Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K - FNB BANCORP/CA/ | fnb_8k.htm |
| EX-99.1 - EXHIBIT 99.1 - FNB BANCORP/CA/ | ex99_1.htm |
| EX-99.3 - EXHIBIT 99.3 - FNB BANCORP/CA/ | ex99_3.htm |
| EX-99.2 - EXHIBIT 99.2 - FNB BANCORP/CA/ | ex99_2.htm |
| EX-23.1 - EXHIBIT 23.1 - FNB BANCORP/CA/ | ex23_1.htm |
Exhibit 99.4
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The unaudited pro forma condensed combined balance sheet set forth below reflects consummation of the merger between FNB Bancorp and Oceanic Bank Holding, Inc. as if the merger had been consummated on June 30, 2012. The unaudited pro forma condensed combined statements of earnings for FNB Bancorp and Oceanic Bank Holding, Inc. for the six months ended June 30, 2012 and for the twelve months ended December 31, 2011 were prepared as if the merger had been consummated as of the beginning of the periods presented. The unaudited pro forma condensed combined financial statements and notes thereto reflect the application of the acquisition method of accounting. Under the acquisition method of accounting, the assets and liabilities of Oceanic Bank Holding, Inc. are recorded on the books of FNB Bancorp at their fair value as of the effective time of the merger. The difference between the cost of Oceanic Bank Holding, Inc. and the fair value of its identifiable assets, less the fair value of its liabilities, is recognized as goodwill. Conversely, the difference between the fair value of its identifiable assets, less the fair value of liabilities assumed, is recognized as a bargain purchase gain and is reflected in income at the time of acquisition. The unaudited pro forma condensed combined financial statements included herein are not necessarily indicative of the future results of operations or the future financial position of the combined entities or the results of operations and financial position of the combined entities that would have actually occurred had the transactions been in effect as of the dates or for the periods presented. Such information does not include any pro forma adjustments relating to any future revenue enhancements and reductions in expenses that may be realized.
FNB Bancorp and Subsidiary
Unaudited Proforma Condensed Combined Balance Sheet
June 30, 2012
| Oceanic | |||||||||||||||||
| FNB | Bank | Pro Forma | Pro Forma | ||||||||||||||
| Bancorp | Holding, Inc. | Adjustments | Combined | ||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| ASSETS | |||||||||||||||||
| Cash and due from banks | $ | 44,856 | $ | 29,594 | $ | (27,761 | ) | (2) | $ | 46,689 | |||||||
| Investment securities, available for sale | 203,548 | 13,878 | (210 | ) | (3) | 217,216 | |||||||||||
| Loans | 461,758 | 113,603 | (4,290 | ) | (3) | 571,071 | |||||||||||
| Allowance for loan losses | (8,458 | ) | (1,901 | ) | 1,901 | (3) | (8,458 | ) | |||||||||
| Premises and equipment, net | 12,916 | 12 | — | 12,928 | |||||||||||||
| Goodwill | 1,841 | — | — | 1,841 | |||||||||||||
| Core deposit intangible, net | 146 | 0 | 109 | (3) | 255 | ||||||||||||
| Other assets | 32,143 | 2,896 | 1,075 | (3) | 36,114 | ||||||||||||
| Total assets | $ | 748,750 | $ | 158,082 | $ | (29,176 | ) | $ | 877,656 | ||||||||
| LIABILITIES | |||||||||||||||||
| Deposits: | |||||||||||||||||
| Noninterest-bearing | $ | 159,370 | $ | 12,046 | $ | — | $ | 171,416 | |||||||||
| Interest-bearing | 492,473 | 102,611 | 49 | (3) | 595,133 | ||||||||||||
| Total deposits | 651,843 | 114,657 | 49 | 766,549 | |||||||||||||
| Borrowings | — | 10,090 | 82 | (3) | 10,172 | ||||||||||||
| Other liabilities | 7,586 | 487 | — | 8,073 | |||||||||||||
| Total liabilities | 659,429 | 125,234 | 131 | 784,794 | |||||||||||||
| Shareholder’s Equity | |||||||||||||||||
| Preferred Stock | 12,600 | — | — | 12,600 | |||||||||||||
| Common Stock | 49,097 | 9,000 | (9,000 | ) | (4) | 49,097 | |||||||||||
| Retained Earnings | 24,179 | 23,848 | (23,848 | ) | (4) | 24,179 | |||||||||||
| — | — | 3,541 | (4) | 3,541 | |||||||||||||
| Accumulated other comprehensive income | 3,445 | — | — | 3,445 | |||||||||||||
| Total shareholder’s equity | 89,321 | 32,848 | (29,307 | ) | 92,862 | ||||||||||||
| Total liabilities and shareholder’s equity | $ | 748,750 | $ | 158,082 | $ | (29,176 | ) | $ | 877,656 | ||||||||
See Notes to the Unaudited Pro Forma Condensed Combined Financial Statements.
FNB Bancorp and Subsidiary
Proforma Condensed Combined Statement of Earnings
For the Six Months Ended June 30, 2012
| Oceanic | Proforma | ||||||||||||||||
| FNB | Bank | Proforma | Combined | ||||||||||||||
| Bancorp | Holding, Inc. | Adjustments | Company | ||||||||||||||
| Interest income: | |||||||||||||||||
| Interest and fees on loans | $ | 13,513 | $ | 3,054 | 534 | (5) | 17,101 | ||||||||||
| Interest and dividends on cash and securities | 2,247 | 223 | — | 2,470 | |||||||||||||
| Total interest income | 15,760 | 3,277 | 534 | 19,571 | |||||||||||||
| Interest expense: | |||||||||||||||||
| Interest on deposits | 1,337 | 418 | 10 | (5) | 1,765 | ||||||||||||
| Interest on FHLB Advances | — | 109 | (20 | ) | (5) | 89 | |||||||||||
| Total interest expense | 1,337 | 527 | (10 | ) | 1,854 | ||||||||||||
| Provision for loan losses | 800 | 55 | — | 855 | |||||||||||||
| Net interest income after provision for loan losses | 13,623 | 2,695 | 544 | 16,862 | |||||||||||||
| Noninterest income: | |||||||||||||||||
| Service charges | 1,496 | 13 | — | 1,509 | |||||||||||||
| Other income | 1,839 | 136 | — | 1,975 | |||||||||||||
| Total noninterest income | 3,335 | 149 | — | 3,484 | |||||||||||||
| Noninterest expense: | |||||||||||||||||
| Salaries and employee benefits | 7,419 | 867 | — | 8,286 | |||||||||||||
| Occupancy expense | 1,198 | 419 | — | 1,617 | |||||||||||||
| Other expense | 4,934 | 474 | 8 | (6) | 5,416 | ||||||||||||
| Total noninterest expense | 13,551 | 1,760 | 8 | 15,319 | |||||||||||||
| Earnings before provision for income tax expense | 3,407 | 1,084 | 536 | 5,027 | |||||||||||||
| Provision for income tax expense | 891 | 412 | 220 | (7) | 1,523 | ||||||||||||
| Net earnings | $ | 2,516 | $ | 672 | $ | 316 | $ | 3,504 | |||||||||
| Preferred stock dividends | 343 | — | — | $ | 343 | ||||||||||||
| Net earnings available to common shareholders | $ | 2,173 | $ | 672 | $ | 316 | $ | 3,161 | |||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | 0.62 | $ | 0.90 | |||||||||||||
| Diluted | $ | 0.61 | $ | 0.89 | |||||||||||||
| Weighted average shares - basic | 3,512 | 3,512 | |||||||||||||||
| Weighted average shares - diluted | 3,563 | 3,563 |
See Notes to the Unaudited Pro Forma Condensed Combined Financial Statement
FNB Bancorp and Subsidiary
Proforma Condensed Combined Statement of Earnings
For the Year Ended December 31, 2011
| Proforma | |||||||||||||||||
| Oceanic Bank | Proforma | Combined | |||||||||||||||
| FNB Bancorp | Holding, Inc. | Adjustments | Company | ||||||||||||||
| Interest income: | |||||||||||||||||
| Interest and fees on loans | $ | 29,320 | $ | 6,339 | 1,068 | (5) | 36,727 | ||||||||||
| Interest and dividends on cash and securities | 3,577 | 720 | — | 4,297 | |||||||||||||
| Total interest income | 32,897 | 7,059 | 1,068 | 41,024 | |||||||||||||
| Interest expense: | |||||||||||||||||
| Interest on deposits | 3,327 | 963 | 20 | (5) | 4,310 | ||||||||||||
| Interest on FHLB Advances | — | 466 | (40 | ) | (5) | 426 | |||||||||||
| Total interest expense | 3,327 | 1,429 | (20 | ) | 4,736 | ||||||||||||
| Provision for loan losses | 1,750 | 138 | — | 1,888 | |||||||||||||
| Net interest income after provision for loan losses | 27,820 | 5,492 | 1,088 | 34,400 | |||||||||||||
| Noninterest income: | |||||||||||||||||
| Service charges | 3,107 | 114 | — | 3,221 | |||||||||||||
| Other income | 1,972 | 287 | — | 2,259 | |||||||||||||
| Total noninterest income | 5,079 | 401 | — | 5,480 | |||||||||||||
| Noninterest expense: | |||||||||||||||||
| Salaries and employee benefits | 13,726 | 2,028 | — | 15,754 | |||||||||||||
| Occupancy expense | 2,331 | 823 | — | 3,154 | |||||||||||||
| Other expense | 11,017 | 962 | 16 | (6) | 11,995 | ||||||||||||
| Total noninterest expense | 27,074 | 3,813 | 16 | 30,903 | |||||||||||||
| Earnings before provision for income tax expense | 5,825 | 2,080 | 1,072 | 8,977 | |||||||||||||
| Provision for income tax expense | 1,568 | 782 | 440 | (7) | 2,790 | ||||||||||||
| Net earnings | $ | 4,257 | $ | 1,298 | $ | 632 | $ | 6,187 | |||||||||
| Preferred stock dividends | 800 | — | — | $ | 800 | ||||||||||||
| Net earnings available to common shareholders | $ | 3,457 | $ | 1,298 | $ | 632 | $ | 5,387 | |||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | 0.99 | $ | 1.54 | |||||||||||||
| Diluted | $ | 0.98 | $ | 1.53 | |||||||||||||
| Weighted average shares - basic | 3,509 | 3,509 | |||||||||||||||
| Weighted average shares - diluted | 3,532 | 3,532 | |||||||||||||||
See Notes to the Unaudited Pro Forma Condensed Combined Financial Statement
(1) Basis of Presentation. The Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2012 has been prepared as if the merger had been consummated on that date. The Unaudited Pro Forma Condensed Statements of Income for the six and twelve month periods ended June 30, 2012 and December 31, 2011, respectively, for FNB Bancorp and Subsidiary have been prepared as if the merger had been consummated at the beginning of the periods presented.
The Unaudited Pro Forma condensed Combined Balance Sheet is based on historical information from financial statements of FNB Bancorp and Oceanic Bank Holding, Inc. after giving effect to the merger under the acquisition method of accounting and the assumptions and adjustments in the notes that follow.
Assumptions relating to the pro forma adjustments set forth in the Unaudited Pro Forma Condensed Combined Financial Statements are based, in part, upon estimated fair values. Estimated fair values for securities, loans deposits and borrowings were obtained from appropriate valuation methodologies and market information in accordance with Statement of Financial Accounting Standards Board ASC 820, “Fair Values Measurements.” The resulting discounts on loans and deposits for purposes of these pro forma financial statements are being amortized to interest income and interest expense on a straight line basis over the estimated term to maturity of 5 years for loans and 7 years for deposits. The actual discounts will be amortized to interest income and expense to produce a constant yield to maturity. Core deposit intangibles created as a result of the transaction are for non-maturity deposits and in the pro forma financial statements are being amortized to non-interest expense using straight line amortization over a period of seven years.
(2) Purchase accounting adjustments recorded for the merger were as follows:
| Contractual purchase price | $ | 27,750 | ||
| Escrow and closing costs, net | 11 | |||
| Total cash paid | $ | 27,761 |
(3) Fair value adjustments to the net book value of assets acquired and liabilities assumed for the merger are as follows:
| Fair Value Adjustment | ||||
| Investment securities | $ | (210 | ) | |
| Loans receivable | (4,290 | ) | ||
| Allowance for loan losses | 1,901 | |||
| Core deposit intangible | 109 | |||
| Time Deposits | (49 | ) | ||
| Other borrowings | (82 | ) | ||
| Subtotal net fair value adjustments | (2,621 | ) | ||
| Deferred tax asset related to purchase | 1,075 | |||
| Total fair value adjustments | $ | (1,546 | ) |
(4) Purchase accounting adjustments to eliminate shareholders’ equity and to record a bargain purchase gain are as follows:
| Elimination of common stock | $ | (9,000 | ) | |
| Elimination of retained earnings | (23,848 | ) | ||
| Cash consideration paid to sellers | 27,761 | |||
| Fair value adjustments (see Note 3) | 1,546 | |||
| Bargain purchase gain | $ | (3,541 | ) |
(5) Pro forma adjustments to interest income and interest expense were calculated for the transaction as follows:
| For the Six Months Ended June 30, 2012 | For the Twelve Months Ended December 31, 2012 | |||||||
| Accretion of discount on loans (5 years) | $ | 534 | $ | 1,068 | ||||
| Total adjustments to interest income | $ | 534 | $ | 1,068 | ||||
| Amortization of premium on time certificates of deposit (2 years) | $ | 10 | $ | 20 | ||||
| Amortization of premium on FHLB advances (2 years) | (20 | ) | (40 | ) | ||||
| Total adjustments to interest expense | $ | 10 | $ | 20 |
(6) The core deposit intangible created as a result of the merger was $109,000. The core deposit intangible is amortized based on a straight line basis over 7 years. The Pro forma adjustment to non-interest expense for the amortization of the core deposit intangible is $8,000 for the six months ended June 30, 2012 and $16,000 for twelve months ended December 31, 2011.
(7) Pro forma income tax expense was calculated using an effective tax rate of 41%.
(8) Pro forma basic earnings per common share is calculated by dividing net earnings by the average number of common shares outstanding. Diluted earnings per common share is calculated using the same method as basic earnings per common share, but reflects potential dilution of common share equivalents. The basic and diluted weighted average number of common stock and common stock equivalents utilized for the calculation of earnings per share for the periods presented were calculated using FNB Bancorp’s historical weighted average common stock and common stock equivalents.