Short-term borrowings 250,312 226,433 10.5
Long-term debt 466,852 410,647 13.7
Trust preferred securities 128,866 66,582 *
Liabilities of discontinued operations -- 2,888,080 *
Shareholders' equity (1) 241,702 610,327 -60.4
ASSET QUALITY DATA (CONTINUING OPERATIONS)
Non-accrual loans $22,353 $23,605 -5.3
Restructured loans 5,753 6,099 -5.7
------- -------
Non-performing loans 28,106 29,704 -5.4
Other real estate owned 3,399 2,951 15.2
------- -------
Non-performing assets $31,505 $32,655 -3.5
======= =======
Net loan charge-offs $8,228 $8,684 -5.3
Allowance for loan losses 46,099 46,330 -0.5
Non-performing loans / total loans 0.87% 0.92%
Non-performing assets / total assets 0.66% 0.71%
Allowance for loan losses / total loans 1.43% 1.43%
Allowance for loan losses /
non-performing loans 164.02% 155.97%
Net loan charge-offs (annualized) /
average loans 0.51% 0.54%
BALANCES AT PERIOD END
Total assets 4,771,095 $8,266,396 -42.3
Assets of discontinued operations -- 3,652,219 *
Earning assets 4,378,213 4,207,076 4.1
Securities 1,147,023 939,658 22.1
Mortgage loans held for sale 3,893 26,250 -85.2
Loans, net of unearned 3,226,889 3,236,283 -0.3
Goodwill 28,940 27,893 3.8
Deposits and repos 3,479,920 3,477,796 0.1
Short-term borrowings 295,807 348,498 -15.1
Long-term debt 571,379 415,828 37.4
Trust preferred securities 128,866 125,000 *
Liabilities of discontinued operations -- 3,213,796 *
Shareholders' equity (1) 232,508 630,875 -63.1
Book value per common share (1) $5.02 $13.68 -63.3
Tangible book value per common share (1) 4.19 9.10 -54.0
* Percent variance not meaningful