FNB Corp. is a bank holding company for its wholly-owned bank subsidiary First National Bank and Trust Company a national banking association. Some of the major banking services offered include regular checking accounts interest checking accounts money market accounts savings accounts certificates of deposit holiday club accounts individual retirement accounts debit cards credit cards and loans both secured and unsecured for business agricultural and personal use. Other services offered include internet banking cash management investment and trust services. FNB United Corp. has a market cap of $30.4 million; its shares were traded at around $2.66 with and P/S ratio of 0.3. The dividend yield of FNB United Corp. stocks is 3.8%. FNB United Corp. had an annual average earning growth of 0.4% over the past 5 years.
Highlight of Business Operations:The Company s total assets at March 31, 2009, were $2.2 billion, an increase of 5%, or $109.6 million from year-end 2008. Investments grew $94.9 million, or 41%, reflecting the Company s leveraging strategy to offset the earnings dilution resulting from participation in the Capital Purchase Program. Loans held for sale increased $12.8 million, or 35%, due to refinancing of residential mortgages. Gross loans held for investment totaled $1.6 billion at March 31, 2009, essentially flat from the prior year end.
Total deposits grew $91.9 million, to $1.6 billion in 2009, representing a 6% increase due primarily to increased consumer use of deposit account products in the current economic environment and an increase in the general consumer rate of savings. Borrowings decreased $23.6 million or 6%, during the first three months of 2009, compared to the period ended December 31, 2008. Total shareholders equity increased $44.9 million compared to December 31, 2008 primarily as a result of $51.5 million of capital invested by the U.S. Treasury in the first quarter of 2009 partially offset by the $5.8 million net loss for the quarter.
The Company experienced a net loss of $5.8 million in the first quarter of 2009 compared to net income of $2.3 million for the same quarter in 2008 and is primarily the result of a $12.5 million increase in the provision for loan losses. These losses were partially offset by $5.2 million in lower income taxes.
Noninterest income increased 17.0% to $5.9 million for the first three months in 2009, compared to $5.0 million for the same period in 2008. Cardholder and merchant services income increased $126,000 due to increased interchange fees and surcharge fees, and income from mortgage loan sales increased by $845,000 attributable to sizable increases in 2009 production driven by refinancing activity.
Noninterest expense for the first quarter increased 2% to $15.8 million in 2009 from $15.5 million in 2008. The Company undertook a major noninterest expense improvement project during the second half of 2008, which included consolidation of operational functions, strong vendor management and tighter staffing models. This effort resulted in an 8%, or $717,000 decrease, in personnel expense when comparing the first three months of 2009 to the same period in 2008. This reduction was offset by increases in other expenses, primarily auditing fees and FDIC insurance costs, which were $325,000 and $262,000, respectively, higher than the same period in 2008. The Company also incurred noninterest expense of $290,000 in the first quarter of 2009 related to its write-off of an investment in a failed banker s bank.
For the three months ended March 31, 2009, net interest income before the provision for loan losses was $14.1 million, a decrease of $1.3 million, or 8%, from $15.4 million for the same quarter in 2008. The decrease was primarily due to a 176 basis point decrease in the yield on average earning assets, which increased $218.2 million, partially offset by a 124 basis point decrease in the cost of average interest-bearing liabilities, which increased $209.0 million.
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