EXHIBIT 99.1
FOR IMMEDIATE RELEASE: CONTACTS: Dwayne Powell, CEO
870-802-1700
POCAHONTAS BANCORP, INC. ANNOUNCES FOURTH QUARTER EARNINGS
Jonesboro, Arkansas, December 8, 2003, Pocahontas Bancorp, Inc.
(Nasdaq-NMS:PFSL) has announced earnings for the fourth quarter of fiscal year
ending September 30, 2003. Net income was $1,904,084 for the quarter ended
September 30, 2003, compared to net income of $1,091,640 for the quarter ended
September 30, 2002, an increase of $812,444 or 74.4%. Basic earnings per share
was $.43 and diluted earnings per share was $0.42 compared to basic and diluted
earnings per share of $0.25 for the same period last year. During the
three-month period ended September 30, 2003, the Company sold its Brinkley,
Arkansas operations resulting in a gain on sale of $1,898,140.
Net interest income for the quarter ended September 30, 2003 was $4,587,675
compared to $4,798,520 for the quarter ended September 30, 2002, a decrease of
$210,845 or 4.4%. The decrease was primarily due to a decrease in interest
income of $256,217 or 2.7% partially offset by a decrease in interest expense of
$45,372 or 0.9%. The Company's net interest rate spread was 2.83% for the
quarter ended September 30, 2003 compared to 3.58% for the quarter ended
September 30, 2002. Net interest margin was 2.75% for the quarter ended
September 30, 2003 compared to 3.53% for the quarter ended September 30, 2002.
The decrease was primarily due to lower yields on average interest earning
assets for the quarter ended September 30, 2003 compared to the same period last
year, as loans were prepaid and refinanced in the lower market rate environment.
Provision for loan losses for the quarter ended September 30, 2003 was
$1,100,000 compared to $500,000 for the quarter ended September 30, 2002, an
increase of $600,000 or 120.0%. The increase in the provision for loan loss was
a result of a weakening economy and the Company's shift from being a traditional
single-family lending institution to diversifying into a larger percentage of
commercial loans and the corresponding increase in reserve requirements.
Non-interest income increased to $3,850,767 for the three-month period ended
September 30, 2003 compared to $1,293,892 for the quarter ended September 30,
2002, an increase of $2,556,876 or 197.6%. The increase in non-interest income
was primarily due to the $1,898,140 gain on the sale of a branch, a trading gain
on equity investments of $46,541 for the quarter ended September 30, 2003
compared to a trading loss of $216,640 for the quarter ended September 30, 2002,
an increase of $263,181. The gain on sale of loans increased $618,151 or 268.8%
for the quarter ended September 30, 2003 to $848,139 from $229,988 for the
quarter ended September 30, 2002.
Total operating expenses were $4,880,026 for the quarter ended September 30,
2003, compared to $3,930,887 for the quarter ended September 30, 2002, an
increase of $949,139 or 24.2%. The increase in operating expense was primarily
due to increased compensation expense as a result of an increase in employees
and an increase in occupancy expenses associated with the growth of the Company,
which was partially attributable to the acquisition of Marked Tree Bancshares,
Inc. during the quarter ended June 30, 2003.
Net income for the twelve month period ended September 30, 2003 was $5,294,358
compared to $4,234,994 for the period ended September 30, 2002, an increase of
$1,059,364 or 25.0%. Basic earnings per share was $1.22 and diluted earnings per
share was $1.20 for period ended September 30, 2003, compared to basic and
diluted earnings per share of $0.96 for the same period last year. During the
twelve month period ended September 30, 2003, the Company sold its Brinkley,
Arkansas operation resulting in a gain on sale of $1,898,140 and its Carlisle
and England, Arkansas operations resulting in a gain on sale of $513,594. The
increase in net income was also attributed to the acquisition of Marked Tree
Bancshares, Inc. during the quarter ended June 30, 2003. The Company's net
interest rate spread was 2.98% for the twelve months ended September 30, 2003
compared to 3.59% for the twelve months ended September 30, 2002. Net interest
margin was 2.91% for the twelve months ended September 30, 2003 compared to
3.56% for the twelve months ended September 30, 2002. The decrease was primarily
due to lower yields on average interest earning assets for the twelve months
ended September 30, 2003 compared to the same period last year, as loans were
prepaid and refinanced in the lower market rate environment and higher costs
associated with demand deposits. The increased cost on demand deposits was the
result of special promotions offered during the twelve month period ended
September 30, 2003 which increased the deposit base and the resulting cost on
those deposits by 0.6%.
Net interest income for the twelve-month period ended September 30, 2003 was
$17,802,860 compared to $16,906,943 for the twelve-month period ended September
30, 2002, an increase of $895,917 or 5.3%. Interest income increased $2,936,477
or 8.6%; the increase resulted from the increase in earnings due to the purchase
of investment securities with cash provided by deposit growth. Interest expense
on deposits increased $2,703,439 or 19.4% as a result of offering competitive
rates on specific deposit products and an increased deposit portfolio balance
due to the acquisitions of North Arkansas Bancshares and, Peoples Bank of
Imboden, during fiscal year 2002, and Marked Tree Bancshares, during fiscal year
2003, while interest expense on borrowed funds decreased $706,704, or 35.6%
during the period compared to the same period last year which was attributed to
a decrease in both borrowings and the average rate on borrowings.
Provision for loan losses for the twelve-month period ended September 30, 2003
was $2,595,000 compared to $900,000 for the twelve-month period ended September
30, 2002, an increase of $1,695,000 or 188.3%. The increase in the provision for
loan loss was the result of a weakening economy and the Company's shift from
being a traditional single-family lending institution to diversifying into a
larger percentage of commercial loans and the corresponding increase in reserve
requirements.
Non-interest income increased to $10,552,251 for the twelve-month period ended
September 30, 2003 compared to $5,195,853 for the twelve-month period ended
September 30, 2002, an increase of $5,356,398 or 103.1%. The increase in
non-interest income was primarily the result of an increase in gain on sale of
loans to $3,277,919 for the twelve-month period ended September 30, 2003 from
$1,002,501 for the same period ended September 30, 2002, an increase of
$2,275,418, or 226.9%. During the twelve month period ended September 30, 2003,
the Company sold its Brinkley, Arkansas operation resulting in a gain on sale of
$1,898,140 and its Carlisle and England, Arkansas operations resulting in a gain
on sale of $513,594.
Total operating expenses increased to $18,079,164 for the twelve-month period
ended September 30, 2003 compared to $14,780,111, for the twelve-month period
ended September 30, 2002, an increase of $3,299,053 or 22.3%. The increase in
operating expense was primarily due to increased compensation expense as a
result of an increase in employees and an increase in occupancy expenses
associated with the growth of the Company, which was partially attributable to
the acquisition of North Arkansas Bancshares, Peoples Bank of Imboden and Marked
Tree Bancshares.
Total assets increased to $763.5 million at September 30, 2003 from $617.0
million at September 30, 2002, an increase of $146.5 million or 23.7%. The
increase was partially the result of $383.7 million of securities purchased
using cash obtained from the growth in deposits, offset by the sale of $16.9
million, and principal payments and maturities of $203.7 million, which resulted
in a net increase in investment securities of $173.5 million or 138.3%. The
yield on average interest earning assets at September 30, 2003 was 6.05%
compared to 7.19 % at September 30, 2002.
Total loans receivable decreased to $389.0 million at September 30, 2003 from
$408.1 million at September 30, 2002, a decrease of $19.1 million or 4.7%.
During the twelve-month period ended September 30, 2003 the Company sold $79.1
million of loans held for sale. Total nonperforming loans increased to $5.6
million at September 30, 2003 from $3.2 million at September 30, 2002, an
increase of $2.4 million or 75%. The increase in nonperforming loans was
primarily the result of a weakening economy and the Company's shift from being a
traditional single-family lending institution to diversifying into a larger
percentage of commercial loans and the corresponding increase in reserve
requirements.
Total deposits increased to $586.1 million at September 30, 2003 from $520.0
million at September 30, 2002, an increase of $66.1 million or 12.7%. The change
in deposits was primarily the result of an increased deposit base from offering
more competitive rates and the acquisition of Marked Tree Bancshares, Inc. that
had $28.6 million in deposits and was partially offset by the sales of the
Carlisle and England, Arkansas branches that had combined deposits of $14.8
million and the Brinkley, Arkansas branch that had combined deposits of $36.1
million.
Pocahontas Bancorp, Inc. is a unitary thrift holding company, which owns First
Community Bank, a federally chartered savings and loan. First Community Bank
conducts business from 20 offices located primarily in Northeast Arkansas.
Pocahontas Bancorp's common stock is traded on the NASDAQ National Market under
the symbol PFSL.
POCAHONTAS BANCORP, INC
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
September 30
2003 2002
------ ------
ASSETS
Cash $ 22,020,489 $ 34,306,598
Cash surrender value of life insurance 7,340,618 6,883,493
Securities held-to-maturity, at amortized cost 5,403,862 8,123,832
Securities available-for-sale, at fair value 293,569,266 117,340,818
Trading Securities, at fair value 1,497,252 1,464,458
Loans receivable, net 389,002,255 408,081,375
Accrued interest receivable 5,161,006 4,362,821
Premises and equipment, net 13,998,751 13,910,158
Federal Home Loan Bank Stock, at cost 5,583,700 2,125,500
Goodwill 8,847,572 8,847,572
Core deposit premiums, net 7,880,406 9,084,027
Other assets 3,182,703 2,484,974
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TOTAL ASSETS $ 763,487,880 $ 617,015,626
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $ 586,092,147 $ 520,031,702
Federal Home Loan Bank advances 100,693,629 22,136,967
Deferred compensation 2,885,238 4,123,553
Accrued expenses and other liabilties 3,899,149 6,330,406
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Total liabilities 693,570,163 552,622,628
Trust Preferred Securities 16,921,150 16,900,383
STOCKHOLDERS' EQUITY:
Common stock 74,970 74,923
Additional paid-in capital 56,533,430 56,342,563
Unearned ESOP Shares (538,121) (671,130)
Unearned RRP Shares -- (35,251)
Accumulated other comprehensive income 899,339 1,596,925
Retained earnings 20,199,149 16,304,221
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77,168,767 73,612,251
Less treasury stock at cost (24,172,200) (26,119,636)
------------- -------------
Total stockholders' equity 52,996,567 47,492,615
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 763,487,880 $ 617,015,626
============= =============
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
- --------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
September 30 September 30
2003 2002 2003 2002
------ ------ ------ ------
INTEREST INCOME:
Loans receivable $ 6,194,866 $ 7,356,170 $ 26,260,122 $ 26,664,444
Investment securities 3,182,939 2,277,852 10,783,530 7,442,731
------------ ------------ ------------ ------------
Total interest income 9,377,805 9,634,022 37,043,652 34,107,175
INTEREST EXPENSE:
Deposits 4,035,049 4,085,351 16,667,659 13,964,221
Borrowed funds 437,914 412,019 1,280,614 1,987,319
Interest on Trust Preferred Securities 317,167 338,132 1,292,519 1,248,692
------------ ------------ ------------ ------------
Total interest expense 4,790,130 4,835,502 19,240,792 17,200,232
NET INTEREST INCOME 4,587,675 4,798,520 17,802,860 16,906,943
PROVISION FOR LOAN LOSSES 1,100,000 500,000 2,595,000 900,000
------------ ------------ ------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 3,487,675 4,298,520 15,207,860 16,006,943
OTHER INCOME:
Fees and service charges 757,911 900,552 3,594,981 3,644,507
Gain on Sale of Loans 848,139 229,988 3,277,919 1,002,501
Gain on Sale of Securities 59,328 369,403 324,225 555,497
Trading gains (losses), net 46,541 (216,640) 377,741 (381,528)
Gain on Sale of Branches 1,898,140 -- 2,411,734 --
Other 240,708 10,589 565,651 374,876
------------ ------------ ------------ ------------
Total other income 3,850,767 1,293,892 10,552,251 5,195,853
------------ ------------ ------------ ------------
OPERATING EXPENSE:
Compensation and benefits 2,968,955 2,267,884 10,443,598 8,200,671
Occupancy and equipment 736,044 684,392 2,653,568 2,419,280
Insurance premiums 90,773 95,979 328,974 286,414
Professional fees 290,858 158,263 1,072,780 533,494
Data processing 184,719 167,567 734,989 596,402
Advertising / Donations 135,525 123,738 600,656 588,215
Office Supplies 83,080 119,334 338,524 459,181
REO and other repossessed assets 113,875 116,772 538,541 215,639
Other 276,197 196,958 1,367,534 1,480,814
------------ ------------ ------------ ------------
Total operating expense 4,880,026 3,930,887 18,079,164 14,780,110
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 2,458,416 1,661,525 7,680,947 6,422,686
INCOME TAXES 554,332 569,885 2,386,589 2,187,692
------------ ------------ ------------ ------------
NET INCOME 1,904,084 1,091,640 5,294,358 4,234,994
(Continued)
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
- --------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
September 30 September 30
2003 2002 2003 2002
------ ------ ------ ------
OTHER COMPREHENSIVE INCOME,
NET OF TAX:
Unrealized holding gain on securities arising
during the year $(1,622,006.00) $ 827,521.00 $ 911,574.00 $ 741,511.00
Reclassification adjustment for gains
included in net income (39,157.00) (243,806.00) (213,988.00) (366,628.00)
------------- ------------- ------------- -------------
Other comprehensive income (1,661,163.00) 583,715.00 697,586.00 374,883.00
------------- ------------- ------------- -------------
COMPREHENSIVE INCOME $ 242,921.00 $ 1,675,355.00 $ 5,991,944.00 $ 4,609,877.00
============= ============= ============= =============
EARNINGS PER SHARE:
Basic earnings per share $ 0.43 $ 0.25 $ 1.22 $ 0.96
============= ============= ============= =============
Diluted earnings per share $ 0.42 $ 0.24 $ 1.20 $ 0.96
============= ============= ============= =============
(Concluded)
See notes to consolidated financial statements.