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

MUSCATINE, Iowa--()--Iowa First Bancshares Corp. (OTC Pink: IOFB) today reported net income of $909,000 for the quarter ended June 30, 2019, compared to net income of $961,000 for the quarter ended June 30, 2018. The decrease in second quarter net income year-over-year of $52,000 (5.4%) was primarily attributable to lower net interest income of $25,000 (0.7%), lower provision for loan losses of $60,000 (14.3%), and higher noninterest expense of $37,000 (1.2%). Noninterest income decreased $42,000 (4.7%) and income tax expense increased $8,000 (2.9%) when comparing the second quarter of 2019 to the same quarter in 2018.

The Company recorded net income of $1,718,000 for the six months ended June 30, 2019, compared with net income of $1,694,000 for the two quarters ended June 30, 2018, an increase of $24,000 (1.4%). Over that time period, net interest income decreased $31,000 (0.4%), noninterest income decreased $61,000 (3.5%), and noninterest expense increased $82,000 (1.3%). Over the same period provision for loan losses decreased $225,000 (23.4%) and income tax expense increased $27,000 (5.5%).

Basic and diluted earnings per share were $1.52 for the six months ended June 30, 2019, up $.02 or 1.3% from the same period in 2018. The Company’s annualized return on average assets for the first two quarters of 2019 and 2018 was .74% and .72%, respectively. The Company’s annualized return on average equity for the six months ended June 30, 2019 and June 30, 2018 was 7.2% and 7.3%, respectively.

Total assets at June 30, 2019 were $460,428,000, a decrease of $15,537,000 (3.3%) from June 30, 2018. Gross loans outstanding decreased $27,515,000 (7.0%), while total deposits decreased $13,565,000 (3.3%) year-over-year. The allowance for loan losses totaled $6,657,000 at June 30, 2019, or 1.81% of gross loans outstanding. Nonaccrual loans totaled $5.3 million or 1.4% of gross loans outstanding on June 30, 2019, a reduction of $1.1 million from June 30, 2018.

The board of directors declared a $.29 per common share cash dividend to be paid on July 30, 2019, to shareholders of record July 1, 2019. On an annualized basis this dividend represents a return of 3.2% on the December 31, 2018 stock price. Iowa First Bancshares Corp. has paid a cash dividend to shareholders every year since 1989.

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 Three

For the Three

For the Six

For the Six

Months Ended

Months Ended

Months Ended

Months Ended

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

Net Interest Income

$

3,734

$

3,759

$

7,472

$

7,503

Provision for Loan Losses

 

360

 

420

 

735

 

960

Noninterest Income

 

848

 

890

 

1,662

 

1,723

Noninterest Expense

 

3,033

 

2,996

 

6,164

 

6,082

Income Tax Expense

 

280

 

272

 

517

 

490

Net Income after Income Taxes

 

909

 

961

 

1,718

 

1,694

 
Net Income Per Common Share, Basic and Diluted

$

0.80

$

0.85

$

1.52

$

1.50

 
Average year-to-date common shares outstanding, basic and diluted

 

1,130,966

 

1,131,847

 

1,130,966

 

1,131,847

As of

As of

As of

June 3, 2019

December 31, 2018

June 30, 2018

Gross Loans

$

368,039

 

$

379,737

 

$

395,554

 

Total Assets

 

460,428

 

 

462,159

 

 

475,965

 

Total Deposits

 

393,395

 

 

396,047

 

 

406,960

 

Tier 1 Capital

 

48,098

 

 

47,036

 

 

47,115

 

 
Return on Average Equity

 

7.2

%

 

4.9

%

 

7.3

%

Return on Average Assets

 

.74

 

 

.49

 

 

.72

 

Net Interest Margin (tax equivalent)

 

3.39

 

 

3.42

 

 

3.40

 

Allowance as a Percent of Total Loans

 

1.81

 

 

1.66

 

 

1.52

 

 

Contacts

D. Scott Ingstad, Chairman, President and CEO (563-262-4202) Or
Kim K. Bartling, Executive Vice President, Chief Operating Officer & Treasurer (563-262-4216)

Contacts

D. Scott Ingstad, Chairman, President and CEO (563-262-4202) Or
Kim K. Bartling, Executive Vice President, Chief Operating Officer & Treasurer (563-262-4216)