First National Bank of Northern California Reports Second Quarter 2016 Earnings of $0.52 per Diluted Share
/EINPresswire.com/ -- SOUTH SAN FRANCISCO, CA -- (Marketwired) -- 07/27/16 -- FNB Bancorp (OTCBB: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common shareholders for the second quarter of 2016 of $2,448,000 or $0.52 per diluted share, compared to net earnings available to common shareholders of $2,071,000 or $0.45 per diluted share for the second quarter of 2015.
The second quarter of 2016 operating results, when compared to the same period a year ago, were positively affected by the completion of the America California Bank ("ACB") acquisition that occurred in September 2015. The ACB acquisition provided an opportunity for the Company to increase our interest earning assets and interest bearing liabilities in a cost effective manner. During the second quarter of 2016, our net interest income was $10.5 million, a decrease of $180,000 from the first quarter of 2016. This decrease was caused by a decline in average earning assets outstanding of $6.7 million during the quarter, and a drop in yield of 18 basis points.
"During the second quarter of 2016, the Company was able to control operational expenses that helped to offset the negative affect of declines in total assets at June 30, 2016 as compared to March 31, 2016. The Company experienced declines in both our loan and deposit totals during the quarter, and these portfolio reductions serve as evidence of the difficulty of holding our relatively high net interest margin while at the same time striving to grow our balance sheet in a low interest rate environment. Net interest margins declined during the second quarter of 2016, due primarily to higher yielding loan payoffs that were partially reinvested into new loans at lower yields, lower yielding investment securities and partially used to maintain liquidity. During the second quarter of 2016, we were able to increase our noninterest bearing DDA deposit balances by $1.6 million. Management understands the values of our core deposit base and we make every effort to develop and grow our core deposit banking relationships," stated CEO Tom McGraw.
"During the second quarter of 2016, our non-accrual loans increased above levels experienced at year-end. The increase in non-accrual loans was not related to any systemic problems identified within any segments or loan types within our loan portfolio but was isolated to a few individual customer relationships. The Bank has worked hard to adhere to prudent underwriting standards as we continue to search for quality deposit and loan relationships. The second quarter provision for loan losses was $75,000. Management believes the level of reserves are sufficient to absorb expected losses inherent in our loan portfolio at June 30, 2016," continued Tom McGraw.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands) As of
June 30,
2016 2015
----------- -----------
ASSETS
Cash and due from banks $ 20,564 $ 91,662
Interest-bearing time deposits with financial
institutions 205 2,138
Securities available for sale, at fair value 342,420 295,171
Other equity securities 7,206 6,069
Loans, net of deferred loan fees and allowance for
loan losses 725,471 571,665
Bank premises, equipment and leasehold
improvements, net 10,114 10,527
Bank owned life insurance 16,050 12,681
Accrued interest receivable 4,547 3,909
Other real estate owned 1,247 806
Goodwill 4,580 1,841
Prepaid expenses 783 922
Other assets 15,393 12,437
----------- -----------
TOTAL ASSETS $ 1,148,580 $ 1,009,828
=========== ===========
LIABILITIES
Deposits:
Demand, noninterest bearing $ 267,593 $ 249,420
Demand, interest bearing 112,591 101,693
Savings and money market 508,605 437,092
Time 118,700 104,935
----------- -----------
Total Deposits 1,007,489 893,140
Federal Home Loan Bank advances 7,000 -
Note payable 4,650 5,250
Accrued expenses and other liabilities 17,026 11,001
----------- -----------
Total Liabilities 1,036,165 909,391
STOCKHOLDERS' EQUITY
Common stock, no par value: 75,944 67,597
Retained Earnings 31,424 31,452
Accumulated other comprehensive earnings, net of
tax 5,047 1,388
----------- -----------
Total Stockholders' Equity 112,415 100,437
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,148,580 $ 1,009,828
=========== ===========
CONSOLIDATED STATEMENTS OF
EARNINGS
(Amounts in thousands, except per (Unaudited) (Unaudited)
share amounts) Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
--------- --------- --------- ---------
INTEREST INCOME
Interest and fees on loans $ 9,563 $ 7,855 $ 19,434 $ 15,565
Interest on dividends and
securities 1,731 1,432 3,416 2,776
Interest on deposits with other
financial institutions 1 13 2 27
--------- --------- --------- ---------
Total interest income 11,295 9,300 22,852 18,368
--------- --------- --------- ---------
INTEREST EXPENSE
Deposits 709 538 1,492 992
Federal Home Loan Bank advances 1 - 9 1
Interest on note payable 56 57 113 116
--------- --------- --------- ---------
Total interest expense 766 595 1,614 1,109
--------- --------- --------- ---------
NET INTEREST INCOME 10,529 8,705 21,238 17,259
Provision for loan losses 75 75 150 150
--------- --------- --------- ---------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 10,454 8,630 21,088 17,109
--------- --------- --------- ---------
NONINTEREST INCOME
Service charges 618 627 1,239 1,238
Net gain on sale of available-
for-sale securities 57 152 241 221
Earnings on bank owned life
insurance 105 87 205 171
Other income 277 401 514 715
--------- --------- --------- ---------
Total Noninterest Income 1,057 1,267 2,199 2,345
--------- --------- --------- ---------
NONINTEREST EXPENSES
Salaries and employee benefits 4,876 4,111 9,814 8,413
Occupancy expense 617 646 1,248 1,314
Equipment expense 438 410 872 815
Professional fees 294 354 681 741
FDIC assessment 150 150 300 300
Telephone, postage, supplies 306 256 601 545
Advertising expense 183 170 300 269
Data processing expense 140 147 332 281
Low income housing expense 71 71 142 142
Surety insurance 87 88 174 176
Director fees 72 72 144 144
Other real estate owned expense
recovery, net - (6) (10) (6)
Other expenses 415 320 838 598
--------- --------- --------- ---------
Total Noninterest Expense 7,649 6,789 15,436 13,732
--------- --------- --------- ---------
EARNINGS BEFORE PROVISION FOR
INCOME TAXES 3,862 3,108 7,851 5,722
Provision for income taxes 1,414 1,037 2,836 1,852
--------- --------- --------- ---------
NET EARNINGS AVAILABLE TO COMMON
STOCKHOLDERS $ 2,448 $ 2,071 $ 5,015 $ 3,870
========= ========= ========= =========
Per Share Data:
Basic earnings per share
available to common
stockholders $ 0.53 $ 0.46 $ 1.10 $ 0.86
Diluted earnings per share
available to common
stockholders $ 0.52 $ 0.45 $ 1.07 $ 0.84
Cash dividends declared $ 686 $ 559 $ 1,369 $ 1,114
Average shares outstanding 4,582 4,511 4,568 4,499
Average diluted shares
outstanding 4,695 4,636 4,693 4,629
FINANCIAL HIGHLIGHTS
(Dollars in thousands)
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
----------- ----------- ----------- -----------
AVERAGE BALANCES:
Total Assets $ 1,156,072 $ 953,193 $ 1,151,283 $ 936,347
Total Loans 740,097 590,872 741,689 589,396
Total Earning Assets 1,079,470 871,816 1,076,130 860,434
Total Deposits 1,024,736 836,610 1,018,502 819,260
Total Stockholder's
Equity 109,064 99,701 107,642 98,924
SELECTED PERFORMANCE
DATA
Annualized return on
average assets 0.85% 0.87% 0.87% 0.83%
Annualized return on
average equity 8.98% 8.31% 9.32% 7.82%
Net interest margin
(taxable equivalent) 3.96% 4.14% 4.05% 4.13%
Average loans as a
percent of average
deposits 72.22% 70.63% 72.82% 71.94%
Average total
stockholders' equity
as a % of average
total assets 9.43% 10.46% 9.35% 10.56%
Annualized common
dividend payout ratio 28.02% 26.99% 27.30% 28.79%
NON-PERFORMING (Extracted
ASSETS from
(Dollars In audited
Thousands) annual
financial
(Unaudited)(Unaudited) statements)(Unaudited)(Unaudited)
As of
------------------------------------------------------
June 30, March 31, December September June 30,
2016 2016 31, 2015 30, 2015 2015
---------- ---------- ---------- ---------- ----------
Non-accrual loans $ 8,182 $ 6,882 $ 7,915 $ 5,192 $ 6,020
Other real estate
owned 1,247 1,055 1,026 838 806
---------- ---------- ---------- ---------- ----------
Total non-
performing assets 9,429 7,937 8,941 6,030 6,826
========== ========== ========== ========== ==========
Loan loss reserve $ 10,038 $ 9,943 $ 9,970 $ 9,940 $ 9,836
Non-accrual
loans/Gross loans 1.11% 0.92% 1.08% 0.73% 1.03%
Loan loss
reserves/Gross
loans 1.36% 1.33% 1.36% 1.40% 1.69%
CONSOLIDATED BALANCE (Extracted
SHEETS from
(Dollars in audited
thousands) annual
financial
(Unaudited)(Unaudited) statements)(Unaudited)(Unaudited)
As of
------------------------------------------------------
June 30, March 31, December September June 30,
2016 2016 31, 2015 30, 2015 2015
---------- ---------- ---------- ---------- ----------
ASSETS
Cash and due from
banks $ 20,564 $ 37,737 $ 12,314 $ 40,282 $ 91,662
Interest-bearing
time deposits
with financial
institutions 205 205 205 1,246 2,138
Securities
available for
sale, at fair
value 342,420 329,396 329,207 315,560 295,171
Other equity
securities 7,206 6,756 6,748 6,748 6,069
Loans, net of
deferred loan
fees and
allowance for
loan losses 725,471 733,991 722,747 696,888 571,665
Bank premises,
equipment and
leasehold
improvements, net 10,114 10,320 10,202 10,326 10,527
Bank owned life
insurance 16,050 15,946 15,845 15,742 12,681
Accrued interest
receivable 4,547 4,603 4,511 4,326 3,909
Other real estate
owned 1,247 1,055 1,026 838 806
Goodwill 4,580 4,580 4,580 4,580 1,841
Prepaid expenses 783 945 997 877 922
Other assets 15,393 15,444 15,967 14,044 12,437
---------- ---------- ---------- ---------- ----------
TOTAL ASSETS $1,148,580 $1,160,978 $1,124,349 $1,111,457 $1,009,828
========== ========== ========== ========== ==========
LIABILITIES
Deposits:
Demand,
noninterest
bearing $ 267,593 $ 265,947 $ 263,822 $ 262,206 $ 249,420
Demand, interest
bearing 112,591 113,337 102,304 84,682 101,693
Savings and
money market 508,605 526,557 491,633 512,534 437,092
Time 118,700 124,410 125,430 129,943 104,935
---------- ---------- ---------- ---------- ----------
Total Deposits 1,007,489 1,030,251 983,189 989,365 893,140
Federal Home Loan
Bank advances 7,000 - 17,000 - -
Note payable 4,650 4,800 4,950 5,100 5,250
Accrued expenses
and other
liabilities 17,026 17,230 15,048 13,302 11,001
---------- ---------- ---------- ---------- ----------
Total
Liabilities 1,036,165 1,052,281 1,020,187 1,007,767 909,391
STOCKHOLDERS' EQUITY
Common stock, no
par value: 75,944 75,240 74,805 67,852 67,597
Retained Earnings 31,424 29,666 27,816 33,046 31,452
Accumulated other
comprehensive
earnings, net of
tax 5,047 3,791 1,541 2,792 1,388
---------- ---------- ---------- ---------- ----------
Total
Stockholders'
Equity 112,415 108,697 104,162 103,690 100,437
---------- ---------- ---------- ---------- ----------
TOTAL
LIABILITIES
AND
STOCKHOLDERS'
EQUITY $1,148,580 $1,160,978 $1,124,349 $1,111,457 $1,009,828
========== ========== ========== ========== ==========
CONSOLIDATED
STATEMENTS OF
INCOME
(Amounts in
thousands, except (Unaudited)
per share amounts) Three Months Ended
------------------------------------------------------
June 30, March 31, December September June 30,
2016 2016 31, 2015 30, 2015 2015
---------- ---------- ---------- ---------- ----------
INTEREST INCOME
Interest and fees
on loans $ 9,563 $ 9,871 $ 9,361 $ 8,309 $ 7,855
Interest on
dividends and
securities 1,731 1,685 1,657 1,575 1,432
Interest on
deposits with
other financial
institutions 1 1 3 9 13
---------- ---------- ---------- ---------- ----------
Total interest
income 11,295 11,557 11,021 9,893 9,300
---------- ---------- ---------- ---------- ----------
INTEREST EXPENSE
Deposits 709 783 734 635 538
Federal Home Loan
Bank advances 1 8 7 1 -
Interest on note
payable 56 57 56 57 57
---------- ---------- ---------- ---------- ----------
Total interest
expense 766 848 797 693 595
---------- ---------- ---------- ---------- ----------
NET INTEREST INCOME 10,529 10,709 10,224 9,200 8,705
Provision for loan
losses 75 75 (530) 75 75
---------- ---------- ---------- ---------- ----------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 10,454 10,634 10,754 9,125 8,630
---------- ---------- ---------- ---------- ----------
NONINTEREST INCOME
Service charges 618 621 647 618 627
Net gain on sale
of available-for-
sale securities 57 184 89 29 152
Earnings on bank
owned life
insurance 105 100 103 90 87
Other income 277 237 290 287 401
---------- ---------- ---------- ---------- ----------
Total
Noninterest
Income 1,057 1,142 1,129 1,024 1,267
---------- ---------- ---------- ---------- ----------
NONINTEREST EXPENSES
Salaries and
employee benefits 4,876 4,938 6,010 4,100 4,111
Occupancy expense 617 631 611 592 646
Equipment expense 438 434 393 718 410
Professional fees 294 387 396 334 354
FDIC assessment 150 150 150 150 150
Telephone,
postage, supplies 306 295 292 237 256
Advertising
expense 183 117 119 112 170
Data processing
expense 140 192 136 659 147
Low income housing
expense 71 71 71 70 71
Surety insurance 87 87 83 122 88
Director fees 72 72 72 72 72
Other real estate
owned expense
recovery, net - (10) 10 - (6)
Other expenses 415 423 371 313 320
---------- ---------- ---------- ---------- ----------
Total
Noninterest
Expense 7,649 7,787 8,714 7,479 6,789
---------- ---------- ---------- ---------- ----------
EARNINGS BEFORE
PROVISION FOR
INCOME TAXES 3,862 3,989 3,169 2,670 3,108
Provision for
income taxes 1,414 1,422 1,081 431 1,037
---------- ---------- ---------- ---------- ----------
NET EARNINGS
AVAILABLE TO COMMON
STOCKHOLDERS $ 2,448 $ 2,567 $ 2,088 $ 2,239 $ 2,071
========== ========== ========== ========== ==========
(Unaudited)
Three Months Ended
------------------------------------------------------
June 30, March 31, December September June 30,
2016 2016 31, 2015 30, 2015 2015
---------- ---------- ---------- ---------- ----------
Per Share Data:
Basic earnings per
share available
to common
stockholders $ 0.53 $ 0.56 $ 0.47 $ 0.49 $ 0.46
Diluted earnings
per share
available to
common
stockholders $ 0.52 $ 0.55 $ 0.45 $ 0.48 $ 0.45
Cash dividends
declared $ 686 $ 683 $ 680 $ 646 $ 559
Average shares
outstanding 4,582 4,550 4,487 4,524 4,511
Average diluted
shares
outstanding 4,695 4,687 4,623 4,643 4,636
SELECTED PERFORMANCE
DATA
Annualized return
on average assets 0.85% 0.90% 0.91% 0.86% 0.87%
Annualized return
on average equity 8.98% 9.67% 8.51% 8.88% 8.31%
Net interest
margin (taxable
equivalent) 3.96% 4.14% 4.17% 4.00% 4.14%
Average loans as a
percent of
average deposits 72.22% 73.43% 71.11% 67.72% 70.63%
Average total
stockholders'
equity as a % of
average total
assets 9.43% 9.26% 10.68% 9.69% 10.46%
Annualized common
dividend payout
ratio 28.02% 26.61% 32.57% 28.85% 26.99%
LOANS (Extracted
from
(Dollars in audited
thousands) annual
financial
(Unaudited)(Unaudited) statements)(Unaudited)(Unaudited)
As of
------------------------------------------------------
June 30, March 31, December September June 30,
2016 2016 31, 2015 30, 2015 2015
---------- ---------- ---------- ---------- ----------
Real Estate Loans:
Construction $ 29,251 $ 42,465 $ 44,816 $ 35,868 $ 32,648
Commercial 398,290 411,999 399,993 394,090 330,303
Multi family 82,637 59,993 63,597 63,928 51,613
Residential 174,084 173,437 171,964 172,280 127,900
Commercial &
industrial loans 51,366 55,694 52,033 39,843 37,745
Consumer loans 1,311 1,675 1,574 1,497 1,696
---------- ---------- ---------- ---------- ----------
Gross Loans 736,939 745,263 733,977 707,506 581,905
Net deferred loan
fees (1,430) (1,329) (1,260) (678) (404)
Allowance for loan
losses (10,038) (9,943) (9,970) (9,940) (9,836)
---------- ---------- ---------- ---------- ----------
NET LOANS $ 725,471 $ 733,991 $ 722,747 $ 696,888 $ 571,665
========== ========== ========== ========== ==========
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
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