MUSCATINE, Iowa--(BUSINESS WIRE)--Iowa First Bancshares Corp. (OTCQB: IOFB) today reported record-setting financial results for the year ended December 31, 2014. Net income for the twelve months ended December 31, 2014 totaled $4,256,000 compared with net income of $3,480,000 for 2013, an increase of $776,000 or 22.3%. This set the all-time record for highest annual net income earned by Iowa First. Additionally, earnings per share of $3.78 also reached a new record high in 2014. This was an increase of $.69 per share over the $3.09 earned in 2013, also a 22.3% improvement.
“This significant improvement in earnings performance is a direct result of the vision and guidance by our board of directors, leadership and focus of our management team as well as the demonstrated ability of our dedicated community bankers to effectively execute our business plan,” said D. Scott Ingstad, Chairman, President and CEO.
Kim Bartling, Executive Vice President, COO and Treasurer, added, “The Company’s tremendous financial results in 2014 were directly attributable to improved credit quality, a significant expansion of net interest income, modest growth in noninterest income and continued emphasis on controlling noninterest expenses.”
Net interest income totaled $13,886,000 and $12,872,000 at December 31, 2014 and December 31, 2013, respectively. This increase of $1,014,000, or 7.9%, was the dominant factor in the year-over-year earnings improvement. However, other noninterest income sources totaled $3,450,000 in 2014, which was $101,000, or 3.0%, greater than 2013. Furthermore, other noninterest operating expenses declined by $244,000, or 2.2%, in 2014 as compared to total noninterest operating expenses and the cost associated with the early redemption of trust preferred securities in 2013. This reduction in operating expenses more than offset provision for loan losses of $90,000 in 2014 versus no such provision recognized in 2013.
Contributing to the growth in earnings during 2014 was an increase in loans outstanding, which totaled $355,093,000 at December 31, 2014. This represented an increase of $16,725,000 from the prior year-end. Importantly, while achieving this growth in the loan portfolio, Iowa First also significantly reduced nonaccrual loans which totaled only $1,419,000 at year-end 2014 compared to $5,094,000 at the end of 2013, an impressive 72.1% reduction. Also, rather than incurring additional loan charge-offs while reducing the nonaccrual loans, the company recognized net recoveries during 2014 of $261,000. Total nonaccrual loans represented only 0.4% of gross loans outstanding at December 31, 2014 compared to 1.5% at December 31, 2013.
The year-end 2014 allowance for loan losses of $4,627,000 represented 1.3% of gross loans outstanding, a percentage similar to the prior year-end.
The Company’s annualized return on average assets for 2014 and 2013 was .97% and .79%, respectively. The Company’s annualized return on average equity for the twelve months ended December 31, 2014 and December 31, 2013 was 10.5% and 9.0%, respectively.
Capital increased during 2014, with year-end tier 1 capital of $41,696,000 representing 12.1% of risk-weighted assets, up from $38,665,000 and 11.5% at year-end 2013.
During 2014, Iowa First paid dividends to shareholders totaling $1.14 per share which represented approximately 30% of net income per share. This dividend payout during the year equated to a dividend yield of approximately 3.8% on the beginning of the year stock price.
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 per share data)|
|For the Three||For the Three||For the Twelve||For the Twelve|
|Months Ended||Months Ended||Months Ended||Months Ended|
December 31, 2014
December 31, 2013
December 31, 2014
December 31, 2013
|Net Interest Income||$||3,569||$||3,391||$||13,886||$||12,872|
|Provision for Loan Losses||30||0||90||0|
|Early Redemption of Trust Preferred Securities||0||0||0||285|
|Income Tax Expense||548||503||2,264||1,771|
|Net Income After Income Taxes||1,023||931||4,256||3,480|
|Net Income Per Common Share,|
|Basic and Diluted||$||.91||$||.82||$||3.78||$||3.09|
|As of||As of|
December 31, 2014
December 31, 2013
|Tier 1 Capital||41,696||38,665|
|Return on Average Equity||10.5||%||9.0||%|
|Return on Average Assets||.97||.79|
|Net Interest Margin (tax equivalent)||3.45||3.24|
|Allowance as a Percent of Total Loans||1.30||1.26|