FNB United Corp. (FNBN, Financial) filed Quarterly Report for the period ended 2012-09-30.
Fnb United Corp has a market cap of $252.3 million; its shares were traded at around $11.305 with and P/S ratio of 3.
Net interest margin (taxable equivalent) improved 77 basis points from 2.17% in the first nine months of 2011 to 2.94% in the first nine months of 2012. The increase was attributable to the impact of the Merger, the impact of management strategies to shift the mix of deposits to lower rate demand, savings and money market deposits and the Granite acquisition, declines in interest rates on all deposit products, and the reduction of nonperforming loans compared to the first nine months of 2011. The yield on average earning assets increased by 17 basis points during the first nine months of 2012 to 3.78% from 3.61% in the first nine months of 2011. The cost of interest-bearing liabilities declined during the first nine months of 2012 by 50 basis points to 0.91% compared to 1.41% in the first nine months of 2011, primarily as a result of the deposit mix shift, declines in interest rates on all deposit products, and the impact of the accretion of fair value marks at Granite. The cost of interest-bearing deposits declined 51 basis points from 1.34% for the first nine months 2011 to 0.83% for the first nine months of 2012. The cost of all deposits, including noninterest-bearing deposits, fell to 0.73% for the first nine months of 2012, a decline of 48 basis points from 1.21% for the first nine months of 2011.
For the three months ended September 30, 2012, noninterest income, excluding discontinued operations, was $4.6 million compared to $10.1 million for the same period in 2011. The decline was the result of a decrease from $7.4 million of gains on sales of investment securities in 2011 to a $33 thousand loss in 2012, partially offset by the addition of Granite service charges, gains in service charge income as a result of the Merger and an increase in mortgage loan income as FNB began selling loans to Fannie Mae in 2012. For the nine months ended September 30, 2012, noninterest income, excluding discontinued operations, was $15.0 million compared to $16.9 million for the same period in 2011. The decrease was the result of a decrease in securities gains from $7.3 million in 2011 to $1.9 million in 2012, as well as increases in service charges on deposits and mortgage loan income described above.
Shareholders' equity at September 30, 2012 was $106.9 million as compared to $129.0 million at December 31, 2011. The book value per share was $4.95 and average equity to average assets was 5.08% at September 30, 2012 as compared to a book value per share of $6.11 and average equity to average assets of (1.19)% at December 31, 2011. The change in shareholders' equity reflects a net loss to common shareholders for the nine months ended September 30, 2012 of $33.7 million, offset by $6.7 million in common equity raised during the first nine months of 2012, and $5.8 million other comprehensive income, net of tax. FNB did not declare common dividends during the nine months ended September 30, 2012, and will not be able to pay any dividends until such time as FNB returns to profitability and either receives or is not required to receive regulatory approval for the payment of dividends. FNB does not expect to pay dividends to shareholders for the foreseeable future.
The level of nonperforming loans decreased from $106.0 million or 9.0% of loans held for investment at December 31, 2011, to $86.1 million, or 7.0% of loans held for investment at September 30, 2012. OREO and repossessed assets were $80.8 million at September 30, 2012, compared to $110.4 million at December 31, 2011, a decline of $29.6 million. During the first nine months of 2012, we recorded net write-downs and net loss on sales of OREO of $16.1 million as compared to $27.7 million during the first nine months of 2011. Depressed market conditions have adversely impacted, and may continue to adversely impact, the financial condition and liquidity position of certain borrowers. Additionally, the value of real estate collateral may come under further pressure from weak economic conditions and prevailing unemployment levels, resulting in additional delinquencies and loans being placed on nonaccrual.
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Fnb United Corp has a market cap of $252.3 million; its shares were traded at around $11.305 with and P/S ratio of 3.
Highlight of Business Operations:
Net interest margin (taxable equivalent) improved 91 basis points from 2.04% in the third quarter of 2011 to 2.95% in the third quarter of 2012. The increase was attributable to the impact of the Merger, management strategies to shift the mix of deposits to lower rate demand, savings and money market deposits, and the reduction of nonperforming loans compared to the third quarter of 2011. The yield on average earning assets increased by 23 basis points during the third quarter of 2012 to 3.73% from 3.50% in the third quarter of 2011. The cost of interest-bearing liabilities declined during the third quarter of 2012 by 51 basis points to 0.86% compared to 1.37% in the third quarter of 2011, primarily as a result of the deposit mix shift, declines in interest rates on all deposit products, and the impact of the accretion of fair value marks at Granite. Importantly, the cost of interest-bearing deposits declined 54 basis points, or 42%,from 1.30% for the third quarter of 2011 to 0.76% for the third quarter of 2012. The cost of all deposits, including noninterest-bearing deposits, fell to 0.66% for the third quarter of 2012, a decline of 52 basis points from 1.18% for the third quarter of 2011.Net interest margin (taxable equivalent) improved 77 basis points from 2.17% in the first nine months of 2011 to 2.94% in the first nine months of 2012. The increase was attributable to the impact of the Merger, the impact of management strategies to shift the mix of deposits to lower rate demand, savings and money market deposits and the Granite acquisition, declines in interest rates on all deposit products, and the reduction of nonperforming loans compared to the first nine months of 2011. The yield on average earning assets increased by 17 basis points during the first nine months of 2012 to 3.78% from 3.61% in the first nine months of 2011. The cost of interest-bearing liabilities declined during the first nine months of 2012 by 50 basis points to 0.91% compared to 1.41% in the first nine months of 2011, primarily as a result of the deposit mix shift, declines in interest rates on all deposit products, and the impact of the accretion of fair value marks at Granite. The cost of interest-bearing deposits declined 51 basis points from 1.34% for the first nine months 2011 to 0.83% for the first nine months of 2012. The cost of all deposits, including noninterest-bearing deposits, fell to 0.73% for the first nine months of 2012, a decline of 48 basis points from 1.21% for the first nine months of 2011.
For the three months ended September 30, 2012, noninterest income, excluding discontinued operations, was $4.6 million compared to $10.1 million for the same period in 2011. The decline was the result of a decrease from $7.4 million of gains on sales of investment securities in 2011 to a $33 thousand loss in 2012, partially offset by the addition of Granite service charges, gains in service charge income as a result of the Merger and an increase in mortgage loan income as FNB began selling loans to Fannie Mae in 2012. For the nine months ended September 30, 2012, noninterest income, excluding discontinued operations, was $15.0 million compared to $16.9 million for the same period in 2011. The decrease was the result of a decrease in securities gains from $7.3 million in 2011 to $1.9 million in 2012, as well as increases in service charges on deposits and mortgage loan income described above.
Shareholders' equity at September 30, 2012 was $106.9 million as compared to $129.0 million at December 31, 2011. The book value per share was $4.95 and average equity to average assets was 5.08% at September 30, 2012 as compared to a book value per share of $6.11 and average equity to average assets of (1.19)% at December 31, 2011. The change in shareholders' equity reflects a net loss to common shareholders for the nine months ended September 30, 2012 of $33.7 million, offset by $6.7 million in common equity raised during the first nine months of 2012, and $5.8 million other comprehensive income, net of tax. FNB did not declare common dividends during the nine months ended September 30, 2012, and will not be able to pay any dividends until such time as FNB returns to profitability and either receives or is not required to receive regulatory approval for the payment of dividends. FNB does not expect to pay dividends to shareholders for the foreseeable future.
The level of nonperforming loans decreased from $106.0 million or 9.0% of loans held for investment at December 31, 2011, to $86.1 million, or 7.0% of loans held for investment at September 30, 2012. OREO and repossessed assets were $80.8 million at September 30, 2012, compared to $110.4 million at December 31, 2011, a decline of $29.6 million. During the first nine months of 2012, we recorded net write-downs and net loss on sales of OREO of $16.1 million as compared to $27.7 million during the first nine months of 2011. Depressed market conditions have adversely impacted, and may continue to adversely impact, the financial condition and liquidity position of certain borrowers. Additionally, the value of real estate collateral may come under further pressure from weak economic conditions and prevailing unemployment levels, resulting in additional delinquencies and loans being placed on nonaccrual.
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