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

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

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)

Three Months Ended

Twelve Months Ended

March 31,

December 31,

2018

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

126

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

Interest on note payable

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

–

210

438

Earnings on bank owned life insurance

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

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

349

347

Director fees

288

Other real estate owned (income) expense, net

(333
)

(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)

Three Months Ended

Twelve Months Ended

March 31,

December 31,

2018

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
%

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)

March 31

December 31,

September 30,

June 30,

March 31,

2018

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
%

1.22
%

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)

March 31,

December 31,

September 30,

June 30,

March 31,

2018

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

230

205

Securities available for sale, at fair value

348,264

355,857

360,301

362,006

353,364

Other equity securities

7,567

7,211

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

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

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

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

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

–

123

Earnings on bank owned life insurance

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

130

Telephone, postage, supplies

314

324

321

325

297

Advertising expense

100

109

127

107

108

Data processing expense

143

145

144

139

Low income housing expense

129

122

123

105

Surety insurance

Director fees

Other real estate owned (income) expense, net

(333
)

–

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

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)

March 31,

December 31,

September 30,

June 30,

March 31,

2018

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
)

(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

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

1.10
%

5,114

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

0.11
%

123,675

0.09
%

Money market

360,353

340

0.38
%

400,081

389

0.39
%

Savings

88,574

0.11
%

89,149

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

5.85
%

5,732

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

ReleaseID: 497749

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