FORT DODGE, Iowa, April 28 /PRNewswire-FirstCall/ -- North Central Bancshares, Inc. (the "Company") , the holding company for First Federal Savings Bank of Iowa (the "Bank"), announced today that the Company earned diluted earnings per share of $0.82 for the quarter ended March 31, 2006, compared to diluted earnings per share of $0.68 for the quarter ended March 31, 2005. The Company's net income was $1.24 million for the quarter ended March 31, 2006, compared to $1.08 million for the quarter ended March 31, 2005. The increase in earnings was primarily due to an increase in noninterest income.
Net interest income for the quarter ended March 31, 2006 was $3.32 million, compared to net interest income of $3.41 million for the quarter ended March 31, 2005. The decrease in net interest income was due primarily to a decrease in the net interest margin, offset in part by an increase in interest earning assets. The net interest spread of 2.62% for the quarter ended March 31, 2006 represented a decrease from the net interest spread of 2.91% for the quarter ended March 31, 2005. The net interest margin of 2.88% for the quarter ended March 31, 2006 represented a decrease from the net interest margin of 3.14% for the quarter ended March 31, 2005.
The Company's provision for loan losses was $60,000 and $50,000 for the quarters ended March 31, 2006 and 2005, respectively. The Company establishes provisions for loan losses, which are charged to operations, in order to maintain the allowance for loan losses at a level which is deemed to be appropriate based upon an assessment of prior loss experience, industry standards, past due loans, economic conditions, the volume and type of loans in the Bank's portfolio, and other factors related to the collectibility of the Bank's loan portfolio.
The Company's noninterest income was $1.93 million and $1.19 million for the quarters ended March 31, 2006 and 2005, respectively. The increase in noninterest income was due to increases in loan prepayment fees, fees associated with checking accounts, including overdraft fees, and abstract fees. The increase in noninterest income was also due to an impairment of securities available-for-sale recognized during the quarter ended March 31, 2005.
During the quarter ended March 31, 2005, the Company recorded an other- than-temporary impairment, non-cash, after-tax charge of $229,000, or $0.15 per diluted share, related to a $1.0 million face value perpetual preferred stock that declined in value due to decreased interest rates. This perpetual preferred stock was issued by Freddie Mac and is an investment grade security that is held in the Company's available-for-sale securities portfolio. Absent this other-than-temporary charge, diluted earnings per share would have been $0.83 for the quarter ended March 31, 2005.
The Company's noninterest expense was $3.38 million and $2.92 million for the quarters ended March 31, 2006 and 2005, respectively. The increase in noninterest expense was primarily due to increases in employee salaries and benefits expenses and other operating expenses, which included the write-down of other real estate owned.
The Company's provision for income taxes was $572,000 and $553,000 for the quarters ended March 31, 2006 and 2005, respectively. The increase in the provision for income taxes was due to the increase in the income before income taxes, offset in part by the limited deductibility of the impairment of securities available-for-sale.
Total assets at March 31, 2006 were $492.3 million, compared to $485.2 million at December 31, 2005. The increase in assets consisted primarily of an increase in net loans. Net loans increased by $7.0 million, or 1.6%, to $437.3 million at March 31, 2006, from $430.3 million at December 31, 2005. At March 31, 2006, net loans consisted of $212.2 million of one-to- four family real estate loans, $88.6 million of commercial real estate loans, $77.4 million of multi-family real estate loans, and $59.1 million of consumer loans. The increase in net loans was primarily due to the purchase of commercial, multi-family, and one-to-four family real estate loans and the origination of one-to-four family first and second mortgage real estate loans. These purchases and originations were offset in part by payments, prepayments, and sales of loans.
Deposits increased $4.6 million, or 1.4%, to $338.9 million at March 31, 2006, from $334.3 million at December 31, 2005. Borrowed funds increased $5.0 million, or 4.9%, to $107.4 million at March 31, 2006, from $102.4 million at December 31, 2005. The increase in the deposits and borrowed funds was used primarily to fund loan growth.
Nonperforming assets were 0.42% of total assets as of March 31, 2006, compared to 0.36% of total assets as of December 31, 2005. The allowance for loan losses was $3.3 million, or 0.75% of total loans, at March 31, 2006, compared to $3.3 million, or 0.76% of total loans, at December 31, 2005.
Stockholders' equity was $42.1 million at March 31, 2006, compared to $44.3 million at December 31, 2005. Stockholders' equity decreased by $2.2 million primarily due to stock repurchases and declared dividends, offset in part by earnings, the exercise of stock options, and an increase in unrealized gain on securities available-for-sale. Book value, or stockholders' equity per share, at March 31, 2006 was $29.45, compared to $29.37 at December 31, 2005. The ratio of stockholders' equity to total assets was 8.6% at March 31, 2006, compared to 9.1% at December 31, 2005.
During the quarter ended March 31, 2006, the Company repurchased $3.3 million, or 85,850 shares, of common stock at prevailing market prices averaging $38.80 per share. The Company also announced a new stock repurchase program, which will commence upon the completion of the current program. The program authorizes the Company to repurchase up to 100,000 shares, or 6.99%, of its 1,430,053 outstanding shares of common stock and will remain open until all shares authorized for repurchase have been repurchased. The repurchases will be made from time to time, in open market transactions, at the discretion of management.
All stockholders of record on March 17, 2006, received a quarterly cash dividend of $0.33 per share on April 6, 2006. As of March 31, 2006, the Company had 1,430,053 shares of common stock outstanding.
North Central Bancshares, Inc. serves north central and southeastern Iowa at ten full service locations in Fort Dodge, Nevada, Ames, Perry, Ankeny, Clive, Burlington, and Mount Pleasant, Iowa through its wholly-owned subsidiary, First Federal Savings Bank of Iowa, headquartered in Fort Dodge, Iowa.
The Bank's deposits are insured by the Federal Deposit Insurance Corporation to the full extent permitted by law.
Statements included in this press release and in future filings by North Central Bancshares, Inc. with the Securities and Exchange Commission, in North Central Bancshares, Inc. press releases, and in oral statements made with the approval of an authorized executive officer, which are not historical or current facts, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. North Central Bancshares, Inc. wishes to caution readers not to place undue reliance on such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect North Central Bancshares, Inc.'s actual results, and could cause North Central Bancshares, Inc.'s actual financial performance to differ materially from that expressed in any forward- looking statement: (1) competitive pressures among depository and other financial institutions may increase significantly; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards, may adversely affect the business in which the Company is engaged; (6) competitors may have greater financial resources and developed products that enable such competitors to compete more successfully than the Company; and (7) adverse changes may occur in the securities markets or with respect to inflation. The foregoing list should not be construed as exhaustive, and North Central Bancshares, Inc. disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events.
For more information contact: David M. Bradley, President and Chief Executive Officer, 515-576-7531
FINANCIAL HIGHLIGHTS OF NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Financial Condition
(Unaudited)
(Dollars in Thousands, except per
share and share data)
March 31, 2006 December 31, 2005
Assets
Cash and cash equivalents $7,963 $8,640
Securities available-for-sale 22,121 20,708
Loans (net of allowance of loan loss
of $3,335 and $3,326, respectively) 437,274 430,278
Goodwill 4,971 4,971
Other assets 20,000 20,594
Total assets $492,329 $485,191
Liabilities
Deposits $338,956 $334,338
Other borrowed funds 107,437 102,444
Other liabilities 3,824 4,131
Total liabilities 450,217 440,913
Stockholders' equity 42,112 44,278
Total liabilities and stockholders'
equity $492,329 $485,191
Stockholders' equity to total assets 8.55% 9.13%
Book value per share $29.45 $29.37
Total shares outstanding 1,430,053 1,507,703
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in Thousands, except per share data)
For the Three Months
Ended March 31,
2006 2005
Interest income $6,775 $6,308
Interest expense 3,452 2,896
Net interest income 3,323 3,412
Provision for loan loss 60 50
Net interest income after provision
for loan loss 3,263 3,362
Noninterest income 1,926 1,188
Noninterest expense 3,376 2,921
Income before income taxes 1,813 1,629
Income taxes 572 553
Net income $1,241 $1,076
Basic earnings per share $0.84 $0.70
Diluted earnings per share $0.82 $0.68
Selected Financial Ratios
For the Three Months
Ended March 31,
2006 2005
Performance ratios
Net interest spread 2.62% 2.91%
Net interest margin 2.88% 3.14%
Return on average assets 1.01% 0.93%
Return on average equity 11.38% 10.22%
Efficiency ratio (noninterest expense divided by
the sum of net interest income before provision
for loan losses plus noninterest income) 64.32% 63.50%
