Exhibit 99.1
FIRSTBANK NW CORP. CONTACT: Larry K. Moxley
1300 16th Avenue Exec. VP & CFO
CLARKSTON, WA 99403 (509) 295-5100
NEWS RELEASE
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FIRSTBANK NW CORP. REPORTS STRONG FIRST QUARTER EARNINGS AND
DECLARES REGULAR QUARTERLY CASH DIVIDEND OF $0.17 PER SHARE
CLARKSTON, WA - July 22, 2004 - FirstBank NW Corp. (Nasdaq: FBNW), the holding
company for FirstBank Northwest, today reported solid growth as net income
improved 99% to $1.55 million, or $0.52 per diluted share, in its first fiscal
quarter ended June 30, 2004. This compares to net income of $779,000, or $0.58
per diluted share, in the comparable quarter a year ago.
FirstBank also announced that its Board of Directors has declared a regular
quarterly cash dividend of $0.17 per common share. The dividend will be paid on
August 25, 2004 to shareholders of record as of the close of business on August
11, 2004. This marks the Company's 28th regular quarterly cash dividend since it
became a publicly traded company in July 1997.
"The increase in net income is attributable to loan growth and the acquisition
of Pioneer Bank during the past year with net loans increasing to $493.1 million
as of June 30, 2004 compared to $265.0 million at June 30, 2003, and an improved
net interest margin of 4.31%," said Clyde E. Conklin, President and Chief
Executive Officer. Mr. Conklin noted "in addition, non-interest income continues
to remain strong, representing 20.8% of net income before non-interest expense,
provision for loan losses, and taxes compared to the comparable quarter a year
ago of 31.4%." Larry K. Moxley, Executive Vice President and Chief Financial
Officer added that the Company's "net interest income also was affected by
reserve allocations driven by new loan growth." The provision for loan losses
for the quarter ended June 30, 2004 was $376,000, compared to $177,000 in the
comparable quarter a year ago. The increase in the provision for loan losses is
attributable to loan growth during the year.
Non-interest income was $1.72 million for the first fiscal quarter, compared to
$1.39 million in the comparable quarter a year ago. "Increases in service
charges, fees, and loan fee income contributed to the increase in non-interest
income over last year," said Moxley.
Non-interest expense, or operating expense increased $2.6 million to $5.7
million for the quarter ended June 30, 2004, compared to $3.1 million a year
ago, which reflects the increase in non-interest expenses related to the
acquisition of Pioneer Bank. FirstBank's efficiency ratio was 66.8% in its first
fiscal quarter of 2004, compared to 69.0% for the like quarter a year ago.
Non-interest expenses are expected to remain at this level reflecting the
addition of staff for the loan production offices in Boise, Idaho and Spokane,
Washington, the new branches in Hayden and Boise, Idaho, and the additional
fixed cost of branch remodels and construction of the new Clarkston, Washington
branch facility.
Total assets were $732.8 million at June 30, 2004, an increase of $388.6
million, or 113%, from total assets of $344.2 million at June 30, 2003. Conklin
noted that, "in addition to growth through the acquisition of Pioneer Bank,
FirstBank is also continuing to produce target asset growth through new loan
originations. Total assets at June 30, 2004 increased $32.6 million, or 5%, from
total assets at March 31, 2004 of $700.2 million. Total loans for the same
period grew $33.6 million, or 7% from $496.3 million at March 31, 2004 to $529.9
million at June 30, 2004."
(more)
FBNW First Fiscal Quarter Results
July 22, 2004
Page Two
Total deposits increased $259.8 million, or 127.29%, to $463.9 million at June
30, 2004 compared with $204.1 million at June 30, 2003. Branch deposit growth
for the quarter ended June 30, 2004 was $3.4 million, or 0.7%. Other funding for
the quarter ended June 30, 2004 included Federal Home Loan Bank borrowings and
brokered deposits totaling $192.0 million compared to $103.3 million on June 30,
2003, an increase of $88.7 million, or 86%.
The provision for loan and lease losses increased $2.8 million, or 79%, to $6.42
million on June 30, 2004 from $3.59 million on June 30, 2003. Total reserves
represent 1.3% of net loans and 553.5% of non-performing loans. "It is essential
that our provisions adequately reflect the credit risk in the portfolio and the
non-performing assets identified, therefore we continue to add to reserves,"
said Moxley. "Charge-offs, net of recoveries, for the quarter totaled $269,000
compared to $2,000 for the comparable quarter a year ago. Of the $269,000 net
charge offs, $205,000 consists of two commercial loans that were totally written
off; both were previously classified assets. Asset quality remains stable."
Total non-performing assets on June 30, 2004 were $2.5 million, or 0.4% of total
assets compared with $3.7 million, or 0.52% of total assets on March 31, 2004.
"We continue to focus on credit risk on a quarterly basis through the asset
review committee and on an on-going basis through executive management loan
committee and credit administration," said Conklin.
"New growth in the quarter ending June 30, 2004 met operational expectations,
and loan demands are strong in our Boise and Coeur d'Alene, Idaho and Spokane,
Washington markets," noted Conklin. "Additionally, net income growth is expected
to remain strong as compared to year ago levels primarily because of the
acquisition of Oregon Trail Financial Corp. completed on October 31, 2003,
however, earnings per share growth is expected to be moderate reflecting our
investments in technology, infrastructure and staff."
FirstBank NW Corp. is the parent of FirstBank Northwest. Founded in 1920,
FirstBank Northwest is based in Clarkston, Washington. FirstBank Northwest
operates 20 branch locations in northern Idaho along the Idaho/Washington border
and in eastern Oregon, in addition to residential loan centers in Lewiston,
Coeur d'Alene, and Boise, Idaho, and Baker City, Oregon. Salomon Smith Barney
has investment centers in FirstBank's Coeur d'Alene, Idaho, Clarkston and
Liberty Lake, Washington, and Baker City, LaGrande, Pendleton and Ontario,
Oregon branches. FirstBank Northwest is known as the local community bank,
offering its customers highly personalized service in the many communities it
serves.
Certain matters in this News Release may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements may relate to, among others,
expectations of the business environment in which FirstBank operates,
projections of future performance, including operating efficiencies,
perceived opportunities in the market, potential future credit experience and
statements regarding FirstBank's mission and vision. These forward-looking
statements are based upon current management expectations, and may,
therefore, involve risks and uncertainties. FirstBank's actual results,
performance, and achievements may differ materially from those suggested,
expressed or implied by forward-looking statements due to a wide range of
factors including, but not limited to, the general business environment,
interest rates, the real estate market in Washington, Idaho and Oregon, the
demand for mortgage loans, FirstBank's ability to successfully integrate the
business of Oregon Trail, the realization of expected cost savings or
accretion to earnings because of the acquisition of Oregon Trail, competitive
conditions between banks and non-bank financial service providers, regulatory
changes, and other risks detailed in the Company's reports filed with the
Securities and Exchange Commission, including its Annual Report on From
10-KSB for the fiscal year ended March 31, 2004.
(tables follow)
FBNW First Fiscal Quarter Results
July 22, 2004
Page Three
FIRSTBANK NW CORP
FINANCIAL HIGHLIGHTS
(unaudited) (in thousands except share and per share data)
Three Months Three Months
Ended Ended
June 30, June 30,
2004 2003
------------ ------------
Interest Income $ 9,510 $ 5,097
Interest Expense 2,982 2,056
Provision for Loan Losses 376 177
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Net Interest Income After Provision for
Loan Losses 6,152 2,864
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Non-Interest Income
Gain on sale of loans 504 780
Gain on sale of securities, net 0 0
Service fees and charges 1,181 577
Commission and other 33 33
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Total Non-Interest Income 1,718 1,390
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Non-Interest Expenses
Compensation and Related Expenses 3,418 1,920
Occupancy 744 351
Other 1,528 877
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Total Non-Interest Expense 5,690 3,148
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Income Tax Expense 628 327
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Net Income $ 1,552 $ 779
============ ============
Basic Earnings per Share $ 0.54 $ 0.61
Diluted Earnings per Share $ 0.52 $ 0.58
Weighted Average Shares Outstanding- Basic 2,866,090 1,280,984
Weighted Average Shares Outstanding- Diluted 2,996,698 1,351,654
Actual Shares Issued 2,965,266 1,382,392
June 30, 2004 March 31, 2004 June 30, 2003
-------------- -------------- --------------
Total Assets $ 732,806 $ 700,232 $ 344,193
Cash and Cash Equivalents $ 37,007 $ 38,397 $ 26,609
Loans Receivable, net $ 493,146 $ 464,368 $ 264,963
Mortgage-Backed Securities $ 71,180 $ 77,027 $ 8,674
Investment Securities $ 49,326 $ 38,787 $ 17,469
Stock in FHLB, at cost $ 12,628 $ 12,506 $ 5,806
Deposits $ 487,650 $ 491,035 $ 229,182
FHLB Advances & Other Borrowings $ 168,447 $ 132,056 $ 78,237
Stockholders' Equity $ 69,671 $ 69,332 $ 31,010
Tangible Book Value per Share (1) $ 16.92 $ 17.33 $ 23.70
FASB 115 Adjustment after Taxes $ 82 $ 1,268 $ 1,141
Tangible Equity/ Total Tangible Assets 6.86% 7.57% 9.01%
Tier 1 Capital to Average Assets 6.64% 6.51% 8.35%
Risk-based Capital to Risk-Weighted Assets 10.45% 10.50% 12.95%
Number of full-time equivalent Employees 257 247 137
(1) Calculation is based on number of shares outstanding at the end of the
period rather than weighted average shares outstanding and excludes
unallocated shares in the employee stock ownership plan (ESOP) 6/04 --
77,060, 3/04 -- 79,149 shares, and 6/03 -- 85,418 shares.
FBNW First Fiscal Quarter Results
July 22, 2004
Page Four
FINANCIAL STATISTICS
(ratios annualized)
Three Months Fiscal Year Three Months
Ended Ended Ended
June 30, March 31, June 30,
2004 2004 2003
------------ ------------ ------------
Return on Average Assets 0.88% 0.90% 0.93%
Return on Average Tangible Equity 12.76% 11.17% 10.14%
Average Tangible Equity/Average Tangible Assets 7.11% 8.19% 9.19%
Average Equity/Average Assets 9.88% 9.71% 9.19%
Average Tangible Equity/Average Loans 10.13% 11.37% 12.15%
Efficiency Ratio (2) 66.78% 70.44% 69.04%
Non-Interest Expenses / Average Assets 3.23% 3.43% 3.77%
Net Interest Margin (3) 4.31% 4.17% 4.10%
Average Interest Earning Assets /
Average Deposits and Other Borrowed Funds 114.78% 102.09% 115.42%
Three Months Fiscal Year Three Months
Ended Ended Ended
June 30, March 31, June 30,
LOANS 2004 2004 2003
(unaudited) (in thousands except share and per share data) ------------ ------------ ------------
LOAN ORIGINATIONS (4):
Residential loan centers $ 78,169 $ 244,456 $ 71,448
Consumer loan centers 16,345 16,364 1,890
Agricultural loan centers 3,937 8,048 3,193
Commercial loan centers 28,885 86,929 34,291
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Total Loan Originations $ 127,336 $ 355,797 $ 110,822
============ ============ ============
LOAN PORTFOLIO ANALYSIS:
Real estate loans:
Residential $ 117,582 $ 112,312 $ 48,195
Construction 76,004 68,236 50,970
Agricultural 19,648 18,568 15,692
Commercial 126,590 122,132 70,200
------------ ------------ ------------
Total real estate loans 339,824 321,248 185,057
------------ ------------ ------------
Consumer and other loans:
Home equity 31,430 25,599 16,557
Agricultural operating 29,079 24,876 15,771
Commercial 81,551 75,878 54,620
Other consumer 42,693 43,425 7,349
------------ ------------ ------------
Total consumer and other loans 184,753 169,778 94,297
------------ ------------ ------------
Loans held for sale-residential real estate 5,285 5,253 10,590
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Total Loans Receivable $ 529,862 $ 496,279 $ 289,944
============ ============ ============
Three Months Fiscal Year Three Months
Ended Ended Ended
June 30, March 31, June 30,
2004 2004 2003
------------ ------------ ------------
ALLOWANCE FOR LOAN LOSSES:
Balance at Beginning of Period $ 6,314 $ 3,414 $ 3,414
Purchased $ 2,863
Provision for Loan Losses 376 395 177
Charge Offs (Net of Recoveries) (269) (358) (2)
------------ ------------ ------------
Balance at End of Period $ 6,421 $ 6,314 $ 3,589
============ ============ ============
Loan Loss Allowance / Net Loans 1.30% 1.36% 1.35%
Loan Loss Allowance / Non-Performing Loans 553.53% 199.37% 208.06%
(2) Calculation is non-interest expense divided by tax equivalent non-interest
income and net interest income.
(3) Calculation is tax equivalent net interest income divided by total
interest-earning assets.
(4) Loan originations are based upon new production.
FBNW First Fiscal Quarter Results
July 22, 2004
Page Five
NON-PERFORMING ASSETS:
Three Months Fiscal Year Three Months
Ended Ended Ended
June 30, March 31, June 30,
2004 2004 2003
------------ ------------ ------------
Accruing Loans - 90 Days Past Due $ 0 $ 0 $ 0
Non-accrual Loans 1,160 2,900 1,725
------------ ------------ ------------
Total Non-performing Loans 1,160 2,900 1,725
Restructured Loans on Accrual 827 152 502
Real Estate Owned (REO) 525 552 120
Repossessed Assets 28 52 0
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Total Non-performing Assets $ 2,540 $ 3,656 $ 2,347
============ ============ ============
Total Non-performing Assets/Total Assets 0.35% 0.52% 0.68%
Loan and REO Loss Allowance as a % of Non-
Performing Assets 252.80% 160.95% 276.48%
AVERAGE BALANCES, INTEREST AVERAGE YIELDS/COSTS
Three Months Fiscal Year Three Months
Ended Ended Ended
June 30, March 31, June 30,
2004 2004 2003
------------ ------------ ------------
Average Interest Earning Assets:
Average Loans receivable:
Average Mortgage Loans receivable $ 116,905 $ 74,416 $ 48,929
Average Commercial Loans receivable 200,685 150,557 121,386
Average Construction Loans receivable 47,824 36,356 31,682
Average Consumer Loans receivable 71,651 43,063 25,977
Average Agricultural Loans receivable 45,391 37,547 29,738
Average Unearned Loan Fees and Discounts,
Allowance for Loan losses, and Other (8,122) (6,350) (4,667)
------------ ------------ ------------
Total Average Loans receivable, net 474,334 335,589 253,045
Average Loans Held for Sale 5,782 7,584 8,202
Average Mortgage-backed securities 74,874 35,869 9,327
Average Investment securities 39,191 24,840 17,135
Average Other Earning Assets 39,847 35,999 21,239
------------ ------------ ------------
Total Average Interest Earning Assets 634,028 439,881 308,948
Average Non-Interest Earning Assets 70,733 44,685 25,453
------------ ------------ ------------
Total Average Assets $ 704,761 $ 484,566 $ 334,401
============ ============ ============
Average Interest Bearing Liabilities:
Average Passbook, NOW, and money market accounts $ 217,194 $ 137,025 $ 73,903
Average Certificates of deposit 197,252 149,626 113,355
Average Advances from FHLB and other 137,932 101,106 80,405
------------ ------------ ------------
Total Average Interest Bearing Liabilities 552,378 387,757 267,663
Average Non-Interest Bearing Deposits 75,321 43,107 30,345
------------ ------------ ------------
Average Deposits and Other Borrowed Funds 627,699 430,864 298,008
Average Non-Interest Bearing Liabilities 7,450 6,638 5,658
------------ ------------ ------------
Total Average Liabilities 635,149 437,502 303,666
Total Average Equity 69,612 47,064 30,735
------------ ------------ ------------
Total Average Liabilities and Equity $ 704,761 $ 484,566 $ 334,401
============ ============ ============
Total Tangible Average Equity $ 48,643 $ 39,030 $ 30,735
============ ============ ============
Interest Rate Yield on Earning Assets 6.19% 6.41% 6.77%
Interest Rate Expense on Deposits and Other Borrowed Funds 1.90% 2.31% 3.07%
Interest Rate Spread 4.29% 4.10% 3.70%
Net Interest Margin 4.31% 4.17% 4.10%