SOURCE: FNB Bancorp

FNB Bancorp

January 30, 2015 08:30 ET

First National Bank of Northern California Reports Fourth Quarter 2014 Earnings of $0.94 per Diluted Share

SOUTH SAN FRANCISCO, CA--(Marketwired - Jan 30, 2015) - 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 fourth quarter of 2014 of $4,123,000 or $0.94 per diluted share, compared to net earnings available to common shareholders of $2,013,000 or $0.47 per diluted share for the fourth quarter of 2013. During the fourth quarter of 2014, FNB Bancorp reversed $1,095,000 out of the provision for loan losses due to noted trends of improving credit metrics within the loan portfolio. In addition, the Company recorded a pretax gain of $2,085,000 from the sale of our S. Airport Boulevard, South San Francisco building and we received a $500,000 pretax breakup fee related to the Valley Community Bank definitive purchase agreement that was terminated. During the fourth quarter of 2014, Valley Community Bank signed a new definitive agreement to be purchased by Bay Commercial Bank. For the year ended December 31, 2014 asset growth was 2.8%, loan growth was 5.5% and deposit growth was 2.4%.

"The fourth quarter of 2014 provided the Bank a favorable loan production environment, with the annualized loan growth rate for the quarter at 9.7%. Credit metrics continued to improve during the fourth quarter, which allowed management to reverse a little over $1.1 million from our allowance for loan losses. The Bank recorded net recoveries of $841 thousand during the year ended December 31, 2014 and ended the year with an allowance for loan losses / gross loans ratio of 1.64%. Increases in our deposit balance during the fourth quarter were led by growth of 19.7% in our NOW accounts, primarily due to an influx of public agency NOW deposits towards the end of the year. The Bank's Certificates of Deposit accounts experienced net inflows of $1.1 million during the quarter. Net deposit outflows for the quarter in our non-interest bearing deposit balances were $5.8 million, and included declines in both our individual and business products. Federal home loan balances were reduced by $7 million during the fourth quarter to end the year at $9 million," stated Tom McGraw, CEO.

                         
                         
Financial Highlights: Fourth Quarter, 2014   (Unaudited)  
    Three months     Three months     Year     Year  
Consolidated Statements of Earnings   ended     ended     ended     ended  
(in '000s except earnings per share amounts)   December 31,     December 31,     December 31,     December 31,  
        2014     2013     2014     2013  
                                 
Interest income   $ 9,315     $ 9,375     $ 36,859     $ 37,389  
Interest expense     531       514       2,093       2,395  
  Net interest income     8,784       8,861       34,766       34,994  
(Recovery) provision for loan losses     (1,095 )     50       (1,020 )     1,385  
Noninterest income     3,522       1,137       6,589       4,183  
Noninterest expense     6,761       6,954       27,868       29,028  
  Income before income taxes     6,640       2,994       14,507       8,764  
Provision for income taxes     (2,517 )     (995 )     (5,098 )     (1,325 )
  Net earnings     4,123       1,999       9,409       7,439  
  Dividends and discount accretion on preferred stock    
-
     
(14
)    
170
     
567
 
  Net earnings available to                                
    common shareholders   $ 4,123     $ 2,013     $ 9,239     $ 6,872  
                                 
                                 
Basic earnings per share   $ 0.97     $ 0.48     $ 2.18     $ 1.66  
Diluted earnings per share   $ 0.94     $ 0.47     $ 2.12     $ 1.63  
                                 
Average assets   $ 914,250     $ 912,819     $ 901,533     $ 903,825  
Average equity   $ 94,500     $ 93,679     $ 90,938     $ 93,166  
Return on average assets, annualized     1.80 %     0.88 %     1.02 %     0.76 %
Return on average equity, annualized     17.45 %     8.60 %     10.16 %     7.38 %
Efficiency ratio     55 %     70 %     67 %     74 %
Net interest margin (taxable equivalent)     4.17 %     4.24 %     4.14 %     4.31 %
Average shares outstanding     4,256       4,163       4,232       4,132  
Average diluted shares outstanding     4,389       4,292       4,367       4,225  
                                 
                                 
         
         
Financial Highlights: Fourth Quarter, 2014   As of   As of
Consolidated Balance Sheets   December 31,   December 31,
(in '000s)   2014   2013
             
  Assets:            
Cash and due from banks   $ 14,978   $ 14,007
Interest-bearing time deposits with            
other financial institutions     2,784     5,543
Securities available for sale, at fair value     264,881     263,988
Loans, net     583,715     552,343
Premises, equipment and leasehold improvements, net    
10,951
   
12,512
Bank owned life insurance     12,510     12,151
Other equity securities     5,769     5,300
Accrued interest receivable     3,725     3,808
Other real estate owned, net     763     5,318
Goodwill     1,841     1,841
Prepaid expenses     1,045     701
Other assets     14,202     14,418
  Total assets   $ 917,164   $ 891,930
             
  Liabilities and stockholders' equity:            
Deposits:            
  Demand and NOW   $ 292,359   $ 279,269
  Savings and money market     394,676     370,194
  Time     105,159     124,152
    Total deposits     792,194     773,615
Federal Home Loan Bank advances     9,000     15,000
Note payable     5,550     -
Accrued expenses and other liabilities     13,332     9,066
    Total liabilities     820,076     797,681
Stockholders' equity     97,088     94,249
  Total liabilities and stockholders' equity   $ 917,164   $ 891,930
             
Other Financial Information            
Allowance for loan losses   $ 9,700   $ 9,879
Nonperforming assets   $ 5,906   $ 12,669
Total gross loans   $ 593,415   $ 562,222

"During the fourth quarter, the Bank's taxable equivalent net interest margin dropped 3 basis points to 4.17% for the quarter. The Bank continues to build the loan portfolio at pricing that is prudent and underwriting standards that are conservative. The Bank benefitted from a significant increase in non-interest income during the quarter, driven by two significant transactions; the receipt of a $500,000 termination fee and the sale of our S. Airport Blvd. branch building. The termination fee was paid to the Bank by Valley Community Bank after Valley Community Bank terminated our definitive purchase agreement and signed a new definitive agreement to be purchased by Bay Commercial Bank. The S. Airport Blvd. branch was closed and ceased it's branch operations on September 30, 2013. During the fourth quarter of 2014, the building was sold in an all cash transaction that resulted in a pretax gain of approximately $2.1 million. Non-interest expenses declined 2.8% during the fourth quarter due primarily to reductions in salary and benefits costs. Management has worked with the Board of Directors to keep salary and benefit costs as low as is reasonably possible. Capital ratios continued to increase during the quarter, with the Bank finishing the year with a Tier 1 leverage capital ratio of 10.79%, a Tier 1 risk-based capital ratio of 13.88% and total risk-based capital of 15.13%", continued 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

    www.fnbnorcal.com