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

MUSCATINE, Iowa–(BUSINESS WIRE)–Iowa First Bancshares Corp. (OTCBB: IOFB) today reported operating
results for the three month period ended March 31, 2011. Consolidated
net income totaled $804,000, a considerable improvement over net income
of $668,000 for the same period last year. The increase in first quarter
net income year-over-year of $136,000 or 20.4% continued the upward
trend established last year when net income for all of 2010 increased
$333,000 or 11.5% compared to 2009.

The primary contributing factors to this improvement in first quarter
2011 net income in relation to the same period in 2010 include an
increase of $31,000 in net interest income, a reduction of $160,000 in
provision for loan losses, and a reduction of $97,000 in noninterest
expense. These improvements more than offset a decline of $87,000 in
noninterest income and an increase of $65,000 in income tax expense. The
Company’s annualized return on average assets and return on average
equity for the quarter ended March 31, 2011, was .77% and 10.0%,
respectively. Annualized return on average assets and return on average
equity for the first quarter of 2010 was .67% and 8.7%, respectively.

The $87,000 decrease in noninterest income during the first three months
of 2011 compared to 2010 reflected a reduction of $30,000 in fees
collected for overdrawn deposit accounts. New regulations limiting such
fees became effective during the third quarter of 2010. Also impacting
the decrease in noninterest income was, in conjunction with other
factors, a reduction from the prior year in the volume of residential
real estate loans underwritten and sold to the secondary market.

The reduction of $160,000 in the provision for loan losses for the first
quarter of 2011 compared to 2010 reflects a more stabilized economy and
management’s assessment that potential problem credits have been
identified and adequately reserved. The $97,000 reduction in noninterest
expense was heavily influenced by FDIC insurance premiums which
decreased $47,000, expenses associated with carrying other real estate
which were reduced by $28,000, and computer processing costs which
declined by $17,000.

Total assets increased $15.3 million (3.8%) while total deposits grew
$22.8 million (6.8%), comparing the end of the first quarter of 2011 to
2010. Gross loans outstanding at March 31, 2011, increased $4.6 million
(1.5%), compared to March 31, 2010. The allowance for loan losses
totaled approximately $5.2 million at March 31, 2011, or 1.71% of gross
loans outstanding compared to 1.56% of gross loans at March 31, 2010.
Nonaccrual loans and loans past due 90 days or more and still accruing
decreased $881,000 or 15.0% from March 31, 2010 to March 31, 2011,
totaling $4,983,000 at the current quarter-end.

The board of directors declared a $.285 per share cash dividend to be
paid on April 26, 2011, to shareholders of record March 31, 2011. On an
annualized basis this dividend represents a return of 4.6% on the
December 31, 2010 stock price.

At the annual shareholders meeting held April 21, 2011, the shareholders
voted in favor of the election of two incumbent directors and two new
directors to serve three year terms on the board of directors.

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 several factors could cause actual results to differ
materially from those in the forward-looking statements. 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
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) the strength of the local
and national economy; (2) changes in interest rates, legislative or
regulatory changes, monetary and fiscal policies of the U.S. government,
including policies of the U. S. Treasury and the Federal Reserve Board,
and changes in the scope and cost of Federal Deposit Insurance
Corporation insurance and fees; (3) the loss of key executives or
employees; (4) changes in the quality and composition of the Company’s
loan and securities portfolios, demand for loan products and deposit
flows; (5) changes in the assumptions and estimates underlying the
establishment of reserves for possible loan losses and other estimates;
(6) the effects of competition and the overall demand for financial
services in the Company’s market areas; (7) our ability to implement new
technologies and develop and maintain secure and reliable electronic
systems; (8) changes in accounting principles, policies, and guidelines;
and (9) other risk factors.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollar amounts in thousands, except per share data)

(Unaudited)

 

 

For the Quarter

 

For the Quarter

Ended

Ended

March 31, 2011

March 31, 2010

 

 

Net Interest Income

$

3,227

$

3,196

Provision for Loan Losses

180

340

Noninterest Income, including securities gains

825

912

Operating Expense

2,692

2,789

Net Income after Income Taxes

804

668

 

Net Income Per Common Share,

Basic and Diluted

$

0.71

$

0.59

 

 

As of

 

As of

 

As of

March 31, 2011

December 31, 2010

March 31, 2010

 

Gross Loans

$

304,001

$

304,381

$

299,427

Total Assets

420,978

416,484

405,716

Total Deposits

360,957

353,603

338,117

Tier 1 Capital

36,079

35,598

34,178

 

Return on Average Equity

10.0

%

10.2

%

8.7

%

Return on Average Assets

.77

%

.79

%

.67

%

Net Interest Margin (tax equivalent)

3.40

%

3.52

%

3.54

%

Allowance as a Percent of Total Loans

1.71

%

1.70

%

1.56

%

Article source: http://www.businesswire.com/news/home/20110428005010/en/Iowa-Bancshares-Corp.-Reports-Quarter-Financial-Results