SOURCE: FNB Bancorp

FNB Bancorp

July 27, 2016 17:00 ET

First National Bank of Northern California Reports Second Quarter 2016 Earnings of $0.52 per Diluted Share

SOUTH SAN FRANCISCO, CA--(Marketwired - Jul 27, 2016) - FNB Bancorp (OTCBB: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common shareholders for the second quarter of 2016 of $2,448,000 or $0.52 per diluted share, compared to net earnings available to common shareholders of $2,071,000 or $0.45 per diluted share for the second quarter of 2015.

The second quarter of 2016 operating results, when compared to the same period a year ago, were positively affected by the completion of the America California Bank ("ACB") acquisition that occurred in September 2015. The ACB acquisition provided an opportunity for the Company to increase our interest earning assets and interest bearing liabilities in a cost effective manner. During the second quarter of 2016, our net interest income was $10.5 million, a decrease of $180,000 from the first quarter of 2016. This decrease was caused by a decline in average earning assets outstanding of $6.7 million during the quarter, and a drop in yield of 18 basis points.

"During the second quarter of 2016, the Company was able to control operational expenses that helped to offset the negative affect of declines in total assets at June 30, 2016 as compared to March 31, 2016. The Company experienced declines in both our loan and deposit totals during the quarter, and these portfolio reductions serve as evidence of the difficulty of holding our relatively high net interest margin while at the same time striving to grow our balance sheet in a low interest rate environment. Net interest margins declined during the second quarter of 2016, due primarily to higher yielding loan payoffs that were partially reinvested into new loans at lower yields, lower yielding investment securities and partially used to maintain liquidity. During the second quarter of 2016, we were able to increase our noninterest bearing DDA deposit balances by $1.6 million. Management understands the values of our core deposit base and we make every effort to develop and grow our core deposit banking relationships," stated CEO Tom McGraw.

"During the second quarter of 2016, our non-accrual loans increased above levels experienced at year-end. The increase in non-accrual loans was not related to any systemic problems identified within any segments or loan types within our loan portfolio but was isolated to a few individual customer relationships. The Bank has worked hard to adhere to prudent underwriting standards as we continue to search for quality deposit and loan relationships. The second quarter provision for loan losses was $75,000. Management believes the level of reserves are sufficient to absorb expected losses inherent in our loan portfolio at June 30, 2016," continued Tom McGraw.

     
CONSOLIDATED BALANCE SHEETS   (Unaudited)
(Dollars in thousands)   As of
    June 30,
    2016   2015
ASSETS            
  Cash and due from banks   $ 20,564   $ 91,662
  Interest-bearing time deposits with financial institutions     205     2,138
  Securities available for sale, at fair value     342,420     295,171
  Other equity securities     7,206     6,069
  Loans, net of deferred loan fees and allowance for loan losses     725,471     571,665
  Bank premises, equipment and leasehold improvements, net     10,114     10,527
  Bank owned life insurance     16,050     12,681
  Accrued interest receivable     4,547     3,909
  Other real estate owned     1,247     806
  Goodwill     4,580     1,841
  Prepaid expenses     783     922
  Other assets     15,393     12,437
    TOTAL ASSETS   $ 1,148,580   $ 1,009,828
             
LIABILITIES            
  Deposits:            
    Demand, noninterest bearing   $ 267,593   $ 249,420
    Demand, interest bearing     112,591     101,693
    Savings and money market     508,605     437,092
    Time     118,700     104,935
      Total Deposits     1,007,489     893,140
  Federal Home Loan Bank advances     7,000     -
  Note payable     4,650     5,250
  Accrued expenses and other liabilities     17,026     11,001
      Total Liabilities     1,036,165     909,391
STOCKHOLDERS' EQUITY            
  Common stock, no par value:     75,944     67,597
  Retained Earnings     31,424     31,452
  Accumulated other comprehensive earnings, net of tax     5,047     1,388
    Total Stockholders' Equity     112,415     100,437
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,148,580   $ 1,009,828
             
                       
CONSOLIDATED STATEMENTS OF EARNINGS   (Unaudited)     (Unaudited)  
(Amounts in thousands, except per share amounts)   Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2016   2015     2016     2015  
INTEREST INCOME                              
  Interest and fees on loans   $ 9,563   $ 7,855     $ 19,434     $ 15,565  
  Interest on dividends and securities     1,731     1,432       3,416       2,776  
  Interest on deposits with other financial institutions     1     13       2       27  
    Total interest income     11,295     9,300       22,852       18,368  
                               
INTEREST EXPENSE                              
  Deposits     709     538       1,492       992  
  Federal Home Loan Bank advances     1     -       9       1  
  Interest on note payable     56     57       113       116  
    Total interest expense     766     595       1,614       1,109  
NET INTEREST INCOME     10,529     8,705       21,238       17,259  
  Provision for loan losses     75     75       150       150  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     10,454     8,630       21,088       17,109  
NONINTEREST INCOME                              
  Service charges     618     627       1,239       1,238  
  Net gain on sale of available-for-sale securities     57     152       241       221  
  Earnings on bank owned life insurance     105     87       205       171  
  Other income     277     401       514       715  
    Total Noninterest Income     1,057     1,267       2,199       2,345  
NONINTEREST EXPENSES                              
  Salaries and employee benefits     4,876     4,111       9,814       8,413  
  Occupancy expense     617     646       1,248       1,314  
  Equipment expense     438     410       872       815  
  Professional fees     294     354       681       741  
  FDIC assessment     150     150       300       300  
  Telephone, postage, supplies     306     256       601       545  
  Advertising expense     183     170       300       269  
  Data processing expense     140     147       332       281  
  Low income housing expense     71     71       142       142  
  Surety insurance     87     88       174       176  
  Director fees     72     72       144       144  
  Other real estate owned expense recovery, net     -     (6 )     (10 )     (6 )
  Other expenses     415     320       838       598  
    Total Noninterest Expense     7,649     6,789       15,436       13,732  
EARNINGS BEFORE PROVISION FOR INCOME TAXES     3,862     3,108       7,851       5,722  
  Provision for income taxes     1,414     1,037       2,836       1,852  
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS   $ 2,448   $ 2,071     $ 5,015     $ 3,870  
                               
                               
Per Share Data:                              
  Basic earnings per share available to common stockholders   $ 0.53   $ 0.46     $ 1.10     $ 0.86  
  Diluted earnings per share available to common stockholders   $ 0.52   $ 0.45     $ 1.07     $ 0.84  
  Cash dividends declared   $ 686   $ 559     $ 1,369     $ 1,114  
  Average shares outstanding     4,582     4,511       4,568       4,499  
  Average diluted shares outstanding     4,695     4,636       4,693       4,629  
                               
                         
FINANCIAL HIGHLIGHTS                        
(Dollars in thousands)                        
    (Unaudited)     (Unaudited)  
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2016     2015     2016     2015  
                                 
AVERAGE BALANCES:                                
  Total Assets   $ 1,156,072     $ 953,193     $ 1,151,283     $ 936,347  
  Total Loans     740,097       590,872       741,689       589,396  
  Total Earning Assets     1,079,470       871,816       1,076,130       860,434  
  Total Deposits     1,024,736       836,610       1,018,502       819,260  
  Total Stockholder's Equity     109,064       99,701       107,642       98,924  
                                 
SELECTED PERFORMANCE DATA                                
  Annualized return on average assets     0.85 %     0.87 %     0.87 %     0.83 %
  Annualized return on average equity     8.98 %     8.31 %     9.32 %     7.82 %
  Net interest margin (taxable equivalent)     3.96 %     4.14 %     4.05 %     4.13 %
  Average loans as a percent of average deposits     72.22 %     70.63 %     72.82 %     71.94 %
  Average total stockholders' equity as a % of average total assets     9.43 %     10.46 %     9.35 %     10.56 %
  Annualized common dividend payout ratio     28.02 %     26.99 %     27.30 %     28.79 %
                                 
                       
NON-PERFORMING ASSETS           (Extracted from          
(Dollars In Thousands)           audited annual          
    (Unaudited)   (Unaudited)   financial statements)   (Unaudited)   (Unaudited)  
                As of      
 
 
 
 
June 30,
2016
 
 
March 31,
2016
 
 
December 31, 2015  
 
September 30, 2015  
 
June 30,
2015
 
 
Non-accrual loans   $ 8,182   $ 6,882   $ 7,915   $ 5,192   $ 6,020  
Other real estate owned     1,247     1,055     1,026     838     806  
  Total non-performing assets     9,429     7,937     8,941     6,030     6,826  
                                 
                                 
Loan loss reserve   $ 10,038   $ 9,943   $ 9,970   $ 9,940   $ 9,836  
Non-accrual loans/Gross loans     1.11 %   0.92 %   1.08 %   0.73 %   1.03 %
Loan loss reserves/Gross loans     1.36 %   1.33 %   1.36 %   1.40 %   1.69 %
                                 
                                 
CONSOLIDATED BALANCE SHEETS           (Extracted from          
(Dollars in thousands)           audited annual          
    (Unaudited)   (Unaudited)   financial statements)   (Unaudited)   (Unaudited)  
                As of      
 
 
 
 
June 30,
2016
 
 
March 31,
2016
 
 
December 31, 2015  
 
September 30, 2015  
 
June 30,
2015
 
 
ASSETS                                
  Cash and due from banks   $ 20,564   $ 37,737   $ 12,314   $ 40,282   $ 91,662  
  Interest-bearing time deposits with financial institutions     205     205     205     1,246     2,138  
  Securities available for sale, at fair value     342,420     329,396     329,207     315,560     295,171  
  Other equity securities     7,206     6,756     6,748     6,748     6,069  
  Loans, net of deferred loan fees and allowance for loan losses     725,471     733,991     722,747     696,888     571,665  
  Bank premises, equipment and leasehold improvements, net     10,114     10,320     10,202     10,326     10,527  
  Bank owned life insurance     16,050     15,946     15,845     15,742     12,681  
  Accrued interest receivable     4,547     4,603     4,511     4,326     3,909  
  Other real estate owned     1,247     1,055     1,026     838     806  
  Goodwill     4,580     4,580     4,580     4,580     1,841  
  Prepaid expenses     783     945     997     877     922  
  Other assets     15,393     15,444     15,967     14,044     12,437  
    TOTAL ASSETS   $ 1,148,580   $ 1,160,978   $ 1,124,349   $ 1,111,457   $ 1,009,828  
                                 
LIABILITIES                                
  Deposits:                                
    Demand, noninterest bearing   $ 267,593   $ 265,947   $ 263,822   $ 262,206   $ 249,420  
    Demand, interest bearing     112,591     113,337     102,304     84,682     101,693  
    Savings and money market     508,605     526,557     491,633     512,534     437,092  
    Time     118,700     124,410     125,430     129,943     104,935  
      Total Deposits     1,007,489     1,030,251     983,189     989,365     893,140  
  Federal Home Loan Bank advances     7,000     -     17,000     -     -  
  Note payable     4,650     4,800     4,950     5,100     5,250  
  Accrued expenses and other liabilities     17,026     17,230     15,048     13,302     11,001  
      Total Liabilities     1,036,165     1,052,281     1,020,187     1,007,767     909,391  
STOCKHOLDERS' EQUITY                                
  Common stock, no par value:     75,944     75,240     74,805     67,852     67,597  
  Retained Earnings     31,424     29,666     27,816     33,046     31,452  
  Accumulated other comprehensive earnings, net of tax     5,047     3,791     1,541     2,792     1,388  
      Total Stockholders' Equity     112,415     108,697     104,162     103,690     100,437  
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,148,580   $ 1,160,978   $ 1,124,349   $ 1,111,457   $ 1,009,828  
                                 
                       
CONSOLIDATED STATEMENTS OF INCOME           (Unaudited)          
(Amounts in thousands, except per share amounts)       Three Months Ended      
 
 
 
 
June 30,
2016
 
 
March 31,
2016
 
 
December 31, 2015  
 
September 30, 2015  
 
June 30,
2015
 
 
INTEREST INCOME                                
  Interest and fees on loans   $ 9,563   $ 9,871   $ 9,361   $ 8,309   $ 7,855  
  Interest on dividends and securities     1,731     1,685     1,657     1,575     1,432  
  Interest on deposits with other financial institutions     1     1     3     9     13  
    Total interest income     11,295     11,557     11,021     9,893     9,300  
                                 
INTEREST EXPENSE                                
  Deposits     709     783     734     635     538  
  Federal Home Loan Bank advances     1     8     7     1     -  
  Interest on note payable     56     57     56     57     57  
    Total interest expense     766     848     797     693     595  
NET INTEREST INCOME     10,529     10,709     10,224     9,200     8,705  
  Provision for loan losses     75     75     (530 )   75     75  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     10,454     10,634     10,754     9,125     8,630  
NONINTEREST INCOME                                
  Service charges     618     621     647     618     627  
  Net gain on sale of available-for-sale securities     57     184     89     29     152  
  Earnings on bank owned life insurance     105     100     103     90     87  
  Other income     277     237     290     287     401  
    Total Noninterest Income     1,057     1,142     1,129     1,024     1,267  
NONINTEREST EXPENSES                                
  Salaries and employee benefits     4,876     4,938     6,010     4,100     4,111  
  Occupancy expense     617     631     611     592     646  
  Equipment expense     438     434     393     718     410  
  Professional fees     294     387     396     334     354  
  FDIC assessment     150     150     150     150     150  
  Telephone, postage, supplies     306     295     292     237     256  
  Advertising expense     183     117     119     112     170  
  Data processing expense     140     192     136     659     147  
  Low income housing expense     71     71     71     70     71  
  Surety insurance     87     87     83     122     88  
  Director fees     72     72     72     72     72  
  Other real estate owned expense recovery, net     -     (10 )   10     -     (6 )
  Other expenses     415     423     371     313     320  
    Total Noninterest Expense     7,649     7,787     8,714     7,479     6,789  
EARNINGS BEFORE PROVISION FOR INCOME TAXES     3,862     3,989     3,169     2,670     3,108  
  Provision for income taxes     1,414     1,422     1,081     431     1,037  
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS   $ 2,448   $ 2,567   $ 2,088   $ 2,239   $ 2,071  
                                 
                                 
            (Unaudited)          
        Three Months Ended      
 
 
 
 
June 30,
2016
 
 
March 31,
2016
 
 
December 31,
2015
 
 
September 30,
2015
 
 
June 30,
2015
 
 
Per Share Data:                                
  Basic earnings per share available to common stockholders   $ 0.53   $ 0.56   $ 0.47   $ 0.49   $ 0.46  
  Diluted earnings per share available to common stockholders   $ 0.52   $ 0.55   $ 0.45   $ 0.48   $ 0.45  
  Cash dividends declared   $ 686   $ 683   $ 680   $ 646   $ 559  
  Average shares outstanding     4,582     4,550     4,487     4,524     4,511  
  Average diluted shares outstanding     4,695     4,687     4,623     4,643     4,636  
                                 
SELECTED PERFORMANCE DATA                                
  Annualized return on average assets     0.85 %   0.90 %   0.91 %   0.86 %   0.87 %
  Annualized return on average equity     8.98 %   9.67 %   8.51 %   8.88 %   8.31 %
  Net interest margin (taxable equivalent)     3.96 %   4.14 %   4.17 %   4.00 %   4.14 %
  Average loans as a percent of average deposits     72.22 %   73.43 %   71.11 %   67.72 %   70.63 %
  Average total stockholders' equity as a % of average total assets     9.43 %   9.26 %   10.68 %   9.69 %   10.46 %
  Annualized common dividend payout ratio     28.02 %   26.61 %   32.57 %   28.85 %   26.99 %
                                 
                                 
LOANS           (Extracted from          
(Dollars in thousands)           audited annual          
    (Unaudited)   (Unaudited)   financial statements)   (Unaudited)   (Unaudited)  
                As of      
 
 
 
 
June 30,
2016
 
 
March 31,
2016
 
 
December 31,
2015
 
 
September 30,
2015
 
 
June 30,
2015
 
 
Real Estate Loans:                                
  Construction   $ 29,251   $ 42,465   $ 44,816   $ 35,868   $ 32,648  
  Commercial     398,290     411,999     399,993     394,090     330,303  
  Multi family     82,637     59,993     63,597     63,928     51,613  
  Residential     174,084     173,437     171,964     172,280     127,900  
Commercial & industrial loans     51,366     55,694     52,033     39,843     37,745  
Consumer loans     1,311     1,675     1,574     1,497     1,696  
  Gross Loans     736,939     745,263     733,977     707,506     581,905  
Net deferred loan fees     (1,430 )   (1,329 )   (1,260 )   (678 )   (404 )
Allowance for loan losses     (10,038 )   (9,943 )   (9,970 )   (9,940 )   (9,836 )
  NET LOANS   $ 725,471   $ 733,991   $ 722,747   $ 696,888   $ 571,665  
                                 

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