Exhibit 99.1 Press Release
PRESS RELEASE
July 26, 2004
For further information contact:
David M. Bradley
Chairman, President and Chief Executive Officer
North Central Bancshares, Inc.
825 Central Avenue
Fort Dodge, Iowa 50501
515-576-7531
NORTH CENTRAL BANCSHARES, INC. ANNOUNCES EARNINGS
FOR SECOND QUARTER ENDED JUNE 30, 2004
Fort Dodge, Iowa -- North Central Bancshares, Inc. (the "Company") (Nasdaq:
FFFD), the holding company for First Federal Savings Bank of Iowa (the "Bank"),
announced today that the Company earned $0.91 diluted earnings per share for the
quarter ended June 30, 2004, compared to diluted earnings per share of $0.92 for
the quarter ended June 30, 2003. In dollars, the Company's net income was
$1,481,000 for the quarter ended June 30, 2004, as compared to $1,528,000 for
the quarter ended June 30, 2003. Net income decreased primarily due to an
increase in operating expenses and a decrease in noninterest income, offset in
part by a slight increase in net interest income and a decrease in income tax
expense. (See below.) The Company earned $1.64 diluted earnings per share for
the six months ended June 30, 2004, compared to diluted earnings per shares of
$1.80 for the six months ended June 30, 2003. In dollars, the Company's net
income was $2.7 million for the six months ended June 30, 2004, as compared to
$3.0 million for the six months ended June, 30, 2003. Net income decreased
primarily due to an increase in operating expenses, offset in part by a decrease
in income tax expense. (See below.)
Total assets at June 30, 2004 were $450.2 million as compared to $424.0 million
at December 31, 2003. The increase in assets consisted primarily of an increase
in loans. Loans increased by $29.6 million, or 8.1%, to $392.5 million at June
30, 2004 from $363.0 million at December 31, 2003. At June 30, 2004, net loans
consisted of $173.8 million of one-to-four family loans, $79.2 million of
multifamily real estate loans, $86.0 million of commercial real estate loans and
$53.5 million of consumer loans. The increase in net loans consisted of an
increase of $17.1 million in commercial real estate loans, an increase of $9.7
million in multifamily real estate loans, an increase of $2.4 million in
one-to-four family loans and an increase of $436,000 in consumer loans. The
increase in loans was due primarily to the origination of one-to-four family
loans and multifamily loans, the purchase of multifamily and commercial real
estate loans and the origination of second mortgage loans. These originations
and purchases were offset in part by payments, loan prepayments and sales of
loans.
Deposits increased $18.6 million, or 6.5%, to $302.5 million at June 30, 2004
from $284.0 million at December 31, 2003. The increase in deposits is due
primarily to increases in deposits at the Clive, Iowa and Ankeny, Iowa offices,
which opened at their permanent location in March, 2004 and February, 2003,
respectively. Other borrowed funds increased $7.5 million, or 7.9%, to $102.5
million at June 30, 2004 from $95.0 million at December 31, 2003. The increase
in the deposits and borrowed funds were used to fund loans.
Nonperforming assets were 0.38% of total assets as of June 30, 2004 compared to
0.49% of total assets as of December 31, 2003. The allowance for loan losses was
$3.2 million, or 0.81% of total loans, at June 30, 2004, compared to $3.2
million, or 0.86% of total loans, at December 31, 2003.
-MORE-
The net interest spread of 2.96% for the quarter ended June 30, 2004 represented
a decrease from the net interest spread of 3.00% for the quarter ended June 30,
2003. The net interest margin of 3.20% for the quarter ended June 30, 2004
represented a decrease from the net interest margin of 3.26% for the quarter
ended June 30, 2003. Net interest income for the quarter ended June 30, 2004 was
$3,360,000, compared to net interest income of $3,304,000 for the quarter ended
June 30, 2003.
The net interest spread of 2.97% for the six months ended June 30, 2004
represented a decrease from the net interest spread of 3.06% for the six months
ended June 30, 2003. The net interest margin of 3.22% for the six months ended
June 30, 2004 represented a decrease from the net interest margin of 3.33% for
the six months ended June 30, 2003. Net interest income for the six months ended
June 30, 2004 was $6,643,000, compared to net interest income of $6,651,000 for
the six months ended June 30, 2003.
The Company's provision for loan losses was $50,000 and $60,000 for the quarters
ended June 30, 2004 and 2003, 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 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. These factors include prior loss experience, industry standards,
past due loans, economic conditions, the volume and type of loans in the Bank's
portfolio, which includes a significant amount of multi-family and commercial
real estate loans, substantially all of which are purchased and are
collateralized by properties located outside of the Bank's market area, and
other factors related to the collectibility of the Bank's loan portfolio.
Stockholders' equity was $41.2 million at June 30, 2004, compared to $41.6
million at December 31, 2003. Stockholders' equity decreased by $372,000
primarily due to stock repurchases, declared dividends and increases in the
accumulated other comprehensive losses, offset in part by earnings and the
exercise of stock options. Book value, or stockholders' equity per share, at
June 30, 2004 was $26.38 compared to $25.92 at December 31, 2003. The ratio of
stockholders' equity to total assets was 9.2% at June 30, 2004, as compared to
9.8% at December 31, 2003.
All stockholders of record on June 15, 2004, received a quarterly cash dividend
of $0.25 per share on July 6, 2004. The Company has 1,562,780 shares of common
stock currently outstanding.
During the quarter ended June 30, 2004, the Company repurchased a total of
24,000 shares or approximately 1.5% of its outstanding shares of common stock at
prevailing market prices averaging $38.23 per share. Since its formation in
1996, the Company has invested a total of $50.0 million in the repurchase of
2,677,272 shares of its outstanding stock.
The Company's noninterest income was $1,632,000 and $1,699,000 for the three
months ended June 30, 2004 and 2003, respectively. The decrease in noninterest
income was due in part to decreases in mortgage banking income and abstract
fees, offset in part by increases in fees associated with checking accounts,
including overdraft fees, increases in loan prepayment fees, increases in
foreclosed real estate income, offset in part by decreases in revenues from the
sale of annuities and mutual funds and decreases from the sale of insurance.
The Company's noninterest income was $3,064,000 and $3,092,000 for the six
months ended June 30, 2004 and 2003, respectively. The decrease in noninterest
income was due in part to decreases in mortgage banking income and abstract
fees, offset in part by increases in fees associated with checking accounts,
including overdraft fees, increases in loan prepayment fees, increases in
foreclosed real estate income, an increase in rent income due to the
opening of a second multifamily apartment building in March, 2003, increases in
revenues from the sale of annuities and mutual funds and increases from the sale
of insurance.
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The Company's noninterest expense was $2,753,000 and $2,654,000 for the three
months ended June 30, 2004 and 2003, respectively. The increase in noninterest
expense was due in part to expenses in connection with the Bank's new branch
office in Clive, Iowa, increases in employee benefits costs, normal salary
increases and a general increase in other noninterest expenses, offset in part
by a decrease in the Company's employee stock ownership plan costs.
The Company's noninterest expense was $5.6 million and $5.2 million for the six
months ended June 30, 2004 and 2003, respectively. The increase in noninterest
expense was due in part to expenses in connection with the Bank's branch offices
in Ankeny and Clive, Iowa, increases in employee benefits costs, normal salary
increases, an increase in apartment operating costs due to the opening of a
second multifamily apartment building in March, 2003 and a general increase in
other noninterest expenses.
The Company's provision for income taxes was $708,000 and $762,000 for the three
months ended June 30, 2004 and 2003, respectively. The decrease in the provision
for income taxes was due to the decrease in the income before income taxes and
an increase in recurring low income federal tax credit.
The Company's provision for income taxes was $1.3 million and $1.4 million for
the six months ended June 30, 2004 and 2003, respectively. The decrease in the
provision for income taxes was due to the decrease in the income before income
taxes and an increase in recurring low income federal tax credit, offset in part
by a one time low-income housing Iowa income tax credit with an effect on net
income of approximately $110,000 that was recorded in 2003.
The Company 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 up
to the full extent permitted by law. The Company's stock is traded on The Nasdaq
National Market under the symbol "FFFD".
Statements contained in this news release, which are not historical facts,
contain forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risk and uncertainties which could cause actual results to differ
materially from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents filed by the
Company with the Securities and Exchange Commission from time to time. The
Company or the Bank does not undertake to update any forward looking statement,
whether written or oral, that may be made from time to time by or on behalf of
the Company or the Bank.
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) June 30, 2004 December 31, 2003
------------- -----------------
Assets
Cash and cash equivalents $ 8,502 $ 10,019
Securities available-for-sale 24,693 26,952
Loans (net of allowance of loan loss of $3,231 and
$3,165, respectively) 392,536 362,959
Goodwill 4,971 4,971
Other assets 19,527 19,108
---------- ----------
Total Assets $ 450,229 $ 424,009
========== ==========
Liabilities
Deposits $ 302,532 $ 283,964
Other borrowed funds 102,488 95,005
Other liabilities 3,989 3,448
---------- ----------
Total Liabilities 409,009 382,417
Stockholders' Equity 41,220 41,592
---------- ----------
Total Liabilities and Stockholders' Equity $ 450,229 $ 424,009
========== ==========
Stockholders' equity to total assets 9.16% 9.81%
========== ==========
Book value per share $ 26.38 $ 25.92
========== ==========
Total shares outstanding 1,562,780 1,604,780
========== ==========
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in Thousands, except per share data)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
-------------------------------------------------
Interest income $ 6,163 $ 6,441 $12,263 $12,967
Interest expense 2,803 3,137 5,620 6,316
------- ------- ------- -------
Net interest income 3,360 3,304 6,643 6,651
Provision for loan loss 50 60 110 120
------- ------- ------- -------
Net interest income after provision for loan loss 3,310 3,244 6,533 6,531
Noninterest income 1,632 1,699 3,064 3,092
Noninterest expense 2,753 2,654 5,616 5,212
------- ------- ------- -------
Income before income taxes 2,189 2,289 3,981 4,411
Income taxes 708 761 1,283 1,381
------- ------- ------- -------
Net income $ 1,481 $ 1,528 $ 2,698 $ 3,030
======= ======= ======= =======
Basic earnings per share $ 0.95 $ 0.97 $ 1.72 $ 1.91
======= ======= ======= =======
Diluted earnings per share $ 0.91 $ 0.92 $ 1.64 $ 1.80
======= ======= ======= =======
Selected Financial Ratios For the Three Months For the Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
----------------------------------------------------
Performance ratios
Net interest spread 2.96% 3.00% 2.97% 3.06%
Net interest margin 3.20% 3.26% 3.22% 3.33%
Return on average assets 1.34% 1.43% 1.24% 1.44%
Return on average equity 14.30% 15.62% 12.96% 15.53%
Efficiency ratio (noninterest expense divided by
the sum of net interest income before provision
for loan losses plus noninterest income) 55.14% 53.05% 57.85% 53.49%