Exhibit 99.1 Press Release
PRESS RELEASE
July 28, 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 RESULTS FOR SECOND QUARTER 2006
AND THE OPENING OF ITS NEW WEST DES MOINES OFFICE
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 diluted earnings per share of $0.87 for
the quarter ended June 30, 2006, compared to diluted earnings per share of $0.65
for the quarter ended June 30, 2005. The Company's net income was $1.26 million
for the quarter ended June 30, 2006, compared to $1.03 million for the quarter
ended June 30, 2005. The increase in earnings for the quarter was primarily due
to an increase in noninterest income.
The Company earned diluted earnings per share of $1.69 for the six months ended
June 30, 2006, compared to diluted earnings per share of $1.34 for the six
months ended June 30, 2005. The Company's net income was $2.50 million for the
six months ended June 30, 2006, compared to $2.11 million for the six months
ended June 30, 2005. The increase in earnings for the six months was primarily
due to an increase in noninterest income.
Net interest income for the quarter ended June 30, 2006 was $3.29 million,
compared to net interest income of $3.51 million for the quarter ended June 30,
2005. The decrease in net interest income was due to a decrease in the net
interest margin, offset in part by an increase in interest-earning assets. The
net interest spread of 2.62% for the quarter ended June 30, 2006 represented a
decrease from the net interest spread of 2.93% for the quarter ended June 30,
2005. The net interest margin of 2.85% for the quarter ended June 30, 2006
represented a decrease from the net interest margin of 3.14% for the quarter
ended June 30, 2005.
Net interest income for the six months ended June 30, 2006 was $6.61 million,
compared to net interest income of $6.92 million for the six months ended June
30, 2005. The decrease in net interest income was due to a decrease in the net
interest margin, offset in part by an increase in interest-earning assets. The
net interest spread of 2.62% for the six months ended June 30, 2006 represented
a decrease from the net interest spread of 2.92% for the six months ended June
30, 2005. The net interest margin of 2.86% for the six months ended June 30,
2006 represented a decrease from the net interest margin of 3.14% for the six
months ended June 30, 2005.
The Company's provision for loan losses was $60,000 and $70,000 for the quarters
ended June 30, 2006 and 2005, respectively. The Company's provision for loan
losses was $120,000 for each of the six months ended June 30, 2006 and 2005. 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
-MORE-
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 $1.77 million and $1.29 million for the
quarters ended June 30, 2006 and 2005, respectively. The increase in noninterest
income was due to an increase in fees associated with checking accounts,
including overdraft fees. The increase in noninterest income was also due to an
impairment of securities available-for-sale recognized during the quarter ended
June 30, 2005. During the quarter ended June 30, 2005, the Company recorded an
other-than-temporary impairment, non-cash, after-tax charge of $424,500, or
$0.27 per diluted share, related to two Freddie Mac adjustable rate, perpetual
preferred stocks with a face value of $2,499,000. These perpetual preferred
stock issues are investment grade securities that are held in the Company's
available-for-sale securities portfolio. Absent this other-than-temporary
charge, earnings were $1.46 million, or $0.92 per diluted share, for the quarter
ended June 30, 2005.
The Company's noninterest income was $3.70 million and $2.48 million for the six
months ended June 30, 2006 and 2005, respectively. The increase in noninterest
income was due to an increase in fees associated with checking accounts,
including overdraft fees, loan prepayment fees, and abstract fees. The increase
in noninterest income was also due to an impairment of securities
available-for-sale recognized during the six months ended June 30, 2005. During
the six months ended June 30, 2005, the Company recorded an other-than-temporary
impairment, non-cash, after-tax charge of $653,500, or $0.41 per diluted share,
related to three Freddie Mac adjustable rate, perpetual preferred stocks that
declined in value due to decreased interest rates. These perpetual preferred
stocks are investment grade securities that are held in the Company's
available-for-sale securities portfolio. Absent the other-than-temporary
charges, earnings were $2.76 million, or $1.75 per diluted share, for the six
months ended June 30, 2005.
The Company's noninterest expense was $3.22 million and $3.03 million for the
quarters ended June 30, 2006 and 2005, respectively. The increase in noninterest
expense was primarily due to increases in compensation and data processing
expenses.
The Company's noninterest expense was $6.59 million and $5.95 million for the
six months ended June 30, 2006 and 2005, respectively. The increase in
noninterest expense was primarily due to increases in compensation, data
processing, and other operating expenses.
The Company's provision for income taxes was $525,000 and $671,000 for the
quarters ended June 30, 2006 and 2005, respectively. The decrease in the
provision for income taxes was primarily due to the lack of deductibility of the
other-than-temporary impairment of securities available-for-sale in 2005.
The Company's provision for income taxes was $1.10 million and $1.22 million for
the six months ended June 30, 2006 and 2005, respectively. The decrease in the
provision for income taxes was primarily due to the limited deductibility of the
other-than-temporary impairment of securities available-for-sale in 2005.
Total assets at June 30, 2006 were $496.2 million, compared to $485.2 million at
December 31, 2005. The increase in assets consisted primarily of increases in
loans, premises and equipment, and securities available-for-sale. Net loans
increased by $8.7 million, or 2.0%, to $439.0 million at June 30, 2006, from
$430.3 million at December 31, 2005. At June 30, 2006, net loans consisted of
$212.7 million of one-to-four family real estate loans, $89.6 million of
commercial real estate loans, $74.8 million of multi-family real estate loans,
and $61.9 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 $1.2 million, or 11.1%, to $12.2 million at June
30, 2006, from $11.0 million at December 31, 2005. The increase in premises and
equipment was primarily due to the 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. Securities available-for-sale increased $800,000, or 3.9%, to $21.5
million at June 30, 2006, from $20.7 million at December 31, 2005. The increase
in securities available-for-sale consisted primarily of an increase in
investments in municipal securities and FHLB stock, offset in part by a decrease
in mortgage-backed securities.
Deposits increased $1.6 million, or 0.5%, to $335.9 million at June 30, 2006,
from $334.3 million at December 31, 2005. The increase in the deposits was used
primarily to fund loan growth.
Nonperforming assets were 0.43% of total assets as of June 30, 2006, compared to
0.36% of total assets as of December 31, 2005. The allowance for loan losses was
$3.4 million, or 0.76% of total loans, at June 30, 2006, compared to $3.3
million, or 0.76% of total loans, at December 31, 2005.
Stockholders' equity was $42.4 million at June 30, 2006, compared to $44.3
million at December 31, 2005. Stockholders' equity decreased by $1.9 million
primarily due to stock repurchases, declared dividends, and an increase in
unrealized loss on securities available-for-sale, offset in part by earnings and
the exercise of stock options. Book value, or stockholders' equity per share, at
June 30, 2006 was $29.79, compared to $29.37 at December 31, 2005. The ratio of
stockholders' equity to total assets was 8.6% at June 30, 2006, compared to 9.1%
at December 31, 2005.
All stockholders of record on June 16, 2006, received a quarterly cash dividend
of $0.33 per share on July 6, 2006. As of June 30, 2006, the Company had
1,423,653 shares of common stock outstanding.
The Company also announced the opening of its Jordan Creek Town Center office at
120 S. 68th Street, West Des Moines, Iowa, in early August, 2006. With the
opening of the West Des Moines office, First Federal Savings Bank of Iowa has
eleven full service locations, including three in the Des Moines metro area, to
serve its customers. The Jordan Creek Town Center office will provide a full
array of checking, savings, and loan products and services, including
residential, multi-family, and commercial real estate loans. The office will be
managed by William Boord, Vice President.
North Central Bancshares, Inc. serves north central and southeastern Iowa at
eleven full service locations in Fort Dodge, Nevada, Ames, Perry, Ankeny, Clive,
West Des Moines, 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) June 30, 2006 December 31, 2005
------------- -----------------
Assets
Cash and cash equivalents $ 8,515 $ 8,640
Securities available-for-sale 21,508 20,708
Loans (net of allowance of loan loss of $3,387 and
$3,326, respectively) 439,027 430,278
Goodwill 4,947 4,971
Other assets 22,244 20,594
---------- ----------
Total Assets $ 496,241 $ 485,191
========== ==========
Liabilities
Deposits $ 335,913 $ 334,338
Other borrowed funds 113,425 102,444
Other liabilities 4,490 4,131
---------- ----------
Total Liabilities 453,828 440,913
Stockholders' Equity 42,413 44,278
---------- ----------
Total Liabilities and Stockholders' Equity $ 496,241 $ 485,191
========== ==========
Stockholders' equity to total assets 8.55% 9.13%
========== ==========
Book value per share $ 29.79 $ 29.37
========== ==========
Total shares outstanding 1,423,653 1,507,703
========== ==========
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,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Interest income $ 6,951 $ 6,588 $ 13,726 $ 12,896
Interest expense 3,663 3,082 7,114 5,979
----------- ----------- ----------- -----------
Net interest income 3,288 3,506 6,612 6,917
Provision for loan loss 60 70 120 120
----------- ----------- ----------- -----------
Net interest income after provision for loan loss 3,228 3,436 6,492 6,797
Noninterest income 1,772 1,295 3,698 2,483
Noninterest expense 3,218 3,027 6,595 5,948
----------- ----------- ----------- -----------
Income before income taxes 1,782 1,704 3,595 3,332
Income taxes 525 671 1,097 1,224
----------- ----------- ----------- -----------
Net income $ 1,257 $ 1,033 $ 2,498 $ 2,108
=========== =========== =========== ===========
Basic earnings per share $ 0.88 $ 0.67 $ 1.72 $ 1.38
=========== =========== =========== ===========
Diluted earnings per share $ 0.87 $ 0.65 $ 1.69 $ 1.34
=========== =========== =========== ===========
For the Three Months For the Six Months
Selected Financial Ratios Ended June 30, Ended June 30,
2006 2005 2006 2005
----------- ----------- ----------- ----------
Performance ratios
Net interest spread 2.62% 2.93% 2.62% 2.92%
Net interest margin 2.85% 3.14% 2.86% 3.14%
Return on average assets 1.02% 0.87% 1.02% 0.90%
Return on average equity 11.87% 9.58% 11.61% 9.89%
Efficiency ratio (noninterest expense divided by
the sum of net interest income before provision
for loan losses plus noninterest income) 63.60% 63.05% 63.97% 63.27%