Exhibit 99.1
Press Release for FirstBank NW Corp. dated November 10, 2005
EXHIBIT 99.1
Press Release FirstBank NW Corp. (FBNW)
Company Release - 11/10/05
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FIRSTBANK NW CORP. REPORTS RECORD SECOND QUARTER EARNINGS
Highlights for the Quarter Ended September 30, 2005:
o Diluted EPS Growth: increased 38.9% compared to the quarter
ended September 30, 2004 with net income up 38.4% compared to
the quarter ended September 30, 2004
o Net Loans Receivable Growth: increased 19.1% since September
30, 2004
o Deposit Growth: increased 13.0% since September 30, 2004
o Net Interest Margin: 4.58% vs. 4.30% for the quarters ended
September 30, 2005 and 2004, respectively
o Improved Return on Average Tangible Equity: 16.1% vs. 13.0%
for the quarters ended September 30, 2005 and 2004,
respectively
CLARKSTON, WA - November 10, 2005 - FirstBank NW Corp. (the Company) (Nasdaq:
FBNW) today announced another quarter of strong financial results as a result of
continued successful execution of the business plan and risk management policies
and economic strength in its market areas. For the quarter ended September 30,
2005, the second quarter of its fiscal year, diluted earnings per share
increased 38.9% to $0.75 compared to $0.54 for the same quarter a year ago. Net
income for the quarter increased 38.4% to $2.3 million compared to $1.6 million
for the same quarter a year ago.
For the quarter ended September 30, 2005, the Company's return on average
tangible equity was 16.1% compared to 13.0% for the quarter ended September 30,
2004. Return on average tangible equity for the six months ended September 30,
2005 was 14.9% compared to 12.9% for the same period a year ago. The net
interest margin was higher for the quarter ended September 30, 2005, at 4.58%
compared to 4.30% in the quarter ended September 30, 2004.
LOAN GROWTH AND CREDIT QUALITY:
Net loans receivable increased 19.1% to $595.7 million at September 30, 2005
from $500.0 million at September 30, 2004. Net loans receivable decreased 1.2%
from $603.0 million at June 30, 2005 to $595.7 million at September 30, 2005,
which was primarily attributable to anticipated payoffs. Net loan growth for the
six months ended September 30, 2005 was $33.6 million, or 12.0% on an annualized
basis.
"While we continue to have good loan demand throughout our market area, fiscal
year to date loan growth was primarily driven by construction lending in the
Boise, Idaho market, and commercial real estate lending in the Boise and Coeur
d'Alene, Idaho and Spokane, Washington markets," said Clyde E. Conklin,
President and Chief Executive Officer.
The credit quality of the Company's loan portfolio remained strong with total
non-performing assets of $2.1 million, or 0.26% of total assets at September 30,
2005 compared to $2.3 million, or 0.32% of total assets at September 30, 2004.
This compares with non-performing assets at June 30, 2005 of $2.4 million, or
0.28% of total assets, and non-performing assets at fiscal year end March 31,
2005 of $2.8 million, or 0.35% of total assets. Net loan charge-offs for the
quarter ended September 30, 2005 were $57,000, compared to $20,000 for the
comparable quarter a year ago, and, on a sequential quarter basis, compared to
$151,000 for the quarter ended June 30, 2005, and $151,000 for the quarter ended
March 31, 2005.
The reserve for losses on loans and loan commitments at September 30, 2005
increased to 1.37% of net loans from 1.32% at September 30, 2004. The provision
for loan losses was $272,000 for the quarter ended September 30, 2005, an
increase of $78,000, or 40.2%, from $194,000 for the quarter ended September 30,
2004, and a decrease from $488,000 for the quarter ended March 31, 2005. The
increase in the provision for loan losses reflects the classified asset changes
within the portfolio during the quarter and the resulting allowance for loan and
lease losses adjustment, which is determined through the use of a formula by
management. Management believes the reserve is at an appropriate level
considering the credit quality of all loans, loan loss histories, and prevailing
economic conditions.
FUNDING:
Deposit balances as of September 30, 2005 increased 13.0% to $561.4 million from
$496.7 million at September 30, 2004. Deposit growth for the six months ended
September 30, 2005 was $42.7 million, or 16.5% on an annualized basis.
At September 30, 2005, total branch deposits were $519.3 million, consisting of
$321.1 million, or 61.8% in core deposits and $198.2 million, or 38.2% in time
deposits compared with the comparable period a year ago of $473.0 million in
total branch deposits, which consisted of $298.4 million, or 63.1% in core
deposits and $174.6 million, or 36.9% in time deposits. Brokered deposits at
September 30, 2005 totaled $42.1 million as compared to $23.7 million a year
ago, an increase of $18.4 million. Federal Home Loan Bank of Seattle (FHLB) and
other borrowings at September 30, 2005 totaled $160.6 million as compared to
$149.8 million a year ago, an increase of $10.8 million. "Branch deposit growth
with an emphasis on core deposit growth remains essential to long term funding
and earnings," noted Conklin.
FHLB and other borrowings at June 30, 2005 of $193.8 million was reduced by
$33.3 million during the quarter ended September 30, 2005 in connection with the
implementation of remote capture automation driven by the Federal Reserve's
"Check 21" regulation. "The change in cash flow as a result of the
implementation of "Check 21" has enhanced the Company's net interest margin,"
said Larry K. Moxley, Chief Financial Officer. "As a result of this regulation,
enhanced earnings will be partially offset by recurring Federal Reserve charges
for substitute checks."
NET INTEREST MARGIN AND INTEREST RATE RISK:
The Company's net interest margin was 4.58% for the quarter ended September 30,
2005 compared to 4.30% for the quarter ended September 30, 2004. The flattening
of the yield curve continues to pressure the net interest margin, however, the
interest rate sensitivity of the Company's assets has helped to offset the
pressure on the net interest margin from increases in the costs of deposits and
borrowed funds. Yields on earning assets increased by 29 basis points during the
current quarter to 7.11% compared to 6.82% for the quarter ended June 30, 2005.
Meanwhile, the average rates paid on total deposits and borrowed funds increased
19 basis points during the current quarter ended September 30, 2005 to 2.52%
compared to 2.33% for the quarter ended June 30, 2005. The yield curve continues
to fluctuate with the economy with the net interest margin remaining under
pressure. Attainment of branch deposit growth objectives as opposed to continued
reliance on high cost of FHLB borrowings is essential to maintenance of the net
interest margin.
NON-INTEREST INCOME AND EXPENSE:
Non-interest income was $1.8 million for the quarter ended September 30, 2005,
an increase of $338,000 from $1.4 million for the comparable period one year
ago. For the six months ended September 30, 2005, non-interest income increased
$277,000 from $3.1 million to $3.4 million. Non-interest income is driven by
gain on sales of loans and transaction account fees.
Non-interest expense for the quarter ended September 30, 2005 was $6.4 million,
an increase of 12.8% compared to $5.7 million for the quarter ended September
30, 2004. For the six months ended September 30, 2005, non-interest expense
increased $988,000 to $12.4 million from $11.4 million for the comparable period
in 2004. Non-interest expenses are expected to increase as the Company invests
in new branches and complies with increased regulatory and audit requirements.
The Company's efficiency ratio of 61.73% for the three months ended September
30, 2005 decreased from 67.34% one year ago. Non-interest expense to average
assets decreased to 3.07% for the three months ended September 30, 2005 from
3.12% one year ago, and is down to 2.98% for the six months ended September 30,
2005 compared to 3.17% for the same six month period last year.
CAPITAL:
At September 30, 2005, Tier 1 capital (leverage ratio based on average assets)
was $55.8 million, or 6.8%, and total risk capital (to risk-weighted assets) was
$66.0 million, or 11.4%. Risk capital includes $3.0 million in subordinated debt
by the Company's subsidiary, FirstBank Northwest, to US Bank.
BUSINESS STRATEGY:
FirstBank NW Corp. (headquartered in Clarkston, Washington) is the holding
company for FirstBank Northwest, a Washington state chartered savings bank
founded in 1920, and has a track record of consistent above-average growth and
improving profitability, operating in the rural markets of eastern Oregon,
eastern Washington and central Idaho, in addition to the larger and growing
markets of Boise and Coeur d'Alene, Idaho and Spokane, Washington. FirstBank
Northwest is focused on each community served, striving to deliver competitive
financial products and services through exceptional customer service standards,
local expertise and leadership. 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. FirstBank Northwest is known as the local community
bank, offering its customers highly personalized service in the many communities
it serves.
FORWARD LOOKING STATEMENTS:
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-K for the fiscal year ended March 31, 2005.
FIRSTBANK NW CORP
FINANCIAL HIGHLIGHTS
(unaudited) (in thousands except share and per share data)
Three Months Ended Six Months Ended
September 30, September 30,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Interest Income $ 12,998 $ 9,912 $ 25,138 $ 19,422
Interest Expense 4,765 3,193 9,093 6,175
Provision for Loan Losses 272 194 1,140 570
------------ ------------ ------------ ------------
Net Interest Income After Provision for
Loan Losses 7,961 6,525 14,905 12,677
------------ ------------ ------------ ------------
Non-Interest Income
Gain on Sale of Loans (1) 448 177 786 681
Service Fees and Charges 1,266 1,183 2,483 2,364
Commission and Other 52 68 154 101
------------ ------------ ------------ ------------
Total Non-Interest Income 1,766 1,428 3,423 3,146
------------ ------------ ------------ ------------
Non-Interest Expenses
Compensation and Related Expenses 3,729 3,424 7,368 6,842
Occupancy 763 715 1,469 1,459
Other 1,944 1,569 3,549 3,097
------------ ------------ ------------ ------------
Total Non-Interest Expenses 6,436 5,708 12,386 11,398
------------ ------------ ------------ ------------
Income Tax Expense 1,041 619 1,840 1,248
------------ ------------ ------------ ------------
Net Income $ 2,250 $ 1,626 $ 4,102 $ 3,177
============ ============ ============ ============
Basic Earnings per Share $ 0.77 $ 0.56 $ 1.40 $ 1.10
Diluted Earnings per Share $ 0.75 $ 0.54 $ 1.37 $ 1.06
Weighted Average Shares Outstanding- Basic 2,933,533 2,893,817 2,931,207 2,880,018
Weighted Average Shares Outstanding- Diluted 2,999,822 3,006,158 2,995,400 3,002,147
Actual Shares Issued 3,003,647 2,962,206 3,003,647 2,962,206
FINANCIAL STATISTICS
(ratios annualized) At September 30, At September 30,
2005 2004
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Total Assets $ 812,983 $ 735,277
Cash and Cash Equivalents $ 24,140 $ 31,040
Loans Receivable, net $ 595,743 $ 500,039
Loans Held for Sale $ 6,776 $ 4,496
Mortgage-Backed Securities $ 56,152 $ 68,217
Investment Securities $ 48,057 $ 49,164
Equity Securities, at cost $ 12,789 $ 12,737
Deposits $ 561,403 $ 496,724
FHLB Advances & Other Borrowings $ 160,554 $ 149,820
Stockholders' Equity $ 75,712 $ 70,169
Tangible Book Value per Share (2) $ 19.23 $ 17.33
Tangible Equity/ Total Tangible Assets 7.12% 7.00%
Number of full-time equivalent Employees (3) 269 259
Three Months Ended Six Months Ended
September 30, September 30,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Return on Average Assets 1.07% 0.89% 0.99% 0.88%
Return on Average Tangible Equity 16.06% 13.02% 14.89% 12.89%
Return on Average Equity 11.94% 9.23% 11.01% 9.07%
Average Equity/Average Assets 8.98% 9.62% 8.96% 9.75%
Efficiency Ratio (4) 61.73% 67.34% 60.95% 66.23%
Non-Interest Expenses / Average Assets 3.07% 3.12% 2.98% 3.17%
Net Interest Margin (5) 4.58% 4.30% 4.53% 4.36%
LOANS At September 30, 2005 At September 30, 2004
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(unaudited) (in thousands except share
and per share data)
LOAN PORTFOLIO ANALYSIS: Amount Percent Amount Percent
------------ ------------ ------------ ------------
Real Estate Loans:
Residential $ 116,292 19.18% $ 114,820 22.58%
Construction 92,486 15.26 50,409 9.92
Agricultural 20,824 3.43 19,387 3.81
Commercial 178,144 29.39 137,336 27.01
------------ ------------ ------------ ------------
Total Real Estate Loans 407,746 67.26 321,952 63.32
------------ ------------ ------------ ------------
Consumer and Other Loans:
Home Equity 40,901 6.75 33,331 6.55
Agricultural Operating 27,384 4.52 30,088 5.92
Commercial 88,258 14.56 81,604 16.05
Other Consumer 41,928 6.91 41,464 8.16
------------ ------------ ------------ ------------
Total Consumer and Other Loans 198,471 32.74 186,487 36.68
------------ ------------ ------------ ------------
Total Loans Receivable $ 606,217 100.00% $ 508,439 100.00%
============ ============ ============ ============
ALLOWANCE FOR LOAN LOSSES Six Months Ended Six Months Ended
September 30, 2005 September 30, 2004
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Balance at Beginning of Period $ 7,254 $ 6,314
Provision for Loan Losses 1,140 570
Charge Offs (Net of Recoveries) (208) (290)
------------ ------------
Balance at End of Period $ 8,186 $ 6,594
============ ============
Loan Loss Allowance / Net Loans 1.37% 1.32%
Loan Loss Allowance / Non-Performing Loans 713.69% 440.78%
NON-PERFORMING ASSETS
At September 30, 2005 At September 30, 2004
--------------------------- ---------------------------
Accruing Loans - 90 Days Past Due $ 0 $ 0
Non-accrual Loans 1,147 1,496
------------ ------------
Total Non-Performing Loans 1,147 1,496
Restructured Loans on Accrual 970 306
Real Estate Owned (REO) 0 493
Repossessed Assets 7 34
------------ ------------
Total Non-Performing Assets $ 2,124 $ 2,329
============ ============
Total Non-Performing Assets/Total Assets 0.26% 0.32%
Loan and REO Loss Allowance as a Percentage
of Non-Performing Assets 385.40% 283.13%
AVERAGE BALANCES Six Months Ended Six Months Ended
September 30, 2005 September 30, 2004
--------------------------- ---------------------------
Total Average Interest Earning Assets $ 746,643 $ 644,669
Total Average Assets 831,934 718,740
Average Deposits and Other Borrowed Funds 749,263 641,521
Average Total Tangible Equity 55,107 49,310
(1) Gain on sale of loans includes impairment of mortgage servicing rights of
$44 and $111 for the three months ended September 30, 2005 and 2004. Gain
on sale of loans includes (recovery) impairment of mortgage servicing
rights of $25 and ($23) for the six months ended September 30, 2005 and
2004.
(2) Calculation excludes unallocated shares in the employee stock ownership
plan (ESOP) September 30, 2005 -- 66,615 shares and September 30, 2004 --
74,971 shares.
(3) Number of full-time equivalent employees is the quarterly average.
(4) Calculation is non-interest expense divided by tax equivalent non-interest
income and tax equivalent net interest income.
(5) Calcualation is tax equivalent net interest income divided by total
interest-earning assets.