FBNW Firstbank NW

FirstBank NW Corp. Reports Third Quarter Earnings and Declares Regular Quarterly Cash Dividend of $0.17 Per Share CLARKSTON, Wash., Jan. 25 /PRNewswire-FirstCall/ -- FirstBank NW Corp. (NASDAQ:FBNW) ("Company"), the holding company for FirstBank Northwest ("Bank"), today reported net income of $1.5 million, or $0.51 per diluted share, in its third fiscal quarter ended December 31, 2004. This compares to net income of $1.3 million, or $0.52 per diluted share, in the comparable quarter a year ago. The Company also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.17 per common share. The dividend will be paid on February 17, 2005 to shareholders of record as of the close of business on February 3, 2005. This is the Company's 30th regular quarterly cash dividend since it became a publicly traded company in July 1997. "The increase in net income is attributable to loan growth during the past year with net loans increasing to $533.8 million as of December 31, 2004 compared to $459.5 million at December 31, 2003, and an improved net interest margin of 4.3% for the three months ended December 31, 2004," said Clyde E. Conklin, President and Chief Executive Officer. "The Company's net income also was affected by reserve allocations driven by new loan growth," noted Larry K. Moxley, Executive Vice President and Chief Financial Officer. The provision for loan losses for the quarter ended December 31, 2004 was $470,000, compared to $162,000 in the comparable quarter a year ago. The increase in the provision for loan losses is attributable to loan growth during the quarter. Non-interest income improved to $1.4 million for the third fiscal quarter, compared to $1.2 million in the comparable quarter a year ago. The increases in service charges and fee income of $260,000 offset decreases in other non-interest income. Non-interest expense, or operating expense increased $1.2 million to $5.9 million for the quarter ended December 31, 2004, compared to $4.7 million for the comparable quarter a year ago, which includes a full quarter of expenses versus the partial quarter last year because of the acquisition of Oregon Trail Financial Corp. ("Oregon Trail") and its subsidiary, Pioneer Bank, A Federal Savings Bank ("Pioneer Bank"). Non-recurring core processing conversion expense and non-recurring employment termination expense reduced earnings per share by an estimated $0.06 per share. FirstBank's efficiency ratio was 68.3% in its third fiscal quarter of 2004, compared to 71.3% for the comparable quarter a year ago. "Strategic growth initiatives require continued investment in human resources, facilities, equipment, technology, marketing, and other miscellaneous expense," stated Conkin. "We intend to prioritize our investments by reviewing the investment's potential for profitability and determining if the investment achieves our shareholder value strategies," noted Moxley. "Fully integrated core processing systems, network systems and operating policies and procedures present the opportunity to focus on efficiency initiatives and profitability analysis of our products and services," Moxley continued. Total assets were $769.6 million at December 31, 2004, an increase of $84.3 million, or 12.3%, from total assets of $685.3 million at December 31, 2003. Total assets at December 31, 2004 increased $69.3 million, or 9.9%, from total assets of $700.2 million at March 31, 2004. Total loans receivable for the same period grew $69.5 million, or 15.0% from $464.4 million at March 31, 2004 to $533.8 million at December 31, 2004. "Strong loan growth has been realized primarily in commercial real estate and construction lending, which is consistent with our commercial banking initiative," stated Conklin. "To a moderate extent, we have also realized growth in commercial and industrial, residential real estate, home equity, and other consumer loans. We have achieved our asset growth target through new loan originations." Total deposits increased $29.1 million, or 6.1%, to $503.6 million at December 31, 2004 compared with $474.5 million at December 31, 2003. Other funding for the quarter ended December 31, 2004 included Federal Home Loan Bank and other borrowings totaling $186.6 million compared to $134.1 million for the quarter ended December 31, 2003, an increase of $52.5 million, or 39.2%. The allowance for loan and lease losses increased $320,000, or 4.9%, to $6.9 million for the nine months ended December 31, 2004 from $6.6 million for the comparable period one year ago. Total reserves for the nine months ended December 31, 2004 represent 1.30% of net loans and 552.9% of non-performing loans. "It is essential that our allowance adequately reflect the credit risk in the portfolio and the non-performing assets identified, therefore we continue to add to our reserves," said Moxley. "Charge-offs, net of recoveries, for the quarter totaled $147,000 compared to $45,000 for the comparable quarter a year ago. Asset quality remains stable." Total non-performing assets at December 31, 2004 were $2.3 million, or 0.30% of total assets compared with $3.7 million, or 0.52% of total assets at March 31, 2004. "We continue to focus on credit risk on a quarterly basis through the asset review committee and on an on-going basis through executive management loan committee and credit administration," said Conklin. Conklin concluded by stating, "The conversion of the core processing systems was completed in December, which was necessary after the acquisition of Oregon Trail and Pioneer Bank on October 31, 2003. This was a substantial acquisition that took us from $340 million in total assets to $770 million to date, with branches in three states. Virtually, ever area of the Bank's operation was impacted. The Company has been strengthened in this process and is in an improved position to effectively compete and attain our shareholder value strategies." FirstBank NW Corp. is the parent of FirstBank Northwest. Founded in 1920, FirstBank Northwest is based in Clarkston, Washington. FirstBank Northwest operates 20 branch locations in northern Idaho along the Idaho/Washington border and in eastern Oregon, in addition to residential loan centers in Lewiston, Coeur d'Alene, Boise and Nampa, Idaho, Spokane, Washington, and Baker City, Oregon. Salomon Smith Barney has investment centers in the Coeur d'Alene, Idaho, Clarkston and Liberty Lake, Washington branches, and the Baker City, LaGrande, Pendleton and Ontario, Oregon branches. FirstBank Northwest is known as the local community bank, offering its customers highly personalized service in the many communities it serves. 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, The Company's ability to successfully integrate the business of Oregon Trail, the realization of expected cost savings or accretion to earnings because of the acquisition of Oregon Trail, competitive conditions between banks and non-bank financial service providers, regulatory changes, and other risks detailed in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on From 10-KSB for the fiscal year ended March 31, 2004. FIRSTBANK NW CORP FINANCIAL HIGHLIGHTS (unaudited)(in thousands except share and per share data) Three Months Ended Nine Months Ended December 31, December 31, 2004 2003 2004 2003 Interest Income $10,369 $8,011 $29,791 $18,116 Interest Expense 3,366 2,795 9,541 6,866 Provision for Loan Losses 470 162 1,040 418 Net Interest Income After Provision for Loan Losses 6,533 5,054 19,210 10,832 Non-Interest Income Gain on Sale of Loans 260 286 942 1,656 Service Fees and Charges 1,130 870 3,494 1,982 Commission and Other 41 70 141 136 Total Non-Interest Income 1,431 1,226 4,577 3,774 Non-Interest Expenses Compensation and Related Expenses 3,680 2,854 10,522 6,729 Occupancy 668 591 2,128 1,289 Other 1,548 1,278 4,644 2,997 Total Non-Interest Expenses 5,896 4,723 17,294 11,015 Income Tax Expense 542 276 1,790 837 Net Income $1,526 $1,281 $4,703 $2,754 Basic Earnings per Share $0.53 $0.56 $1.63 $1.70 Diluted Earnings per Share $0.51 $0.52 $1.57 $1.59 Weighted Average Shares Outstanding -- Basic 2,904,719 2,285,027 2,888,281 1,621,314 Weighted Average Shares Outstanding -- Diluted 2,984,444 2,483,620 2,997,145 1,731,498 Actual Shares Issued 2,989,262 2,862,331 2,989,262 2,862,331 December 31, March 31, December 31, 2004 2004 2003 Total Assets $769,570 $700,232 $685,267 Cash and Cash Equivalents $40,378 $38,397 $23,464 Loans Receivable, net $533,823 $464,368 $459,540 Mortgage-Backed Securities $64,988 $77,027 $81,344 Investment Securities $48,517 $38,787 $38,506 Stock in FHLB, at cost $12,810 $12,506 $12,224 Deposits $503,559 $491,035 $474,480 FHLB Advances & Other Borrowings $186,577 $132,056 $134,056 Stockholders' Equity $71,418 $69,332 $68,910 Tangible Book Value per Share (1) $17.71 $17.33 $17.94 FASB 115 Adjustment after Taxes $558 $1,268 $1,166 Tangible Equity/ Total Tangible Assets 6.89% 7.57% 7.50% Number of full-time equivalent Employees 270 247 248 (1) Calculation is based on number of shares outstanding at the end of the period rather than weighted average shares outstanding and excludes unallocated shares in the employee stock ownership plan (ESOP): 12/04 -- 72,883 shares, 3/04 -- 79,149 shares, 12/03 -- 81,238 shares. FINANCIAL STATISTICS (ratios annualized) Three Months Fiscal Year Nine Months Ended Ended Ended December 31, March 31, December 31, 2004 2003 2004 2004 2003 Return on Average Assets 0.81% 0.90% 0.90% 0.86% 0.88% Return on Average Tangible Equity 11.91% 11.46% 11.17% 12.55% 10.43% Average Tangible Equity/ Average Tangible Assets 7.02% 7.98% 8.19% 6.66% 8.56% Average Equity/ Average Assets 9.49% 9.95% 9.17% 9.66% 9.53% Average Tangible Equity /Average Loans 9.96% 11.48% 11.37% 10.03% 12.10% Efficiency Ratio (2) 68.30% 71.29% 70.44% 67.87% 71.26% Non-Interest Expenses /Average Assets 3.15% 3.30% 3.43% 3.16% 3.53% Net Interest Margin (3) 4.34% 4.09% 4.17% 4.29% 4.07% Average Interest Earning Assets/ Average Deposits and Other Borrowed Funds 112.12% 113.61% 102.09% 112.65% 114.68% Nine Months Fiscal Year Nine Months Ended Ended Ended December 31, March 31, December 31, LOANS 2004 2004 2003 (unaudited)(in thousands except share and per share data) LOAN ORIGINATIONS (4): Residential loan centers $203,526 $244,456 $194,594 Consumer loan centers 35,903 16,364 9,012 Agricultural loan centers 8,005 8,048 20,875 Commercial loan centers 120,750 86,929 101,678 Total Loan Originations $368,184 $355,797 $326,159 LOAN PORTFOLIO ANALYSIS: Real estate loans: Residential $116,028 $112,312 $112,556 Construction (5) 58,518 68,236 64,146 Agricultural 19,453 18,568 20,246 Commercial 155,303 122,132 122,017 Total real estate loans 349,302 321,248 318,965 Consumer and other loans: Home equity 36,235 25,599 19,667 Agricultural operating 26,039 24,876 31,031 Commercial 87,943 75,878 66,965 Other consumer 40,027 43,425 51,252 Total consumer and other loans 190,244 169,778 168,915 Loans held for sale -- residential real estate 3,377 5,253 6,890 Total Loans Receivable $542,923 $496,279 $494,770 Nine Months Fiscal Year Nine Months Ended Ended Ended ALLOWANCE FOR LOAN LOSSES: December 31, March 31, December 31, 2004 2004 2003 Balance at Beginning of Period $6,314 $3,414 $3,414 Purchased 0 2,863 2,863 Provision for Loan Losses 1,039 395 418 Charge Offs (Net of Recoveries) (436) (358) (98) Balance at End of Period $6,917 $6,314 $6,597 Loan Loss Allowance/ Net Loans 1.30% 1.36% 1.44% Loan Loss Allowance/ Non-Performing Loans 552.92% 199.37% 452.47% (2) Calculation is non-interest expense divided by tax equivalent non-interest income and net interest income. (3) Calculation is tax equivalent net interest income divided by total interest-earning assets. (4) Loan originations are based upon new production. (5) As of December 31, 2004, these loans are reported net of loans in progress. NON-PERFORMING ASSETS: Nine Months Fiscal Year Nine Months Ended Ended Ended December 31, March 31, December 31, 2004 2004 2003 Accruing Loans -- 90 Days Past Due $0 $0 $0 Non-accrual Loans 1,251 2,900 1,458 Total Non-performing Loans 1,251 2,900 1,458 Restructured Loans on Accrual 554 152 228 Real Estate Owned (REO) 410 552 883 Repossessed Assets 61 52 28 Total Non-performing Assets $2,276 $3,656 $2,597 Total Non-performing Assets/ Total Assets 0.30% 0.52% 0.38% Loan and REO Loss Allowance as a % of Non-Performing Assets 303.91% 160.95% 254.02% AVERAGE BALANCES, INTEREST AVERAGE YIELDS/COSTS Three Months Fiscal Year Nine Months Ended Ended Ended December 31, Year Ended December 31, 2004 2003 March 31, 2004 2004 2003 Average Interest Earning Assets: Average Loans Receivable: Average Mortgage Loans Receivable $116,264 $91,482 $74,416 $116,354 $62,030 Average Commercial Loans Receivable 227,170 163,955 150,557 213,192 136,578 Average Construction Loans Receivable 53,452 35,980 36,356 50,461 34,359 Average Consumer Loans Receivable 75,156 54,210 43,063 73,741 34,366 Average Agricultural Loans Receivable 46,667 43,436 37,547 47,401 35,046 Average Unearned Loan Fees and Discounts, Allowance for Loan Losses, and Other (8,787) (7,187) (6,350) (8,395) (5,598) Total Average Loans Receivable, net 509,922 381,876 335,589 492,754 296,781 Average Loans Held for Sale 4,811 7,345 7,584 5,334 8,185 Average Mortgage -backed Securities 66,831 46,500 35,869 70,428 21,374 Average Investment Securities 48,876 26,671 24,840 45,764 20,321 Average Other Earning Assets 38,357 54,676 36,000 38,461 32,486 Total Average Interest Earning Assets 668,797 517,068 439,882 652,741 379,147 Average Non-Interest Earning Assets 81,031 55,311 44,684 76,400 36,783 Total Average Assets $749,828 $572,379 $484,566 $729,141 $415,930 Average Interest Bearing Liabilities: Average Passbook, NOW, and Money Market Accounts $239,724 $174,430 $137,025 $231,657 $107,912 Average Certificates of Deposits 203,696 172,611 149,626 200,051 132,855 Average Advances from FHLB and Other 153,079 108,067 101,106 147,729 89,842 Total Average Interest Bearing Liabilities 596,499 455,108 387,757 579,437 330,609 Average Non-Interest Bearing Deposits 74,926 52,399 43,107 72,088 39,422 Average Deposits and Other Borrowed Funds 671,425 507,507 430,864 651,525 370,031 Average Non-Interest Bearing Liabilities 7,207 7,946 6,638 7,179 6,253 Total Average Liabilities 678,632 515,453 437,502 658,704 376,284 Total Average Equity 71,196 56,926 47,064 70,437 39,646 Total Average Liabilities and Equity $749,828 $572,379 $484,566 $729,141 $415,930 Total Tangible Average Equity $51,259 $44,701 $39,030 $49,961 $35,221 Interest Rate Yield on Earning Assets 6.35% 6.36% 6.41% 6.24% 6.53% Interest Rate Expense on Deposits and Other Borrowed Funds 2.01% 2.64% 2.31% 1.95% 2.85% Interest Rate Spread 4.34% 3.72% 4.10% 4.29% 3.68% Net Interest Margin 4.33% 4.09% 4.17% 4.29% 4.07% DATASOURCE: FirstBank NW Corp. CONTACT: Larry K. Moxley, Exec. VP & CFO of FIRSTBANK NW CORP., +1-509-295-5100 Web site: http://www.fbnw.com/

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