Financial Highlights: First quarter, 2008
Consolidated Statement of Earnings
(in ‘000s except earnings per share amounts)
Three Three
months ended months ended
March 31, March 31,
2008 2007
Interest income $ 10,371 $ 9,904
Interest expense 3,322 3,086
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Net Interest Income 7,049 6,818
Provision for loan losses (990) (150)
Non-interest income 1,261 1,004
Non-interest expense 6,177 5,758
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Income before income taxes 1,143 1,914
Provision for income taxes (256) (455)
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Net Earnings $ 887 $ 1,459
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Basis earnings per share $ 0.30 $ 0.49
Diluted earnings per share $ 0.30 $ 0.48
Average assets $ 652,476 $ 596,026
Average equity $ 67,747 $ 62,592
Return on average assets 0.54% 0.98%
Return on average equity 5.23% 9.32%
Efficiency ratio 74% 74%
Net interest margin (taxable
equivalent) 4.86% 5.23%
Average number of shares
outstanding 2,966 2,985
Average diluted shares
outstanding 2,975 3,037
Consolidated Balance Sheets
(In ‘000s)
As of As of
March 31, 2008 March 31, 2007
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Assets
Cash and cash equivalents $ 22,099 $ 40,151
Securities available for sale 87,107 90,679
Loans, net 491,400 440,487
Premises, equipment and
leasehold improvements 13,880 13,723
Other real estate owned 3,955 -
Goodwill 1,841 1,841
Other assets 29,262 28,106
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Total assets $ 649,544 $ 614,987
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Liabilities and
stockholders’ equity:
Deposits:
Demand and NOW $ 183,157 $ 183,448
Savings and money market 183,460 187,284
Time 133,062 143,805
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Total deposits 499,679 514,537
Federal Home Loan Bank advances 75,000 30,000
Accrued expenses and other
liabilities 7,794 7,744
-------------- --------------
Total liabilities 582,473 552,281
Stockholders’ equity 67,071 62,706
-------------- --------------
Total liabilities and
stockholders’ equity $ 649,544 $ 614,987
============== ==============
"The financial results for the first quarter of 2008 were below our
expectations and reflect the difficult operating environment that all
financial institutions currently face. During the first quarter of 2008,
management took steps to prudently identify problem credits that require
additional attention and recorded an increase in the Bank's loan loss
provision. During the first quarter of 2008, assets grew by $5,079,000 or
less than 1% above December 31, 2007 levels. Total deposits have decreased
by $14,858,000 or 3% year over year. The decrease in our deposit levels
reflects the drawdown of cash reserves by many of our customers in reaction
to the current economic slowdown coupled with an expectation of increased
inflationary pressures, driven in no small part by the high cost of energy.
Year over year, we have increased our use of FHLB borrowings to help fund
loan growth and keep the interest rates paid on our deposit accounts at
prudent levels. Since June of 2007, actions taken by the Federal Open
Market Committee have driven down short term interest rates significantly.
As a result, our taxable equivalent net interest margin decreased to 4.86%
during the first quarter of 2008, compared with 5.23% for the same period
in 2007. Our quarterly net interest income increased by $231,000 year over
year, however, our provision for loan losses increased by $840,000 compared
to prior year levels. The additional provision was considered necessary
given the increased charge-off levels experienced during the first quarter
of 2008. The financial results of the quarter were positively affected by
a pretax gain of $138,000 that was related to the sale of approximately
$8,200,000 in book value municipal securities that were sold in order to
reduce existing FHLB borrowing levels," stated Tom McGraw, Chief Executive
Officer.
"The difficulties experienced within the loan portfolio during the first
quarter of 2008 were not related to internal control or specific loan
segment problems. They were customer specific situations whose problems
were primarily market driven. We are not a subprime lender, and we do not
have subprime loans within our loan portfolio. However, severe and
continuing declines in the housing markets, including housing markets
located in the surrounding Bay Area, coupled with a general contraction of
available credit facilities has necessitated the actions that we have
taken," continued Tom McGraw, Chief Executive Officer.
"Our loan and deposit portfolios are performing at reasonable levels,
despite the significant drop in market interest rates we have recently
experienced. Management is committed to providing our loan customers the
credit they need, even during difficult times, while providing our
depository customers a safe and convenient place to meet their banking
needs. The Company and the Bank are well capitalized and have withstood
difficult economic times before. For over forty-four years we have been
dedicated to our customers, our communities, and our shareholders. We have
demonstrated our ability to deliver products and services that provide
meaningful financial solutions for our customers while we launch new
products and services designed to make your banking experience easier and
more convenient," noted Mr. McGraw.
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.
Contact Information: Contacts: Tom McGraw Chief Executive Officer (650) 875-4864 Dave Curtis Chief Financial Officer (650) 875-4862 Website: www.fnbnorcal.com