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Ahead Of The Bell: FNB Moves To Raise Capital

The Associated Press

NEW YORK (AP) — Shares of F.N.B. Corp. slipped in premarket trading Tuesday after the banking company announced plans to sell $115 million of its common stock.

Stock offerings dilute current shareholders' stakes, and shares of companies offering stock tend to sell off initially after announcing such a move.

Shares shed 44 cents, or 6.3 percent, to $6.55 ahead of the market's open.

Also Tuesday, BMO Capital Markets analyst Peter Winter upgraded the stock to "Market Perform" from "Underperform," noting that the shares are trading at a premium to the bank's Pennsylvania banking peers and in line with other small-cap banks.

Winter subsequently reduced his 2009 earnings estimate to account for the dilution of the capital raise. He now expects full-year earnings of 51 cents per share, down from a prior estimate of 59 cents per share.

Based in Hermitage, Pa., F.N.B. is the holding company of First National Bank of Pennsylvania. The company plans to use proceeds from its stock offering for general corporate purposes and possibly to repay a $100 million investment from the U.S. Treasury received earlier this year under the government's Troubled Asset Relief Program, or TARP.

Many banks that received TARP funds have expressed a desire to return the money to rid themselves of the constraints of the government support, including restrictions on executive pay. Banks wanting to return the bailout money must first prove they can raise capital on their own in the public markets.

The government is expected to announce on Tuesday a number of large and mid-size banks that have been approved to repay the funds.