SOUTH SAN FRANCISCO, CA -- (Marketwire) -- 11/02/12 -- FNB Bancorp (OTCQB: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common shareholders for the third quarter of 2012 of $4,783,000 or $1.33 per diluted share, compared to net earnings available to common shareholders of $817,000 or $0.23 per diluted share for the third quarter of 2011. During September 2012, Oceanic Bank Holding, Inc. and its wholly-owned subsidiary, Oceanic Bank, were acquired by FNB Bancorp. The material increase in earnings, assets and loans year over year were enhanced by this one-time event. Dividend payments on the preferred shares outstanding were made as required by the Treasury Department's Small Business Lending Program during the third quarter of 2012 and the third quarter of 2011. Total assets as of September 30, 2012 were $897,724,000 compared to $723,020,000 as of September 30, 2011. Our net loan totals increased by $103,828,000 or 23.4% during the nine months of this year, and our deposits increased $170,186,000 or 27.4% during the same time period. The Company's liquidity position remains strong with $228,805,000 in available for sale securities and $70,803,000 in cash and cash equivalents as of September 30, 2012.
On September 15, 2011, Preferred Stock was issued by FNB Bancorp to the U. S. Treasury as part of the U. S. Treasury's Small Business Lending Fund ("SBLF"). The initial dividend rate is 5%. Depending on the volume of our small business lending, it can decrease to as low as one percent. If our small business lending does not increase in the first two years, the rate will increase to seven percent. After 4.5 years, the dividend rate will increase to nine percent if the Company has not repaid the SBLF funding. The proceeds of this Preferred Stock investment were used to pay off the Preferred Stock Series A and B that were issued by the U. S. Treasury under the TARP program in 2009.
"With respect to the recent acquisition of Oceanic Bank, all the employees of Oceanic were offered employment with First National Bank of Northern California, so there were no layoffs that resulted from this transaction. Adding Oceanic Bank's locations, customers, and employee expertise to that of our own will give us a greater presence in San Francisco. During the third quarter of 2012, our nonperforming loans continued to decrease, excluding the nonperforming loans acquired in the Oceanic Bank merger and one large nonperforming credit relationship was paid off in full," stated Tom McGraw, Chief Executive Officer.
Financial Highlights: Third Quarter, 2012
Consolidated Statements of Earnings
(in '000s except earnings per share amounts)
Three months Three months Nine months Nine months
ended ended ended ended
September September September September
30, 30, 30, 30,
2012 2011 2012 2011
------------ ------------ ------------ ------------
Interest income $ 8,355 $ 8,241 $ 24,115 $ 24,730
Interest expense 663 842 2,000 2,583
----------- ----------- ----------- -----------
Net interest
income 7,692 7,399 22,115 22,147
Provision for loan
losses (400) (450) (1,200) (1,300)
Noninterest income 4,770 1,367 8,105 3,769
Noninterest expense 6,631 6,783 20,182 20,303
----------- ----------- ----------- -----------
Income before
income taxes 5,431 1,533 8,838 4,313
Income tax expense 490 344 1,381 1,141
----------- ----------- ----------- -----------
Net earnings 4,941 1,189 7,457 3,172
Dividends and
discount
accretion on
preferred stock 158 372 501 800
----------- ----------- ----------- -----------
Net earnings
available to
common
shareholders $ 4,783 $ 817 $ 6,956 $ 2,372
=========== =========== =========== ===========
Basic earnings per
share $ 1.36 $ 0.23 $ 1.98 $ 0.68
Diluted earnings per
share $ 1.33 $ 0.23 $ 1.95 $ 0.67
Average assets $ 787,264 $ 724,083 $ 757,792 $ 716,068
Average equity $ 90,135 $ 84,574 $ 88,834 $ 82,872
Return on average
assets (annualized) 2.43% 0.45% 1.22% 0.44%
Return on average
equity (annualized) 21.23% 3.86% 10.44% 3.82%
Efficiency ratio 53% 77% 67% 78%
Net interest margin
(taxable
equivalent) 4.58% 4.83% 4.55% 4.92%
Average shares
outstanding 3,516 3,509 3,513 3,509
Average diluted
shares outstanding 3,583 3,528 3,569 3,528
"During the third quarter, we demonstrated our ability to grow our deposits and our loan pipeline volumes are increasing. We have hired Stuart Keirle to enhance our business development efforts in San Francisco, and we have successfully expanded our lending reach into Santa Clara County with our loan production office in Sunnyvale. We are continually looking for ways to add value to our franchise, either through expansion of our branch and lending operations organically or through successful acquisitions. However, our primary objective has been, and will continue to be, to provide local banking services that our customers need with service levels that exceed expectations," continued Mr. McGraw.
Financial Highlights: Third Quarter, 2012
Consolidated Balance Sheets
(in '000s) As of As of As of As of
September 30, December 31, September 30, December 31,
2012 2011 2011 2010
------------- ------------- ------------- -------------
Assets:
Cash and cash
equivalents $ 70,803 $ 38,474 $ 69,273 $ 60,874
Securities available
for sale 228,805 187,664 152,376 126,189
Loans, net 547,549 443,721 456,106 474,828
Premises, equipment
and leasehold
improvements, net 12,761 13,227 13,399 13,535
Other real estate
owned, net 1,923 2,747 2,988 6,680
Goodwill 1,841 1,841 1,841 1,841
Other equity
securities 5,888 4,608 4,768 5,246
Accrued interest
receivable 3,639 3,614 3,120 3,765
Prepaid expenses 1,513 2,107 1,753 2,843
Other assets 23,002 17,638 17,396 18,838
------------- ------------- ------------- -------------
Total assets $ 897,724 $ 715,641 $ 723,020 $ 714,639
============= ============= ============= =============
Liabilities and
stockholders'
equity:
Deposits:
Demand and NOW $ 254,611 $ 202,690 $ 201,823 $ 197,650
Savings and money
market 351,078 310,237 324,321 305,390
Time 186,275 108,851 105,510 125,400
------------- ------------- ------------- -------------
Total deposits 791,964 621,778 631,654 628,440
Accrued expenses and
other liabilities 11,044 6,667 5,672 5,275
------------- ------------- ------------- -------------
Total liabilities 803,008 628,445 637,326 633,715
Stockholders' equity 94,716 87,196 85,694 80,924
------------- ------------- ------------- -------------
Total liab. and
stockholders'
equity $ 897,724 $ 715,641 $ 723,020 $ 714,639
============= ============= ============= =============
Other Financial
Information
Allowance for loan
losses $ 8,582 $ 9,897 $ 9,646 $ 9,524
Nonperforming assets $ 25,555 $ 21,845 $ 19,168 $ 23,392
Total gross loans $ 556,131 $ 453,618 $ 465,752 $ 484,352
On September 21, 2012, FNB Bancorp completed its purchase of Oceanic Bank Holding, Inc., the sole shareholder of Oceanic Bank. As part of the purchase transaction, Oceanic Bank Holding, Inc. was merged into FNB Bancorp, and Oceanic Bank was merged into First National Bank of Northern California. The assets and liabilities were valued at fair value at the time the purchase was completed. Listed below is a summary of the balance sheet of Oceanic Bank at acquisition, the preliminary estimates of the balance sheet effects of recording the assets and liabilities at fair value, and the post-merger balance sheet positions that were merged into First National Bank of Northern California. The purchase transaction was an all cash deal for $27,750,000, which resulted in a bargain purchase gain of $3,666,133 which is recorded as non-interest income.
Oceanic Bank
Statement of Financial Condition
As of Friday, September 21, 2012 PST
Merger and
Fair
Balance Market Balance
as of Adjustments post
Description 9/21/2012 (2) merger
Assets
Cash and Due From Banks $ 9,297,624 $ (27,671,585) (1) $ (18,373,961)
Time deposits 17,096,333 - 17,096,333
MBS and CMO securities 5,292,917 (209,612) 5,083,305
Commercial paper
investments 8,303,735 - 8,303,735
Gross loans 107,483,947 - 107,483,947
Loan purchase discount - (4,290,371) (4,290,371)
Less: Allowance for loan
and lease losses (1,902,092) 1,902,092 -
Fixed assets and suspense
accounts 42,867 - 42,867
Interest receivable 396,587 - 396,587
Prepaid assets 96,586 - 96,586
Deferred tax assets 1,008,860 972,000 1,980,860
Core deposit intangibles - 109,544 109,544
------------- ------------- -------------
Total assets $ 147,117,364 $ (29,187,932) $ 117,929,432
============= ============= =============
Liabilities
DDA and savings deposits $ 24,075,230 - $ 24,075,230
Time deposits 83,544,506 49,401 83,593,907
------------- ------------- -------------
Total deposits $ 107,619,736 $ 49,401 $ 107,669,137
FHLB Borrowings 6,015,000 6,015,000
Deferred interest offset -
FHLB Borrowings - 81,711 81,711
Interest payable 163,735 - 163,735
Accounts payable 333,716 - 333,716
------------- ------------- -------------
Total liabilities $ 114,132,187 $ 131,112 $ 114,263,299
------------- ------------- -------------
Equity:
Capital Stock $ 10,000,000 $ (10,000,000) $ -
Retained earnings 22,086,214 (22,086,214) -
Bargain purchase gain - 3,666,133 3,666,133
YTD 2012 net earnings 898,963 (898,963) -
------------- ------------- -------------
Total Equity $ 32,985,177 $ (29,319,044) $ 3,666,133
------------- ------------- -------------
Total liabilities and
equity $ 147,117,364 $ (29,187,932) $ 117,929,432
============= ============= =============
Footnotes:
1) The $27,671,585 is the purchase price of $27,750,000 plus escrow costs
less funds held in the name of Oceanic Holding, Inc. They are not fair value
adjustments to book valuations.
2) All fair market value adjustments contained in this schedule are based on
the facts known at this time. Subsequent information may become available
that could cause these fair market adjustments to change.
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.
