EXHIBIT 99.1
FIRST FOR
FEDERAL==============================================================IMMEDIATE
BANCSHARES RELEASE
P. O. Box 550
200 West Stephenson
Harrison, AR 72601 FOR FURTHER INFORMATION CONTACT:
Larry J. Brandt/President-CEO
Tommy Richardson/EVP-COO
Sherri Billings/EVP-CFO
870-741-7641
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
ANNOUNCES EARNINGS
Harrison, Arkansas - April 30, 2003 - (NASDAQ NMS:FFBH) First Federal
Bancshares of Arkansas, Inc. (the "Corporation"), a unitary savings and loan
holding company for First Federal Bank of Arkansas, FA (the "Bank") announced
today that the Corporation's net income amounted to $1,984,000 or $0.78 basic
earnings per share and $0.75 diluted earnings per share during the first
quarter of 2003 compared to net income of $1,756,000 or $0.61 basic earnings
per share and $0.60 diluted earnings per share during the first quarter of
2002. Book value, or stockholders' equity per share, at March 31, 2003, was
$26.40.
Larry J. Brandt, President/CEO for the Corporation said, "We are pleased to
report $0.75 diluted earnings per share for the first quarter of this year, a
25% improvement over the $0.60 diluted earnings per share for the first
quarter of 2002. Our net income of $1.98 million is a 13% improvement over
first quarter 2002 earnings of $1.76 million. The improvement in our net
interest margin from 3.21% for first quarter 2002 to 3.55% for first quarter
2003 and a 20% increase in noninterest income were two significant factors
contributing to our increase in net income for this quarter. During this
quarter, we enhanced shareholder value by increasing our quarterly dividend
by 14.3% to $0.16 per share. The construction of our new Northtown corporate
office is on schedule for a June 2nd opening. In addition, we will plan to
open our fourth office in Benton County during the first week of July."
Total assets at March 31, 2003 amounted to $696.2 million, total liabilities
were $625.8 million and stockholders' equity totaled $70.4 million or 10.1% of
total assets. This compares with total assets of $679.9 million, total
liabilities of $610.6 million and stockholders' equity of $69.3 million or
10.2% of total assets at December 31, 2002. At March 31, 2003 compared to
December 31, 2002, cash and cash equivalents increased $28.1 million or
63.1%, investment securities held to maturity decreased $17.9 million or
15.6%, and net loans receivable increased $4.0 million or 0.8%. At March 31,
2003, liabilities were $625.8 million compared to $610.6 million at December
31, 2002. The $15.1 million or 2.5% increase was primarily due to an increase
of $6.8 million or 1.2% in deposits and an increase in Federal Home Loan Bank
("FHLB") of Dallas advances of $5.6 million or 14.4%. The funds available
from the proceeds of matured or called investment securities held to maturity
and the
increase in deposits and FHLB advances were temporarily invested in cash and
cash equivalents and used to fund loan growth. Stockholders' equity increased
during the three month period ended March 31, 2003 primarily due to net income
in the amount of $2.0 million for the three month period resulting from
continued profitable operations and due to the issuance of 24,884 shares of
treasury stock totaling $489,000 as a result of the exercise of stock options.
Such increase was partially offset by the purchase of 46,500 shares of
treasury stock totaling $1.2 million in connection with the Corporation's
stock repurchase program and, to a lesser extent, due to the payment of
quarterly cash dividends in the amount of $427,000.
Nonperforming assets, consisting of nonaccrual and restructured loans and
repossessed assets, amounted to $8.0 million or 1.15% of total assets at March
31, 2003, compared to $7.3 million or 1.07% of total assets at December 31,
2002. At March 31, 2003, nonaccrual loans, restructured loans, and
repossessed assets amounted to $3.1 million, $4.2 million, and $686,000,
respectively compared to $2.7 million, $4.2 million, and $361,000,
respectively, at December 31, 2002. The allowance for loan losses amounted
to $1.7 million at March 31, 2003 or 0.32% of total loans. The allowance for
loan losses amounted to $1.5 million at December 31, 2002 or 0.30% of total
loans.
Net interest income, the primary component of net income, increased from $5.2
million to $5.7 million for the three months ended March 31, 2002 and 2003,
respectively. Net interest margin for the three months ended March 31, 2003
was 3.55% compared to 3.21% for the same period in 2002. In addition,
interest rate spread for the three months ended March 31, 2003 was 3.41%
compared to 2.96% for the same period in 2002.
Noninterest income increased $255,000 or 19.8% to $1,542,000 for the three
month period ended March 31, 2003 compared to $1,287,000 for the three months
ended March 31, 2002. The increase in noninterest income for the three months
ended March 31, 2003 compared to the three months ended March 31, 2002 was
primarily due to an increase in the gain on sale of mortgage loans in the
secondary mortgage market and the recognition of additional fees related to
such loans.
Noninterest expenses increased $616,000 or 18.0% between the 2003 and 2002
three month periods ended March 31. Such increase for the three month
comparable periods was primarily due to an increase in salaries and employee
benefits expense, net occupancy expense, advertising and public relations
expense, and data processing expense.
During the first quarter of 2003, the Bank promoted checking accounts. The
Bank offers a wide variety of checking accounts that allow people to choose
the right account to fit their needs. Our checking accounts have many
features including OnLine Banking, 24/7 Telephone Banking, Bounce Protection,
FREE Visa Check Card, Combined Statements and FREE Financial Analysis by
PrimeVest Financial Service, Inc. For information on our products and
services, visit us at www.ffbh.com or call our Account Information Center at
(870) 365-8329 or (866) AIC-FFBH toll free or by email at aic@ffbh.com. The
Bank, in its 69th year, conducts business from 16 offices in Northcentral and
Northwest Arkansas.
Financial Tables Attached
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands of dollars)
March 31, December 31,
ASSETS 2003 2002
--------- ------------
(Unaudited)
Cash and cash equivalents $ 72,547 $ 44,493
Investment securities - held to maturity 96,595 114,471
Federal Home Loan Bank stock 5,095 5,064
Loans receivable, net of allowances 487,481 483,468
Accrued interest receivable 4,128 4,380
Real estate acquired in settlement of loans, net 618 320
Office properties and equipment, net 12,633 10,690
Prepaid expenses and other assets 17,057 17,010
------ ------
TOTAL ASSETS $696,154 $679,896
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $575,543 $568,762
Federal Home Loan Bank advances 44,184 38,610
Advance payments by borrowers for
taxes and insurance 827 760
Other liabilities 5,214 2,498
------- -------
Total liabilities 625,768 610,630
TOTAL STOCKHOLDERS' EQUITY 70,386 69,266
TOTAL LIABILITIES AND ------- -------
STOCKHOLDERS' EQUITY $696,154 $679,896
======= =======
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND RELATED SELECTED OPERATING DATA
(In thousands of dollars, except earnings per share)
Three Months Ended March 31,
----------------------------
2003 2002
-------------- ------------
(Unaudited) (Unaudited)
Interest income $10,091 $11,204
Interest expense 4,388 6,046
------ ------
Net interest income 5,703 5,158
Provision for loan losses 279 362
------ ------
Net interest income after
provision for loan losses 5,424 4,796
Noninterest income 1,542 1,287
Noninterest expense 4,033 3,417
------ ------
Income before income taxes 2,933 2,666
Income tax provision 949 910
------ ------
Net income $ 1,984 $ 1,756
===== =====
Earnings Per Share:
Basic $0.78 $0.61
==== ====
Diluted $0.75 $0.60
==== ====
Selected Operating Data (Annualized):
------------------------------------
Interest rate spread 3.41% 2.96%
Net interest margin 3.55% 3.21%
Return on average assets 1.16% 1.03%
Noninterest expenses to average assets 2.36% 2.01%
Return on average equity 11.24% 9.73%