Exhibit 99.1
PRESS RELEASE
October 27, 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 THIRD QUARTER ENDED
SEPTEMBER 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 $0.87 diluted earnings per share for the
quarter ended September 30, 2004, compared to diluted earnings per share of
$0.90 for the quarter ended September 30, 2003. The Company's net income was
$1,392,000 for the quarter ended September 30, 2004, as compared to $1,494,000
for the quarter ended September 30, 2003. Net income decreased primarily due to
a decrease in noninterest income, offset in part by an increase in net interest
income and a decrease in income tax expense. (See below.) The Company earned
$2.51 diluted earnings per share for the nine months ended September 30, 2004,
compared to diluted earnings per shares of $2.69 for the nine months ended
September 30, 2003. The Company's net income was $4.1 million for the nine
months ended September 30, 2004, as compared to $4.5 million for the nine months
ended September, 30, 2003. Net income decreased primarily due to an increase in
operating expenses and a decrease in noninterest income, offset in part by a
decrease in income tax expense and an increase in net interest income. (See
below.)
Total assets at September 30, 2004 were $453.4 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 $33.0 million, or 9.1%, to $396.0 million
at September 30, 2004 from $363.0 million at December 31, 2003. At September 30,
2004, net loans consisted of $176.8 million of one-to-four family loans, $88.8
million of commercial real estate loans, $76.0 million of multifamily real
estate loans, and $54.4 million of consumer loans. The increase in net loans
consisted of an increase of $19.7 million in commercial real estate loans, an
increase of $6.5 million in multifamily real estate loans, an increase of $5.4
million in one-to-four family loans and an increase of $1.4 million in consumer
loans. The increase in loans was due primarily to the origination of one-to-four
family loans, multifamily loans, and commercial real estate loans, the purchase
of commercial and multifamily 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 $21.9 million, or 7.7%, to $305.9 million at September 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 locations in March, 2004 and February, 2003,
respectively. Other borrowed funds increased $8.0 million, or 8.4%, to $103.0
million at September 30, 2004 from $95.0 million at December 31, 2003. The
increase in the deposits and borrowed funds was used to fund loans.
Nonperforming assets were 0.47% of total assets as of September 30, 2004
compared to 0.49% of total assets as of December 31, 2003. The allowance for
loan losses was $3.2 million, or 0.80% of total loans, at September 30, 2004,
compared to $3.2 million, or 0.86% of total loans, at December 31, 2003.
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The net interest spread of 2.94% for the quarter ended September 30, 2004
represented a decrease from the net interest spread of 3.01% for the quarter
ended September 30, 2003. The net interest margin of 3.16% for the quarter ended
September 30, 2004 represented a decrease from the net interest margin of 3.25%
for the quarter ended September 30, 2003. Net interest income for the quarter
ended September 30, 2004 increased to $3,397,000, compared to net interest
income of $3,287,000 for the quarter ended September 30, 2003. The increase is
attributable to higher average balances of interest earning assets offset by the
decrease in the net interest spread.
The net interest spread of 2.96% for the nine months ended September 30, 2004
represented a decrease from the net interest spread of 3.05% for the nine months
ended September 30, 2003. The net interest margin of 3.20% for the nine months
ended September 30, 2004 represented a decrease from the net interest margin of
3.30% for the nine months ended September 30, 2003. Net interest income for the
nine months ended September 30, 2004 was $10,039,000, compared to net interest
income of $9,938,000 for the nine months ended September 30, 2003. The increase
is attributable to higher average balances of interest earning assets offset by
the decrease in the net interest spread.
The Company's provision for loan losses was $75,000 for the quarters ended both
September 30, 2004 and 2003. 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.
The Company's noninterest income was $1,505,000 and $1,763,000 for the three
months ended September 30, 2004 and 2003, respectively. The decrease in
noninterest income was due in part to decreases in mortgage banking income,
abstract fees (due to a decrease in mortgage refinancing), and loan prepayment
fees, offset in part by increases in fees associated with checking accounts,
including overdraft fees, increases in loan servicing income, and an increase in
revenues from the sale of annuities.
The Company's noninterest income was $4,569,000 and $4,855,000 for the nine
months ended September 30, 2004 and 2003, respectively. The decrease in
noninterest income was due in part to decreases in mortgage banking income and
abstract fees (due to a decrease in mortgage refinancing), offset in part by
increases in fees associated with checking accounts, including overdraft fees,
increases in loan servicing income, increases in revenues from the sale of
annuities, increases in rent income due to the opening of a second multifamily
apartment building in March, 2003, increases in foreclosed real estate income,
and increases in insurance sales.
The Company's noninterest expense was $2,795,000 and $2,760,000 for the three
months ended September 30, 2004 and 2003, respectively.
The Company's noninterest expense was $8.4 million and $8.0 million for the nine
months ended September 30, 2004 and 2003, respectively. The increase in
noninterest expense was due in part to expenses associated with the Bank's
offices in Ankeny and Clive, Iowa, normal salary increases and other personnel
related costs, an increase in costs
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associated with checking accounts, 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 $640,000 and $721,000 for the three
months ended September 30, 2004 and 2003, respectively. The decrease in the
provision for income taxes was due to the decrease in the income before income
taxes.
The Company's provision for income taxes was $1.9 million and $2.1 million for
the nine months ended September 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.
Stockholders' equity was $41.5 million at September 30, 2004, compared to $41.6
million at December 31, 2003. Stockholders' equity decreased by $93,000
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
September 30, 2004 was $26.82 compared to $25.92 at December 31, 2003. The ratio
of stockholders' equity to total assets was 9.2% at September 30, 2004, as
compared to 9.8% at December 31, 2003.
All stockholders of record on September 15, 2004, received a quarterly cash
dividend of $0.25 per share on October 6, 2004. The Company has 1,547,280 shares
of common stock outstanding, as of October 25, 2004.
During the quarter ended September 30, 2004, the Company repurchased a total of
36,450 shares or approximately 2.3% of its outstanding shares of common stock at
prevailing market prices averaging $37.50 per share. Since its formation in
1996, the Company has invested a total of $51.4 million in the repurchase of
2,713,722 shares of its outstanding stock.
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) September 30, 2004 December 31, 2003
Assets ------------------ -----------------
Cash and cash equivalents $ 9,362 $ 10,019
Securities available-for-sale 24,117 26,952
Loans (net of allowance of loan loss of $3,231
and $3,165, respectively) 396,036 362,959
Goodwill 4,971 4,971
Other assets 18,964 19,108
---------- ----------
Total Assets $ 453,450 $ 424,009
========== ==========
Liabilities
Deposits $ 305,867 $ 283,964
Other borrowed funds 102,981 95,005
Other liabilities 3,104 3,448
---------- ----------
Total Liabilities 411,952 382,417
Stockholders' Equity 41,498 41,592
---------- ----------
Total Liabilities and Stockholders' Equity $ 453,450 $ 424,009
========== ==========
Stockholders' equity to total assets 9.15% 9.81%
========== ==========
Book value per share $ 26.82 $ 25.92
========== ==========
Total shares outstanding 1,547,280 1,604,780
========== ==========
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in Thousands, except per share data)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
--------------------------------------------------------------------
Interest income $ 6,255 $ 6,342 $ 18,518 $ 19,310
Interest expense 2,858 3,055 8,479 9,372
----------- ----------- ----------- -----------
Net interest income 3,397 3,287 10,039 9,938
Provision for loan loss 75 75 185 195
----------- ----------- ----------- -----------
Net interest income after provision for loan loss 3,322 3,212 9,854 9,743
Noninterest income 1,505 1,763 4,569 4,855
Noninterest expense 2,795 2,760 8,411 7,972
----------- ----------- ----------- -----------
Income before income taxes 2,032 2,215 6,012 6,626
Income taxes 640 721 1,923 2,102
----------- ----------- ----------- -----------
Net income $ 1,392 $ 1,494 $ 4,089 $ 4,524
=========== =========== =========== ===========
Basic earnings per share $ 0.90 $ 0.95 $ 2.62 $ 2.86
=========== ========== =========== ===========
Diluted earnings per share $ 0.87 $ 0.90 $ 2.51 $ 2.69
=========== ========== =========== ===========
For the Three Months For the Nine Months
Selected Financial Ratios Ended September 30, Ended September 30,
2004 2003 2004 2003
------------------------------------------------
Performance ratios
Net interest spread 2.94% 3.01% 2.96% 3.05%
Net interest margin 3.16% 3.25% 3.20% 3.30%
Return on average assets 1.23% 1.39% 1.23% 1.42%
Return on average equity 13.40% 14.83% 13.10% 15.29%
Efficiency ratio (noninterest expense divided by
the sum of net interest income before provision
for loan losses plus noninterest income) 57.03% 54.65% 57.58% 53.89%