FNB Financial Services Corporation Announces Special Provision for Credit Losses
19 1월 2006 - 6:45AM
Business Wire
FNB Financial Services Corporation (NASDAQ: FNBF) today announced
that its banking subsidiary, FNB Southeast ("Bank"), recorded an
aggregate provision for credit losses of $13.6 million during the
fourth quarter of the year ended December 31, 2005. This provision
is primarily attributable to the following components: -- Through
an internal investigation and reviews by independent consultants,
the Bank has identified a significant number of loans in its
Harrisonburg, Virginia region which are believed to have
questionable appraisals and/or collateral value or which were
incorrectly graded for credit risk based on the financial strength
of the borrower and other factors. As a result of these loans, the
Bank increased its allowance for credit losses by $8.2 million. --
The Bank has reclassified loans made to two separate borrowers
outside of its Harrisonburg, Virginia region as a consequence, in
each case, of the borrower's deteriorating financial condition and
the Bank's discovery of a significant reduction in the collateral
base supporting the loans. As a result of these loans, the Bank has
increased its allowance for credit losses by $4.4 million. A
significant portion of the loans described above involve violations
of the Bank's policies and/or applicable banking regulations. The
Bank has discussed these issues and other related matters with its
federal and state banking regulators in the course of the Bank's
continuing annual safety and soundness examination. The Bank has
taken steps to prevent similar violations in the future and to
correct deficiencies in its credit approval and credit
administration procedures. Management of the Corporation believes
that the provision for credit losses noted above will reduce the
Corporation's earnings for the year ended December 31, 2005 by
approximately $8.5 million (net of the estimated tax effect), with
the result that the Corporation's projected net income for the year
will be approximately $800,000 ($0.11 per basic share and $0.11 per
diluted share). FNB Financial Services Corporation has one
subsidiary, FNB Southeast; a North Carolina chartered commercial
bank. FNB Southeast currently operates 17 banking offices located
in North Carolina and Virginia. FNB Southeast Mortgage Corporation
and FNB Southeast Investment Services, Inc. are operating
subsidiaries of FNB Southeast. Forward Looking Statements This news
release contains forward looking statements with respect to the
financial conditions and results of operations of FNB Financial
Services Corporation. These forward looking statements involve
certain risks and uncertainties. Factors that may cause actual
results to differ materially from those contemplated by such
forward looking statements include, among others, the following
possibilities: (1) projected results in connection with the
implementation of our business plan are lower than expected; (2)
competitive pressure among financial services companies increases
significantly; (3) costs or difficulties related to the integration
of acquisitions or expenses in general are greater than expected;
(4) general economic conditions, in the markets in which the
Corporation does business, are less favorable than expected; (5)
risks inherent in making loans, including repayment risks and risks
associated with collateral values, are greater than expected; (6)
changes in the interest rate environment reduce interest margins
and affect funding sources; (7) changes in market rates and prices
may adversely affect the value of financial products; (8)
legislation or regulatory requirements or changes thereto adversely
affect the businesses in which the Corporation is engaged; (9)
regulatory compliance cost increases are greater than expected; and
(10) decisions to change the business mix of the Corporation. For
further information and other factors which could affect the
accuracy of forward looking statements, please see the
Corporation's reports filed with the SEC pursuant to the Securities
Exchange Act of 1934 which are available at the SEC's website
(www.sec.gov) or at the Corporation's website
(www.fnbsoutheast.com). Readers are cautioned not to place undue
reliance on these forward looking statements, which reflect
management's judgments only as of the date hereof. The Corporation
undertakes no obligation to publicly revise those forward looking
statements to reflect events and circumstances that arise after the
date hereof.
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