SOURCE: FNB Bancorp

FNB Bancorp

October 30, 2009 17:46 ET

First National Bank of Northern California Reports Third Quarter 2009 Earnings of $0.35 per Diluted Share

SOUTH SAN FRANCISCO, CA--(Marketwire - October 30, 2009) - FNB Bancorp (OTCBB: FNBG), parent company of First National Bank of Northern California, today announced operating earnings for the third quarter of 2009 of $1,049,000 or $0.35 per diluted share after deducting dividends on preferred stock, compared to operating earnings of $1,047,000 or $0.34 per diluted share for the third quarter of 2008. Net income for the third quarter of 2009 was $1,263,000, before the payment of preferred stock dividends, compared to net income of $1,047,00 in the third quarter of 2008. Dividend payments on the preferred shares outstanding were made as required by the Treasury Department's Capital Purchase Program during the third quarter of 2009. Total consolidated assets as of September 30, 2009 were $699,313,000 compared to $660,957,000 as of December 31, 2008.

During the first nine months of 2009, assets grew by $38,356,000 or 6% above December 31, 2008 levels. Total deposits increased by $84,257,000 or approximately 17% during this same time period. Our deposit growth during the first nine months of 2009 has allowed us to repay over $56 million in Federal Home Loan Bank advances during this same period. The current rate environment of very low short term rates has negatively affected our taxable equivalent net interest margin, which has decreased to 4.62% during the third quarter of 2009, compared with 4.75% for the same period in 2008. "During the third quarter of 2009, we purchased approximately $19 million dollars of performing loans from another community bank. Management has been, and continues to look for market opportunities as other institutions downsize and shed assets. Also during the third quarter, we added $796,000 into our provision for loan losses in order to bolster our allowance for loan losses. This action was taken to insure reserves were sufficient to absorb any future losses that may occur in our lending portfolio. We believe that the level of the provision for the remainder of 2009 is expected to be lower than the provision levels recorded during the first nine months of the year," stated Tom McGraw, CEO.

Financial Highlights: Third Quarter, 2009
Consolidated Statements of Earnings
(in '000s except earnings per share amounts)

                                  Three      Three      Nine       Nine
                                  months     months     months     months
                                  ended      ended      ended      ended
                                September  September  September  September
                                   30,        30,        30,        30,
                                  2009       2008       2009       2008
                                ---------  ---------  ---------  ---------

Interest income                 $   9,283  $   9,787  $  26,837  $  29,815
Interest expense                    2,293      2,725      6,974      8,888
                                ---------  ---------  ---------  ---------
   Net interest income              6,990      7,062     19,863     20,927
Provision for loan losses            (796)      (300)    (3,696)    (1,590)
Noninterest income                  1,672        769      4,266      3,167
Noninterest expense                 6,427      6,481     20,605     18,944
                                ---------  ---------  ---------  ---------
   Interest before income taxes     1,439      1,050       (172)     3,560
Provision for income taxes           (176)        (3)       250       (536)
                                ---------  ---------  ---------  ---------
   Net earnings (loss)              1,263      1,047         78      3,024
   Dividends and discount
    accretion on preferred stock      214         --        419         --
   Net earnings (loss)
    available to common         ---------  ---------  ---------  ---------
    shareholders                $   1,049  $   1,047  $    (341) $   3,024
                                =========  =========  =========  =========

Basic earnings per share        $    0.35  $    0.34  ($   0.11) $    0.98
Diluted earnings per share      $    0.35  $    0.34  ($   0.11) $    0.97

Average assets                  $ 694,806  $ 661,328  $ 675,487  $ 655,178
Average equity                  $  78,525  $  67,189  $  76,834  $  67,562
Return on average assets             0.60%      0.63%     -0.20%      1.85%
Return on average equity             5.34%      6.23%     -1.78%     17.90%
Efficiency ratio                       74%        83%        85%        79%
Net interest margin (taxable
 equivalent)                         4.62%      4.75%      4.43%      4.78%
Average shares outstanding          3,030      3,055      3,030      3,092
Average diluted shares
 outstanding                        3,030      3,065      3,030      3,118




Financial Highlights: Third Quarter, 2009

Consolidated Balance Sheets
(in '000s)                        As of      As of      As of      As of
                                September   December   September  December
                                    30,        31,        30,        31,
                                   2009       2008       2008       2007
                                ---------- ---------- ---------- ----------
               Assets:
Cash and cash equivalents       $   46,371 $   14,865 $   17,873 $   15,750
Securities available for sale       94,264     99,221    104,489     94,432
Loans, net                         506,537    497,984    489,644    489,574
Premises, equipment and
 leasehold improvements             12,040     13,030     13,378     13,686
Other real estate owned              9,425      3,557      3,819        440
Goodwill                             1,841      1,841      1,841      1,841
Other assets                        28,835     30,459     29,252     28,742
                                ---------- ---------- ---------- ----------
   Total assets                 $  699,313 $  660,957 $  660,296 $  644,465
                                ========== ========== ========== ==========

 Liabilities and stockholders' equity:
Deposits:
Demand and NOW                  $  174,826 $  179,688 $  184,014 $  181,638
Savings and money market           279,696    179,382    181,426    181,276
Time                               130,645    141,840    155,030    136,341
                                ---------- ---------- ---------- ----------
   Total deposits                  585,167    500,910    520,470    499,255
Federal Home Loan Bank advances     30,000     86,100     66,000     66,000
Federal funds purchased                  -          -          -      5,595
Accrued expenses and other
 liabilities                         5,218      5,798      7,275      7,070
                                ---------- ---------- ---------- ----------
   Total liabilities               620,385    592,808    593,745    577,920
Stockholders' equity                78,928     68,149     66,551     66,545
                                ---------- ---------- ---------- ----------
   Total liab. and
    stockholders' equity        $  699,313 $  660,957 $  660,296 $  644,465
                                ========== ========== ========== ==========

Other Financial Information
Allowance for loan losses       $    9,424 $    7,075 $    6,031 $    5,638
Nonperforming assets            $   32,164 $   17,659 $   15,694 $   11,905
Total gross loans               $  515,961 $  505,059 $  495,675 $  495,212

"We are working very hard to insure our loan customers have the credit they need as they plan for the future. The Treasury Department has gone on record that they believe the recession may have ended. While that may be technically true, we are also acutely aware of the fragile real estate and business climate that currently exists. The strength of our balance sheet will allow us to grow our banking franchise locally in a safe and sound manner during a time when others may be required to sell assets and shrink their institutions," continued Mr. McGraw.

"Management has had to make some painful decisions during the first nine months of 2009. Our level of OREO assets and nonperforming loans have steadily increased during the first nine months of 2009. Management has instituted plans that we believe will reduce the OREO and nonperforming levels in the near future. Management is committed to reducing nonperforming assets as soon as possible. We believe our decisions and proactive approach in dealing with troubled credits has paved the way for the Bank to attract new customers, grow our franchise, reduce future credit related problems and to provide a solid investment for our shareholders," stated Mr. McGraw.

Cautionary Statement: This release contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those stated herein. Management's assumptions and projections are based on their anticipation of future events and actual performance may differ materially from those projected. Risks and uncertainties which could impact future financial performance include, among others, (a) competitive pressures in the banking industry; (b) changes in the interest rate environment; (c) general economic conditions, either nationally or regionally or locally, including fluctuations in real estate values; (d) changes in the regulatory environment; (e) changes in business conditions or the securities markets and inflation; (f) possible shortages of gas and electricity at utility companies operating in the State of California, and (g) the effects of terrorism, including the events of September 11, 2001, and thereafter, and the conduct of war on terrorism by the United States and its allies. Therefore, the information set forth herein, together with other information contained in the periodic reports filed by FNB Bancorp with the Securities and Exchange Commission, should be carefully considered when evaluating its business prospects. FNB Bancorp undertakes no obligation to update any forward-looking statements contained in this release.

Contact Information

  • Contacts:
    Tom McGraw
    Chief Executive Officer
    (650) 875-4864

    Dave Curtis
    Chief Financial Officer
    (650) 875-4862

    Website: www.fnbnorcal.com