FOR IMMEDIATE RELEASE: CONTACT: Dwayne Powell, CEO
870-802-1700
POCAHONTAS BANCORP, INC. ANNOUNCES FIRST QUARTER EARNINGS
Jonesboro, Arkansas, February 9, 2006-- Pocahontas Bancorp, Inc.
(Nasdaq-NMS:PFSL) announced earnings for the first quarter of the fiscal year
ending September 30, 2006. Net income was $0.86 million for the quarter ended
December 31, 2005, compared to net income of $1.12 million for the quarter ended
December 31, 2004. Basic and diluted earnings per share were $0.19 for the
quarter ended December 31, 2005 compared to basic earnings per share of $0.25
and diluted earnings per share of $0.24 for the same period last year.
Net interest income before provision for loan loss for the quarter ended
December 31, 2005 was $3.95 million compared to $4.37 million for the quarter
ended December 31, 2004, a decrease of $0.42 million. The decrease was primarily
due to a 44 basis point decrease in the net interest rate spread to 2.43% for
the quarter ended December 31, 2005 compared to 2.87% for the quarter ended
December 31, 2004. Net interest margin was 2.35% for the quarter ended December
31, 2005 compared to 2.72% for the quarter ended December 31, 2004.
There was no provision for loan losses for the quarter ended December 31, 2005
compared to $0.13 million for the quarter ended December 31, 2004. 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, 2005 and 2004 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 decreased $0.10 million to $1.46 million for the quarter
ended December 31, 2005 compared to the quarter ended December 31, 2004. The
decrease in non-interest income was primarily due to a nominal trading gain on
equity securities during the quarter ended December 31, 2005 compared to a $0.36
million trading gain on equity securities for the quarter ended December 31,
2004 and a $0.07 million decrease in the gain on sale of loans to $0.20 million
for the quarter ended December 31, 2005 from $0.27 million for the quarter ended
December 31, 2004, partially offset by a $0.22 million gain on the sale of loan
servicing for the quarter ended December 31, 2005.
Total operating expenses were $4.32 million for the quarter ended December 31,
2005, compared to $4.10 million for the quarter ended December 31, 2004. The
increase in total operating expense was primarily due to the increases in
compensation and benefits, and occupancy and equipment. The Company's savings
and loan subsidiary operated 21 locations at December 31, 2005 compared to 19
locations at December 31, 2004. Both compensation and benefits and occupancy and
equipment expenses increased during the three-month period ended December 31,
2005 compared to the same period last year due to the increase in branch
locations.
Total assets increased 1.4% to $751.53 million at December 31, 2005 from $741.26
million at September 30, 2005. The increase was primarily the result of an
increase in investment securities of $25.56 million and a $2.73 million increase
in cash, which were partially offset by a decrease in total net loans of $14.76
million. The yield on average interest earning assets at December 31, 2005 was
5.62% compared to 5.44% at September 30, 2005.
Investment balances increased $25.56 million during the quarter ended December
31, 2005 due primarily to $34.44 million in securities purchased, which was
partly offset by $10.42 million in principal paydowns and maturities and the
sale and call of $1.66 million in securities.
Total net loans receivable were $414.84 million at December 31, 2005 compared to
$429.60 million at September 30, 2005. During the three-month period ended
December 31, 2005, proceeds from the sale of mortgage loans held for sale were
$11.94 million, compared to $15.11 million sold during the three-month period
ended December 31, 2004. Total nonperforming loans decreased 6.3% to $3.69
million at December 31, 2005 from $3.94 million at September 30, 2005.
Total deposits increased $19.60 million or 3.8% to $533.64 million at December
31, 2005 compared to $514.04 million at September 30, 2005. The increase was
mainly due to the Company refocusing its efforts on attracting certificate
accounts by offering more competitive interest rates and terms on those
accounts. Total Federal Home Loan Bank advances decreased $6.07 million or 4.1%
to $142.58 million at December 31, 2005 compared to $148.65 million at September
30, 2005.
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 21 offices located primarily in Northeast Arkansas and
Tulsa County, Oklahoma. 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,
2005 2005
ASSETS
Cash $ 26,144,377 $ 23,411,451
Cash surrender value of life insurance 8,098,936 8,019,097
Securities held-to-maturity, at cost 144,282,884 129,952,373
Securities available-for-sale, at fair value 110,683,625 99,460,045
Trading securities, at fair value - 3,126,044
Loans receivable, net 412,113,533 426,538,047
Loans receivable, held for sale 2,726,168 3,057,985
Accrued interest receivable 4,501,314 4,487,837
Premises and equipment, net 16,595,320 16,716,912
Federal Home Loan Bank stock, at cost 8,041,800 7,962,000
Goodwill 8,847,572 8,847,572
Core deposit premiums, net 5,080,018 5,323,319
Other assets 4,410,900 4,360,885
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TOTAL ASSETS $ 751,526,447 $ 741,263,567
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $ 533,639,492 $ 514,043,734
Federal Home Loan Bank advances 142,580,123 148,645,397
Deferred compensation 2,120,850 2,176,859
Accrued expenses and other liabilities 3,658,074 7,066,640
Trust preferred securities 16,967,875 16,962,683
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Total liabilities 698,966,414 688,895,313
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STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value, 8,000,000 shares authorized;
7,602,492 shares issued and 4,641,717 shares outstanding
at December 31, 2005 and September 30, 2005 76,024 76,024
Additional paid-in capital 57,275,390 57,275,390
Unearned ESOP shares (2,152,968) (2,076,856)
Accumulated other comprehensive loss, net (2,734,653) (2,517,282)
Retained earnings 24,498,784 24,013,522
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76,962,577 76,770,798
Treasury stock at cost, 2,960,775 shares, at
December 31, 2005 and September 30, 2005 (24,402,544) (24,402,544)
--------------- --------------
Total stockholders' equity 52,560,033 52,368,254
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 751,526,447 $ 741,263,567
=============== ==============
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
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Three Months Ended
December 31
2005 2004
INTEREST INCOME:
Loans receivable $ 6,901,166 $ 5,792,124
Investment securities 2,550,338 2,985,994
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Total interest income 9,451,504 8,778,118
INTEREST EXPENSE:
Deposits 3,828,760 2,795,804
Borrowed funds 1,294,078 1,273,509
Trust preferred securities 375,347 341,398
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Total interest expense 5,498,185 4,410,711
NET INTEREST INCOME 3,953,319 4,367,407
PROVISION FOR LOAN LOSSES - 125,000
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NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 3,953,319 4,242,407
NON-INTEREST INCOME:
Dividends 97,701 61,868
Fees and service charges 813,728 793,704
Gain on sale of loans 201,634 273,429
Gain on sale of loan servicing 219,754 -
Gain on sale of securities, net 54,023 -
Trading gain, net 337 362,128
Other 67,758 59,659
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Total other income 1,454,935 1,550,788
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OPERATING EXPENSE:
Compensation and benefits 2,443,520 2,369,650
Occupancy and equipment 736,194 668,533
Insurance premiums 109,074 90,459
Professional fees 251,359 256,757
Data processing 183,990 148,212
Advertising and donations 139,497 166,744
Office supplies 73,167 52,755
REO and other repossessed assets 23,671 27,535
Other 357,066 319,272
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Total operating expense 4,317,538 4,099,917
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INCOME BEFORE INCOME TAXES 1,090,716 1,693,278
INCOME TAXES 234,117 575,900
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NET INCOME $ 856,599 $ 1,117,378
(Continued)
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
- --------------------------------------------------------------------------------
Three Months Ended
December 31
2005 2004
OTHER COMPREHENSIVE INCOME (LOSS),
NET OF TAX:
Unrealized holding gain (loss) on securities
available for-sale arising during the period $ (181,716) $ 355,523
Reclassification adjustment for gains
included in net income (35,655) -
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Other comprehensive income (loss) (217,371) 355,523
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COMPREHENSIVE INCOME $ 639,228 $ 1,472,901
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EARNINGS PER SHARE:
Basic earnings per share $ 0.19 $ 0.25
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Diluted earnings per share $ 0.19 $ 0.24
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(Concluded)