FOLSOM, Calif., Jan. 28, 2016 (GLOBE NEWSWIRE) -- Folsom Lake Bank (OTCMARKETS:FOLB), announced pre-tax earnings of $1,419,543, for 2015, a 64.6% increase over 2014 pre-tax earnings of $862,299. Total assets were up 15.7% to reach $178.5 million at year end 2015. Loans increased 11.0% compared to 2014 as a strong increase in the level of earning assets pushed net interest income up 16.8%. “Folsom Lake Bank continues to benefit from increased loan demand and an improving economy. Assets, loans, deposits and net interest income have all increased to new record highs,” said Robert J. Flautt, President and Chief Executive Officer. “With our third branch now fully assimilated, the Bank continues to experience a strong increase in both revenue and operating profit.”
Pre-tax earnings for the fourth quarter were $417,091, a 131.1% increase over fourth quarter 2014 earnings of $180,484 and the Bank’s 24th consecutive quarter of profitability. Overall, the Bank’s pre-tax income was helped by strong growth in earning assets, the elimination of all non performing loans from the great recession and moderating growth in expenses subsequent to opening the Bank’s third branch in Rancho Cordova in late 2014. Because the Bank began accruing for income taxes for the first time in 2015, net income for 2015 was $851,210 compared to $1,214,559 in 2014. This represents a decline of 29.9%, however 2015 results include a $568,333 provision for income taxes, and 2014 results included a $352,260 negative tax provision as the Bank realized the final portion of its deferred tax asset. Overall, the Bank made almost the same after tax profit ($851,210) in 2015 as it produced in pre-tax profit ($862,299) in 2014, almost completely offsetting the 2015 tax provision of $568,333. For the fourth quarter, the Bank’s net income was $245,441, compared to $492,744 for the fourth quarter of 2014. In likewise fashion, the fourth quarter 2015 results include a provision for income taxes of $171,650 and the fourth quarter 2014 results include a negative tax provision of $312,260. Earnings per share for the fourth quarter were $0.15 compared to $0.31 per share in the fourth quarter of 2014. Earnings per share for the full twelve months of 2015 were $0.53 compared to $0.76 per share in 2014.
After almost nine years of operation and the opening of a third branch in nearby Rancho Cordova now complete, steady growth has pushed the Bank to over $178 million in assets. Total assets ended 2015 at $178.5 million, up 15.7% or $24.3 million compared to $154.2 million at the end of 2014. Assets also increased during the fourth quarter, growing $11.1 million or 6.7%. Total loans increased significantly, growing $10.2 million or 11.0%, from $93.2 million at 12/31/14 to $103.4 million at 12/31/15. Total deposits grew to $143.8 million as of 12/31/15, an increase of $18.7 million or 14.9% compared to $125.1 million as of 12/31/14. Investment securities increased from $44.1 million to $57.3 million, up $13.2 million or 29.9%. Shareholder Common Equity increased to $16.3 million, up $759,273 or 4.9%, surpassing the Bank’s initial capitalization of $15.9 million for the first time. “Folsom Lake Bank has taken advantage of several years of improved economic activity in our local markets to support growth in our branch network as well as sustained growth in assets,” said Robert J. Flautt, President and Chief Executive Officer. “This steady increase in assets, coupled with moderating expenses, has helped drive a higher level of efficiency as well as substantially improved operating results.”
Net interest income for 2015 was $5,792,830, up $833,022 or 16.8% compared to $4,959,808 for 2014. For the fourth quarter, net interest income was $1,559,394, up $259,197 or 19.9% compared to the fourth quarter of 2014. Interest income for 2015 was $6,357,846, up $892,340 or 16.3%, compared to $5,465,506 for 2014. For the quarter ending 12/31/15, interest income was $1,698,184, up $261,757 or 18.2% compared to $1,436,427 for the fourth quarter of 2014. Interest expense was higher on a growing deposit base, $565,016 in 2015, up $59,318 or 11.7% from 2014. For the quarter, interest expense grew 1.9% or $2,560, increasing to 138,790. The net interest margin for the Bank improved from 3.65% in 2014 to 3.82% in 2015. The fourth quarter NIM of 3.81% was improved 15 bps from the fourth quarter 2014 NIM of 3.66%. The improvement in the Bank’s net interest income came from strong increases in earning assets, improved yield and continued low interest expense. The improvement in the Bank’s net interest margin was primarily due to maintaining asset yields and eliminating all non-performing loans.
Non-interest income for 2015 was $356,152, up $75,304 or 26.8% compared to $280,848 in 2014. For the fourth quarter of 2015, non-interest income was $80,576, down $3,383 or 4.0% compared to the fourth quarter of 2014. The Bank showed increases in all categories including deposit service charges, debit card income, correspondent bank dividends and BOLI income. Non-Interest expense for 2015 was $4,804,439, up 9.7% or $426,082 compared to $4,378,357 in 2014. The Bank dedicated additional resources in staffing and occupancy to open the third branch in Rancho Cordova in 2014. For the quarter, expenses were $1,222,879, up $19,207, or 1.6% compared to the fourth quarter of 2014, as the fourth quarter of 2014 included most of the increased expenses for Rancho Cordova. The Bank expects expense increases to be modest for the coming year. The Bank’s efficiency ratio improved substantially, from 83.5% in 2014 to 78.1% in 2015.
The Bank made no provision for credit losses in 2014 and recorded a negative provision of $75,000 in 2015. There were no credit losses in 2015 however the Bank did have a $12,000 recovery from previous year’s losses, compared to $53,895 in loan losses in 2014. Non-accrual loans declined from $1,711,299 at December 31, 2014 to none at December 31, 2015. OREO declined from $334,000 at December 31, 2014 to $250,000 at December 31, 2015. The Bank’s Allowance for Loan & Lease Losses (ALLL) was 1.47% of loans as of December 31, 2015 compared to 1.69% at year end 2014. The balance in the Bank’s loan loss reserve stands at $1,516,920 and is adequate to absorb the inherent risk of credit loss in the Bank’s loan portfolio.
Earnings per share were $0.53 for 2015, a decrease from $0.76 in 2014. For the fourth quarter of 2015 earnings per share were $0.15, a decrease from $0.31 per share for the fourth quarter of 2014. Return on average equity was 5.2% for 2015 compared to 7.8% in 2014. Return on average earning assets was 0.56% in 2015 compared to 0.89% in 2014. The decline in earnings per share as well as operating ratios was due to the commencement of income tax accruals, which began for the first time in 2015. Tier 1 Capital at December 31, 2015 was $16,129,388, up from $15,234,504 at year end 2014, an increase of $894,884. At December 31, 2015 the Bank’s Tier 1 Capital Ratio was 9.38% compared to 10.17% at December 31, 2014. Total Risk Based Capital to Risk Weighted Assets at December 31, 2015 was 14.12% compared to 15.47% at year end 2014. Both capital ratios are well above minimum regulatory standards to be considered a well-capitalized bank by the FDIC. Liquidity remains healthy at $65.5 million as of December 31, 2014 and the Bank maintained a moderate loan to deposit ratio of 72.0%. The investment portfolio consists primarily of U.S. Government agency bonds & mortgage-backed securities.
The Bank received recognition from many financial rating organizations in 2015, including a 5-Star rating from Bauer Financial, its highest rating for Banks and an A+ rating from DepositAccounts.com which places Folsom Lake Bank as one of the healthiest banks in the nation. Folsom Lake Bank has three locations, 905 Sutter Street in Folsom, 2233 Douglas Boulevard in Roseville, and 2865 Sunrise Boulevard in Rancho Cordova. 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.