News Column

Iowa First Bancshares Corp. Reports Second Quarter Financial Results and Dividend Payment

July 24, 2014

MUSCATINE, Iowa--(BUSINESS WIRE)-- Iowa First Bancshares Corp. (OTCQB: IOFB) today reported net income of $1,056,000 for the quarter ended June 30, 2014, compared to net income of $902,000 for the quarter ended June 30, 2013. The increase in second quarter net income year-over-year of $154,000 or 17.1% was primarily attributable to higher net interest income, which rose $277,000 or 8.8%. Provision for loan losses expense was $30,000 in the second quarter of 2014, compared to no such expense in 2013. Noninterest income for the second quarter of 2014 was $74,000 or 8.1% less than the second quarter of 2013 primarily due to lower income from mortgage loan origination and net loan servicing fees. Offsetting this reduction in noninterest income, noninterest expense declined by $81,000 or 3.0%. Due to higher pretax income, income tax expense increased $100,000 or 21.6%.

Basic and diluted earnings per share were $.94 for the three months ended June 30, 2014, $.14 or 17.5% greater than the same period in 2013.

The Company recorded net income of $2,072,000 for the six months ended June 30, 2014, compared with net income of $1,552,000 for the two quarters ended June 30, 2013, an increase of $520,000 or 33.5%. The primary factors contributing to this earnings increase included a $580,000 (9.3%) increase in net interest income and the 2013 non-recurring $285,000 cost associated with the early redemption of trust preferred securities. Also contributing to the improvement in net income for the first six months of 2014 compared to 2013 was $25,000 or 0.5% less noninterest expense. Partially offsetting the earnings improvements noted above was the $30,000 provision for loan losses, noninterest income decreased $32,000 or 1.9%, and income tax expense rose $308,000 or 38.7%.

Basic and diluted earnings per share were $1.84 for the six months ended June 30, 2014, up $.46 or 33.3% from the same period in 2013. The Company’s annualized return on average assets for the first two quarters of 2014 and 2013 was .95% and .70%, respectively. The Company’s annualized return on average equity for the six months ended June 30, 2014 and June 30, 2013 was 10.5% and 8.3%, respectively.

Total assets at June 30, 2014 totaled $441,889,000, a modest increase of $1,634,000 (0.4%) from June 30, 2013. Gross loans outstanding increased a robust $28,183,000 (8.8%), while total deposits decreased $2,514,000 (0.7%) year-over-year. The allowance for loan losses totaled $4,702,000 at June 30, 2014, or 1.35% of gross loans outstanding.

The board of directors declared a $.285 per common share cash dividend to be paid on July 29, 2014, to shareholders of record July 1, 2014. On an annualized basis this dividend represents a return of 3.8% on the December 31, 2013 stock price.

In the May 2014 edition of American Banker Magazine’s ranking of the top 200 community banks and thrifts, Iowa First Bancshares Corp. was recognized for its outstanding three-year average return on equity. Employing this important financial benchmark, Iowa First was ranked number 103 among all U.S. community banking and thrift organizations with less than two billion dollars in assets. Iowa First Bancshares Corp. has been the only Iowa based banking organization included in this prestigious ranking for each of the last six years.

Iowa First Bancshares Corp. is a bank holding company headquartered in Muscatine, Iowa. The Company provides a wide array of banking and other financial services to individuals, businesses and governmental organizations through its two wholly-owned national banks located in Muscatine and Fairfield, Iowa.

This press release may contain forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and many factors could cause actual results to differ materially from the results anticipated or projected. Our ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements or that could have a material effect on the operations and future prospects of the Company include, but are not limited to: (1) credit quality deterioration or pronounced and sustained reduction in real estate or other collateral values could cause an increase in the allowance for loan losses and a reduction in net income; (2) our management’s ability to reduce and effectively manage interest rate risk and the impact of interest rates in general on the level and volatility of our net interest income; (3) changes in the economic environment, competition, or other factors that may affect our ability to acquire loans or influence the anticipated growth rate of loans and deposits and the quality of the loan portfolio and loan and deposit pricing; (4) fluctuations in the value of our investment securities; (5) governmental monetary and fiscal policies; (6) legislative, regulatory and tax law changes as well as changes in the scope and cost of Federal Deposit Insurance Corporation insurance and other fees; (7) the ability to attract and retain key executives and employees; (8) the sufficiency of the allowance for loan losses to absorb the amount of actual losses inherent in our loan portfolio; (9) our ability to adapt successfully to technological changes; (10) credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio; (11) the effects of competition from numerous sources; (12) the failure of assumptions underlying the establishment of allowances for loan losses and estimation of values of collateral and various other financial assets and liabilities; (13) volatility, duration and matching risks of rate-sensitive assets and liabilities as well as liquidity risk; (14) operational risks, including data processing system failure or fraud; (15) the costs, effects and outcomes of existing or future litigation; (16) changes in general economic or industry conditions, nationally or in the communities in which we conduct business; (17) changes in accounting policies and practices; and (18) other risks.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollar amounts in thousands, except per share data)

(unaudited)

 
 

For the Three

 

For the Three

 

For the Six

 

For the Six

Months Ended

Months Ended

Months Ended

Months Ended

June 30, 2014

June 30, 2013

June 30, 2014

June 30, 2013

 
Net Interest Income $ 3,436 $ 3,159 $ 6,792 $ 6,212
Provision for Loan Losses 30 0 30 0
Noninterest Income 841 915 1,698 1,730
Early Redemption of Trust Preferred Securities 0 0 0 285
Noninterest Expense 2,627 2,708 5,284 5,309
Income Tax Expense 564 464 1,104 796
Net Income after Income Taxes 1,056 902 2,072 1,552
 
Net Income Per Common Share,
Basic and Diluted $ .94 $ .80 $ 1.84 $ 1.38
 
 

As of

 

As of

 

As of

June 30, 2014

December 31, 2013

June 30, 2013

 
Gross Loans $ 348,551 $ 338,368 $ 320,368
Total Assets 441,889 433,925 440,255
Total Deposits 378,879 375,728 381,393
Tier 1 Capital 40,156 38,665 37,379
 
Return on Average Equity 10.5 % 9.0 % 8.3 %
Return on Average Assets .95 .79 .70
Net Interest Margin (tax equivalent) 3.41 3.24 3.13
Allowance as a Percent of Total Loans 1.35 1.26 1.36





Iowa First Bancshares Corp.

D. Scott Ingstad, 563-262-4202

Chairman, President and CEO

or

Kim K. Bartling, 563-262-4216

Executive Vice President, Chief Operating Officer & Treasurer

Source: Iowa First Bancshares Corp.


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