SOURCE: FNB Bancorp

FNB Bancorp

July 24, 2017 17:05 ET

FNB Bancorp Reports Second Quarter 2017 Earnings of $0.44 Per Diluted Share

SOUTH SAN FRANCISCO, CA--(Marketwired - Jul 24, 2017) - FNB Bancorp (NASDAQ: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common stockholders for the second quarter of 2017 of $3,351,000 or $0.44 per diluted share, compared to net earnings available to common shareholders of $2,448,000 or $0.33 per diluted share for the second quarter of 2016.

During the second quarter of 2017, our net interest income was $11.4 million, an increase of $882,000 from the second quarter of 2016. This increase was primarily the result of an increase in the average volume of our interest earning assets outstanding partially offset by a slight reduction in our earning rate when compared to the same period in 2016. 

"During the second quarter of 2017, the Company was able to grow our net loan portfolio by $1.3 million. Loan production was strong during the first half of the quarter, however, commercial real estate loan prepayments during June lowered our overall loan portfolio growth rate. During the quarter, our deposit balances decreased by $3 million, however, we were able to grow our non-interest bearing DDA account balances by $9 million. The growth in loans and the reduction in the overall deposit balances was funded by an increase in short term FHLB borrowings of $5 million. Net interest income was helped by the fact that the adjustable rate portion of our loan portfolio has begun to reset to higher yields, in response to increases to short term rates by the Federal Open Market Committee and increases in the short term LIBOR rates. The current low rate environment has put pressure on our net interest margin, but we have added enough interest earning assets at spreads that have allowed us to expand our net interest income at an acceptable rate. Our net interest margin was 3.93% for the second quarter and our increased earnings coupled with a flattening yield curve have allowed our capital base to increase by over $4 million during the quarter. We worked hard during the second quarter to improve our profitability while continuing to provide for our customers' needs and provide them with the products they want delivered in an efficient and effective manner," stated CEO Tom McGraw. 

"Our total non-accrual loans balance decreased by $1 million during the second quarter. This decrease was the result of management efforts to reduce the levels of our non-accrual loans. We utilize a conservative underwriting approach in our loan origination process which should serve to keep problem loans at acceptable levels as we work to prudently increase the size of our loan portfolio. There was a $140,000 recovery of provision for loan losses during the second quarter that was related to improving credit characteristics in our loan portfolio," continued Tom McGraw.

         
FNB Bancorp and Subsidiary        
CONSOLIDATED BALANCE SHEETS   (Unaudited)
(Dollar and share amounts in thousands, except earnings per share)   As of
    June 30,
    2017   2016
ASSETS            
  Cash and due from banks   $ 21,859   $ 20,564
  Interest-bearing time deposits with financial institutions     230     205
  Securities available for sale, at fair value     362,006     342,420
  Other equity securities     7,567     7,206
  Loans, net of deferred loan fees and allowance for loan losses     808,508     725,471
  Bank premises, equipment and leasehold improvements, net     9,416     10,114
  Bank owned life insurance     16,438     16,050
  Accrued interest receivable     4,945     4,547
  Other real estate owned     1,459     1,247
  Goodwill     4,580     4,580
  Prepaid expenses     621     783
  Other assets     16,032     15,393
    TOTAL ASSETS   $ 1,253,661   $ 1,148,580
             
LIABILITIES            
  Deposits:            
    Demand, noninterest bearing   $ 296,249   $ 267,593
    Demand, interest bearing     129,435     112,591
    Savings and money market     472,050     508,605
    Time     124,604     118,700
      Total Deposits     1,022,338     1,007,489
  Federal Home Loan Bank advances     91,000     7,000
  Note payable     4,050     4,650
  Accrued expenses and other liabilities     17,546     17,026
      Total Liabilities     1,134,934     1,036,165
STOCKHOLDERS' EQUITY            
  Common stock, no par value:     85,159     75,944
  Retained earnings     32,306     31,424
  Accumulated other comprehensive earnings, net of tax     1,262     5,047
    Total Stockholders' Equity     118,727     112,415
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,253,661   $ 1,148,580
                 
                 
                       
                       
FNB Bancorp and Subsidiary
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollar and share amounts in thousands, except earnings per share)
 
    (Unaudited)   (Unaudited)  
    Three Months Ended   Six Months Ended  
    June 30,   June 30,  
    2017     2016   2017     2016  
INTEREST INCOME                              
  Interest and fees on loans   $ 10,370     $ 9,563   $ 20,443     $ 19,434  
  Interest on dividends and securities     1,989       1,731     3,932       3,416  
  Interest on deposits with other financial institutions     19       22     30       31  
    Total interest income     12,378       11,316     24,405       22,881  
                               
INTEREST EXPENSE                              
  Deposits     677       709     1,313       1,492  
  Federal Home Loan Bank advances     214       1     360       9  
  Interest on note payable     55       56     108       113  
    Total interest expense     946       766     1,781       1,614  
NET INTEREST INCOME     11,432       10,550     22,624       21,267  
  (Recovery of) provision for loan losses     (140 )     75     (140 )     150  
NET INTEREST INCOME AFTER (RECOVERY OF) PROVISION FOR LOAN LOSSES     11,572       10,475     22,764       21,117  
NONINTEREST INCOME                              
  Service charges     564       618     1,161       1,239  
  Net gain on sale of available-for-sale securities     123       57     151       241  
  Earnings on bank owned life insurance     88       105     190       205  
  Other income     237       256     520       485  
    Total Noninterest Income     1,012       1,036     2,022       2,170  
NONINTEREST EXPENSES                              
  Salaries and employee benefits     4,862       4,876     9,636       9,814  
  Occupancy expense     707       617     1,358       1,248  
  Equipment expense     406       438     808       872  
  Professional fees     408       294     881       681  
  FDIC assessment     90       150     220       300  
  Telephone, postage, supplies     325       306     622       601  
  Advertising expense     107       183     215       300  
  Data processing expense     144       140     283       332  
  Low income housing expense     123       71     228       142  
  Surety insurance     89       87     173       174  
  Director fees     72       72     144       144  
  Other real estate owned expense (recovery), net     7       -     17       (10 )
  Other expenses     338       415     698       838  
    Total Noninterest Expense     7,678       7,649     15,283       15,436  
EARNINGS BEFORE PROVISION FOR INCOME TAXES     4,906       3,862     9,503       7,851  
  Provision for income taxes     1,555       1,414     3,063       2,836  
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS   $ 3,351     $ 2,448   $ 6,440     $ 5,015  
                               
                               
Per Share Data:                              
  Basic earnings per share available to common stockholders   $ 0.46     $ 0.34   $ 0.88     $ 0.70  
  Diluted earnings per share available to common stockholders   $ 0.44     $ 0.33   $ 0.85     $ 0.68  
  Cash dividends declared   $ 882     $ 686   $ 1,661     $ 1,369  
  Average shares outstanding     7,342       7,216     7,329       7,194  
  Average diluted shares outstanding     7,585       7,393     7,559       7,390  
  Shares outstanding as of the end of period     7,362       7,255     7,362       7,255  
                               
                               
                         
                         
FNB Bancorp and Subsidiary
FINANCIAL HIGHLIGHTS
(Dollar and share amounts in thousands, except earnings per share)
 
    (Unaudited)     (Unaudited)  
    Three Months Ended     Six Months Ended  
    March 31,     June 30,  
    2017     2016     2017     2016  
                                 
AVERAGE BALANCES:                                
  Total Assets   $ 1,256,608     $ 1,156,072     $ 1,244,943     $ 1,151,283  
  Total Loans     830,318       740,097       819,030       741,689  
  Total Earning Assets     1,191,820       1,091,162       1,180,119       1,086,925  
  Total Deposits     1,022,838       1,024,736       1,017,952       1,018,502  
  Total Stockholder's Equity     115,720       109,064       113,551       107,642  
                                 
SELECTED PERFORMANCE DATA                                
  Annualized return on average assets     1.07 %     0.85 %     0.52 %     0.87 %
  Annualized return on average equity     11.58 %     8.98 %     5.67 %     9.32 %
  Net interest margin (taxable equivalent)     3.93 %     3.98 %     3.95 %     4.03 %
  Average loans as a percent of average deposits     81.18 %     72.22 %     80.46 %     72.82 %
  Average total stockholders' equity as a % of average total assets     9.21 %     9.43 %     9.12 %     9.35 %
  Annualized common dividend payout ratio     26.32 %     28.02 %     25.79 %     27.30 %
                                   
                                 
                               
                               
NON-PERFORMING ASSETS               (Extracted from              
(Dollars In Thousands)               audited annual              
    (Unaudited)     (Unaudited)     financial statements)     (Unaudited)     (Unaudited)  
                               
    June 30,     March 31,     December 31,     September 30,     June 30,  
    2017     2017     2016     2016     2016  
Non-accrual loans   $ 7,363     $ 8,444     $ 6,647     $ 6,903     $ 8,182  
Other real estate owned     1,459       1,443       1,427       1,346       1,247  
  Total non-performing assets   $ 8,822     $ 9,887     $ 8,074     $ 8,249     $ 9,429  
                                         
                                         
Loan loss reserve   $ 10,177     $ 10,144     $ 10,167     $ 10,092     $ 10,038  
Non-accrual loans/Gross loans     1.02 %     1.03 %     0.84 %     0.92 %     1.11 %
Loan loss reserves/Gross loans     1.41 %     1.24 %     1.28 %     1.34 %     1.36 %
                                         
                                         
                         
                         
FNB Bancorp and Subsidiary                        
CONSOLIDATED BALANCE SHEETS                        
(Dollar and share amounts in thousands, except earnings per share)         (Extracted from          
              audited annual          
    (Unaudited)   (Unaudited)     financial statements)     (Unaudited)   (Unaudited)
                         
    June 30,   March 31,     December 31,     September 30,   June 30,
    2017   2017     2016     2016   2016
ASSETS                                  
  Cash and due from banks   $ 21,859   $ 25,337     $ 15,758     $ 17,342   $ 20,564
  Interest-bearing time deposits with financial institutions     230     205       205       204     205
  Securities available for sale, at fair value     362,006     353,364       360,105       358,877     342,420
  Other equity securities     7,567     7,211       7,206       7,206     7,206
  Loans, net of deferred loan fees and allowance for loan losses     808,508     807,191       782,485       741,407     725,471
  Bank premises, equipment and leasehold improvements, net     9,416     9,571       9,837       9,918     10,114
  Bank owned life insurance     16,438     16,349       16,247       16,145     16,050
  Accrued interest receivable     4,945     4,785       4,942       4,544     4,547
  Other real estate owned     1,459     1,443       1,427       1,346     1,247
  Goodwill     4,580     4,580       4,580       4,580     4,580
  Prepaid expenses     621     768       856       670     783
  Other assets     16,032     15,917       15,746       15,309     15,393
    TOTAL ASSETS   $ 1,253,661   $ 1,246,721     $ 1,219,394     $ 1,177,548   $ 1,148,580
                                   
LIABILITIES                                  
  Deposits:                                  
    Demand, noninterest bearing   $ 296,249   $ 287,029     $ 296,273     $ 285,767   $ 267,593
    Demand, interest bearing     129,435     125,643       121,086       110,147     112,591
    Savings and money market     472,050     496,697       487,763       491,047     508,605
    Time     124,604     115,622       114,384       116,496     118,700
      Total Deposits     1,022,338     1,024,991       1,019,506       1,003,457     1,007,489
  Federal Home Loan Bank advances     91,000     86,000       71,000       37,000     7,000
  Note payable     4,050     4,200       4,350       4,500     4,650
  Accrued expenses and other liabilities     17,546     17,198       14,224       18,847     17,026
      Total Liabilities     1,134,934     1,132,389       1,109,080       1,063,804     1,036,165
STOCKHOLDERS' EQUITY                                  
  Common stock, no par value:     85,159     84,603       84,283       76,065     75,944
  Retained Earnings     32,306     29,842       27,577       33,123     31,424
  Accumulated other comprehensive earnings (losses), net of tax     1,262     (113 )     (1,546 )     4,556     5,047
      Total Stockholders' Equity     118,727     114,332       110,314       113,744     112,415
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,253,661   $ 1,246,721     $ 1,219,394     $ 1,177,548   $ 1,148,580
                                   
                                   
                       
                       
FNB Bancorp and Subsidiary            
CONSOLIDATED STATEMENTS OF INCOME            
(Dollar and share amounts in thousands, except earnings per share)   (Unaudited)        
              Three Months Ended        
    June 30,     March 31,   December 31,   September 30,   June 30,
    2017     2017   2016   2016   2016
INTEREST INCOME                                
  Interest and fees on loans   $ 10,370     $ 10,073   $ 9,578   $ 9,301   $ 9,563
  Interest on dividends and securities     1,989       1,943     1,925     1,815     1,731
  Interest on deposits with other financial institutions     19       11     7     6     22
    Total interest income     12,378       12,027     11,510     11,122     11,316
                                 
INTEREST EXPENSE                                
  Deposits     677       637     631     657     709
  Federal Home Loan Bank advances     214       145     48     10     1
  Interest on note payable     55       53     55     54     56
    Total interest expense     946       835     734     721     766
NET INTEREST INCOME     11,432       11,192     10,776     10,401     10,550
  (Recovery of) provision for loan losses     (140 )     -     -     -     75
NET INTEREST INCOME AFTER (RECOVERY OF) PROVISION FOR LOAN LOSSES     11,572       11,192     10,776     10,401     10,475
NONINTEREST INCOME                                
  Service charges     564       597     599     623     618
  Net gain on sale of available-for-sale securities     123       28     57     140     57
  Earnings on bank owned life insurance     88       102     102     94     105
  Other income     237       283     565     245     256
    Total Noninterest Income     1,012       1,010     1,323     1,102     1,036
NONINTEREST EXPENSES                                
  Salaries and employee benefits     4,862       4,774     4,839     4,821     4,876
  Occupancy expense     707       651     635     645     617
  Equipment expense     406       402     448     445     438
  Professional fees     408       473     384     298     294
  FDIC assessment     90       130     150     150     150
  Telephone, postage, supplies     325       297     298     300     306
  Advertising expense     107       108     120     104     183
  Data processing expense     144       139     178     147     140
  Low income housing expense     123       105     71     71     71
  Surety insurance     89       84     85     88     87
  Director fees     72       72     72     72     72
  Other real estate owned expense, net     7       10     5     -     -
  Other expenses     338       360     458     372     415
    Total Noninterest Expense     7,678       7,605     7,743     7,513     7,649
EARNINGS BEFORE PROVISION FOR INCOME TAXES     4,906       4,597     4,356     3,990     3,862
  Provision for income taxes     1,555       1,508     1,314     1,546     1,414
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS   $ 3,351     $ 3,089   $ 3,042   $ 2,444   $ 2,448
                                 
                                 
                               
                               
FNB Bancorp and Subsidiary                    
(Dollar and share amounts in thousands, except earnings per share)     (Unaudited)              
                Three Months Ended              
    June 30,     March 31,     December 31,     September 30,     June 30,  
    2017     2017     2016     2016     2016  
                                         
Per Share Data:                                        
  Basic earnings per share available to common stockholders   $ 0.46     $ 0.42     $ 0.42     $ 0.34     $ 0.34  
  Diluted earnings per share available to common stockholders   $ 0.44     $ 0.41     $ 0.41     $ 0.33     $ 0.33  
  Cash dividends declared   $ 882     $ 780     $ 739     $ 738     $ 686  
  Average shares outstanding     7,342       7,301       7,275       7,263       7,216  
  Average diluted shares outstanding     7,585       7,518       7,461       7,428       7,393  
  Shares outstanding as of end of period     7,362       7,311       7,280       7,269       7,255  
                                         
SELECTED PERFORMANCE DATA                                        
  Annualized return on average assets     1.07 %     1.00 %     1.02 %     0.84 %     0.85 %
  Annualized return on average equity     11.58 %     11.24 %     10.88 %     8.69 %     8.98 %
  Net interest margin (taxable equivalent)     3.93 %     3.98 %     3.89 %     3.88 %     3.96 %
  Average loans as a percent of average deposits     81.18 %     79.73 %     75.01 %     72.96 %     72.22 %
  Average total stockholders' equity as a % of average total assets     9.21 %     8.91 %     9.38 %     9.70 %     9.43 %
  Annualized common dividend payout ratio     26.32 %     25.25 %     24.29 %     30.20 %     28.02 %
                                         
                               
                               
                (Extracted from              
LOANS               audited annual              
(Dollars in thousands)   (Unaudited)     (Unaudited)     financial statements)     (Unaudited)     (Unaudited)  
                               
    June 30,     March 31,     December 31,     September 30,     June 30,  
    2017     2017     2016     2016     2016  
Real estate loans:                                        
  Construction   $ 46,325     $ 49,490     $ 43,683     $ 38,162     $ 29,251  
  Commercial     369,657       432,301       421,222       404,841       398,290  
  Multi family     90,733       112,911       105,963       83,946       82,637  
  Residential     150,546       169,373       170,523       173,476       174,084  
Commercial & industrial loans     54,102       49,277       48,874       50,967       51,366  
Consumer loans     8,884       6,065       3,533       1,630       1,311  
  Gross loans     720,247       819,417       793,798       753,022       736,939  
Net deferred loan fees     (1,010 )     (1,076 )     (1,146 )     (1,523 )     (1,430 )
Allowance for loan losses     (10,177 )     (10,144 )     (10,167 )     (10,092 )     (10,038 )
  NET LOANS   $ 709,060     $ 808,197     $ 782,485     $ 741,407     $ 725,471  
                                         

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