Highlights for the Fiscal Year Ended March 31, 2006:
- Net income increased 35.6% to $8.5 million.
- Diluted earnings per share growth of 34.3% to $1.41 per common share.
- Net interest margin expansion of 21 basis points to 4.59%.
- Net loan growth of 12.5% to $632.5 million.
- Deposit growth of 9.9% to $570.0 million; core deposit growth of 4.6% to
$315.4 million.
- Non-performing assets were 0.14% of total assets.
- Return on average tangible equity of 14.9%.
CLARKSTON, Wash., May 22 /PRNewswire-FirstCall/ -- FirstBank NW Corp.
(the Company) (Nasdaq: FBNW) today reported fiscal year end 2006 net income
of $8.5 million and total assets of $846.0 million, representing a 35.6%
increase in net income and a 5.6% increase in total assets. Mr. Clyde E.
Conklin, President and Chief Executive Officer, noted, "The Company's
strong income performance is reflective of continued loan growth and an
expanding net interest margin."
The Board of Directors declared a quarterly cash dividend of $0.10 per
common share on April 12, 2006. The dividend was paid on May 18, 2006 to
shareholders of record as of the close of business on May 4, 2006. This
marked the thirty-fifth regular quarterly cash dividend since FirstBank
became a publicly traded company in July 1997.
LOAN GROWTH AND CREDIT QUALITY:
Net loans receivable increased $70.4 million, or 12.5%, to $632.5
million at March 31, 2006 from $562.1 million at March 31, 2005. "While we
continue to experience good loan demand throughout our market area, fiscal
year end loan growth was primarily driven by construction lending in the
Boise, Idaho market, and commercial real estate lending in the Boise and
Coeur d'Alene, Idaho and Spokane, Washington markets," said Conklin.
The credit quality of the Company's loan portfolio remained strong with
total non-performing assets of $1.2 million, or 0.14% of total assets at
March 31, 2006, compared to $2.8 million, or 0.35% of total assets at March
31, 2005. Net loan charge offs to average outstanding loans for the year
ended March 31, 2006 were 0.15% compared to 0.12% for the year ended March
31, 2005. Net loan charge offs increased $327,000 to $915,000 for the year
ended March 31, 2006 from $588,000 for the year ended March 31, 2005
primarily as a result of one large agricultural loan in Oregon that was
charged off.
FUNDING:
Deposit balances as of March 31, 2006 increased $51.3 million, or 9.9%,
to $570.0 million from $518.7 million at March 31, 2005. At March 31, 2006,
total branch deposits were $525.3 million, consisting of $315.4 million, or
60.0% in core deposits and $209.9 million, or 40.0% in time deposits
compared with the comparable period a year ago of $476.0 million in total
branch deposits, which consisted of $301.5 million, or 63.3% in core
deposits and $174.5 million, or 36.7% in time deposits. Brokered deposits
at March 31, 2006 totaled $44.7 million as compared to $42.7 million a year
ago, an increase of $2.0 million. Advances from the Federal Home Loan Bank
of Seattle (FHLB) and other borrowings at March 31, 2006 totaled $176.8
million as compared to $185.3 million a year ago, a decrease of $8.5
million, or 4.6%. Conklin noted, "Branch deposit growth with an emphasis on
core deposit growth remains essential to long term funding and earnings."
NET INTEREST MARGIN AND INTEREST RATE RISK:
The Company's net interest margin was 4.59% for the year ended March
31, 2006 compared to 4.38% for the year ended March 31, 2005. The
flattening of the yield curve continues to pressure the net interest
margin, however, the interest rate sensitivity of the Company's assets has
helped to offset the pressure on the net interest margin from increases in
the costs of deposits and borrowed funds. Yields on earning assets
increased to 7.15% compared to 6.38% for the year ended March 31, 2005, a
spread increase of 77 basis points during the current year. Meanwhile, the
average rates paid on total deposits and borrowed funds increased 59 basis
points during the year ended March 31, 2006 to 2.59% compared to 2.00% for
the year ended March 31, 2005. "The Company deploys a disciplined approach
to deposit pricing, targeting core deposit growth with priority pricing for
money market funds and middle market pricing for certificates of deposit
with periodic specials based on funding demands," said Larry K. Moxley,
Chief Financial Officer. "Federal Home Loan Bank and brokered funding are
utilized to supplement funding requirements."
NON-INTEREST INCOME AND EXPENSE:
Non-interest income was $6.9 million for the year ended March 31, 2006,
an increase of $923,000, or 15.4%, from $6.0 million for the comparable
period one year ago. "The increase in non-interest income was primarily
driven by increases in gain on sale of loans and service fees and charges,"
said Conklin. "Service fees and charges continue to represent the largest
portion of total non-interest income. The competitive pricing in
residential real estate term loan markets continue to pressure growth in
gain on sale of loan income."
Non-interest expense for the year ended March 31, 2006 was $25.6
million, an increase of $2.5 million, from $23.1 million for the year ended
March 31, 2005. Non-interest expense to average assets decreased to 3.08%
for the year ended March 31, 2006 from 3.11% one year ago. The Company's
efficiency ratio of 61.63% for the year ended March 31, 2006 improved from
65.91% one year ago. Non-interest expenses are expected to increase as the
Company invests in new branches, additional staffing, and complies with
increased regulatory and audit requirements. Conklin noted, "The importance
of a disciplined review of resources and expenditures in relation to
profitability contribution is essential on an ongoing basis."
CAPITAL:
At March 31, 2006, the Bank's Tier 1 capital was $60.3 million, or 7.3%
leverage ratio based on average assets, and total risk-based capital was
$70.9 million, or 11.6% risk-based capital ratio based on risk-weighted
assets.
Highlights for the Fourth Quarter Ended March 31, 2006:
-- Net income increased 42.8% to $2.2 million.
-- Diluted earnings per share growth of 42.3% to $0.37 per common share.
-- Net interest margin expanded 28 basis points to 4.67% from 4.39%.
-- Net loan growth of $21.5 million, or 14.1% annualized from
December 31, 2005 to March 31, 2006.
-- Deposit growth of $16.6 million, or 12.0% annualized from
December 31, 2005 to March 31, 2006.
-- Non-performing assets decreased from $2.5 million to $1.2 million from
December 31, 2005 to March 31, 2006.
"For the fourth quarter of the fiscal year ending March 31, 2006,
financial performance continued to demonstrate consistent improvement
throughout the fiscal year of 2006 for the Company," Conklin stated.
"Fourth quarter performance was consistent with management's expectations
and a fitting close to a record year for the Company," said Conklin. "The
franchise expansion is continuing with construction anticipated to begin in
June 2006 on a new branch in Meridian, Idaho."
LOAN GROWTH:
Net loans receivable increased $21.5 million during the quarter ended
March 31, 2006, or 14.1% on an annualized basis. Non-performing loans
decreased from $2.5 million for the quarter ended December 31, 2005 to $1.2
million for the quarter ended March 31, 2006. The decrease was primarily
attributable to one agricultural loan in Oregon that was charged off during
the quarter. Allowance for loan losses decreased $381,000 during the
quarter, which reflects the loss related to this agricultural loan and the
provisions based on the mix of loans contained in the loan portfolio and
changes in loan balances. "Credit quality remains very sound and loan
demand is strong for similar quality credit," said Conklin.
NET INTEREST MARGIN:
The Company's net interest margin increased to 4.67% for the three
months ended March 31, 2006 from 4.39% for the three months ended March 31,
2005. Net interest income after provision for loan losses increased $1.7
million, or 25.8%, to $8.3 million for the three months ended March 31,
2006 from $6.6 million for the three months ended March 31, 2005.
NON-INTEREST INCOME AND EXPENSE:
Non-interest income increased $283,000, or 19.7%, to $1.7 million for
the three months ended March 31, 2006 from $1.4 million for the three
months ended March 31, 2005.
Non-interest expense increased $791,000, or 13.5%, to $6.6 million for
the three months ended March 31, 2006 from $5.9 million for the three
months ended March 31, 2005.
BUSINESS STRATEGY:
FirstBank NW Corp. (headquartered in Clarkston, Washington) is the
holding company for FirstBank Northwest, a Washington state chartered
savings bank founded in 1920, and has a track record of consistent
above-average growth and improving profitability, operating in the rural
markets of eastern Oregon, eastern Washington and central Idaho, in
addition to the larger and growing markets of Boise and Coeur d'Alene,
Idaho and Spokane, Washington. FirstBank Northwest is focused on each
community served, striving to deliver competitive financial products and
services through exceptional customer service standards, local expertise
and leadership. FirstBank Northwest operates 20 branch locations in Idaho,
eastern Washington and eastern Oregon, in addition to loan centers in
Lewiston, Coeur d'Alene, Boise and Nampa, Idaho, Spokane, Washington, and
Baker City, Oregon. FirstBank Northwest is known as the local community
bank, offering its customers highly personalized service in the many
communities it serves.
FORWARD LOOKING STATEMENTS:
Certain matters in this News Release may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements may relate to, among others,
expectations of the business environment in which the Company operates,
projections of future performance, including operating efficiencies,
perceived opportunities in the market, potential future credit experience
and statements regarding the Company's mission and vision. These
forward-looking statements are based upon current management expectations,
and may, therefore, involve risks and uncertainties. The Company's actual
results, performance, and achievements may differ materially from those
suggested, expressed or implied by forward-looking statements due to a wide
range of factors including, but not limited to, the general business
environment, interest rates, the real estate market in Washington, Idaho
and Oregon, the demand for mortgage loans, competitive conditions between
banks and non-bank financial service providers, regulatory changes, costs
of implementing additional securities requirements and requirements of the
Sarbanes Oxley Act of 2002 and other risks detailed in the Company's
reports filed with the Securities and Exchange Commission, including its
Annual Report on Form 10-K for the fiscal year ended March 31, 2005.
FIRSTBANK NW CORP
(unaudited) (dollars in thousands except per share data)
FINANCIAL HIGHLIGHTS
Three Months Ended Fiscal Year Ended
March 31, March 31,
2006 2005 2006 2005
Interest Income $13,763 $10,840 $52,188 $40,631
Interest Expense 5,258 3,778 19,314 13,319
Provision for Loan Losses 237 488 1,799 1,528
Net Interest Income After
Provision for Loan Losses 8,268 6,574 31,075 25,784
Non-Interest Income
Gain on Sale of Loans (1) 506 184 1,835 1,125
Service Fees and Charges 1,143 1,010 4,817 4,504
Commission and Other 67 239 281 381
Total Non-Interest Income 1,716 1,433 6,933 6,010
Non-Interest Expense
Compensation and Related
Expenses 4,036 3,522 15,161 14,044
Occupancy 712 717 2,901 2,844
Other 1,898 1,616 7,522 6,261
Total Non-Interest Expense 6,646 5,855 25,584 23,149
Income Tax Expense 1,090 578 3,908 2,367
Net Income $2,248 $1,574 $8,516 $6,278
Basic Earnings per Share (6) $0.38 $0.27 $1.45 $1.08
Diluted Earnings per Share (6) $0.37 $0.26 $1.41 $1.05
Weighted Average Shares
Outstanding- Basic (6) 5,916,622 5,841,664 5,879,598 5,792,614
Weighted Average Shares
Outstanding- Diluted (6) 6,064,766 5,995,522 6,020,332 5,995,260
Actual Shares Issued (6) 6,053,186 5,997,190 6,053,186 5,997,190
FINANCIAL STATISTICS
(ratios annualized)
At March 31, At March 31,
2006 2005
Total Assets $846,003 $801,122
Cash and Cash Equivalents $26,903 $41,801
Loans Receivable, net $632,543 $562,101
Loans Held for Sale $3,785 $3,999
Mortgage-Backed Securities $52,155 $61,904
Investment Securities $48,541 $48,334
Equity Securities, at cost $12,789 $12,789
Deposits $570,040 $518,676
FHLB Advances & Other Borrowings $176,817 $185,337
Stockholders' Equity $79,130 $72,311
Tangible Book Value per Share (2) (6) $10.17 $9.00
Tangible Equity/ Total Tangible
Assets 7.29% 6.74%
Number of full-time equivalent
Employees (3) 268 268
Three Months Fiscal Year
Ended Ended
March 31, March 31,
2006 2005 2006 2005
Return on Average Assets 1.08% 0.80% 1.03% 0.84%
Return on Average Tangible Equity 14.95% 11.94% 14.92% 12.38%
Return on Average Equity 11.37% 8.69% 11.16% 8.85%
Average Equity/Average Assets 9.50% 9.21% 9.19% 9.54%
Efficiency Ratio (4) 62.53% 64.22% 61.63% 65.91%
Non-Interest Expenses / Average
Assets 3.20% 2.98% 3.08% 3.11%
Net Interest Margin (5) 4.67% 4.39% 4.59% 4.38%
LOANS At March 31, 2006 At March 31, 2005
LOAN PORTFOLIO ANALYSIS: Amount Percent Amount Percent
Real Estate Loans:
Residential $123,461 19.20% $117,541 20.55%
Construction 108,650 16.89 69,148 12.09
Agricultural 18,792 2.92 19,434 3.40
Commercial 201,282 31.30 173,757 30.39
Total Real Estate Loans 452,185 70.31 379,880 66.43
Other Loans:
Home Equity 40,926 6.36 37,806 6.61
Agricultural Operating 19,333 3.00 22,625 3.96
Commercial 91,628 14.25 92,780 16.23
Other Consumer 39,089 6.08 38,724 6.77
Total Other Loans 190,976 29.69 191,935 33.57
Total Loans Receivable $643,161 100.00% $571,815 100.00%
ALLOWANCE FOR LOAN LOSSES Fiscal Year Fiscal Year
Ended Ended
March 31, 2006 March 31, 2005
Balance at Beginning of Period $7,254 $6,314
Provision for Loan Losses 1,799 1,528
Charge Offs (Net of Recoveries) (915) (588)
Balance at End of Period $8,138 $7,254
Loan Loss Allowance / Net Loans 1.29% 1.29%
Loan Loss Allowance / Non-Performing
Loans 2608.33% 661.86%
NON-PERFORMING ASSETS At March 31, At March 31,
2006 2005
Accruing Loans - 90 Days Past Due $4 $377
Non-accrual Loans 308 719
Total Non-Performing Loans 312 1,096
Restructured Loans on Accrual 872 1,094
Real Estate Owned (REO) 0 603
Repossessed Assets 13 18
Total Non-Performing Assets $1,197 $2,811
Total Non-Performing Assets/Total
Assets 0.14% 0.35%
Loan Loss Allowance as a Percentage
of Non-Performing Assets 679.87% 258.06%
AVERAGE BALANCES Fiscal Year Fiscal Year
Ended Ended
March 31, 2006 March 31, 2005
Total Average Interest Earning Assets $753,505 $664,277
Total Average Assets 830,205 743,258
Average Deposits and Other Borrowed
Funds 745,495 665,003
Average Total Tangible Equity 57,060 50,693
(1) Gain on sale of loans includes recovery of mortgage servicing
rights of $20 and $14 for the three months ended March 31, 2006
and 2005, respectively. Gain on sale of loans includes recovery
of mortgage servicing rights of $64 and $81 for the fiscal year
ended March 31, 2006 and 2005, respectively.
(2) Calculation excludes unallocated shares in the employee stock
ownership plan (ESOP) March 31, 2006 -- 124,874 shares and
March 31, 2005 -- 141,586 shares.
(3) Number of full-time equivalent employees is the quarterly average.
(4) Calculation is non-interest expense divided by tax equivalent non-
interest income and tax equivalent net interest income.
(5) Calculation is tax equivalent net interest income divided by
average daily balance of total interest-earning assets.
(6) The outstanding shares, weighted average shares outstanding, and
earnings per share have been adjusted to reflect the two-for-one
stock split in the form of a 100% per share stock dividend
announced on January 4, 2006.
SOURCE FirstBank NW Corp.
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Related links:
http://www.fbnw.com/
CONTACT:
Larry Moxley of FirstBank NW Corp.,
+1-509-295-5100, or lmoxley@fbnw.com
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