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Iowa First Bancshares Corp. Reports Full Year Financial Results

^{Published on 2009-02-18 09:14:29, Last Modified on 2009-02-18 09:15:54 - Market Wire}
 

MUSCATINE, Iowa--([ BUSINESS WIRE ])--Iowa First Bancshares Corp. (OTCBB: IOFB) today reported net income for 2008 totaling $2,859,000. This earnings figure was $1,170,000 or 29% less than the all-time high net income reported the prior year. "Given the extremely difficult economic conditions experienced worldwide during 2008, we take some solace in the fact Iowa First Bancshares Corp. earned a return on average assets of .70% and a return on average equity of 9.8%," said Chairman Scott Ingstad. "While these results clearly are below our company's normal expectations, they do compare somewhat more favorably with our industry in a year when there was a dramatic decline in overall bank earnings," according to Chairman Ingstad.

A major contributing factor in the net income reduction in 2008 was a deterioration of certain loans as evidenced by a $1,674,000 increase in non-accrual loans to total $5,585,000 or 1.72% of gross loans outstanding. Net loans charged off totaled $1,395,000 in 2008 compared to $188,000 the previous year. The year-end 2008 allowance for loan losses of $4,483,000 represented 1.38% of total loans which is considerably higher than 2007's year-end allowance of $3,445,000, or 1.05% of total loans. In order to adequately fund the loan loss allowance in 2008, our banks incurred a provision expense of $2,433,000, up from $170,000 in 2007.

Excluding the higher provision for loan losses, the company performed reasonably well in terms of net interest income, other non-interest income, and other non-interest expenses. Specifically, net interest income increased $479,000 or 3.7% in 2008, non-interest income grew $157,000 or 4.8%, and non-interest expense grew $164,000 or only 1.6%, excluding a nonrecurring $100,000 write-down of an asset.

During 2008, Iowa First purchased $1,311,000 of stock for the treasury and paid dividends to shareholders of $1,316,000. Dividends declared to shareholders totaled $1.14 per share in 2008, an increase from $1.11 in 2007.

Year-end 2008 total assets, loans, and deposits were $403,319,000, $325,631,000, and $322,034,000, respectively, all of which were modestly lower than total assets of $408,202,000, loans of $327,546,000, and deposits of $333,440,000 as of December 31, 2007.

Iowa First Bancshares Corp. and its subsidiary banks continue to maintain strong capital ratios which exceed the thresholds of banking regulations to be considered well-capitalized. In order to maintain this well-capitalized status, a primary goal of the company, the board of directors is retaining the possible option of issuing additional capital in accordance with the U.S. Treasury's capital purchase program, which is limited to healthy financial institutions such as Iowa First.

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 contains 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. Forward-looking statements may relate to anticipated revenues, gross margins, earnings, and growth of the market for our services and products. The following factors, among others, could cause actual results to differ from those indicated in the forward-looking statements: uncertainties associated with market acceptance of and demand for the Company's services and products, impact of competitive products and pricing, dependence on third party suppliers, uncertainties associated with the development and deployment of technology, regulatory or other developments in the industry, and the emergence of future opportunities or threats.