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EQUITABLE FINANCIAL ANNOUNCES THREE AND NINE MONTH RESULTS
Grand Island, Nebraska (May 5, 2006)--Equitable Financial Corp. (OTCBB: EQFC),
the holding company for Equitable Bank, today announced net income of $116,000
for the quarter ended March 31, 2006, compared to net income of $72,000 for the
quarter ended March 31, 2005. For the nine months ended March 31, 2006, the
Company reported a net loss of $508,000 compared to net income of $152,000 for
the nine months ended March 31, 2005. The net loss for the nine months ended
March 31, 2006 was primarily due to the one-time $726,000 expense associated
with the funding and establishment of the Equitable Bank Charitable Foundation
in connection with Equitable Bank's mutual holding company reorganization.
Net interest income increased $57,000, or 5.8%, to $1.03 million for the quarter
ended March 31, 2006 compared to $973,000 for the quarter ended March 31, 2005.
The interest rate spread and net interest margin for the quarter ended March 31,
2006 were 2.1% and 2.5%, respectively, compared to 2.5% and 2.8% for the same
period in 2005. Interest income increased $396,000, or 20.6%, to $2.3 million
for the three-month period ended March 31, 2006 as the Company had an increase
in the volume of interest-earning assets, as well as an increase in the average
yield. The loan growth for the nine months ended March 31, 2006 was due to loan
originations in our new North Platte and Omaha operations, as well as our recent
emphasis on commercial, construction and non-residential real estate loans.
Interest expense increased $340,000, or 35.9%, to $1.3 million for the quarter
ended March 31, 2006, due to an increase in the average rate paid on deposits
and an increase in deposit volume. For the nine-month period ended March 31,
2006, net interest income decreased $92,000 to $2.9 million due primarily to an
increase in our overall funding costs. For the nine months ended March 31, 2006,
the interest rate spread and net interest margin were 2.1% and 2.5%,
respectively, compared to 2.5% and 2.8% for fiscal 2005.
Noninterest income increased $577,000 to $705,000 for the three months ended
March 31, 2006 compared to $128,000 for the same period ended March 31, 2005.
This increase was primarily due to the sale of Freddie Mac common stock in
January 2006, giving the Company a pre-tax gain of $354,000. Brokerage fee
income increased $207,000 to $243,000 for the three months ended March 31, 2006
compared to the same period in 2005. The increase was due to the opening of our
new brokerage operations in Grand Island and North Platte during 2005.
Noninterest income increased $1.2 million to $1.7 million for the nine-month
period ended March 31, 2006 as a result of the sale of Freddie Mac common stock
and increases in brokerage fees.
Noninterest expense increased $544,000, or 54.7%, to $1.5 million for the
three-month period ended March 31, 2006. Salaries and employee benefits
increased $306,000, or 56.8%, to $844,000. Occupancy and equipment increased
$47,000, or 20.1%, to $281,000. Professional fees increased $101,000, or 918.2%,
to $112,000. The increase in salaries and benefit expense, as well as the
increase in occupancy and advertising expense, was due to the opening of three
new branch facilities in Omaha, Grand Island and North Platte. The professional
fees increase was due to our ongoing strategic activities, including our
expansion activities. For the nine months ended March 31, 2006, noninterest
expense totaled $5.3 million compared to $3.2 million for the same period in
2005. This $2.1 million increase was due to a combination of factors, including
the
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contribution to the Equitable Bank Charitable Foundation, the loss on the sale
of loans, the cost of opening three new facilities. The professional fees
increase was due to our ongoing strategic activities, including our expansion
activities.
Nonperforming assets totaled $47,000 at March 31, 2006, compared to $194,000, or
0.1% of total assets, at June 30, 2005. The allowance for loan losses was
$931,000, or 0.6% of total gross loans, at March 31, 2006 compared to $786,000,
or 0.6% of total gross loans, at June 30, 2005. We had $12,000 and $25,000 of
charge-offs for the three and nine months ended March 31, 2006, respectively,
compared to $32,000 and $67,000 for the same 2005 periods, respectively. The
provision for loan loss for the three months ended March 31, 2006 and 2005 was
$30,000 and for the nine months ended March 31, 2006 and 2005 was $90,000.
Management considered both the provision and allowance for loan loss to be
adequate during all periods based on the changing composition of the loan
portfolio due to loan growth particularly in commercial loans.
Total assets at March 31, 2006 were $175.0 million, compared to $145.4 million
at June 30, 2005. Total loans increased $27.7 million, or 22.8%, to $149.4
million at March 31, 2006, from $121.7 million at June 30, 2005. The majority of
the loan portfolio growth was concentrated in the commercial and agricultural
business segments. This growth was due primarily to the three new branch
facilities opened since March 31, 2005. The growth was offset by the sale of
$6.5 million of fixed-rate real estate loans. Investment securities decreased
$1.2 million, or 10.2%, to $10.8 million at March 31, 2006, from $12.1 million
at June 30, 2005. The decrease in investment securities was due primarily to the
maturity of agency securities, the prepayment of principal in mortgage-backed
securities and the sale of all Freddie Mac common stock. Total deposits
increased $19.7 million, or 20.3%, to $116.5 million at March 31, 2006. The
increase reflects the addition of $14.0 million in brokered certificates.
Transaction accounts comprised 24.3% of total deposits at March 31, 2006,
compared to 22.3% at June 30, 2005.
Shareholders' equity increased to $25.6 million at March 31, 2006 from $14.4
million at June 30, 2005, an increase of $11.2 million, or 78.0%. The increase
reflects the sale of 1.4 million shares of common stock in connection with
Equitable Bank's reorganization to a mutual holding company form.
Equitable Bank is headquartered in Grand Island, Nebraska and is a
community-oriented financial institution dedicated to serving the financial
services needs of consumers and businesses within our market area. We are
engaged primarily in the business of attracting deposits from the general public
and using such funds to originate various type loans. We offer financial
services through our main office and full-service branches in Grand Island and
North Platte, and have our also have our loan production offices in Grand Island
and Omaha.
This news release may contain forward-looking statements, which can be
identified by the use of words such as "believes," "expects," "anticipates,"
"estimates" or similar expressions. Such forward-looking statements and all
other statements that are not historical facts are subject to risks and
uncertainties which could cause actual results to differ materially from those
currently anticipated due to a number of factors. These factors include, but are
not limited to, changes in interest rates, general economic conditions,
legislative or regulatory changes that may adversely affect our business, the
quality or composition of the Company's loan or investment portfolios,
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changes in competition and demand for financial services, adverse changes in the
securities markets, changes in the quality or composition of the Company's loan
or investment portfolios, and changes in accounting principles, policies and
guidelines. Additionally, other risks and uncertainties may be described in the
Company's quarterly reports on Form 10-QSB and its registration statement on
Form SB-2, each filed with the Securities and Exchange Commission, which are
available through the SEC's website at www.sec.gov. Should one or more of these
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risks materialize, actual results may vary from those anticipated, estimated or
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. The Company assumes no obligation to update any forward-looking
statements.
CONTACTS:
Equitable Financial Corp.
Richard L. Harbaugh (308) 382-3136
Kim E. Marco (308) 382-3136
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EQUITABLE FINANCIAL CORP.
SELECTED FINANCIAL INFORMATION
(Unaudited)
MARCH 31, JUNE 30,
SELECTED FINANCIAL CONDITION DATA 2006 2005
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(In Thousands)
Total assets $ 174,990 $ 145,372
Cash and cash equivalents 4,274 2,160
Loans, net 149,365 121,656
Securities available for sale 10,660 12,785
Deposits 116,452 96,788
Federal Home Loan Bank advances 31,429 32,952
Stockholders' equity 25,557 14,363
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
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SELECTED OPERATIONS DATA 2006 2005 2006 2005
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(In thousands, except per share data)
Total interest income $ 2,315 $ 1,919 $ 6,561 $ 5,776
Total interest expense 1,286 946 3,674 2,797
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Net interest income 1,029 973 2,887 2,979
Provision for loan losses 30 30 90 90
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Net interest income after
provision for loan losses 999 943 2,797 2,889
Noninterest income 705 128 1,693 497
Noninterest expense 1,539 994 5,347 3,219
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Income/(loss) before taxes 165 77 (858) 167
Income tax (benefit)/expense 49 5 (350) 15
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Net (loss) / income $ 116 $ 72 $ (508) $ 152
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Basic earnings (loss) per share (1) .04 -- (0.13) --
Diluted earnings (loss) per share (1) .04 -- (0.13) --
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THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
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SELECTED FINANCIAL RATIOS 2006 2005 2006 2005
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Return on average assets .3% .2% (.4)% .1%
Return on average equity 2.8 2.0 (3.9) 1.4
Average equity to average assets 11.1 9.9 10.0 9.9
Interest rate spread during the
period 2.1 2.5 2.1 2.5
Net interest margin 2.5 2.8 2.4 2.8
General and administrative
expenses to average assets 3.5 2.7 4.3 3.0
Efficiency ratio 111.5 90.3 137.7 92.6
AS OF AS OF
MARCH 31, 2006 MARCH 31, 2005
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Nonperforming assets to total assets 0.0% 0.02%
Book value per share $7.75 (1)
Number of shares outstanding for
book value computation 3,297,509 (1)
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(1) The Company completed its initial stock offering and reorganization on
November 8, 2005 and, as a result, shares for purposes of the 2006
earnings per share calculations were not outstanding for the nine-month
periods. Prior to the Company's initial stock offering and
reorganization, Equitable Bank was a mutual association without
stockholders; therefore, earnings per share for the three and nine months
ended March 31, 2005 are not applicable.