UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2004
Commission File Number 0-13823
FNB CORP.
(Exact name of Registrant as specified in its charter)
| North Carolina | 56-1456589 | |
| (State of incorporation) | (I.R.S. Employer Identification No.) |
101 Sunset Avenue, Asheboro, North Carolina 27203
(Address of principal executive offices)
(336) 626-8300
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
The registrant had 5,639,212 shares of $2.50 par value common stock outstanding at July 30, 2004.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FNB Corp. and Subsidiaries
CONSOLIDATED BALANCE SHEETS (unaudited)
| June 30, |
December 31, 2003 |
|||||||||||
| 2004 |
2003 |
|||||||||||
| (in thousands, except share and per share data) | ||||||||||||
| ASSETS |
||||||||||||
| Cash and due from banks |
$ | 18,891 | $ | 22,940 | $ | 17,164 | ||||||
| Interest-bearing bank balances |
18,478 | 28,776 | 8,641 | |||||||||
| Federal funds sold |
535 | 1,951 | 1,319 | |||||||||
| Investment securities: |
||||||||||||
| Available for sale, at estimated fair value (amortized cost of $73,477, $88,374 and $77,971) |
74,625 | 92,276 | 80,558 | |||||||||
| Held to maturity (estimated fair value of $53,233, $55,915 and $63,000) |
54,934 | 55,150 | 63,701 | |||||||||
| Loans: |
||||||||||||
| Loans held for sale |
16,629 | 44,143 | 8,567 | |||||||||
| Loans held for investment |
597,044 | 517,024 | 543,346 | |||||||||
| Less allowance for loan losses |
(6,579 | ) | (6,038 | ) | (6,172 | ) | ||||||
| Net loans |
607,094 | 555,129 | 545,741 | |||||||||
| Premises and equipment, net |
16,132 | 14,564 | 15,009 | |||||||||
| Goodwill |
16,335 | 16,343 | 16,325 | |||||||||
| Other assets |
26,213 | 21,653 | 24,787 | |||||||||
| Total Assets |
$ | 833,237 | $ | 808,782 | $ | 773,245 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
| Deposits: |
||||||||||||
| Noninterest-bearing demand deposits |
$ | 74,219 | $ | 66,933 | $ | 70,671 | ||||||
| Interest-bearing deposits: |
||||||||||||
| Demand, savings and money market deposits |
219,934 | 212,368 | 215,846 | |||||||||
| Time deposits of $100,000 or more |
134,182 | 108,943 | 118,199 | |||||||||
| Other time deposits |
191,165 | 206,948 | 193,209 | |||||||||
| Total deposits |
619,500 | 595,192 | 597,925 | |||||||||
| Retail repurchase agreements |
18,228 | 20,057 | 14,816 | |||||||||
| Federal Home Loan Bank advances |
75,024 | 53,345 | 53,303 | |||||||||
| Federal funds purchased |
9,900 | — | 625 | |||||||||
| Other borrowed funds |
23,144 | 52,027 | 17,977 | |||||||||
| Other liabilities |
7,839 | 8,365 | 7,141 | |||||||||
| Total Liabilities |
753,635 | 728,986 | 691,787 | |||||||||
| Shareholders’ equity: |
||||||||||||
| Preferred stock - $10.00 par value; authorized 200,000 shares, none issued |
— | — | — | |||||||||
| Common stock - $2.50 par value; authorized 10,000,000 shares, issued shares - 5,636,512, 5,653,800 and 5,686,899 |
14,091 | 14,135 | 14,217 | |||||||||
| Surplus |
11,267 | 11,609 | 12,478 | |||||||||
| Retained earnings |
53,538 | 51,478 | 53,174 | |||||||||
| Accumulated other comprehensive income |
706 | 2,574 | 1,589 | |||||||||
| Total Shareholders’ Equity |
79,602 | 79,796 | 81,458 | |||||||||
| Total Liabilities and Shareholders’ Equity |
$ | 833,237 | $ | 808,782 | $ | 773,245 | ||||||
See accompanying notes to consolidated financial statements.
2
FNB Corp. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended June 30, (unaudited) |
Six Months Ended June 30, (unaudited) | ||||||||||||
| 2004 |
2003 |
2004 |
2003 | ||||||||||
| (in thousands, except share and per share data) | |||||||||||||
| Interest Income |
|||||||||||||
| Interest and fees on loans |
$ | 8,338 | $ | 8,476 | $ | 16,311 | $ | 16,637 | |||||
| Interest and dividends on investment securities: |
|||||||||||||
| Taxable income |
860 | 1,358 | 1,796 | 2,941 | |||||||||
| Non-taxable income |
435 | 402 | 874 | 732 | |||||||||
| Other interest income |
46 | 86 | 75 | 185 | |||||||||
| Total interest income |
9,679 | 10,322 | 19,056 | 20,495 | |||||||||
| Interest Expense |
|||||||||||||
| Deposits |
2,122 | 2,523 | 4,204 | 5,216 | |||||||||
| Retail repurchase agreements |
33 | 48 | 59 | 102 | |||||||||
| Federal Home Loan Bank advances |
638 | 582 | 1,225 | 1,158 | |||||||||
| Federal funds purchased |
9 | 1 | 21 | 1 | |||||||||
| Other borrowed funds |
166 | 388 | 309 | 486 | |||||||||
| Total interest expense |
2,968 | 3,542 | 5,818 | 6,963 | |||||||||
| Net Interest Income |
6,711 | 6,780 | 13,238 | 13,532 | |||||||||
| Provision for loan losses |
2,780 | 830 | 3,050 | 1,080 | |||||||||
| Net Interest Income After Provision for Loan Losses |
3,931 | 5,950 | 10,188 | 12,452 | |||||||||
| Noninterest Income |
|||||||||||||
| Mortgage loan sales |
580 | 3,197 | 1,888 | 3,875 | |||||||||
| Service charges on deposit accounts |
1,356 | 1,239 | 2,592 | 2,425 | |||||||||
| Trust and investment services |
341 | 516 | 820 | 709 | |||||||||
| Cardholder and merchant services income |
273 | 226 | 508 | 416 | |||||||||
| Other service charges, commissions and fees |
196 | 123 | 382 | 426 | |||||||||
| Bank owned life insurance |
153 | 148 | 309 | 296 | |||||||||
| Other income |
35 | 3 | 35 | 68 | |||||||||
| Total noninterest income |
2,934 | 5,452 | 6,534 | 8,215 | |||||||||
| Noninterest Expense |
|||||||||||||
| Personnel expense |
3,949 | 4,464 | 8,125 | 7,818 | |||||||||
| Net occupancy expense |
394 | 365 | 787 | 699 | |||||||||
| Furniture and equipment expense |
471 | 551 | 948 | 1,051 | |||||||||
| Data processing services |
312 | 269 | 595 | 759 | |||||||||
| Other expense |
1,928 | 1,792 | 3,696 | 3,127 | |||||||||
| Total noninterest expense |
7,054 | 7,441 | 14,151 | 13,454 | |||||||||
| Income (Loss) Before Income Taxes |
(189 | ) | 3,961 | 2,571 | 7,213 | ||||||||
| Income taxes (benefit) |
(305 | ) | 1,281 | 503 | 2,271 | ||||||||
| Net Income |
$ | 116 | $ | 2,680 | $ | 2,068 | $ | 4,942 | |||||
| Net income per common share: |
|||||||||||||
| Basic |
$ | .02 | $ | .48 | $ | .36 | $ | .89 | |||||
| Diluted |
.02 | .45 | .35 | .85 | |||||||||
| Weighted average number of shares outstanding: |
|||||||||||||
| Basic |
5,704,276 | 5,626,471 | 5,704,939 | 5,536,964 | |||||||||
| Diluted |
5,867,105 | 5,929,445 | 5,885,502 | 5,819,524 | |||||||||
See accompanying notes to consolidated financial statements.
3
FNB Corp. and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
Six Months Ended June 30, 2004 and June 30, 2003 (unaudited)
| Common Stock |
Surplus |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total |
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| Shares |
Amount |
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| (in thousands, except share and per share data) | |||||||||||||||||||||||
| Balance, December 31, 2002 |
5,416,731 | $ | 13,542 | $ | 8,823 | $ | 48,095 | $ | 2,630</ | ||||||||||||||