EXHIBIT 99.1
Press Release for FirstBank NW Corp. dated October 26, 2004.
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 SECOND QUARTER EARNINGS AND
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DECLARES REGULAR QUARTERLY CASH DIVIDEND OF $0.17 PER SHARE
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CLARKSTON, WA - October 26, 2004 - FirstBank NW Corp. (Nasdaq: FBNW), the
holding company for FirstBank Northwest, today reported solid growth as net
income improved to $1.63 million, or $0.54 per diluted share, in its second
fiscal quarter ended September 30, 2004. This compares to net income of
$694,000, or $0.51 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
December 3, 2004 to shareholders of record as of the close of business on
November 18, 2004. This marks the Company's 29th 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 $504.5 million
as of September 30, 2004 compared to $256.3 million at September 30, 2003, and
an improved net interest margin of 4.23% for the three months ended September
30, 2004," said Clyde E. Conklin, President and Chief Executive Officer. "The
Company's net interest income also was affected by reserve allocations driven by
new loan growth," noted Larry K. Moxley, Executive Vice President and Chief
Financial Officer. The provision for loan losses for the quarter ended September
30, 2004 was $193,400, compared to $78,000 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 $1.43 million for the second fiscal quarter, compared to
$1.16 million in the comparable quarter a year ago. "Increases in service
charges and fee income contributed to the increase in non-interest income over
last year," said Moxley. "Gain on sale of loans decreased to $288,000, excluding
impairment, for the quarter ending September 30, 2004 compared to $590,000 in
the same quarter last year, due to reduced refinancings and a slowing purchase
market."
Non-interest expense, or operating expense increased $2.6 million to $5.7
million for the quarter ended September 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 68.5% in its
second fiscal quarter of 2004, compared to 73.6% 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. Additionally, a new Loan Production Office in Nampa, Idaho has
been authorized and is scheduled to open during the next fiscal quarter of 2004.
"The staff has been hired and offices are being identified. The Nampa, Idaho
market is adjacent to the Boise, Idaho market and is a logical expansion of our
presence in Idaho", said Conklin.
Total assets were $735.3 million at September 30, 2004, an increase of $392.2
million, or 114%, from total assets of $343.1 million at September 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 September 30, 2004 increased $35.1 million,
or 5%, from total assets at March 31, 2004 of $700.2 million. Total loans
receivable for the same period grew $46.0 million, or 9.3% from $496.3 million
at March 31, 2004 to $542.3 million at September 30, 2004."
(more)
FBNW Second Fiscal Quarter Results
October 26, 2004
Page Two
Total branch deposits increased $279.2 million, or 135.7%, to $484.9 million at
September 30, 2004 compared with $205.7 million at September 30, 2003. Other
funding for the quarter ended September 30, 2004 included Federal Home Loan Bank
borrowings and brokered deposits totaling $173.5 million compared to $100.7
million on September 30, 2003, an increase of $72.8 million, or 72.3%.
The allowance for loan and lease losses increased $3.0 million, or 82.4%, to
$6.6 million on September 30, 2004 from $3.6 million on September 30, 2003.
Total reserves represent 1.31% of net loans and 440.8% 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 $21,000 compared to $51,000 for the comparable quarter a year ago. Of
the $289,000 net charge offs for the six months ended September 30, 2004,
$193,000 consists of two commercial loans that were totally written off; both
were previously classified assets. Asset quality remains stable." Total
non-performing assets on September 30, 2004 were $2.3 million, or 0.32% 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 September 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. The core
processing system conversion will take place during the next fiscal quarter
ending December 31, 2004. The one time expenses related to the conversion will
impact earnings in the quarter."
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)
FIRSTBANK NW CORP
FINANCIAL HIGHLIGHTS
(unaudited) (in thousands except share and per share data)
Three Months Ended Six Months Ended
September 30, September 30,
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2004 2003 2004 2003
---------- ---------- ---------- ----------
Interest Income $ 9,912 $ 5,007 $ 19,422 $ 10,105
Interest Expense 3,194 2,015 6,176 4,071
Provision for Loan Losses 193 78 569 256
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Net Interest Income After Provision for
Loan Losses 6,525 2,914 12,677 5,778
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Non-Interest Income
Gain on Sale of Loans 178 590 682 1,370
Service Fees and Charges 1,183 535 2,364 1,112
Commission and Other 67 33 100 67
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Total Non-Interest Income 1,428 1,158 3,146 2,549
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Non-Interest Expenses
Compensation and Related Expenses 3,424 1,956 6,842 3,876
Occupancy 715 347 1,459 698
Other 1,568 843 3,097 1,720
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Total Non-Interest Expenses 5,707 3,146 11,398 6,294
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Income Tax Expense 620 232 1,248 560
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Net Income $ 1,626 $ 694 $ 3,177 $ 1,473
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Basic Earnings per Share $ 0.56 $ 0.54 $ 1.10 $ 1.14
Diluted Earnings per Share $ 0.54 $ 0.51 $ 1.06 $ 1.09
Weighted Average Shares Outstanding- Basic 2,893,817 1,294,267 2,880,018 1,287,650
Weighted Average Shares Outstanding- Diluted 3,006,158 1,366,142 3,002,147 1,353,745
Actual Shares Issued 2,962,208 1,390,492 2,962,208 1,390,492
September 30, 2004 March 31, 2004 September 30, 2003
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Total Assets $735,277 $700,232 $343,116
Cash and Cash Equivalents $ 31,040 $ 38,397 $ 34,282
Loans Receivable, net $504,535 $464,368 $256,269
Mortgage-Backed Securities $ 68,217 $ 77,027 $ 7,669
Investment Securities $ 49,164 $ 38,787 $ 17,250
Stock in FHLB, at cost $ 12,737 $ 12,506 $ 5,882
Deposits $508,581 $491,035 $229,515
FHLB Advances & Other Borrowings $149,820 $132,056 $ 76,972
Stockholders' Equity $ 70,169 $ 69,332 $ 31,393
Tangible Book Value per Share (1) $ 17.33 $ 17.33 $ 24.20
FASB 115 Adjustment after Taxes $ 748 $ 1,268 $ 816
Tangible Equity/ Total Tangible Assets 7.00% 7.57% 9.15%
Tier 1 Capital to Average Assets 6.66% 6.51% 8.36%
Risk-based Capital to Risk-Weighted Assets 10.69% 10.50% 13.55%
Number of full-time equivalent Employees 259 247 140
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(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) 9/04--74,971
shares, 3/04 -- 79,149 shares, 9/03 -- 83,330 shares.
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FINANCIAL STATISTICS
(ratios annualized) Three Months Ended Six Months Ended
September 30, Fiscal September 30,
---------------------- Year Ended ----------------------
2004 2003 March 31, 2004 2004 2003
------- ------- -------------- ------- -------
Return on Average Assets 0.89% 0.81% 0.90% 0.88% 0.87%
Return on Average Tangible Equity 13.02% 8.88% 11.17% 12.89% 9.50%
Average Tangible Equity/Average Tangible Assets 7.02% 9.17% 8.19% 7.06% 9.18%
Average Equity/Average Assets 9.62% 9.17% 9.17% 9.75% 9.18%
Average Tangible Equity/Average Loans 10.01% 11.83% 11.37% 10.07% 11.80%
Efficiency Ratio (2) 68.54% 73.63% 70.44% 67.65% 71.24%
Non-Interest Expenses / Average Assets 3.12% 3.69% 3.43% 3.17% 3.73%
Net Interest Margin (3) 4.23% 4.00% 4.17% 4.27% 4.05%
Average Interest Earning Assets /
Average Deposits and Other Borrowed Funds 112.61% 115.75% 102.09% 113.66% 115.59%
Six Months Ended Fiscal Year Ended Six Months Ended
September 30, 2004 March 31, 2004 September 30, 2003
LOANS ------------------ ----------------- ------------------
(unaudited) (in thousands except share and per share data)
LOAN ORIGINATIONS (4):
Residential loan centers $136,765 $244,456 $138,412
Consumer loan centers 26,642 16,364 3,844
Agricultural loan centers 4,548 8,048 4,600
Commercial loan centers 64,681 86,929 65,757
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Total Loan Originations $232,636 $355,797 $212,613
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LOAN PORTFOLIO ANALYSIS:
Real estate loans:
Residential $114,923 $112,312 $ 45,612
Construction 79,638 68,236 57,995
Agricultural 19,387 18,568 15,805
Commercial 137,336 122,132 71,095
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Total real estate loans 351,284 321,248 190,507
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Consumer and other loans:
Home equity 33,331 25,599 15,153
Agricultural operating 30,088 24,876 13,748
Commercial 81,604 75,878 48,531
Other consumer 41,464 43,425 6,995
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Total consumer and other loans 186,487 169,778 84,427
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Loans held for sale-residential real estate 4,496 5,253 9,560
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Total Loans Receivable $542,267 $496,279 $284,494
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Six Months Ended Fiscal Year Ended Six Months Ended
September 30, 2004 March 31, 2004 September 30, 2003
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ALLOWANCE FOR LOAN LOSSES:
Balance at Beginning of Period $ 6,314 $ 3,414 $ 3,414
Purchased 0 2,863 0
Provision for Loan Losses 569 395 256
Charge Offs (Net of Recoveries) (289) (358) (54)
-------- -------- --------
Balance at End of Period $ 6,594 $ 6,314 $ 3,616
======== ======== ========
Loan Loss Allowance / Net Loans 1.31% 1.36% 1.41%
Loan Loss Allowance / Non-Performing Loans 440.78% 199.37% 204.87%
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(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.
4
NON-PERFORMING ASSETS:
Six Months Ended Fiscal Year Ended Six Months Ended
September 30, 2004 March 31, 2004 September 30, 2003
------------------ ----------------- ------------------
Accruing Loans - 90 Days Past Due $ 0 $ 0 $ 0
Non-accrual Loans 1,496 2,900 1,765
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Total Non-performing Loans 1,496 2,900 1,765
Restructured Loans on Accrual 306 152 284
Real Estate Owned (REO) 493 552 664
Repossessed Assets 34 52 0
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Total Non-performing Assets $ 2,329 $ 3,656 $ 2,713
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Total Non-performing Assets/Total Assets 0.32% 0.52% 0.79%
Loan and REO Loss Allowance as a % of Non-
Performing Assets 283.13% 160.95% 133.28%
AVERAGE BALANCES, INTEREST AVERAGE YIELDS/COSTS
Six Months Ended Fiscal Year Ended Six Months Ended
September 30, 2004 March 31, 2004 September 30, 2003
------------------ ----------------- ------------------
Average Interest Earning Assets:
Average Loans Receivable:
Average Mortgage Loans Receivable $116,399 $ 74,416 $ 47,295
Average Commercial Loans Receivable 206,165 150,557 122,897
Average Construction Loans Receivable 48,958 36,356 33,559
Average Consumer Loans Receivable 73,029 43,063 24,436
Average Agricultural Loans Receivable 47,769 37,547 30,858
Average Unearned Loan Fees and Discounts,
Allowance for Loan Losses, and Other (8,198) (6,350) (4,804)
-------- -------- --------
Total Average Loans Receivable, net 484,122 335,589 254,241
Average Loans Held for Sale 5,597 7,584 8,607
Average Mortgage-backed Securities 72,236 35,869 8,808
Average Investment Securities 44,200 24,840 17,146
Average Other Earning Assets 38,514 36,000 21,391
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Total Average Interest Earning Assets 644,669 439,882 310,193
Average Non-Interest Earning Assets 74,071 44,684 27,531
-------- -------- --------
Total Average Assets $718,740 $484,566 $337,724
======== ======== ========
Average Interest Bearing Liabilities:
Average Passbook, NOW, and Money Market Accounts $225,390 $137,025 $ 74,657
Average Certificates of Deposits 196,747 149,626 112,975
Average Advances from FHLB and Other 145,040 101,106 80,732
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Total Average Interest Bearing Liabilities 567,177 387,757 268,364
Average Non-Interest Bearing Deposits 74,344 43,107 32,948
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Average Deposits and Other Borrowed Funds 641,521 430,864 301,312
Average Non-Interest Bearing Liabilities 7,164 6,638 5,405
-------- -------- --------
Total Average Liabilities 648,685 437,502 306,717
Total Average Equity 70,055 47,064 31,007
-------- -------- --------
Total Average Liabilities and Equity $718,740 $484,566 $337,724
======== ======== ========
Total Tangible Average Equity $ 49,310 $ 39,030 $ 31,007
======== ======== ========
Interest Rate Yield on Earning Assets 6.19% 6.41% 6.68%
Interest Rate Expense on Deposits and Other Borrowed Funds 1.93% 2.31% 3.03%
Interest Rate Spread 4.26% 4.10% 3.65%
Net Interest Margin 4.27% 4.17% 4.05%
5