Exhibit 99.2 Press Release
PRESS RELEASE
July 27, 1998 For further information contact:
David M. Bradley
Chairman, President and Chief Executive Officer
North Central Bancshares, Inc.
825 Central Avenue PO Box 1237
Fort Dodge, Iowa 50501
515-576-7531
NORTH CENTRAL BANCSHARES, INC. ANNOUNCES RECORD
SECOND QUARTER 1998 EARNINGS
Fort Dodge, Iowa -- North Central Bancshares, Inc., (the "Company") the holding
company for First Federal Savings Bank of Iowa (the "Bank"), announced today
that the Company earned $1,116,000, or diluted earnings per share of $0.35, for
the second quarter of 1998, compared to $960,000, or diluted earnings per share
of $0.30, during the second quarter of 1997. For the six months ended June 30,
1998, the Company's net earnings were $2,222,000, or diluted earnings per share
of $0.69, as compared to $1,848,000, or diluted earnings per share of $0.56, for
the corresponding period a year ago.
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 June 30, 1998. The operating results for the period ended June 30, 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 June 30, 1998 were $331.1 million as compared to $222.0 million
at December 31, 1997.
Nonperforming assets were 0.14% of total assets as of June 30, 1998 compared to
0.10% of total assets as of December 31, 1997. The allowance for loan losses was
$2.6 million, or 1.02% of total loans at June 30, 1998, compared to $2.2
million, or 1.10% of total loans, at December 31, 1997.
The pro forma net interest spread for the quarter ended June 30, 1998 of 2.81%
was only slightly changed from 2.79% for the quarter ended June 30, 1997. The
pro forma net interest margin for the quarter ended June 30, 1998 of 3.49% was
only slightly changed from 3.43% for the quarter ended June 30, 1997. Pro forma
net interest income for the quarter ended June 30, 1998 was $2.8 million,
compared to $2.6 million for the corresponding quarter last year.
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The Company's provision for loan losses was $60,000 for the quarters ended June
30, 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 $49.2 million at June 30, 1998, as compared to $50.4
million at December 31, 1997. Book value, or stockholders' equity, per share at
June 30, 1998 was $15.73, as compared to $15.43 at December 31, 1997. The ratio
of stockholders' equity to total assets was 14.9% at June 30, 1998, as compared
to a pro forma ratio of stockholders' equity of 15.1% at December 31, 1997.
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
Actual Actual Pro Forma*
(Dollars in Thousands, except per share and share data) June 30, 1998 December 31, 1997 December 31, 1997
-------------- ------------------ ------------------
Assets
Cash and cash equivalents $ 10,223 $ 3,445 $ 8,517
Securities available for sale 53,657 19,816 58,892
Loans (net of allowance
of loan loss of $2.6 million, $2.2 million and
$2.5 million, respectively) 250,371 191,249 250,701
Goodwill 6,564 196 6,735
Other assets 10,309 7,248 9,304
---------- ---------- ----------
Total Assets $ 331,124 $ 221,954 $ 334,149
========== ========== ==========
Liabilities
Deposits $ 246,398 $ 141,124 $ 240,635
Other borrowed funds 32,342 28,550 39,859
Other liabilities 3,197 1,863 3,238
---------- ---------- ----------
Total Liabilities 281,937 171,537 283,732
Stockholders' Equity $ 49,187 $ 50,417 $ 50,417
---------- ---------- ----------
Total Liabilities and Stockholders' Equity $ 331,124 $ 221,954 $ 334,149
========== ========== ==========
Stockholders' equity to total assets 14.85% 22.72% 15.09%
========== ========== ==========
Book value per share $15.73 $15.43 $15.43
========== ========== ==========
Total shares outstanding 3,126,383 3,266,483 3,266,483
========== ========== ==========
* See explanatory note on following page.
Condensed Consolidated Statements of Income
(Dollars in Thousands, except per share data)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
------ ------ ------- ------
Interest income $6,050 $3,932 $11,515 $7,836
Interest expense 3,291 1,896 6,163 3,750
------ ------ ------- ------
Net interest income 2,759 2,036 5,352 4,086
Provision for loan loss 60 60 120 120
------ ------ ------- ------
Net interest income after provision for loan loss 2,699 1,976 5,232 3,966
Noninterest income 974 599 1,734 1,083
Gain on the sale of securities available for sale -- -- 55 --
Noninterest expense 1,895 1,119 3,529 2,229
------ ------ ------- ------
Income before income taxes 1,778 1,456 3,492 2,820
Income taxes 662 496 1,270 972
------ ------ ------- ------
Net income $1,116 $ 960 $ 2,222 $1,848
====== ====== ======= ======
Basic earnings per share $ 0.36 $ 0.30 $ 0.71 $ 0.57
====== ====== ======= ======
Diluted earnings per share $ 0.35 $ 0.30 $ 0.69 $ 0.56
====== ====== ======= ======
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
------ ------ ------- ------
Performance ratios: Actual
Net interest spread 2.85% 2.88% 2.84% 3.00%
Net interest margin 3.51% 4.07% 3.58% 4.24%
Return on average assets 1.35% 1.86% 1.42% 1.78%
Return on average equity 8.79% 7.87% 8.73% 7.51%
Efficiency ratio (noninterest expense divided by the
sum of net interest income before provision for
loan losses plus noninterest income) 50.75% 42.48% 49.42% 42.76%
Pro Forma Condensed Consolidated Statements of Income*
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
------ ------ ------- -------
Interest income $6,050 $5,878 $12,137 $11,667
Interest expense 3,291 3,268 6,614 6,412
------ ------ ------- -------
Net interest income 2,759 2,610 5,523 5,255
Provision for loan loss 60 (40) 120 20
------ ------ ------- -------
Net interest income after provision for loan loss 2,699 2,650 5,403 5,235
Noninterest income 966 798 1,788 1,463
Gain on the sale of securities available for sale -- -- 55 --
Noninterest expense 1,947 1,816 3,935 3,576
------ ------ ------- -------
Income before income taxes 1,718 1,632 3,311 3,122
Income taxes 641 595 1,229 1,127
------ ------ ------- -------
Net income $1,077 $1,037 $ 2,082 $ 1,995
====== ====== ======= =======
Basic earnings per share $ 0.35 $ 0.32 $ 0.67 $ 0.62
====== ====== ======= =======
Diluted earnings per share $ 0.33 $ 0.32 $ 0.65 $ 0.61
====== ====== ======= =======
* See explanatory note below.
Selected Financial Ratios
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
------ ------ ------- -------
Performance ratios: Pro Forma*
Net interest spread 2.81% 2.79% 2.83% 2.80%
Net interest margin 3.49% 3.43% 3.50% 3.46%
Return on average assets 1.29% 1.30% 1.25% 1.25%
Return on average equity 8.45% 8.34% 8.18% 8.27%
Efficiency ratio (noninterest expense divided by the
sum of net interest income before provision for
loan losses plus noninterest income) 52.27% 53.29% 53.42% 53.23%
*See explanatory note below.
June 30, 1998 March 31, 1998 December 31, 1997
------------- -------------- -----------------
Asset Quality Ratios:
Nonaccrual loans to total net loans 0.10% 0.22% 0.08%
Nonperforming assets to total assets 0.14% 0.26% 0.10%
Allowance for loan losses as a percent
of total loans receivable 1.02% 1.01% 1.10%
*Pro Forma Consolidated Condensed Financial Statements (Unaudited)
The above unaudited pro forma consolidated financial statements presented are
based on the historical financial statements of the Company and Valley
Financial. The unaudited pro forma consolidated statements of income for the
three and six months ended June 30, 1998 and 1997 were prepared as if the
Acquisition had occurred as of the beginning of the respective periods for
purposes of the combined consolidated statements of income and as if such an
Acquisition had occurred at December 31, 1997 for purposes of the combined
consolidated statement of financial condition.
The pro forma financial statements are not necessarily indicative of the results
of operations that might have occurred had the Acquisition taken place at the
beginning of the period, or to project the Company' results of operations at any
future date or for any future period.