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News   Press Releases

FNB Bancorp Reports First Quarter 2018 Earnings of $0.54 Per Diluted Share

April 27, 2018

SAN FRANCISCO, CA / ACCESSWIRE / April 27, 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 first quarter of 2018 of $4,188,000 or $0.54 per diluted share, compared to net earnings available to common shareholders of $3,089,000 or $0.41 per diluted share for the first quarter of 2017. First quarter results include the first full quarter of federal income tax rates of 21% following the enactment of the Tax Cuts and Jobs Act of 2017 (''H.R.1'') in December 2017 which reduced the federal income tax rate from 35% to 21% beginning January 1, 2018. First quarter results also reflect the sale of our OREO property located in South San Francisco, CA at a pretax gain of $392,000.

On December 11, 2017, the Company entered into an Agreement and Plan of Merger and Reorganization (''Merger Agreement'') with TriCo Bancshares (TCBK) pursuant to which the Company would merge with and into TriCo Bancshares and the Bank would merge with and into Tri Counties Bank, the California state banking subsidiary of TriCo Bancshares. Consummation of the mergers is subject to the receipt of approvals by the shareholders of each of the Company and TriCo Bancshares, the receipt of all necessary regulatory approvals, and the satisfaction of other closing conditions which are customary for such transactions. TriCo Bancshares has filed a Form S-4 registration statement with the Securities and Exchange Commission containing a joint proxy statement/prospectus which the Company and TriCo Bancshares are providing to their shareholders of record on April 9, 2018 for the special meetings of their respective shareholders to be held on May 29, 2018 seeking approvals of the Merger Agreement and the mergers.

''During the first quarter of 2018, the Company was able to grow our net loan portfolio by $1.3 million. Growth in our non-interest bearing DDA liabilities totaled $20.2 million. Cash outflows from higher cost deposit liabilities were offset by an increase in our FHLB borrowings outstanding of $25 million. Our personnel worked diligently during the first 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.

''During the first quarter of 2018, we were able to sell our South San Francisco, CA OREO commercial real estate property for a pretax gain of $392,000. The purchase and sale agreement for this property sale requires that the Company continue our efforts to obtain a formally agreed upon toxic soil and water remediation plan with the local water board. We have set aside $725,000 to cover the expected future remediation and monitoring costs based on advice we have received from our soil and water engineering consultant, which could vary in the future,'' continued Tom McGraw.

FNB Bancorp and Subsidiary
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollar and share amounts in thousands, except earnings per share)
As of
March 31,
2018
2017
ASSETS
Cash and due from banks
$ 21,233 $ 25,337
Interest-bearing time deposits with financial institutions
130 205
Securities available for sale, at fair value
348,264 353,364
Other equity securities
7,567 7,211
Loans, net of deferred loan fees and allowance for loan losses
831,049 807,191
Bank premises, equipment and leasehold improvements, net
9,159 9,571
Bank owned life insurance
16,736 16,349
Accrued interest receivable
4,914 4,785
Other real estate owned
1,817 1,443
Goodwill
4,580 4,580
Prepaid expenses
675 768
Other assets
13,842 15,917
TOTAL ASSETS
$ 1,259,966 $ 1,246,721
LIABILITIES
Deposits:
Demand, noninterest bearing
$ 333,681 $ 287,029
Demand, interest bearing
129,340 125,643
Savings and money market
425,757 496,697
Time
129,675 115,622
Total Deposits
1,018,453 1,024,991
Federal Home Loan Bank advances
100,000 86,000
Note payable
3,600 4,200
Accrued expenses and other liabilities
17,455 17,198
Total Liabilities
1,139,508 1,132,389
STOCKHOLDERS' EQUITY
Common stock, no par value
85,854 84,603
Retained earnings
37,866 29,842
Accumulated other comprehensive losses, net of tax
(3,262 ) (113 )
Total Stockholders' Equity
120,458 114,332
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 1,259,966 $ 1,246,721

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
March 31, December 31,
2018
2017
2017
2016
INTEREST INCOME
Interest and fees on loans
$ 10,399 $ 10,073 $ 41,956 $ 38,313
Interest on dividends and securities
2,090 1,943 8,136 7,156
Interest on deposits with other financial institutions
72 11 126 44
Total interest income
12,561 12,027 50,218 45,513
INTEREST EXPENSE
Deposits
737 636 2,807 2,780
Federal Home Loan Bank advances
349 146 850 67
Interest on note payable
53 53 214 222
Total interest expense
1,139 835 3,871 3,069
NET INTEREST INCOME
11,422 11,192 46,347 42,444
(Recovery of) provision for loan losses
- - (360 ) 150
NET INTEREST INCOME AFTER (RECOVERY OF) PROVISION FOR LOAN LOSSES
11,422 11,192 46,707 42,294
NONINTEREST INCOME
Service charges
529 597 2,264 2,461
Net gain on sale of available-for-sale securities
- 28 210 438
Earnings on bank owned life insurance
99 102 390 402
Other income
214 283 996 1,294
Total noninterest income
842 1,010 3,860 4,595
NONINTEREST EXPENSES
Salaries and employee benefits
4,121 4,774 19,366 19,474
Occupancy expense
657 651 2,747 2,528
Equipment expense
523 402 1,646 1,765
Professional fees
203 473 1,482 1,363
FDIC assessment
90 130 400 600
Telephone, postage, supplies
314 297 1,267 1,199
Advertising expense
100 108 451 524
Data processing expense
143 139 571 657
Low income housing expense
129 105 472 284
Surety insurance
89 84 349 347
Director fees
72 72 288 288
Other real estate owned (income) expense, net
(333 ) 10 80 (5 )
Other expenses
313 360 1,430 1,668
Total noninterest expense
6,421 7,605 30,549 30,692
EARNINGS BEFORE PROVISION FOR INCOME TAXES
5,843 4,597 20,018 16,197
Provision for income taxes
1,655 1,508 9,307 5,696
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS
$ 4,188 $ 3,089 $ 10,711 $ 10,501
Per Share and Shareholder Information
Basic earnings per share available to common stockholders
$ 0.56 $ 0.42 $ 1.46 $ 1.45
Diluted earnings per share available to common stockholders
$ 0.54 $ 0.41 $ 1.41 $ 1.42
Cash dividends declared
$ 973 $ 780 $ 3,634 $ 2,890
Average shares outstanding
7,463 7,300 7,361 7,233
Average diluted shares outstanding
7,685 7,518 7,607 7,417
Shares outstanding as of the end of period
7,481 7,311 7,442 7,280

FNB Bancorp and Subsidiary
FINANCIAL HIGHLIGHTS
(Dollar and share amounts in thousands, except earnings per share)
(Unaudited) (Unaudited)
Three Months Ended Twelve Months Ended
March 31, December 31,
2018
2017
2017
2016
AVERAGE BALANCES
Total Assets
$ 1,270,575 $ 1,233,278 $ 1,257,836 $ 1,163,454
Total Loans
836,165 807,741 823,333 746,829
Total Earning Assets
1,214,133 1,168,418 1,192,081 1,099,192
Total Deposits
1,042,162 1,013,065 1,033,117 1,017,398
Total Stockholder's Equity
118,157 109,926 116,814 109,854
SELECTED PERFORMANCE DATA
Annualized return on average assets
1.32 % 1.00 % 0.85 % 0.90 %
Annualized return on average equity
14.18 % 11.24 % 9.17 % 9.56 %
Net interest margin (taxable equivalent)
3.86 % 3.97 % 3.95 % 3.95 %
Average loans as a percent of average deposits
80.23 % 79.73 % 79.69 % 73.41 %
Average total stockholders' equity as a % of average total assets
9.30 % 8.91 % 9.29 % 9.44 %
Annualized common dividend payout ratio
23.22 % 25.25 % 33.93 % 27.52 %

NON-PERFORMING ASSETS
(Extracted from
(Dollars in ihousands)
audited annual
(Unaudited)
financial statements)
(Unaudited)
(Unaudited)
(Unaudited)
March 31
December 31,
September 30,
June 30,
March 31,
2018
2017
2017
2017
2017
Non-accrual loans
$ 3,774 $ 1,940 $ 6,933 $ 7,363 $ 8,444
Other real estate owned
1,817 3,300 1,471 1,459 1,443
Total non-performing assets
$ 5,591 $ 5,240 $ 8,404 $ 8,822 $ 9,887
Loan loss reserve
$ 10,186 $ 10,171 $ 10,250 $ 10,177 $ 10,144
Non-accrual loans/Gross loans
0.45 % 0.23 % 0.83 % 0.90 % 1.03 %
Loan loss reserves/Gross loans
1.21 % 1.21 % 1.22 % 1.24 % 1.24 %

FNB Bancorp and Subsidiary
CONSOLIDATED BALANCE SHEETS
(Dollar and share amounts in thousands, except earnings per share)
(Extracted from
audited annual
(Unaudited)
financial statements)
(Unaudited)
(Unaudited)
(Unaudited)
March 31,
December 31,
September 30,
June 30,
March 31,
2018
2017
2017
2017
2017
ASSETS
Cash and due from banks
$ 21,233 $ 18,353 $ 23,714 $ 21,859 $ 25,337
Interest-bearing time deposits with financial institutions
130 130 230 230 205
Securities available for sale, at fair value
348,264 355,857 360,301 362,006 353,364
Other equity securities
7,567 7,567 7,567 7,567 7,211
Loans, net of deferred loan fees and allowance for loan losses
831,049 829,766 829,100 808,508 807,191
Bank premises, equipment and leasehold improvements, net
9,159 9,322 9,417 9,416 9,571
Bank owned life insurance
16,736 16,637 16,540 16,438 16,349
Accrued interest receivable
4,914 5,317 4,804 4,945 4,785
Other real estate owned
1,817 3,300 1,471 1,459 1,443
Goodwill
4,580 4,580 4,580 4,580 4,580
Prepaid expenses
675 825 469 621 768
Other assets
13,842 13,584 16,421 16,032 15,917
TOTAL ASSETS
$ 1,259,966 $ 1,265,238 $ 1,274,614 $ 1,253,661 $ 1,246,721
LIABILITIES
Deposits:
Demand, noninterest bearing
$ 333,681 $ 313,435 $ 309,753 $ 296,249 $ 287,029
Demand, interest bearing
129,340 130,988 122,353 129,435 125,643
Savings and money market
425,757 467,788 482,335 472,050 496,697
Time
129,675 138,084 130,630 124,604 115,622
Total Deposits
1,018,453 1,050,295 1,045,071 1,022,338 1,024,991
Federal Home Loan Bank advances
100,000 75,000 85,000 91,000 86,000
Note payable
3,600 3,750 3,900 4,050 4,200
Accrued expenses and other liabilities
17,455 16,913 19,447 17,546 17,198
Total Liabilities
1,139,508 1,145,958 1,153,418 1,134,934 1,132,389
STOCKHOLDERS' EQUITY
Common stock, no par value
85,854 85,565 85,309 85,159 84,603
Retained Earnings
37,866 34,654 34,655 32,306 29,842
Accumulated other comprehensive (losses) earnings, net of tax
(3,262 ) (939 ) 1,232 1,262 (113 )
Total Stockholders' Equity
120,458 119,280 121,196 118,727 114,332
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 1,259,966 $ 1,265,238 $ 1,274,614 $ 1,253,661 $ 1,246,721

FNB Bancorp and Subsidiary
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollar and share amounts in thousands, except earnings per share)
(Unaudited)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2018
2017
2017
2017
2017
INTEREST INCOME
Interest and fees on loans
$ 10,399 $ 10,867 $ 10,646 $ 10,370 $ 10,073
Interest on dividends and securities
2,090 2,119 2,085 1,989 1,943
Interest on deposits with other financial institutions
72 42 54 19 11
Total interest income
12,561 13,028 12,785 12,378 12,027
INTEREST EXPENSE
Deposits
737 757 737 677 636
Federal Home Loan Bank advances
349 249 241 214 146
Interest on note payable
53 52 54 55 53
Total interest expense
1,139 1,058 1,032 946 835
NET INTEREST INCOME
11,422 11,970 11,753 11,432 11,192
Recovery of loan losses
- (220 ) - (140 ) -
NET INTEREST INCOME AFTER RECOVERY OF LOAN LOSSES
11,422 12,190 11,753 11,572 11,192
NONINTEREST INCOME
Service charges
529 532 571 564 597
Net gain on sale of available-for-sale securities
- - 59 123 28
Earnings on bank owned life insurance
99 97 102 89 102
Other income
214 237 240 236 283
Total noninterest income
842 866 972 1,012 1,010
NONINTEREST EXPENSES
Salaries and employee benefits
4,121 4,906 4,824 4,862 4,774
Occupancy expense
657 685 704 707 651
Equipment expense
523 402 436 406 402
Professional fees
203 261 340 408 473
FDIC assessment
90 90 90 90 130
Telephone, postage, supplies
314 324 321 325 297
Advertising expense
100 109 127 107 108
Data processing expense
143 143 145 144 139
Low income housing expense
129 122 122 123 105
Surety insurance
89 87 89 89 84
Director fees
72 72 72 72 72
Other real estate owned (income) expense, net
(333 ) 63 - 7 10
Other expenses
313 354 378 338 360
Total noninterest expense
6,421 7,618 7,648 7,678 7,605
EARNINGS BEFORE PROVISION FOR INCOME TAXES
5,843 5,438 5,077 4,906 4,597
Provision for income taxes
1,655 4,478 1,766 1,555 1,508
NET EARNINGS AVAILABLE TO COMMON STOCKHOLDERS
$ 4,188 $ 960 $ 3,311 $ 3,351 $ 3,089

FNB Bancorp and Subsidiary
(Dollar and share amounts in thousands, except earnings per share)
(Unaudited)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2018
2017
2017
2017
2017
Per Share and Shareholder Information:
Basic earnings per share available to common stockholders
$ 0.56 $ 0.13 $ 0.45 $ 0.46 $ 0.42
Diluted earnings per share available to common stockholders
$ 0.54 $ 0.13 $ 0.43 $ 0.44 $ 0.41
Cash dividends declared
$ 973 $ 964 $ 961 $ 886 $ 823
Average shares outstanding
7,463 7,412 7,375 7,342 7,300
Average diluted shares outstanding
7,685 7,669 7,619 7,585 7,518
Shares outstanding as of end of period
7,481 7,442 7,403 7,362 7,311
SELECTED PERFORMANCE DATA
Annualized return on average assets
1.32 % 0.30 % 1.05 % 1.07 % 1.00 %
Annualized return on average equity
14.18 % 3.18 % 11.10 % 11.58 % 11.24 %
Net interest margin (taxable equivalent)
3.86 % 4.01 % 3.97 % 3.93 % 3.97 %
Average loans as a percent of average deposits
80.23 % 79.17 % 78.73 % 81.18 % 79.73 %
Average total stockholders' equity as a % of average total assets
9.30 % 9.47 % 9.43 % 9.21 % 8.91 %
Annualized common dividend payout ratio
23.23 % 100.42 % 29.02 % 26.44 % 26.64 %

(Extracted from
LOANS
audited annual
(Dollars in thousands)
(Unaudited)
financial statements)
(Unaudited)
(Unaudited)
(Unaudited)
March 31,
December 31,
September 30,
June 30,
March 31,
2018
2017
2017
2017
2017
Real estate loans:
Construction
$ 36,775 $ 35,206 $ 49,374 $ 46,325 $ 49,490
Commercial
453,999 456,992 443,556 436,286 431,295
Multi family
105,780 105,138 109,396 104,373 112,911
Residential
175,656 173,476 174,000 166,610 169,373
Commercial & industrial loans
51,520 55,727 51,827 57,217 49,277
Consumer loans
17,993 14,057 11,193 8,884 6,065
Gross loans
841,723 840,596 839,346 819,695 818,411
Net deferred loan (fees) cost
(489 ) (659 ) 4 (1,010 ) (1,076 )
Allowance for loan losses
(10,186 ) (10,171 ) (10,250 ) (10,177 ) (10,144 )
NET LOANS
$ 831,048 $ 829,766 $ 829,100 $ 808,508 $ 807,191

NET INTEREST INCOME AND AVERAGE BALANCES
FNB BANCORP AND SUBSIDIARY
Three months ended March 31,
2018 2017
Annualized
Annualized
Average
Average
Average
Average
(Dollar amounts in thousands)
Balance
Interest
Yield
Balance
Interest
Yield
INTEREST EARNING ASSETS
Loans, gross (1) (2)
$ 836,165 $ 10,399 5.04 % $ 807,741 10,073 5.06 %
Taxable securities
221,387 1,364 2.50 % 219,857 1,210 2.23 %
Nontaxable securities (3)
130,045 872 2.72 % 135,706 982 2.93 %
Interest on deposits in
other financial institutions
26,536 72 1.10 % 5,114 11 0.87 %
Total interest earning assets
1,214,133 12,707 4.24 % 1,168,418 12,276 4.26 %
Cash and due from banks
6,252 15,275
Premises
9,275 9,720
Other assets
40,915 39,865
Total noninterest earning assets
56,442 64,860
TOTAL ASSETS
$ 1,270,575 $ 1,233,278
Demand, int bearing
130,927 37 0.11 % 123,675 28 0.09 %
Money market
360,353 340 0.38 % 400,081 389 0.39 %
Savings
88,574 23 0.11 % 89,149 22 0.10 %
Time deposits
135,962 337 1.01 % 114,577 197 0.70 %
FHLB advances
90,104 349 1.57 % 89,344 146 0.66 %
Note payable
3,675 53 5.85 % 5,732 53 3.75 %
Total interest bearing liabilities
809,595 1,139 0.57 % 822,558 835 0.41 %
NONINTEREST BEARING LIABILITIES:
Demand deposits
326,346 285,583
Other liabilities
16,447 15,211
Total noninterest bearing liabilities
342,793 300,794
TOTAL LIABILITIES
1,152,388 1,123,352
Stockholders' equity
118,157 109,926
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
$ 1,270,545 $ 1,233,278
NET INTEREST INCOME AND MARGIN
ON TOTAL EARNING ASSETS (4)
$ 11,568 3.86 % $ 11,441 3.97 %

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. Statements concerning the potential merger of the Company with TriCo Bancshares and the potential merger of the Bank with Tri Counties Bank may also be forward-looking statements. Reference should be made to the Company's Annual Report on Forms 10-K and 10-K/A for the year ended December 31 2017, the TriCo Bancshares Annual Report on Form 10-K for the year ended December 31, 2017, and the TriCo Bancshares Form S-4 Registration Statement, as well as their other filings with the Securities and Exchange Commission, for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.

Contacts:

Tom McGraw, Chief Executive Officer (650) 875-4864
Dave Curtis, Chief Financial Officer (650) 875-4862

SOURCE: FNB Bancorp

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