Folsom Lake Bank First Quarter Earnings Up 20% F

FOLSOM, Calif., April 20, 2017 (GLOBE NEWSWIRE) -- Folsom Lake Bank (OTCQB:FOLB) reported net income of $271,139 for the first quarter of 2017, a 19.7% increase over first quarter 2016 net income of $226,598 and the Bank’s 29^th consecutive quarter of profitability. Highlights for the first quarter results include: total assets up 11.2% to surpass the $200 million mark for the first time; loans increased by 20.3% compared to first quarter 2016; net interest income grew by 6.4%.  "Folsom Lake Bank continues to focus on building strong local banking relationships complimented by an emphasis on superior customer service and attention to the customer," said Robert J. Flautt, President and Chief Executive Officer. "Our 20% growth in earnings for the first quarter continues to reflect the success of our customer centered approach to community banking."

April marks the 10 year anniversary of Folsom Lake Bank, with three branches including Folsom, Roseville and Rancho Cordova, and continued strong growth in assets, loans and deposits. Total assets grew $20.4 million or 11.2% to reach $202.7 million as of March 31, 2017 from $182.4 million as of March 31, 2016.  Assets also increased from the previous quarter, up $3.0 million or 1.5% over December 31, 2016 assets of $199.7 million.  Total loans were $120.5 million at March 31, 2017, up $20.3 million or 20.3% from March 31, 2016. Total deposits were $167.5 million, up $12.4 million, or 8.0% from the first quarter of 2016.  Non-interest DDA account balances also showed strong growth, increasing 28.2% to reach $57.3 million as of March 31, 2017, reflecting the Bank’s continued focus on small business lending and deposit relationships. Shareholder equity increased $573,563, or 3.4% to reach $17.4 million.

Interest income for the first quarter of 2017 was $1,752,428, up 7.6% compared to interest income of $1,628,847 in the first quarter of 2016. Interest expense for the first quarter of 2017 was $178,395, an increase of $28,517, or 19.0%, compared to $149,878 for the first quarter of 2016. Higher interest income was due primarily to increased earning assets as well as a better mix. The increase in interest expense was primarily due to an increase in FHLB borrowings to support asset growth. Net interest income for the first quarter of 2017 was $1,574,033 compared to $1,478,969 in the first quarter of 2016, an increase of $95,064 or 6.4%. The increase in revenue comes primarily from a higher level of earning assets, up $30.2 million or 19.3% compared to 2016, a better asset mix, that is somewhat offset by a lower overall asset yield.  The Bank’s net interest margin was 3.40% in the first quarter of 2017 down from 3.56% during the first quarter of 2016, again reflecting the somewhat lower asset yield on bonds and loans.  The Bank’s loan to deposit ratio was 71.95% at the end of the first quarter of 2017, improved from 64.61% for the first quarter of 2016. Non-interest income for the first quarter ending March 2017 was $76,874, an increase of $2,859 over the first quarter of 2016.

Non-Interest expense for the first quarter of 2017 was $1,190,139, up a modest $22,233 or 1.9% compared to the first quarter of 2016, with salaries and benefits up 4.2%, occupancy up 2.7% and most other expenses flat or lower. The Bank’s efficiency ratio improved to 72.1% for the first quarter from 75.5% in 2016.

Earnings per share for the first quarter of 2017, was $0.17, an increase of 19.7% compared to earnings per share of $0.14 for the first quarter of 2016.  Return on assets was 0.58% for the first quarter of 2017 compared to 0.54% in the first quarter of 2016 and return on average equity was 6.2% for the first quarter of 2017 compared to 5.5% for the first quarter of 2016.  

As of March 31, 2017, the Bank had zero past due loans, zero non performing loans and zero OREO. The Bank also had zero past due loans, zero non-performing loans and zero OREO at the end of the first quarter of 2016. In the first quarter of 2017 the Bank did not make a provision for loan losses and the loan loss reserve stood at $1,466,920, or 1.22% of loans. The Bank also did not make a provision in the first quarter of 2016 and the balance in the loan loss reserve at March 31, 2016 was $1,516,920, or 1.51%. The balance in the Bank’s loan loss reserve is considered adequate to absorb the inherent risk of credit loss in the Bank’s loan portfolio.

Tier 1 Capital at March 31, 2017 was $17,472,300, up from $16,368,372 at March 31, 2016, an increase of $1,103,928 or 6.7%. At March 31, 2017, the Bank’s Tier 1 Capital Ratio was 8.71% compared to 9.26% at March 31, 2016. Total Risk Based Capital to Risk Weighted Assets was 13.57% compared to 14.66% at quarter end 2017 and 2016, respectively. Both capital ratios are well above minimum regulatory standards to be considered a well-capitalized bank by the FDIC.  Liquidity remains healthy at $61.1 million as of March 31, 2017, and the Bank maintained a moderate loan to deposit ratio of 71.95%. The Bank’s investment portfolio consists primarily of safe U.S. Government agency bonds and mortgage-backed securities. 

The Bank continues to be involved heavily in the community. Among the many organizations the Bank supports are: Mercy Hospital Foundation, Sutter Roseville Foundation, Folsom Lake College Foundation, Harris Center at Three Stages, Eureka Schools Foundation, Folsom Economic Development Corporation, Folsom, Roseville, Rancho Cordova & El Dorado Hills Chambers, Rotary International, Kiwanis, Placer County SPCA, Folsom Pro Rodeo & the Folsom Historical Society. Folsom Lake Bank has three locations, one in the heart of the Folsom’s historic district on Sutter Street, one in Roseville on Douglas Boulevard and our new branch in Rancho Cordova on Sunrise just south of Hwy 50. The Bank is a locally owned and locally operated full service commercial bank focused on small business owners, professionals and individuals in the communities surrounding Folsom Lake.

This correspondence may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act. All of the statements contained in this correspondence, other than statements of historical fact, should be considered forward-looking statements. Although the Bank believes the expectations reflected in those forward-looking statements are reasonable, it can give no assurance that those expectations will prove to have been correct. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are not intended to give any assurance as to future results.

Robert J. Flautt President & CEO (916) 235-4570