Exhibit 99.5 Press Release
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 RECORD
FIRST QUARTER 1998 EARNINGS
(Nasdaq: FFFD)
Fort Dodge, Iowa -- North Central Bancshares, Inc., (the "Company") the holding
company for First Federal Savings Bank of Iowa (formerly known as First Federal
Savings Bank of Fort Dodge) (the "Bank"), announced today the Company's results
of operations for the first quarter. For the quarter ended March 31, 1998, the
Company reported net income of $1,105,000, or diluted earnings per share of
$0.34, which represents an increase of over 24% from the first quarter of 1997,
when the company reported net income of $889,000 or diluted earnings per share
of $0.27.
As of the close of business on January 30, 1998, the Bank completed the
acquisition of Valley Financial Corp. pursuant to an Agreement and Plan of
Merger, dated as of September 18, 1997. The acquisition resulted in the merger
of Valley Financial's wholly owned subsidiary, Valley Savings Bank, FSB with and
into the Bank, with the Bank as the resulting financial institution. Valley
Savings, headquartered in Burlington, Iowa, was a federally-charted stock
savings bank with three branch offices located in southeastern Iowa, with assets
of approximately $110 million. The former offices of Valley Savings are being
operated as a division of the Bank.
The acquisition was accounted for as a purchase transaction and therefore, the
operating results of the former offices of Valley Savings Bank are included in
the 1998 operating results of the Company only from the date of acquisition
through March 31, 1998. The operating results for the period ended March 31,
1997 and the Company's balance sheet as of December 31, 1997 have not been
restated to include any Valley Savings Bank assets, liabilities or operations.
Therefore, the comparison between periods is significantly impacted by this
acquisition. Total assets at March 31, 1998 totalled $332.8 million as compared
to $222.0 million at December 31, 1997.
Stockholders of record on March 16, 1998, received a quarter cash dividend of
$0.08 per share, a 28% increase from the cash dividend of $0.0625 per share paid
during the previous quarter.
Nonperforming assets were 0.26% of total assets as of March 31, 1998 compared to
0.10% of total assets as of December 31, 1997. This increase is due primarily to
the acquisition of Valley Financial Corp. The allowance for loan losses was $2.6
million or 1.01% of total loans at March 31, 1997, compared to $2.2 million or
1.10% of total loans at December 31, 1997.
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The net interest spread for the quarter ended March 31, 1998 of 2.86% was only
slightly changed from 2.87% for the quarter ended March 31, 1997, however, the
net interest margin for the quarter ended March 31, 1998 was reduced to 3.68%
compared to 4.15% for the corresponding quarter in 1997, primarily due to a
shift in the ratio of interest earning assets to interest bearing liabilities
caused by the acquisition of Valley Financial Corp. Net interest income for the
quarter ended March 31, 1998 was $2.6 million, an increase of 26.4% from $2.1
million for the corresponding quarter last year.
The Company's provision for loan losses was $60,000 for the quarters ended March
31, 1998 and 1997. 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
conditions, the volume and type of loans in the Company's portfolio, and other
factors related to the collectibility of the Company's loan portfolio.
Stockholders' equity was $51.3 million at March 31, 1998, compared to $50.4
million at December 31, 1997. Book value, or stockholders' equity, per share at
March 31, 1998 was $15.72 and was $15.43 at December 31, 1997. The ratio of
stockholders' equity to total assets was 15.4% at March 31, 1998, as compared to
22.7% for the corresponding date in 1997. This decrease was primarily due to the
acquisition of Valley Financial Corp.
North Central Bancshares, Inc. serves north central and southeastern Iowa at 7
full service locations in Fort Dodge, Nevada, Ames, 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. The Company's stock is traded on The
Nasdaq National Market under the symbol "FFFD".
For more information contact: David M. Bradley, President, 515-576-7531
FINANCIAL HIGHLIGHTS OF NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Financial Condition
(Dollars in Thousands, except per share and share data) March 31, 1998 December 31, 1997
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Assets
Cash and cash equivalents $ 12,588 $ 3,445
Securities available for sale 51,643 19,816
Mortgage backed securities
Loans (net of allowance of loan loss of $2.6 4,911 --
million and $2.2 million, respectively) 247,661 191,249
Goodwill 6,652 --
Other assets 9,357 7,444
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Total Assets $ 332,812 $ 221,954
========== ==========
Liabilities
Deposits $ 244,733 $ 141,124
Other borrowed funds 33,592 28,550
Other liabilities 3,153 1,863
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Total Liabilities 281,478 171,537
Stockholders' Equity $ 51,334 $ 50,417
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Total Liabilities and Stockholders' Equity $ 332,812 $ 221,954
========== ==========
Stockholders' equity to total assets 15.42% 22.72%
========== ==========
Book value per share $15.72 $15.43
========== ==========
Total shares outstanding 3,266,483 3,266,483
========== ==========
Condensed Consolidated Statements of Income
(Dollars in Thousands, except per share data)
For the Three Months
Ended March 31, 1998
1998 1997
------ ------
Interest income $5,465 $3,905
Interest expense 2,873 1,854
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Net interest income 2,592 2,051
Provision for loan loss 60 60
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Net interest income after provision for loan loss 2,532 1,991
Noninterest income 760 484
Gain on the sale of securities available for sale 55 --
Noninterest expense 1,634 1,110
------ ------
Income before income taxes 1,713 1,365
Income taxes 608 476
------ ------
Net income $1,105 $ 889
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Basic earnings per share $ 0.35 $ 0.27
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Diluted earnings per share $ 0.34 $ 0.27
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Selected Financial Ratios
For the Three Months
Ended March 31,
1998 1997
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Performance ratios:
Net interest spread 2.86% 2.87%
Net interest margin 3.68% 4.15%
Return on average assets 1.49% 1.74%
Return on average equity 8.67% 7.15%
Efficiency ratio (noninterest expense divided by the
sum of net interest income before provision for
loan losses plus noninterest income) 47.96% 43.79%
March 31, 1998 December 31, 1997 March 31, 1997
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Asset Quality Ratios:
Nonaccrual loans to total net loans 0.22% 0.08% 0.18%
Nonperforming assets to total assets 0.26% 0.10% 0.22%
Allowance for loan losses as a percent
of total loans receivable 1.01% 1.10% 1.17%