FBNW Firstbank NW

Highlights for the Quarter Ended December 31, 2005: - Diluted EPS Growth: increased 38.5% compared to the quarter ended December 31, 2004, with net income up 41.9% compared to the quarter ended December 31, 2004 - Net Loans Receivable Growth: increased 15.2% since December 31, 2004 - Deposit Growth: increased 12.9% since December 31, 2004 - Net Interest Margin: 4.63% vs. 4.40% for the quarters ended December 31, 2005 and 2004, respectively - Return on Average Tangible Equity: 15.0% vs. 11.9% for the quarters ended December 31, 2005 and 2004, respectively CLARKSTON, Wash., Feb. 10 /PRNewswire-FirstCall/ -- FirstBank NW Corp. (the Company) (NASDAQ:FBNW) today announced another quarter of strong financial results as a result of the continued successful execution of its business plan and risk management policies, and the continued economic strength in its market areas. For the quarter ended December 31, 2005, the third quarter of its fiscal year, diluted earnings per share increased 38.5% to $0.36 compared to $0.26 for the same quarter a year ago. Net income for the quarter increased 41.9% to $2.2 million compared to $1.5 million for the same quarter a year ago. For the quarter ended December 31, 2005, the Company's return on average tangible equity was 15.0% compared to 11.9% for the quarter ended December 31, 2004. Return on average tangible equity for the nine months ended December 31, 2005 was 14.9% compared to 12.6% for the same period a year ago. The net interest margin was higher for the quarter ended December 31, 2005, at 4.63% compared to 4.40% in the quarter ended December 31, 2004. On January 4, 2006, FirstBank NW Corp. announced that its Board of Directors declared a two-for-one stock split in the form of a 100% per share stock dividend on the Company's outstanding common stock. The stock dividend was paid on February 9, 2006. Each shareholder of record as of the close of business on January 26, 2006 received one additional share for every share owned on that date. The outstanding shares, weighted average shares outstanding, and earnings per share have been adjusted to reflect this two-for-one stock split in the form of a 100% per share stock dividend announced on January 4, 2006. LOAN GROWTH AND CREDIT QUALITY: Net loans receivable increased 15.2% to $611.1 million at December 31, 2005 from $530.4 million at December 31, 2004. Net loan growth for the nine months ended December 31, 2005 was $49.0 million, or 11.6% on an annualized basis. "While we continue to have good loan demand throughout our market area, fiscal year to date loan growth was primarily driven by construction lending in the Boise, Idaho market, and commercial real estate lending in the Boise and Coeur d'Alene, Idaho and Spokane, Washington markets," said Clyde E. Conklin, President and Chief Executive Officer. The credit quality of the Company's loan portfolio remained strong with total non-performing assets of $2.5 million, or 0.30% of total assets at December 31, 2005, compared to $2.3 million, or 0.30% of total assets at December 31, 2004. This compares with non-performing assets at fiscal year end March 31, 2005 of $2.8 million, or 0.35% of total assets. Net loan charge offs to average outstanding loans for the nine months ended December 31, 2005 were 0.05% compared to 0.09% for the nine months ended December 31, 2004. The reserve for losses on loans and loan commitments at December 31, 2005 increased to 1.39% of net loans from 1.30% at December 31, 2004. The provision for loan losses was $422,000 for the quarter ended December 31, 2005; a decrease from $470,000 for the quarter ended December 31, 2004; and a decrease from $488,000 for the quarter ended March 31, 2005. The provision for loan losses reflects the classified asset changes within the portfolio during the quarter and the resulting allowance for loan and lease losses adjustment, which is determined through the use of a formula by management. Management believes the reserve is at an appropriate level considering the credit quality of all loans, loan loss histories, and prevailing economic conditions. FUNDING: Deposit balances as of December 31, 2005 increased 12.9% to $553.5 million from $490.1 million at December 31, 2004. Deposit growth for the nine months ended December 31, 2005 was $34.8 million, or 8.9% on an annualized basis. At December 31, 2005, total branch deposits were $508.8 million, consisting of $303.4 million, or 59.6% in core deposits and $205.4 million, or 40.4% in time deposits compared with the comparable period a year ago of $460.4 million in total branch deposits, which consisted of $285.5 million, or 62.0% in core deposits and $174.9 million, or 38.0% in time deposits. Brokered deposits at December 31, 2005 totaled $44.7 million as compared to $29.7 million a year ago, an increase of $15.0 million. Advances from the Federal Home Loan Bank of Seattle (FHLB) and other borrowings at December 31, 2005 totaled $180.0 million as compared to $186.6 million a year ago, a decrease of $6.6 million. "Branch deposit growth with an emphasis on core deposit growth remains essential to long term funding and earnings," noted Conklin. NET INTEREST MARGIN AND INTEREST RATE RISK: The Company's net interest margin was 4.63% for the quarter ended December 31, 2005 compared to 4.40% for the quarter ended December 31, 2004. The flattening of the yield curve continues to pressure the net interest margin, however, the interest rate sensitivity of the Company's assets has helped to offset the pressure on the net interest margin from increases in the costs of deposits and borrowed funds. Yields on earning assets increased by 15 basis points during the current quarter to 7.26% compared to 7.11% for the quarter ended September 30, 2005. Meanwhile, the average rates paid on total deposits and borrowed funds increased 16 basis points during the quarter ended December 31, 2005 to 2.68% compared to 2.52% for the quarter ended September 30, 2005. Attainment of branch deposit growth objectives as opposed to continued reliance on high cost of FHLB borrowings is essential to maintenance of the net interest margin. NON-INTEREST INCOME AND EXPENSE: Non-interest income was $1.8 million for the quarter ended December 31, 2005, an increase of $363,000 from $1.4 million for the comparable period one year ago. For the nine months ended December 31, 2005, non-interest income increased $640,000 to $5.2 million from $4.6 million for the nine months ended December 31, 2004. Non-interest income is driven by gain on sales of loans and transaction account fees. Non-interest expense for the quarter ended December 31, 2005 was $6.6 million, an increase of 11.1% from $5.9 million for the quarter ended December 31, 2004. For the nine months ended December 31, 2005, non-interest expense increased $1.6 million to $18.9 million from $17.3 million for the comparable period in 2004. Non-interest expense to average assets increased to 3.18% for the three months ended December 31, 2005 from 3.15% one year ago, and is down to 3.04% for the nine months ended December 31, 2005 compared to 3.16% for the same nine month period last year. The Company's efficiency ratio of 62.04% for the three months ended December 31, 2005 improved from 67.05% one year ago. Non-interest expenses are expected to increase as the Company invests in new branches, additional staffing, and complies with increased regulatory and audit requirements. Conklin noted, "the importance of disciplined review of resources and expenditures in relation to profitability contribution is essential on an ongoing basis." CAPITAL: At December 31, 2005, the Bank's Tier 1 capital (leverage ratio based on average assets) was $58.3 million, or 7.3%, and total risk capital (to risk-weighted assets) was $68.8 million, or 11.6%. Risk capital includes $3.0 million in subordinated debt by the Company's subsidiary, FirstBank Northwest, to US Bank. BUSINESS STRATEGY: FirstBank NW Corp. (headquartered in Clarkston, Washington) is the holding company for FirstBank Northwest, a Washington state chartered savings bank founded in 1920, and has a track record of consistent above-average growth and improving profitability, operating in the rural markets of eastern Oregon, eastern Washington and central Idaho, in addition to the larger and growing markets of Boise and Coeur d'Alene, Idaho and Spokane, Washington. FirstBank Northwest is focused on each community served, striving to deliver competitive financial products and services through exceptional customer service standards, local expertise and leadership. 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. FirstBank Northwest is known as the local community bank, offering its customers highly personalized service in the many communities it serves. FORWARD LOOKING STATEMENTS: 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-K for the fiscal year ended March 31, 2005. FIRSTBANK NW CORP FINANCIAL HIGHLIGHTS (unaudited) (in thousands except share and per share data) Three Months Ended Nine Months Ended December 31, December 31, 2005 2004 2005 2004 Interest Income $13,287 $10,369 $38,425 $29,791 Interest Expense 4,963 3,366 14,056 9,541 Provision for Loan Losses 422 470 1,562 1,040 Net Interest Income After Provision for Loan Losses 7,902 6,533 22,807 19,210 Non-Interest Income Gain on Sale of Loans (1) 543 260 1,329 941 Service Fees and Charges 1,191 1,130 3,674 3,494 Commission and Other 60 41 214 142 Total Non-Interest Income 1,794 1,431 5,217 4,577 Non-Interest Expense Compensation and Related Expenses 3,757 3,680 11,125 10,522 Occupancy 720 668 2,189 2,127 Other 2,075 1,548 5,624 4,645 Total Non-Interest Expense 6,552 5,896 18,938 17,294 Income Tax Expense 978 542 2,818 1,789 Net Income $2,166 $1,526 $6,268 $4,704 Basic Earnings per Share (6) $0.37 $0.26 $1.07 $0.81 Diluted Earnings per Share (6) $0.36 $0.26 $1.04 $0.78 Weighted Average Shares Outstanding- Basic (6) 5,877,524 5,809,438 5,867,469 5,776,562 Weighted Average Shares Outstanding- Diluted (6) 6,016,034 5,968,888 5,999,569 5,994,290 Actual Shares Issued (6) 6,014,494 5,978,524 6,014,494 5,978,524 FINANCIAL STATISTICS (ratios annualized) At December 31, At December 31, 2005 2004 Total Assets $824,859 $769,570 Cash and Cash Equivalents $23,661 $40,378 Loans Receivable, net $611,051 $530,447 Loans Held for Sale $5,712 $3,377 Mortgage-Backed Securities $53,718 $64,988 Investment Securities $48,459 $48,517 Equity Securities, at cost $12,789 $12,810 Deposits $553,461 $490,092 FHLB Advances & Other Borrowings $179,992 $186,577 Stockholders' Equity $77,291 $71,418 Tangible Book Value per Share (2) (6) $9.90 $8.85 Tangible Equity/ Total Tangible Assets 7.23% 6.89% Number of full-time equivalent Employees (3) 274 270 Three Months Ended Nine Months Ended December 31, December 31, 2005 2004 2005 2004 Return on Average Assets 1.05% 0.81% 1.01% 0.86% Return on Average Tangible Equity 14.96% 11.91% 14.91% 12.55% Return on Average Equity 11.24% 8.57% 11.09% 8.90% Average Equity/Average Assets 9.34% 9.49% 9.09% 9.66% Efficiency Ratio (4) 62.04% 67.05% 61.32% 66.50% Non-Interest Expenses / Average Assets 3.18% 3.15% 3.04% 3.16% Net Interest Margin (5) 4.63% 4.40% 4.56% 4.38% LOANS (unaudited) (in thousands except share and per share data) At December 31, 2005 At December 31, 2004 LOAN PORTFOLIO ANALYSIS: Amount Percent Amount Percent Real Estate Loans: Residential $117,800 18.94 % $116,026 21.50 % Construction 100,101 16.09 58,518 10.85 Agricultural 19,301 3.10 19,453 3.61 Commercial 190,584 30.64 155,340 28.79 Total Real Estate Loans 427,786 68.77 349,337 64.75 Consumer and Other Loans: Home Equity 41,008 6.59 36,235 6.71 Agricultural Operating 25,615 4.12 26,039 4.82 Commercial 86,973 13.98 87,943 16.30 Other Consumer 40,689 6.54 40,027 7.42 Total Consumer and Other Loans 194,285 31.23 190,244 35.25 Total Loans Receivable $622,071 100.00 % $539,581 100.00 % ALLOWANCE FOR LOAN LOSSES Nine Months Ended Nine Months Ended December 31, 2005 December 31, 2004 Balance at Beginning of Period $7,254 $6,314 Provision for Loan Losses 1,562 1,040 Charge Offs (Net of Recoveries) (297) (437) Balance at End of Period $8,519 $6,917 Loan Loss Allowance / Net Loans 1.39% 1.30% Loan Loss Allowance / Non-Performing Loans 549.61% 552.92% NON-PERFORMING ASSETS At December 31, At December 31, 2005 2004 Accruing Loans - 90 Days Past Due $0 $0 Non-accrual Loans 1,550 1,251 Total Non-Performing Loans 1,550 1,251 Restructured Loans on Accrual 895 555 Real Estate Owned (REO) 0 410 Repossessed Assets 35 60 Total Non-Performing Assets $2,480 $2,276 Total Non-Performing Assets/Total Assets 0.30% 0.30% Loan and REO Loss Allowance as a Percentage of Non-Performing Assets 343.51% 303.91% AVERAGE BALANCES Nine Months Ended Nine Months Ended December 31, 2005 December 31, 2004 Total Average Interest Earning Assets $750,005 $652,741 Total Average Assets 829,660 729,141 Average Deposits and Other Borrowed Funds 746,066 651,525 Average Total Tangible Equity 56,047 49,961 (1) Gain on sale of loans includes (recovery) impairment of mortgage servicing rights of ($69) and ($44) for the three months ended December 31, 2005 and 2004, respectively. Gain on sale of loans includes (recovery) impairment of mortgage servicing rights of ($44) and ($67) for the nine months ended December 31, 2005 and 2004, respectively. (2) Calculation excludes unallocated shares in the employee stock ownership plan (ESOP) December 31, 2005 -- 129,052 shares and December 31, 2004 -- 145,764 shares. (3) Number of full-time equivalent employees is the quarterly average. (4) Calculation is non-interest expense divided by tax equivalent non-interest income and tax equivalent net interest income. (5) Calcualation is tax equivalent net interest income divided by total interest-earning assets. (6) The outstanding shares, weighted average shares outstanding, and earnings per share have been adjusted to reflect the two-for-one stock split in the form of a 100% per share stock dividend announced on January 4, 2006. DATASOURCE: FirstBank NW Corp. CONTACT: Larry K. Moxley of FirstBank NW Corp., +1-509-295-5100 Web site: http://www.fbnw.com/

Copyright