FOLSOM, Calif., Jan. 30, 2017 (GLOBE NEWSWIRE) -- Folsom Lake Bank (OTCMARKETS:FOLB), reported net income of $1,008,694 for 2016, a 18.5% increase over 2015 earnings of $851,210. The Bank completed its 28th consecutive quarter of profitability with earnings of $341,616 for the fourth quarter of 2016, up 39.2% compared to $245,441 for the fourth quarter of 2015. Total assets were up 11.9% to reach $199.7 million at year end 2016 and loans grew 15.7% to reach $119.7 million. Earnings per share increased to $0.63 for 2016, compared to $0.53 for 2015. “Folsom Lake Bank concluded another successful year of growth and profitability and continues to benefit from increased loan demand and an improving economy,” said Robert J. Flautt, President and Chief Executive Officer. “With excellent credit quality and improving efficiencies, the Bank is positioned well to continue helping local small business owners and individuals with our personalized brand of banking services.”
Net income for the twelve months ending December 31, 2016 was $1,008,694, an increase of $157,484 or 18.5%, over 2015 net income of $851,210. Net income for the fourth quarter was $341,616, an increase of $96,175 or 39.2% over fourth quarter 2015 earnings of $245,441 and the Bank’s 28th consecutive quarter of profitability. Overall, the Bank’s net income results for the full year and the fourth quarter were helped by strong growth in earning assets, tight control of expense growth, and a somewhat lower tax burden. Earnings were negatively impacted by a lower yield on average earning assets, which declined from 4.38% in 2015 to 3.94% in 2016, primarily due to lower loan yields. Earnings per share for the full twelve months of 2016 were $0.63 compared to $0.53 per share in 2015. Earnings per share for the fourth quarter were $0.21 compared to $0.15 per share in the fourth quarter of 2015.
After almost ten years of operation and the successful opening of two additional branches, Roseville in 2009 and Rancho Cordova in 2014, steady growth has pushed the Bank to almost $200 million in assets. Total assets ended 2016 at $199.7 million, up $21.3 million, or 11.9% compared to $178.5 million at the end of 2015. Assets also increased during the fourth quarter, growing $5.1 million or 2.6%. Total loans increased significantly, growing $16.3 million or 15.7%, from $103.4 million at 12/31/15 to $119.7 million at 12/31/16. Total deposits grew to $164.0 million as of 12/31/16, an increase of $20.2 million or 14.1% compared to $143.8 million as of 12/31/15. Investment securities increased from $57.5 million to $67.7 million, up $10.2 million or 17.7%. Shareholder Common Equity increased to $16.7 million, up $440,909 or 2.7%, from $16.3 million at 12/31/15. Book value per share increased from $10.22 as of 12/31/15 to $10.50 at 12/31/16. “The growth in our branch network as well as continued sustained growth in customer relationships has worked to our advantage for several years and continued in 2016,” said Robert J. Flautt, President and Chief Executive Officer. “This success of our local business model centered on a higher level of customer service continues to help drive growth in assets and increased shareholder value.
Interest income for 2016 was $6,514,817, up $156,971 or 2.5% compared to $6,357,846 for 2015. For the fourth quarter, interest income was $1,730,835 up $32,651 or 1.9% compared to the fourth quarter of 2015. Interest expense was higher on a growing deposit base, $644,000 in 2016, up $78,984 or 14.0%, compared to $565,016 for 2015. For the quarter ending 12/31/16, interest expense was $164,101, up $25,311 or 18.2% compared to $138,790 for the fourth quarter of 2015. Net interest income was $5,870,817 in 2016, up $77,987 or 1.3% from 2015. Although the Bank had substantially higher earning assets in 2016, up $20.4 million, the net interest yield dropped from 4.38% to 3.94% as the Bank absorbed lower yields on both loans and investments. For the quarter ending 12/31/16, net interest income was $1,566,734 up $7,340, or 0.5%, from $1,559,394 in the fourth quarter of 2015. The net interest margin was 3.55% in 2016 compared to 3.99% in 2015, reflecting lower yield available to the Bank on loans and investments.
Non-interest income for 2016 was $420,246, up $64,094 or 18.0% compared to $356,152 in 2015. For the fourth quarter of 2016, non-interest income was $132,545, up $51,969 or 64.5% compared to the fourth quarter of 2015. Increases in non-interest income were primarily in deposit service charges, correspondent bank dividends and BOLI income. Non-Interest expense for 2016 was $4,768,160, down 0.8% or $36,279 compared to $4,804,439 in 2015. For the quarter, expenses were $1,197,141, down $25,738, or 2.1% compared to the fourth quarter of 2015. The substantial growth in earning assets was produced with staffing remaining relatively even and technology and occupancy down modestly. The result was an improvement in the Bank’s efficiency ratio from 78.1% in 2015 to 75.8% for 2016. Expenses are expected to continue to moderate in 2017 with continued improvement in the efficiency rate.
The Bank made no provision for credit losses in 2016. There were no credit losses in either 2016 or 2015. Non-accrual loans remained unchanged at zero for both 2016 and 2015. OREO declined from $250,000 at 12/31/15 to zero at 12/31/16. The Bank’s Allowance for Loan & Lease Losses (ALLL) was 1.23% of loans as of December 31, 2016 compared to 1.47% at year end 2015. The Bank recorded a negative provision of $50,000 in 2016. The balance in the Bank’s loan loss reserve stands at $1,466,920 and is adequate to absorb the inherent risk of credit loss in the Bank’s loan portfolio.
Return on average equity was 6.0% for 2016 compared to 5.2% in 2015. Return on average earning assets was 0.61% in 2016 compared to 0.59% in 2015. Tier 1 Capital at December 31, 2016 was $17,188,496, up from $16,129,388 at year end 2015, an increase of $1,059,108 or $0.67 per share. At December 31, 2016 the Bank’s Tier 1 Capital Ratio was 8.87% compared to 9.38% at December 31, 2015. Total Risk Based Capital to Risk Weighted Assets at December 31, 2016 was 13.23% compared to 14.12% at year end 2015. Both capital ratios are well above minimum regulatory standards to be considered a well-capitalized bank by the FDIC. Liquidity remains healthy at $58.5 million as of December 31, 2016, and the Bank maintained a moderate loan to deposit ratio of 73.0%. The investment portfolio consists primarily of U.S. Government agency bonds and mortgage-backed securities.
The Bank received recognition from many financial rating organizations in 2016, 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.