EXHIBIT 99.1
Press Release FirstBank NW Corp. (FBNW)
Company Release - 02/10/06
________________________________________________________________________________
FIRSTBANK NW CORP. REPORTS RECORD THIRD QUARTER EARNINGS
Highlights for the Quarter Ended December 31, 2005:
o Diluted EPS Growth: increased 38.5% compared to the quarter
ended December 31, 2004, with net income up 41.9% compared to
the quarter ended December 31, 2004
o Net Loans Receivable Growth: increased 15.2% since December
31, 2004
o Deposit Growth: increased 12.9% since December 31, 2004
o Net Interest Margin: 4.63% vs. 4.40% for the quarters ended
December 31, 2005 and 2004, respectively
o Return on Average Tangible Equity: 15.0% vs. 11.9% for the
quarters ended December 31, 2005 and 2004, respectively
CLARKSTON, WA - February 10, 2006 - FirstBank NW Corp. (the Company) (Nasdaq:
FBNW) today announced another quarter of strong financial results as a result of
the continued successful execution of its business plan and risk management
policies, and the continued economic strength in its market areas. For the
quarter ended December 31, 2005, the third quarter of its fiscal year, diluted
earnings per share increased 38.5% to $0.36 compared to $0.26 for the same
quarter a year ago. Net income for the quarter increased 41.9% to $2.2 million
compared to $1.5 million for the same quarter a year ago.
For the quarter ended December 31, 2005, the Company's return on average
tangible equity was 15.0% compared to 11.9% for the quarter ended December 31,
2004. Return on average tangible equity for the nine months ended December 31,
2005 was 14.9% compared to 12.6% for the same period a year ago. The net
interest margin was higher for the quarter ended December 31, 2005, at 4.63%
compared to 4.40% in the quarter ended December 31, 2004.
On January 4, 2006, FirstBank NW Corp. announced that its Board of Directors
declared a two-for-one stock split in the form of a 100% per share stock
dividend on the Company's outstanding common stock. The stock dividend was paid
on February 9, 2006. Each shareholder of record as of the close of business on
January 26, 2006 received one additional share for every share owned on that
date. The outstanding shares, weighted average shares outstanding, and earnings
per share have been adjusted to reflect this two-for-one stock split in the form
of a 100% per share stock dividend announced on January 4, 2006.
LOAN GROWTH AND CREDIT QUALITY:
Net loans receivable increased 15.2% to $611.1 million at December 31, 2005 from
$530.4 million at December 31, 2004. Net loan growth for the nine months ended
December 31, 2005 was $49.0 million, or 11.6% 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 $2.5 million, or 0.30% of total assets at December 31,
2005, compared to $2.3 million, or 0.30% of total assets at December 31, 2004.
This compares with non-performing assets at fiscal year end March 31, 2005 of
$2.8 million, or 0.35% of total assets. Net loan charge offs to average
outstanding loans for the nine months ended December 31, 2005 were 0.05%
compared to 0.09% for the nine months ended December 31, 2004.
The reserve for losses on loans and loan commitments at December 31, 2005
increased to 1.39% of net loans from 1.30% at December 31, 2004. The provision
for loan losses was $422,000 for the quarter ended December 31, 2005; a decrease
from $470,000 for the quarter ended December 31, 2004; and a decrease from
$488,000 for the quarter ended March 31, 2005. 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 December 31, 2005 increased 12.9% to $553.5 million from
$490.1 million at December 31, 2004. Deposit growth for the nine months ended
December 31, 2005 was $34.8 million, or 8.9% on an annualized basis.
At December 31, 2005, total branch deposits were $508.8 million, consisting of
$303.4 million, or 59.6% in core deposits and $205.4 million, or 40.4% in time
deposits compared with the comparable period a year ago of $460.4 million in
total branch deposits, which consisted of $285.5 million, or 62.0% in core
deposits and $174.9 million, or 38.0% in time deposits. Brokered deposits at
December 31, 2005 totaled $44.7 million as compared to $29.7 million a year ago,
an increase of $15.0 million. Advances from the Federal Home Loan Bank of
Seattle (FHLB) and other borrowings at December 31, 2005 totaled $180.0 million
as compared to $186.6 million a year ago, a decrease of $6.6 million. "Branch
deposit growth with an emphasis on core deposit growth remains essential to long
term funding and earnings," noted Conklin.
NET INTEREST MARGIN AND INTEREST RATE RISK:
The Company's net interest margin was 4.63% for the quarter ended December 31,
2005 compared to 4.40% for the quarter ended December 31, 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 15 basis points during the
current quarter to 7.26% compared to 7.11% for the quarter ended September 30,
2005. Meanwhile, the average rates paid on total deposits and borrowed funds
increased 16 basis points during the quarter ended December 31, 2005 to 2.68%
compared to 2.52% for the quarter ended September 30, 2005. 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 December 31, 2005, an
increase of $363,000 from $1.4 million for the comparable period one year ago.
For the nine months ended December 31, 2005, non-interest income increased
$640,000 to $5.2 million from $4.6 million for the nine months ended December
31, 2004. Non-interest income is driven by gain on sales of loans and
transaction account fees.
Non-interest expense for the quarter ended December 31, 2005 was $6.6 million,
an increase of 11.1% from $5.9 million for the quarter ended December 31, 2004.
For the nine months ended December 31, 2005, non-interest expense increased $1.6
million to $18.9 million from $17.3 million for the comparable period in 2004.
Non-interest expense to average assets increased to 3.18% for the three months
ended December 31, 2005 from 3.15% one year ago, and is down to 3.04% for the
nine months ended December 31, 2005 compared to 3.16% for the same nine month
period last year. The Company's efficiency ratio of 62.04% for the three months
ended December 31, 2005 improved from 67.05% one year ago. Non-interest expenses
are expected to increase as the Company invests in new branches, additional
staffing, and complies with increased regulatory and audit requirements. Conklin
noted, "the importance of disciplined review of resources and expenditures in
relation to profitability contribution is essential on an ongoing basis."
CAPITAL:
At December 31, 2005, the Bank's Tier 1 capital (leverage ratio based on average
assets) was $58.3 million, or 7.3%, and total risk capital (to risk-weighted
assets) was $68.8 million, or 11.6%. 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 Nine Months Ended
December 31, December 31,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Interest Income $ 13,287 $ 10,369 $ 38,425 $ 29,791
Interest Expense 4,963 3,366 14,056 9,541
Provision for Loan Losses 422 470 1,562 1,040
------------ ------------ ------------ ------------
Net Interest Income After Provision for
Loan Losses 7,902 6,533 22,807 19,210
------------ ------------ ------------ ------------
Non-Interest Income
Gain on Sale of Loans (1) 543 260 1,329 941
Service Fees and Charges 1,191 1,130 3,674 3,494
Commission and Other 60 41 214 142
------------ ------------ ------------ ------------
Total Non-Interest Income 1,794 1,431 5,217 4,577
------------ ------------ ------------ ------------
Non-Interest Expense
Compensation and Related Expenses 3,757 3,680 11,125 10,522
Occupancy 720 668 2,189 2,127
Other 2,075 1,548 5,624 4,645
------------ ------------ ------------ ------------
Total Non-Interest Expense 6,552 5,896 18,938 17,294
------------ ------------ ------------ ------------
Income Tax Expense 978 542 2,818 1,789
------------ ------------ ------------ ------------
Net Income $ 2,166 $ 1,526 $ 6,268 $ 4,704
============ ============ ============ ============
Basic Earnings per Share (6) $ 0.37 $ 0.26 $ 1.07 $ 0.81
Diluted Earnings per Share (6) $ 0.36 $ 0.26 $ 1.04 $ 0.78
Weighted Average Shares Outstanding- Basic (6) 5,877,524 5,809,438 5,867,469 5,776,562
Weighted Average Shares Outstanding- Diluted (6) 6,016,034 5,968,888 5,999,569 5,994,290
Actual Shares Issued (6) 6,014,494 5,978,524 6,014,494 5,978,524
FINANCIAL STATISTICS
(ratios annualized)
At December 31, 2005 At December 31, 2004
--------------------------- ---------------------------
Total Assets $ 824,859 $ 769,570
Cash and Cash Equivalents $ 23,661 $ 40,378
Loans Receivable, net $ 611,051 $ 530,447
Loans Held for Sale $ 5,712 $ 3,377
Mortgage-Backed Securities $ 53,718 $ 64,988
Investment Securities $ 48,459 $ 48,517
Equity Securities, at cost $ 12,789 $ 12,810
Deposits $ 553,461 $ 490,092
FHLB Advances & Other Borrowings $ 179,992 $ 186,577
Stockholders' Equity $ 77,291 $ 71,418
Tangible Book Value per Share (2) (6) $ 9.90 $ 8.85
Tangible Equity/ Total Tangible Assets 7.23% 6.89%
Number of full-time equivalent Employees (3) 274 270
Three Months Ended Nine Months Ended
December 31, December 31,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Return on Average Assets 1.05% 0.81% 1.01% 0.86%
Return on Average Tangible Equity 14.96% 11.91% 14.91% 12.55%
Return on Average Equity 11.24% 8.57% 11.09% 8.90%
Average Equity/Average Assets 9.34% 9.49% 9.09% 9.66%
Efficiency Ratio (4) 62.04% 67.05% 61.32% 66.50%
Non-Interest Expenses / Average Assets 3.18% 3.15% 3.04% 3.16%
Net Interest Margin (5) 4.63% 4.40% 4.56% 4.38%
LOANS
(unaudited)
(in thousands except share and per share data)
At December 31, 2005 At December 31, 2004
--------------------------- ---------------------------
LOAN PORTFOLIO ANALYSIS: Amount Percent Amount Percent
------------ ------------ ------------ ------------
Real Estate Loans:
Residential $ 117,800 18.94% $ 116,026 21.50%
Construction 100,101 16.09 58,518 10.85
Agricultural 19,301 3.10 19,453 3.61
Commercial 190,584 30.64 155,340 28.79
------------ ------------ ------------ ------------
Total Real Estate Loans 427,786 68.77 349,337 64.75
------------ ------------ ------------ ------------
Consumer and Other Loans:
Home Equity 41,008 6.59 36,235 6.71
Agricultural Operating 25,615 4.12 26,039 4.82
Commercial 86,973 13.98 87,943 16.30
Other Consumer 40,689 6.54 40,027 7.42
------------ ------------ ------------ ------------
Total Consumer and Other Loans 194,285 31.23 190,244 35.25
------------ ------------ ------------ ------------
Total Loans Receivable $ 622,071 100.00% $ 539,581 100.00%
============ ============ ============ ============
ALLOWANCE FOR LOAN LOSSES Nine Months Ended Nine Months Ended
December 31, 2005 December 31, 2004
--------------------------- ---------------------------
Balance at Beginning of Period $ 7,254 $ 6,314
Provision for Loan Losses 1,562 1,040
Charge Offs (Net of Recoveries) (297) (437)
------------ ------------
Balance at End of Period $ 8,519 $ 6,917
============ ============
Loan Loss Allowance / Net Loans 1.39% 1.30%
Loan Loss Allowance / Non-Performing Loans 549.61% 552.92%
NON-PERFORMING ASSETS
At December 31, 2005 At December 31, 2004
--------------------------- ---------------------------
Accruing Loans - 90 Days Past Due $ 0 $ 0
Non-accrual Loans 1,550 1,251
------------ ------------
Total Non-Performing Loans 1,550 1,251
Restructured Loans on Accrual 895 555
Real Estate Owned (REO) 0 410
Repossessed Assets 35 60
------------ ------------
Total Non-Performing Assets $ 2,480 $ 2,276
============ ============
Total Non-Performing Assets/Total Assets 0.30% 0.30%
Loan and REO Loss Allowance as a Percentage
of Non-Performing Assets 343.51% 303.91%
AVERAGE BALANCES Nine Months Ended Nine Months Ended
December 31, 2005 December 31, 2004
--------------------------- ---------------------------
Total Average Interest Earning Assets $ 750,005 $ 652,741
Total Average Assets 829,660 729,141
Average Deposits and Other Borrowed Funds 746,066 651,525
Average Total Tangible Equity 56,047 49,961
(1) Gain on sale of loans includes (recovery) impairment of mortgage servicing
rights of ($69) and ($44) for the three months ended December 31, 2005 and
2004, respectively. Gain on sale of loans includes (recovery) impairment of
mortgage servicing rights of ($44) and ($67) for the nine months ended
December 31, 2005 and 2004, respectively.
(2) Calculation excludes unallocated shares in the employee stock ownership
plan (ESOP) December 31, 2005 -- 129,052 shares and December 31, 2004 --
145,764 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) Calculation is tax equivalent net interest income divided by total
interest-earning assets.
(6) The outstanding shares, weighted average shares outstanding, and earnings
per share have been adjusted to reflect the two-for-one stock split in the
form of a 100% per share stock dividend announced on January 4, 2006.