FNB BANCORP/CA/ - FORM 8-K - EX-99.01 - EXHIBIT 99.01

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8-K - FORM 8-K - FNB BANCORP/CA/	fnb_8k.htm

Exhibit 99.01

Press Release+

Available for Immediate Publication: July 24, 2017

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

Source: FNB Bancorp (CA) (NASDAQ: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 (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, excpet 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, excpet 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, excpet 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, excpet 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, excpet 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, excpet 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.

FNB BANCORP/CA/ - FORM 8-K - EX-99.01 - EXHIBIT 99.01 - July 24, 2017

Attached files

FNB BANCORP/CA/ Reports