SOUTH SAN FRANCISCO, CA--(Marketwire - February 27, 2009) - FNB Bancorp (
OTCBB:
FNBG), parent
company of First National Bank of Northern California, today announced it
has received $12,000,000 through the sale of the Company's newly authorized
Preferred Stock under the U.S. Department of the Treasury's Capital
Purchase Program. The Board of Directors approved the issuance of
$12,000,000 dollars in senior preferred shares of FNB Bancorp and the
issuance of a warrant covering another $600,000 in warrant preferred shares
under standardized terms as described in the U.S. Department of the
Treasury's term sheet for private banks which is available on the U.S.
Treasury's website.
"FNB Bancorp and our wholly owned subsidiary, First National Bank of
Northern California, maintain strong capital positions and are
'well-capitalized' by regulatory standards. We are financially secure and
continue to actively work with any borrower that is having problems making
their payments. Management and the Board carefully deliberated whether it
was in the best interest of our shareholders and our customers to accept
TARP funds that were made available to us by the U.S. Treasury. We
concluded that accepting TARP funds makes sense so long as the funds are
used as intended by Congress, which means the Bank will use this capital to
increase our current lending volumes and to become part of the solution to
the credit and liquidity problems that continue to play a part in our
country's current recession," stated Tom McGraw, Chief Executive Officer.
The following table provides information relative to FNB Bancorp's capital
positions, on a proforma basis, with and without the TARP program's CPP
funds.
Well-capitalized 12/30/08
Capital Regulatory 12/30/08 With Additional
Ratios Standards Actual CPP Funds
------ --------- ------ ---------
Tier 1 Leverage 5% 9.70% 11.30%
Tier 1 Risk Based 6% 10.67% 12.61%
Total Risk Based 10% 11.86% 13.80%
The money received under TARP through the CPP is not a government handout.
There are significant costs we are required to pay. We will also be
subjected to increased governmental scrutiny and contractual requirements
that can be altered unilaterally at any time by the U.S. Treasury. For
their investment, the U.S. Treasury will receive:
- 12,000 shares of senior preferred stock with a 5% coupon for 5 years
and 9% thereafter. The shares have a liquidation value of $1,000 per share
and these shares must be redeemed after ten years.
- Warrant to purchase 600 shares of warrant preferred stock with a 9%
stated coupon that has a liquidation value of $1,000 per share and a
purchase price of $0.01 per share. The U.S. Treasury will purchase these
shares immediately as part of this transaction.
"If these shares remain outstanding for three years, the U.S. Treasury will
receive an all-in dividend yield of 6.83%, which is significant. Given
this cost, management and the Board of Directors elected to participate in
this program in order to be able to provide our customers with additional
credit and liquidity that might not otherwise be available to them. We
cannot tell you what the magnitude or the duration of the current economic
downturn will be. What we can tell you is that our family bank is a safe
and well capitalized institution that believes in the value of prudent
lending within our market area. The additional capital from the U.S.
Treasury should allow us to expand our existing lending abilities at a time
that our customers need the money," stated Tom 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