Exhibit 99.1
FNB Corp. Announces First Quarter Earnings
and Regulatory Approval for Integrity Financial Merger
ASHEBORO, N.C.--(BUSINESS WIRE)--April 20, 2006--FNB Corp.
(NASDAQ:FNBN), the holding company for First National Bank and Trust
Company and Dover Mortgage Company, today announced its financial
results for the first quarter of 2006. Net income for the first
quarter increased to $2.677 Million, or $.42 per diluted share, from
$2.306 Million, or $.40 per diluted share, in the same period of 2005,
the gains in net income and earnings per share being 16.1% and 5.0%,
respectively.
At March 31, 2006, total assets were $1,106,268,000, an increase
of 23.5% from March 31, 2005, loans were $820,710,000, an increase of
18.8%, and deposits were $850,561,000, an increase of 24.2%. Return on
average equity on an annualized basis for the first quarter of 2006
was 10.26%, and return on average assets was 0.98%. Return on tangible
equity and assets (calculated by deducting average goodwill and core
deposit premiums from average equity and from average assets) amounted
to 14.91% and 1.01%, respectively.
The first quarter of 2006 was the first full quarter of earnings
that included the former United Financial, Inc., which was acquired by
FNB Corp. in November of 2005. United's banking subsidiary, Alamance
Bank (including its division, Hillsborough Bank) was merged with and
into First National Bank and Trust Company effective February 1, 2006.
Included in the first quarter financial results are costs of various
integration expenses and data and other systems conversions which were
accomplished in February. Synergies from the acquisition are expected
to begin being realized during the second quarter. In addition, net
income was reduced $112,000 in the first quarter of 2006 by the
accounting change effective January 1, 2006 that requires recognition
of compensation expense for stock options based on their grant-date
fair value.
"We are again pleased to report increased quarterly earnings
during a time of merger integrations and challenging interest rate
cycles," reported FNB Chairman Michael C. Miller. "We had an increase
in net interest income in the first quarter of 2006, due to shifts in
interest rates and growth in earning assets. We were also able to
scale back our provision for loan losses as a result of improved loan
loss experience."
Net interest income increased $2,262,000 or 28.9% in the first
quarter of 2006 compared to the same period in 2005, reflecting the
effect of an increase in the net interest margin, stated on a taxable
equivalent basis, from 4.08% in 2005 to 4.26% in 2006 coupled with a
22.6% increase in the level of average earning assets.
Noninterest income increased $348,000 or 11.0% in the first
quarter of 2006 compared to the same period in 2005. Increased fees
for deposit account services, increased investment management fees and
a slight improvement in income from mortgage loan sales offset a lower
level of sales of non-FDIC insured investments. Noninterest expense
was $2,193,000 or 30.4% higher in the 2006 first quarter, representing
both the increased size of the organization following the United
acquisition and the conversion/integration and other expenses noted
above.
At March 31, 2006, the allowance for loan losses was $9,960,000
amounting to 1.25% of loans held for investment compared to 1.25% at
December 31, 2005 and 1.14% at March 31, 2005. The provision for loan
losses recorded in the first quarter of 2006 was $77,000 compared to
the $370,000 provision recorded in the same period of 2005. As of
March 31, 2006, nonperforming loans were $10,100,000 in total compared
to $6,046,000 and $5,773,000 as of December 31, 2005 and March 31,
2005, respectively. Nonaccrual loans and accruing loans past due 90
days or more amounted to $8,549,000 and $1,551,000, respectively at
March 31, 2006, $5,398,000 and $648,000 at December 31, 2005, and
$5,336,000 and $437,000 at March 31, 2005. Loans considered impaired
as of March 31, 2006 totaled $206,000 (of which, loans totaling
$118,000 were also on nonaccrual status) compared to $1,084,000 as of
March 31, 2005. There were no loans considered impaired as of December
31, 2005.
Miller also commented on FNB's pending merger with Integrity
Financial Corporation, based in Hickory, North Carolina. "We're
pleased that shareholders of both organizations approved this
transaction, and that the Federal Reserve has given its regulatory
approval. We're looking forward to completing the merger, on behalf of
our customers, communities, shareholders and employees." In the
merger, FNB Corp. will change its name to FNB United Corp. and the
combined entity will have over 6,000 shareholders, 10.9 Million shares
outstanding and a market capitalization exceeding $200 Million.
FNB Corp. is the central North Carolina-based bank holding company
for First National Bank and Trust Company and Dover Mortgage Company.
First National (www.MyYesBank.com) operates 25 community YES! Banks in
Archdale, Asheboro, Biscoe, Burlington, China Grove, Ellerbe, Graham,
Greensboro, Hillsborough, Kannapolis, Laurinburg, Pinehurst, Ramseur,
Randleman, Rockingham, Salisbury, Seagrove, Siler City, Southern Pines
and Trinity. Dover Mortgage Company (www.dovermortgage.com) operates
10 mortgage production offices in Carolina Beach, Charlotte,
Goldsboro, Greensboro, Greenville, Lake Norman, Leland, Raleigh,
Waxhaw and Wilmington. Through its subsidiaries, FNB offers a complete
line of consumer, mortgage and business banking services, including
loan, deposit, cash management, wealth management and internet banking
services. The Federal Deposit Insurance Corporation insures deposits
up to applicable limits.
FNB Corp. stock is traded on the NASDAQ National Market System
under the symbol "FNBN". Market makers are Scott & Stringfellow,
Morgan Keegan & Company, Howe Barnes Investments, Smith Barney, FIG
Partners, Ferris Baker Watts, Keefe, Bruyette & Woods, Sandler, O'Neil
and Partners, Knight Securities, Goldman Sachs, Stern, Agee and Leach
and Ryan, Beck & Company.
This news release contains forward-looking statements, including
estimates of future operating results and other forward-looking
financial information for FNB. These estimates constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and involve various risks and
uncertainties. Actual results may differ materially due to such
factors as: (1) expected cost savings from the mergers not
materializing within the expected time frame; (2) revenues following
the mergers not meeting expectations; (3) competitive pressures among
financial institutions increasing significantly; (4) costs or
difficulties related to the integration of the businesses of FNB,
United and Integrity being greater than anticipated; (5) general
economic conditions being less favorable than anticipated; and (6)
legislation or regulatory changes adversely affecting the business in
which the combined company will be engaged. FNB does not assume 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.
FNB Corp. and Subsidiaries
CONSOLIDATED FINANCIAL INFORMATION
(In thousands except per share data)
SUMMARY OF OPERATIONS
Three Months Ended
March 31,
-------------------
2006 2005
-------------------
Interest income:
Loans $15,206 $10,554
Investment securities:
Taxable income 1,296 806
Non-taxable income 460 422
Other 164 32
-------------------
Total interest income 17,126 11,814
Interest expense 7,045 3,995
-------------------
Net interest income 10,081 7,819
Provision for loan losses 77 370
-------------------
Net interest income after
provision for loan losses 10,004 7,449
Noninterest income 3,510 3,162
Noninterest expense 9,415 7,222
-------------------
Income before income taxes 4,099 3,389
Income taxes 1,422 1,083
-------------------
Net income $ 2,677 $ 2,306
===================
Per share data:
Net income:
Basic $ .42 $ .41
Diluted .42 .40
Cash dividends declared .15 .15
BALANCE SHEET INFORMATION March 31, Dec. 31,
------------------------------------------
2006 2005 2005
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Total assets $1,106,268 $895,769 $1,102,085
Cash and due from banks 20,751 13,916 22,389
Investment securities 158,282 125,901 159,806
Loans 820,710 690,637 812,666
Other earning assets 19,036 10,641 22,490
Goodwill 31,389 16,359 31,381
Deposits 850,561 685,014 841,609
Other interest-bearing
liabilities 139,877 119,130 146,567
Shareholders' equity 103,936 82,921 102,315
Per share data:
Book value $ 16.27 $ 14.80 $ 16.06
Closing market price 20.42 20.09 19.00
FNB Corp. is the holding company for First National Bank and Trust
Company and Dover Mortgage Company. Alamance Bank was acquired
effective November 4, 2005 under a merger transaction for the
acquisition of United Financial, Inc., accounted for as a purchase
business combination. Prior period financial information has not been
restated. Alamance Bank was merged into First National Bank effective
February 1, 2006.
FNB Corp. stock is traded on the Nasdaq National Market under the
symbol "FNBN". Market makers are Scott & Stringfellow, Morgan Keegan &
Company, Howe Barnes Investments, Smith Barney, FIG Partners, Ferris
Baker Watts, Keefe, Bruyette & Woods, Sandler O'Neill & Partners,
Knight Securities, Goldman Sachs, Stern Agee and Leach and Ryan Beck &
Company
CONTACT: FNB Corp.
Jerry A. Little, 336-626-8300