EXHIBIT 99.1
FIRST FOR
FEDERAL IMMEDIATE
BANCSHARES RELEASE
1401 Highway 62-65 North
P. O. Box 550
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 - January 26, 2004 - (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 $1,713,000 or $0.33 basic
earnings per share and $0.31 diluted earnings per share during
the fourth quarter of 2003 compared to net income of $1,964,000
or $0.38 basic earnings per share and $0.37 diluted earnings per
share during the fourth quarter of 2002. Earnings for the twelve
months ended December 31, 2003 amounted to $7,456,000 or $1.46
basic earnings per share and $1.38 diluted earnings per share
compared to earnings of $7,778,000 or $1.44 basic earnings per
share and $1.39 diluted earnings per share for the same period
ended December 31, 2002. Book value or stockholders' equity per
share, at December 31, 2003, was $14.06.
Larry J. Brandt, President/CEO for the Corporation said, "I am
very pleased to report we finished the year strong with a 62%
increase in our stock price at December 31, 2003 compared to
December 31, 2002. As a result of our excellent stock
performance during the year, we declared a two-for-one stock
split payable December 31, 2003. In addition, our basic earnings
per share for 2003 improved to $1.46 compared to last year's
basic earnings per share of $1.44. We also increased our cash
dividend by 30% for the year which further enhanced our
shareholders' value."
Total assets at December 31, 2003 amounted to $690.7 million,
total liabilities were $615.6 million and stockholders' equity
totaled $75.1 million or 10.9% 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 December 31, 2003 compared
to December 31, 2002, cash and cash equivalents increased $11.7
million or 26.3%, investment securities held to maturity
decreased $34.1 million or 29.8% and net loans receivable
increased $29.3 million or 6.1%. At December 31, 2003,
liabilities were $615.6 million compared to $610.6 million at
December 31, 2002. The $5.0 million or 0.8% increase was
primarily due to an increase of $4.8 million or 0.9% in deposits
and an increase in Federal Home Loan Bank ("FHLB") of Dallas
advances of $1.0 million or 2.5%. The funds available from the
proceeds of matured or called investment securities held to
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EXHIBIT 99.1
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
twelve month period ended December 31, 2003, due to net income in
the amount of $7.5 million resulting from continued profitable
operations, as well as the issuance of 145,768 shares of treasury
stock totaling $1.4 million as a result of the exercise of stock
options. Such increase was partially offset by the purchase of
190,400 shares of treasury stock totaling $2.8 million in
connection with the Corporation's stock repurchase program and,
to a lesser extent, the payment of quarterly cash dividends in
the amount of $1.8 million.
Non-performing assets, consisting of nonaccrual and restructured
loans and repossessed assets, amounted to $5.0 million or 0.72%
of total assets at December 31, 2003, compared to $7.3 million or
1.07% of total assets at December 31, 2002. At December 31,
2003, nonaccrual loans, restructured loans, and repossessed
assets amounted to $2.8 million, $1.4 million, and $839,000,
respectively, compared to $2.7 million, $4.2 million, and
$361,000, respectively, at December 31, 2002. The allowance for
loan losses amounted to $1.6 million at December 31, 2003 or .29%
of total loans. The allowance for loan losses amounted to $1.5
million at December 31, 2002 or 0.30% of total loans. The
allowance for loan losses includes $252,000 and $625,000 in
allowances allocated to specific loans as of December 31, 2003
and December 31, 2002, respectively.
Net interest income, the primary component of net income,
decreased from $5.9 million for the three months ended December
31, 2002 to $5.8 million for the comparable period in 2003 and
increased from $22.5 million to $22.8 million for the twelve
months ended December 31, 2002 and 2003, respectively. Net
interest margin for the three months and twelve months ended
December 31, 2003 was 3.59% and 3.52%, respectively, compared to
3.73% and 3.50%, respectively, for the same periods in 2002.
The provision for loan losses decreased $446,000 to $71,000 for
the three month period ended December 31, 2003 compared to
$517,000 for the three month period ended December 31, 2002 and
decreased $810,000 to $690,000 for the twelve month period ended
December 31, 2003 compared to $1,500,000 for the twelve month
period ended December 31, 2002. The decrease in the provision
for loan losses for the twelve month period ended December 31,
2003, compared to the same period in 2002, was due primarily to a
significant provision in 2002 resulting from a charge-off on a
commercial real estate loan of approximately $415,000, as well as
a decrease in 2003 of approximately $440,000 in the loss
allowance allocated to a specific commercial loan relationship.
Noninterest income decreased $37,000 or 2.5% to $1.4 million for
the three month period ended December 31, 2003 compared to $1.5
million for the three months ended December 31, 2002 primarily
due to a decrease in profit on sale of mortgage loans in the
secondary market which was partially offset by an increase in
deposit fee income. Non-interest income increased $1.6 million
or 30.7% to $7.0 million for the twelve month period ended
December 31, 2003 compared to $5.3 million for the twelve months
ended December 31, 2002 primarily due to an increase in profit on
sale of mortgage loans in the secondary market and the
corresponding recognition of fees related to such loans, an
increase in deposit fee income and the appreciation in value
recognized on the contribution of the office building formerly
occupied by the Bank's lending operations.
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EXHIBIT 99.1
Noninterest expenses increased $768,000 or 19.6% between the 2002
and 2003 three month periods ended December 31 and increased $3.7
million or 25.7% between the 2002 and 2003 twelve month periods
ended December 31. Such increases were primarily due to an
increase in salaries and employee benefits and net occupancy
expense. In addition, the increase between the twelve month
periods was due to an increase in contributions as a result of
the donation of the building discussed above.
First Federal Bank is a community bank serving consumers and
businesses with a full range of checking, savings, investment and
loan products and services. The Bank, in its 70th year, conducts
business from 15 full-service branch locations, one stand-alone
loan production office, and 24 ATMS located in northcentral and
northwest Arkansas. The Bank recently opened another office in
Bentonville, Arkansas, one of the fastest growing areas of the
country. For information on all the products and services we
offer, visit us at www.ffbh.com or contact our Account
Information Center at (870) 365-8329 or (866) AIC-FFBH toll free
or by email at aic@ffbh.com.
Financial Tables Attached
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EXHIBIT 99.1
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands of dollars)
(Unaudited)
December 31, December 31,
ASSETS 2003 2002
____________ ____________
Cash and cash equivalents $ 56,201 $ 44,493
Investment securities held to maturity 80,379 114,471
Federal Home Loan Bank stock 3,749 5,064
Loans receivable, net of allowances 512,756 483,468
Accrued interest receivable 4,089 4,380
Real estate acquired in settlementof loans, net 822 320
Office properties and equipment, net 14,238 10,690
Prepaid expenses and other assets 18,419 17,010
_______ _______
TOTAL ASSETS $690,653 $679,896
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $573,580 $568,762
Federal Home Loan Bank advances 39,562 38,610
Advance payments by borrowers for
taxes and insurance 725 760
Other liabilities 1,708 2,498
_______ _______
Total liabilities 615,575 610,630
TOTAL STOCKHOLDERS' EQUITY 75,078 69,266
_______ _______
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $690,653 $679,896
======= =======
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EXHIBIT 99.1
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND RELATED SELECTED OPERATING DATA
(In thousands of dollars, except earnings per share)
(Unaudited)
Three Months Ended Twelve Months Ended
__________________ ___________________
Dec. 31, Dec. 31,
________ ________
2003 2002 2003 2002
______ ______ ______ ______
Interest income $ 9,464 $10,678 $38,745 $44,094
Interest expense 3,681 4,758 15,986 21,633
_____ ______ ______ ______
Net interest income 5,783 5,920 22,759 22,461
Provision for loan losses 71 517 690 1,500
_____ ______ ______ ______
Net interest income after
provision for loan losses 5,712 5,403 22,069 20,961
Noninterest income 1,440 1,477 6,989 5,346
Noninterest expenses 4,689 3,921 18,263 14,524
_____ ______ ______ ______
Income before income taxes 2,463 2,959 10,795 11,783
Income tax provision 750 995 3,339 4,005
_____ ______ ______ ______
Net income $1,713 $ 1,964 $ 7,456 $ 7,778
===== ====== ====== ======
Earnings Per Share:
Basic $0.33 $0.38 $1.46 $1.44
==== ==== ==== ====
Diluted $0.31 $0.37 $1.38 $1.39
==== ==== ==== ====
Selected Operating Data (Quarter
________________________________
Annualized):
____________
Interest rate spread 3.48% 3.56% 3.40% 3.30%
Net interest margin 3.59% 3.73% 3.52% 3.50%
Return on average assets .99% 1.16% 1.08% 1.14%
Noninterest expenses to average assets 2.72% 2.32% 2.64% 2.14%
Return on average equity 9.16% 11.33% 10.25% 11.01%
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