Business & Finance
Wed, January 28, 2009Tue, January 27, 2009Mon, January 26, 2009Sat, January 24, 2009Fri, January 23, 2009Thu, January 22, 2009Wed, January 21, 2009Tue, January 20, 2009Idaho Bancorp: Idaho Bancorp Reports Annual Results for 2008 and Receipt of TARP Capital
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Published in Business and Finance on Friday, January 23rd 2009 at 18:28 GMT, Last Modified on 2009-01-23 18:31:07 by Market WireBOISE, ID--(Marketwire - January 23, 2009) - Today Idaho Bancorp (
Since the Federal Open Market Committee lowered the fed funds rate by 400 basis points during 2008, the Bank's average tax equivalent net interest margin decreased only 41 basis points from the 2007 level to 3.83% for 2008. As a result, a 2008 unfavorable net interest income rate variance of approximately $919,000 was recognized compared to 2007. Average earning assets increased during 2008 by 4.74% or $10,314,000, which led to a favorable net interest income volume variance of approximately $437,000, offsetting the unfavorable rate variance.
The Company is focused on improving its tax equivalent net interest margin with the introduction of the Perfectly Free Business Checking product during the third quarter 2008. The Bank has been accepted into the Certificate of Deposit Account Registry Service (CDARS) program and can offer fully insured certificates of deposit up to $50 million under this program. The Bank also introduced the Picture Perfect Treasury Money Market Account in early 2008.
Due to the weakening economy, the Company has increased its allowance for loan losses to 1.46% of outstanding loans from 1.38% at December 31, 2007. This increase, combined with net charge-offs of $1,395,000, led to a provision in the income statement of $1,845,000, an increase of $1,535,000 compared to 2007. The annualized year-to-date net charge-offs to loans ratio is 0.71%. Nonperforming loans consist of nineteen accounts totaling $9,350,000, or 4.43% of loans outstanding as of December 31, 2008 compared to $911,000 in nonperforming loans at the end of 2007. The Company believes it has an adequate reserve for these loans.
As previously reported, the Company was one of the first non-SEC reporting companies to receive preliminary approval for TARP capital from the U.S. Treasury. Idaho Bancorp is pleased to announce that it did receive final approval to receive $6.9 million of TARP capital, which was funded to the Bank on January 16, 2009 and will be recorded as preferred stock on the Bank's balance sheet. Until the preferred stock is redeemed, the Bank will pay cumulative dividends of 5% to the U.S. Treasury for the use of this capital. The cumulative dividend rate increases to 9% after five years. One of the purposes, as stated in the legislation allowing qualifying institutions to purchase TARP capital, is that the funds are to be used in a manner that "maximizes overall returns to the taxpayers of the United States." This indicates the U.S. Treasury will only allow safe and sound institutions to purchase TARP capital. Jim Latta, President and CEO of Idaho Bancorp's subsidiary, Idaho Banking Company, said, "We appreciate the faith the U.S. Treasury has shown in our bank. This investment will allow us additional flexibility to manage our business in the challenging current market environment. The capital will also give us the opportunity to increase our active relationship lending within the Treasure Valley."
The Bank's noninterest expenses increased by $478,000 or 6% compared to 2007 levels, largely due to one time charges of approximately $453,000 due to changes in management personnel. Idaho Banking Company, the primary subsidiary of Idaho Bancorp, continues to look for ways to become more efficient and to reduce its noninterest expenses in relation to its operating revenue.
Idaho Bancorp President and CEO James C. Latta commented, "2008 was a turbulent year for all banks in the Treasure Valley. The Bank is very fortunate to have employees dedicated to providing lasting impressions of trust and service, while building strong loan and deposit relationships with businesses and individuals within our market area. Our employees' genuine concern for the success of the Bank's customers will reap rewards for the Bank's shareholders."
Idaho Bancorp is the parent company of Idaho Banking Company, a state-chartered commercial bank and member of the Federal Reserve, which was organized in 1996 and operates four branch offices, and a construction & mortgage home loan center. The Bank serves clients throughout southwestern Idaho.
This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected, including but not limited to the following: the concentration of loans of the company's banking subsidiary, particularly with respect to commercial and residential real estate lending; a continued decline in the housing and real estate market, changes in the regulatory environment and increases in associated costs, particularly ongoing compliance expenses and resource allocation needs in response to regulatory rules and guidelines; vendor quality and efficiency; employee recruitment and retention; the company's ability to control risks associated with rapidly changing technology both from an internal perspective as well as for external providers; increased competition among financial institutions; fluctuating interest rate environments; a tightening of available credit, and similar matters. Readers are cautioned not to place undue reliance on the forward-looking statements. Idaho Bancorp undertakes no obligation to publicly revise or update the forward-looking statements to reflect events or circumstances that arise after the date of this release. This statement is included for the express purpose of invoking PSLRA's safe harbor provisions.
Idaho Bancorp and Subsidiary Consolidated Financial Highlights (unaudited) (Dollars in thousands, except per share) For the year ended December 31: 2008 2007 $ Change % Change --------- --------- --------- --------- Net interest income $ 8,598 $ 9,080 $ (482) -5% Provision for loan losses 1,845 310 1,535 495% Mortgage banking income 643 715 (72) -10% Other noninterest income 509 625 (116) -19% Noninterest expense 8,339 7,860 479 6% Net income before taxes (434) 2,250 (2,684) -119% Income taxes (202) 809 (1,011) -125% Net income (loss) (232) 1,441 (1,673) -116% Earnings per share Basic (0.13) 0.79 (0.92) -116% Diluted (0.13) 0.78 (0.91) -117% At December 31: 2008 2007 $ Change % Change --------- --------- --------- --------- Loans $ 211,133 $ 190,366 $ 20,767 11% Allowance for loan losses 3,073 2,623 450 17% Assets 249,285 234,502 14,783 6% Deposits 185,467 189,226 (3,759) -2% Shareholders' equity 16,743 17,438 (695) -4% Nonperforming loans 9,350 911 8,439 926% Other real estate owned * 380 0 380 N/A Book value per share 9.10 9.61 (0.51) -5% Shares of common stock outstanding 1,839,860 1,814,222 25,638 1% Allowance to loan ratio 1.46% 1.38% Allowance to nonperforming loans 33% 288% Nonperforming loans to total loans 4.43% 0.48% Averages for the year ended December 31: 2008 2007 $ Change % Change --------- --------- --------- --------- Loans $ 195,998 $ 181,719 $ 14,279 8% Earning assets 227,866 217,553 10,313 5% Assets 238,069 229,412 8,657 4% Deposits 182,004 186,789 (4,785) -3% Shareholders' equity 17,755 16,779 976 6% For the year ended December 31: Return on average assets -0.10% 0.63% Return on average equity -1.31% 8.59% Average loans to deposits 107.69% 97.29% Net interest margin - tax equivalent 3.83% 4.24% Net loan charge-offs (recoveries) 1,395 106 Net charge-offs (recoveries) to loans (annualized) 0.71% 0.06% * Includes only retaken property. Idaho Bancorp and Subsidiary Quarterly Consolidated Financial Highlights (unaudited) (Dollars in thousands, except per share) 2008 Q4 2008 Q3 2008 Q2 2008 Q1 2007 Q4 -------- -------- -------- -------- ------- Net interest income $ 2,112 $ 2,250 $ 2,122 $ 2,114 $ 2,325 Provision for loan losses 1,240 260 200 145 125 Mortgage banking income 100 168 161 214 197 Other noninterest income 118 135 123 133 217 Noninterest expense 1,718 2,044 2,443 2,134 1,955 Net income before taxes (628) 249 (237) 182 659 Income taxes (237) 80 (98) 53 278 Net income (loss) (391) 169 (139) 129 381 Earnings per share Basic (0.21) 0.09 (0.08) 0.07 0.21 Diluted (0.21) 0.09 (0.08) 0.07 0.21 Average loans 202,924 197,948 193,323 189,698 194,381 Average earning assets 231,825 227,730 228,614 223,253 227,257 Average assets 242,057 238,021 238,248 233,908 238,798 Average deposits 180,689 176,924 185,846 184,627 191,565 Average shareholders' equity 17,730 17,763 17,985 17,541 17,439 Return on average assets -0.64% 0.28% -0.23% 0.22% 0.63% Return on average equity -8.77% 3.78% -3.11% 2.96% 8.67% Average loans to deposits 112.31% 111.88% 104.02% 102.75% 101.47% Net interest margin - tax equivalent 3.68% 3.99% 3.79% 3.87% 4.13% Nonperforming loans - period end $ 9,350 $ 2,158 $ 60 $ 316 $ 911 Other real estate owned - period end * 380 336 206 - - Loans - period end 211,133 199,788 196,894 189,284 190,366 Allowance for loan losses - period end 3,073 3,024 2,868 2,662 2,623 Net charge-offs (recoveries) - quarterly 1,191 104 (6) 106 91 Allowance to loans 1.46% 1.51% 1.46% 1.41% 1.38% Allowance to nonperforming loans 33% 140% 4780% 842% 288% Nonperforming loans to total loans 4.43% 1.08% 0.03% 0.17% 0.48% Net charge-offs to loans - annualized 2.33% 0.21% -0.01% 0.22% 0.19% * Includes only retaken property.
