SOURCE: FNB Bancorp

FNB Bancorp

January 30, 2017 20:35 ET

First National Bank of Northern California Reports Fourth Quarter 2016 Earnings of $0.61 Per Diluted Share

SOUTH SAN FRANCISCO, CA--(Marketwired - Jan 30, 2017) - FNB Bancorp (OTCQB: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common stockholders for the fourth quarter of 2016 of $3,042,000 or $0.61 per diluted share, compared to net earnings available to common shareholders of $2,444,000 or $0.49 per diluted share for the third quarter of 2016, adjusted for 5% stock dividend paid in December, 2016. 

The fourth quarter of 2016 operating results, when compared to the same period a year ago, provide the first year over year comparison where the earnings subsequent to the America California Bank ("ACB") acquisition are fully reflected. During the fourth quarter of 2016, our net interest income was $10.8 million, an increase of $375,000 from the third quarter of 2016. This increase was primarily the result of an increase in the average volume of our interest earning assets.

"During the fourth quarter of 2016, the Company was able to grow our total assets by $42 million. This growth included an increase in gross loans of $41 million. The Company also experienced an $11 million increase in our demand deposit balances. Overall, the deposit portfolio increased by $16 million, due primarily to declines in interest rate sensitive money market balances. The bank was able to continue to grow our interest earning assets by obtaining $34 million in additional Federal Home Loan Bank advances from existing credit facilities during the quarter. The current low rate environment has put pressure on our net interest margin, but we have added loans and investments in order to expand our interest earning assets. Our net interest margin improved during the fourth quarter of 2016 by 1 basis point, due primarily to higher loan levels within our interest earning assets. We remain "well capitalized" by regulatory standards and our earnings are growing. We are proud of our accomplishments, which are the result of our emphasis on meeting our customers' needs and providing them with products delivered with a high level of customer service", stated CEO Tom McGraw. 

"Our total non-accrual loans balance decreased by $0.3 million during the fourth quarter. We continue to utilize a conservative underwriting approach in our loan origination process which should serve us well in the future. There was no fourth quarter provision for loan losses and our allowance for loan loss was considered by management to be sufficient, as of December 31, 2016", continued Tom McGraw.

     
CONSOLIDATED BALANCE SHEETS   (Unaudited)
(Dollars in thousands)   As of
    December 31,
    2016     2015
ASSETS              
  Cash and due from banks   $ 15,758     $ 12,314
  Interest-bearing time deposits with financial institutions     205       205
  Securities available for sale, at fair value     360,105       329,207
  Other equity securities     7,206       6,748
  Loans, net of deferred loan fees and allowance for loan losses     782,485       722,747
  Bank premises, equipment and leasehold improvements, net     9,837       10,202
  Bank owned life insurance     16,247       15,845
  Accrued interest receivable     4,942       4,511
  Other real estate owned     1,427       1,026
  Goodwill     4,580       4,580
  Prepaid expenses     856       997
  Other assets     15,746       15,967
    TOTAL ASSETS   $ 1,219,394     $ 1,124,349
                 
LIABILITIES              
  Deposits:              
    Demand, noninterest bearing   $ 296,273     $ 263,822
    Demand, interest bearing     121,086       102,304
    Savings and money market     487,763       491,633
    Time     114,384       125,430
      Total Deposits     1,019,506       983,189
  Federal Home Loan Bank advances     71,000       17,000
  Note payable     4,350       4,950
  Accrued expenses and other liabilities     14,224       15,048
      Total Liabilities     1,109,080       1,020,187
STOCKHOLDERS' EQUITY              
  Common stock, no par value:     76,433       74,805
  Retained Earnings     35,427       27,816
  Accumulated other comprehensive earnings, net of tax     (1,546 )     1,541
    Total Stockholders' Equity     110,314       104,162
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,219,394     $ 1,124,349
               
                       
CONSOLIDATED STATEMENTS OF EARNINGS   (Unaudited)     (Unaudited)  
(Amounts in thousands, except per share amounts)   Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2016   2015     2016     2015  
INTEREST INCOME                              
  Interest and fees on loans   $ 9,578   $ 9,361     $ 38,313     $ 33,235  
  Interest on dividends and securities     1,925     1,657       7,156       6,008  
  Interest on deposits with other financial institutions     7     3       44       39  
  Total interest income     11,510     11,021       45,513       39,282  
                               
INTEREST EXPENSE                              
  Deposits     631     732       2,780       2,359  
  Federal Home Loan Bank advances     48     7       67       9  
  Interest on note payable     55     56       222       229  
    Total interest expense     734     795       3,069       2,597  
NET INTEREST INCOME     10,776     10,226       42,444       36,685  
  Provision for loan losses     -     (530 )     150       (305 )
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     10,776     10,756       42,294       36,990  
NONINTEREST INCOME                              
  Service charges     599     645       2,461       2,501  
  Net gain on sale of available-for-sale securities     57     89       438       339  
  Earnings on bank owned life insurance     102     103       402       364  
  Other income     565     290       1,294       1,292  
    Total Noninterest Income     1,323     1,127       4,595       4,496  
NONINTEREST EXPENSES                              
  Salaries and employee benefits     4,839     6,010       19,474       18,523  
  Occupancy expense     635     611       2,528       2,517  
  Equipment expense     448     393       1,765       1,926  
  Professional fees     384     396       1,363       1,471  
  FDIC assessment     150     150       600       600  
  Telephone, postage, supplies     298     292       1,199       1,074  
  Advertising expense     120     119       524       500  
  Data processing expense     178     136       657       1,076  
  Low income housing expense     71     71       284       283  
  Surety insurance     85     83       347       381  
  Director fees     72     72       288       288  
  Other real estate owned expense (recovery), net     5     10       (5 )     4  
  Other expenses     458     371       1,668       1,282  
    Total Noninterest Expense     7,743     8,714       30,692       29,925  
EARNINGS BEFORE PROVISION FOR INCOME TAXES     4,356     3,169       16,197       11,561  
  Provision for income taxes     1,314     1,081       5,696       3,364  
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS   $ 3,042   $ 2,088     $ 10,501     $ 8,197  
                               
                               
Per Share Data:                              
  Basic earnings per share available to common stockholders   $ 0.63   $ 0.44     $ 2.18     $ 1.73  
  Diluted earnings per share available to common stockholders   $ 0.61   $ 0.43     $ 2.12     $ 1.68  
  Cash dividends declared   $ 739   $ 648     $ 2,847     $ 2,409  
  Average shares outstanding     4,850     4,763       4,822       4,742  
  Average diluted shares outstanding     4,974     4,904       4,945       4,876  
  Shares outstanding as of the end of period     4,853     4,769       4,853       4,769  
                               
                           
FINANCIAL HIGHLIGHTS                      
(Dollars in thousands)                      
      (Unaudited)     (Unaudited)  
      Three Months Ended     Twelve Months Ended  
      December 31,     December 31,  
      2016     2015     2016     2015  
                                 
AVERAGE BALANCES:                                
  Total Assets   $ 1,191,942     $ 1,126,582     $ 1,163,454     $ 1,010,435  
  Total Loans     763,654       715,026       746,829       629,814  
  Total Earning Assets     1,127,339       1,038,581       1,091,703       923,700  
  Total Deposits     1,018,071       999,024       1,017,398       890,369  
  Total Stockholder's Equity     111,807       103,780       109,854       100,621  
                                 
SELECTED PERFORMANCE DATA                                
  Annualized return on average assets     1.02 %     0.74 %     0.90 %     0.81 %
  Annualized return on average equity     10.88 %     8.05 %     9.56 %     8.15 %
  Net interest margin (taxable equivalent)     3.89 %     4.00 %     3.97 %     4.06 %
  Average loans as a percent of average deposits     75.01 %     71.57 %     73.41 %     70.74 %
  Average total stockholders' equity as a % of average total assets     9.38 %     9.21 %     9.44 %     9.96 %
  Annualized common dividend payout ratio     24.29 %     31.03 %     27.11 %     29.39 %
                                 
                                 
NON-PERFORMING ASSETS                     (Extracted from  
(Dollars In Thousands)                     audited annual  
  (Unaudited)   (Unaudited)     (Unaudited)     (Unaudited)     financial statements)  
  December 31,     September 30,       June 30,       March 31,       December 31,  
  2016     2016       2016       2016       2015  
Non-accrual loans $ 6,647   $ 6,903     $ 8,182     $ 6,882     $ 7,915  
Other real estate owned 1,427     1,346       1,247       1,055       1,026  
  Total non-performing assets 8,074     8,249       9,429       7,937       8,941  
                                   
                                   
Loan loss reserve $ 10,167   $ 10,092     $ 10,038     $ 9,943     $ 9,970  
Non-accrual loans/Gross loans 0.84%     0.92 %     1.11 %     0.92 %     1.08 %
Loan loss reserves/Gross loans 1.28%     1.34 %     1.36 %     1.33 %     1.36 %
                                   
                       
CONSOLIDATED BALANCE SHEETS                     (Extracted from
(Dollars in thousands)                     audited annual
    (Unaudited)     (Unaudited)   (Unaudited)   (Unaudited)   financial statements)
    December 31,     September 30,   June 30,   March 31,   December 31,
    2016     2016   2016   2016   2015
ASSETS                                
  Cash and due from banks   $ 15,758     $ 17,342   $ 20,564   $ 37,737   $ 12,314
  Interest-bearing time deposits with financial institutions     205       204     205     205     205
  Securities available for sale, at fair value     360,105       358,877     342,420     329,396     329,207
  Other equity securities     7,206       7,206     7,206     6,756     6,748
  Loans, net of deferred loan fees and allowance for loan losses     782,485       741,407     725,471     733,991     722,747
  Bank premises, equipment and leasehold improvements, net     9,837       9,918     10,114     10,320     10,202
  Bank owned life insurance     17,247       16,145     16,050     15,946     15,845
  Accrued interest receivable     4,942       4,544     4,547     4,603     4,511
  Other real estate owned     1,427       1,346     1,247     1,055     1,026
  Goodwill     4,580       4,580     4,580     4,580     4,580
  Prepaid expenses     856       670     783     945     997
  Other assets     14,746       15,309     15,393     15,444     15,967
    TOTAL ASSETS   $ 1,219,394     $ 1,177,548   $ 1,148,580   $ 1,160,978   $ 1,124,349
                                   
LIABILITIES                                
  Deposits:                                
  Demand, noninterest bearing   $ 296,273     $ 285,767   $ 267,593   $ 265,947   $ 263,822
    Demand, interest bearing     121,086       110,147     112,591     113,337     102,304
    Savings and money market     487,763       491,047     508,605     526,557     491,633
    Time     114,384       116,496     118,700     124,410     125,430
      Total Deposits     1,019,506       1,003,457     1,007,489     1,030,251     983,189
  Federal Home Loan Bank advances     71,000       37,000     7,000     -     17,000
  Note payable     4,350       4,500     4,650     4,800     4,950
  Accrued expenses and other liabilities     14,224       18,847     17,026     17,230     15,048
      Total Liabilities     1,109,080       1,063,804     1,036,165     1,052,281     1,020,187
STOCKHOLDERS' EQUITY                                
  Common stock, no par value:     76,433       76,065     75,944     75,240     74,805
  Retained Earnings     35,427       33,123     31,424     29,666     27,816
  Accumulated other comprehensive earnings, net of tax     (1,546 )     4,556     5,047     3,791     1,541
      Total Stockholders' Equity     110,314       113,744     112,415     108,697     104,162
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,219,394     $ 1,177,548   $ 1,148,580   $ 1,160,978   $ 1,124,349
                                 
                         
CONSOLIDATED STATEMENTS OF INCOME   (Unaudited)  
(Amounts in thousands, except per share amounts)   Three Months Ended  
    December 31,   September 30,   June 30,   March 31,     December 31,  
    2016   2016   2016   2016     2015  
INTEREST INCOME                                  
  Interest and fees on loans   $ 9,578   $ 9,301   $ 9,563   $ 9,871     $ 9,361  
  Interest on dividends and securities     1,925     1,815     1,731     1,685       1,657  
  Interest on deposits with other financial institutions     7     6     22     9       3  
    Total interest income     11,510     11,122     11,316     11,565       11,021  
                                     
INTEREST EXPENSE                                  
  Deposits     631     657     709     783       734  
  Federal Home Loan Bank advances     48     10     1     8       7  
  Interest on note payable     55     54     56     57       56  
    Total interest expense     734     721     766     848       797  
NET INTEREST INCOME     10,776     10,401     10,550     10,717       10,224  
  Provision (recovery) for loan losses     -     -     75     75       (530 )
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     10,776     10,401     10,475     10,642       10,754  
NONINTEREST INCOME                                  
  Service charges     599     623     618     621       647  
  Net gain on sale of available-for-sale securities     57     140     57     184       89  
  Earnings on bank owned life insurance     102     94     105     100       103  
  Other income     565     245     256     229       290  
    Total Noninterest Income     1,323     1,102     1,036     1,134       1,129  
NONINTEREST EXPENSES                                  
  Salaries and employee benefits     4,839     4,821     4,876     4,938       6,010  
  Occupancy expense     635     645     617     631       611  
  Equipment expense     448     445     438     434       393  
  Professional fees     384     298     294     387       396  
  FDIC assessment     150     150     150     150       150  
  Telephone, postage, supplies     298     300     306     295       292  
  Advertising expense     120     104     183     117       119  
  Data processing expense     178     147     140     192       136  
  Low income housing expense     71     71     71     71       71  
  Surety insurance     85     88     87     87       83  
  Director fees     72     72     72     72       72  
  Other real estate owned expense (recovery), net     5     -     -     (10 )     10  
  Other expenses     458     372     415     423       371  
    Total Noninterest Expense     7,743     7,513     7,649     7,787       8,714  
EARNINGS BEFORE PROVISION FOR INCOME TAXES     4,356     3,990     3,862     3,989       3,169  
  Provision for income taxes     1,314     1,546     1,414     1,422       1,081  
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS   $ 3,042   $ 2,444   $ 2,448   $ 2,567     $ 2,088  
                                   
                               
    (Unaudited)  
    Three Months Ended  
(Amounts in thousands, except per share   December 31,     September 30,     June 30,     March 31,     December 31,  
amounts and percentages)   2016     2016     2016     2016     2015  
                                         
Per Share Data:                                        
  Basic earnings per share available to common stockholders   $ 0.63     $ 0.50     $ 0.51     $ 0.54     $ 0.44  
  Diluted earnings per share available to common stockholders   $ 0.61     $ 0.49     $ 0.50     $ 0.52     $ 0.43  
  Cash dividends declared   $ 739     $ 738     $ 686     $ 683     $ 680  
  Average shares outstanding     4,850       4,843       4,811       4,777       4,711  
  Average diluted shares outstanding     4,974       4,953       4,930       4,921       4,854  
  Shares outstanding as of end of period     4,853       4,847       4,837       4,794       4,769  
                                           
SELECTED PERFORMANCE DATA                                        
  Annualized return on average assets     1.02 %     0.84 %     0.85 %     0.90 %     0.91 %
  Annualized return on average equity     10.88 %     8.69 %     8.98 %     9.67 %     8.51 %
  Net interest margin (taxable equivalent)     3.89 %     3.88 %     3.96 %     4.14 %     4.17 %
  Average loans as a percent of average deposits     75.01 %     72.96 %     72.22 %     73.43 %     71.11 %
  Average total stockholders' equity as a % of average total assets     9.38 %     9.70 %     9.43 %     9.26 %     10.68 %
  Annualized common dividend payout ratio     24.29 %     30.20 %     28.02 %     26.61 %     32.57 %
                                         
                                         
                                         
                            (Extracted from  
LOANS                           audited annual  
(Dollars in thousands)   (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     financial statements)  
    December 31,     September 30,     June 30,     March 31,     December 31,  
    2016     2016     2016     2016     2015  
Real Estate Loans:                                        
  Construction   $ 43,683     $ 38,162     $ 29,251     $ 42,465     $ 44,816  
  Commercial     421,222       404,841       398,290       411,999       399,993  
  Multi family     105,963       83,946       82,637       59,993       63,597  
  Residential     170,523       173,476       174,084       173,437       171,964  
Commercial & industrial loans     48,874       50,967       51,366       55,694       52,033  
Consumer loans     3,533       1,630       1,311       1,675       1,574  
  Gross Loans     793,798       753,022       736,939       745,263       733,977  
Net deferred loan fees     (1,146 )     (1,523 )     (1,430 )     (1,329 )     (1,260 )
Allowance for loan losses     (10,167 )     (10,092 )     (10,038 )     (9,943 )     (9,970 )
  NET LOANS   $ 782,485     $ 741,407     $ 725,471     $ 733,991     $ 722,747  
                                         

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