Today Idaho First Bank (OTCBB: IDFB) reported financial results for
2008. The Bank experienced significant growth during 2008. Loans
grew to $51.7 million, a 90% increase from December 31, 2007.
Deposits grew by 67% during the same period to $53.3 million at the
end of 2008. "We are pleased with the growth of the Bank during
these times of economic challenge. We believe we have become the
largest bank in McCall during the year, measured by deposits," said
Greg Lovell, President and CEO.
The net loss reported for 2008 was $2,007,000 compared to a loss
of $1,447,000 in 2007. The Federal Reserve's unprecedented lowering
of short-term interest rates had a negative impact on the Bank's
net interest margin. Net interest margin fell from 4.37% in the
fourth quarter of 2007 to 3.54% in the fourth quarter of 2008. Don
Madsen, the Bank's Chief Financial Officer, commented, "The Federal
Reserve Bank's actions are unprecedented. Low interest rates have
had a significant negative impact on our net interest margin and
will continue to hurt future performance."
The economic turmoil is a major factor in the Bank increasing
its provision for loan losses from $109,000 in 2007 to $1,050,000
during 2008. The large increase in the provision for loan losses
was required by loan charge-offs of $709,000 and the rapid loan
growth. The Bank believes there will be some recovery during 2009
of charged-off loans, however, the continued weakness in Idaho and
the nation will continue to cause financial stress in the loan
portfolio. The Bank believes that loan charge-offs experienced in
2008 were caused by economic difficulties and not by poor loan
underwriting. The Bank has taken additional actions to increase
monitoring and management of the credit portfolio.
The allowance for loan losses was 1.43% of total loans at the
end of the year and was 64% of nonperforming loans at the end of
the year. The Bank continues to be impacted by worsening economic
conditions both nationally and locally. As of December 31, 2008,
nonperforming loans increased to $1,150,000, or 2.23% of loans. In
addition, the Bank had $459,000 of other real estate owned bringing
total nonperforming assets to $1,609,000. "The Bank's lending staff
is working diligently with our clients to identify potential
problems early and to begin mitigation actions as soon as
possible," stated Lovell.
The Bank continued to focus on expense management during the
fourth quarter. Non-interest expense decreased from the third
quarter despite a significant increase in FDIC insurance costs.
These increases are a result of the FDIC needing to increase
deposit insurance premiums to recapitalize the fund in compliance
with federal law.
Stockholders' equity was $6.5 million at December 31, 2008, and
book value per share was $4.73. The Bank was able to issue 465,620
new shares of common stock at $5.00 per share in 2008, resulting in
new capital of $2.3 million. The Bank continues to consider
participation in the Capital Purchase Program from the U. S.
Treasury as well as other strategic alternatives to enhance
shareholder value.
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. These risks and uncertainties include, but
are not limited to, economic conditions, the regulatory
environment, loan concentrations, vendors, employees, technology,
competition, and interest rates. Readers are cautioned not to place
undue reliance on the forward-looking statements. Idaho First Bank
has no obligation to publicly update the forward-looking statements
after the date of this release. This statement is included for the
express purpose of invoking PSLRA's safe harbor provisions.
Idaho First Bank
Financial Highlights (unaudited)
(Dollars in thousands, except per share)
For the year ended December 31: 2008 2007 Change
--------- --------- --------------------
Net interest income $ 1,977 $ 1,472 $ 505 34%
Provision for loan losses 1,050 109 941 863%
Mortgage banking income 161 141 20 14%
Other noninterest income 206 154 52 34%
Noninterest expenses 3,301 3,105 196 6%
Net loss (2,007) (1,447) (560) -39%
At December 31: 2008 2007 Change
--------- --------- --------------------
Loans $ 51,665 $ 27,123 $ 24,542 90%
Allowance for loan losses 741 400 341 85%
Assets 64,375 38,207 26,168 68%
Deposits 53,326 31,882 21,444 67%
Stockholders' equity 6,509 6,004 505 8%
Nonaccrual loans 645 495 150 30%
Accruing loan more than 90
days past due 505 505
Other real estate owned 459 459
Total nonperforming assets 1,609 495 1,114 225%
Book value per share 4.73 6.59 (1.86) -28%
Shares outstanding 1,376,584 910,964 465,620 51%
Allowance to loans 1.43% 1.47%
Allowance to nonperforming
loans 64% 81%
Nonperforming loans to total
loans 2.23% 1.83%
Averages for year ended
December 31: 2008 2007 Change
--------- --------- --------------------
Loans $ 40,440 $ 23,722 $ 16,718 70%
Earning assets 51,626 32,518 19,108 59%
Assets 54,215 34,669 19,546 56%
Deposits 45,222 29,543 15,679 53%
Stockholders' equity 5,592 4,430 1,162 26%
Loans to deposits 89% 80%
Net interest margin 3.83% 4.53%
Idaho First Bank
Quarterly Financial Highlights (unaudited)
(Dollars in thousands)
Q4 2008 Q3 2008 Q2 2008 Q1 2008 Q4 2007
-------- -------- -------- -------- --------
Net interest income $ 537 $ 543 $ 477 $ 420 $ 393
Provision for loan
losses 400 175 65 410 68
Mortgage banking income 21 58 49 33 37
Other noninterest income 50 65 48 43 51
Noninterest expenses 811 840 836 814 829
Net loss (603) (349) (327) (728) (416)
Period End Information Q4 2008 Q3 2008 Q2 2008 Q1 2008 Q4 2007
-------- -------- -------- -------- --------
Loans $ 51,665 $ 45,833 $ 42,123 $ 36,689 $ 27,123
Allowance for loan
losses 741 697 527 462 400
Nonperforming loans 1,150 428 147 147 495
Other real estate owned 459
Quarterly net
charge-offs 356 5 - 348 -
Allowance to loans 1.43% 1.52% 1.25% 1.26% 1.47%
Allowance to
nonperforming loans 64% 163% 359% 314% 81%
Nonperforming loans to
loans 2.23% 0.93% 0.35% 0.40% 1.83%
Average Balance
Information Q4 2008 Q3 2008 Q2 2008 Q1 2008 Q4 2007
-------- -------- -------- -------- --------
Loans $ 47,504 $ 43,025 $ 39,929 $ 31,195 $ 26,221
Earning assets 60,269 56,757 48,764 40,563 35,643
Assets 62,853 59,588 51,281 42,984 38,048
Deposits 53,441 50,236 42,810 34,255 31,699
Stockholders' equity 5,991 5,615 5,039 5,717 6,050
Loans to deposits 89% 86% 93% 91% 83%
Net interest margin 3.54% 3.81% 3.93% 4.16% 4.37%
Contacts: Greg Lovell President and CEO 208-630-2001 Don Madsen
CFO 208-947-0430
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