FNB Earnings in Line, Revs Up - Analyst Blog
22 Gennaio 2014 - 3:50PM
Zacks
F.N.B. Corp.’s (FNB) fourth-quarter operating
earnings came in at 21 cents per share, which was in line with the
Zacks Consensus Estimate. However, this was down 8.7% from 23 cents
earned in the year-ago quarter.
Rise in revenues, growth in loans and deposit balances, strong
capital ratios and an improved asset quality were the positives.
However, higher operating expenses and deteriorating profitability
ratios were headwinds.
Considering certain non-recurring items, net income in the quarter
was $28.4 million, down 1.8% year over over.
For full-year 2013, net income available to common shareholders
totaled $123.5 million or $0.84 per share, compared with $117.8
million or $0.84 per share in 2012. Earnings per share beat the
Zacks Consensus Estimate by a penny.
Performance in Detail
FNB’s total revenue in the said quarter came in at $150.296
million, up 7.6% from the prior-year quarter. Further, it surpassed
the Zacks Consensus Estimate of $143.0 million.
In 2013, total revenue grew 2.3% year over year to $576.2 million.
Moreover, it was ahead of the Zacks Consensus Estimate of $534.0
million.
Taxable-equivalent net interest income rose 13.5% year over year to
$108.7 million. The rise was mainly attributable to higher interest
income and a decline in interest expense. Similarly, non-interest
income increased 1.8% from the prior-year quarter to $32.7 million,
mainly driven by rise in securities commissions and fees as well as
trust income.
Non-interest expense increased 20.3% year over year to $92.1
million. A significant rise in merger related costs as well as
salaries and employee benefits expenses were the primary reasons
for higher non-interest expense.
The efficiency ratio rose to 57.77% from 55.43% recorded in the
prior-year quarter. The rise indicates deterioration in
profitability.
Total loans as of Dec 31, 2013 were $9.5 billion, rising 16.8% from
Dec 31, 2012. Moreover, total deposits advanced 12.3% year over
year to $10.2 billion.
Asset Quality
Asset quality was a mixed bag during the reported quarter, with
provision for loan losses decreasing 9.8% from the prior-year
quarter to $8.4 million. Moreover, annualized net charge-offs as a
percentage of total average loans came in at 0.32%, down from 0.28%
in the year-ago period.
Further, nonperforming assets remained stable on a year-over-year
basis at $118.9 million. However, allowance for loan losses
increased 6.1% year over year to $110.7 million.
Capital and Profitability Ratios
During 2013, capital ratios remained strong while profitability
ratios deteriorated. As of Dec 31, 2013, the leverage ratio rose to
8.80% from 8.29% in the year-ago quarter. Ratio of tangible equity
to tangible assets was 7.55%, up from 6.09% on a year-over-year
basis.
The return on average assets was 0.99% compared with 0.96% as of
Dec 31, 2012. As of Dec 31, 2013, return on average equity came in
at 6.66%, down from 8.23% as of Dec 31, 2012.
Our Viewpoint
FNB’s consistent organic growth, improving credit quality and
strong balance sheet are impressive. However, mounting expenses,
the prevalent low interest rate environment and stringent
regulations remain major near-term concerns.
FNB currently carries a Zacks Rank #4 (Sell).
Among other Southeast banks, Hancock Holding Co.
(HBHC), Simmons First National Corp. (SFNC) and
United Community Banks, Inc. (UCBI) are scheduled
to announce their fourth-quarter and 2013 results on Jan 23.
FNB CORP (FNB): Free Stock Analysis Report
HANCOCK HLDG CO (HBHC): Free Stock Analysis Report
SIMMONS FIRST A (SFNC): Free Stock Analysis Report
UTD CMNTY BK/GA (UCBI): Free Stock Analysis Report
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