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| 8-K - NORTH CENTRAL BANCSHARES, INC. 8-K 1ST QTR - NORTH CENTRAL BANCSHARES INC | form8k.htm |
North Central Bancshares, Inc.
David M. Bradley
515-576-7531
Distribution: Iowa Newsline
May 11, 2011
NORTH CENTRAL BANCSHARES, INC. ANNOUNCES RESULTS FOR FIRST QUARTER 2011
Fort Dodge, Iowa -- North Central Bancshares, Inc. (the “Company”) (NASDAQ: FFFD), the holding company for First Federal Savings Bank of Iowa (the “Bank”), announced today its preliminary financial results for the first quarter ended March 31, 2011.
The Company’s net income for the quarter ended March 31, 2011 was $690,000, or $0.41 per diluted share, compared to net income of $629,000, or $0.37 per diluted share, for the quarter ended March 31, 2010. The increase in earnings was primarily due to a decrease in provision for loan losses, offset in part by a decrease in net interest income and an increase in noninterest expenses.
Net interest income for the quarter ended March 31, 2011 and 2010, was $3.6 million and $3.8 million, respectively. The decrease in net interest income was primarily due to a decrease in net interest spread (the difference in the average yield on assets and average cost of liabilities) and a decrease in the average balance of interest-earning assets, offset in part by a decrease in the average balance of interest-bearing liabilities. Net interest spread for the quarter ended March 31, 2011 was 3.25%, compared to net interest spread of 3.32% for the quarter ended March 31, 2010. Net interest margin for the quarter ended March 31, 2011 was 3.41%, compared to net interest margin of 3.53% for the quarter ended March 31, 2010.
The Company’s provision for loan losses was $300,000 and $800,000 for the quarters ended March 31, 2011 and 2010, respectively. Net loans charged off for the quarter ended March 31, 2011 totaled $206,000, compared to $210,000 for the quarter ended March 31, 2010. The Company establishes provisions for loan losses, which are charged to operations, in order to maintain the allowance for loan losses at a level which is deemed to be appropriate based upon an assessment of prior loss experience, a review of classified loans, a realistic determination of value and adequacy of underlying collateral, levels and trends of loan categories, industry standards, past due loans, economic conditions, the volume and type of loans in the Company’s portfolio, and other factors related to the collectibility of the Company’s loan portfolio. The provision for loan loss for the three-months ended March 31, 2011 was impacted in part by the overall reduction in the size of the loan portfolio and the reduction in the identification of new impaired loans.
The allowance for loan losses at March 31, 2011 constituted 1.9% of loans and 58.2% of nonperforming loans, compared to the allowance for loan losses at December 31, 2010 constituting 1.8% of loans and 53.1% of nonperforming loans. Nonperforming assets were $14.1 million, or 3.07% of total assets, at March 31, 2011, compared to $16.2 million, or 3.57% of total assets, at December 31, 2010.
The Company’s noninterest income was $1.6 million and $1.7 million for the quarters ended March 31, 2011 and 2010, respectively. The decrease in noninterest income for the quarter ended March 31, 2011 compared to the same period in 2010 was primarily due to decreases in abstract fees, investment and insurance sales, and foreclosed real estate net earnings. These decreases were offset in part by an increase in fees and service charges on checking accounts.
The Company’s noninterest expense was $3.9 million and $3.8 million for the quarters ended March 31, 2011 and 2010, respectively. The increase in noninterest expense was primarily due to increases in impairment on foreclosed real estate, advertising and promotion expense, professional fees, printing and postage, and other expenses. These increases were partially offset by decreases in compensation and employee benefits, data processing, and checking account charges for the quarter ended March 31, 2011 compared to the same period in 2010.
The Company’s provision for income taxes was $276,000 and $256,000 for the quarters ended March 31, 2011 and 2010, respectively. The increase in the provision for income taxes was primarily due to an increase in income before income taxes.
Total assets at March 31, 2011 were $459.6 million, compared to $452.3 million at December 31, 2010. Net loans decreased by $12.7 million, or 3.8%, to $321.7 million at March 31, 2011, from $334.5 million at December 31, 2010. The decrease in net loans was primarily due to payments, prepayments, and sales of loans, offset in part by the origination of one-to-four family residential, commercial real estate and consumer loans. At March 31, 2011, net loans consisted of (i) $136.6 million of one-to-four family real estate loans, representing a decrease of $3.5 million from December 31, 2010, (ii) $64.8 million of commercial real estate loans, representing a decrease of $5.1 million from December 31, 2010, (iii) $54.9 million of multi-family real estate loans, representing a decrease of $1.8 million from December 31, 2010, and (iv) $65.4 million of consumer loans, representing a decrease of $2.3 million from December 31, 2010. Cash and cash equivalents increased $20.1 million, or 97.4%, to $40.7 million at March 31, 2011, compared to $20.6 million at December 31, 2010. Investment in certificates of deposit decreased $4.3 million, or 33.7%, to $8.4 million at March 31, 2011, compared to $12.7 million at December 31, 2010. Securities available-for-sale increased $6.5 million, or 13.4%, to $54.9 million at March 31, 2011, compared to $48.4 million at December 31, 2010, primarily due to purchases of securities during the quarter, offset by payments, maturities and sales of securities in the quarter.
Deposits increased $17.6 million, or 5.0%, to $367.4 million at March 31, 2011, from $349.8 million at December 31, 2010. The increase in deposits was primarily due to increases in interest bearing demand deposits, money market, savings accounts and certificates of deposits of $4.3 million, $6.1 million, $2.6 million and $5.2 million, respectively, partially offset by a decrease in noninterest bearing deposits of $600,000. Borrowed funds decreased $10.0 million, or 20.3%, to $39.3 million at March 31, 2011, from $49.3 million at December 31, 2010.
The Bank remains “well capitalized” for regulatory capital purposes. See the Selected Financial Ratios included in the Financial Highlights below. Stockholders’ equity was $49.9 million at March 31, 2011, compared to $49.2 million at December 31, 2010. The increase in stockholders equity was primarily due to earnings for the quarter, offset in part by dividends paid to stockholders. Book value, or stockholders’ equity per common share, was $29.34 at March 31, 2011, compared to $28.84 at December 31, 2010. The ratio of stockholders’ equity to total assets was 10.85% at March 31, 2011, compared to 10.87% at December 31, 2010.
All common stockholders of record on March 11, 2011, received a quarterly cash dividend of $0.01 per common share on April 1, 2011. In addition, on February 15, 2011, the Company paid an aggregate cash dividend of $127,500 on the cumulative preferred stock issued to the Treasury. As of March 31, 2011, the Company had 1,351,448 shares of common stock outstanding and 10,200 shares of cumulative preferred stock outstanding.
About the Company and the Bank
North Central Bancshares, Inc. serves north central and southeastern Iowa at eleven full service locations in Fort Dodge, Nevada, Ames, Perry, Ankeny, Clive, West Des Moines, Burlington, and Mount Pleasant, Iowa through its wholly-owned subsidiary, First Federal Savings Bank of Iowa, headquartered in Fort Dodge, Iowa.
The Bank’s deposits are insured by the Federal Deposit Insurance Corporation up to the full extent permitted by law.
Statements included in this press release and in future filings by North Central Bancshares, Inc. with the Securities and Exchange Commission, in North Central Bancshares, Inc. press releases, and in oral statements made with the approval of an authorized executive officer, which are not historical or current facts, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. North Central Bancshares, Inc. wishes to caution readers not to place undue reliance on such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect North Central Bancshares, Inc.’s actual results, and could cause North Central Bancshares, Inc.’s actual financial performance to differ materially from that expressed in any forward-looking statement: (1) competitive pressures among depository and other financial institutions may increase significantly; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards, may adversely affect the business in which the Company is engaged; (6) competitors may have greater financial resources and developed products that enable such competitors to compete more successfully than the Company; and (7) adverse changes may occur in the securities markets or with respect to inflation. The foregoing list should not be construed as exhaustive, and North Central Bancshares, Inc. disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events.
For more information contact: David M. Bradley, Chairman, President and Chief Executive Officer,
515-576-7531
FINANCIAL HIGHLIGHTS OF NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Financial Condition
(Unaudited)
(Dollars in Thousands, except per share data)
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March 31, 2011
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December 31, 2010
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Assets
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Cash and cash equivalents
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$ | 40,662 | $ | 20,604 | ||||
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Investments in certificates of deposit
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8,414 | 12,689 | ||||||
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Securities available-for-sale
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54,919 | 48,436 | ||||||
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Federal Home Loan Bank stock
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2,517 | 3,017 | ||||||
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Loans (net of allowance for loan loss of $6,241 and
$6,147, respectively)
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321,733 | 334,461 | ||||||
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Foreclosed real estate
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3,354 | 4,586 | ||||||
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Other assets
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28,009 | 28,471 | ||||||
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Total assets
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$ | 459,608 | $ | 452,264 | ||||
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Liabilities
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Deposits
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$ | 367,426 | $ | 349,833 | ||||
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Other borrowed funds
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39,250 | 49,250 | ||||||
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Other liabilities
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3,079 | 4,006 | ||||||
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Total liabilities
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409,755 | 403,089 | ||||||
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Stockholders’ equity
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49,853 | 49,175 | ||||||
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Total liabilities and stockholders’ equity
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$ | 459,608 | $ | 452,264 | ||||
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Stockholders’ equity to total assets
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10.85 | % | 10.87 | % | ||||
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Book value per common share
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$ | 29.34 | $ | 28.84 | ||||
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Total shares of common stock outstanding
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1,351,448 | 1,351,448 | ||||||
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Total shares of cumulative preferred stock outstanding
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10,200 | 10,200 | ||||||
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in Thousands, except per share data)
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For the Three Months
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Ended March 31,
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2011
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2010
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Interest income
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$ | 5,175 | $ | 5,788 | ||
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Interest expense
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1,606 | 2,022 | ||||
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Net interest income
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3,569 | 3,766 | ||||
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Provision for loan loss
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300 | 800 | ||||
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Net interest income after provision for loan loss
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3,269 | 2,966 | ||||
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Noninterest income
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1,634 | 1,664 | ||||
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Securities gains, net
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0 | 8 | ||||
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Noninterest expense
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3,937 | 3,753 | ||||
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Income before income taxes
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966 | 885 | ||||
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Income taxes
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276 | 256 | ||||
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Net income
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$ | 690 | $ | 629 | ||
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Preferred stock dividends and accretion of discount
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132 | 132 | ||||
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Net income available to common shareholders
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$ | 558 | $ | 497 | ||
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Basic earnings per common share
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$ | 0.41 | $ | 0.37 | ||
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Diluted earnings per common share
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$ | 0.41 | $ | 0.37 | ||
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Selected Financial Ratios
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For the Three Months
Ended March 31,
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2011
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2010
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Performance ratios
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Net interest spread
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3.25%
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3.32%
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Net interest margin
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3.41%
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3.53%
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Return on average assets
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0.61%
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0.55%
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Return on average equity
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5.58%
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5.17%
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March 31,
2011
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March 31,
2010
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Capital ratios (First Federal Savings Bank of Iowa)
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Tangible*
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10.24%
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9.98%
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Core*
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10.24%
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9.98%
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Risk-based*
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17.32%
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15.62%
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*Exceeds regulatory definition of “well capitalized”
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