FBNW Firstbank NW

FirstBank NW Corp. Reports Fiscal Year End Net Income Up 57.2%, Asset Growth of 110.6% to $699.9 Million; Declares Regular Quarterly Cash Dividend of $0.17 Per Share CLARKSTON, Wash., April 27 /PRNewswire-FirstCall/ -- FirstBank NW Corp. , the holding company for FirstBank Northwest, today reported fiscal year 2004 net income of $4.36 million and total assets of $699.9 million, representing an increase of 57.2% in net income and 110.6% in total assets. The year was highlighted by the acquisition of Oregon Trail Financial Corp., and its wholly-owned subsidiary, Pioneer Bank, A Federal Savings Bank on October 31, 2003. The acquisition increased shareholder value through enhanced earnings capacity, increasing the asset and deposit base which positions FirstBank for growth in the Boise, Idaho, Coeur d'Alene, Idaho, and Spokane, Washington markets. Additionally, this past year, two new branches were opened in Hayden, Idaho and Boise, Idaho, as well as FirstBank built its new headquarters with a branch in Clarkston, Washington, which opened in July 2003. "We have had an exceptionally busy and productive year which positions FirstBank to continue the performance-focused growth in earnings and assets," said Clyde E. Conklin, President and Chief Executive Officer. "The integration of the two bank's systems, along with regulatory compliance of FDICIA and Sarbanes-Oxley will be accomplished over fiscal year 2005, all of which will require substantial investment in systems and technology. We will remain focused on earnings and balance sheet growth as we work through these initiatives during this next year," said Conklin. On April 21, 2004, the Board of Directors for FirstBank NW Corp. declared a regular quarterly cash dividend of $0.17 per common share. The dividend will be paid on June 3, 2004 to shareholders of record as of May 20, 2004. This is the twenty-seventh consecutive regular quarterly cash dividend since FirstBank's conversion to the stock form of ownership in July 1997. Including this dividend to be paid, total dividend payout is $0.64 per share or 30% of the diluted earnings of $2.15 per share. Net income benefited from non-interest income and the acquisition of Oregon Trail. The net interest margin was $17.5 million for the twelve months ended March 31, 2004, compared to $11.9 million for the same period ending March 31, 2003. Net interest income, before loan loss allowances, increased 47.3% for the twelve-month period. According to Larry K. Moxley, Chief Financial Officer, "The net interest margin benefited from loan growth and reduced interest expense. Additionally, non-interest income increased from $4.4 million for the twelve-month period ending March 31, 2003 to $5.4 million for the same period ending March 31, 2004. The primary driver of the increase was from gain on sale of loans and service fees. The non-interest income performance was impacted by the write down of mortgage servicing rights valuation of $427,000 during fiscal year 2004. The value of servicing rights currently reflected approximates fair value based on the current interest rate environment." "We continue to make significant progress towards a balance sheet structure typical to commercial banking," said Conklin. "The loan portfolio has grown to $464.4 million at March 31, 2004 from $257.0 million at March 31, 2003; an increase of 4.2% excluding the purchase of $196.6 million in Pioneer Bank loans. Commercial loans represent 39.9%, agricultural loans 8.7%, construction loans 13.8%, consumer loans 13.7%, and residential real estate 23.9%, based on the total portfolio. Construction loans increased according to plan during the year, primarily because of the Boise Loan Production Office (LPO). The construction loan portfolio increased from $46.8 million at March 31, 2003 to $68.3 million on March 31, 2004. Total construction loans made during fiscal year 2004 were $107.2 million. Additionally, commercial/agricultural loan production remained strong, with the Spokane LPO originating $22.2 million in new loans, the Coeur d'Alene Loan Center originating $27.9 million, and the Baker City Loan Center originating $6.6 million. Total new commercial/agricultural loan origination for fiscal year 2004 was $95.0 million. The commercial/agricultural loan portfolio increased from $147.6 million on March 31, 2003 to $241.5 million on March 31, 2004, an increase of 20.3% excluding the purchase of $63.9 million in commercial/agricultural loans from Pioneer Bank. Notwithstanding the commercial/agricultural loan portfolio increase, the residential real estate loan portfolio decreased $6.7 million from March 31, 2003 to March 31, 2004, a decrease of 12.0% excluding the purchase of residential real estate loans from Pioneer Bank. The record pace of refinancing impacted the portfolio as FirstBank no longer portfolios 30-year mortgage real estate loans. Total residential real estate term loan originations were a record $137.2 million during fiscal year 2004. Sold loan fee income, excluding impairment, totaled $2.5 million at March 31, 2004 compared to $2.4 million at March 31, 2003. The Spokane, Washington and Boise, Idaho Loan Centers are now fully staffed with both commercial and residential real estate lenders, which when combined with existing staff, positions FirstBank for continued loan growth," continued Conklin. "Deposit growth, excluding the purchased $256.3 million in deposits of Pioneer Bank, was $20.4 million; an increase of 9.5% since last year, and funding from core deposits continue to increase," said Moxley. "Core deposits grew from $102.3 million at March 31, 2003 to $290.4 million at March 31, 2004 with the purchased $161.9 million in core deposits from Pioneer Bank, while CDs decreased from $206.6 million to $200.6 million over the same time period with the purchase of $94.5 million in CDs from Pioneer Bank. Core deposits represent 59.1% of our total branch deposits. All of our deposit growth in branches last year was in core deposits, which is our primary emphasis," continued Moxley. "Additionally, it is important to note that deposit growth is focused on core demand deposits related primarily to commercial customers." Other funding sources include Federal Home Loan Bank borrowings, as well as brokered deposit markets. Allowance for loan loss reserves increased from $3.4 million on March 31, 2003 to $6.3 million on March 31, 2004. Total reserves are now 1.4% of net loans as of March 31, 2004 versus 1.3% as of March 31, 2003. "Reserves appropriately reflect portfolio loan allocations and the credit risk associated with the slow economy," noted Conklin. "Specifically, provisions were increased in fiscal year 2004 to reflect credit risk resulting from the Pioneer Bank acquisition and continued slow economic growth." "Asset quality is good and remains a high priority for FirstBank," continued Conklin. Total non-performing assets on March 31, 2004 were $3.9 million, or 0.56% of total assets, compared with $1.8 million, or 0.55% of total assets on March 31, 2003. Total non-performing assets increased by $2.1 million over fiscal year ending March 31, 2003, reflecting $1.8 million at March 31, 2003 compared to $3.9 million at March 31, 2004. Loan loss allowances to non-performing assets were 161.0% on March 31, 2004 compared with 188.3% on March 31, 2003. The non-performing assets increased with the acquisition of Oregon Trail and continued economic diversity throughout the market area. Net charge-offs for the year ending March 31, 2004 were $358,000 compared with $182,000 for the same period ending March 31, 2003. "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 110.6% to $699.9 million on March 31, 2004 compared to $332.4 million on March 31, 2003. Stockholders equity on March 31, 2004 was $69.0 million compared with $30.1 million on March 31, 2003. The tangible equity ratio was 7.6% at March 31, 2004 compared to 9.0% a year ago. Tangible book value decreased to $17.33 per share on March 31, 2004 compared to $23.24 per share last year, reflecting the acquisition of Pioneer Bank. At its closing stock price of $25.81 per share on April 26, 2004, shares were selling at just 148.9% of tangible book and 12.0 times fiscal year 2003 diluted earnings per share. Reported net income for the fourth quarter ending March 31, 2004 was $1.6 million compared to $777,000 for the same period one year ago; an increase of 106.4%. Earnings per share (diluted) for the fourth quarter ending March 31, 2004 was $0.55 per share compared to $0.58 per share for the same period last year. "Earnings were negatively impacted by accounting for mark to market investment premium, reduced FHLB dividend income, REO write down, start-up costs for the Hayden Branch and other non-interest expense timing," noted Moxley. "Adjusting for non-reoccurring expenses to the quarter's net income would be approximately $1.7 million." Asset growth for the fourth quarter was $16.2 million, or 2.4%. FirstBank NW Corp. is the parent of FirstBank Northwest. Founded in 1920, FirstBank Northwest is based in Clarkston, Washington. FirstBank Northwest operates twenty branch locations in northern Idaho along the Idaho/Washington border and in eastern Oregon, in addition to residential loan centers in Lewiston, Coeur d'Alene, and Boise, Idaho, and Baker City, Oregon. Salomon Smith Barney has investment centers in FirstBank's Coeur d'Alene, Idaho, Clarkston and Liberty Lake, Washington, and Baker City, LaGrande, Pendleton 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 FirstBank operates, projections of future performance, including operating efficiencies, perceived opportunities in the market, potential future credit experience and statements regarding FirstBank's mission and vision. These forewarned-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. FirstBank'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 actors 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, FirstBank's ability to successfully integrate the business of Oregon Trail, the realization of expected cost savings or accretion to earnings because of the acquisition of Oregon Trail, competitive conditions between banks and non-bank financial service providers, regulatory changes, and other risks detailed in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on From 10-KSB for the fiscal year ended March 31, 2003. FIRSTBANK NW CORP FINANCIAL HIGHLIGHTS (unaudited) (in thousands except share and per share data) Three Months Ended Fiscal Year Ended March 31, March 31, 2004 2003 2004 2003 Interest Income $9,299 $5,080 $27,415 $20,575 Interest Expense 3,068 2,042 9,934 8,710 Provision for Loan Losses (23) 236 395 1,033 Net Interest Income After Provision for Loan Losses 6,254 2,802 17,086 10,832 Non-Interest Income Gain on sale of loans 412 596 2,068 2,128 Gain on sale of securities, net 0 0 0 0 Mortgage Servicing Fees 14 42 77 184 Service fees and charges 1,124 504 3,043 1,913 Commission and other 72 39 208 161 Total Non-Interest Income 1,622 1,181 5,396 4,386 Non-Interest Expenses Compensation and Related Expenses 3,366 1,770 10,095 7,057 Occupancy 788 327 2,077 1,260 Other 1,472 781 4,469 3,076 Total Non-Interest Expense 5,626 2,878 16,641 11,393 Income Tax Expense 646 328 1,483 1,053 Net Income $1,604 $777 $4,358 $2,772 Basic Earnings per Share $0.56 $0.61 $2.26 $2.15 Diluted Earnings per Share $0.55 $0.58 $2.15 $2.07 Weighted Average Shares Outstanding - Basic 2,863,292 1,277,582 1,925,804 1,286,204 Weighted Average Shares Outstanding - Diluted 2,933,774 1,336,102 2,024,352 1,344,272 Actual Shares Issued 2,940,047 1,380,992 2,940,047 1,380,992 March 31, 2004 March 31, 2003 Total Assets $699,931 $332,398 Cash and Cash Equivalents $38,397 $24,741 Loans Receivable, net $464,368 $257,019 Mortgage-Backed Securities $77,027 $9,618 Investment Securities $38,502 $16,813 Stock in FHLB, at cost $12,506 $5,731 Deposits $491,035 $214,340 FHLB Advances & Other Borrowings $132,056 $81,816 Stockholders' Equity $69,031 $30,064 Tangible Book Value per Share (A) $17.33 $23.24 FASB 115 Adjustment after Taxes $984 $1,035 Tangible Equity/ Total Tangible Assets 7.57% 9.04% Number of full-time equivalent Employees 247 137 (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) 3/04 -- 79,149 shares and 3/03 -- 87,311 shares. FINANCIAL STATISTICS (ratios annualized) Three Months Ended Fiscal Year Ended March 31, March 31, 2004 2003 2004 2003 Return on Average Assets 0.93% 0.95% 0.90% 0.87% Return on Average Tangible Equity 12.74% 10.35% 11.17% 9.49% Average Tangible Equity/Average Tangible Assets 7.49% 10.35% 8.19% 9.16% Average Equity/Average Assets 10.04% 9.15% 9.71% 9.16% Average Tangible Equity/Average Loans 10.99% 11.81% 11.37% 12.00% Efficiency Ratio (B) 68.90% 66.48% 70.44% 68.04% Non-Interest Expenses/ Average Assets 3.26% 3.50% 3.43% 3.57% Net Interest Margin (C) 4.27% 4.11% 4.17% 4.16% Average Interest Earning Assets/Average Deposits and Other Borrowed Funds 101.42% 115.88% 102.09% 114.96% LOANS (unaudited) (in thousands except share and per share data) Fiscal Year Ended Fiscal Year Ended March 31, 2004 March 31, 2003 LOAN ORIGINATIONS (D): Residential loan centers $244,456 $206,806 Consumer loan centers 16,364 12,861 Agricultural loan centers 8,048 14,004 Commercial loan centers 86,929 64,399 Total Loan Origination $355,797 $298,070 LOAN PORTFOLIO ANALYSIS: Real estate loans: Residential $113,281 $50,781 Construction 68,336 46,836 Agricultural 18,568 15,921 Commercial 106,935 68,125 Total real estate loans 307,120 181,663 Consumer and other loans: Home equity 24,530 19,924 Agricultural operating 24,876 13,000 Commercial 91,097 50,603 Other consumer 43,402 7,843 Total consumer and other loans 183,905 91,370 Loans held for sale-residential real estate 5,227 5,214 Total Loans Receivable $496,252 $278,247 Fiscal Year Ended Fiscal Year Ended March 31, 2004 March 31, 2003 ALLOWANCE FOR LOAN LOSSES: Balance at Beginning of Period $3,414 $2,563 Purchased $2,863 0 Provision for Loan Losses 395 1,033 Charge offs (Net of Recoveries) (358) (182) Balance at End of Period $6,314 $3,414 Loan Loss Allowance / Net Loans 1.36% 1.33% Loan Loss Allowance / Non-Performing Loans 199.37% 272.90% (B) Calcuation is non-interest expense divided by tax equivalent non-interest income and net interest income. (C) Calculation is tax equivalent net interest income divided by total intererst-earning assets. (D) Loan originations are based upon new production. NON-PERFORMING ASSETS: Fiscal Year Ended Fiscal Year Ended March 31, 2004 March 31, 2003 Accruing Loans - 90 Days Past Due $0 $0 Non-accrual Loans 3,167 1,251 Total Non-performing Loans 3,167 1,251 Restructured Loans on Accrual 152 442 Real Estate Owned (REO) 552 120 Repossessed Assets 52 0 Total Non-performing Assets $3,923 $1,813 Total Non-performing Assets/Total Assets 0.56% 0.55% Loan and REO Loss Allowance as a % of Non-Performing Assets 160.95% 188.31% AVERAGE BALANCES, INTEREST AVERAGE YIELDS/COSTS Three Months Ended Fiscal Year Ended March 31, March 31, 2004 2003 2004 2003 Average Interest Earning Assets: Average Loans receivable: Average Mortgage Loans receivable $111,702 $51,788 $74,416 $55,975 Average Commercial Loans receivable 192,634 120,267 150,557 109,559 Average Construction Loans receivable 42,362 28,296 36,356 19,750 Average Consumer Loans receivable 69,252 28,727 43,063 31,085 Average Agricultural Loans receivable 45,045 29,608 37,547 30,894 Average unearned loan fees and discounts, allowance for loan losses, and other (8,610) (4,348) (6,350) (3,814) Total Average Loans receivable, net 452,385 254,338 335,589 243,449 Average Loans Held for Sale 5,766 5,698 7,584 6,483 Average Mortgage-backed securities 79,542 10,113 35,869 10,832 Average Investment securities 38,462 16,700 24,840 14,554 Average Other earning assets 46,494 19,539 35,999 21,540 Total Average Interest Earning Assets 622,649 306,388 439,881 296,858 Average Non-Interest Earning Assets 68,437 22,072 44,684 21,880 Total Average Assets $691,086 $328,460 $484,565 $318,738 Average Interest Bearing Liabilities: Average Passbook, NOW, and money market accounts $224,630 $70,093 $137,025 $67,522 Average Certificate of deposits 200,091 109,645 149,626 108,406 Average Advances from FHLB and other 135,041 84,660 101,106 82,292 Total Average Interest Bearing Liabilities 559,762 264,398 387,757 258,220 Average Non-Interest Bearing Deposits 54,142 28,055 43,107 26,140 Average Deposits and Other Borrowed Funds 613,904 292,453 430,864 284,360 Average Non-Interest Bearing Liabilities 7,797 5,966 6,638 5,169 Total Average Liabilities 621,701 298,419 437,502 289,529 Total Average Equity 69,385 30,041 47,064 29,209 Total Average Liabilities and Equity $691,086 $328,460 $484,566 $318,738 Total Tangible Average Equity $50,368 $30,041 $39,030 $29,209 Interest Rate Yield on Earning Assets 6.18% 6.78% 6.41% 7.10% Interest Rate Expense on Deposits and Other Borrowed Funds 2.00% 2.79% 2.31% 3.06% Interest Rate Spread 4.18% 3.99% 4.10% 4.04% Net Interest Margin 4.27% 4.11% 4.17% 4.16% 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/

Copyright