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 FISCAL YEAR END NET INCOME UP 44.1%,
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ASSET GROWTH OF 14.4% TO $801.1 MILLION
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CLARKSTON, WA - May 27, 2005 - FirstBank NW Corp. (Nasdaq: FBNW), the holding
company for FirstBank Northwest, today reported fiscal year 2005 net income of
$6.28 million and total assets of $801.1 million, representing an increase of
44.1% in net income and 14.4% in total assets. "The year was highlighted by
exceptional growth from the markets in Boise and Coeur d'Alene, Idaho and
Spokane, Washington, which are our targeted growth markets," said Clyde E.
Conklin, President and Chief Executive Officer. Total loans receivable grew
22.4%, from $459.1 million at March 31, 2004 to $562.1 million at March 31,
2005. "Additionally," Conklin noted, "the core processing system conversion was
completed in December 2004, and the network and other systems were fully
integrated during the year, which essentially completed the systems integration
of Oregon Trail Financial Corp., and its subsidiary, Pioneer Bank, with
FirstBank NW Corp., and its subsidiary, FirstBank Northwest." The merger closed
on October 31, 2003. Conklin went on to note "the merger was large and complex,
which required substantial dedication of resources for a successful execution.
We have essentially rebuilt the Bank's systems, policies and processes in order
to facilitate future growth. Our major compliance initiative for fiscal year
2006 are the provisions regarding internal control over financial reporting in
the Sarbanes-Oxley Act of 2002. We will also reinforce our compliance with Bank
Secrecy Act (BSA) and Customer Identification Program (CIP) regulations." It is
expected that FirstBank will become an accelerated filer as of March 31, 2006.
"We will remain focused on earnings growth and balance sheet growth as we
continue to implement these new requirements," stated Conklin.
Income was enhanced through increased net interest income from a growing loan
portfolio and a full year of combined operations after the October 31, 2003
merger of Pioneer Bank. Net interest income, after provision for loans losses,
was $25.8 million for the year ended March 31, 2005, compared to $17.1 million
for the year ended March 31, 2004. Income was also enhanced by a stable net
interest margin of 4.38% on March 31, 2005, compared to 4.28% on March 31, 2004.
Non-interest income was $6.0 million for the year ended March 31, 2005, compared
to $5.5 million for the year ended March 31, 2004. "While gain on sale of loans
was down from $2.2 million for the year ended March 31, 2004 to $1.1 million for
the year ended March 31, 2005, we did increase other fees, service charges, and
other non-interest income from $3.3 million for the year ended March 31, 2004 to
$4.9 million for the year ended March 31, 2005," said Larry K. Moxley, Chief
Financial Officer.
Non-interest expenses increased $6.4 million, or 38.1%, from $16.8 million for
fiscal year 2004 to $23.1 million for fiscal year 2005. Compensation and
benefits totaled $14.0 million, or 60.7% of total non-interest expense for the
fiscal year ended March 31, 2005 as compared to $10.1 million, or 60.2% of total
non-interest expense for the fiscal year ended March 31, 2004. FirstBank's
efficiency ratio improved from 68.9% for the year ended March 31, 2004 to 65.9%
for the year ended March 31, 2005 because net interest income and non-interest
income increased faster than non-interest expense.
Net income, after tax, for the year ended March 31, 2005 was $6.28 million, or
$2.09 per share on 2,997,630 diluted shares outstanding, compared to net income
of $4.36 million, or $2.12 per share on 2,055,635 diluted shares for the year
ended March 31, 2004.
"We continue to make significant progress towards a balance sheet structure
typical to commercial banking," said Conklin. "The total loan portfolio,
including loans held for sale, is $575.8 million in which commercial loans
represent 46.3%, agricultural loans 7.3%, construction loans 12.0%, consumer
loans 13.3%, residential real estate loans 20.4%, and loans held for sale 0.7%.
The construction loan portfolio increased from $44.5 million at March 31, 2004
to $69.1 million at March 31, 2005. Total construction loans originated during
fiscal year 2005 were $171.6 million. Additionally, commercial/agricultural loan
production remained strong, with the Spokane loan production office originating
$22.4 million in new loans, the Coeur d'Alene Loan Center originating $33.7
million, the Baker City Loan Center originating $18.1 million, the Lewiston Loan
Center originating $49.5 million, and the Boise Loan Center originating $57.4
million. The Boise Commercial Loan Center completed its first full year of
operation on March 31, 2005. Total new commercial/agricultural loan origination
for fiscal year 2005 was $181.1 million. The commercial and agricultural loan
portfolio increased from $241.5 million at March 31, 2004 to $308.6 million at
March 31, 2005, an increase of 27.8%. The residential real estate loan portfolio
increased $4.5 million, or 4.0%, from March 31, 2004 to March 31, 2005. Total
residential real estate term loan originations were $102.2 million during fiscal
year 2005. "FirstBank has added to its loan portfolio all 10-year and 15-year
first mortgage loans that it originated this past year," noted Moxley.
(more)
FBNW Fourth Quarter Results
May 27, 2005
Page Two
"Deposit growth was $38.1 million for the year ended March 31, 2005, an increase
of 7.9% since last year, and funding from core deposits continues to increase,"
said Moxley. Core deposits grew from $279.9 million at March 31, 2004 to $301.5
million at March 31, 2005, while certificates of deposit increased from $200.6
million to $217.2 million over the same period. "Core deposits represent 58.1%
of our total branch deposits," said Moxley. "Additionally, it is important to
note that deposit growth is focused on core demand deposits related primarily to
commercial customers," Moxley continued. Other funding sources include Federal
Home Loan Bank borrowings, as well as brokered deposit markets.
Allowance for loan loss reserves increased from $6.3 million at March 31, 2004
to $7.3 million at March 31, 2005. Total reserves are now 1.29% of net loans as
of March 31, 2005 compared to 1.38% as of March 31, 2004. "Reserves
appropriately reflect portfolio loan allocations and the credit risk associated
with the current economy," said Conklin.
"Asset quality is good and remains a high priority for FirstBank," continued
Conklin. Total non-performing assets at March 31, 2005 were $2.8 million, or
0.35% of total assets, compared with $3.7 million, or 0.50% of total assets, at
March 31, 2004. The ratio of loan loss allowances to non-performing assets was
258.1% at March 31, 2005 compared with 172.7% at March 31, 2004. "Workout of
non-performing assets and improvement in economies throughout our market area
has contributed to this improvement," said Conklin.
Net charge-offs for the year ended March 31, 2005 were $588,000 compared with
$358,000 for the year ended March 31, 2004. "We continue to scrutinize our loan
portfolio on a regular basis to assure that we maintain credit quality," said
Conklin.
FirstBank NW Corp.'s total assets increased 14.4% to $801.1 million on March 31,
2005 compared to $700.2 million on March 31, 2004. Stockholders' equity on March
31, 2005 was $72.3 million compared with $69.3 million on March 31, 2004.
Tangible stockholder equity, which excludes goodwill and other intangible
assets, was $52.7 million on March 31, 2005 compared with $48.3 million on March
31, 2004. The ratio of tangible equity to tangible assets was 6.7% at March 31,
2005 compared to 7.1% a year earlier. Tangible book value increased to $18.00
per share on March 31, 2005 compared to $16.88 per share last year.
Reported net income for the fourth quarter ended March 31, 2005 was $1.6 million
compared to $1.6 million for the same period one year ago. Earnings per share
(diluted) for the fourth quarter ended March 31, 2005 was $0.52 per share
compared to $0.55 per share for the same period last year. "Earnings growth for
the period ending March 31, 2005 was impacted by system and integration expense,
reduced Federal Home Loan Bank dividend income, and regulatory and audit
expense," said Moxley. Asset growth for the fourth quarter was $31.6 million, or
4.1%, or an annualized rate of 16.4%.
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 Idaho, eastern Washington and eastern Oregon, in
addition to residential loan centers in Lewiston, Coeur d'Alene, Boise and
Nampa, Idaho, Spokane, Washington and Baker City, Oregon. Salomon Smith Barney
has investment centers in the Coeur d'Alene, Idaho, Clarkston and Liberty Lake,
Washington branches, and the Baker City, LaGrande 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 the Company operates,
projections of future performance, including operating efficiencies,
perceived opportunities in the market, potential future credit experience
and statements regarding the Company's mission and vision. These
forward-looking statements are based upon current management expectations,
and may, therefore, involve risks and uncertainties. The Company'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, competitive conditions between
banks and non-bank financial service providers, regulatory changes, costs
of implementing additional securities requirements and requirements of the
Sarbanes Oxley Act of 2002 and other risks detailed in the Company's
reports filed with the Securities and Exchange Commission, including its
Annual Report on Form 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 Fiscal Year Ended
March 31, March 31,
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2005 2004 2005 2004
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Interest Income $ 10,840 $ 9,299 $ 40,631 $ 27,415
Interest Expense 3,778 3,068 13,319 9,934
Provision for Loan Losses 488 (23) 1,528 395
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Net Interest Income After Provision for
Loan Losses 6,574 6,254 25,784 17,086
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Non-Interest Income
Gain on Sale of Loans 184 532 1,125 2,188
Service Fees and Charges 1,010 1,138 4,504 3,120
Commission and Other 239 72 381 208
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Total Non-Interest Income 1,433 1,742 6,010 5,516
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Non-Interest Expenses
Compensation and Related Expenses 3,522 3,366 14,044 10,095
Occupancy 717 788 2,844 2,077
Other 1,616 1,592 6,261 4,590
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Total Non-Interest Expense 5,855 5,746 23,149 16,762
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Income Tax Expense 578 646 2,367 1,482
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Net Income $ 1,574 $ 1,604 $ 6,278 $ 4,358
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Basic Earnings per Share $ 0.54 $ 0.56 $ 2.17 $ 2.26
Diluted Earnings per Share $ 0.52 $ 0.55 $ 2.09 $ 2.12
Weighted Average Shares Outstanding- Basic 2,920,832 2,863,292 2,896,307 1,925,804
Weighted Average Shares Outstanding- Diluted 2,997,761 2,933,774 2,997,630 2,055,635
Actual Shares Issued 2,998,595 2,940,047 2,998,595 2,940,047
March 31, 2005 March 31, 2004
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Total Assets $ 801,122 $ 700,232
Cash and Cash Equivalents $ 41,801 $ 38,397
Loans Receivable, net $ 562,101 $ 459,114
Loans Held for Sale $ 3,999 $ 5,254
Mortgage-Backed Securities $ 61,904 $ 77,027
Investment Securities $ 48,334 $ 38,787
Stock in FHLB, at cost $ 12,789 $ 12,506
Deposits $ 518,676 $ 480,548
FHLB Advances & Other Borrowings $ 185,337 $ 132,056
Stockholders' Equity $ 72,311 $ 69,332
Tangible Book Value per Share (1) $ 18.00 $ 16.88
FASB 115 Adjustment after Taxes $ 149 $ 1,268
Tangible Equity/ Total TangibleAssets 6.74% 7.11%
Number of Full-Time Equivalent Employees 268 247
(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) 3/05--70,793
shares and 3/04 -- 79,149 shares.
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FINANCIAL STATISTICS
(ratios annualized)
Three Months Ended Fiscal Year Ended
March 31, March 31,
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2005 2004 2005 2004
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Return on Average Assets 0.80% 0.93% 0.84% 0.90%
Return on Average Tangible Equity 11.94% 12.74% 12.38% 11.17%
Average Tangible Equity/Average Tangible
Assets 6.88% 7.49% 7.01% 8.19%
Average Equity/Average Assets 9.21% 10.04% 9.54% 9.71%
Average Tangible Equity/Average Loans 9.65% 11.13% 10.02% 11.63%
Efficiency Ratio (2) 64.22% 67.41% 65.91% 68.88%
Non-Interest Expenses / Average Assets 2.98% 3.26% 3.11% 3.46%
Net Interest Margin (3) 4.39% 4.36% 4.38% 4.28%
Average Interest Earning Assets /
Average Deposits and Other Borrowed Funds 99.06% 101.42% 99.89% 102.09%
Fiscal Year Ended Fiscal Year Ended
LOANS March 31, 2005 March 31, 2004
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(unaudited) (in thousands except share
and per share data)
LOAN ORIGINATIONS (4):
Residential loan centers $ 273,786 $ 244,456
Consumer loan centers 45,844 16,364
Agricultural loan centers 12,149 8,048
Commercial loan centers 168,976 86,929
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Total Loan Origination $ 500,755 $ 355,797
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LOAN PORTFOLIO ANALYSIS:
Real estate loans:
Residential 117,541 $ 113,016
Construction 69,148 44,536
Agricultural 19,434 18,567
Commercial 173,757 122,132
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Total real estate loans 379,880 298,251
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Consumer and other loans:
Home equity 37,806 24,530
Agricultural operating 22,625 24,876
Commercial 92,780 75,878
Other consumer 38,724 43,425
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Total consumer and other loans 191,935 168,709
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Loans held for sale-residential real estate 3,999 5,254
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Total Loans Receivable $ 575,814 $ 472,214
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Fiscal Year Ended Fiscal Year Ended
March 31, 2005 March 31, 2004
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ALLOWANCE FOR LOAN LOSSES:
Balance at Beginning of Period $ 6,314 $ 3,414
Purchased $ 0 $ 2,863
Provision for Loan Losses 1,528 395
Charge offs (Net of Recoveries) (588) (358)
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Balance at End of Period $ 7,254 $ 6,314
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Loan Loss Allowance / Net Loans 1.29% 1.38%
Loan Loss Allowance / Non-Performing Loans 661.86% 217.72%
(2) Calcuation is non-interest expense divided by non-interest income and tax
equivalent 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.
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NON-PERFORMING ASSETS:
Fiscal Year Ended Fiscal Year Ended
March 31, 2005 March 31, 2004
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Accruing Loans - 90 Days Past Due $ 377 $ 0
Non-accrual Loans 719 2,900
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Total Non-performing Loans 1,096 2,900
Restructured Loans on Accrual 1,094 152
Real Estate Owned (REO) 603 552
Repossessed Assets 18 52
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Total Non-performing Assets $ 2,811 $ 3,656
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Total Non-performing Assets/Total Assets 0.35% 0.50%
Loan and REO Loss Allowance as a % of Non-
Performing Assets 258.06% 172.70%
AVERAGE BALANCES, INTEREST AVERAGE YIELDS/COSTS
Three Months Ended Fiscal Year Ended
March 31, March 31,
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2005 2004 2005 2004
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Average Interest Earning Assets:
Average Loans receivable:
Average Mortgage Loans receivable $ 119,041 $ 111,702 $ 117,016 $ 74,416
Average Commercial Loans receivable 253,610 192,634 223,158 150,557
Average Construction Loans receivable 64,232 42,362 53,857 36,356
Average Consumer Loans receivable 76,468 69,252 74,413 43,063
Average Agricultural Loans receivable 42,692 45,045 46,240 37,547
Average unearned loan fees and discounts,
allowance for loan losses, and other (9,351) (8,610) (8,631) (6,350)
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Total Average Loans receivable,net 546,692 452,385 506,053 335,589
Average Loans Held for Sale 2,794 5,766 4,708 7,584
Average Mortgage-backed securities 63,666 79,542 68,761 35,869
Average Investment securities 48,495 38,462 46,438 24,840
Average Other earning assets 37,877 46,494 38,317 36,000
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Total Average Interest Earning Assets 699,524 622,649 664,277 439,882
Average Non-Interest Earning Assets 86,869 68,437 78,981 44,684
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Total Average Assets $ 786,393 $ 691,086 $ 743,258 $ 484,566
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Average Interest Bearing Liabilities:
Average Passbook, NOW, and money market
accounts $ 237,394 $ 224,630 $ 231,963 $ 137,025
Average Certificate of deposits 206,811 200,091 200,980 149,626
Average Advances from FHLB and other 190,337 135,041 158,235 101,106
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Total Average Interest Bearing Liabilities 634,542 559,762 591,178 387,757
Average Non-Interest Bearing Deposits 71,644 54,142 73,825 43,107
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Average Deposits and Other Borrowed Funds 706,186 613,904 665,003 430,864
Average Non-Interest Bearing Liabilities 7,779 7,797 7,327 6,638
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Total Average Liabilities 713,965 621,701 672,330 437,502
Total Average Equity 72,428 69,385 70,928 47,064
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Total Average Liabilities and Equity $ 786,393 $ 691,086 $ 743,258 $ 484,566
============ ============ ============ ============
Total Tangible Average Equity $ 52,740 $ 50,368 $ 50,693 $ 39,030
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Interest Rate Yield on Earning Assets 6.55% 6.33% 6.38% 6.54%
Interest Rate Expense on Deposits and Other
Borrowed Funds 2.14% 2.00% 2.00% 2.31%
Interest Rate Spread 4.41% 4.33% 4.38% 4.23%
Net Interest Margin 4.39% 4.36% 4.38% 4.28%
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