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F.N.B. Corp. Reports Net Income of $15.8M in 4th Quarter
HERMITAGE, Pa. -- F.N.B. Corp. (NYSE:FNB) recorded fourth- quarter 2004 net income of $15.8 million, or 31 cents per diluted share, the diversified financial services company reported Thursday.That figure compares to its net income of $14.7 million, or 31 cents per diluted share, for the third quarter of 2004 and income from continuing operations of $6.2 million, or 13 cents per diluted share, the fourth quarter of 2003.Fourth-quarter results included after-tax restructuring charges of $6.1 million, or 13 cents per diluted share, related to the F.N.B.'s spin-off of its Florida operations on Jan. 1, 2004.Net income for the full year 2004 was $61.8 million, or $1.29 per diluted share. Income from continuing operations for 2003 was $27.0 million, or 57 cents per diluted share, including after-tax restructuring charges of $26.1 million, or 55 cents per diluted share, related to the spin-off of the Florida operations. For the year 2004, return on equity was 23.5%, return on tangible equity 30.4% and return on assets 1.29%.Last Oct. 8, F.N.B. completed its acquisition of Slippery Rock Financial Corp., parent of First National Bank of Slippery Rock, with $335 million in assets by issuing 3,309,203 shares of its common stock and paying cash. Operations of the Slippery Rock bank, included in F.N.B.'s books since Oct. 8, was neutral to earnings per share in the fourth quarter after excluding $1.7 million of merger related expenses.Fourth-quarter earnings were influenced by recording $4.8 million of income from Sun Bancorp Inc. merging with Omega Financial Corp., F.N.B. said. This represents an additional gain on its equity investment and a termination fee received as a result of canceling its data processing contract with Sun.In the fourth quarter, F.N.B. also executed a plan to retire $60 million in higher cost debt and $55 million in lower yielding investment securities, thereby enhancing future net interest income. As a result, the quarter's results show a $1.0 million loss on the sale of investment securities, along with a $1.0 million expense related to the prepayment of Federal Home Loan Bank borrowings. The net effect of these items, coupled with the Slippery Rock merger expenses, was an after-tax benefit of $700,000 or one cents per diluted share, in the fourth quarter.Net interest income, fully tax equivalent, was $45.0 million, an increase of $2.3 million, or 5.4%, on a sequential quarter basis. This increase resulted primarily from the $272 million addition in average earning assets from the Slippery Rock merger. F.N.B.'s net interest margin was 3.87% for the fourth quarter compared to 3.88% for the third quarter.Non-interest income for the fourth quarter was $21.2 million, a 12.8% increase when compared to the linked quarter. Other than the items mentioned, as well as the $1.2 million Sun gain in the third quarter, securities commissions and fees on sales of retail investment products increased $300,000, or 26.7%, over the third quarter and Slippery Rock contributed $400,000 in additional service charge fee income quarter-over-quarter.Non-interest expense in the fourth quarter increased $2.7 million over the previous quarter entirely because of the addition of Slippery Rock, F.N.B. said. Merger-related expenses accounted for $1.7 million of the increase with the remaining amount attributable to Slippery Rock's operations.Non-performing assets increased $7.4 million in the fourth quarter, primarily the result of acquiring the Slippery Rock bank, F.N.B. said. Annualized net charge-offs for the fourth quarter were 53 basis points of average loans, compared to 59 basis points for the fourth quarter of 2003 and 43 basis points in the third quarter of 2004. The increase on a linked quarter basis is principally attributed to seasonal activity at F.N.B.'s consumer finance company and a single loan at the bank that was fully reserved. Net charge-offs for 2004 were 50 basis points of average loans, an improvement over the 56 basis points recorded in 2003.A basis point is 0.01%Shareholders' equity at Dec. 31 rose to $64.6 million vis a vis Sept. 30, the increase a result mostly of the additional equity issued in the Slippery Rock merger. Leverage and tangible capital ratios were 6.5% and 4.5%, respectively, at the end of the year. F.N.B. continues to maintain "well-capitalized" ratios for federal bank regulatory purposes."Delivering on a key component of shareholders' total return, the corporation paid out over 70% of 2004 net income in cash dividends, which represented a dividend yield of 4.5% at year-end 2004," said Stephen Gurgovits, president and chief executive officer. "This dividend yield ranked F.N.B. the highest of all banks with $3 billion to $10 billion in assets across the continental United States."Looking back," Gurgovits reflected, "2004 was a very rewarding year. In addition to the previously mentioned Florida spin-off and Slippery Rock acquisition, Regency, our consumer finance company, added eight offices in the greater Columbus, Ohio, region, and our insurance agency subsidiary doubled in size through the acquisition of Morrell, Butz and Junker, one of the largest independent insurance agencies in the Pittsburgh market."In addition, we will extend our presence into the affluent and growing communities in northern Allegheny and Butler counties when we complete the pending acquisition of NorthSide Bank.""