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 - July 29, 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 $1,931,000 or $0.38 basic earnings per share and $0.36 diluted
earnings per share during the second quarter of 2004 compared to net
income of $1,887,000 or $0.37 basic earnings per share and $0.35
diluted earnings per share during the second quarter of 2003.
Earnings for the six months ended June 30, 2004 amounted to
$3,691,000 or $0.72 basic earnings per share and $0.68 diluted
earnings per share compared to earnings of $3,871,000 or $0.76 basic
earnings per share and $0.73 diluted earnings per share for the same
period ended June 30, 2003. Book value or stockholders' equity per
share, at June 30, 2004, was $14.35.
Larry J. Brandt, President/CEO for the Corporation said, "We are
pleased to report our assets have grown to $713 million. This growth
is the result of the outstanding growth in our loan portfolio for the
year as evidenced by the increase of approximately $66 million in net
loans receivable which represents an annualized increase of 25.7%.
Loan production continues to be the primary factor in the improvement
of our net interest margin which increased to 3.84% for the quarter
ended June 30, 2004. We are also pleased with the return on average
assets and return on average equity of 1.10% and 10.21%,
respectively, for the quarter ended June 30, 2004.
Total assets at June 30, 2004 amounted to $712.6 million, total
liabilities were $638.1 million and stockholders' equity totaled
$74.6 million or 10.5% 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 June 30, 2004 compared to December 31, 2003,
cash and cash equivalents decreased $40.7 million or 72.4%,
investment securities held to maturity decreased $3.0 million or 3.7%
and net loans receivable increased $65.9 million or 12.9%. At June
30, 2004, liabilities were $638.1 million compared to $615.6 million
at December 31, 2003. The $22.5 million or 3.7% increase was
primarily due to an increase of $8.1 million or 1.4% in deposits and
an increase in Federal Home Loan Bank ("FHLB") of Dallas advances of
$13.9 million or 35.2%. Cash and cash equivalents,
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funds available from the proceeds of matured or called investment
securities held to maturity, and the increases in deposits and FHLB
advances were used to fund loan growth. Stockholders' equity decreased
during the six month period ended June 30, 2004 primarily due to the
purchase of 256,700 shares of treasury stock totaling $5.2 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
$1.1 million. Such decrease was partially offset by net income in the
amount of $3.7 million resulting from continued profitable operations
as well as the issuance of 112,096 shares of treasury stock totaling
$1.1 million as a result of the exercise of stock options.
Nonperforming assets, consisting of nonaccrual loans, nonperforming
restructured loans and repossessed assets, amounted to $3.5 million
or 0.48% of total assets at June 30, 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 June 30, 2004 or 0.27% of
total loans and $1.6 million at December 31, 2003 or 0.29% of total
loans.
Net interest income, the primary component of net income, increased
from $5.6 million and $11.3 million for the three and six months
ended June 30, 2003, respectively, to $6.3 million and $12.2 million
for the comparable periods in 2004. Net interest margin for the
three months and six months ended June 30, 2004 was 3.84% and 3.73%,
respectively, compared to 3.45% and 3.50%, respectively, for the same
periods in 2003.
The provision for loan losses increased $66,000 to $202,000 for the
three month period ended June 30, 2004 compared to $136,000 for the
three month period ended June 30, 2003 and increased $46,000 to
$461,000 for the six month period ended June 30, 2004 compared to
$415,000 for the six month period ended June 30, 2003.
Noninterest income decreased $560,000 or 26.1% to $1.6 million for
the three month period ended June 30, 2004 compared to $2.1 million
for the three months ended June 30, 2003 and decreased $672,000 or
18.2% to $3.0 million for the six month period ended June 30, 2004
compared to $3.7 million for the six months ended June 30, 2003. The
decrease in noninterest income for the three months and six months
ended June 30, 2004 compared to the three months and six months ended
June 30, 2003 was primarily due to a decrease in profit on sale of
mortgage loans in the secondary market and the corresponding
recognition of fees related to such loans and the appreciation in
value recognized in the second quarter of 2003 on the contribution of
the office building formerly occupied by the Bank's lending
operations. This decrease was partially offset by an increase in
deposit fee income.
Noninterest expenses decreased $170,000 or 3.4% between the 2003 and
2004 three month periods ended June 30 and increased $270,000 or 3.0%
between the 2003 and 2004 six month periods ended June 30. The
decrease for the three month period was primarily due to a decrease
in contributions. This decrease was partially offset by an increase
in salaries and employee benefits and advertising and public
relations. The increase in the six month period was primarily due to
an increase in salaries and employment benefits, net occupancy
expense, and advertising and public relations. This increase was
partially offset by a decrease in contributions. The decrease in
contributions is a result of the donation of the building discussed
above.
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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 the second quarter, the Bank broke
ground on its third office in Mountain Home, Arkansas. The
Corporation was also named one of the top 200 publicly traded
community banks in the United States by U.S. Banker magazine, based
on 3 year average return on equity. 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
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FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands of dollars)
(Unaudited)
June 30, December 31,
ASSETS 2004 2003
------- -----------
Cash and cash equivalents $ 15,509 $ 56,201
Investment securities held to maturity 77,378 80,379
Federal Home Loan Bank stock 3,322 3,749
Loans receivable, net of allowances 578,682 512,756
Accrued interest receivable 4,269 4,089
Real estate acquired in settlement of loans, net 523 822
Office properties and equipment, net 14,599 14,238
Cash surrender value of life insurance 17,509 17,102
Prepaid expenses and other assets 850 1,317
------- -------
TOTAL ASSETS $712,641 $690,653
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $581,641 $573,580
Federal Home Loan Bank advances 53,497 39,562
Advance payments by borrowers for
taxes and insurance 591 725
Other liabilities 2,339 1,708
------- -------
Total liabilities 638,068 615,575
TOTAL STOCKHOLDERS' EQUITY 74,573 75,078
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $712,641 $690,653
======= =======
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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 June 30, Six Months Ended June 30,
--------------------------- -------------------------
2004 2003 2004 2003
----------- -------------- ----------- -------------
Interest income $ 9,713 $ 9,716 $19,094 $19,807
Interest expense 3,433 4,118 6,940 8,506
------ ------ ------ ------
Net interest income 6,280 5,598 12,154 11,301
Provision for loan losses 202 136 461 415
------ ------ ------ ------
Net interest income after
provision for loan losses 6,078 5,462 11,693 10,886
Noninterest income 1,585 2,145 3,016 3,688
Noninterest expenses 4,824 4,994 9,298 9,028
------ ------ ------ ------
Income before income taxes 2,839 2,613 5,411 5,546
Income tax provision 908 726 1,720 1,675
------ ------ ------ ------
Net income $ 1,931 $ 1,887 $ 3,691 $ 3,871
====== ====== ====== ======
Earnings Per Share:
Basic $ 0.38 $ 0.37 $ 0.72 $ 0.76
====== ====== ====== ======
Diluted $ 0.36 $ 0.35 $ 0.68 $ 0.73
====== ====== ====== ======
Selected Operating Data (Quarter Annualized):
- ---------------------------------------------
Interest rate spread 3.73% 3.32% 3.61% 3.36%
Net interest margin 3.84% 3.45% 3.73% 3.50%
Return on average assets 1.10% 1.09% 1.05% 1.12%
Noninterest expenses to average assets 2.75% 2.87% 2.66% 2.62%
Return on average equity 10.21% 10.48% 9.77% 10.86%
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