Exhibit 99.1 Press Release
PRESS RELEASE
January 31, 2006
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 ANNUAL RESULTS FOR YEAR END 2005 AND
STOCK REPURCHASE PROGRAM
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 $3.20 diluted earnings per share for the
year ended December 31, 2005, compared to diluted earnings per share of $3.34
for the year ended December 31, 2004. The Company's net income was $5.0 million
for the year ended December 31, 2005, compared to $5.4 million for the year
ended December 31, 2004.
The Company's net income was $1.16 million, or diluted earnings per share of
$0.75, for the fourth quarter of 2005, compared to net income of $1.31 million,
or diluted earnings per share of $0.83, for the fourth quarter of 2004. The
decrease in net income for the quarter was primarily due to the recognition of
an $111,000, or diluted earnings per share of $0.07, write-down of other real
estate owned, net of income taxes.
Net interest income for the year ended December 31, 2005 was $13.7 million,
compared to net interest income of $13.4 million for the year ended December 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 2.83% for the year ended December 31, 2005
represented a decrease from the net interest spread of 3.02% for the year ended
December 31, 2004. The net interest margin of 3.05% for the year ended December
31, 2005 represented a decrease from the net interest margin of 3.22% for the
year ended December 31, 2004.
The Company's provision for loan losses was $260,000 and $240,000 for the years
ended December 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 loss experience, industry
standards, past due loans, economic 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 $6.5 million and $6.1 million for the years
ended December 31, 2005 and 2004, respectively. The increase in noninterest
income was primarily due to an increase in fees associated with checking
accounts, including overdraft fees, and loan prepayment fees, offset in part by
an other-than-temporary impairment of securities available-for-sale and a
decrease in abstract fees.
The Company's noninterest expense was $12.4 million and $11.3 million for the
years ended December 31, 2005 and 2004, respectively. The increase in
noninterest expense was primarily due to increases in employee salaries and
benefits expenses and other operating expenses, which included the write-down of
other real estate owned.
-MORE-
The Company's provision for income taxes was $2.5 million and $2.5 million for
the years ended December 31, 2005 and 2004, respectively. The provision for
income taxes remained steady primarily due to the decrease in income before
income taxes, offset in part by the limited deductibility of the
other-than-temporary impairment of securities available-for-sale.
Total assets at December 31, 2005 were $485.2 million, compared to $462.7
million at December 31, 2004. The increase in assets consisted primarily of
increases in loans, premises and equipment, and cash and cash equivalents,
offset in part by a decrease in securities available-for-sale. Net loans
increased by $23.0 million, or 5.6%, to $430.3 million at December 31, 2005 from
$407.3 million at December 31, 2004. At December 31, 2005, net loans consisted
of $210.8 million of one-to-four family real estate loans, $85.8 million of
commercial real estate loans, $73.5 million of multi-family real estate loans,
and $60.2 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. Premises and
equipment, net, increased by $1.1 million, or 10.8%, to $11.0 million at
December 31, 2005 from $9.9 million at December 31, 2004. The increase in
premises and equipment was primarily due to the initial construction costs
associated with the construction of a new branch office located at the Jordan
Creek Town Center in West Des Moines, Iowa and the expansion of the Crossroads
branch in Fort Dodge, Iowa. Cash and cash equivalents increased $0.7 million, or
9.1%, to $8.6 million at December 31, 2005, compared to $7.9 million at December
31, 2004. Securities available-for-sale decreased $2.4 million, or 10.4%, to
$20.7 million at December 31, 2005 from $23.1 million at December 31, 2004. The
decrease in securities available-for-sale consisted primarily of a decrease in
investments in mortgage-backed and municipal securities, offset in part by a
decrease in unrealized losses and an increase in investment in FHLB stock.
Deposits increased $18.0 million, or 5.7%, to $334.3 million at December 31,
2005 from $316.3 million at December 31, 2004. Other borrowed funds increased
$1.5 million, or 1.5%, to $102.4 million at December 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 0.36% of total assets as of December 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 December 31, 2005,
compared to $3.2 million, or 0.77% of total loans, at December 31, 2004.
Stockholders' equity was $44.3 million at December 31, 2005, compared to $41.5
million at December 31, 2004. Stockholders' equity increased by $2.7 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 stock
repurchases and declared dividends. Book value, or stockholders' equity per
share, at December 31, 2005 was $29.37, compared to $27.14 at December 31, 2004.
The ratio of stockholders' equity to total assets was 9.1% at December 31, 2005,
compared to 9.0% at December 31, 2004.
All stockholders of record on December 15, 2005, received a quarterly cash
dividend of $0.29 per share on January 6, 2006. As of December 31, 2005, the
Company had 1,507,703 shares of common stock outstanding.
During the year ended December 31, 2005, the Company repurchased a total of
50,932 shares of common stock, or approximately 3.3% of its outstanding shares
of common stock at prevailing market prices averaging $38.23 per share.
The Company also announced that it will commence a new stock repurchase program.
The program authorizes the Company to repurchase up to 100,000 shares, or 6.63%,
of its 1,507,703 outstanding shares of common stock and will remain open until
all shares authorized for repurchase have been repurchased. The repurchases will
be made from time to time, in open market transactions, at the discretion of
management.
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.
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) December 31, 2005 December 31, 2004
----------------- -----------------
Assets
Cash and cash equivalents $ 8,640 $ 7,918
Securities available-for-sale 20,708 23,106
Loans (net of allowance of loan loss of $3,326 and
$3,235, respectively) 430,278 407,316
Goodwill 4,971 4,971
Other assets 20,594 19,424
---------- ----------
Total assets $ 485,191 $ 462,735
========== ==========
Liabilities
Deposits $ 334,338 $ 316,334
Other borrowed funds 102,444 100,975
Other liabilities 4,131 3,892
---------- ----------
Total liabilities 440,913 421,201
Stockholders' equity 44,278 41,534
---------- ----------
Total liabilities and stockholders' equity $ 485,191 $ 462,735
========== ==========
Stockholders' equity to total assets 9.13% 8.98%
========== ==========
Book value per share $ 29.37 $ 27.14
========== ==========
Total shares outstanding 1,507,703 1,530,530
========== ==========
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in Thousands, except per share data)
For the Three Months For the Years
Ended December 31, Ended December 31,
2005 2004 2005 2004
------------------------------------------------------
Interest income $ 6,752 $ 6,297 $26,272 $24,757
Interest expense 3,368 2,888 12,607 11,367
------- ------- ------- -------
Net interest income 3,384 3,409 13,665 13,390
Provision for loan loss 80 55 260 240
------- ------- ------- -------
Net interest income after provision for loan loss 3,304 3,354 13,405 13,150
Noninterest income 1,647 1,473 6,548 6,060
Noninterest expense 3,355 2,945 12,439 11,315
------- ------- ------- -------
Income before income taxes 1,596 1,882 7,514 7,895
Income taxes 436 573 2,499 2,496
------- ------- ------- -------
Net income $ 1,160 $ 1,309 $ 5,015 $ 5,399
======= ======= ======= =======
Basic earnings per share $ 0.77 $ 0.85 $ 3.29 $ 3.47
======= ======= ======= =======
Diluted earnings per share $ 0.75 $ 0.83 $ 3.20 $ 3.34
======= ======= ======= =======
For the Three Months For the Years
Selected Financial Ratios Ended December 31, Ended December 31,
2005 2004 2005 2004
----------------------------------------------------------------------
Performance ratios
Net interest spread 2.76% 3.00% 2.83% 3.02%
Net interest margin 2.97% 3.19% 3.05% 3.22%
Return on average assets 0.96% 1.15% 1.05% 1.21%
Return on average equity 10.51% 12.58% 11.57% 12.97%
Efficiency ratio (noninterest expense divided by
the sum of net interest income before provision
for loan losses plus noninterest income) 66.69% 60.33% 61.54% 58.18%