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Fresno, CA (January 27, 2014) - Fresno First Bank (Bank) (OTC Bulletin Board FSNF) reported today unaudited net income of $26,000 for the year ended December 31, 2013 compared to income of
$1,171,000 for 2012. Income for the 4th quarter ended December 31, 2013 rose to $509,000 compared to net income of $262,000 during the comparable quarter in 2012, a 94% increase. Fully diluted earnings per share were $.01 and $.49 in 2013 and 2012 respectively.
"In 2013 our net income fell short of goal, but in other ways we had a very successful year and have better positioned the Bank for future success," stated Rick Whitsell, President and CEO of Fresno First Bank. "In June we wrote off a significant loan relationship. To battle back from a million dollar loss at the end of the second quarter with two of our best quarters back to back, and to turn a profit for the year, took a real team effort. We saw significant gains in our top line revenue, an improved efficiency ratio and significant growth in loans, deposits and the number of customers we serve. We are well positioned for success in 2014."
At December 31, 2013, total deposits reached $197.0 million, an increase of $10.6 million or 5.7%, compared to $186.4 million at December 31, 2012. Total loans outstanding were $135.9 million at year end 2013 compared to $108.8 million in 2012, an increase of $27.1 million or 24.9%, and total assets stood at $218.9 million compared to $210.3 million at December 31, 2012. Shareholders' equity at December 31, 2013 was $22.5 million, reflecting a strong capital ratio of 10.28% of total assets. "2013 was another excellent growth year for Fresno First especially in the loan area," added Steve Canfield, Executive Vice President and CFO. "In particular we saw strong increases in all loan areas during the year with growth in agriculture loans, business lines of credit, commercial term loans, and our SBA department was named the most active Small Business Administration ("SBA") Community Bank Lender for the 2013 fiscal year according to the Fresno District Office of the U.S. Small Business Administration."
Gross revenue increased 6.0% during the year to $8.97 million led by a 12.0% increase in net interest income. The increase was primarily attributable to increases in loans and investment securities outstanding. Operating expenses declined by $50,000 year over year to $5.65 million. As a result the Bank's operating income before provision for loan losses and tax expense increased 20.0% or $553,000, from $2.77 million in 2012 to $3.32 million in 2013. The Bank's efficiency ratio improved to 61.75% in
2013 from 68.69% in 2012. The Bank's annualized net interest margin decreased .21% to 3.87% for the year ended December 31, 2013 compared to 4.08% for 2012. "Although we were able to lower our cost of funds in 2013 and increase our interest income, the low interest rate environment for loans and investment securities has caused our net interest margin to compress over the past year," stated Canfield.
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Fresno First Bank - page 2
Non‐interest income for the year ended December 31, 2013 was $941,000 compared to $1.30 million in
2012, a decline of $359,000. "The primary reason for the year‐over‐year decline in non‐interest income was a $200,000 write‐down of our OREO property as part of a sale we agreed to at year end. In addition, we did see lower mortgage origination volume during the second half of 2013 with the uptick in long term interest rates," stated Whitsell. "In 2014, we expect increased non‐interest income from merchant services and government guaranteed lending. And, while the mortgage refinance volume has slowed down, the mortgage purchase market is picking up which should be a positive."
During 2013, the Bank recorded $3,250,000 in net loan charge offs compared to $1,075,000 in net charge offs during 2012. Net charge offs represented 2.65% of average loans outstanding in 2013 compared to 1.04% of average loans outstanding in 2012. For the year ended December 31, 2013, the Bank recorded a provision for credit losses of $3,275,000 compared to $783,000 for 2012. The allowance for credit losses as a percentage of total loans was 1.86% at December 31, 2013 compared to 2.30% at December 31, 2012. The Company believes the allowance for credit losses is adequate to provide for possible losses inherent within the loan portfolio at December 31, 2013.
Non‐performing assets were $2,072,000, or .95% of total assets as of December 31, 2013 compared to
$3,607,000, or 1.72% of total assets as of December 31, 2012. Non‐performing assets consisted of one non‐accrual loan of $49,000 and one OREO property valued at $2,023,000 at December 31, 2013. "In late December we agreed to a sale of the OREO property and it is currently in escrow and expected to close during the first quarter of 2014," explained Whitsell. "The charge‐offs we took in the second quarter needed to be done, but with that behind us our delinquencies and non‐accrual loans have been virtually eliminated. Our reserve is at a very solid level and we are ready for improved earnings in
2014."
Fresno First Bank stock trades on NASDAQ's Over the Counter Bulletin Board under the symbol "FSNF". The Bank's Mandatorily Convertible Series C Preferred shares are also listed on the OTC Bulletin Board under the symbol "FSNFP". The Bank is headquartered in Fresno, California and was founded in December 2005. Additional information about Fresno First Bank is available from the Bank's website at www.fresnofirstbank.com.
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FORWARD‐LOOKING STATEMENTS: In addition to historical information, this release may include forward‐looking statements, which reflect management's current expectations for Fresno First Bank's future financial results, business prospects and business developments. Management's expectations for Fresno First Bank's future necessarily involve assumptions, estimates and the evaluation of risks and uncertainties. Various factors could cause actual events or results to differ materially from those expectations. Specific factors include, but are not limited to the continued weak economic recovery in the United States and in particular the Fresno and Central Valley the markets in which we operate, the response of the federal and state government and our regulators thereto, our ability to continue our growth, our beliefs as to the adequacy of the existing and anticipated allowances for loan losses, beliefs and expectations regarding actions that may be taken by regulatory authorities having oversight of our operations, interest rates and financial policies of the United States government and the Board of Governors of the Federal Reserve, continued weakness in the real estate markets within which we operate and general economic conditions in both the United States and abroad. Any forward‐looking statements
contained herein represent management's expectations as of the date of this release. Fresno First Bank undertakes
no obligation to release publicly the results of any revisions to the forward‐looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events. For those statements, the Bank claims the protection of the safe harbor for forward‐looking statements contained in the Private Securities Litigation Reform Act of 1995.
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