LEWISTON, Idaho, June 21 /PRNewswire/ -- FirstBank Corp. (Nasdaq: FBNW)
today announced its total assets in the first two months of fiscal 2000 grew
nearly 5% to approximately $215 million at May 31, compared to $206 million at
March 31, 1999. The growth was due mainly to commercial loan originations and
a seasonal increase in agricultural operating loan originations.
"Loan growth is a strategic objective, and agricultural, commercial and
consumer loans were very strong in April and May," said Clyde E. Conklin,
President and Chief Executive Officer. "Because of this loan growth, we've
added significantly to FirstBank's allowance for loan losses, which will hit
first quarter profits. The loan loss reserve we have to set aside for loans
generated in just these two months totals approximately 40% of the reserves we
had budgeted for the entire fiscal year. The seasonality of ag operating
loans will diminish reserve requirements this fall.
"Last year FirstBank experienced a big pay down in residential loans,
which resulted in excess residential loan reserves; those reserves buffered
the need for additional reserve requirements from growth in other types of
loans," he noted. "This year, we are not seeing the big pay down in
residential loans, which is good; however, it also means that we have no
excess reserves to buffer the additional reserves required by this year's ag
and commercial loan growth.
"Our ag and commercial loans are very high quality, with minimal risk.
Underwriting criteria is conservative, requiring secondary repayment sources,"
Conklin added. "We were proud to end fiscal 1999 with no delinquent or past
due agricultural loans, and only one delinquent commercial loan. We expect
that experience to continue."
FirstBank also increased reserves for Year 2000 (Y2K) planning purposes.
The company's Y2K Project Plan is complete and contingency plans are being
finalized.
"We have just completed the data processing conversion that was another of
FirstBank's strategic objectives. This technological upgrade was vital to
improved customer service and employee efficiency. It is outstanding to have
this major project completed, so that we can now fully focus on the business
of banking," Conklin said. "Conversion expenses were more than anticipated,
which also will adversely impact first quarter profits.
"New branches also are a component of FirstBank's strategic plan. The
Post Falls, Idaho, supermarket branch is now open and the Liberty Lake,
Washington, branch is targeted for opening in October 1999. The new branches
will not contribute to earnings for several months. Current earnings are
being impacted by costs of opening these new branches," he said. Liberty Lake
will be FirstBank's second Washington State branch and its eighth branch
overall.
In addition to adding new bank branches, FirstBank is opening an
Investment Center in its downtown Lewiston branch through an agreement with
Salomon Smith Barney Inc. -- one of the best known and most respected names in
investing. Similar services also will be offered in FirstBank's Coeur d'Alene
branch, and the bank intends to place Investment Centers in additional
branches over time in order to provide a full spectrum of financial products.
Salomon Smith Barney is a subsidiary of Citigroup Inc.
"We anticipate excellent long term benefits from our arrangement with
Salomon Smith Barney," Conklin said. "But once again, long term growth will
come at the expense of short term profits. We are confident all these
investments will pay off."
FirstBank Corp. is the parent of FirstBank Northwest, which is
headquartered in Lewiston, Idaho at the northern end of Hell's Canyon.
Founded in 1920, the Bank converted from its charter as a federal stock
savings bank to a Washington State savings bank charter February 2, 1998.
FirstBank operates seven branch locations along the Idaho/Washington border,
plus two residential loan centers located in Lewiston and Coeur d'Alene,
Idaho. A supermarket branch location opened in February in Post Falls, Idaho
and a second Washington State branch -- in Liberty Lake, near Spokane --
will open later this year. FirstBank is known as the local community bank,
offering its customers highly personalized service in the many communities it
serves.
Statements concerning future performance, developments or events,
concerning expectations regarding loan quality, reserve adequacy,
profitability, new branches, additional Investment Centers, Y2K preparedness,
and any other guidance on future periods, constitute forward-looking
statements that are subject to a number of risks and uncertainties. These
include seasonal factors, regional economic conditions, local, national and
international agricultural conditions, interest rate fluctuations, the ability
to market new products, and government and regulatory actions, which might
cause actual results to differ materially from stated expectations
SOURCE FirstBank Corp.
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Related links:
http://www.firstbanknw.com
Company News On-Call:
http://www.prnewswire.com/comp/124037.html or fax,
800-758-5804, ext. 124037
CONTACT:
Larry K. Moxley, Chief Financial Officer of
FirstBank Corp., 208-746-9610
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