F.N.B. Corporation Reports First Quarter 2009 Earnings

PRESS RELEASE

April 23, 2009 - HERMITAGE, PA

F.N.B. Corporation (NYSE: FNB), a diversified financial services company, today reported financial results for the first quarter of 2009. Net income available to common shareholders was $14.3 million, or $0.16 per diluted common share for the first quarter of 2009. Comparative results in the fourth quarter of 2008 were a net loss of $18.9 million, or $(0.21) per diluted share, and in the first quarter of 2008 net income totaled $16.5 million, or $0.27 per diluted share. For the first quarter of 2009, F.N.B. Corporation’s performance ratios were as follows: return on average tangible common equity was 17.48%; return on average common equity was 6.22%; return on average tangible assets was 0.87% and return on average assets was 0.75%.

“We are pleased to deliver a quarter consistent with our expectations as we continue to win customers in the market place,” said Stephen J. Gurgovits, Chairman, President and Chief Executive Officer of F.N.B. Corporation. “We entered 2009 well positioned with strong capital levels, a healthy franchise and the right team in place to take advantage of continued competitive disruption in our markets.”

Net Interest Income

Net interest income totaled $64.1 million for the first quarter of 2009, representing a decrease of $4.3 million from the prior quarter. This decline was due primarily to a narrowing of the net interest margin and fewer days in the quarter.  The net interest margin equaled 3.70% for the first quarter of 2009, compared to 3.88% in the fourth quarter of 2008 and 3.73% in the first quarter of 2008. The narrowing of 18 basis points from the fourth quarter of 2008 was driven by loan yields declining faster than deposit rates, reflecting the aggressive actions of the Federal Reserve to lower interest rates during the fourth quarter of 2008.  Additionally, the first quarter 2009 net interest margin reflects a reduced benefit from the accretion of Omega purchase accounting adjustments for time deposits compared to the fourth quarter of 2008. Net interest income for the first quarter of 2009 increased 30.9% compared to the first quarter of 2008, reflecting a combination of organic growth and the 2008 acquisitions of Omega Financial Corporation and Iron and Glass Bancorp, Inc.

Average loans totaled $5.8 billion, representing a decrease of 0.6% compared to the fourth quarter of 2008. This decrease reflects a mix of seasonally lower consumer loans, higher refinance activity and slower commercial loan bookings. Commercial loans decreased 0.8% from the fourth quarter of 2008 reflecting the effect of a slower economic environment in the Corporation’s Pennsylvania markets.  However, commercial loan bookings did pick up at the F.N.B. Corporation Reports First Quarter 2009 Earnings – Page 2 of 10 end of the first quarter of 2009 as the period-end commercial loan portfolio balance was $18 million or 0.6% higher than the average commercial loan portfolio balance for the first quarter, providing a good start to the second quarter.  In addition, during the first quarter of 2009, average consumer loan balance growth in home equity lines of credit and indirect loans essentially offset a decrease in direct installment loans compared to the fourth quarter of 2008. Moreover, the Corporation continued to benefit from competitive disruption in the automobile finance market that led to an increase in indirect lending. Seasonally weaker demand and higher refinance activity drove lower direct installment lending.  Compared to the first quarter of 2008, average total loans for the first quarter of 2009 increased 32.2%. Excluding the effects of the Omega and Iron and Glass acquisitions, the organic growth rate in average total loans was 2.6% compared to the first quarter of 2008.

Average deposits and treasury management balances totaled $6.5 billion for the first quarter of 2009 and were flat compared to the fourth quarter of 2008, which represented good performance given that balances typically decline from the fourth quarter.  Growth in savings accounts and treasury management accounts during the first quarter of 2009 offset declines in certificates of deposit and seasonal declines in business non-interest bearing accounts.  Certificates of deposit are down by design as a result of the strong performance in core deposits.  The growth in treasury management balances during the first quarter of 2009 reflects continued strong growth in new clients as well as seasonal increases for clients in higher education and government banking. Compared to the first quarter of 2008, average deposits and treasury management balances for the first quarter of 2009 increased 39.4%. Excluding the effects of the Omega and Iron and Glass acquisitions, the organic growth rate in average deposits and treasury management balances was a strong 6.3% compared to the first quarter of 2008.

Non-Interest Income

Non-interest income totaled $28.2 million for the first quarter of 2009, compared to $8.3 million in the fourth quarter of 2008 and $22.2 million in the first quarter of 2008. The fourth quarter of 2008 included $20.1 million in non-cash impairment charges related to certain investments, while the first quarter 2009 results included a $0.2 million other-than-temporary impairment charge for bank stocks. Excluding the impairment charges from the results for the first quarter of 2009 and the fourth quarter of 2008, non-interest income was essentially flat as seasonally lower service charges and securities commissions and fees were offset by increased contingency fees in the insurance business.  In total, non-interest income represented 30% of net revenue for the first quarter of 2009.

Non-Interest Expense

Non-interest expense totaled $61.0 million for the first quarter of 2009, representing a $2.6 million, or 4.4%, increase compared to $58.4 million for the fourth quarter of 2008. This increase was primarily driven by higher salary and benefits costs and seasonally higher F.N.B. Corporation Reports First Quarter 2009 Earnings – Page 3 of 10 occupancy costs. Salaries and employee benefits for the first quarter of 2009 included $1 million in costs associated with the departure of the Corporation’s former CEO, as well as a seasonal increase in employee taxes and higher pension costs. Pension costs increased by $1 million compared to the fourth quarter of 2008 given the 2008 investment performance for the pension plan assets. Other non-interest expense for the first quarter of 2009 included a $1.7 million increase in FDIC insurance costs offset by seasonally lower marketing and business development expenses and tight control on operating expenses.  The efficiency ratio totaled 63.1% in the first quarter of 2009, compared to 72.1% in the fourth quarter of 2008 and 59.8% in the first quarter of 2008.

Credit Quality

“We are pleased with the performance of our Pennsylvania and Regency loan portfolios at this point in the economic cycle,” remarked Mr. Gurgovits. “The Florida portfolio performed as expected in the first quarter and continues to reflect a challenging environment.” The Pennsylvania loan portfolio totaled $5.3 billion at March 31, 2009 (92% of the total loan portfolio) and continued to deliver good credit quality metrics. Net loan charge-offs totaled $2.3 million or 0.17% annualized of average loans for the first quarter of 2009, compared to $5.8 million or 0.45% annualized of average loans for the fourth quarter of 2008. Non-performing loans and OREO as a percentage of total loans and OREO increased to 1.15% at March 31, 2009, up from 0.98% at year-end 2008. In terms of the allowance coverage ratios for the Pennsylvania loan portfolio as of March 31, 2009, the allowance for loan losses represented 1.30% of total loans (flat with year-end 2008) and covered 133% of non-performing loans (down from 153% at year-end 2008).

The Florida loan portfolio totaled $302 million at March 31, 2009 (5% of the total loan portfolio) and delivered credit quality metrics that were steady but showed continued weakness. Net loan charge-offs totaled $8.2 million or 11.22% annualized of average loans for the first quarter of 2009, compared to $13.7 million or 18.59% annualized of average loans for the fourth quarter of 2008.  For the first quarter of 2009, $8.2 million in net charge¬offs were taken on two Florida credits that had previously-established specific reserves of $5.7 million. Non-performing loans and OREO as a percentage of total loans and OREO equaled 31.65% at March 31, 2009, down slightly from 31.91% at year-end 2008. Florida’s non-performing loans and OREO totaled $96.3 million at March 31, 2009, or approximately 59% of the Corporation’s total non-performing loans and OREO. In terms of the allowance coverage ratios for the Florida loan portfolio as of March 31, 2009, the allowance for loan losses represented 9.04% of total loans (down from 9.69% at year-end 2008) and covered 29% of non-performing loans (down from 31% at year-end 2008). The decrease in the Florida allowance coverage ratios compared to year end reflects the utilization of the previously-established specific reserves in conjunction with the charge-offs taken during the first quarter of 2009. F.N.B. Corporation Reports First Quarter 2009 Earnings – Page 4 of 10

Capital Position

Shareholders’ equity at March 31, 2009 totaled $1.0 billion, representing an increase of $101 million, or 10.9%, compared to $926 million at December 31, 2008. The increase reflects the Corporation’s January 9, 2009 participation in the U.S. Treasury’s Capital Purchase Program for $100 million and net retained earnings for the first quarter of 2009, partially offset by higher unrealized losses on securities since year-end 2008. Tangible book value per common share was $3.99, compared to $3.92 at year-end 2008.  The Corporation’s tangible common equity ratio was 4.54%, compared to 4.51% at year-end 2008. At quarter end, the tangible book value per common share and tangible common equity ratio excluding accumulated other comprehensive income equaled $4.31 and 4.91%, respectively. The Corporation’s capital ratios continue to exceed federal bank regulatory agency “well capitalized” thresholds. The Corporation’s leverage capital ratio was 8.67% at March 31, 2009, compared to 7.34% at December 31, 2008. The estimated tier 1 risk-based capital ratio was 11.1% at March 31, 2009, compared to 9.7% at December 31, 2008.  The estimated total risk-based capital ratio was 12.5% at March 31, 2009, compared to 11.1% at December 31, 2008.

Conference Call

F.N.B. Corporation will host its regularly scheduled quarterly conference call to discuss results for the first quarter of 2009 on Friday, April 24, 2009, at 8:00 AM Eastern Time.  Hosting the call will be Stephen J. Gurgovits, Chairman, President and Chief Executive Officer, and Brian Lilly, Chief Financial Officer. The call can be accessed by dialing (888) 747-4626 or (913) 312-1416 for international callers; the confirmation number is 1564034. A replay of the call will be available from 11:00 AM Eastern Time on the day of the call until midnight Eastern Time on Friday, May 1, 2009. The replay can be accessed by dialing (888) 203-1112 or (719) 457-0820 for international callers; the confirmation number is 1564034.  A transcript of the call will be posted to the “Shareholder and Investor Relations” section of
F.N.B. Corporation’s Web site at www.fnbcorporation.com.
 
About F.N.B. Corporation

F.N.B. Corporation, headquartered in Hermitage, PA, is a diversified financial services company with total assets of $8.5 billion as of March 31, 2009. F.N.B. Corporation is a leading provider of commercial and retail banking, leasing, wealth management, insurance, merchant banking and consumer finance services in Pennsylvania and Ohio, where it owns and operates First National Bank of Pennsylvania, First National Trust Company, First National Investment Services Company, LLC, F.N.B. Investment Advisors, Inc., First National F.N.B. Corporation Reports First Quarter 2009 Earnings – Page 5 of 10 Insurance Agency, LLC, F.N.B. Capital Corporation, LLC, Regency Finance Company and Bank Capital Services. It also operates consumer finance offices in Tennessee and loan production offices in Pennsylvania, Tennessee and Florida. Investor information is available on F.N.B. Corporation’s Web site at www.fnbcorporation.com.

Forward-looking Statements

This press release of F.N.B. Corporation and the reports F.N.B. Corporation files with the Securities and Exchange Commission often contain “forward-looking statements” relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets and products of F.N.B. Corporation. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause F.N.B. Corporation’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce net interest margins; (3) changes in prepayment speeds, loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions; (5) legislative or regulatory changes that may adversely affect the businesses in which F.N.B. Corporation is engaged; (6) technological issues which may adversely affect F.N.B. Corporation’s financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements F.N.B. Corporation files with the Securities and Exchange Commission. F.N.B. Corporation undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

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