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News   Press Releases

FNB Bancorp Reports Fourth Quarter 2017 Earnings of $0.13 Per Diluted Share

January 31, 2018

SAN FRANCISCO, CA / ACCESSWIRE / January 31, 2018 / 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 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
(Dollar and share amounts in thousands, except earnings per share)


 (Unaudited)
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
(Dollars in thousands)
(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
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.

Contacts:

Tom McGraw, Chief Executive Officer (650) 875-4864
Dave Curtis, Chief Financial Officer (650) 875-4862
Website: www.fnbnorcal.com

SOURCE: FNB Bancorp

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