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 - April 28, 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 $1,760,000 or $0.34 basic
earnings per share and $0.32 diluted earnings per share during
the first quarter of 2004 compared to net income of $1,984,000 or
$0.39 basic earnings per share and $0.38 diluted earnings per
share during the first quarter of 2003. The decrease of $224,000
or 11.3% was primarily due to an increase in noninterest
expenses. Book value or stockholders' equity per share, at
March 31, 2004, was $14.22.
Larry J. Brandt, President/CEO for the Corporation said, "We
continued to add to shareholder value this quarter by increasing
our cash dividend one cent per share for an 11.1% increase
compared to the previous quarter (split-adjusted). Our strong
capital base and continued profitability enabled us to pay our
29th consecutive quarterly dividend. We were successful in
continuing to grow our loan portfolio during the quarter, as
evidenced by the increase of over $21 million in net loans
receivable which represents an annualized increase of 16.8%.
Loan production was a factor in our net interest margin improving
to 3.61% and for our return on assets exceeding 1%. During this
quarter, we also received regulatory approval for our third
office in Mountain Home near the Wal-Mart Supercenter. We
continue to look for opportunities for growth and expansion in
Northwest Arkansas."
Total assets at March 31, 2004 amounted to $697.3 million, total
liabilities were $621.7 million and stockholders' equity totaled
$75.6 million or 10.8% of total assets. This compares with total
assets of $690.7 million, total liabilities of $615.6 million and
stockholders' equity of $75.1 million or 10.9% of total assets at
December 31, 2003. At March 31, 2004 compared to December 31,
2003, cash and cash equivalents decreased $23.6 million or 42.0%,
investment securities held to maturity increased $8.3 million or
10.3% and net loans receivable increased $21.6 million or 4.2%.
At March 31, 2004, liabilities were $621.7 million compared to
$615.6 million at December 31, 2003. The $6.1 million or 1.0%
increase was primarily due to an increase of $7.3 million or 1.3%
in deposits which was partially offset by a decrease in Federal
Home Loan Bank ("FHLB") of Dallas advances of $2.1
1
million or 5.2%. Cash and cash equivalents and the funds available
from the increase in deposits were used to fund loan growth, to
invest in investment securities held to maturity, and pay down FHLB
of Dallas advances. Stockholders' equity increased during the
three month period ended March 31, 2004, due to net income in the
amount of $1.8 million resulting from continued profitable
operations, as well as the issuance of 74,170 shares of treasury
stock totaling $745,000 as a result of the exercise of stock
options. Such increase was partially offset by the purchase of
99,000 shares of treasury stock totaling $2.0 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 $532,000.
Non-performing assets, consisting of nonaccrual and restructured
loans and repossessed assets, amounted to $4.2 million or 0.60%
of total assets at March 31, 2004, compared to $4.5 million or
0.65% of total assets at December 31, 2003. The allowance for
loan losses amounted to $1.7 million at March 31, 2004 or 0.29%
of total loans and $1.6 million at December 31, 2003 or 0.29% of
total loans. As of March 31, 2004, the allowance for loan losses
included $298,000 allocated to specific loans.
Net interest income, the primary component of net income,
increased from $5.7 million for the three months ended March 31,
2003 to $5.9 million for the comparable period in 2004. Net
interest margin for the three months ended March 31, 2004 was
3.61% compared to 3.55% for the same period in 2003.
The provision for loan losses decreased $20,000 to $259,000 for
the three month period ended March 31, 2004 compared to $279,000
for the three month period ended March 31, 2003.
Noninterest income decreased $110,000 or 7.1% to $1.4 million for
the three month period ended March 31, 2004 compared to $1.5
million for the three months ended March 31, 2003 primarily due
to a decrease in profit on sale of mortgage loans in the
secondary market. This decrease was partially offset by an
increase in deposit fee income.
Noninterest expenses increased $441,000 or 10.9% between the 2003
and 2004 three month periods ended March 31. Such increase was
primarily due to an increase in salaries and employee benefits
and net occupancy expense.
First Federal Bank is a community bank serving consumers and
businesses with a full range of checking, savings, investment and
loan products and services. In April, the Bank began a new
program to aggressively promote its checking products through
direct mail, merchandising, and referrals. This program is
expected to have a significant impact on new checking business.
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. 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
2
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands of dollars)
(Unaudited)
March 31, December 31,
ASSETS 2004 2003
--------- ------------
Cash and cash equivalents $32,573 $56,201
Investment securities held to maturity 88,661 80,379
Federal Home Loan Bank stock 3,763 3,749
Loans receivable, net of allowances 534,353 512,756
Accrued interest receivable 4,324 4,089
Real estate acquired in settlement of loans, net 597 822
Office properties and equipment, net 14,720 14,238
Cash surrender value of life insurance 17,313 17,102
Prepaid expenses and other assets 980 1,317
------- -------
TOTAL ASSETS $697,284 $690,653
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $580,847 $573,580
Federal Home Loan Bank advances 37,490 39,562
Advance payments by borrowers for
taxes and insurance 887 725
Other liabilities 2,478 1,708
Total liabilities 621,702 615,575
------- -------
TOTAL STOCKHOLDERS' EQUITY 75,582 75,078
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $697,284 $690,653
======= =======
3
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
March. 31,
------------------------
2004 2003
----- ------
Interest income $ 9,380 $ 10,091
Interest expense 3,506 4,388
----- ------
Net interest income 5,874 5,703
Provision for loan losses 259 279
----- ------
Net interest income after
provision for loan losses 5,615 5,424
Noninterest income 1,432 1,542
Noninterest expenses 4,474 4,033
----- -----
Income before income taxes 2,573 2,933
Income tax provision 813 949
----- -----
Net income $ 1,760 $ 1,984
===== =====
Earnings Per Share:
Basic $ 0.34 $ 0.39
==== ====
Diluted $ 0.32 $ 0.38
==== ====
Selected Operating Data (Quarter Annualized):
--------------------------------------------
Interest rate spread 3.50% 3.41%
Net interest margin 3.61% 3.55%
Return on average assets 1.01% 1.16%
Noninterest expenses to average assets 2.57% 2.36%
Return on average equity 9.33% 11.24%