Exhibit 99.1
FIRST FEDERAL FOR
BANCSHARES OF ARKANSAS, INC. IMMEDIATE
RELEASE
1401 Highway 62/65 North FOR FURTHER INFORMATION CONTACT:
P. O. Box 550 Larry J. Brandt/President-CEO
Harrison, AR 72602 Tommy Richardson/EVP-COO
Sherri Billings/EVP-CFO
870-741-7641
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
ANNOUNCES EARNINGS
HARRISON, ARKANSAS - JULY 28, 2005 - (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 $1,949,000 or $0.39 basic
earnings per share and $0.37 diluted earnings per share during
the second quarter of 2005 compared to net income of $1,931,000
or $0.38 basic earnings per share and $0.36 diluted earnings per
share during the second quarter of 2004. Earnings for the six
months ended June 30, 2005 amounted to $3,913,000 or $0.79 basic
earnings per share and $0.75 diluted earnings per share compared
to earnings of $3,691,000 or $0.72 basic earnings per share and
$0.68 diluted earnings per share for the same period ended
June 30, 2004. Book value or stockholders' equity per share, at
June 30, 2005, was $15.03.
Larry J. Brandt, President/CEO for the Corporation said, "We
reached a growth milestone this quarter with total assets in
excess of $800 million representing annualized growth of over 14%
since December 31, 2004, thanks to the outstanding loan
production by our team members. Strong loan growth was the
primary factor in the improvement of net interest income for the
second quarter of 2005 compared to the second quarter of 2004.
This improvement in net interest income along with the increase
in noninterest income, were the primary factors in the increase
in net income and earnings per share for the second quarter of
2005 compared to same quarter of 2004. I am also pleased to
report that First Federal was recently recognized by US Banker as
one of the Top 200 Publicly Traded Community Banks for the second
consecutive year. In addition, First Federal was also recently
recognized by the Arkansas Democrat-Gazette as one of the top
five best performing Arkansas stocks in 2004 with a 317% return
for the last five years. We completed our third office in
Mountain Home at the end of June and it is now open for business
as the 16th office in our expanding branch network in northwest
Arkansas."
Total assets at June 30, 2005 amounted to $805.4 million, total
liabilities were $729.4 million and stockholders' equity totaled
$75.9 million or 9.4% of total assets. This compares with total
assets of $751.7 million, total liabilities of $676.4 million and
stockholders' equity of $75.3 million or 10.0%
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of total assets at December 31, 2004. At June 30, 2005 compared to
December 31, 2004, cash and cash equivalents decreased $2.0 million
or 12.2%, Federal Home Loan Bank stock increased $2.2 million or
46.1%, net loans receivable increased $51.7 million or 8.2% and
office properties and equipment increased by $1.4 million or 9.2%.
The $53.1 million or 7.9% increase in total liabilities was primarily
due to an increase in Federal Home Loan Bank ("FHLB") of Dallas
advances of $50.3 million or 56.0% and an increase of $2.6
million or 0.5% in deposits. Cash and cash equivalents, 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. The increase in
office properties and equipment was due to land purchased for
branch expansion, construction costs for new branches in Mountain
Home and Springdale, and remodeling of existing branch locations.
Stockholders' equity increased during the six month period ended
June 30, 2005, due to net income in the amount of $3.9 million
resulting from continued profitable operations, as well as the
issuance of 172,188 shares of treasury stock totaling $1.7
million as a result of the exercise of stock options. Such
increase was partially offset by the purchase of 213,000 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 $1.2
million.
Non-performing assets, consisting of certain classified loans and
repossessed assets, amounted to $11.8 million or 1.46% of total
assets at June 30, 2005, compared to $8.5 million or 1.13% of
total assets at December 31, 2004. This increase was primarily
due to two lending relationships. The allowance for loan losses
amounted to $2.0 million at June 30, 2005 or 0.26% of total loans
and $1.8 million at December 31, 2004 or 0.26% of total loans.
Net interest income, the primary component of net income,
increased to $6.4 million and $12.9 million for the three and six
months ended June 30, 2005 from $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, 2005 was 3.45% and
3.53%, respectively, compared to 3.84% and 3.73% for the same
periods in 2004.
The provision for loan losses increased $85,000 to $287,000 for
the three month period ended June 30, 2005 compared to $202,000
for the three month period ended June 30, 2004 and increased
$75,000 to $536,000 for the six month period ended June 30, 2005
compared to $461,000 for the six month period ended June 30,
2004.
Noninterest income increased $139,000 or 8.8% to $1.7 million for
the three month period ended June 30, 2005 compared to $1.6
million for the same period in 2004 and increased $278,000 or
9.2% to $3.3 million for the six month period ended June 30, 2005
compared to $3.0 million for the same period in 2004, primarily
due to an increase in deposit fee income.
Noninterest expenses increased $155,000 or 3.2% to $5.0 million
for the three months ended June 30, 2005 compared to $4.8 million
for the same period in 2004 and increased $578,000 or 6.2% to
$9.9 million for the six months ended June 30, 2005 compared to
$9.3 million for the same period in 2004. Such increases were
primarily due to increases in salaries and employee benefits.
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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. The Bank, in its 71st year, conducts
business from 16 full-service branch locations, one stand-alone
loan production office, and 25 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 2005 2004
__________ ____________
Cash and cash equivalents $14,047 $16,003
Investment securities held to maturity 55,885 56,660
Federal Home Loan Bank stock 7,124 4,876
Loans receivable, net of allowances 685,939 634,217
Accrued interest receivable 5,425 4,427
Real estate acquired in settlement of loans, net 316 563
Office properties and equipment, net 16,707 15,295
Cash surrender value of life insurance 18,286 17,897
Prepaid expenses and other assets 1,642 1,727
________ ________
TOTAL ASSETS $805,371 $751,665
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $585,018 $582,424
Federal Home Loan Bank advances 140,051 89,756
Advance payments by borrowers for
taxes and insurance 519 757
Other liabilities 3,847 3,427
________ ________
Total liabilities 729,435 676,364
TOTAL STOCKHOLDERS' EQUITY 75,936 75,301
________ ________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $805,371 $751,665
======== ========
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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 June 30, Six Months Ended June 30,
___________________________ _________________________
2005 2004 2005 2004
____________ ___________ __________ ____________
Interest income $11,001 $9,713 $21,597 $19,094
Interest expense 4,588 3,433 8,716 6,940
_______ ______ _______ _______
Net interest income 6,413 6,280 12,881 12,154
Provision for loan losses 287 202 536 461
_______ ______ _______ _______
Net interest income after
provision for loan
losses 6,126 6,078 12,345 11,693
Noninterest income 1,724 1,585 3,294 3,016
Noninterest expenses 4,979 4,824 9,876 9,298
______ ______ ______ ______
Income before income taxes 2,871 2,839 5,763 5,411
Income tax provision 922 908 1,850 1,720
______ ______ ______ ______
Net income $1,949 $1,931 $3,913 $3,691
====== ====== ====== ======
Earnings Per Share:
Basic $ 0.39 $ 0.38 $ 0.79 $ 0.72
====== ====== ====== ======
Diluted $ 0.37 $ 0.36 $ 0.75 $ 0.68
====== ====== ====== ======
Cash Dividends Declared $ 0.12 $ 0.10 $ 0.24 $ 0.20
====== ====== ====== ======
Selected Operating Data (Quarter Annualized):
- --------------------------------------------
Interest rate spread 3.35% 3.73% 3.43% 3.61%
Net interest margin 3.45% 3.84% 3.53% 3.73%
Return on average assets 0.98% 1.10% 1.00% 1.05%
Noninterest expenses to
average assets 2.50% 2.75% 2.53% 2.66%
Return on average equity 10.27% 10.21% 10.34% 9.77%
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