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Folsom Lake Bank First Quarter Earnings Up 39%

FOLSOM, Calif., April 21, 2016 (GLOBE NEWSWIRE) -- Folsom Lake Bank (OTCQB:FOLB) reported net income of $226,598 for the first quarter of 2016, a 38.8% increase over first quarter 2015 net income of $163,213 and the Bank’s 25th consecutive quarter of profitability. Net interest income was up 14.2%, shareholder equity grew 6.1% to reach $16,860,978 and assets, loans and deposits all reached new record levels for the Bank’s first quarter. “Folsom Lake Bank’s emphasis on strong local banking relationships continues to produce solid growth and increased profitability,” said Robert J. Flautt, President and Chief Executive Officer. “Our 24% growth in deposits demonstrates the continued interest that local clients have in full service, high touch banking."

Now with three full service branches locally, Folsom Lake Bank continues to show strong performance with total assets growing $27.7 million or 17.9% to reach $182.4 million as of March 31, 2016. Assets were also increased from the previous quarter, up $3.9 million or 2.2% over December 31, 2015. Total loans were $100.2 million at March 31, 2016, up $2.4 million or 2.5% from March 31, 2015. Total deposits were $155.1 million, up $30.1 million, or 24.1% from the first quarter of 2015. Low cost checking account balances also showed strong growth, increasing 27.0% to reach $44.7 million as of March 31, 2016. The Bank’s continued focus on valuable, low cost core deposit growth and maintaining a lower cost of funds are key to maintaining an adequate net interest margin in the persistent low rate interest environment.

Net interest income for the first quarter of 2016 was $1,478,969 compared to $1,295,291 in the first quarter of 2015, an increase of $183,678 or 14.2%. The Bank’s net-interest-margin was 3.56% in the first quarter of 2016, down from 3.67% during the first quarter of 2015. The increasing revenue comes primarily from a higher level of earning assets and is offset somewhat by a lower overall asset yield. The Bank’s loan to deposit ratio was 64.6% in 2016, down from 78.2% in the first quarter of 2015. Non-interest income for the first quarter ending March 2016 was $74,015, a decrease of $14,409 over the first quarter of 2015 primarily because there were no gains on sales of investment securities taken in the first quarter of 2016.

Non-Interest expense for the first quarter of 2016 was $1,167,906, down $32,823 or 2.7% compared to the first quarter of 2015, due to lower occupancy and staffing costs, mostly connected with moderating new branch expenses from the Bank’s Rancho Cordova branch, opened in the fourth quarter of 2014.The Bank closed on the sale of it’s last bank owned real estate property in the first quarter, eliminating substantial carrying costs from the overall expense load. The Bank’s efficiency ratio improved to 75.2% for the first quarter from 86.8% in 2015.

Earnings per share for the first quarter of 2016, was $0.14, an increase of 38.8% compared to earnings per share of $0.10 for the first quarter of 2015. Return on average assets was 0.54% for the first quarter of 2016 compared to 0.44% in the first quarter of 2015, an increase of 22.1% from one year ago. Return on average equity was 5.5% for the first quarter of 2016 and 4.3% for the first quarter of 2015.

Due to improving credit conditions, the Bank had no provision for loan losses during the first quarter of 2016, as it currently does not have any past due or classified loans at quarter end. In the first quarter of 2015 the Bank had a negative provision for loan losses of $75,000. The loan loss reserve was $1,516,920 at March 31, 2016 compared to $1,504,530 as of March 31, 2015. There were no credit losses in the first quarter of 2016. Non-accrual loans declined from $1,690,591 at March 31, 2015 to zero at March 31, 2016. OREO declined from $250,000 as of March 31, 2015 to zero as of March 31, 2016. As a result, the Bank has no non-performing assets at March 31, 2016. The Bank’s Allowance for Loan & Lease Losses (ALLL) was 1.51% of loans as of March 31, 2016 compared to 1.54% as of March 31, 2015. 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, 2016 was $16,368,372, up from $15,408,616 at March 31, 2015, an increase of $959,756 or 6.2%. At March 31, 2016, the Bank’s Tier 1 Capital Ratio was 9.26% compared to 10.12% at March 31, 2015. Total Risk Based Capital to Risk Weighted Assets was 14.66% compared to 15.48% at quarter end 2016 and 2015, respectively. Both capital ratios are well above minimum regulatory standards to be considered a well-capitalized bank by the FDIC. Liquidity remains healthy at $76.0 million as of March 31, 2016, and the Bank maintained a moderate loan to deposit ratio of 64.6%. 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.

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

Source:Folsom Lake Bank