Exhibit 99.1
[FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.] FOR
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 - October 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 $2,036,000 or $0.41 basic
earnings per share and $0.39 diluted earnings per share during the third
quarter of 2005 compared to net income of $2,098,000 or $0.42 basic earnings
per share and $0.39 diluted earnings per share during the third quarter of
2004. Earnings for the nine months ended September 30, 2005 amounted to
$5,950,000 or $1.19 basic earnings per share and $1.14 diluted earnings per
share compared to earnings of $5,788,000 or $1.14 basic earnings per share
and $1.07 diluted earnings per share for the same period ended September 30,
2004. Book value or stockholders' equity per share, at September 30, 2005,
was $15.33.
Larry J. Brandt, President/CEO for the Corporation said, "We are pleased to
report another solid quarter of earnings with net income of $2 million for the
quarter and $6 million for the nine months ended September 30, 2005. Loan
demand continues to be strong in Northwest Arkansas, as evidenced by our
nearly $80 million increase in net loans receivable since December 31, 2004.
The resulting increase in interest income, as well as increased deposit fee
income, have had a positive impact on return on average equity, which has
increased to 11.2% this quarter compared to 10.4% for the year ended December
31, 2004. During the third quarter, the Corporation increased the quarterly
cash dividend by 8% to $0.13 per share compared to $0.12 per share last quarter
and $0.11 per share for the same quarter in 2004, an 18% increase. The grand
opening for our third full-service office in Mountain Home was held in August
and construction progress is on schedule for a December completion date for
both our Springdale and Centerton offices."
Total assets at September 30, 2005 amounted to $840.9 million, total
liabilities were $763.3 million and stockholders' equity totaled $77.6 million
or 9.2% 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% of total assets at December 31, 2004. At September 30, 2005 compared
to December 31, 2004, cash and cash equivalents increased $2.4 million or
14.8%, Federal Home Loan Bank stock increased $3.5 million or 70.8%, net loans
receivable increased $79.4 million or 12.5% and office
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Exhibit 99.1
properties and equipment increased by $2.4 million or 16.0%. The $86.9 million
or 12.9% increase in total liabilities was primarily due to an increase in
Federal Home Loan Bank ("FHLB") of Dallas advances of $79.7 million or 88.8%
and an increase of $6.9 million or 1.2% 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 nine month period ended
September 30, 2005, due to net income in the amount of $6.0 million resulting
from continued profitable operations, as well as the issuance of 201,543 shares
of treasury stock totaling $2.0 million as a result of the exercise of stock
options. Such increase was partially offset by the purchase of 233,000 shares
of treasury stock totaling $5.7 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 $1.9 million.
Non-performing assets, consisting of certain classified loans and repossessed
assets, amounted to $13.8 million or 1.64% of total assets at September 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 $2.1 million at September 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 $6.8
million and $19.7 million for the three and nine months ended September 30,
2005 from $6.5 million and $18.6 million for the comparable periods in 2004.
Net interest margin for the three months and nine months ended September 30,
2005 was 3.55% and 3.54%, respectively, compared to 3.83% and 3.76% for the
same periods in 2004.
The provision for loan losses increased $83,000 to $285,000 for the three
month period ended September 30, 2005 compared to $202,000 for the three month
period ended September 30, 2004 and increased $157,000 to $820,000 for the
nine month period ended September 30, 2005 compared to $663,000 for the nine
month period ended September 30, 2004.
Noninterest income increased $245,000 or 15.6% to $1.8 million for the three
month period ended September 30, 2005 compared to $1.6 million for the same
period in 2004 and increased $523,000 or 11.4% to $5.1 million for the nine
month period ended September 30, 2005 compared to $4.6 million for the same
period in 2004, primarily due to an increase in deposit fee income during
both periods in 2005.
Noninterest expenses increased $579,000 or 12.2% to $5.3 million for the three
months ended September 30, 2005 compared to $4.7 million for the same period
in 2004 and increased $1.2 million or 8.3% to $15.2 million for the nine months
ended September 30, 2005 compared to $14.0 million for the same period in 2004.
Such increases were primarily due to increases in salaries and employee
benefits.
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Exhibit 99.1
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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Exhibit 99.1
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands of dollars)
(Unaudited)
September 30, December 31,
ASSETS 2005 2004
_____________ ____________
Cash and cash equivalents $ 18,376 $16,003
Investment securities held to maturity 56,184 56,660
Federal Home Loan Bank stock 8,329 4,876
Loans receivable, net of allowances 713,576 634,217
Accrued interest receivable 6,469 4,427
Real estate acquired in settlement
of loans, net 348 563
Office properties and equipment, net 17,742 15,295
Cash surrender value of life insurance 18,476 17,897
Prepaid expenses and other assets 1,404 1,727
________ ________
TOTAL ASSETS $840,904 $751,665
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $589,298 $582,424
Federal Home Loan Bank advances 169,491 89,756
Advance payments by borrowers for
taxes and insurance 595 757
Other liabilities 3,911 3,427
________ ________
Total liabilities 763,295 676,364
TOTAL STOCKHOLDERS' EQUITY 77,609 75,301
________ ________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $840,904 $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 Sept. 30, Nine Months Ended Sept. 30,
____________________________ ___________________________
2005 2004 2005 2004
____________ _____________ ____________ ____________
Interest income $11,916 $10,083 $33,512 $29,176
Interest expense 5,135 3,620 13,850 10,559
_______ _______ _______ _______
Net interest income 6,781 6,463 19,662 18,617
Provision for loan losses 285 202 820 663
_______ _______ _______ _______
Net interest income after
provision for loan losses 6,496 6,261 18,842 17,954
Noninterest income 1,818 1,573 5,111 4,588
Noninterest expenses 5,313 4,734 15,188 14,031
_______ _______ _______ _______
Income before income taxes 3,001 3,100 8,765 8,511
Income tax provision 965 1,002 2,815 2,723
_______ _______ _______ _______
Net income $ 2,036 $ 2,098 $ 5,950 $ 5,788
======= ======= ======= =======
Earnings Per Share:
Basic $ 0.41 $ 0.42 $ 1.19 $ 1.14
======= ======= ======= =======
Diluted $ 0.39 $ 0.39 $ 1.14 $ 1.07
======= ======= ======= =======
Cash Dividends Declared $ 0.13 $ 0.11 $ 0.37 $ 0.31
======= ======= ======= =======
Selected Operating Data
(Quarter Annualized):
________________________
Interest rate spread 3.45% 3.73% 3.44% 3.65%
Net interest margin 3.55% 3.83% 3.54% 3.76%
Return on average assets 1.00% 1.16% 1.00% 1.09%
Noninterest expenses to
average assets 2.61% 2.62% 2.55% 2.64%
Return on average equity 11.15% 11.20% 10.60% 10.24%
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