Pocahontas Bancorp, Inc. (NASDAQ: PFSL) announced earnings for the
third quarter of the fiscal year ending September 30, 2006. Net
income was $638,713 for the quarter ended June 30, 2006, compared
to net income of $838,076 for the quarter ended June 30, 2005.
Basic and diluted earnings per share were $0.14 for the quarter
ended June 30, 2006 compared to basic earnings per share of $0.19
and diluted earnings per share of $0.18 for the same period last
year. Net interest income before provision for loan loss for the
quarter ended June 30, 2006 was $3.61 million compared to $4.20
million for the quarter ended June 30, 2005, a decrease of $0.59
million. The decrease was primarily due to a 39 basis point
decrease in the net interest rate spread to 2.20% for the quarter
ended June 30, 2006 compared to 2.59% for the quarter ended June
30, 2005. Net interest margin was 2.15% for the quarter ended June
30, 2006 compared to 2.53% for the quarter ended June 30, 2005.
There was no provision for loan losses for the quarter ended June
30, 2006 or the quarter ended June 30, 2005. Management
periodically reviews the credit quality of the loan portfolio in
order to establish a sufficient allowance for losses on loans. The
provision for loan loss for the quarters ended June 30, 2006 and
2005 reflected management's estimate of the amount of allowance for
loan losses required based on management's current judgments about
the credit quality of individual loans and segments of the loan
portfolio; changing economic and other conditions may require
future adjustments to the allowance for loan losses. Non-interest
income decreased $0.58 million to $1.15 million for the quarter
ended June 30, 2006 compared to the quarter ended June 30, 2005.
The decrease in non-interest income was primarily due to having no
gain on sale of securities during the quarter ended June 30, 2006
compared to a $0.56 million gain for the quarter ended June 30,
2005. Total operating expenses were $4.16 million for the quarter
ended June 30, 2006, compared to $4.65 million for the quarter
ended June 30, 2005. The decrease in total operating expense was
primarily due to decreases in compensation, REO and other
repossessed assets and in advertising and donations expenses. Net
income was $2.13 million for the nine months ended June 30, 2006,
compared to net income of $2.39 million for the nine months ended
June 30, 2005. Basic and diluted earnings per share were $0.47 for
the nine months ended June 30, 2006 compared to basic earnings per
share of $0.53 and diluted earnings per share of $0.52 for the same
period last year. Net interest income before provision for loan
loss for the nine months ended June 30, 2006 was $11.46 million
compared to $12.72 million for the nine months ended June 30, 2005,
a decrease of $1.26 million. The decrease was primarily due to a 38
basis point decrease in the net interest rate spread to 2.31% for
the nine months ended June 30, 2006 compared to 2.69% for the nine
months ended June 30, 2005. Net interest margin was 2.26% for the
nine months ended June 30, 2006 compared to 2.59% for the nine
months ended June 30, 2005. There was a $0.31 million provision for
loan losses for the nine months ended June 30, 2006 compared to a
$0.13 million provision for loan losses for the nine months ended
June 30, 2005. Non-interest income decreased $0.14 million to $3.96
million for the nine months ended June 30, 2006 from $4.10 million
for the nine months ended June 30, 2005. The decrease in
non-interest income was primarily due to a $0.29 million decrease
in gain on the sale of securities and a $0.15 million decrease in
gain on the sale of loans during the nine months ended June 30,
2006 compared to the nine months ended June 30, 2005, which was
partially offset by a $0.16 million gain on the sale of loan
servicing during the nine months ended June 30, 2006, compared to
no gain on loan servicing during the same period last year. Total
operating expenses were $12.86 million for the nine months ended
June 30, 2006, compared to $13.08 million for the nine months ended
June 30, 2005. The $0.22 million decrease in total operating
expense was primarily due to the decreases in compensation and
benefits, and in advertising and donations expenses, which were
partially offset by an increase in occupancy and equipment. Total
assets decreased 1.1% to $732.94 million at June 30, 2006 from
$741.26 million at September 30, 2005. The decrease was primarily
the result of a $7.24 million decrease in cash. The yield on
average interest earning assets at June 30, 2006 was 5.73% compared
to 5.44% at September 30, 2005. Investment balances increased $3.85
million during the nine-month period ended June 30, 2006 due to
investment purchases of $34.44 million, which were partially offset
by $28.57 million in principal payments, calls and maturities and
$2.90 million in investment sales. Total net loans receivable were
$429.22 million at June 30, 2006 compared to $429.60 million at
September 30, 2005. During the nine-month period ended June 30,
2006, proceeds from the sale of mortgage loans held for sale were
$38.32 million, compared to $37.82 million during the nine-month
period ended June 30, 2005. Total nonperforming loans decreased
44.9% to $2.17 million at June 30, 2006 from $3.94 million at
September 30, 2005. Total deposits increased $20.71 million or 4.0%
to $534.75 million at June 30, 2006 compared to $514.04 million at
September 30, 2005. The increase was mainly due to the Company
refocusing its efforts on attracting certificate accounts by
offering more competitive interest rates and terms on those
accounts. Total Federal Home Loan Bank advances decreased $23.57
million or 15.9% to $125.08 million at June 30, 2006 compared to
$148.65 million at September 30, 2005. Accrued expenses and other
liabilities decreased $4.22 million at June 30, 2006 to $2.85
million from $7.07 million at September 30, 2005. The decrease in
accrued expenses and other liabilities was primarily due to a $2.4
million liability for investment securities that were committed
prior to September 30, 2005 but had a settlement date after the
fiscal year end. Stockholders' equity decreased $0.90 million at
June 30, 2006 to $51.47 million from $52.37 million at September
30, 2005. The decrease in stockholders' equity at June 30, 2006
compared to September 30, 2005, was primarily due to the payment of
cash dividends and to the change in accumulated other comprehensive
loss on securities, which were partially offset by net income for
the nine-month period ended June 30, 2006. Accumulated other
comprehensive loss on securities increased $1.84 million to $4.36
million at June 30, 2006 compared to $2.52 million at September 30,
2005. The decrease in market value was due primarily to changes in
market interest rates and is considered a temporary impairment.
Pocahontas Bancorp, Inc. is a unitary thrift holding company that
owns First Community Bank, a federally chartered savings and loan.
First Community Bank conducts business from 21 offices located
primarily in Northeast Arkansas and Tulsa County, Oklahoma.
Pocahontas Bancorp's common stock is traded on the NASDAQ Global
Market under the symbol "PFSL." Except for the historical
information contained in this press release, the matters discussed
may be deemed to be forward-looking statements, within the meaning
of the Private Securities Litigation Reform Act of 1995, that
involve risks and uncertainties, including changes in economic
conditions in the Company's market area, changes in policies by
regulatory agencies, fluctuations in interest rates, demand for
loans in the Company's market area, competition, and other risks
detailed from time to time in the Company's SEC reports. Actual
strategies and results in future periods may differ materially from
those currently expected. These forward-looking statements
represent the Company's judgment as of the date of this release.
The Company disclaims, however, any intent or obligation to update
these forward-looking statements. -0- *T POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------------------------------
June 30, September 30, 2006 2005 (Unaudited) ASSETS Cash and due
from banks $ 16,172,216 $ 23,411,451 Cash surrender value of life
insurance 8,342,739 8,019,097 Securities held-to-maturity, at cost
136,423,194 129,952,373 Securities available-for-sale, at fair
value 96,841,074 99,460,045 Trading securities, at fair value -
3,126,044 Loans receivable, net 425,681,760 426,538,047 Loans
receivable, held for sale 3,536,780 3,057,985 Accrued interest
receivable 4,701,138 4,487,837 Premises and equipment, net
16,137,635 16,716,912 Federal Home Loan Bank stock, at cost
7,154,200 7,962,000 Goodwill 8,847,572 8,847,572 Core deposit
premiums, net 4,593,416 5,323,319 Other assets 4,511,923 4,360,885
------------ ------------ TOTAL ASSETS $732,943,647 $741,263,567
============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES: Deposits $534,754,881 $514,043,734 Federal Home Loan
Bank advances 125,076,586 148,645,397 Deferred compensation
1,817,911 2,176,859 Accrued expenses and other liabilities
2,849,582 7,066,640 Trust preferred securities 16,978,258
16,962,683 ------------ ------------ Total liabilities 681,477,218
688,895,313 ------------ ------------ STOCKHOLDERS' EQUITY: Common
stock, $0.01 par value, 8,000,000 shares authorized; 7,602,492
shares issued and 4,641,717 shares outstanding at June 30, 2006 and
September 30, 2005 76,024 76,024 Additional paid-in capital
57,275,390 57,275,390 Unearned ESOP shares (2,152,968) (2,076,856)
Accumulated other comprehensive loss, net (4,354,961) (2,517,282)
Retained earnings 25,025,488 24,013,522 ------------ ------------
75,868,973 76,770,798 Treasury stock at cost, 2,960,775 shares, at
June 30, 2006 and September 30, 2005 (24,402,544) (24,402,544)
Total stockholders' equity 51,466,429 52,368,254 ------------
------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$732,943,647 $741,263,567 ============ ============ POCAHONTAS
BANCORP, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended June 30, June 30, 2006 2005
2006 2005 INTEREST INCOME: Loans receivable $ 7,208,684 $ 5,876,659
$21,093,650 $17,191,584 Investment securities 2,607,873 3,181,993
7,944,276 9,369,404 ----------- ----------- ----------- -----------
Total interest income 9,816,557 9,058,652 29,037,926 26,560,988
INTEREST EXPENSE: Deposits 4,442,662 3,122,294 12,277,310 8,852,830
Borrowed funds 1,353,128 1,376,226 4,119,373 3,930,244 Trust
preferred securities 408,297 363,597 1,185,020 1,056,870
----------- ----------- ----------- ----------- Total interest
expense 6,204,087 4,862,117 17,581,703 13,839,944 NET INTEREST
INCOME 3,612,470 4,196,535 11,456,223 12,721,044 PROVISION FOR LOAN
LOSSES - - 310,000 125,000 ----------- ----------- -----------
----------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
3,612,470 4,196,535 11,146,223 12,596,044 NON-INTEREST INCOME:
Dividends 93,442 89,986 290,580 217,447 Fees and service charges
794,107 808,673 2,374,334 2,372,253 Gain on sale of loans 213,927
258,390 583,804 733,428 Gain/(loss) on sale of loan servicing
(34,908) - 159,148 - Gain on sale of securities, net 3,982 564,290
269,941 564,290 Trading gain/(loss), net - (16,227) 337 7,492 Other
79,319 29,001 278,702 208,692 ----------- ----------- -----------
----------- Total non- interest income 1,149,869 1,734,113
3,956,846 4,103,602 ----------- ----------- ----------- -----------
ON-INTEREST EXPENSE Compensation and benefits 2,329,291 2,508,409
7,151,644 7,269,121 Occupancy and equipment 724,239 645,067
2,223,130 2,079,739 Insurance premiums 102,965 95,559 301,361
271,899 Professional fees 286,281 251,862 870,658 789,116 Data
processing 194,856 167,173 561,980 478,796 Advertising and
donations 139,147 312,342 429,435 732,870 Office supplies 73,042
140,996 228,612 258,925 REO and other repossessed assets 4,307
132,981 85,410 172,494 Other 307,067 398,483 1,005,814 1,025,174
----------- ----------- ----------- ----------- Total non- interest
expense 4,161,195 4,652,872 12,858,044 13,078,134 -----------
----------- ----------- ----------- INCOME BEFORE INCOME TAXES
601,144 1,277,776 2,245,025 3,621,512 INCOME TAXES (37,569) 439,700
119,048 1,236,200 ----------- ----------- ----------- -----------
NET INCOME $ 638,713 $ 838,076 $ 2,125,977 $ 2,385,312 ===========
=========== =========== =========== EARNINGS PER SHARE: Basic
earnings per share $ 0.14 $ 0.19 $ 0.47 $ 0.53 ===========
=========== =========== =========== Diluted earnings per share $
0.14 $ 0.18 $ 0.47 $ 0.52 =========== =========== ===========
=========== *T
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