FLB First Natl Bancshares Fla

First National Bankshares of Florida Reports $0.23 Per Share for Second Quarter of 2004; Beats Analysts' Estimate NAPLES, Fla., July 14 /PRNewswire-FirstCall/ -- First National Bankshares of Florida, Inc. (NYSE:FLB) today reported second quarter 2004 net income of $11.3 million, or $0.23 per share, compared with $10.6 million, or $0.22 per share, in the second quarter of 2003. These results exceeded the analysts' consensus estimate of $0.22 per share and were adjusted for the 3% stock dividend payable on July 15, 2004 to shareholders of record on June 30, 2004. (Logo: http://www.newscom.com/cgi-bin/prnh/20031230/FNBFLOGO ) "We are very proud to deliver another solid quarter," said Gary L. Tice, Chairman and Chief Executive Officer of First National Bankshares. "During the period, we continued to experience significant gains on the revenue side, while maintaining expenses. We also enjoyed further improvement in our already excellent credit quality." For the first six months of 2004, net income totaled $21.6 million, or $0.44 per share. This compares with $19.3 million, or $0.40 per share, for the same period a year ago. During the six months ended June 30, 2003, the company incurred after-tax expenses of $0.01 per share related to the acquisition of Southern Exchange Bank in Tampa, Florida. First National Bankshares' second quarter 2004 results reflect a return on average assets of 1.13% and a return on average shareholders' equity of 12.3%. Due to the significant levels of capital required to be assigned to intangibles for regulatory capital purposes, management also evaluates performance ratios on a cash basis, or excluding the impact of intangibles and any related intangible amortization. On a cash basis, the return on average assets was 1.20% and the return on average shareholders' equity was 24.9% for the second quarter of 2004. Intangibles as of June 30, 2004 totaled $184.0 million. Pre-tax intangible amortization recognized during the second quarter of 2004 totaled $345,000. The company's second quarter 2004 operating revenue, consisting of net interest income on a taxable equivalent basis and non-interest income, totaled $51.7 million, representing an increase of 3.6% from the $49.9 million reported during the second quarter of 2003. Credit quality at First National Bankshares remained excellent during the quarter. As of June 30, 2004, the allowance for loan losses totaled $29.7 million, or 1.11% of total loans and 686% of non-performing loans. This compares with 1.14% and 684%, respectively, as of March 31, 2004, and 1.12% and 564%, respectively, as of June 30, 2003. Annualized net loan charge-offs for the quarter represented 0.05% of average loans as of June 30, 2004, compared with 0.06% as of March 31, 2004, and 0.12% as of June 30, 2003. Non-performing assets represented 0.12% of total assets as of June 30, 2004, compared with 0.12% as of March 31, 2004, and 0.17% as of June 30, 2003. Net interest income on a tax-equivalent basis was $34.0 million for the second quarter of 2004, up 4.9% from $32.4 million a year ago. The net interest margin for the quarter ended June 30, 2004, was 3.88%, compared with 4.00% for the quarter ended March 31, 2004, and 4.10% for the quarter ended June 30, 2003. The margin was impacted during the quarter by a strategic focus on originating variable and adjustable rate loans and extending maturities on time deposits as well as Federal Home Loan Bank advances. Non-interest income totaled $17.8 million for the second quarter of 2004, up 1.3% from $17.5 million during the same period a year ago. Revenue from insurance and wealth management, which is included in non-interest income, totaled $11.0 million during the second quarter of 2004, up 31.4% from $8.3 million during the second quarter of 2003. This increase of $2.7 million was partially offset by a $2.0 million decline in gains from the sale of mortgage loans. In the second quarter of 2004, non-interest income represented 34.3% of operating revenue. Non-interest expense for the second quarter of 2004 was $33.3 million, up $1.8 million or 5.8% from $31.5 million during the second quarter of 2003. Approximately $1.4 million of this total increase is attributable to the acquisition of the Lupfer-Frakes Insurance agency, which closed on July 1, 2003. The efficiency ratio for the three months ended June 30, 2004 was 64.5%, versus 65.5% for the three months ended March 31, 2004. Total earning assets increased 13.3% to $3.6 billion as of June 30, 2004, compared with $3.2 billion as of June 30, 2003. Total loans increased 16.6% to $2.7 billion as of June 30, 2004, compared with $2.3 billion as of June 30, 2003. On a linked quarter basis, average loans increased by a compound annual growth rate of approximately 20%. At June 30, 2004, investment securities totaled $880 million and represented 24.6% of earning assets, compared with 26.1% at June 30, 2003. Total deposits increased 8.6% to $3.0 billion as of June 30, 2004, compared with $2.7 billion as of June 30, 2003. On a linked quarter basis, average deposits grew by a compound annual growth rate of 21.6%. In addition to releasing its second quarter 2004 results, First National Bankshares of Florida is providing earnings guidance in a range of $0.22 to $0.24 per share for the third quarter of 2004 and in a range of $0.88 to $0.92 per share for the full year of 2004. Both amounts have been adjusted to reflect the 3% stock dividend payable on July 15, 2004. The guidance for the full year also reflects the $0.02 per share dilution of the planned acquisition of Southern Community Bancorp as previously discussed by the company. First National Bankshares announced its plans to acquire Southern Community Bancorp, the holding company for three state-chartered commercial banks, on March 22, 2004. Headquartered in Orlando, Florida, Southern Community has more than $1 billion in total assets and 18 full-service banking offices located throughout South and Central Florida. The transaction, subject to normal regulatory and shareholder approvals, is expected to close in September 2004. Once the merger is completed, all Southern Community offices will become branches of First National Bank. In connection with this acquisition, First National Bankshares issued $25 million of trust preferred securities during the first quarter of 2004. The proceeds from this issuance are being used to fund the purchase of approximately 1.1 million shares of First National Bankshares common stock in 2004. From April 1, 2004 to June 30, 2004, the company repurchased 588,900 of its shares. On June 30, 2004, First National Bankshares announced the planned acquisition of First Bradenton Bank. Established in 1997, First Bradenton is a state-chartered commercial bank with $60.5 million in assets, $55.5 million in deposits and one banking location in Bradenton, Florida. Upon completion of the merger, First National Bank will have more than $5.2 billion in total assets, $3.9 billion in total deposits and 76 full-service financial centers in South and Central Florida, including the acquisition of Southern Community. "This acquisition combined with the Southern Community merger fits perfectly with our strategic plan, which calls for significant growth in highly attractive Florida markets," Tice said. "Both First Bradenton and Southern Community will enable us to grow our Florida franchise and provide us with tremendous opportunities to expand not only our banking services but also our full line of wealth management and insurance products. We are delighted to welcome these two fine organizations into the First National family." First National Bankshares also continues to expand through de novo branching in key markets. As previously announced, the company initiated construction on two full-service financial centers in Naples and Fort Myers, Florida. The bank also plans to open a full-service financial center in the Old Naples market. These new facilities will add to First National Bank's presence in these growing Southwest Florida markets. The offices are expected to open within a year and will offer a full line of financial products and services. First National Bankshares management will host a conference call on Thursday, July 15, 2004, at 11 a.m. (Eastern Time) to discuss the second quarter 2004 results and to further discuss its strategic plan for expansion in the Florida market. This conference call may be accessed by dialing 1-800-346-7359, with the entry code #1160. For those unable to listen to the live conference call, a replay will be made available from 2 p.m. on July 15, 2004, until 6 p.m. on July 22, 2004, by dialing 1-800-332-6854, with the entry code #1160. About First National Bankshares Headquartered in Naples, Florida, First National Bankshares of Florida, Inc. is a $4.1 billion diversified financial services company. The company's focus is on expansion in the high-growth Florida market. In addition to traditional community banking, the company provides a complete line of insurance and wealth management services with 59 full-service financial centers located throughout Southwest and Central Florida. The company's stock is traded on the New York Stock Exchange under the symbol "FLB." This document contains forward-looking statements with respect to the plans, objectives, financial condition, results of operations and businesses of First National Bankshares of Florida, Inc.; the benefits and synergies of the planned acquisitions of Southern Community Bancorp and First Bradenton Bank; and the expected date of closing of the acquisitions, including statements containing such words as "believes," "expects," "projects," "anticipates," and similar expressions. Such statements involve risks and uncertainties. There are a number of important factors that could cause future results to differ materially from historical performance and these forward- looking statements. Factors that might cause such a difference include, but are not limited to: (1) competitive pressures among depository institutions increase significantly; (2) changes in the interest rate environment reduce interest margins; (3) general economic conditions are less favorable than expected; (4) legislative or regulatory changes adversely affect the businesses in which the company is engaged; (5) costs, delays, and any other difficulties related to the planned acquisition of Southern Community or First Bradenton Bank; (6) failure of the parties to satisfy conditions to the closing of the acquisitions; (7) the ability to manage and continue growth; and (8) other risk factors as detailed in First National Bankshares' reports filed with the Securities and Exchange Commission. First National Bankshares disclaims any responsibility to update these forward-looking statements. CONTACT: Clay W. Cone Vice President, Director of Corporate Communications 239-436-1676 FIRST NATIONAL BANKSHARES OF FLORIDA, INC. (Unaudited) (Dollars in thousands, except per share data) 2004 Second First Statement of earnings Quarter Quarter Interest income - taxable equivalent basis $45,808 $43,897 Interest income $45,414 $43,523 Interest expense 11,845 10,919 Net interest income 33,569 32,604 Provision for loan losses 875 1,400 Net interest income after provision 32,694 31,204 Service charges 4,974 4,898 Insurance commissions and fees 8,894 7,680 Securities commissions and fees 1,206 1,116 Trust income 855 814 Gain on sale of securities 0 163 Gain on sale of mortgage loans 766 1,020 Other 1,061 1,019 Total non-interest income 17,756 16,710 Salaries and employee benefits 19,857 19,494 Occupancy and equipment 5,376 5,368 Amortization of intangibles 345 345 Merger expenses 0 0 Other 7,783 7,322 Total non-interest expense 33,361 32,529 Income before income taxes 17,089 15,385 Income taxes 5,798 5,036 Net income (loss) $11,291 $10,349 Basic earnings per share 0.24 0.22 Diluted earnings per share 0.23 0.21 Earnings excluding merger and restructuring expenses $11,291 $10,349 Basic earnings per share 0.24 0.22 Diluted earnings per share 0.23 0.21 Average basic shares outstanding 47,648,095 47,694,145 Average diluted shares outstanding 49,013,292 48,942,636 Common shares outstanding 47,515,420 47,697,061 Cash dividend per common share 0.07 0.07 Performance ratios Return on average shareholders' equity 12.28% 11.19% Return on average assets 1.13% 1.09% Net interest margin (FTE) 3.88% 4.00% Yield on earning assets (FTE) 5.24% 5.33% Efficiency ratio (FTE) 64.50% 65.47% Performance ratios (earnings excluding merger and restructuring expenses) Return on average shareholders' equity 12.28% 11.19% Return on average shareholders' equity, cash basis 24.93% 22.61% Return on average assets 1.13% 1.09% Return on average assets, cash basis 1.20% 1.17% Efficiency ratio (FTE) 64.50% 65.47% *Percent variance not meaningful 2003 Fourth Third Second First Statement of earnings Quarter Quarter Quarter Quarter Interest income - taxable equivalent basis $43,363 $42,168 $44,458 $38,534 Interest income $42,819 $41,617 $43,895 $37,963 Interest expense 10,163 10,636 12,068 9,979 Net interest income 32,656 30,981 31,827 27,984 Provision for loan losses 2,672 952 1,828 1,732 Net interest income after provision 29,984 30,029 29,999 26,252 Service charges 4,353 4,872 4,891 3,999 Insurance commissions and fees 6,686 6,861 6,558 6,077 Securities commissions and fees 839 993 1,096 863 Trust income 763 701 681 623 Gain on sale of securities 23 7 102 311 Gain on sale of mortgage loans 636 256 2,772 1,926 Other 1,448 1,351 1,423 1,305 Total non-interest income 14,748 15,041 17,523 15,104 Salaries and employee benefits 19,690 21,042 19,154 16,766 Occupancy and equipment 5,094 5,058 4,928 3,971 Amortization of intangibles 342 341 305 278 Merger expenses 221 0 0 1,014 Other 12,148 6,581 7,145 6,220 Total non-interest expense 37,495 33,022 31,532 28,249 Income before income taxes 7,237 12,048 15,990 13,107 Income taxes 3,090 3,749 5,404 4,388 Net income (loss) $4,147 $8,299 $10,586 $8,719 Basic earnings per share 0.09 0.17 0.22 0.18 Diluted earnings per share 0.09 0.17 0.22 0.18 Earnings excluding merger and restructuring expenses $10,682 $9,497 $10,586 $9,378 Basic earnings per share 0.22 0.20 0.22 0.20 Diluted earnings per share 0.22 0.20 0.22 0.19 Average basic shares outstanding 47,510,616 47,475,241 47,450,845 47,426,950 Average diluted shares outstanding 48,449,740 48,415,199 48,296,220 48,304,846 Common shares outstanding 47,701,137 47,466,332 47,495,831 47,444,048 Cash dividend per common share N/A N/A N/A N/A Performance ratios Return on average shareholders' equity 3.69% 7.33% 9.85% 12.72% Return on average assets 0.44% 0.89% 1.15% 1.25% Net interest margin (FTE) 4.11% 3.97% 4.10% 4.57% Yield on earning assets (FTE) 5.37% 5.31% 5.62% 6.17% Efficiency ratio (FTE) 78.20% 70.90% 63.17% 64.70% Performance ratios (earnings excluding merger and restructuring expenses) Return on average shareholders' equity 9.52% 8.39% 9.85% 13.68% Return on average shareholders' equity, cash basis 16.55% 14.57% 16.98% 18.69% Return on average assets 1.14% 1.02% 1.15% 1.35% Return on average assets, cash basis 1.22% 1.10% 1.23% 1.40% Efficiency ratio (FTE) 60.00% 66.72% 63.17% 62.38% *Percent variance not meaningful 2nd Qtr 2004 - For the Six Months 2nd Qtr 2003 Ended June 30, Percent Percent Statement of earnings Variance 2004 2003 Variance Interest income - taxable equivalent basis 3.0 $89,705 $82,992 8.1 Interest income 3.5 $88,937 $81,858 8.6 Interest expense -1.8 $22,764 $22,047 3.3 Net interest income 5.5 66,173 59,811 10.6 Provision for loan losses -52.1 2,275 3,560 -36.1 Net interest income after provision 9.0 63,898 56,251 13.6 Service charges 1.7 9,872 8,890 11.0 Insurance commissions and fees 35.6 16,574 12,635 31.2 Securities commissions and fees 10.0 2,322 1,959 18.5 Trust income 25.6 1,669 1,304 28.0 Gain on sale of securities -100.0 163 413 -60.5 Gain on sale of mortgage loans -72.4 1,786 4,698 -62.0 Other -25.4 2,080 2,728 -23.8 Total non-interest income 1.3 34,466 32,627 5.6 Salaries and employee benefits 3.7 39,351 35,920 9.6 Occupancy and equipment 9.1 10,744 8,899 20.7 Amortization of intangibles 13.1 690 583 18.4 Merger expenses -100.0 0 1,014 -100.0 Other 8.9 15,105 13,365 13.0 Total non-interest expense 5.8 65,890 59,781 10.2 Income before income taxes 6.9 32,474 29,097 11.6 Income taxes 7.3 10,834 9,792 10.6 Net income (loss) 6.7 $21,640 $19,305 12.1 Basic earnings per share 9.1 0.45 0.41 9.8 Diluted earnings per share 4.5 0.44 0.40 10.0 Earnings excluding merger and restructuring expenses 6.7 $21,640 $19,964 8.4 Basic earnings per share 9.1 0.45 0.42 7.1 Diluted earnings per share 4.5 0.44 0.41 7.3 Average basic shares outstanding 0.4 47,671,120 47,436,211 0.5 Average diluted shares outstanding 1.5 48,979,340 48,297,202 1.4 Common shares outstanding 0.0 47,515,420 47,495,354 0.0 Cash dividend per common share * 0.14 N/A * Performance ratios Return on average shareholders' equity 11.73% 11.00% Return on average assets 1.11% 1.20% Net interest margin (FTE) 3.94% 4.35% Yield on earning assets (FTE) 5.28% 5.93% Efficiency ratio (FTE) 64.98% 63.89% Performance ratios (earnings excluding merger and restructuring expenses) Return on average shareholders' equity 11.73% 11.38% Return on average shareholders' equity, cash basis 23.76% 17.84% Return on average assets 1.11% 1.24% Return on average assets, cash basis 1.19% 1.31% Efficiency ratio (FTE) 64.98% 62.80% *Percent variance not meaningful FIRST NATIONAL BANKSHARES OF FLORIDA, INC. (Unaudited) (Dollars in thousands, except per share data) 2004 Second First Average balances Quarter Quarter Total assets $4,030,853 $3,808,391 Earning assets 3,516,235 3,314,374 Securities 884,285 798,555 Loans, net of unearned 2,628,440 2,509,380 Allowance for loan losses 29,965 28,895 Intangibles 184,148 184,137 Non-interest bearing deposits 535,622 475,369 Interest bearing deposits 2,419,877 2,339,375 Total deposits 2,955,499 2,814,744 Short-term borrowings 328,225 297,968 Long-term debt 338,386 290,195 Shareholders' equity 369,718 371,984 Asset quality data Non-performing loans $4,332 $4,263 Other real estate owned 440 440 Non-performing assets 4,772 4,703 Net loan charge-offs $312 $363 Allowance for loan losses 29,705 29,141 Non-performing loans/total loans 0.16% 0.17% Non-performing assets/total assets 0.12% 0.12% Allowance for loan losses/total loans 1.11% 1.14% Allowance for loan losses/ non-performing loans 685.71% 683.58% Net loan charge-offs (annualized)/ average loans 0.05% 0.06% Balances at period end Total assets $4,087,319 $3,998,528 Earning assets 3,571,654 3,492,684 Securities 879,952 885,258 Mortgage loans held for sale 12,827 20,629 Loans, net of unearned 2,677,862 2,559,791 Intangibles 183,998 184,339 Non-interest bearing deposits 545,882 560,498 Interest bearing deposits 2,431,729 2,399,655 Total deposits 2,977,611 2,960,153 Short-term borrowings 388,724 324,603 Long-term debt 326,196 296,479 Shareholders' equity 358,403 377,814 Book value per common share 7.54 7.92 Tangible book value per common share 3.67 4.06 Tangible capital ratio 4.47 5.07 *Percent variance not meaningful 2003 Fourth Third Second First Average balances Quarter Quarter Quarter Quarter Total assets $3,721,345 $3,683,569 $3,683,030 $2,827,481 Earning assets 3,203,028 3,150,708 3,171,344 2,534,157 Securities 796,648 820,723 869,901 446,171 Loans, net of unearned 2,399,789 2,318,335 2,275,443 2,072,235 Allowance for loan losses 27,047 26,632 25,423 21,976 Intangibles 184,145 184,666 176,779 70,792 Non-interest bearing deposits 439,786 438,973 445,089 378,727 Interest bearing deposits 2,268,907 2,277,667 2,309,268 1,808,086 Total deposits 2,708,693 2,716,640 2,754,357 2,186,813 Short-term borrowings 323,265 276,293 248,962 271,604 Long-term debt 198,412 199,190 202,703 51,723 Shareholders' equity 445,298 448,903 431,221 277,985 Asset quality data Non-performing loans $5,521 $4,291 $4,565 $4,897 Other real estate owned 0 1,465 1,641 1,428 Non-performing assets 5,521 5,756 6,206 6,325 Net loan charge-offs $851 $416 $655 $1,086 Allowance for loan losses 28,104 26,283 25,746 24,575 Non-performing loans/ total loans 0.23% 0.18% 0.20% 0.22% Non-performing assets/ total assets 0.15% 0.16% 0.17% 0.17% Allowance for loan losses /total loans 1.15% 1.13% 1.12% 1.11% Allowance for loan losses /non-performing loans 509.04% 612.51% 563.99% 501.84% Net loan charge-offs (annualized)/average loans 0.14% 0.07% 0.12% 0.21% Balances at period end Total assets $3,751,136 $3,710,352 $3,668,719 $3,665,861 Earning assets 3,245,863 3,177,985 3,153,152 3,158,504 Securities 775,334 820,762 822,582 906,927 Mortgage loans held for sale 15,153 13,819 28,883 25,938 Loans, net of unearned 2,449,382 2,335,533 2,296,770 2,209,204 Intangibles 184,246 184,864 175,162 175,510 Non-interest bearing deposits 451,837 439,285 460,852 458,505 Interest bearing deposits 2,268,152 2,297,474 2,280,312 2,303,926 Total deposits 2,719,989 2,736,759 2,741,164 2,762,431 Short-term borrowings 354,051 300,724 260,988 233,956 Long-term debt 271,000 194,096 191,855 205,282 Shareholders' equity 365,115 442,734 438,423 422,959 Book value per common share 7.65 9.33 9.23 8.91 Tangible book value per common share 3.79 5.43 5.54 5.22 Tangible capital ratio 5.07 7.31 7.54 7.09 *Percent variance not meaningful 2nd Qtr 2004 - For the Six Months 2nd Qtr 2003 Ended June 30, Percent Percent Average balances Variance 2004 2003 Variance Total assets 9.4 $3,919,622 $3,241,899 20.9 Earning assets 10.9 3,415,304 $2,824,354 20.9 Securities 1.7 841,420 $652,192 29.0 Loans, net of unearned 15.5 2,568,910 $2,152,861 19.3 Allowance for loan losses 17.9 29,430 $23,710 24.1 Intangibles 4.2 184,142 $124,078 48.4 Non-interest bearing deposits 20.3 505,495 411,827 22.7 Interest bearing deposits 4.8 2,379,626 2,057,619 15.6 Total deposits 7.3 2,885,121 2,469,446 16.8 Short-term borrowings 31.8 313,096 255,822 22.4 Long-term debt 66.9 314,291 127,348 146.8 Shareholders' equity -14.3 370,851 353,819 4.8 Asset quality data Non-performing loans -5.1 $4,332 $4,565 -5.1 Other real estate owned -73.2 440 1,641 -73.2 Non-performing assets -23.1 4,772 6,206 -23.1 Net loan charge-offs -52.4 $675 $1,741 -61.2 Allowance for loan losses 15.4 29,705 25,746 15.4 Non-performing loans/total loans 0.16% 0.20% Non-performing assets/total assets 0.12% 0.17% Allowance for loan losses/total loans 1.11% 1.12% Allowance for loan losses/ non-performing loans 685.71% 563.99% Net loan charge-offs (annualized) /average loans 0.05% 0.16% Balances at period end Total assets 11.4 $4,087,319 $3,668,719 11.4 Earning assets 13.3 3,571,654 3,153,152 13.3 Securities 7.0 879,952 822,582 7.0 Mortgage loans held for sale -55.6 12,827 28,883 -55.6 Loans, net of unearned 16.6 2,677,862 2,296,770 16.6 Intangibles 5.0 183,998 175,162 5.0 Non-interest bearing deposits 18.5 545,882 460,852 18.5 Interest bearing deposits 6.6 2,431,729 2,280,312 6.6 Total deposits 8.6 2,977,611 2,741,164 8.6 Short-term borrowings 48.9 388,724 260,988 48.9 Long-term debt 70.0 326,196 191,855 70.0 Shareholders' equity -18.3 358,403 438,423 -18.3 Book value per common share 7.54 9.23 Tangible book value per common share 3.67 5.54 Tangible capital ratio 4.47 7.54 *Percent variance not meaningful http://www.newscom.com/cgi-bin/prnh/20031230/FNBFLOGO http://photoarchive.ap.org/ DATASOURCE: First National Bankshares of Florida, Inc. CONTACT: Clay W. Cone, Vice President, Director of Corporate Communications, First National Bankshares of Florida, +1-239-436-1676 Web site: http://www.firstnationalbankshares.com/

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