SOURCE: FNB Bancorp

FNB Bancorp

October 24, 2016 17:00 ET

First National Bank of Northern California Reports Third Quarter 2016 Earnings of $0.52 Per Diluted Share

SOUTH SAN FRANCISCO, CA--(Marketwired - Oct 24, 2016) - 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 third quarter of 2016 of $2,444,000 or $0.52 per diluted share, compared to net earnings available to common stockholders of $2,239,000 or $0.48 per diluted share for the third quarter of 2015. 

The third 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 third quarter of 2016, our net interest income was $10.3 million, a decrease of $133,000 from the second quarter of 2016. This decrease was caused by a drop in yield that was partially offset by an increase in average interest earning assets.

"During the third quarter of 2016, the Company was able to grow our total assets by $29 million. This growth included an increase in gross loans of $16 million and an increase in available for sale investment securities of $16 million. The Company also experienced a $16 million increase in our demand deposit balances. Overall, the deposit portfolio declined by $4 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 $30 million in additional Federal Home Loan Bank advances from existing credit facilities during the quarter. The current low rate environment has put stress on our net interest margin, but we have found solid opportunities to expand our interest earning assets. Our net interest margin declined during the third quarter of 2016 by 10 basis points, due primarily to higher yielding loan payoffs that were partially reinvested into new loans at lower yields. We remain "well capitalized" by regulatory definition and our earnings are sufficient to support our growth and pay out quarterly cash dividends. We take pride in our accomplishments, and we make every effort possible to listen to our customers and provide them with the products they want delivered with customer service levels that exceed their expectations", stated CEO Tom McGraw. 

"Our total non-accrual loan balances decreased by $1.3 million during the third quarter. The decrease in non-accrual loans was not related to any changes in systemic problems identified within any segments or loan types within our loan portfolio but was isolated to improved individual customer relationships that were adequately collateralized. We continue to utilize a conservative underwriting approach to loan origination and we endeavor to cultivate new and existing deposit and loan relationships. There was no third quarter provision for loan losses and our allowance for loan loss was considered sufficient to absorb potential losses within our loan portfolio as of September 30, 2016", continued Tom McGraw.

         
CONSOLIDATED BALANCE SHEETS   (Unaudited)
(Dollars in thousands)   As of
    September 30,
    2016   2015
ASSETS            
  Cash and due from banks   $ 17,342   $ 40,282
  Interest-bearing time deposits with financial institutions     204     1,246
  Securities available for sale, at fair value     358,877     315,560
  Other equity securities     7,206     6,748
  Loans, net of deferred loan fees and allowance for loan losses     741,407     696,888
  Bank premises, equipment and leasehold improvements, net     9,918     10,326
  Bank owned life insurance     16,145     15,742
  Accrued interest receivable     4,544     4,326
  Other real estate owned     1,346     838
  Goodwill     4,580     4,580
  Prepaid expenses     670     877
  Other assets     15,309     14,044
    TOTAL ASSETS   $ 1,177,548   $ 1,111,457
               
LIABILITIES            
  Deposits:            
    Demand, noninterest bearing   $ 285,767   $ 262,206
    Demand, interest bearing     110,147     84,682
    Savings and money market     491,047     512,534
    Time     116,496     129,943
      Total Deposits     1,003,457     989,365
  Federal Home Loan Bank advances     37,000     -
  Note payable     4,500     5,100
  Accrued expenses and other liabilities     18,847     13,302
      Total Liabilities     1,063,804     1,007,767
STOCKHOLDERS' EQUITY            
  Common stock, no par value:     76,065     67,852
  Retained Earnings     33,123     33,046
  Accumulated other comprehensive earnings, net of tax     4,556     2,792
    Total Stockholders' Equity     113,744     103,690
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,177,548   $ 1,111,457
             
             
                     
CONSOLIDATED STATEMENTS OF EARNINGS   (Unaudited)   (Unaudited)  
(Amounts in thousands, except per share amounts)   Three Months Ended   Nine Months Ended  
    September 30,   September 30,  
    2016   2015   2016     2015  
INTEREST INCOME                            
  Interest and fees on loans   $ 9,301   $ 8,309   $ 28,735     $ 23,874  
  Interest on dividends and securities     1,815     1,575     5,231       4,351  
  Interest on deposits with other financial institutions     1     9     3       36  
    Total interest income     11,117     9,893     33,969       28,261  
                               
INTEREST EXPENSE                            
  Deposits     657     635     2,149       1,625  
  Federal Home Loan Bank advances     10     1     19       2  
  Interest on note payable     54     57     167       173  
    Total interest expense     721     693     2,335       1,800  
NET INTEREST INCOME     10,396     9,200     31,634       26,461  
  Provision for loan losses     -     75     150       225  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     10,396     9,125     31,484       26,236  
NONINTEREST INCOME                            
  Service charges     623     618     1,862       1,854  
  Net gain on sale of available-for-sale securities     140     29     381       250  
  Earnings on bank owned life insurance     94     90     299       261  
  Other income     250     287     764       1,002  
    Total Noninterest Income     1,107     1,024     3,306       3,367  
NONINTEREST EXPENSES                            
  Salaries and employee benefits     4,821     4,100     14,635       12,513  
  Occupancy expense     645     592     1,893       1,906  
  Equipment expense     445     718     1,317       1,533  
  Professional fees     298     334     979       1,075  
  FDIC assessment     150     150     450       450  
  Telephone, postage, supplies     300     237     901       782  
  Advertising expense     104     112     404       381  
  Data processing expense     147     659     479       940  
  Low income housing expense     71     70     213       212  
  Surety insurance     88     122     262       298  
  Director fees     72     72     216       216  
  Other real estate owned expense (recovery), net     -     -     (10 )     (6 )
  Other expenses     372     313     1,210       911  
    Total Noninterest Expense     7,513     7,479     22,949       21,211  
EARNINGS BEFORE PROVISION FOR INCOME TAXES     3,990     2,670     11,841       8,392  
  Provision for income taxes     1,546     431     4,382       2,283  
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS   $ 2,444   $ 2,239   $ 7,459     $ 6,109  
                               
                               
Per Share Data:                            
  Basic earnings per share available to common stockholders   $ 0.53   $ 0.49   $ 1.63     $ 1.36  
  Diluted earnings per share available to common stockholders   $ 0.52   $ 0.48   $ 1.59     $ 1.32  
  Cash dividends declared   $ 738   $ 646   $ 2,152     $ 1,760  
  Average shares outstanding     4,582     4,524     4,568       4,508  
  Average diluted shares outstanding     4,687     4,643     4,686       4,635  
  Shares oustanding as of the end of period     4,616     4,532     4,616       4,532  
                             
                             
                         
FINANCIAL HIGHLIGHTS                        
(Dollars in thousands)                        
    (Unaudited)     (Unaudited)  
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2016     2015     2016     2015  
                                 
AVERAGE BALANCES:                                
  Total Assets   $ 1,159,129     $ 1,040,049     $ 1,153,889     $ 971,294  
  Total Loans     740,218       624,123       741,180       601,098  
  Total Earning Assets     1,092,060       933,292       1,081,448       884,986  
  Total Deposits     1,014,541       921,615       1,017,172       853,753  
  Total Stockholder's Equity     112,448       100,801       109,211       99,556  
                                 
SELECTED PERFORMANCE DATA                                
  Annualized return on average assets     0.84 %     0.86 %     1.29 %     1.26 %
  Annualized return on average equity     8.69 %     8.88 %     13.66 %     12.27 %
  Net interest margin (taxable equivalent)     3.88 %     4.00 %     4.00 %     4.09 %
  Average loans as a percent of average deposits     72.96 %     67.72 %     72.87 %     70.41 %
  Average total stockholders' equity as a % of average total assets     9.70 %     9.69 %     9.46 %     10.25 %
  Annualized common dividend payout ratio     30.20 %     28.85 %     28.85 %     28.81 %
                                 
                               
NON-PERFORMING ASSETS                     (Extracted from        
(Dollars In Thousands)                     audited annual        
    (Unaudited)     (Unaudited)     (Unaudited)     financial statements)     (Unaudited)  
                            As of  
    September 30,     June 30,     March 31,     December 31,     September 30,  
    2016     2016     2016     2015     2015  
Non-accrual loans   $ 6,903     $ 8,182     $ 6,882     $ 7,915     $ 5,192  
Other real estate owned     1,346       1,247       1,055       1,026       838  
  Total non-performing assets     8,249       9,429       7,937       8,941       6,030  
                                         
                                         
Loan loss reserve   $ 10,092     $ 10,038     $ 9,943     $ 9,970     $ 9,940  
Non-accrual loans/Gross loans     0.92 %     1.11 %     0.92 %     1.08 %     0.73 %
Loan loss reserves/Gross loans     1.34 %     1.36 %     1.33 %     1.36 %     1.40 %
                                         
                     
                     
CONSOLIDATED BALANCE SHEETS               (Extracted from    
(Dollars in thousands)               audited annual    
    (Unaudited)   (Unaudited)   (Unaudited)   financial statements)   (Unaudited)
                    As of
    September 30,   June 30,   March 31,   December 31,   September 30,
    2016   2016   2016   2015   2015
ASSETS                              
  Cash and due from banks   $ 17,342   $ 20,564   $ 37,737   $ 12,314   $ 40,282
  Interest-bearing time deposits with financial institutions     204     205     205     205     1,246
  Securities available for sale, at fair value     358,877     342,420     329,396     329,207     315,560
  Other equity securities     7,206     7,206     6,756     6,748     6,748
  Loans, net of deferred loan fees and allowance for loan losses     741,407     725,471     733,991     722,747     696,888
  Bank premises, equipment and leasehold improvements, net     9,918     10,114     10,320     10,202     10,326
  Bank owned life insurance     16,145     16,050     15,946     15,845     15,742
  Accrued interest receivable     4,544     4,547     4,603     4,511     4,326
  Other real estate owned     1,346     1,247     1,055     1,026     838
  Goodwill     4,580     4,580     4,580     4,580     4,580
  Prepaid expenses     670     783     945     997     877
  Other assets     15,309     15,393     15,444     15,967     14,044
    TOTAL ASSETS   $ 1,177,548   $ 1,148,580   $ 1,160,978   $ 1,124,349   $ 1,111,457
                                 
LIABILITIES                              
  Deposits:                              
    Demand, noninterest bearing   $ 285,767   $ 267,593   $ 265,947   $ 263,822   $ 262,206
    Demand, interest bearing     110,147     112,591     113,337     102,304     84,682
    Savings and money market     491,047     508,605     526,557     491,633     512,534
    Time     116,496     118,700     124,410     125,430     129,943
      Total Deposits     1,003,457     1,007,489     1,030,251     983,189     989,365
  Federal Home Loan Bank advances     37,000     7,000     -     17,000     -
  Note payable     4,500     4,650     4,800     4,950     5,100
  Accrued expenses and other liabilities     18,847     17,026     17,230     15,048     13,302
      Total Liabilities     1,063,804     1,036,165     1,052,281     1,020,187     1,007,767
STOCKHOLDERS' EQUITY                              
  Common stock, no par value:     76,065     75,944     75,240     74,805     67,852
  Retained Earnings     33,123     31,424     29,666     27,816     33,046
  Accumulated other comprehensive earnings, net of tax     4,556     5,047     3,791     1,541     2,792
      Total Stockholders' Equity     113,744     112,415     108,697     104,162     103,690
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,177,548   $ 1,148,580   $ 1,160,978   $ 1,124,349   $ 1,111,457
                               
                               
                               
CONSOLIDATED STATEMENTS OF INCOME   (Unaudited)  
(Amounts in thousands, except per share amounts)   Three Months Ended  
    September 30,     June 30,     March 31,     December 31,     September 30,  
    2016     2016     2016     2015     2015  
INTEREST INCOME                                        
  Interest and fees on loans   $ 9,301     $ 9,563     $ 9,871     $ 9,361     $ 8,309  
  Interest on dividends and securities     1,815       1,731       1,685       1,657       1,575  
  Interest on deposits with other financial institutions     1       1       1       3       9  
    Total interest income     11,117       11,295       11,557       11,021       9,893  
                                         
INTEREST EXPENSE                                        
  Deposits     657       709       783       734       635  
  Federal Home Loan Bank advances     10       1       8       7       1  
  Interest on note payable     54       56       57       56       57  
    Total interest expense     721       766       848       797       693  
NET INTEREST INCOME     10,396       10,529       10,709       10,224       9,200  
  Provision (recovery) for loan losses     -       75       75       (530 )     75  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     10,396       10,454       10,634       10,754       9,125  
NONINTEREST INCOME                                        
  Service charges     623       618       621       647       618  
  Net gain on sale of available-for-sale securities     140       57       184       89       29  
  Earnings on bank owned life insurance     94       105       100       103       90  
  Other income     250       277       237       290       287  
    Total Noninterest Income     1,107       1,057       1,142       1,129       1,024  
NONINTEREST EXPENSES                                        
  Salaries and employee benefits     4,821       4,876       4,938       6,010       4,100  
  Occupancy expense     645       617       631       611       592  
  Equipment expense     445       438       434       393       718  
  Professional fees     298       294       387       396       334  
  FDIC assessment     150       150       150       150       150  
  Telephone, postage, supplies     300       306       295       292       237  
  Advertising expense     104       183       117       119       112  
  Data processing expense     147       140       192       136       659  
  Low income housing expense     71       71       71       71       70  
  Surety insurance     88       87       87       83       122  
  Director fees     72       72       72       72       72  
  Other real estate owned expense (recovery), net     -       -       (10 )     10       -  
  Other expenses     372       415       423       371       313  
    Total Noninterest Expense     7,513       7,649       7,787       8,714       7,479  
EARNINGS BEFORE PROVISION FOR INCOME TAXES     3,990       3,862       3,989       3,169       2,670  
  Provision for income taxes     1,546       1,414       1,422       1,081       431  
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS   $ 2,444     $ 2,448     $ 2,567     $ 2,088     $ 2,239  
                                         
                                         
          (Unaudited)        
          Three Months Ended        
(Amounts in thousands, except per share   September 30,     June 30,     March 31,     December 31,     September 30,  
amounts and percentages)   2016     2016     2016     2015     2015  
                                         
Per Share Data:                                        
Basic earnings per share available to common stockholders   $ 0.53     $ 0.53     $ 0.56     $ 0.47     $ 0.49  
Diluted earnings per share available to common stockholders   $ 0.52     $ 0.52     $ 0.55     $ 0.45     $ 0.48  
Cash dividends declared   $ 738     $ 686     $ 683     $ 680     $ 646  
Average shares outstanding     4,612       4,582       4,550       4,487       4,524  
Average diluted shares outstanding     4,717       4,695       4,687       4,623       4,643  
Shares outstanding as of end of period     4,616       4,607       4,566       4,542       4,316  
                                         
SELECTED PERFORMANCE DATA                                        
Annualized return on average assets     0.84 %     0.85 %     0.90 %     0.91 %     0.86 %
Annualized return on average equity     8.69 %     8.98 %     9.67 %     8.51 %     8.88 %
Net interest margin (taxable equivalent)     3.88 %     3.96 %     4.14 %     4.17 %     4.00 %
Average loans as a percent of average deposits     72.96 %     72.22 %     73.43 %     71.11 %     67.72 %
Average total stockholders' equity as a % of average total assets     9.70 %     9.43 %     9.26 %     10.68 %     9.69 %
Annualized common dividend payout ratio     30.20 %     28.02 %     26.61 %     32.57 %     28.85 %
                                         
                                         
                                         
                      (Extracted from        
LOANS                     audited annual     (Unaudited)  
(Dollars in thousands)   (Unaudited)     (Unaudited)     (Unaudited)     financial statements)     As of  
                               
    September 30,     June 30,     March 31,     December 31,     September 30,  
    2016     2016     2016     2015     2015  
Real Estate Loans:                                        
Construction   $ 38,162     $ 29,251     $ 42,465     $ 44,816     $ 35,868  
Commercial     404,841       398,290       411,999       399,993       394,090  
Multi family     83,946       82,637       59,993       63,597       63,928  
Residential     173,476       174,084       173,437       171,964       172,280  
Commercial & industrial loans     50,967       51,366       55,694       52,033       39,843  
Consumer loans     1,630       1,311       1,675       1,574       1,497  
Gross Loans     753,022       736,939       745,263       733,977       707,506  
Net deferred loan fees     (1,523 )     (1,430 )     (1,329 )     (1,260 )     (678 )
Allowance for loan losses     (10,092 )     (10,038 )     (9,943 )     (9,970 )     (9,940 )
NET LOANS   $ 741,407     $ 725,471     $ 733,991     $ 722,747     $ 696,888  
                                         

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.

Website: www.fnbnorcal.com

Contact Information

  • Contacts:
    Tom McGraw
    Chief Executive Officer
    (650) 875-4864

    Dave Curtis
    Chief Financial Officer
    (650) 875-4862