Market Overview

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

Share:





Iowa First Bancshares Corp. (OTC:IOFB) today reported operating
results for the three month period ended March 31, 2017. Consolidated
net income totaled $393,000 compared to net income of $1,000,000 for the
same period last year, a decrease of $607,000 or 60.7%. The main reason
for this reduction in net income was significant deterioration in one
loan relationship at our Fairfield subsidiary bank, resulting in
charge-off of approximately $1,000,000 and concomitant replenishment of
our allowance for loan losses by substantially increasing the provision
for loan losses. Comparing first quarter 2017 and first quarter 2016
results: net interest income increased $84,000 or 2.3%; provision for
loan losses increased $975,000; noninterest income improved $47,000 or
5.8%; noninterest expense increased $81,000 or 2.8%; and income tax
expense decreased $318,000.

The tax equivalent net interest margin of 3.41% during the first quarter
of 2017 compared to 3.52% during the first quarter of 2016 and 3.43% for
the full year of 2016. Basic and diluted earnings per share were $.35
for the three months ended March 31, 2017, a decrease of $.54 from the
same period in 2016. The Company's annualized return on average assets
for the first quarter of 2017 and 2016 was .33% and .88%, respectively.
The Company's annualized return on average equity for the first quarter
of 2017 and 2016 was 3.5% and 8.8%, respectively.

Total assets at March 31, 2017 were nearly $470 million, an increase of
approximately $8.65 million (1.9%) from March 31, 2016. Deposits totaled
$398.6 million, an increase of approximately $12.2 million (3.2%) when
comparing the end of the first quarter of 2017 to 2016. Importantly,
gross loans outstanding at March 31, 2017, increased $28.6 million
(7.6%), compared to March 31, 2016. The allowance for loan losses
totaled $4.59 million at March 31, 2017, or 1.13% of gross loans
outstanding compared to 1.23% of gross loans at March 31, 2016. Net
loans charged-off during the first quarter of 2017 and 2016 totaled
$1,160,000 and $39,000, respectively. Nonaccrual loans totaled $2.4
million or .6% of gross outstanding loans at March 31, 2017. Nonaccrual
loans totaled $1.6 million or .4% of gross outstanding loans at March
31, 2016.

The board of directors declared a quarterly cash dividend of $.29 per
share payable April 25, 2017, to shareholders of record April 3, 2017.
This represents an increase over the previous quarterly dividend payment
of $.285 per share. On an annualized basis this dividend represents a
return of 3.1% on the December 31, 2016 stock price. Iowa First
Bancshares Corp. has paid a cash dividend to shareholders every year
since 1989.

At the annual shareholders meeting held April 20, 2017, the shareholders
voted in favor of the election of all four 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.

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

(Unaudited)

                   

For the Quarter

For the Quarter

Ended

Ended

March 31, 2017

March 31, 2016

 
Net Interest Income $ 3,773 $ 3,689
Provision for Loan Losses 1,080 105
Noninterest Income 855 808
Noninterest Expense 2,967 2,886
Income Tax Expense 188 506
Net Income after Income Taxes 393 1,000
 
Net Income Per Common Share,
Basic and Diluted $ 0.35 $ 0.89
 
           

As of

As of

As of

March 31, 2017

December 31, 2016

March 31, 2016

 
Gross Loans $ 405,949 $ 401,041 $ 377,340
Total Assets 469,999 489,976 461,349
Total Deposits 398,633 414,679 386,397
Tier 1 Capital 44,862 44,796 45,273
Average Common Shares
Outstanding, Basic and Diluted 1,130,436 1,129,930 1,128,951
 
Return on Average Equity 3.5 % 3.1 % 8.8 %
Return on Average Assets .33 % .30 % .88 %
Net Interest Margin (tax equivalent) 3.41 % 3.43 % 3.52 %
Allowance as a Percent of Total Loans 1.13 % 1.16 % 1.23 %
 

View Comments and Join the Discussion!