FBNW Firstbank NW

FirstBank NW Corp. Reports Strong First Quarter Earnings and Declares Regular Quarterly Cash Dividend of $0.17 per Share CLARKSTON, Wash., July 22 /PRNewswire-FirstCall/ -- FirstBank NW Corp. (NASDAQ:FBNW), the holding company for FirstBank Northwest, today reported solid growth as net income improved 99% to $1.55 million, or $0.52 per diluted share, in its first fiscal quarter ended June 30, 2004. This compares to net income of $779,000, or $0.58 per diluted share, in the comparable quarter a year ago. FirstBank 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 August 25, 2004, to shareholders of record as of the close of business on August 11, 2004. This marks the Company's 28th regular quarterly cash dividend since it became a publicly traded company in July 1997. "The increase in net income is attributable to loan growth and the acquisition of Pioneer Bank during the past year with net loans increasing to $493.1 million as of June 30, 2004 compared to $265.0 million at June 30, 2003, and an improved net interest margin of 4.31%," said Clyde E. Conklin, President and Chief Executive Officer. Mr. Conklin noted "in addition, non-interest income continues to remain strong, representing 20.8% of net income before non-interest expense, provision for loan losses, and taxes compared to the comparable quarter a year ago of 31.4%." Larry K. Moxley, Executive Vice President and Chief Financial Officer added that the Company's "net interest income also was affected by reserve allocations driven by new loan growth." The provision for loan losses for the quarter ended June 30, 2004 was $376,000, compared to $177,000 in the comparable quarter a year ago. The increase in the provision for loan losses is attributable to loan growth during the year. Non-interest income was $1.72 million for the first fiscal quarter, compared to $1.39 million in the comparable quarter a year ago. "Increases in service charges, fees, and loan fee income contributed to the increase in non-interest income over last year," said Moxley. Non-interest expense, or operating expense increased $2.6 million to $5.7 million for the quarter ended June 30, 2004, compared to $3.1 million a year ago, which reflects the increase in non-interest expenses related to the acquisition of Pioneer Bank. FirstBank's efficiency ratio was 66.8% in its first fiscal quarter of 2004, compared to 69.0% for the like quarter a year ago. Non-interest expenses are expected to remain at this level reflecting the addition of staff for the loan production offices in Boise, Idaho and Spokane, Washington, the new branches in Hayden and Boise, Idaho, and the additional fixed cost of branch remodels and construction of the new Clarkston, Washington branch facility. Total assets were $732.8 million at June 30, 2004, an increase of $388.6 million, or 113%, from total assets of $344.2 million at June 30, 2003. Conklin noted that, "in addition to growth through the acquisition of Pioneer Bank, FirstBank is also continuing to produce target asset growth through new loan originations. Total assets at June 30, 2004 increased $32.6 million, or 5%, from total assets at March 31, 2004 of $700.2 million. Total loans for the same period grew $33.6 million, or 7% from $496.3 million at March 31, 2004 to $529.9 million at June 30, 2004." Total deposits increased $259.8 million, or 127.29%, to $463.9 million at June 30, 2004 compared with $204.1 million at June 30, 2003. Branch deposit growth for the quarter ended June 30, 2004 was $3.4 million, or 0.7%. Other funding for the quarter ended June 30, 2004 included Federal Home Loan Bank borrowings and brokered deposits totaling $192.0 million compared to $103.3 million on June 30, 2003, an increase of $88.7 million, or 86%. The provision for loan and lease losses increased $2.8 million, or 79%, to $6.42 million on June 30, 2004 from $3.59 million on June 30, 2003. Total reserves represent 1.3% of net loans and 553.5% of non-performing loans. "It is essential that our provisions adequately reflect the credit risk in the portfolio and the non-performing assets identified, therefore we continue to add to reserves," said Moxley. "Charge-offs, net of recoveries, for the quarter totaled $269,000 compared to $2,000 for the comparable quarter a year ago. Of the $269,000 net charge offs, $205,000 consists of two commercial loans that were totally written off; both were previously classified assets. Asset quality remains stable." Total non-performing assets on June 30, 2004 were $2.5 million, or 0.4% of total assets compared with $3.7 million, or 0.52% of total assets on 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. "New growth in the quarter ending June 30, 2004 met operational expectations, and loan demands are strong in our Boise and Coeur d'Alene, Idaho and Spokane, Washington markets," noted Conklin. "Additionally, net income growth is expected to remain strong as compared to year ago levels primarily because of the acquisition of Oregon Trail Financial Corp. completed on October 31, 2003, however, earnings per share growth is expected to be moderate reflecting our investments in technology, infrastructure and staff." 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, and Boise, Idaho, and Baker City, Oregon. Salomon Smith Barney has investment centers in FirstBank's Coeur d'Alene, Idaho, Clarkston and Liberty Lake, Washington, and 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 FirstBank operates, projections of future performance, including operating efficiencies, perceived opportunities in the market, potential future credit experience and statements regarding FirstBank's mission and vision. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. FirstBank'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, FirstBank'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 Three Months Ended Ended June 30, June 30, 2004 2003 Interest Income $9,510 $5,097 Interest Expense 2,982 2,056 Provision for Loan Losses 376 177 Net Interest Income After Provision for Loan Losses 6,152 2,864 Non-Interest Income Gain on sale of loans 504 780 Gain on sale of securities, net 0 0 Service fees and charges 1,181 577 Commission and other 33 33 Total Non-Interest Income 1,718 1,390 Non-Interest Expenses Compensation and Related Expenses 3,418 1,920 Occupancy 744 351 Other 1,528 877 Total Non-Interest Expense 5,690 3,148 Income Tax Expense 628 327 Net Income $1,552 $779 Basic Earnings per Share $0.54 $0.61 Diluted Earnings per Share $0.52 $0.58 Weighted Average Shares Outstanding- Basic 2,866,090 1,280,984 Weighted Average Shares Outstanding- Diluted 2,996,698 1,351,654 Actual Shares Issued 2,965,266 1,382,392 June 30, March 31, June 30, 2004 2004 2003 Total Assets $732,806 $700,232 $344,193 Cash and Cash Equivalents $37,007 $38,397 $26,609 Loans Receivable, net $493,146 $464,368 $264,963 Mortgage-Backed Securities $71,180 $77,027 $8,674 Investment Securities $49,326 $38,787 $17,469 Stock in FHLB, at cost $12,628 $12,506 $5,806 Deposits $487,650 $491,035 $229,182 FHLB Advances & Other Borrowings $168,447 $132,056 $78,237 Stockholders' Equity $69,671 $69,332 $31,010 Tangible Book Value per Share (1) $16.92 $17.33 $23.70 FASB 115 Adjustment after Taxes $82 $1,268 $1,141 Tangible Equity/ Total Tangible Assets 6.86% 7.57% 9.01% Tier 1 Capital to Average Assets 6.64% 6.51% 8.35% Risk-based Capital to Risk-Weighted Assets 10.45% 10.50% 12.95% Number of full-time equivalent Employees 257 247 137 (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) 6/04 -- 77,060, 3/04 -- 79,149 shares, and 6/03 -- 85,418 shares. FINANCIAL STATISTICS (ratios annualized) Three Fiscal Three Months Year Months Ended Ended Ended June 30, March 31, June 30, 2004 2004 2003 Return on Average Assets 0.88% 0.90% 0.93% Return on Average Tangible Equity 12.76% 11.17% 10.14% Average Tangible Equity/Average Tangible Assets 7.11% 8.19% 9.19% Average Equity/Average Assets 9.88% 9.71% 9.19% Average Tangible Equity/Average Loans 10.13% 11.37% 12.15% Efficiency Ratio (2) 66.78% 70.44% 69.04% Non-Interest Expenses / Average Assets 3.23% 3.43% 3.77% Net Interest Margin (3) 4.31% 4.17% 4.10% Average Interest Earning Assets / Average Deposits and Other Borrowed Funds 114.78% 102.09% 115.42% Three Fiscal Three Months Year Months Ended Ended Ended June 30, March 31, June 30, LOANS 2004 2004 2003 (unaudited) (in thousands except share and per share data) LOAN ORIGINATIONS (4): Residential loan centers $78,169 $244,456 $71,448 Consumer loan centers 16,345 16,364 1,890 Agricultural loan centers 3,937 8,048 3,193 Commercial loan centers 28,885 86,929 34,291 Total Loan Originations $127,336 $355,797 $110,822 LOAN PORTFOLIO ANALYSIS: Real estate loans: Residential $117,582 $112,312 $48,195 Construction 76,004 68,236 50,970 Agricultural 19,648 18,568 15,692 Commercial 126,590 122,132 70,200 Total real estate loans 339,824 321,248 185,057 Consumer and other loans: Home equity 31,430 25,599 16,557 Agricultural operating 29,079 24,876 15,771 Commercial 81,551 75,878 54,620 Other consumer 42,693 43,425 7,349 Total consumer and other loans 184,753 169,778 94,297 Loans held for sale-residential real estate 5,285 5,253 10,590 Total Loans Receivable $529,862 $496,279 $289,944 Three Fiscal Three Months Year Months Ended Ended Ended June 30, March 31, June 30, 2004 2004 2003 ALLOWANCE FOR LOAN LOSSES: Balance at Beginning of Period $6,314 $3,414 $3,414 Purchased $2,863 Provision for Loan Losses 376 395 177 Charge Offs (Net of Recoveries) (269) (358) (2) Balance at End of Period $6,421 $6,314 $3,589 Loan Loss Allowance / Net Loans 1.30% 1.36% 1.35% Loan Loss Allowance / Non-Performing Loans 553.53% 199.37% 208.06% (2) Calcuation is non-interest expense divided by tax equivalent non- interest income and net interest income. (3) Calcuation is tax equivalent net interest income divided by total interest-earning assets. (4) Loan originations are based upon new production. NON-PERFORMING ASSETS: Three Fiscal Three Months Year Months Ended Ended Ended June 30, March 31, June 30, 2004 2004 2003 Accruing Loans - 90 Days Past Due $0 $0 $0 Non-accrual Loans 1,160 2,900 1,725 Total Non-performing Loans 1,160 2,900 1,725 Restructured Loans on Accrual 827 152 502 Real Estate Owned (REO) 525 552 120 Repossessed Assets 28 52 0 Total Non-performing Assets $2,540 $3,656 $2,347 Total Non-performing Assets/Total Assets 0.35% 0.52% 0.68% Loan and REO Loss Allowance as a % of Non-Performing Assets 252.80% 160.95% 276.48% AVERAGE BALANCES, INTEREST AVERAGE YIELDS/COSTS Three Fiscal Three Months Year Months Ended Ended Ended June 30, March 31, June 30, 2004 2004 2003 Average Interest Earning Assets: Average Loans receivable: Average Mortgage Loans receivable $116,905 $74,416 $48,929 Average Commercial Loans receivable 200,685 150,557 121,386 Average Construction Loans receivable 47,824 36,356 31,682 Average Consumer Loans receivable 71,651 43,063 25,977 Average Agricultural Loans receivable 45,391 37,547 29,738 Average Unearned Loan Fees and Discounts, Allowance for Loan losses, and Other (8,122) (6,350) (4,667) Total Average Loans receivable, net 474,334 335,589 253,045 Average Loans Held for Sale 5,782 7,584 8,202 Average Mortgage-backed securities 74,874 35,869 9,327 Average Investment securities 39,191 24,840 17,135 Average Other Earning Assets 39,847 35,999 21,239 Total Average Interest Earning Assets 634,028 439,881 308,948 Average Non-Interest Earning Assets 70,733 44,685 25,453 Total Average Assets $704,761 $484,566 $334,401 Average Interest Bearing Liabilities: Average Passbook, NOW, and money market accounts $217,194 $137,025 $73,903 Average Certificates of deposit 197,252 149,626 113,355 Average Advances from FHLB and other 137,932 101,106 80,405 Total Average Interest Bearing Liabilities 552,378 387,757 267,663 Average Non-Interest Bearing Deposits 75,321 43,107 30,345 Average Deposits and Other Borrowed Funds 627,699 430,864 298,008 Average Non-Interest Bearing Liabilities 7,450 6,638 5,658 Total Average Liabilities 635,149 437,502 303,666 Total Average Equity 69,612 47,064 30,735 Total Average Liabilities and Equity $704,761 $484,566 $334,401 Total Tangible Average Equity $48,643 $39,030 $30,735 Interest Rate Yield on Earning Assets 6.19% 6.41% 6.77% Interest Rate Expense on Deposits and Other Borrowed Funds 1.90% 2.31% 3.07% Interest Rate Spread 4.29% 4.10% 3.70% Net Interest Margin 4.31% 4.17% 4.10% 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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