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

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

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)

Three Months Ended

Twelve Months Ended

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

126

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

850

Interest on note payable

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

–

210

438

Earnings on bank owned life insurance

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

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

472

284

Surety insurance

349

347

Director fees

288

Other real estate owned expense (recovery), net

(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)

Three Months Ended

Twelve Months Ended

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
%

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)

financial statements)

December 31,

September 30,

June 30,

March 31,

December 31,

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
%

1.28
%

FNB Bancorp and Subsidiary
CONSOLIDATED BALANCE SHEETS
(Dollar and share amounts in thousands, except earnings per share)

(Extracted from

audited annual

(Unaudited)

financial statements)

December 31,

September 30,

June 30,

March 31,

December 31,

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

205

Securities available for sale, at fair value

355,857

360,301

362,006

353,364

360,105

Other equity securities

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

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

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

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

Interest on note payable

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

–

123

Earnings on bank owned life insurance

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

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

123

105

Surety insurance

Director fees

Other real estate owned expense, net

–

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

2016

Per Share and Shareholder Information:

Basic earnings per share available to common stockholders

$
0.13

$
0.45

$
0.46

$
0.42

Diluted earnings per share available to common stockholders

$
0.13

$
0.43

$
0.44

$
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)

financial statements)

December 31,

September 30,

June 30,

March 31,

December 31,

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)

(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

ReleaseID: 487417

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