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FNB United Corp. Reports Operating Results (10-Q)

May 17, 2010 | About:

FNB United Corp. (FNBN) filed Quarterly Report for the period ended 2010-03-31.

Fnb United Corp. has a market cap of $17.71 million; its shares were traded at around $1.55 with and P/S ratio of 0.14.

Highlight of Business Operations:

For the three months ended March 31, 2010, net interest income before the provision for loan losses was $15.7 million, an increase of $1.6 million, or 11%, from $14.1 million for the same quarter in 2009. The increase was primarily due to a 75 basis point decrease in the cost of average interest-bearing liabilities offset by a 34 basis point decrease in the yield on average earning assets.

During the three-month period ended March 31, 2010, the provision for loan losses was $9.5 million, compared to $14.0 million in the same period of 2009. The level of provision in the first quarter 2010 was driven by a continued deterioration of loan quality. Net charge-offs for the three months ending March 31, 2010 totaled $3.1 million, or .80% of annualized average loans, compared to $10.2 million, or 2.61% of annualized average loans for the same period in 2009. As of March 31, 2010, approximately 21.7% of the gross charge-offs were comprised of land development loans.

For the three months ended March 31, 2010, total noninterest income was $5.6 million the same as reported at March 31, 2009. Mortgage loan income declined by $0.7 million, which is attributable to a drop in loan origination volume. Service charges on deposit accounts declined 9%, or $0.2 million. These decreases were partially offset by a $0.7 million increase in security gains, a $0.2 million increase in cardholder and merchant service income and trust and investment services income.

Noninterest expense for the first quarter of 2010 was $14.8 million, compared to $15.6 million in the first quarter a year ago. This 5% reduction is attributed to a $0.7 million decrease in personnel expense due to lower commissions and benefit costs, and lower net occupancy expense of $0.2 million. Partially offsetting these decreases is a $0.4 million increase in FDIC insurance expense. In the first quarter of 2009, the Bank recognized a one-time write-off of $0.3 million in an investment in a failed bankers bank. OREO-related expenses increased $0.4 million for 2010 compared to first quarter 2009.

Since December 31, 2009, the Companys assets have decreased $68.8 million, to $2.0 billion at March 31, 2010. The principal factors causing this decrease were a $58.1 million decrease in net investment securities, combined with a $15.3 million decrease in loans held for sale and a $14.6 million decrease in loans held for investment. Investment securities of $268.0 million at March 31, 2010 were 18% lower than the $326.2 million balance at December 31, 2009.

Deposits totaled $1.7 billion at March 31, 2010, compared to $1.7 billion at December 31, 2009. At the end of the first quarter 2010, noninterest-bearing deposits were $156.8 million, or 9.3%, of total deposits, up 3% since the end of 2009. Borrowings at the Federal Home Loan Bank (FHLB) totaled $151.1 million at March 31, 2010, compared to $166.2 million at December 31, 2009 and federal funds purchased decreased $10.0 million from year end 2009.

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