Exhibit 99.1
PRESS RELEASE
May 3, 2005
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 RESULTS FOR FIRST QUARTER 2005
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 $0.68 diluted earnings per share for the
quarter ended March 31, 2005, compared to diluted earnings per share of $0.73
for the quarter ended March 31, 2004. The Company's net income was $1,076,000
for the quarter ended March 31, 2005, as compared to $1,217,000 for the quarter
ended March 31, 2004. The reduction in earnings was due primarily to an
other-than-temporary impairment on a security discussed in greater detail below.
Net interest income for the quarter ended March 31, 2005 was $3.44 million,
compared to net interest income of $3.28 million for the quarter ended March 31,
2004. The increase in net interest income was due primarily to an increase in
interest-earning assets, offset in part by a decrease in the net interest
margin. The net interest spread of 2.85% for the quarter ended March 31, 2005
represented a decrease from the net interest spread of 2.97% for the quarter
ended March 31, 2004. The net interest margin of 3.12% for the quarter ended
March 31, 2005 represented a decrease from the net interest margin of 3.23% for
the quarter ended March 31, 2004.
The Company's provision for loan losses was $50,000 and $60,000 for the quarters
ended March 31, 2005 and 2004, 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.
The Company's noninterest income was $1.18 million and $1.43 million for the
quarters ended March 31, 2005 and 2004, respectively. The decrease in
noninterest income was due to an impairment of securities available-for-sale and
decreases in abstract fees, loan prepayment fees, other income and mortgage
banking income, offset in part by increases in fees associated with checking
accounts, including overdraft fees.
During the quarter ended March 31, 2005 the Company recorded an
other-than-temporary impairment, non-cash, after-tax charge of $229,000, or
$0.15 per fully diluted share related to a $1,000,000 face value perpetual
preferred stock that declined in value due to decreased interest rates. This
perpetual preferred stock was issued by Federal
-MORE-
Home Loan Mortgage Corporation ("Freddie Mac"). Its dividend rate reprices every
five years, most recently at year end 2004. This perpetual preferred stock issue
is an investment grade security that is held in the Company's available-for-sale
securities portfolio. Absent this other-than-temporary charge, diluted earnings
per share were $0.83 for the quarter ended March 31, 2005, an increase of 13%
over the same period in 2004. In dollars, absent this other-than-temporary
charge, earnings were $1,305,000, an increase of 7% over the same period in
2004.
The Company's noninterest expense was $2.94 million and $2.86 million for the
quarters ended March 31, 2005 and 2004, respectively. The increase in
noninterest expense was due in part to an increase in professional fees and a
loss on the disposal of fixed assets.
The Company's provision for income taxes was $553,000 and $576,000 for the
quarters ended March 31, 2005 and 2004, respectively. The decrease in the
provision for income taxes was due to the decrease in the income before income
taxes, offset in part by the limited deductibility of the impairment of
securities available-for-sale.
Total assets at March 31, 2005 were $471.2 million as compared to $462.7 million
at December 31, 2004. The increase in assets consisted primarily of an increase
in loans, offset in part by a decrease in securities available-for-sale. Net
loans increased by $8.2 million, or 2.0%, to $415.5 million at March 31, 2005
from $407.3 million at December 31, 2004. At March 31, 2005, net loans consisted
of $190.3 million of one-to-four family real estate loans, $89.0 million of
commercial real estate loans, $80.2 million of multi-family real estate loans,
and $56.0 million of consumer loans. The increase in net loans was due primarily
to the origination of one-to-four family real estate loans, the purchase of
one-to-four family, multi-family, and commercial real estate loans, and the
origination of second mortgage loans. These originations and purchases were
offset in part by payments, prepayments, and sales of loans. Securities
available-for-sale decreased $0.3 million, or 1.5%, to $22.8 million at March
31, 2005 from $23.1 million at December 31, 2004. The decrease in securities
available-for-sale consisted primarily of a decrease in investment in
mortgage-backed securities and an other-than-temporary impairment of securities,
offset in part by a decrease in unrealized losses and an increase in investment
in Federal Home Loan Bank stock.
Deposits increased $4.5 million, or 1.4%, to $320.7 million at March 31, 2005
from $316.3 million at December 31, 2004. Other borrowed funds increased $3.2
million, or 3.2%, to $104.2 million at March 31, 2005 from $101.0 million at
December 31, 2004. The increase in the deposits and borrowed funds were used
primarily to fund loan growth.
Nonperforming assets were 0.33% of total assets as of March 31, 2005 compared to
0.37% of total assets as of December 31, 2004. The allowance for loan losses was
$3.3 million, or 0.76% of total loans, at March 31, 2005, compared to $3.2
million, or 0.77% of total loans, at December 31, 2004.
Stockholders' equity was $42.7 million at March 31, 2005, compared to $41.5
million at December 31, 2004. Stockholders' equity increased by $1.1 million
primarily due to earnings, the exercise of stock options, and a decrease in
unrealized loss on securities available-for-sale, offset in part by declared
dividends. Book value, or stockholders' equity per share, at March 31, 2005 was
$27.73 compared to $27.14 at December 31, 2004. The ratio of stockholders'
equity to total assets was 9.1% at March 31, 2005, as compared to 9.0% at
December 31, 2004.
All stockholders of record on March 16, 2005, received a quarterly cash dividend
of $0.29 per share on April 7, 2005. As of March 31, 2005, the Company had
1,538,430 shares of common stock outstanding.
North Central Bancshares, Inc. 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.
During the quarter the Company purchased a building site in West Des Moines near
Jordon Town Center Mall. The Company intends to begin construction of a new
branch office at this location and open this office in 2006, at which point the
Company will have three offices in the greater Des Moines, Iowa area.
The Bank's deposits are insured by the Federal Deposit Insurance Corporation up
to the full extent permitted by law.
Statements included in this press release and in future filings by North Central
Bancshares, Inc. with the Securities and Exchange Commission, in North Central
Bancshares, Inc. press releases, and in oral statements made with the approval
of an authorized executive officer, which are not historical or current facts,
are "forward-looking statements" made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995, and are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical earnings and those presently anticipated or projected. North
Central Bancshares, Inc. wishes to caution readers not to place undue reliance
on such forward-looking statements, which speak only as of the date made. The
following important factors, among others, in some cases have affected and in
the future could affect North Central Bancshares, Inc.'s actual results, and
could cause North Central Bancshares, Inc.'s actual financial performance to
differ materially from that expressed in any forward-looking statement: (1)
competitive pressures among depository and other financial institutions may
increase significantly; (2) revenues may be lower than expected; (3) changes in
the interest rate environment may reduce interest margins; (4) general economic
conditions, either nationally or regionally, may be less favorable than
expected, resulting in, among other things, a deterioration in credit quality
and/or a reduced demand for credit; (5) legislative or regulatory changes,
including changes in accounting standards, may adversely affect the business in
which the Company is engaged; (6) competitors may have greater financial
resources and developed products that enable such competitors to compete more
successfully than the Company; and (7) adverse changes may occur in the
securities markets or with respect to inflation. The foregoing list should not
be construed as exhaustive, and North Central Bancshares, Inc. disclaims any
obligation to subsequently revise any forward-looking statements to reflect
events or circumstances after the date of such statements, or to reflect the
occurrence of anticipated or unanticipated events.
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) March 31, 2005 December 31, 2004
-------------- -----------------
Assets
Cash and cash equivalents $ 7,995 $ 7,918
Securities available-for-sale 22,764 23,106
Loans (net of allowance of loan loss of $3,260 and
$3,235, respectively) 415,544 407,316
Goodwill 4,971 4,971
Other assets 19,940 19,424
---------- ----------
Total Assets $ 471,214 $ 462,735
========== ==========
Liabilities
Deposits $ 320,738 $ 316,334
Other borrowed funds 104,168 100,975
Other liabilities 3,641 3,892
---------- ----------
Total Liabilities 428,547 421,201
Stockholders' Equity 42,667 41,534
---------- ----------
Total Liabilities and Stockholders' Equity $ 471,214 $ 462,735
========== ==========
Stockholders' equity to total assets 9.05% 8.98%
========== ==========
Book value per share $ 27.73 $ 27.14
========== ==========
Total shares outstanding 1,538,430 1,530,530
========== ==========
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in Thousands, except per share data)
For the Three Months
Ended March,
2005 2004
----------------------
Interest income $6,335 $6,100
Interest expense 2,896 2,817
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Net interest income 3,439 3,283
Provision for loan loss 50 60
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Net interest income after provision for loan loss 3,389 3,223
Noninterest income 1,179 1,432
Noninterest expense 2,939 2,863
------ ------
Income before income taxes 1,629 1,792
Income taxes 553 576
------ ------
Net income $1,076 $1,217
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Basic earnings per share $ 0.70 $ 0.77
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Diluted earnings per share $ 0.68 $ 0.73
====== ======
For the Three Months
Selected Financial Ratios Ended March 31,
2005 2004
--------------------
Performance ratios
Net interest spread 2.85% 2.97%
Net interest margin 3.12% 3.23%
Return on average assets 0.93% 1.13%
Return on average equity 10.22% 11.63%
Efficiency ratio (noninterest expense divided by
the sum of net interest income before provision
for loan losses plus noninterest income) 63.64% 60.72%