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Iowa First Bancshares Corp. Reports First Quarter Financial Results and Dividend Payment

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MUSCATINE, Iowa--(BUSINESS WIRE)--

Iowa First Bancshares Corp. (OTC Pink: IOFB) today reported operating results for the three month period ended March 31, 2016. Consolidated net income totaled $1,000,000 compared to net income of $985,000 for the same period last year, a relatively small increase of $15,000 or 1.5%. Comparing first quarter 2016 and first quarter 2015 results: net interest income increased $202,000 or 5.8%; provision for loan losses increased to $105,000 from $30,000 the prior year; noninterest income improved $15,000 or 1.9%; noninterest expense increased $147,000 or 5.4%; and income tax expense decreased $20,000 or 3.8%.

The tax equivalent net interest margin of 3.52% during the first quarter of 2016 increased slightly from 3.50% during the first quarter of 2015. Basic and diluted earnings per share were $.89 for the three months ended March 31, 2016, an increase of $.02 from the same period in 2015. The Company's annualized return on average assets for the first quarter of 2016 and 2015 was .88% and .90%, respectively. The Company's annualized return on average equity for the first quarter of 2016 and 2015 was 8.8% and 9.3%, respectively.

Total assets exceeding $461 million increased approximately $13.5 million (3.0%) and deposits totaling over $386 million increased approximately $7.3 million (1.9%) when comparing the end of the first quarter of 2016 to 2015. Importantly, gross loans outstanding at March 31, 2016, increased $18.6 million (5.2%), compared to March 31, 2015. The allowance for loan losses totaled $4.63 million at March 31, 2016, or 1.23% of gross loans outstanding compared to 1.29% of gross loans at March 31, 2015. Net loans charged-off during the first quarter of 2016 and 2015 totaled $39,000 and $27,000, respectively. Nonaccrual loans totaled $1.63 million or .4% of gross outstanding loans at March 31, 2016. Nonaccrual loans totaled $1.42 million, which was also .4% of gross outstanding loans at March 31, 2015.

The board of directors declared a $.285 per share cash dividend, payable April 26, 2016, to shareholders of record April 1, 2016. On an annualized basis this dividend represents a return of 3.3% on the December 31, 2015 stock price.

At the annual shareholders meeting held April 21, 2016, the shareholders voted in favor of the election of all three director nominees. The shareholders also voted in favor of each of the other proposals which had been recommended by the Company.

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.

Users of this press release are encouraged to read the Iowa First Bancshares Corp. 2015 Annual Report to Shareholders. Of particular note, page 37 of the aforementioned report discusses contingencies. While the final outcome of any legal proceeding is inherently uncertain, based upon current information, including but not limited to the opinion of the Company's legal counsel, the Company has concluded that in the specific matter discussed in the contingency section of the annual report a loss is neither probable nor estimable at this time. Consequently, no loss contingency has been established as of March 31, 2016.

 

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

       

For the Quarter

For the Quarter

Ended

Ended

March 31, 2016

March 31, 2015

 
Net Interest Income $ 3,689 $ 3,487
Provision for Loan Losses 105 30
Noninterest Income 808 793
Noninterest Expense 2,886 2,739
Income Tax Expense 506 526
Net Income after Income Taxes 1,000 985
 

Net Income Per Common Share,

Basic and Diluted

$ 0.89 $ 0.87
 
           

As of

As of

As of

March 31, 2016

December 31, 2015

March 31, 2015

 
Gross Loans $ 377,340 $ 373,288 $ 358,707
Total Assets 461,349 456,784 447,840
Total Deposits 386,397 387,833 379,128
Tier 1 Capital 45,273 44,595 42,360

Average Common Shares

Outstanding, Basic and Diluted

1,128,951 1,128,445 1,127,319
 
Return on Average Equity 8.8 % 9.4 % 9.3 %
Return on Average Assets .88 % .92 % .90 %
Net Interest Margin (tax equivalent) 3.52 % 3.49 % 3.50 %
Allowance as a Percent of Total Loans 1.23 % 1.22 % 1.29 %
 

Iowa First Bancshares Corp.
D. Scott Ingstad, 563-262-4202
Chairman, President and CEO
or
Kim K. Bartling, 563-262-4216
Executive Vice President, Chief Operating Officer & Treasurer




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