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Exhibit 99.01

Press Release

Available for Immediate Publication: January 31, 2018

 

FNB Bancorp Reports Fourth Quarter 2017 Earnings of $0.13 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 fourth quarter of 2017 of $960,000 or $0.13 per diluted share, compared to net earnings available to common shareholders of $3,042,000 or $0.41 per diluted share for the fourth quarter of 2016. Fourth quarter results include adjustments to asset values that were recorded following the enactment of the Tax Cuts and Jobs Act of 2017 (“H.R.1”), which reduced the federal income tax rate from 35% to 21% beginning in 2018. The fourth quarter adjustments related to H.R.1 included a reduction in our net deferred tax assets of $(3.0) million or $(0.39) per diluted share.

 

During the fourth quarter of 2017, the Company’s Board of Directors signed a definitive agreement whereby FNB Bancorp, the sole shareholder of First National Bank of Northern California, would be sold to TriCo Bancshares. The merger agreement is expected to be presented to and voted on by the shareholders of both companies sometime in late first quarter or early second quarter, 2018.

 

“During the fourth quarter of 2017, the Company was able to grow our net loan portfolio by $0.6 million. Growth in our deposit liabilities total $5.2 million, which included growth in our non-interest bearing DDA of $3.7 million. Cash generated from our growth in deposits and reductions in our cash and investment portfolio was used to reduce our FHLB borrowings outstanding by $10 million. Net interest income was $12.0 million during the fourth quarter of 2017, an increase of $0.2 million during the quarter. Net interest income was helped by the fact that the adjustable rate portion of our loan portfolio continued to reset to higher yields, in response to increases to short term rates by the Federal Open Market Committee and increases in short term LIBOR rates. The reduction in our Stockholder’s Equity during the quarter was related to the additional income tax expense recorded because of H.R.1. Our personnel worked diligently during the fourth quarter to maintain our profitability while continuing to provide for our customers’ financial needs, providing them with what they need when they need it”, stated CEO Tom McGraw.

 

“Our credit quality continued to improve during the fourth quarter of 2017. Total non-performing assets decreased by $3.1 million. This decrease was the result of successful efforts to reduce the level of our non-accrual loans. We did foreclose on one commercial property located in Lafayette, CA, bringing our total number of foreclosure properties to two, with a carrying value of $3.3 million as of December 31, 2017. We utilize a conservative underwriting approach in our loan origination process which, historically, has served to keep problem loans at reasonable levels. During the quarter we recorded a $0.2 million loan loan recovery. This recovery was possible due to the strong credit quality inherent in our loan portfolio coupled with the fact we experienced loan recoveries, net of loan charge offs, totaling $0.1 million during the quarter. Management believes our allowance for loan losses are adequate given the level of risk that has been 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 
   December 31, 
   2017   2016 
ASSETS          
Cash and due from banks  $18,353   $15,758 
Interest-bearing time deposits with financial institutions   130    205 
Securities available for sale, at fair value   355,857    360,105 
Other equity securities   7,567    7,206 
Loans, net of deferred loan fees and allowance for loan losses   829,766    782,485 
Bank premises, equipment and leasehold improvements, net   9,322    9,837 
Bank owned life insurance   16,637    16,247 
Accrued interest receivable   5,317    4,942 
Other real estate owned   3,300    1,427 
Goodwill   4,580    4,580 
Prepaid expenses   825    856 
Other assets   13,584    15,746 
TOTAL ASSETS  $1,265,238   $1,219,394 
           
LIABILITIES          
Deposits:          
Demand, noninterest bearing  $313,435   $296,273 
Demand, interest bearing   130,988    121,086 
Savings and money market   467,788    487,763 
Time   138,084    114,384 
Total Deposits   1,050,295    1,019,506 
Federal Home Loan Bank advances   75,000    71,000 
Note payable   3,750    4,350 
Accrued expenses and other liabilities   16,913    14,224 
Total Liabilities   1,145,958    1,109,080 
STOCKHOLDERS’ EQUITY          
Common stock, no par value    85,565    84,283 
Retained earnings    34,654    27,577 
Accumulated other comprehensive (losses), net of tax    (939   (1,546)
Total Stockholders’ Equity   119,280    110,314 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $1,265,238   $1,219,394 
 
 

FNB Bancorp and Subsidiary                
CONSOLIDATED STATEMENTS OF EARNINGS                
(Dollar and share amounts in thousands, except earnings per share)                
   (Unaudited)   (Unaudited) 
   Three Months Ended   Twelve Months Ended 
   December 31,   December 31, 
   2017   2016   2017   2016 
INTEREST INCOME                    
Interest and fees on loans  $10,867   $9,578   $41,956   $38,313 
Interest on dividends and securities   2,119    1,925    8,136    7,156 
Interest on deposits with other financial institutions   42    7    126    44 
Total interest income   13,028    11,510    50,218    45,513 
                     
INTEREST EXPENSE                    
Deposits   757    631    2,807    2,780 
Federal Home Loan Bank advances   249    48    850    67 
Interest on note payable   52    55    214    222 
Total interest expense   1,058    734    3,871    3,069 
NET INTEREST INCOME   11,970    10,776    46,347    42,444 
(Recovery of) provision for loan losses   (220)       (360)   150 
NET INTEREST INCOME AFTER (RECOVERY OF) PROVISION FOR LOAN LOSSES   12,190    10,776    46,707    42,294 
NONINTEREST INCOME                    
Service charges   532    599    2,264    2,461 
Net gain on sale of available-for-sale securities       57    210    438 
Earnings on bank owned life insurance   97    102    390    402 
Other income   237    565    996    1,294 
Total noninterest income   866    1,323    3,860    4,595 
NONINTEREST EXPENSES                    
Salaries and employee benefits   4,906    4,839    19,366    19,474 
Occupancy expense   685    635    2,747    2,528 
Equipment expense   402    448    1,646    1,765 
Professional fees   261    384    1,482    1,363 
FDIC assessment   90    150    400    600 
Telephone, postage, supplies   324    298    1,267    1,199 
Advertising expense   109    120    451    524 
Data processing expense   143    178    571    657 
Low income housing expense   122    71    472    284 
Surety insurance   87    85    349    347 
Director fees   72    72    288    288 
Other real estate owned expense (recovery), net   63    5    80    (5)
Other expenses   354    458    1,430    1,668 
Total noninterest expense   7,618    7,743    30,549    30,692 
EARNINGS BEFORE PROVISION FOR INCOME TAXES   5,438    4,356    20,018    16,197 
Provision for income taxes   4,478    1,314    9,307    5,696 
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS  $960   $3,042   $10,711   $10,501 
                     
Per Share and Shareholder Information                    
Basic earnings per share available to common stockholders  $0.13   $0.42   $1.46   $1.45 
Diluted earnings per share available to common stockholders  $0.13   $0.41   $1.41   $1.42 
Cash dividends declared  $964   $739   $3,584   $2,847 
Average shares outstanding   7,412    7,275    7,361    7,233 
Average diluted shares outstanding   7,669    7,461    7,607    7,417 
Shares outstanding as of the end of period   7,442    7,279    7,442    7,279 

 
 

FNB Bancorp and Subsidiary                
FINANCIAL HIGHLIGHTS                
(Dollar and share amounts in thousands, except earnings per share)                
   (Unaudited)   (Unaudited) 
   Three Months Ended   Twelve Months Ended 
   December 31,   December 31, 
   2017   2016   2017   2016 
AVERAGE BALANCES                    
Total Assets  $1,276,437   $1,191,942   $1,257,848   $1,163,454 
Total Loans   834,653    763,654    823,333    746,829 
Total Earning Assets   1,209,339    1,127,339    1,192,083    1,099,192 
Total Deposits   1,054,239    1,018,071    1,033,117    1,017,398 
Total Stockholder’s Equity   120,858    111,807    116,902    109,854 
                     
SELECTED PERFORMANCE DATA                    
Annualized return on average assets   0.30   1.02   0.85%    0.90
Annualized return on average equity   3.18%   10.88%   9.16%   9.56%
Net interest margin (taxable equivalent)   4.01%   3.89%   3.97%   3.97%
Average loans as a percent of average deposits   79.17%   75.01%   79.69%   73.41%
Average total stockholders’ equity as a % of average total assets   9.47%   9.38%   9.29%   9.44%
Annualized common dividend payout ratio   100.42%   24.29%   33.46%   27.11%
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, 
   2017   2017   2017   2017   2016 
Non-accrual loans  $1,940   $6,933   $7,363   $8,444   $6,647 
Other real estate owned   3,300    1,471    1,459    1,443    1,427 
Total non-performing assets  $5,240   $8,404   $8,822   $9,887   $8,074 
                          
Loan loss reserve  $10,171   $10,250   $10,177   $10,144   $10,167 
Non-accrual loans/Gross loans   0.23   0.83   0.90   1.03   0.84
Loan loss reserves/Gross loans   1.21%   1.22%   1.24%   1.24%   1.28%
 
 

FNB Bancorp and Subsidiary                    
CONSOLIDATED BALANCE SHEETS                    
(Dollar and share amounts in thousands, except earnings per share)              (Extracted from 
                   audited annual 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   financial
statements)
 
   December 31,   September 30,   June 30,   March 31,   December 31, 
   2017   2017   2017   2017   2016 
ASSETS                         
Cash and due from banks  $18,353   $23,714   $21,859   $25,337   $15,758 
Interest-bearing time deposits with financial institutions   130    230    230    205    205 
Securities available for sale, at fair value   355,857    360,301    362,006    353,364    360,105 
Other equity securities   7,567    7,567    7,567    7,211    7,206 
Loans, net of deferred loan fees and allowance for loan losses   829,766    829,100    808,508    807,191    782,485 
Bank premises, equipment and leasehold improvements, net   9,322    9,417    9,416    9,571    9,837 
Bank owned life insurance   16,637    16,540    16,438    16,349    16,247 
Accrued interest receivable   5,317    4,804    4,945    4,785    4,942 
Other real estate owned   3,300    1,471    1,459    1,443    1,427 
Goodwill   4,580    4,580    4,580    4,580    4,580 
Prepaid expenses   825    469    621    768    856 
Other assets   13,584    16,421    16,032    15,917    15,746 
TOTAL ASSETS  $1,265,238   $1,274,614   $1,253,661   $1,246,721   $1,219,394 
                          
LIABILITIES                         
Deposits:                         
Demand, noninterest bearing  $313,435   $309,753   $296,249   $287,029   $296,273 
Demand, interest bearing   130,988    122,353    129,435    125,643    121,086 
Savings and money market   467,788    482,335    472,050    496,697    487,763 
Time   138,084    130,630    124,604    115,622    114,384 
Total Deposits   1,050,295    1,045,071    1,022,338    1,024,991    1,019,506 
Federal Home Loan Bank advances   75,000    85,000    91,000    86,000    71,000 
Note payable   3,750    3,900    4,050    4,200    4,350 
Accrued expenses and other liabilities   16,913    19,447    17,546    17,198    14,224 
Total Liabilities   1,145,958    1,153,418    1,134,934    1,132,389    1,109,080 
STOCKHOLDERS’ EQUITY                         
Common stock, no par value    85,565    85,309    85,159    84,603    84,283 
Retained Earnings    34,654    34,655    32,306    29,842    27,577 
Accumulated other comprehensive (losses) earnings, net of tax    (939)    1,232    1,262    (113)   (1,546)
Total Stockholders’ Equity   119,280    121,196    118,727    114,332    110,314 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $1,265,238   $1,274,614   $1,253,661   $1,246,721   $1,219,394 
 
 

FNB Bancorp and Subsidiary                    
CONSOLIDATED STATEMENTS OF INCOME                    
(Dollar and share amounts in thousands, except earnings per share)      (Unaudited)         
   Three Months Ended 
   December 31,   September 30,   June 30,   March 31,   December 31, 
   2017   2017   2017   2017   2016 
INTEREST INCOME                         
Interest and fees on loans  $10,867   $10,646   $10,370   $10,073   $9,578 
Interest on dividends and securities   2,119    2,085    1,989    1,943    1,925 
Interest on deposits with other financial institutions   42    54    19    11    7 
Total interest income   13,028    12,785    12,378    12,027    11,510 
                          
INTEREST EXPENSE                         
Deposits   757    737    677    636    631 
Federal Home Loan Bank advances   249    241    214    146    48 
Interest on note payable   52    54    55    53    55 
Total interest expense   1,058    1,032    946    835    734 
NET INTEREST INCOME   11,970    11,753    11,432    11,192    10,776 
Recovery of loan losses   (220)       (140)        
NET INTEREST INCOME AFTER RECOVERY OF LOAN LOSSES   12,190    11,753    11,572    11,192    10,776 
NONINTEREST INCOME                         
Service charges   532    571    564    597    599 
Net gain on sale of available-for-sale securities       59    123    28    57 
Earnings on bank owned life insurance   97    102    89    102    102 
Other income   237    240    236    283    565 
Total noninterest income   866    972    1,012    1,010    1,323 
NONINTEREST EXPENSES                         
Salaries and employee benefits   4,906    4,824    4,862    4,774    4,839 
Occupancy expense   685    704    707    651    635 
Equipment expense   402    436    406    402    448 
Professional fees   261    340    408    473    384 
FDIC assessment   90    90    90    130    150 
Telephone, postage, supplies   324    321    325    297    298 
Advertising expense   109    127    107    108    120 
Data processing expense   143    145    144    139    178 
Low income housing expense   122    122    123    105    71 
Surety insurance   87    89    89    84    85 
Director fees   72    72    72    72    72 
Other real estate owned expense, net   63        7    10    5 
Other expenses   354    378    338    360    458 
Total noninterest expense   7,618    7,648    7,678    7,605    7,743 
EARNINGS BEFORE PROVISION FOR INCOME TAXES   5,438    5,077    4,906    4,597    4,356 
Provision for income taxes   4,478    1,766    1,555    1,508    1,314 
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS  $960   $3,311   $3,351   $3,089   $3,042 

 
 

FNB Bancorp and Subsidiary                    
(Dollar and share amounts in thousands, except earnings per share)   
   (Unaudited)
Three Months Ended
 
   December 31,   September 30,   June 30,   March 31,   December 31, 
   2017   2017   2017   2017   2016 
                     
Per Share and Shareholder Information:                         
Basic earnings per share available to common stockholders  $0.13   $0.45   $0.46   $0.42   $0.42 
Diluted earnings per share available to common stockholders  $0.13   $0.43   $0.44   $0.41   $0.41 
Cash dividends declared  $964   $959   $882   $780   $739 
Average shares outstanding   7,412    7,375    7,342    7,301    7,275 
Average diluted shares outstanding   7,669    7,619    7,585    7,518    7,461 
Shares outstanding as of end of period   7,442    7,403    7,362    7,311    7,280 
                          
SELECTED PERFORMANCE DATA                         
Annualized return on average assets   0.30%   1.05   1.07   1.00   1.02
Annualized return on average equity   3.18%   11.10%   11.58%   11.24%   10.88%
Net interest margin (taxable equivalent)   4.01%   3.97%   3.93%   3.98%   3.89%
Average loans as a percent of average deposits   79.17%   78.73%   81.18%   79.73%   75.01%
Average total stockholders’ equity as a % of average total assets   9.47%   9.43%   9.21%   8.91%   9.38%
Annualized common dividend payout ratio   100.42%   28.96%   26.32%   25.25%   24.29%
                          
                   (Extracted from 
LOANS                  audited annual 
(Dollars in thousands)  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   financial
statements)
 
   December 31,   September 30,   June 30,   March 31,   December 31, 
   2017   2017   2017   2017   2016 
Real estate loans:                         
Construction  $35,206   $49,374   $46,325   $49,490   $43,683 
Commercial   456,992    443,556    436,286    431,295    421,222 
 Multi family   105,138    109,396    104,373    112,911    105,963 
Residential   173,476    174,000    166,610    169,373    170,523 
Commercial & industrial loans   55,727    51,827    57,217    49,277    48,874 
Consumer loans   14,057    11,193    8,884    6,065    3,533 
Gross loans   840,596    839,346    819,695    818,411    793,798 
Net deferred loan (fees) cost   (659)   4    (1,010)   (1,076)   (1,146)
Allowance for loan losses   (10,171)   (10,250)   (10,177)   (10,144)   (10,167)
NET LOANS  $829,766   $829,100   $808,508   $807,191   $782,485 

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.