FNB BANCORP/CA/ - FORM 8-K - EX-99.01 - EXHIBIT 99.01 - January 30, 2017

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Exhibit 99.01

Press Release

Available for Immediate Publication: January 30, 2017

 

First National Bank of Northern California Reports Fourth Quarter 2016 Earnings of $0.61 Per Diluted Share

 

Source: FNB Bancorp (CA) (OTCQB:FNBG)

South San Francisco, California

Website: www.fnbnorcal.com

 

Contacts:

Tom McGraw, Chief Executive Officer (650) 875-4864

Dave Curtis, Chief Financial Officer (650) 875-4862

 

 

 

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 fourth quarter of 2016 of $3,042,000 or $0.61 per diluted share, compared to net earnings available to common shareholders of $2,444,000 or $0.49 per diluted share for the third quarter of 2016, adjusted for 5% stock dividend paid in December, 2016.

 

The fourth quarter of 2016 operating results, when compared to the same period a year ago, provide the first year over year comparison where the earnings subsequent to the America California Bank (“ACB”) acquisition are fully reflected. During the fourth quarter of 2016, our net interest income was $10.8 million, an increase of $375,000 from the third quarter of 2016. This increase was primarily the result of an increase in the average volume of our interest earning assets.

 

“During the fourth quarter of 2016, the Company was able to grow our total assets by $42 million. This growth included an increase in gross loans of $41 million. The Company also experienced an $11 million increase in our demand deposit balances. Overall, the deposit portfolio increased by $16 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 $34 million in additional Federal Home Loan Bank advances from existing credit facilities during the quarter. The current low rate environment has put pressure on our net interest margin, but we have added loans and investments in order to expand our interest earning assets. Our net interest margin improved during the fourth quarter of 2016 by 1 basis point, due primarily to higher loan levels within our interest earning assets. We remain “well capitalized” by regulatory standards and our earnings are growing. We are proud of our accomplishments, which are the result of our emphasis on meeting our customers’ needs and providing them with products delivered with a high level of customer service”, stated CEO Tom McGraw.

 

“Our total non-accrual loans balance decreased by $0.3 million during the fourth quarter. We continue to utilize a conservative underwriting approach in our loan origination process which should serve us well in the future. There was no fourth quarter provision for loan losses and our allowance for loan loss was considered by management to be sufficient, as of December 31, 2016”, continued Tom McGraw.

 
 

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)		  (Unaudited)
As of
December 31,		 
   2016   2015 
ASSETS          
Cash and due from banks  $15,758   $12,314 
Interest-bearing time deposits with financial institutions   205    205 
Securities available for sale, at fair value   360,105    329,207 
Other equity securities   7,206    6,748 
Loans, net of deferred loan fees and allowance for loan losses   782,485    722,747 
Bank premises, equipment and leasehold improvements, net   9,837    10,202 
Bank owned life insurance   16,247    15,845 
Accrued interest receivable   4,942    4,511 
Other real estate owned   1,427    1,026 
Goodwill   4,580    4,580 
Prepaid expenses   856    997 
Other assets   15,746    15,967 
TOTAL ASSETS  $1,219,394   $1,124,349 
           
LIABILITIES          
Deposits:          
Demand, noninterest bearing  $296,273   $263,822 
Demand, interest bearing   121,086    102,304 
Savings and money market   487,763    491,633 
Time   114,384    125,430 
Total Deposits   1,019,506    983,189 
Federal Home Loan Bank advances   71,000    17,000 
Note payable   4,350    4,950 
Accrued expenses and other liabilities   14,224    15,048 
Total Liabilities   1,109,080    1,020,187 
STOCKHOLDERS’ EQUITY          
Common stock, no par value:   76,433    74,805 
Retained Earnings   35,427    27,816 
Accumulated other comprehensive earnings, net of tax   (1,546)   1,541 
Total Stockholders’ Equity   110,314    104,162 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $1,219,394   $1,124,349 

 
 

CONSOLIDATED STATEMENTS OF EARNINGS  (Unaudited)    (Unaudited) 
(Amounts in thousands, except per share amounts)  Three Months Ended   Twelve Months Ended 
   December 31,   December 31, 
   2016   2015   2016   2015 
INTEREST INCOME                    
Interest and fees on loans  $9,578   $9,361   $38,313   $33,235 
Interest on dividends and securities   1,925    1,657    7,156    6,008 
Interest on deposits with other financial institutions   7    3    44    39 
Total interest income   11,510    11,021    45,513    39,282 
                     
INTEREST EXPENSE                    
Deposits   631    732    2,780    2,359 
Federal Home Loan Bank advances   48    7    67    9 
Interest on note payable   55    56    222    229 
Total interest expense   734    795    3,069    2,597 
NET INTEREST INCOME   10,776    10,226    42,444    36,685 
Provision for loan losses   —    (530)   150    (305)
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   10,776    10,756    42,294    36,990 
NONINTEREST INCOME                    
Service charges   599    645    2,461    2,501 
Net gain on sale of available-for-sale securities   57    89    438    339 
Earnings on bank owned life insurance   102    103    402    364 
Other income   565    290    1,294    1,292 
Total Noninterest Income   1,323    1,127    4,595    4,496 
NONINTEREST EXPENSES                    
Salaries and employee benefits   4,839    6,010    19,474    18,523 
Occupancy expense   635    611    2,528    2,517 
Equipment expense   448    393    1,765    1,926 
Professional fees   384    396    1,363    1,471 
FDIC assessment   150    150    600    600 
Telephone, postage, supplies   298    292    1,199    1,074 
Advertising expense   120    119    524    500 
Data processing expense   178    136    657    1,076 
Low income housing expense   71    71    284    283 
Surety insurance   85    83    347    381 
Director fees   72    72    288    288 
Other real estate owned expense (recovery), net   5    10    (5)   4 
Other expenses   458    371    1,668    1,282 
Total Noninterest Expense   7,743    8,714    30,692    29,925 
EARNINGS BEFORE PROVISION FOR INCOME TAXES   4,356    3,169    16,197    11,561 
Provision for income taxes   1,314    1,081    5,696    3,364 
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS  $3,042   $2,088   $10,501   $8,197 
                     
Per Share Data:                    
Basic earnings per share available to common stockholders  $0.63   $0.44   $2.18   $1.73 
Diluted earnings per share available to common stockholders  $0.61   $0.43   $2.12   $1.68 
Cash dividends declared  $739   $648   $2,847   $2,409 
Average shares outstanding   4,850    4,763    4,822    4,742 
Average diluted shares outstanding   4,974    4,904    4,945    4,876 
Shares outstanding as of the end of period   4,853    4,769    4,853    4,769 

 
 

FINANCIAL HIGHLIGHTS                
(Dollars in thousands)                
   (Unaudited)   (Unaudited) 
   Three Months Ended   Twelve Months Ended 
   December 31,   December 31, 
   2016   2015   2016   2015 
                     
AVERAGE BALANCES:                    
Total Assets  $1,191,942   $1,126,582   $1,163,454   $1,010,435 
Total Loans   763,654    715,026    746,829    629,814 
Total Earning Assets   1,127,339    1,038,581    1,091,703    923,700 
Total Deposits   1,018,071    999,024    1,017,398    890,369 
Total Stockholder’s Equity   111,807    103,780    109,854    100,621 
                     
SELECTED PERFORMANCE DATA                    
Annualized return on average assets   1.02%   0.74%   0.90%   0.81%
Annualized return on average equity   10.88%   8.05%   9.56%   8.15%
Net interest margin (taxable equivalent)   3.89%   4.00%   3.97%   4.06%
Average loans as a percent of average deposits   75.01%   71.57%   73.41%   70.74%
Average total stockholders’ equity as a % of average total assets   9.38%   9.21%   9.44%   9.96%
Annualized common dividend payout ratio   24.29%   31.03%   27.11%   29.39%

 

NON-PERFORMING ASSETS                  (Extracted from 
(Dollars In Thousands)                  audited annual 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   financial statements) 
   December 31,   September 30,   June 30,   March 31,   December 31, 
   2016   2016   2016   2016   2015 
Non-accrual loans  $6,647   $6,903   $8,182   $6,882   $7,915 
Other real estate owned   1,427    1,346    1,247    1,055    1,026 
Total non-performing assets   8,074    8,249    9,429    7,937    8,941 
                          
Loan loss reserve  $10,167   $10,092   $10,038   $9,943   $9,970 
Non-accrual loans/Gross loans   0.84%   0.92%   1.11%   0.92%   1.08%
Loan loss reserves/Gross loans   1.28%   1.34%   1.36%   1.33%   1.36%

 
 

 

CONSOLIDATED BALANCE SHEETS                  (Extracted from 
(Dollars in thousands)                  audited annual 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   financial statements) 
   December 31,   September 30,   June 30,   March 31,   December 31, 
   2016   2016   2016   2016   2015 
ASSETS                         
Cash and due from banks  $15,758   $17,342   $20,564   $37,737   $12,314 
Interest-bearing time deposits with financial institutions   205    204    205    205    205 
Securities available for sale, at fair value   360,105    358,877    342,420    329,396    329,207 
Other equity securities   7,206    7,206    7,206    6,756    6,748 
Loans, net of deferred loan fees and allowance for loan losses   782,485    741,407    725,471    733,991    722,747 
Bank premises, equipment and leasehold improvements, net   9,837    9,918    10,114    10,320    10,202 
Bank owned life insurance   17,247    16,145    16,050    15,946    15,845 
Accrued interest receivable   4,942    4,544    4,547    4,603    4,511 
Other real estate owned   1,427    1,346    1,247    1,055    1,026 
Goodwill   4,580    4,580    4,580    4,580    4,580 
Prepaid expenses   856    670    783    945    997 
Other assets   14,746    15,309    15,393    15,444    15,967 
TOTAL ASSETS  $1,219,394   $1,177,548   $1,148,580   $1,160,978   $1,124,349 
                          
LIABILITIES                         
Deposits:                         
Demand, noninterest bearing  $296,273   $285,767   $267,593   $265,947   $263,822 
Demand, interest bearing   121,086    110,147    112,591    113,337    102,304 
Savings and money market   487,763    491,047    508,605    526,557    491,633 
Time   114,384    116,496    118,700    124,410    125,430 
Total Deposits   1,019,506    1,003,457    1,007,489    1,030,251    983,189 
Federal Home Loan Bank advances   71,000    37,000    7,000    —    17,000 
Note payable   4,350    4,500    4,650    4,800    4,950 
Accrued expenses and other liabilities   14,224    18,847    17,026    17,230    15,048 
Total Liabilities   1,109,080    1,063,804    1,036,165    1,052,281    1,020,187 
STOCKHOLDERS’ EQUITY                         
Common stock, no par value:   76,433    76,065    75,944    75,240    74,805 
Retained Earnings   35,427    33,123    31,424    29,666    27,816 
Accumulated other comprehensive earnings, net of tax   (1,546)   4,556    5,047    3,791    1,541 
Total Stockholders’ Equity   110,314    113,744    112,415    108,697    104,162 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $1,219,394   $1,177,548   $1,148,580   $1,160,978   $1,124,349 

 
 

CONSOLIDATED STATEMENTS OF INCOME  (Unaudited) 
(Amounts in thousands, except per share amounts)  Three Months Ended 
   December 31,   September 30,   June 30,   March 31,   December 31, 
   2016   2016   2016   2016   2015 
INTEREST INCOME                         
Interest and fees on loans  $9,578   $9,301   $9,563   $9,871   $9,361 
Interest on dividends and securities   1,925    1,815    1,731    1,685    1,657 
Interest on deposits with other financial institutions   7    6    22    9    3 
Total interest income   11,510    11,122    11,316    11,565    11,021 
                          
INTEREST EXPENSE                         
Deposits   631    657    709    783    734 
Federal Home Loan Bank advances   48    10    1    8    7 
Interest on note payable   55    54    56    57    56 
Total interest expense   734    721    766    848    797 
NET INTEREST INCOME   10,776    10,401    10,550    10,717    10,224 
Provision (recovery) for loan losses   —    —    75    75    (530)
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   10,776    10,401    10,475    10,642    10,754 
NONINTEREST INCOME                         
Service charges   599    623    618    621    647 
Net gain on sale of available-for-sale securities   57    140    57    184    89 
Earnings on bank owned life insurance   102    94    105    100    103 
Other income   565    245    256    229    290 
Total Noninterest Income   1,323    1,102    1,036    1,134    1,129 
NONINTEREST EXPENSES                         
Salaries and employee benefits   4,839    4,821    4,876    4,938    6,010 
Occupancy expense   635    645    617    631    611 
Equipment expense   448    445    438    434    393 
Professional fees   384    298    294    387    396 
FDIC assessment   150    150    150    150    150 
Telephone, postage, supplies   298    300    306    295    292 
Advertising expense   120    104    183    117    119 
Data processing expense   178    147    140    192    136 
Low income housing expense   71    71    71    71    71 
Surety insurance   85    88    87    87    83 
Director fees   72    72    72    72    72 
Other real estate owned expense (recovery), net   5    —    —    (10)   10 
Other expenses   458    372    415    423    371 
Total Noninterest Expense   7,743    7,513    7,649    7,787    8,714 
EARNINGS BEFORE PROVISION FOR INCOME TAXES   4,356    3,990    3,862    3,989    3,169 
Provision for income taxes   1,314    1,546    1,414    1,422    1,081 
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS  $3,042   $2,444   $2,448   $2,567   $2,088 

 
 

   (Unaudited)
Three Months Ended		 
(Amounts in thousands, except per share  December 31,   September 30,   June 30,   March 31,   December 31, 
amounts and percentages)  2016   2016   2016   2016   2015 
                          
Per Share Data:                         
Basic earnings per share available to common stockholders  $0.63   $0.50   $0.51   $0.54   $0.44 
Diluted earnings per share available to common stockholders  $0.61   $0.49   $0.50   $0.52   $0.43 
Cash dividends declared  $739   $738   $686   $683   $680 
Average shares outstanding   4,850    4,843    4,811    4,777    4,711 
Average diluted shares outstanding   4,974    4,953    4,930    4,921    4,854 
Shares outstanding as of end of period   4,853    4,847    4,837    4,794    4,769 
                          
SELECTED PERFORMANCE DATA                         
Annualized return on average assets   1.02%   0.84%   0.85%   0.90%   0.91%
Annualized return on average equity   10.88%   8.69%   8.98%   9.67%   8.51%
Net interest margin (taxable equivalent)   3.89%   3.88%   3.96%   4.14%   4.17%
Average loans as a percent of average deposits   75.01%   72.96%   72.22%   73.43%   71.11%
Average total stockholders’ equity as a % of average total assets   9.38%   9.70%   9.43%   9.26%   10.68%
Annualized common dividend payout ratio   24.29%   30.20%   28.02%   26.61%   32.57%

 

                   (Extracted from 
LOANS                  audited annual 
(Dollars in thousands)  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   financial statements) 
   December 31,   September 30,   June 30,   March 31,   December 31, 
   2016   2016   2016   2016   2015 
Real Estate Loans:                         
Construction  $43,683   $38,162   $29,251   $42,465   $44,816 
Commercial   421,222    404,841    398,290    411,999    399,993 
 Multi family   105,963    83,946    82,637    59,993    63,597 
Residential   170,523    173,476    174,084    173,437    171,964 
Commercial & industrial loans   48,874    50,967    51,366    55,694    52,033 
Consumer loans   3,533    1,630    1,311    1,675    1,574 
Gross Loans   793,798    753,022    736,939    745,263    733,977 
Net deferred loan fees   (1,146)   (1,523)   (1,430)   (1,329)   (1,260)
Allowance for loan losses   (10,167)   (10,092)   (10,038)   (9,943)   (9,970)
NET LOANS  $782,485   $741,407   $725,471   $733,991   $722,747 

 

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.

 

FNB BANCORP/CA/ Reports