EXHIBIT 99.1
FOR IMMEDIATE RELEASE: CONTACT: Dwayne Powell, CEO
870-802-1700
POCAHONTAS BANCORP, INC. ANNOUNCES FIRST QUARTER EARNINGS
Jonesboro, Arkansas, February 9, 2005, Pocahontas Bancorp, Inc.
(Nasdaq-NMS:PFSL) announced earnings for the first quarter of the fiscal year
ending September 30, 2005. Net income was $1.12 million for the quarter ended
December 31, 2004, compared to net income of $1.37 million for the quarter ended
December 31, 2003, a decrease of $0.25 million or 18.2%. Basic earnings per
share was $0.25 and diluted earnings per share was $0.24 for the quarter ended
December 31, 2004 compared to basic and diluted earnings per share of $0.30 for
the same period last year.
Net interest income before provision for loan loss for the quarter ended
December 31, 2004 was $4.37 million compared to $4.98 million for the quarter
ended December 31, 2003, a decrease of $0.61 million or 12.3%. The decrease was
primarily due to a $35.91 million decrease in average interest earning assets
and a 22 basis point decrease in the net interest margin for the quarter ended
December 31, 2004 compared to the quarter ended December 31, 2003. The Company's
net interest rate spread was 2.87% for the quarter ended December 31, 2004
compared to 3.02% for the quarter ended December 31, 2003.
Provision for loan losses for the quarter ended December 31, 2004 was $125,000
compared to $150,000 for the quarter ended December 31, 2003. Management
periodically reviews the credit quality of the loan portfolio in order to
establish a sufficient allowance for losses on loans. The provision for loan
loss for the quarters ended December 31, 2004 and 2003 reflected management's
estimate of the amount of allowance for loan losses required based on
management's current judgments about the credit quality of individual loans and
segments of the loan portfolio; changing economic and other conditions may
require future adjustments to the allowance for loan losses.
Non-interest income increased $0.18 million to $1.55 million for the quarter
ended December 31, 2004 compared to the quarter ended December 31, 2003. The
increase in non-interest income was due to a $0.21 million increase in trading
gain on equity securities, partially offset by a reduction in gain on sale of
loans. A subdued refinancing environment during the quarter ended December 31,
2004 resulted in a decreased number of loans originated and subsequently sold
which resulted in the lower gain on sale of loans.
Total operating expenses were $4.10 million for the quarter ended December 31,
2004, and $4.13 million for the quarter ended December 31, 2003.
Total assets increased 2.0% or $14.60 million to $734.51 million at December 31,
2004 compared to balances at September 30, 2004. The increase was primarily the
result of a net increase in investment securities of $32.07 million or 13.0%,
which was partially offset by a $17.69 million or 4.6% decrease in total net
loans receivable. Investment securities increased as the result of the purchase
of $42.71 million of securities and $0.37 million increase in market value,
partially offset by the call of $0.50 million of securities, and principal
payments and maturities of $10.58 million. The yield on average interest earning
assets at December 31, 2004 was 5.47% compared to 5.50% at September 30, 2004.
Total net loans receivable were $366.12 million at December 31, 2004 compared to
$383.81 million at September 30, 2004. During the three-month period ended
December 31, 2004, the Company sold $15.11 million of loans held for sale,
compared to $18.99 million sold during the three-months ended December 31, 2003.
Total nonperforming loans increased 4.7% to $4.89 million at December 31, 2004
from $4.67 million at September 30, 2004.
Total deposits increased 2.8% or $13.78 million to $504.86 million at December
31, 2004 compared to balances at September 30, 2004. The increase in deposits
was primarily the result of offering more competitive interest rates on a
diverse product base in our market area. Total Federal Home Loan Bank advances
remained constant at $153.84 million at December 31, 2004 compared to $153.90
million at September 30, 2004.
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 18 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)
- --------------------------------------------------------------------------------
December 31, September 30,
2004 2004
ASSETS
Cash $ 33,963,056 $ 35,218,491
Cash surrender value of life insurance 7,778,187 7,684,251
Securities held-to-maturity, at amortized cost 107,074,677 86,200,660
Securities available-for-sale, at fair value 171,828,104 160,633,022
Trading securities, at fair value 2,348,051 1,982,365
Loans receivable, net 365,068,610 382,316,096
Loans receivable held for sale 1,048,200 1,494,200
Accrued interest receivable 3,874,842 4,196,103
Premises and equipment, net 15,348,762 13,762,438
Federal Home Loan Bank Stock, at cost 7,974,600 7,925,900
Goodwill 8,847,572 8,847,572
Core deposit premiums, net 6,053,222 6,296,523
Other assets 3,302,977 3,350,292
------------ ------------
TOTAL ASSETS $734,510,860 $719,907,913
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $504,864,692 $491,078,533
Federal Home Loan Bank advances 153,835,416 153,896,869
Deferred compensation 2,375,555 2,430,094
Accrued expenses and other liabilties 3,205,435 3,059,676
Trust preferred securities 16,947,108 16,941,917
------------ ------------
Total liabilities 681,228,206 667,407,089
STOCKHOLDERS' EQUITY:
Common stock 76,024 76,024
Additional paid-in capital 57,447,655 57,447,655
Unearned ESOP Shares (2,435,931) (2,116,198)
Accumulated other comprehensive income (loss), net (361,562) (717,085)
Retained earnings 22,959,012 22,212,972
------------ ------------
77,685,198 76,903,368
Less treasury stock, at cost (24,402,544) (24,402,544)
------------ ------------
Total stockholders' equity 53,282,654 52,500,824
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $734,510,860 $719,907,913
============ ============
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
- --------------------------------------------------------------------------------
Three-Months Ended
December 31
2004 2003
INTEREST INCOME:
Loans receivable $ 5,792,124 $ 6,213,706
Investment securities 2,985,994 3,239,810
----------- -----------
Total interest income 8,778,118 9,453,516
INTEREST EXPENSE:
Deposits 2,795,804 3,442,901
Borrowed funds 1,273,509 718,044
Trust preferred securities 341,398 314,194
----------- -----------
Total interest expense 4,410,711 4,475,139
NET INTEREST INCOME 4,367,407 4,978,377
PROVISION FOR LOAN LOSSES 125,000 150,000
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,242,407 4,828,377
OTHER INCOME:
Fees and service charges 793,704 790,522
Gain on sale of loans 273,429 350,081
Loss on sale of securities, net - (12,923)
Trading gains net 362,128 153,222
Other 121,527 92,264
----------- -----------
Total other income 1,550,788 1,373,166
----------- -----------
OPERATING EXPENSE:
Compensation and benefits 2,369,650 2,412,014
Occupancy and equipment 668,533 728,758
Insurance premiums 90,459 70,386
Professional fees 256,757 228,439
Data processing 148,212 166,493
Advertising and donations 166,744 70,366
Office supplies 52,755 69,875
REO and other repossessed assets 27,535 64,791
Other 319,272 320,995
----------- -----------
Total operating expense 4,099,917 4,132,117
----------- -----------
INCOME BEFORE INCOME TAXES 1,693,278 2,069,426
INCOME TAXES 575,900 703,931
----------- -----------
NET INCOME $ 1,117,378 $ 1,365,495
(Continued)
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
- --------------------------------------------------------------------------------
Three-Months Ended
December 31
2004 2003
OTHER COMPREHENSIVE INCOME,
NET OF TAX:
Unrealized holding gain (loss) on securities
available for-sale arising during the period $ 355,523 $ (688,160)
Reclassification adjustment for losses
included in net income $ - $ 8,529
----------- -----------
Other comprehensive income (loss) $ 355,523 $ (679,631)
----------- -----------
COMPREHENSIVE INCOME $ 1,472,901 $ 685,864
=========== ===========
EARNINGS PER SHARE:
Basic earnings per share $ 0.25 $ 0.30
=========== ===========
Diluted earnings per share $ 0.24 $ 0.30
=========== ===========
(Concluded)
POCAHONTAS BANCORP, INC
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
- --------------------------------------------------------------------------------
September 30, September 30,
2004 2003
ASSETS
Cash $ 35,218,491 $ 22,020,489
Cash surrender value of life insurance 7,684,251 7,340,618
Securities held-to-maturity, at amortized cost 86,200,660 5,403,862
Securities available-for-sale, at fair value 160,633,022 293,569,266
Trading securities, at fair value 1,982,365 1,497,252
Loans receivable, net 382,316,096 385,872,017
Loans receivable held for sale 1,494,200 3,130,238
Accrued interest receivable 4,196,103 5,161,006
Premises and equipment, net 13,762,438 13,998,751
Federal Home Loan Bank Stock, at cost 7,925,900 5,583,700
Goodwill 8,847,572 8,847,572
Core deposit premiums, net 6,296,523 7,880,406
Other assets 3,350,292 3,182,703
------------ ------------
TOTAL ASSETS $719,907,913 $763,487,880
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $491,078,533 $586,092,147
Federal Home Loan Bank advances 153,896,869 100,693,629
Deferred compensation 2,430,094 2,885,238
Accrued expenses and other liabilties 3,059,676 3,899,149
Trust preferred securities 16,941,917 16,921,150
------------ ------------
Total liabilities 667,407,089 710,491,313
STOCKHOLDERS' EQUITY:
Common stock 76,024 74,970
Additional paid-in capital 57,447,655 56,533,430
Unearned ESOP Shares (2,116,198) (538,121)
Accumulated other comprehensive income on securities (717,085) 899,339
Retained earnings 22,212,972 20,199,149
------------ ------------
76,903,368 77,168,767
Less treasury stock, at cost (24,402,544) (24,172,200)
------------ ------------
Total stockholders' equity 52,500,824 52,996,567
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $719,907,913 $763,487,880
============ ============
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (UNAUDITED)
- --------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
September 30 September 30
2004 2003 2004 2003
INTEREST INCOME:
Loans receivable $ 5,956,561 $ 6,194,866 $ 23,997,993 $26,260,122
Investment securities 2,824,148 3,182,939 12,082,156 10,783,530
----------- ----------- ------------ -----------
Total interest income 8,780,709 9,377,805 36,080,149 37,043,652
INTEREST EXPENSE:
Deposits 2,566,670 4,035,049 11,619,647 16,667,659
Borrowed funds 1,226,266 437,914 3,751,246 1,280,614
Trust preferred securities 338,483 317,167 1,286,688 1,292,519
----------- ----------- ------------ -----------
Total interest expense 4,131,419 4,790,130 16,657,581 19,240,792
NET INTEREST INCOME 4,649,290 4,587,675 19,422,568 17,802,860
PROVISION FOR LOAN LOSSES 2,750,000 1,100,000 3,900,000 2,595,000
----------- ----------- ------------ -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,899,290 3,487,675 15,522,568 15,207,860
OTHER INCOME:
Fees and service charges 825,979 757,911 3,081,844 3,594,981
Gain on sale of loans 314,086 848,139 1,239,705 3,277,919
Gain on sale of securities, net 2,500 59,328 385,866 324,225
Trading gains net 156,743 46,541 398,165 377,741
Gain on sale of branches - 1,898,140 136,834 2,411,734
Other 103,605 240,708 430,103 565,651
----------- ----------- ------------ -----------
Total other income 1,402,913 3,850,767 5,672,517 10,552,251
----------- ----------- ------------ -----------
OPERATING EXPENSE:
Compensation and benefits 2,409,266 2,968,955 9,539,845 10,443,598
Occupancy and equipment 628,601 736,044 2,723,190 2,653,568
Insurance premiums 86,090 90,773 334,768 328,974
Professional fees 227,284 290,858 826,156 1,072,780
Data processing 162,978 184,719 675,485 734,989
Advertising and donations 143,603 135,525 408,480 600,656
Office supplies 54,641 83,080 234,129 338,524
REO and other repossessed assets 51,735 113,875 321,250 538,541
Other 269,066 276,197 1,211,924 1,367,534
----------- ----------- ------------ -----------
Total operating expense 4,033,264 4,880,026 16,275,227 18,079,164
----------- ----------- ------------ -----------
INCOME (LOSS) BEFORE INCOME TAXES (731,061) 2,458,416 4,919,858 7,680,947
INCOME TAXES (463,756) 554,332 1,463,244 2,386,589
----------- ----------- ------------ -----------
NET INCOME (LOSS) $ (267,305) $ 1,904,084 $ 3,456,614 $ 5,294,358
(Continued)
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
- --------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
September 30 September 30
2004 2003 2004 2003
OTHER COMPREHENSIVE INCOME (LOSS),
NET OF TAX:
Unrealized holding gain (loss) on securities
arising during the period $ 2,982,384 $(1,622,007) $ (1,361,752) $ (483,597)
Reclassification adjustment for (gains) / losses
included in net income $ (1,650) $ (39,156) $ (254,672) $ (213,989)
----------- ----------- ------------ -----------
Other comprehensive income (loss) $ 2,980,734 $(1,661,163) $ (1,616,424) $ (697,586)
----------- ----------- ------------ -----------
COMPREHENSIVE INCOME $ 2,713,429 $ 242,921 $ 1 ,840,190 $ 4,596,772
=========== =========== ============ ===========
EARNINGS PER SHARE:
Basic earnings (loss) per share $ (0.06) $ 0.43 $ 0.77 $ 1.22
=========== =========== ============ ===========
Diluted earnings (loss) per share $ (0.06) $ 0.42 $ 0.75 $ 1.20
=========== =========== ============ ===========
(Concluded)