SOURCE: FNB Bancorp

FNB Bancorp

October 26, 2017 08:00 ET

FNB Bancorp Reports Third Quarter 2017 Earnings of $0.43 Per Diluted Share

SOUTH SAN FRANCISCO, CA--(Marketwired - Oct 26, 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 third quarter of 2017 of $3,311,000 or $0.43 per diluted share, compared to net earnings available to common shareholders of $2,444,000 or $0.33 per diluted share for the third quarter of 2016.

During the third quarter of 2017, our net interest income was $11.8 million, an increase of $1.4 million from the third quarter of 2016. This increase was primarily the result of an increase in the average volume of our interest earning assets outstanding coupled with an increase in our earning rate when compared to the same period in 2016. 

"During the third quarter of 2017, the Company was able to grow our net loan portfolio by $20.6 million. Loan production was strong during the quarter, and the Bank had the opportunity to purchase some very seasoned, high quality, single family residential mortgage loans during the quarter. Also during the quarter, our deposit balances increased by $22.7 million, which included a $13.5 million increase in our non-interest bearing DDA accounts. The growth in both the loan and deposit portfolios was complemented with a decrease in short term FHLB borrowings of $6 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 favorable spreads that we were able to expand our net interest margin by 4 basis points during the quarter. Our net interest margin was 3.97% for the third quarter and our increased earnings coupled with a flattening yield curve have allowed our capital base to increase by $2.5 million during the quarter and increase our cash dividend payout to $0.13 per quarter. We worked hard during the third quarter to maintain our profitability while continuing to provide for our customers' needs, providing 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 $0.4 million during the third quarter of 2017. 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 no loan provision for or recovery of loan losses during the third quarter. We continue to see strong credit characteristics within our interest earning assets and our allowance for loan losses continues to be adequate for the level of risk that management has identified 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
    September 30,
    2017   2016
ASSETS            
  Cash and due from banks   $ 23,714   $ 17,342
  Interest-bearing time deposits with financial institutions     230     204
  Securities available for sale, at fair value     360,301     358,877
  Other equity securities     7,567     7,206
  Loans, net of deferred loan fees and allowance for loan losses     829,100     741,407
  Bank premises, equipment and leasehold improvements, net     9,417     9,918
  Bank owned life insurance     16,540     16,145
  Accrued interest receivable     4,804     4,544
  Other real estate owned     1,471     1,346
  Goodwill     4,580     4,580
  Prepaid expenses     469     670
  Other assets     16,421     15,309
    TOTAL ASSETS   $ 1,274,614   $ 1,177,548
             
LIABILITIES            
  Deposits:            
    Demand, noninterest bearing   $ 309,753   $ 285,767
    Demand, interest bearing     122,353     110,147
    Savings and money market     482,335     491,047
    Time     130,630     116,496
      Total Deposits     1,045,071     1,003,457
  Federal Home Loan Bank advances     85,000     37,000
  Note payable     3,900     4,500
  Accrued expenses and other liabilities     19,447     18,847
      Total Liabilities     1,153,418     1,063,804
STOCKHOLDERS' EQUITY            
  Common stock, no par value:     85,309     76,065
  Retained earnings     34,655     33,123
  Accumulated other comprehensive earnings, net of tax     1,232     4,556
    Total Stockholders' Equity     121,196     113,744
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,274,614   $ 1,177,548
         
         
FNB Bancorp and Subsidiary        
CONSOLIDATED STATEMENTS OF EARNINGS        
(Dollar and share amounts in thousands, except earnings per share)        
    (Unaudited)   (Unaudited)
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2017   2016   2017   2016
INTEREST INCOME                        
  Interest and fees on loans   $ 10,646   $ 9,301   $ 31,089   $ 28,735
  Interest on dividends and securities     2,085     1,815     6,017     5,231
  Interest on deposits with other financial institutions     54     6     84     37
    Total interest income     12,785     11,122     37,190     34,003
                         
INTEREST EXPENSE                        
  Deposits     737     657     2,050     2,149
  Federal Home Loan Bank advances     241     10     601     19
  Interest on note payable     54     54     162     167
    Total interest expense     1,032     721     2,813     2,335
NET INTEREST INCOME     11,753     10,401     34,377     31,668
  (Recovery of) provision for loan losses     -     -     (140)     150
NET INTEREST INCOME AFTER (RECOVERY OF) PROVISION FOR LOAN LOSSES     11,753     10,401     34,517     31,518
NONINTEREST INCOME                        
  Service charges     571     623     1,732     1,862
  Net gain on sale of available-for-sale securities     59     140     210     381
  Earnings on bank owned life insurance     103     95     293     300
  Other income     239     244     759     729
    Total Noninterest Income     972     1,102     2,994     3,272
NONINTEREST EXPENSES                        
  Salaries and employee benefits     4,824     4,821     14,460     14,635
  Occupancy expense     704     645     2,062     1,893
  Equipment expense     436     445     1,244     1,317
  Professional fees     340     298     1,221     979
  FDIC assessment     90     150     310     450
  Telephone, postage, supplies     321     300     943     901
  Advertising expense     127     104     342     404
  Data processing expense     145     147     428     479
  Low income housing expense     122     71     350     213
  Surety insurance     89     88     262     262
  Director fees     72     72     216     216
  Other real estate owned expense (recovery), net     -     -     17     (10)
  Other expenses     378     372     1,076     1,210
    Total Noninterest Expense     7,648     7,513     22,931     22,949
EARNINGS BEFORE PROVISION FOR INCOME TAXES     5,077     3,990     14,580     11,841
  Provision for income taxes     1,766     1,546     4,829     4,382
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS   $ 3,311   $ 2,444   $ 9,751   $ 7,459
                         
                         
Per Share Data:                        
  Basic earnings per share available to common stockholders   $ 0.45   $ 0.34   $ 1.33   $ 1.03
  Diluted earnings per share available to common stockholders   $ 0.43   $ 0.33   $ 1.29   $ 1.01
  Cash dividends declared   $ 959   $ 738   $ 2,620   $ 2,107
  Average shares outstanding     7,375     7,264     7,344     7,216
  Average diluted shares outstanding     7,619     7,428     7,579     7,402
  Shares outstanding as of the end of period     7,403     7,269     7,403     7,269
                             
                             
FNB Bancorp and Subsidiary                               
FINANCIAL HIGHLIGHTS                               
(Dollar and share amounts in thousands, except earnings per share)                               
    (Unaudited)     (Unaudited)  
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2017     2016     2017     2016  
                                 
AVERAGE BALANCES:                                
  Total Assets   $ 1,264,864     $ 1,159,129     $ 1,251,583     $ 1,153,889  
  Total Loans     820,497       740,218       819,519       741,180  
  Total Earning Assets     1,198,556       1,092,060       1,186,265       1,081,448  
  Total Deposits     1,042,106       1,014,541       1,026,003       1,017,172  
  Total Stockholder's Equity     119,334       112,448       115,479       109,211  
                                 
SELECTED PERFORMANCE DATA                                
  Annualized return on average assets     1.05 %     0.84 %     1.04 %     0.86 %
  Annualized return on average equity     11.10 %     8.69 %     11.26 %     9.11 %
  Net interest margin (taxable equivalent)     3.97 %     3.88 %     3.96 %     4.00 %
  Average loans as a percent of average deposits     78.73 %     72.96 %     79.87 %     72.87 %
  Average total stockholders' equity as a % of average total assets     9.43 %     9.70 %     9.23 %     9.46 %
  Annualized common dividend payout ratio     28.96 %     30.20 %     26.87 %     28.25 %
                                 
                               
NON-PERFORMING ASSETS                     (Extracted from        
(Dollars In Thousands)                     audited annual        
    (Unaudited)     (Unaudited)     (Unaudited)     financial statements)     (Unaudited)  
                               
    September 30,     June 30,     March 31,     December 31,     September 30,  
    2017     2017     2017     2016     2016  
Non-accrual loans   $ 6,933     $ 7,363     $ 8,444     $ 6,647     $ 6,903  
Other real estate owned     1,471       1,459       1,443       1,427       1,346  
  Total non-performing assets   $ 8,404     $ 8,822     $ 9,887     $ 8,074     $ 8,249  
                                         
                                         
Loan loss reserve   $ 10,250     $ 10,177     $ 10,144     $ 10,167     $ 10,092  
Non-accrual loans/Gross loans     0.83 %     0.90 %     1.03 %     0.84 %     0.92 %
Loan loss reserves/Gross loans     1.22 %     1.24 %     1.24 %     1.28 %     1.34 %
                                         
                     
                     
FNB Bancorp and Subsidiary                    
CONSOLIDATED BALANCE SHEETS                    
(Dollar and share amounts in thousands, except earnings per share)           (Extracted from    
                audited annual    
    (Unaudited)   (Unaudited)   (Unaudited)   financial statements)   (Unaudited)
                     
    September 30,   June 30,   March 31,   December 31,   September 30,
    2017   2017   2017   2016   2016
ASSETS                              
  Cash and due from banks   $ 23,714   $ 21,859   $ 25,337   $ 15,758   $ 17,342
  Interest-bearing time deposits with financial institutions     230     230     205     205     204
  Securities available for sale, at fair value     360,301     362,006     353,364     360,105     358,877
  Other equity securities     7,567     7,567     7,211     7,206     7,206
  Loans, net of deferred loan fees and allowance for loan losses     829,100     808,508     807,191     782,485     741,407
  Bank premises, equipment and leasehold improvements, net     9,417     9,416     9,571     9,837     9,918
  Bank owned life insurance     16,540     16,438     16,349     16,247     16,145
  Accrued interest receivable     4,804     4,945     4,785     4,942     4,544
  Other real estate owned     1,471     1,459     1,443     1,427     1,346
  Goodwill     4,580     4,580     4,580     4,580     4,580
  Prepaid expenses     469     621     768     856     670
  Other assets     16,421     16,032     15,917     15,746     15,309
    TOTAL ASSETS   $ 1,274,614   $ 1,253,661   $ 1,246,721   $ 1,219,394   $ 1,177,548
                               
LIABILITIES                              
  Deposits:                              
    Demand, noninterest bearing   $ 309,753   $ 296,249   $ 287,029   $ 296,273   $ 285,767
    Demand, interest bearing     122,353     129,435     125,643     121,086     110,147
    Savings and money market     482,335     472,050     496,697     487,763     491,047
    Time     130,630     124,604     115,622     114,384     116,496
      Total Deposits     1,045,071     1,022,338     1,024,991     1,019,506     1,003,457
  Federal Home Loan Bank advances     85,000     91,000     86,000     71,000     37,000
  Note payable     3,900     4,050     4,200     4,350     4,500
  Accrued expenses and other liabilities     19,447     17,546     17,198     14,224     18,847
      Total Liabilities     1,153,418     1,134,934     1,132,389     1,109,080     1,063,804
STOCKHOLDERS' EQUITY                              
  Common stock, no par value:     85,309     85,159     84,603     84,283     76,065
  Retained Earnings     34,655     32,306     29,842     27,577     33,123
  Accumulated other comprehensive earnings (losses), net of tax     1,232     1,262     (113)     (1,546)     4,556
      Total Stockholders' Equity     121,196     118,727     114,332     110,314     113,744
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,274,614   $ 1,253,661   $ 1,246,721   $ 1,219,394   $ 1,177,548
                               
                     
                     
FNB Bancorp and Subsidiary                    
CONSOLIDATED STATEMENTS OF INCOME                    
(Dollar and share amounts in thousands, except earnings per share)       (Unaudited)        
            Three Months Ended        
    September 30,   June 30,   March 31,   December 31,   September 30,
    2017   2017   2017   2016   2016
INTEREST INCOME                              
  Interest and fees on loans   $ 10,646   $ 10,370   $ 10,073   $ 9,578   $ 9,301
  Interest on dividends and securities     2,085     1,989     1,943     1,925     1,815
  Interest on deposits with other financial institutions     54     19     11     7     6
    Total interest income     12,785     12,378     12,027     11,510     11,122
                               
INTEREST EXPENSE                              
  Deposits     737     677     636     631     657
  Federal Home Loan Bank advances     241     214     146     48     10
  Interest on note payable     54     55     53     55     54
    Total interest expense     1,032     946     835     734     721
NET INTEREST INCOME     11,753     11,432     11,192     10,776     10,401
  Recovery of loan losses     -     (140)     -     -     -
NET INTEREST INCOME AFTER RECOVERY OF LOAN LOSSES     11,753     11,572     11,192     10,776     10,401
NONINTEREST INCOME                              
  Service charges     571     564     597     599     623
  Net gain on sale of available-for-sale securities     59     123     28     57     140
  Earnings on bank owned life insurance     102     89     102     102     95
  Other income     240     236     283     565     244
    Total Noninterest Income     972     1,012     1,010     1,323     1,102
NONINTEREST EXPENSES                              
  Salaries and employee benefits     4,824     4,862     4,774     4,839     4,821
  Occupancy expense     704     707     651     635     645
  Equipment expense     436     406     402     448     445
  Professional fees     340     408     473     384     298
  FDIC assessment     90     90     130     150     150
  Telephone, postage, supplies     321     325     297     298     300
  Advertising expense     127     107     108     120     104
  Data processing expense     145     144     139     178     147
  Low income housing expense     122     123     105     71     71
  Surety insurance     89     89     84     85     88
  Director fees     72     72     72     72     72
  Other real estate owned expense, net     -     7     10     5     -
  Other expenses     378     338     360     458     372
    Total Noninterest Expense     7,648     7,678     7,605     7,743     7,513
EARNINGS BEFORE PROVISION FOR INCOME TAXES     5,077     4,906     4,597     4,356     3,990
  Provision for income taxes     1,766     1,555     1,508     1,314     1,546
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS   $ 3,311   $ 3,351   $ 3,089   $ 3,042   $ 2,444
                               
                             
FNB Bancorp and Subsidiary                    
(Dollar and share amounts in thousands, except earnings per share)       (Unaudited)        
            Three Months Ended        
    September 30,   June 30,   March 31,   December 31,   September 30,
    2017   2017   2017   2016   2016
                             
Per Share Data:                            
  Basic earnings per share available to common stockholders   $ 0.45   $ 0.46   $ 0.42   $ 0.42   $ 0.34
  Diluted earnings per share available to common stockholders   $ 0.43   $ 0.44   $ 0.41   $ 0.41   $ 0.33
  Cash dividends declared   $ 959   $ 882   $ 780   $ 739   $ 738
  Average shares outstanding   7,375     7,342     7,301     7,275     7,264
  Average diluted shares outstanding   7,619     7,585     7,518     7,461     7,429
  Shares outstanding as of end of period   7,403     7,362     7,311     7,280     7,269
                             
SELECTED PERFORMANCE DATA                            
  Annualized return on average assets   1.05%     1.07%     1.00%     1.02%     0.84%
  Annualized return on average equity   11.10%     11.58%     11.24%     10.88%     8.69%
  Net interest margin (taxable equivalent)   3.97%     3.93%     3.98%     3.89%     3.87%
  Average loans as a percent of average deposits   78.73%     81.18%     79.73%     75.01%     72.96%
  Average total stockholders' equity as a % of average total assets   9.43%     9.21%     8.91%     9.38%     9.70%
  Annualized common dividend payout ratio   28.96%     26.32%     25.25%     24.29%     30.20%
                             
                             
                             
                (Extracted from    
LOANS               audited annual    
(Dollars in thousands)   (Unaudited)   (Unaudited)   (Unaudited)   financial statements)   (Unaudited)
                     
    September 30,   June 30,   March 31,   December 31,   September 30,
    2017   2017   2017   2016   2016
Real estate loans:                            
  Construction   $ 49,374   $ 46,325   $ 49,490   $ 43,683   $ 38,163
  Commercial   443,556     436,286     431,295     421,222     404,964
  Multi family   109,396     104,373     112,911     105,963     83,944
  Residential   174,000     166,610     169,373     170,523     173,441
Commercial & industrial loans   51,827     57,217     49,277     48,874     50,870
Consumer loans   11,193     8,884     6,065     3,533     1,630
  Gross loans   839,346     819,695     818,411     793,798     753,012
Net deferred loan cost (fees)   4     (1,010)     (1,076)     (1,146)     (1,513)
Allowance for loan losses   (10,250)     (10,177)     (10,144)     (10,167)     (10,092)
  NET LOANS   $ 829,100   $ 808,508   $ 807,191   $ 782,485   $ 741,407
                               
                               

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