Exhibit 99.1
FOR RELEASE OCTOBER 20, 2004 at 5:00 PM
F.N.B. CORPORATION REPORTS EARNINGS FOR THIRD QUARTER 2004
HERMITAGE, PA, October 20, 2004 -- F.N.B. Corporation (NYSE: FNB), a diversified
financial services company, today reported third quarter 2004 net income of
$14.7 million or $.31 per diluted share. This compared to net income of $15.1
million, or $.32 per diluted share, for the second quarter of 2004 and a net
loss from continuing operations of $7.8 million, or $.17 per diluted share, for
third quarter 2003. Last year's third quarter included after-tax restructuring
expenses of $20.0 million or $.43 per diluted share, related to the
Corporation's January 2004 spin-off of its Florida operations.
Net income for the first nine months of 2004 was $46.0 million, or $.98 per
diluted share, representing an increase of $25.1 million, or $.54 per diluted
share, over net income from continuing operations for the same period last year.
In first quarter 2004, the Corporation realized an after tax gain of $2.7
million, or $.05 per diluted share, from the sale of two branch offices.
"Our third quarter results reflect a solid performance by the Corporation fueled
by revenue growth and good credit quality," said Stephen Gurgovits, President
and Chief Executive Officer of F.N.B. Corporation.
Third quarter results reflect increasing net interest income, higher
non-interest income and continued strong asset quality that was partially offset
by increases in non-interest expenses when compared to second quarter 2004.
Results for third quarter 2004 reflect a return on average equity of 23.7% and a
return on average assets of 1.2%.
Net interest income in third quarter 2004 increased $.6 million, or 1.4%, on a
linked quarter basis, to $42.1 million, and $1.1 million, or 2.6%, over the same
period last year. This increase was primarily due to increased earning assets,
which more than offset a narrowing of the Corporation's net interest margin.
Third quarter 2004 net interest margin was 3.88% a decline of ten and nine basis
points from second quarter 2004 and third quarter 2003, respectively.
Average commercial loans, home equity installment loans and consumer lines of
credit increased in the third quarter a combined $22.1 million, or .9%, over the
previous quarter. This increase was offset by a decrease of $25.7 million
resulting from the continued planned reduction of the Corporation's indirect
installment, auto leasing and residential mortgage portfolios.
Total average deposits and customer repurchase agreements increased a combined
$42.1 million, or 1.2%, over the previous quarter. This growth occurred
primarily in the more desirable core deposits category.
Non-interest income for third quarter 2004 was $18.8 million, an increase of
$1.4 million, or 8.1%, over the previous quarter and $1.2 million, or 6.8%, over
the same period last year. Third quarter 2004 non-interest income included $1.2
million of income recognized on the Corporation's investment in Sun Bancorp,
Inc. In addition, on a sequential quarter basis, the Corporation realized an
increase of $.8 million, or 30%, in insurance commissions and fees, driven by
the addition of the Morrell, Butz and Junker Insurance Agency, partially offset
by $.5 million lower gain on the sale of loans.
F.N.B. Corporation Page 1 of 3
F.N.B. Corporation Page 2 of 3
Non-interest expense totaled $35.9 million for third quarter 2004, an increase
of $2.4 million, or 7.3%, on a sequential quarter basis and a decrease of $31.6
million, or 46.8%, from third quarter 2003. Third quarter 2004 non-interest
expense included a $1.2 million charge for the early extinguishment of $46
million of higher-cost Federal Home Loan Bank (FHLB) debt, $.7 million due to
the additions of the Morrell, Butz and Junker Insurance Agency and eight offices
acquired by Regency Finance in the second quarter, and $.3 million due to
certain employee-related benefits expense. Third quarter 2003 included pretax
restructuring expenses of $30.4 million related to the spin-off of our Florida
operations.
Credit quality remained solid. Non-performing loans to total loans were .81% in
third quarter 2004 versus .87% for second quarter 2004 and .90% for the same
period last year. Annualized net charge-offs were .43% of average loans in third
quarter 2004 compared to .46% in second quarter 2004 and .55% in third quarter
2003. Allowance for loan losses, at 1.43% of total loans, remained consistent
with the prior quarter and third quarter 2003.
"The Corporation continues to demonstrate its commitment to maintaining strong
asset quality as a key component of a solid financial performance," noted
Gurgovits.
Shareholders' equity at the end of the quarter increased $27.0 million from June
30, 2004, primarily due to the increase in the fair market value of investment
securities coupled with additional equity issued in the purchase of the Morrell,
Butz and Junker Insurance Agency. Leverage capital and tangible capital ratios
were 6.1% and 4.5%, respectively, at the end of the third quarter compared to
6.1% and 4.1%, respectively, at the end of the second quarter. The Corporation
continues to maintain regulatory capital ratios in excess of the regulatory
"well capitalized" measures.
During the quarter, the Corporation continued preparations for the finalization
of its merger with Slippery Rock Financial Corporation, including the election
on September 15 of two Slippery Rock board members to the Board of First
National Bank of Pennsylvania, the principal subsidiary of the Corporation. The
merger was completed on October 8, 2004.
"This was as smooth as any merger could possibly be," said Gurgovits. "On the
first full day of business after the closing, clients of First National Bank of
Slippery Rock conducted their business as if nothing had changed. Only now they
have a broader assortment of services and the convenience of an expanded branch
network."
During the third quarter, F.N.B. finalized the purchase of Morrell, Butz and
Junker Insurance Agency, one of the largest independent insurance agencies in
greater Pittsburgh. This acquisition provided a net positive impact to the
Corporation's earnings in the third quarter and is expected to enhance the
Company's presence in the insurance business going forward.
On October 15th the Corporation announced the signing of a definitive agreement
to acquire NSD Bancorp, Inc., the Pittsburgh-based, $532 million parent company
of NorthSide Bank. The merger expands F.N.B.'s market to include the affluent
and growing communities in the northern half of Allegheny County and into Butler
County. F.N.B. expects to complete the merger in first quarter 2005, subject to
certain conditions including the approvals of NSD shareholders and bank
regulatory authorities.
F.N.B. Corporation Page 3 of 3
The Corporation will host a conference call on Thursday October 21, 2004 at
11:00 a.m. (EDT) to discuss the third 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 October 28, 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
http://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.
# # #
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
http://www.fnbcorporation.com
----------------------
DATA TABLES FOLLOW
F.N.B. CORPORATION
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
2004 2003 3rd Qtr 2004 - 3rd Qtr 2004 -
------------------------ ---------- 2nd Qtr 2004 3rd Qtr 2003
Third Second Third Percent Percent
STATEMENT OF EARNINGS Quarter Quarter Quarter Variance Variance
---------- ---------- ---------- -------- --------
Interest income - taxable equivalent basis $64,536 $62,113 $63,460 3.9 1.7
Interest income $63,950 $61,516 $62,868 4.0 1.7
Interest expense 21,884 20,048 21,872 9.2 0.1
---------- ---------- ----------
Net interest income 42,066 41,468 40,996 1.4 2.6
Provision for loan losses 3,570 3,620 4,285 -1.4 -16.7
---------- ---------- ----------
Net interest income after provision 38,496 37,848 36,711 1.7 4.9
Service charges 8,676 8,507 8,643 2.0 0.4
Insurance commissions and fees 3,257 2,498 2,424 30.4 34.4
Securities commissions and fees 1,069 1,191 997 -10.2 7.2
Trust income 1,693 1,676 1,829 1.1 -7.4
Gain on sale of securities 470 522 733 -9.9 -35.9
Gain on sale of loans 365 815 962 -55.2 -62.0
Gain on sale of branches -- -- -- * *
Other 3,262 2,171 2,003 50.3 62.8
---------- ---------- ----------
Total non-interest income 18,792 17,380 17,591 8.1 6.8
Salaries and employee benefits 18,118 17,040 26,510 6.3 -31.7
Occupancy and equipment 6,123 5,960 6,938 2.7 -11.7
Amortization of intangibles 576 519 543 10.9 6.0
Other 11,086 9,938 33,478 11.6 -66.9
---------- ---------- ----------
Total non-interest expense 35,903 33,457 67,469 7.3 -46.8
Income before income taxes 21,385 21,771 (13,167) -1.8 -262.4
Income taxes 6,689 6,706 (5,352) -0.2 -225.0
---------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 14,696 15,065 (7,815) -2.5 -288.0
Net income from discontinuing operations -- -- 8,299 * *
---------- ---------- ----------
NET INCOME $14,696 $15,065 $484 -2.5 2936.4
========== ========== ==========
Basic earnings per share
Continuing operations $0.32 $0.33 ($0.17) -3.0 288.2
Discontinued operations -- -- 0.18 * *
Net income $0.32 $0.33 $0.01 -3.0 3100.0
Diluted earnings per share
Continuing operations $0.31 $0.32 ($0.17) -3.1 282.4
Discontinued operations -- -- 0.18 * *
Net income $0.31 $0.32 $0.01 -3.1 3000.0
Average basic shares outstanding 46,537,841 46,265,852 46,091,404 0.6 1.0
Average diluted shares outstanding 47,353,352 47,043,011 47,003,985 0.7 0.7
PERFORMANCE RATIOS
Return on average shareholders' equity (1) 23.68% 25.28% 0.32%
Return on average assets (1) 1.23% 1.31% 0.02%
Net interest margin (FTE) 3.88% 3.98% 3.97%
Yield on earning assets (FTE) 5.88% 5.87% 6.06%
Efficiency ratio (FTE) 57.49% 55.41% 113.09%
(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.
Pershare 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, EXCEPT PER SHARE DATA)
For the Nine Months
Ended September 30,
------------------------ Percent
STATEMENT OF EARNINGS 2004 2003 Variance
---------- ---------- --------
Interest income - taxable equivalent basis $189,222 $196,503 -3.7
Interest income $187,442 $194,511 -3.6
Interest expense 61,703 66,341 -7.0
---------- ----------
Net interest income 125,739 128,170 -1.9
Provision for loan losses 11,812 12,315 -4.1
---------- ----------
Net interest income after provision 113,927 115,855 -1.7
Service charges 25,239 25,675 -1.7
Insurance commissions and fees 8,161 7,236 12.8
Securities commissions and fees 3,601 3,122 15.3
Trust income 5,242 5,592 -6.3
Gain on sale of securities 1,437 1,887 -23.9
Gain on sale of loans 1,447 2,562 -43.5
Gain on sale of branches 4,135 -- *
Other 7,679 6,286 22.2
---------- ----------
Total non-interest income 56,941 52,360 8.7
Salaries and employee benefits 53,412 65,498 -18.5
Occupancy and equipment 17,815 20,174 -11.7
Amortization of intangibles 1,614 1,629 -0.9
Other 31,130 53,768 -42.1
---------- ----------
Total non-interest expense 103,971 141,069 -26.3
Income before income taxes 66,897 27,146 146.4
Income taxes 20,914 6,282 232.9
---------- ----------
INCOME FROM CONTINUING OPERATIONS 45,983 20,864 120.4
Net income from discontinuing operations -- 27,604 *
---------- ----------
NET INCOME $45,983 $48,468 -5.1
========== ==========
Basic earnings per share
Continuing operations $0.99 $0.45 120.0
Discontinued operations -- 0.60 *
Net income $0.99 $1.05 -5.7
Diluted earnings per share
Continuing operations $0.98 $0.44 122.7
Discontinued operations -- 0.59 *
Net income $0.98 $1.03 -4.9
Average basic shares outstanding 46,326,420 46,065,527 0.6
Average diluted shares outstanding 47,155,413 46,935,786 0.5
PERFORMANCE RATIOS
Return on average shareholders' equity (1) 25.24% 10.63%
Return on average assets (1) 1.31% 0.83%
Net interest margin (FTE) 3.97% 4.26%
Yield on earning assets (FTE) 5.89% 6.43%
Efficiency ratio (FTE) 55.49% 76.40%
(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.
Pershare 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)
2004 2003 3rd Qtr 2004 - 3rd Qtr 2004 -
------------------------ ---------- 2nd Qtr 2004 3rd Qtr 2003
Third Second Third Percent Percent
AVERAGE BALANCES Quarter Quarter Quarter Variance Variance
---------- ---------- ---------- -------- --------
Total assets $4,753,309 $4,637,230 $8,190,502 2.5 -42.0
Assets of discontinued operations -- -- 3,667,069 -- *
Earning assets 4,369,650 4,252,429 4,154,352 2.8 5.2
Securities 1,138,835 1,018,001 905,084 11.9 25.8
Loans, net of unearned 3,229,363 3,232,935 3,247,642 -0.1 -0.6
Allowance for loan losses 46,960 47,336 46,932 -0.8 0.1
Intangibles 44,069 38,651 38,527 14.0 14.4
Deposits and repos 3,530,894 3,488,836 3,469,901 1.2 1.8
Short-term borrowings 219,532 235,144 294,098 -6.6 -25.4
Long-term debt 562,940 476,183 417,303 18.2 34.9
Trust preferred securities 128,866 128,866 125,000 0.0 3.1
Liabilities of discontinued operations -- -- 3,218,166 -- *
Shareholders' equity (1) 246,860 239,667 608,675 3.0 -59.4
ASSET QUALITY DATA (CONTINUING OPERATIONS)
Non-accrual loans $20,496 $22,353 $23,633 -8.3 -13.3
Restructured loans 5,741 5,753 5,779 -0.2 -0.7
---------- ---------- ----------
Non-performing loans 26,237 28,106 29,412 -6.6 -10.8
Other real estate owned 4,507 3,399 3,168 32.6 42.3
---------- ---------- ----------
Non-performing assets $30,744 $31,505 $32,580 -2.4 -5.6
========== ========== ==========
Net loan charge-offs $3,518 $3,694 $4,493 -4.8 -21.7
Allowance for loan losses 46,151 46,099 46,122 0.1 0.1
Non-performing loans / total loans 0.81% 0.87% 0.90%
Non-performing assets / total assets 0.65% 0.66% 0.71%
Allowance for loan losses / total loans 1.43% 1.43% 1.42%
Allowance for loan losses /
non-performing loans 175.90% 164.02% 156.81%
Net loan charge-offs (annualized) /
average loans 0.43% 0.46% 0.55%
BALANCES AT PERIOD END
Total assets $4,733,542 $4,771,095 $8,288,487 -0.8 -42.9
Assets of discontinued operations -- -- 3,693,852 -- *
Earning assets 4,365,397 4,378,213 4,178,606 -0.3 4.5
Securities 1,140,431 1,147,023 914,949 -0.6 24.6
Mortgage loans held for sale 4,387 3,893 11,298 12.7 -61.2
Loans, net of unearned 3,219,735 3,226,889 3,251,499 -0.2 -1.0
Goodwill 37,884 28,940 27,893 30.9 35.8
Deposits and repos 3,558,619 3,479,920 3,458,532 2.3 2.9
Short-term borrowings 211,737 295,807 383,397 -28.4 -44.8
Long-term debt 510,247 571,379 414,004 -10.7 23.2
Trust preferred securities 128,866 128,866 125,000 0.0 3.1
Liabilities of discontinued operations -- -- 3,251,118 -- *
Shareholders' equity (1) 259,529 232,508 596,787 11.6 -56.5
Book value per common share (1) $5.56 $5.02 $12.97 10.7 -57.1
Tangible book value per common share (1) 4.55 4.19 8.11 8.6 -43.8
*Percent variance not meaningful
F.N.B. CORPORATION
(UNAUDITED)
(DOLLARS IN THOUSANDS)
For the Nine Months
Ended September 30,
------------------------ Percent
AVERAGE BALANCES 2004 2003 Variance
---------- ---------- --------
Total assets $4,674,151 $7,843,503 -40.4
Assets of discontinued operations -- 3,389,583 *
Earning assets 4,290,953 4,083,357 5.1
Securities 1,048,151 849,820 23.3
Loans, net of unearned 3,241,571 3,226,967 0.5
Allowance for loan losses 47,161 47,164 0.0
Intangibles 40,097 39,705 1.0
Deposits and repos 3,495,547 3,421,635 2.2
Short-term borrowings 239,977 246,320 -2.6
Long-term debt 499,115 407,708 22.4
Trust preferred securities 128,866 86,269 49.4
Liabilities of discontinued operations -- 3,006,064 *
Shareholders' equity (1) 243,349 609,769 -60.1
ASSET QUALITY DATA (CONTINUING OPERATIONS)
Non-accrual loans $20,496 $23,633 -13.3
Restructured loans 5,741 5,779 -0.7
---------- ----------
Non-performing loans 26,237 29,412 -10.8
Other real estate owned 4,507 3,168 42.3
---------- ----------
Non-performing assets $30,744 $32,580 -5.6
========== ==========
Net loan charge-offs $11,746 $13,177 -10.9
Allowance for loan losses 46,151 46,122 0.1
Non-performing loans / total loans 0.81% 0.90%
Non-performing assets / total assets 0.65% 0.71%
Allowance for loan losses / total loans 1.43% 1.42%
Allowance for loan losses /
non-performing loans 175.90% 156.81%
Net loan charge-offs (annualized) /
average loans 0.48% 0.55%
BALANCES AT PERIOD END
Total assets $4,733,542 $8,288,487 -42.9
Assets of discontinued operations -- 3,693,852 *
Earning assets 4,365,397 4,178,606 4.5
Securities 1,140,431 914,949 24.6
Mortgage loans held for sale 4,387 11,298 -61.2
Loans, net of unearned 3,219,735 3,251,499 -1.0
Goodwill 37,884 27,893 35.8
Deposits and repos 3,558,619 3,458,532 2.9
Short-term borrowings 211,737 383,397 -44.8
Long-term debt 510,247 414,004 23.2
Trust preferred securities 128,866 125,000 3.1
Liabilities of discontinued operations -- 3,251,118 *
Shareholders' equity (1) 259,529 596,787 -56.5
Book value per common share (1) $5.56 $12.97 -57.1
Tangible book value per common share (1) 4.55 8.11 -43.8
*Percent variance not meaningful