FirstBank NW Corp. Reports Fiscal Year End Net Income Up 44.1%,
Asset Growth of 14.4% to $801.1 Million CLARKSTON, Wash., May 27
/PRNewswire-FirstCall/ -- FirstBank NW Corp. (NASDAQ:FBNW), the
holding company for FirstBank Northwest, today reported fiscal year
2005 net income of $6.28 million and total assets of $801.1
million, representing an increase of 44.1% in net income and 14.4%
in total assets. "The year was highlighted by exceptional growth
from the markets in Boise and Coeur d'Alene, Idaho and Spokane,
Washington, which are our targeted growth markets," said Clyde E.
Conklin, President and Chief Executive Officer. Total loans
receivable grew 22.4%, from $459.1 million at March 31, 2004 to
$562.1 million at March 31, 2005. "Additionally," Conklin noted,
"the core processing system conversion was completed in December
2004, and the network and other systems were fully integrated
during the year, which essentially completed the systems
integration of Oregon Trail Financial Corp., and its subsidiary,
Pioneer Bank, with FirstBank NW Corp., and its subsidiary,
FirstBank Northwest." The merger closed on October 31, 2003.
Conklin went on to note "the merger was large and complex, which
required substantial dedication of resources for a successful
execution. We have essentially rebuilt the Bank's systems, policies
and processes in order to facilitate future growth. Our major
compliance initiative for fiscal year 2006 are the provisions
regarding internal control over financial reporting in the
Sarbanes-Oxley Act of 2002. We will also reinforce our compliance
with Bank Secrecy Act (BSA) and Customer Identification Program
(CIP) regulations." It is expected that FirstBank will become an
accelerated filer as of March 31, 2006. "We will remain focused on
earnings growth and balance sheet growth as we continue to
implement these new requirements," stated Conklin. Income was
enhanced through increased net interest income from a growing loan
portfolio and a full year of combined operations after the October
31, 2003 merger of Pioneer Bank. Net interest income, after
provision for loans losses, was $25.8 million for the year ended
March 31, 2005, compared to $17.1 million for the year ended March
31, 2004. Income was also enhanced by a stable net interest margin
of 4.38% on March 31, 2005, compared to 4.28% on March 31, 2004.
Non-interest income was $6.0 million for the year ended March 31,
2005, compared to $5.5 million for the year ended March 31, 2004.
"While gain on sale of loans was down from $2.2 million for the
year ended March 31, 2004 to $1.1 million for the year ended March
31, 2005, we did increase other fees, service charges, and other
non-interest income from $3.3 million for the year ended March 31,
2004 to $4.9 million for the year ended March 31, 2005," said Larry
K. Moxley, Chief Financial Officer. Non-interest expenses increased
$6.4 million, or 38.1%, from $16.8 million for fiscal year 2004 to
$23.1 million for fiscal year 2005. Compensation and benefits
totaled $14.0 million, or 60.7% of total non-interest expense for
the fiscal year ended March 31, 2005 as compared to $10.1 million,
or 60.2% of total non-interest expense for the fiscal year ended
March 31, 2004. FirstBank's efficiency ratio improved from 68.9%
for the year ended March 31, 2004 to 65.9% for the year ended March
31, 2005 because net interest income and non-interest income
increased faster than non-interest expense. Net income, after tax,
for the year ended March 31, 2005 was $6.28 million, or $2.09 per
share on 2,997,630 diluted shares outstanding, compared to net
income of $4.36 million, or $2.12 per share on 2,055,635 diluted
shares for the year ended March 31, 2004. "We continue to make
significant progress towards a balance sheet structure typical to
commercial banking," said Conklin. "The total loan portfolio,
including loans held for sale, is $575.8 million in which
commercial loans represent 46.3%, agricultural loans 7.3%,
construction loans 12.0%, consumer loans 13.3%, residential real
estate loans 20.4%, and loans held for sale 0.7%. The construction
loan portfolio increased from $44.5 million at March 31, 2004 to
$69.1 million at March 31, 2005. Total construction loans
originated during fiscal year 2005 were $171.6 million.
Additionally, commercial/agricultural loan production remained
strong, with the Spokane loan production office originating $22.4
million in new loans, the Coeur d'Alene Loan Center originating
$33.7 million, the Baker City Loan Center originating $18.1
million, the Lewiston Loan Center originating $49.5 million, and
the Boise Loan Center originating $57.4 million. The Boise
Commercial Loan Center completed its first full year of operation
on March 31, 2005. Total new commercial/agricultural loan
origination for fiscal year 2005 was $181.1 million. The commercial
and agricultural loan portfolio increased from $241.5 million at
March 31, 2004 to $308.6 million at March 31, 2005, an increase of
27.8%. The residential real estate loan portfolio increased $4.5
million, or 4.0%, from March 31, 2004 to March 31, 2005. Total
residential real estate term loan originations were $102.2 million
during fiscal year 2005. "FirstBank has added to its loan portfolio
all 10-year and 15-year first mortgage loans that it originated
this past year," noted Moxley. "Deposit growth was $38.1 million
for the year ended March 31, 2005, an increase of 7.9% since last
year, and funding from core deposits continues to increase," said
Moxley. Core deposits grew from $279.9 million at March 31, 2004 to
$301.5 million at March 31, 2005, while certificates of deposit
increased from $200.6 million to $217.2 million over the same
period. "Core deposits represent 58.1% of our total branch
deposits," said Moxley. "Additionally, it is important to note that
deposit growth is focused on core demand deposits related primarily
to commercial customers," Moxley continued. Other funding sources
include Federal Home Loan Bank borrowings, as well as brokered
deposit markets. Allowance for loan loss reserves increased from
$6.3 million at March 31, 2004 to $7.3 million at March 31, 2005.
Total reserves are now 1.29% of net loans as of March 31, 2005
compared to 1.38% as of March 31, 2004. "Reserves appropriately
reflect portfolio loan allocations and the credit risk associated
with the current economy," said Conklin. "Asset quality is good and
remains a high priority for FirstBank," continued Conklin. Total
non-performing assets at March 31, 2005 were $2.8 million, or 0.35%
of total assets, compared with $3.7 million, or 0.50% of total
assets, at March 31, 2004. The ratio of loan loss allowances to
non-performing assets was 258.1% at March 31, 2005 compared with
172.7% at March 31, 2004. "Workout of non-performing assets and
improvement in economies throughout our market area has contributed
to this improvement," said Conklin. Net charge-offs for the year
ended March 31, 2005 were $588,000 compared with $358,000 for the
year ended March 31, 2004. "We continue to scrutinize our loan
portfolio on a regular basis to assure that we maintain credit
quality," said Conklin. FirstBank NW Corp.'s total assets increased
14.4% to $801.1 million on March 31, 2005 compared to $700.2
million on March 31, 2004. Stockholders' equity on March 31, 2005
was $72.3 million compared with $69.3 million on March 31, 2004.
Tangible stockholder equity, which excludes goodwill and other
intangible assets, was $52.7 million on March 31, 2005 compared
with $48.3 million on March 31, 2004. The ratio of tangible equity
to tangible assets was 6.7% at March 31, 2005 compared to 7.1% a
year earlier. Tangible book value increased to $18.00 per share on
March 31, 2005 compared to $16.88 per share last year. Reported net
income for the fourth quarter ended March 31, 2005 was $1.6 million
compared to $1.6 million for the same period one year ago. Earnings
per share (diluted) for the fourth quarter ended March 31, 2005 was
$0.52 per share compared to $0.55 per share for the same period
last year. "Earnings growth for the period ending March 31, 2005
was impacted by system and integration expense, reduced Federal
Home Loan Bank dividend income, and regulatory and audit expense,"
said Moxley. Asset growth for the fourth quarter was $31.6 million,
or 4.1%, or an annualized rate of 16.4%. FirstBank NW Corp. is the
parent of FirstBank Northwest. Founded in 1920, FirstBank Northwest
is based in Clarkston, Washington. FirstBank Northwest operates 20
branch locations in Idaho, eastern Washington and eastern Oregon,
in addition to residential loan centers in Lewiston, Coeur d'Alene,
Boise and Nampa, Idaho, Spokane, Washington and Baker City, Oregon.
Salomon Smith Barney has investment centers in the Coeur d'Alene,
Idaho, Clarkston and Liberty Lake, Washington branches, and the
Baker City, LaGrande and Ontario, Oregon branches. FirstBank
Northwest is known as the local community bank, offering its
customers highly personalized service in the many communities it
serves. Certain matters in this News Release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements may relate to, among others, expectations of the
business environment in which the Company operates, projections of
future performance, including operating efficiencies, perceived
opportunities in the market, potential future credit experience and
statements regarding the Company's mission and vision. These
forward-looking statements are based upon current management
expectations, and may, therefore, involve risks and uncertainties.
The Company's actual results, performance, and achievements may
differ materially from those suggested, expressed or implied by
forward-looking statements due to a wide range of factors
including, but not limited to, the general business environment,
interest rates, the real estate market in Washington, Idaho and
Oregon, the demand for mortgage loans, competitive conditions
between banks and non-bank financial service providers, regulatory
changes, costs of implementing additional securities requirements
and requirements of the Sarbanes-Oxley Act of 2002 and other risks
detailed in the Company's reports filed with the Securities and
Exchange Commission, including its Annual Report on Form 10-KSB for
the fiscal year ended March 31, 2004. FIRSTBANK NW CORP FINANCIAL
HIGHLIGHTS (unaudited) (in thousands except share and per share
data) Three Months Ended Fiscal Year Ended March 31, March 31, 2005
2004 2005 2004 Interest Income $10,840 $9,299 $40,631 $27,415
Interest Expense 3,778 3,068 13,319 9,934 Provision for Loan Losses
488 (23) 1,528 395 Net Interest Income After Provision for Loan
Losses 6,574 6,254 25,784 17,086 Non-Interest Income Gain on Sale
of Loans 184 532 1,125 2,188 Service Fees and Charges 1,010 1,138
4,504 3,120 Commission and Other 239 72 381 208 Total Non-Interest
Income 1,433 1,742 6,010 5,516 Non-Interest Expenses Compensation
and Related Expenses 3,522 3,366 14,044 10,095 Occupancy 717 788
2,844 2,077 Other 1,616 1,592 6,261 4,590 Total Non-Interest
Expense 5,855 5,746 23,149 16,762 Income Tax Expense 578 646 2,367
1,482 Net Income $1,574 $1,604 $6,278 $4,358 Basic Earnings per
Share $0.54 $0.56 $2.17 $2.26 Diluted Earnings per Share $0.52
$0.55 $2.09 $2.12 Weighted Average Shares Outstanding - Basic
2,920,832 2,863,292 2,896,307 1,925,804 Weighted Average Shares
Outstanding - Diluted 2,997,761 2,933,774 2,997,630 2,055,635
Actual Shares Issued 2,998,595 2,940,047 2,998,595 2,940,047 March
31, 2005 March 31, 2004 Total Assets $801,122 $700,232 Cash and
Cash Equivalents $41,801 $38,397 Loans Receivable, net $562,101
$459,114 Loans Held for Sale $3,999 $5,254 Mortgage-Backed
Securities $61,904 $77,027 Investment Securities $48,334 $38,787
Stock in FHLB, at cost $12,789 $12,506 Deposits $518,676 $480,548
FHLB Advances & Other Borrowings $185,337 $132,056
Stockholders' Equity $72,311 $69,332 Tangible Book Value per Share
(A) $18.00 $16.88 FASB 115 Adjustment after Taxes $149 $1,268
Tangible Equity/ Total Tangible Assets 6.74% 7.11% Number of
Full-Time Equivalent Employees 268 247 (A) Calculation is based on
number of shares outstanding at the end of the period rather than
weighted average shares outstanding and excludes unallocated shares
in the employee stock ownership plan (ESOP) 3/05 -- 70,793 shares
and 3/04 -- 79,149 shares. FINANCIAL STATISTICS (ratios annualized)
Three Months Ended Fiscal Year Ended March 31, March 31, 2005 2004
2005 2004 Return on Average Assets 0.80% 0.93% 0.84% 0.90% Return
on Average Tangible Equity 11.94% 12.74% 12.38% 11.17% Average
Tangible Equity/ Average Tangible Assets 6.88% 7.49% 7.01% 8.19%
Average Equity/Average Assets 9.21% 10.04% 9.54% 9.71% Average
Tangible Equity/Average Loans 9.65% 11.13% 10.02% 11.63% Efficiency
Ratio (B) 64.22% 67.41% 65.91% 68.88% Non-Interest Expenses/
Average Assets 2.98% 3.26% 3.11% 3.46% Net Interest Margin (C)
4.39% 4.36% 4.38% 4.28% Average Interest Earning Assets/Average
Deposits and Other Borrowed Funds 99.06% 101.42% 99.89% 102.09%
LOANS (unaudited) (in thousands except share and per share data)
Fiscal Year Ended Fiscal Year Ended March 31, 2005 March 31, 2004
LOAN ORIGINATIONS (D): Residential loan centers $273,786 $244,456
Consumer loan centers 45,844 16,364 Agricultural loan centers
12,149 8,048 Commercial loan centers 168,976 86,929 Total Loan
Origination $500,755 $355,797 LOAN PORTFOLIO ANALYSIS: Real estate
loans: Residential 117,541 $113,016 Construction 69,148 44,536
Agricultural 19,434 18,567 Commercial 173,757 122,132 Total real
estate loans 379,880 298,251 Consumer and other loans: Home equity
37,806 24,530 Agricultural operating 22,625 24,876 Commercial
92,780 75,878 Other consumer 38,724 43,425 Total consumer and other
loans 191,935 168,709 Loans held for sale-residential real estate
3,999 5,254 Total Loans Receivable $575,814 $472,214 Fiscal Year
Ended Fiscal Year Ended March 31, 2005 March 31, 2004 ALLOWANCE FOR
LOAN LOSSES: Balance at Beginning of Period $6,314 $3,414 Purchased
$0 $2,863 Provision for Loan Losses 1,528 395 Charge offs (Net of
Recoveries) (588) (358) Balance at End of Period $7,254 $6,314 Loan
Loss Allowance / Net Loans 1.29% 1.38% Loan Loss Allowance /
Non-Performing Loans 661.86% 217.72% (B) Calculation is
non-interest expense divided by non-interest income and tax
equivalent net interest income. (C) Calculation is tax equivalent
net interest income divided by total interest-earning assets. (D)
Loan originations are based upon new production. NON-PERFORMING
ASSETS: Fiscal Year Ended Fiscal Year Ended March 31, 2005 March
31, 2004 Accruing Loans - 90 Days Past Due $377 $0 Non-accrual
Loans 719 2,900 Total Non-performing Loans 1,096 2,900 Restructured
Loans on Accrual 1,094 152 Real Estate Owned (REO) 603 552
Repossessed Assets 18 52 Total Non-performing Assets $2,811 $3,656
Total Non-performing Assets/Total Assets 0.35% 0.50% Loan and REO
Loss Allowance as a % of Non-Performing Assets 258.06% 172.70%
AVERAGE BALANCES, INTEREST AVERAGE YIELDS/COSTS Three Months Ended
Fiscal Year Ended March 31, March 31, 2005 2004 2005 2004 Average
Interest Earning Assets: Average Loans receivable: Average Mortgage
Loans receivable $119,041 $111,702 $117,016 $74,416 Average
Commercial Loans receivable 253,610 192,634 223,158 150,557 Average
Construction Loans receivable 64,232 42,362 53,857 36,356 Average
Consumer Loans receivable 76,468 69,252 74,413 43,063 Average
Agricultural Loans receivable 42,692 45,045 46,240 37,547 Average
unearned loan fees and discounts, allowance for loan losses, and
other (9,351) (8,610) (8,631) (6,350) Total Average Loans
receivable, net 546,692 452,385 506,053 335,589 Average Loans Held
for Sale 2,794 5,766 4,708 7,584 Average Mortgage-backed securities
63,666 79,542 68,761 35,869 Average Investment securities 48,495
38,462 46,438 24,840 Average Other earning assets 37,877 46,494
38,317 36,000 Total Average Interest Earning Assets 699,524 622,649
664,277 439,882 Average Non-Interest Earning Assets 86,869 68,437
78,981 44,684 Total Average Assets $786,393 $691,086 $743,258
$484,566 Average Interest Bearing Liabilities: Average Passbook,
NOW, and money market accounts $237,394 $224,630 $231,963 $137,025
Average Certificate of deposits 206,811 200,091 200,980 149,626
Average Advances from FHLB and other 190,337 135,041 158,235
101,106 Total Average Interest Bearing Liabilities 634,542 559,762
591,178 387,757 Average Non-Interest Bearing Deposits 71,644 54,142
73,825 43,107 Average Deposits and Other Borrowed Funds 706,186
613,904 665,003 430,864 Average Non-Interest Bearing Liabilities
7,779 7,797 7,327 6,638 Total Average Liabilities 713,965 621,701
672,330 437,502 Total Average Equity 72,428 69,385 70,928 47,064
Total Average Liabilities and Equity $786,393 $691,086 $743,258
$484,566 Total Tangible Average Equity $52,740 $50,368 $50,693
$39,030 Interest Rate Yield on Earning Assets 6.55% 6.33% 6.38%
6.54% Interest Rate Expense on Deposits and Other Borrowed Funds
2.14% 2.00% 2.00% 2.31% Interest Rate Spread 4.41% 4.33% 4.38%
4.23% Net Interest Margin 4.39% 4.36% 4.38% 4.28% DATASOURCE:
FirstBank NW Corp. CONTACT: Larry K. Moxley, Exec. VP & CFO of
FIRSTBANK NW CORP., +1-509-295-5100 Web site: http://www.fbnw.com/
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