SOURCE: FNB Bancorp

FNB Bancorp

April 28, 2014 16:00 ET

First National Bank of Northern California Reports First Quarter 2014 Earnings of $0.40 per Diluted Share

SOUTH SAN FRANCISCO, CA--(Marketwired - Apr 28, 2014) -  FNB Bancorp (OTCQB: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common shareholders for the first quarter of 2014 of $1,664,000 or $0.40 per diluted share, compared to net earnings available to common shareholders of $772,000 or $0.19 per diluted share for the first quarter of 2013. During the first quarter of 2014, FNB Bancorp redeemed all the outstanding preferred shares held by the Treasury Department as part of their Small Business Lending (SBLF) Program. To partially fund this redemption, FNB Bancorp obtained a $6,000,000 loan that is secured by FNB Bancorp's ownership interest in First National Bank of Northern California. A cash dividend payment from the Bank along with existing cash balances at FNB Bancorp funded the remainder of the redemption. During the first quarter of 2014, net loans increased by $14,518,000.

"During the first quarter of 2014, the Bank experienced strong loan demand and was able to grow our net loans outstanding. At the same time, higher rate brokered time deposits acquired in our Oceanic Bank acquisition have continued to mature. Overall, our deposit portfolio has performed well, with the decrease in total deposits in line with management's projections. During the first quarter of 2014, there was an increase of $10,000,000 in the outstanding wholesale borrowings obtained from the Federal Home Loan Bank, which totaled $25,000,000 as of March 31, 2014. The Bank intends to slowly reduce the amount of our outstanding borrowings during 2014 by utilizing funds derived from principal repayments that occur within our investment portfolio and the slow and steady acquisition of additional deposit accounts and dollars. During the first quarter of 2014, we also redeemed all the outstanding preferred stock held by the U.S. Treasury. The dividend rate increased from 5% to 9% effective January 1, 2014, so it no longer made sense to keep this source of capital. In order to keep the Bank funded at a high level of common equity, during the first quarter of 2014, FNB Bancorp obtained a $6,000,000 holding company loan. The proceeds from this loan were contributed to the Bank as an additional capital contribution," stated Tom McGraw, Chief Executive Officer.

                                 
Financial Highlights: First Quarter, 2014     (Unaudited)  
Consolidated Statements of Earnings
(in '000s except earnings per share amounts)
    Three
months
ended
March 31,
2014
      Three
months
ended
December 31,
2013
      Three
months
ended
March 31,
2013
      Three
months
ended
December 31,
2012
 
                                 
Interest income   $ 8,983     $ 9,375     $ 9,397     $ 9,467  
Interest expense     (469 )     (514 )     (682 )     (727 )
  Net interest income     8,514       8,861       8,715       8,740  
Provision for loan losses     (75 )     (50 )     (600 )     (633 )
Noninterest income     1,040       1,137       976       1,060  
Noninterest expense     (6,842 )     (6,954 )     (7,739 )     (7,557 )
  Interest before income taxes     2,637       2,994       1,352       1,610  
Provision for income tax     (803 )     (995 )     (422 )     (264 )
  Net earnings     1,834       1,999       930       1,346  
    Dividends and discount accretion on preferred stock     (170 )     (119 )     (158 )     (157 )
    Net earnings available to common shareholders   $ 1,664     $ 1,880     $ 772     $ 1,189  
                                 
Basic earnings per share     $0.42       $0.47       $0.20       $0.31  
Diluted earnings per share     $0.40       $0.46       $0.19       $0.30  
                                 
Average assets   $ 889,553     $ 912,819     $ 893,982     $ 900,571  
Average equity   $ 88,995     $ 93,679     $ 95,378     $ 95,206  
Return on average assets (annualized)     0.75 %     0.82 %     0.35 %     0.53 %
Return on average equity (annualized)     7.48 %     8.03 %     3.24 %     5.00 %
Efficiency ratio     -72 %     -70 %     -80 %     -77 %
Net interest margin (taxable equivalent)     4.24 %     4.24 %     4.52 %     4.46 %
Average shares outstanding     3,985       3,965       3,903       3,882  
Average diluted shares outstanding     4,126       4,088       3,996       3,963  
                                 
                         
                         
Consolidated Balance Sheets
(in '000s)
    (Unaudited)
As of
March 31,
2014
    *
As of
December 31,
2013
    (Unaudited)
As of
March 31,
2013
    *
As of
December 31,
2012
                         
  Assets:                        
Cash and cash equivalents   $ 19,244   $ 14,007   $ 39,092   $ 27,861
Interest-bearing time deposits with                        
other financial institutions     4,805     5,543     9,713     13,216
Securities available for sale, at fair value     258,184     263,988     246,460     234,945
Loans, net     566,861     552,343     546,278     541,563
Premises, equipment and leasehold improvements, net     12,533     12,512     12,634     12,706
Other real estate owned, net     2,478     5,318     6,668     6,650
Goodwill     1,841     1,841     1,841     1,841
Other equity securities     5,307     5,300     5,338     5,464
Accrued interest receivable     3,758     3,808     3,751     3,760
Prepaid expenses     631     701     1,116     1,372
Bank owned life insurance     12,248     12,151     11,880     11,785
Other assets     13,658     14,418     12,707     14,177
  Total assets   $ 901,548   $ 891,930   $ 897,478   $ 875,340
                         
    Liabilities and stockholders' equity:                        
Deposits:                        
Demand and NOW   $ 281,366   $ 279,269   $ 255,511   $ 253,849
Savings and money market     380,227     370,194     372,112     343,437
Time     112,352     124,152     162,802     171,066
  Total deposits     773,945     773,615     790,425     768,352
Federal Home Loan Bank advances     25,000     15,000     502     1,220
Bank borrowings     6,000     -     -     -
Accrued expenses and other liabilities     8,977     9,066     10,682     10,410
  Total liabilities     813,922     797,681     801,609     779,982
Stockholders' equity     87,626     94,249     95,869     95,358
  Total liab. and stockholders' equity   $ 901,548   $ 891,930   $ 897,478   $ 875,340
                         
* Taken from the audited annual financial statements                  
                         
Other Financial Information                        
Allowance for loan losses   $ 9,897   $ 9,879   $ 9,357   $ 9,124
Nonperforming assets   $ 9,447   $ 12,669   $ 19,459   $ 19,142
Total gross loans   $ 576,758   $ 562,222   $ 555,635   $ 550,687
                         

"During the first quarter, the Bank's problem assets continued to decrease. Borrowers are making additional investments in our service area, in particular in real estate investments. The skyline in San Francisco is filled with cranes building large residential housing towers. Loans are up for the quarter and overall, our assets grew by approximately 1.1% during the quarter. The Bank's Tier 1 leverage capital increased during the first quarter by $309,000 despite the redemption of the preferred stock by FNB Bancorp during the quarter. At March 31, 2014, the Bank's leverage capital stood at 9.96%. We remain 'well capitalized' by regulatory definitions in all our regulatory capital requirements. The Oceanic Bank purchase has been fully integrated into the operations of the Company and our capital is growing in line with our growth in assets. Steps taken by management to prudently reduce our future noninterest expenses are currently underway. To be successful in our current environment, we understand that we must meet or exceed our customers' expectations in their interaction with the Bank. For over 50 years, we have built our organization around the idea that we must continually earn our customer's business," continued CEO 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