Iowa First Bancshares Corp. Reports Third Quarter and Year-to-Date 2013 Financial Results and Dividend Payment

IOFB

Iowa First Bancshares Corp. (OTCQB: IOFB) today reported financial results for both the third quarter and first three quarters of 2013. Net income of $997,000 for the quarter ended September 30, 2013, compared to the record-setting net income of $1,205,000 for the quarter ended September 30, 2012, a decrease of $208,000 or 17.3%. The decrease in net income during the third quarter of 2013 compared to the third quarter of 2012 resulted from a decline in net interest income of $79,000 or 2.4%. Also negatively influencing the comparison of the third quarter of 2013 versus 2012 was a decrease of $171,000 or 17.1% in noninterest income, while noninterest expense during the third quarter of 2013 was $65,000 or 2.5% more than the total for the third quarter of 2012. Income tax expense was $107,000 or 18.5% lower during the third quarter of 2013 compared to the same period in 2012.

Basic and diluted earnings per share were $.89 for the three months ended September 30, 2013, $.18 or 16.8% less than the same period in 2012.

The Company’s net income of $2,549,000 for the nine months ended September 30, 2013, compared with record-setting net income of $3,241,000 for the three quarters ended September 30, 2012, a decrease of $692,000 or 21.4%. The primary factors contributing to this earnings decline were a decrease in net interest income of $555,000 or 5.5%, a $306,000 or 10.7% decline in noninterest income, and the $285,000 cost associated with the early redemption of trust preferred securities. Noninterest expense decreased $117,000 or 1.5% for the nine months ended September 30, 2013 compared with the same period in 2012, while income tax expense decreased $337,000 or 21.0%.

Basic and diluted earnings per share were $2.27 for the nine months ended September 30, 2013, a reduction of $.61 or 21.2% from the same period in 2012. The Company’s annualized return on average assets for the first three quarters of 2013 and 2012 was .77% and 1.03%, respectively. The Company’s annualized return on average equity for the nine months ended September 30, 2013 and September 30, 2012 was 9.0% and 12.2%, respectively.

The Company's assets at September 30, 2013 totaled $430,307,000, a decrease of $6,552,000 or 1.5% from September 30, 2012. Gross loans outstanding increased $26,008,000 (8.5%) while total deposits decreased $5,441,000 (1.5%) over the past year. The allowance for loan losses totaled $4,355,000 at September 30, 2013, or 1.3% of gross loans outstanding.

The board of directors declared a $.285 per common share cash dividend to be paid to shareholders of record October 1, 2013. Annualized, the dividends paid by the Company result in a yield of 3.8% on the December 31, 2012 common stock price.

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 Nine

For the Nine

Months Ended

Months Ended

Months Ended

Months Ended

September 30, 2013

September 30, 2012

September 30, 2013

September 30, 2012

 
Net Interest Income $ 3,269 $ 3,348 $ 9,481 $ 10,036
Provision for Loan Losses 0 0 0 0
Noninterest Income 829 1,000 2,559 2,865
Early Redemption of Trust Preferred Securities 0 0 285 0
Noninterest Expense 2,629 2,564 7,938 8,055
Income Tax Expense 472 579 1,268 1,605
Net Income After Income Taxes 997 1,205 2,549 3,241
 
Net Income Per Common Share,
Basic and Diluted $ .89 $ 1.07 $ 2.27 $ 2.88
 
           

As of

As of

As of

September 30, 2013

December 31, 2012

September 30, 2012

 
Gross Loans $ 330,989 $ 307,682 $ 304,981
Total Assets 430,307 444,229 436,859
Total Deposits 369,623 387,255 375,064
Tier 1 Capital 38,055 40,407 39,862
 
Return on Average Equity 9.0 % 11.5 % 12.2 %
Return on Average Assets .77 .97 1.03
Net Interest Margin (tax equivalent) 3.19 3.35 3.47
Allowance as a Percent of Total Loans 1.32 1.44 1.52
 


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