BANKING; First Quarter Results FIRST NATIONAL BANK NORCAL

First National Bank of Northern California Reports First Quarter 2013 Earnings of $0.20 per Diluted Share

975 El Camino Real  SSF

975 El Camino Real
SSF

SOUTH SAN FRANCISCO, CA–(Marketwired – Apr 29, 2013) – 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 first quarter of 2013 of $772,000 or $0.20 per diluted share, compared to net earnings available to common shareholders of $1,102,000 or $0.30 per diluted share for the first quarter of 2012. Dividend payments on the preferred shares outstanding were made as required by the Treasury Department’s Small Business Lending Program. Total assets as of March 31, 2013 were $897,478,000 compared to $746,649,000 as of March 31, 2012. Our net loans increased by $98,976,000 or 22.1% year over year. Our deposits increased by $138,734,000 or 21.3% during the same period. At March 31, 2013, the Company had considerable liquid assets on hand as evidenced by $246,460,000 in available for sale securities and $39,092,000 in cash and cash equivalents.

“During the first quarter of 2013, the Board of Directors approved the closure of our island of Guam office. This office was acquired by the Company in our acquisition of Oceanic Bank that was completed in September 2012. Alternatives to closure, such as a sale to another financial institution, either in whole or in part, were explored. After a considerable due diligence period, the Company was not able to find a suitable buyer and a tentative closure date of June 14, 2013 was established. In connection with the closure of our office on the island of Guam, during the month of March 2013, an accrued ‘Stay Bonus’ for all the employees of the Guam office was established totaling $78,000. Additionally, an occupancy accrual for the cost of the Guam branch lease through December 31, 2013, the end of the lease term, of $176,000 was also recorded. Together, the cost of employee severance and the cost to accelerate the expense of the Guam lease was $254,000 and this expense is reflected in our 1(st) quarter, 2013 operating expenses. The Company intends to retain the loan relationships as well as the Certificate of Deposit customers through their maturity date, and will service those customers from our San Francisco locations, but the checking and savings deposit account holders will not be retained. Overall, the closure of the Guam branch will allow the Company to concentrate our efforts on our operations in San Francisco and on the peninsula,” stated Tom McGraw, Chief Executive Officer.

“Our loan portfolio, investment portfolio and deposit portfolio all experienced growth during the first quarter of 2013. Overall, our assets and our deposits grew by 3% during the quarter. Our stockholders’ equity increased during the first quarter as well. As we continue to integrate the Oceanic Bank purchase into the operations of the Company, we should begin to realize additional operational efficiencies. Controlling expenses is a management priority in the near term. Our tax equivalent net interest margin decreased by 3 basis points during the first quarter of 2013 compared to the fourth quarter of 2012. The low interest rate environment currently supported by the Federal Open Market Committee of the Federal Reserve Bank has made it difficult for community banks to maintain net interest margin. In order to offset declines experienced in the yield of our earning assets, management has reduced the interest rates we pay our deposit customers. Further declines in our net interest margin in the near term are likely. We are doing everything that we can to effectively manage our balance sheet in this low interest rate environment,” continued Mr. McGraw.

“The quality of our loan portfolio continued to improve during the first quarter of 2013. Our total loans past due have declined since December 31, 2012 while at the same time we have increased our allowance for loan losses. Our allowance for loan losses coupled with our non-accreteable discount on purchased impaired loans was 1.7% of our outstanding loans as of March 31, 2013. We continue efforts to work with our borrowers that have experienced difficulty in making their loan payments towards the goal of finding solutions that are mutually beneficial to both our customers and the Company. We want the communities in which we live and do business to grow and prosper, and we take pride in doing our very best to help make that possible,” stated Mr. McGraw.

 

Financial Highlights: 
First Quarter, 2013 

Consolidated             Three         Three         Three         Three 
Statements of            months        months        months        months 
Earnings                  ended         ended         ended         ended 
(in '000s except         March                       March 
earnings per share        31,         Dec 31,         31,         Dec 31, 
amounts)                  2013          2012          2012          2011 
                        --------      --------      --------      -------- 

Interest income         $  9,348      $  9,408      $  7,882      $  8,167 
Interest expense             682           727           684           744 
                         -------       -------       -------       ------- 
 Net interest income       8,666         8,681         7,198         7,423 
Provision for loan 
 losses                      600           633           400           450 
Noninterest income         1,025         1,119         1,920         1,310 
Noninterest expense        7,739         7,557         7,053         6,771 
                         -------       -------       -------       ------- 
 Interest before 
  income taxes             1,352         1,610         1,665         1,512 
Provision for income 
 taxes                       422           264           377           427 
                         -------       -------       -------       ------- 
 Net earnings                930         1,346         1,288         1,085 
 Dividends and 
  discount accretion 
  on preferred stock         158           157           186             - 
                         -------       -------       -------       ------- 
 Net earnings 
  available to common 
  stockholders          $    772      $  1,189      $  1,102      $  1,085 
                         =======       =======       =======       ======= 

Basic earnings per 
 share                  $   0.21      $   0.32      $   0.30      $   0.29 
Diluted earnings per 
 share                  $   0.20      $   0.32      $   0.30      $   0.29 

Average assets          $893,982      $900,571      $735,438      $729,771 
Average equity          $ 95,378      $ 95,206      $ 87,878      $ 85,682 
Return on average 
 assets (annualized)        0.35%         0.53%         0.60%         0.59% 
Return on average 
 equity (annualized)        3.24%         5.00%         5.02%         5.07% 
Efficiency ratio              80%           77%           77%           78% 
Net interest margin 
 (taxable equivalent)       4.52%         4.55%         4.61%         4.46% 
Average shares 
 outstanding               3,714         3,693         3,686         3,685 
Average diluted shares 
 outstanding               3,807         3,774         3,726         3,708 

Consolidated Balance    As of       As of       As of       As of 
Sheets                 March 31,    Dec 31,    March 31,    Dec 31, 
(in '000s)               2013        2012        2012        2011 
                      ----------  ----------  ----------  ---------- 

 Assets: 
Cash and cash 
 equivalents          $   39,092  $   27,861  $   45,118  $   38,474 
Interest-bearing 
 time deposits with 
 other financial 
 institutions              9,713      13,216           -           - 
Securities available 
 for sale, at fair 
 value                   246,460     234,945     205,353     187,664 
Loans, net               546,278     541,563     447,302     443,721 
Premises, equipment 
 and leasehold 
 improvements, net        12,634      12,706      13,042      13,227 
Other real estate 
 owned, net                6,668       6,650       1,920       2,747 
Goodwill                   1,841       1,841       1,841       1,841 
Other equity 
 securities                5,338       5,464       4,580       4,608 
Accrued inrterest 
 receivable                3,751       3,760       3,577       3,614 
Prepaid expenses           1,116       1,372       1,844       2,107 
Bank owned life 
 insurance                11,880      11,785      11,491       9,521 
Other assets              12,707      14,177      10,581       8,117 
                       ---------   ---------   ---------   --------- 
 Total assets         $  897,478  $  875,340  $  746,649  $  715,641 
                       =========   =========   =========   ========= 

 Liabilities and 
 stockholders' 
 equity: 
Deposits: 
Demand and NOW        $  255,511  $  253,849  $  216,195  $  202,690 
Savings and money 
 market                  372,112     343,437     327,592     310,237 
Time                     162,802     171,066     107,904     108,851 
                       ---------   ---------   ---------   --------- 
 Total deposits          790,425     768,352     651,691     621,778 
Accrued expenses and 
 other liabilities        11,184      11,630       7,068       6,667 
                       ---------   ---------   ---------   --------- 
 Total liabilities       801,609     779,982     658,759     628,445 
Stockholders' equity      95,869      95,358      87,890      87,196 
                       ---------   ---------   ---------   --------- 
 Total liab. and 
  stockholders' 
  equity              $  897,478  $  875,340  $  746,649  $  715,641 
                       =========   =========   =========   ========= 

Other Financial 
Information 

Allowance for loan 
 losses               $    9,357  $    9,124  $    8,287  $    9,897 
Nonperforming assets  $   19,459  $   19,142  $   21,391  $   12,684 
Total gross loans     $  555,635  $  550,687  $  455,589  $  453,618 
Common shares
 outstanding           3,738,000   3,699,000   3,683,000   3,681,000

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 Wall Street Journal}

S0uth San Francisco’s local banker 975 El Camino Real SSF 650/588.6800

 

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