Pocahontas Bancorp (NASDAQ:PFSL)
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Pocahontas Bancorp, Inc. (NASDAQ: PFSL) announced
earnings for the second quarter of the fiscal year ending September
30, 2005. Net income was $0.43 million for the quarter ended March 31,
2005, compared to net income of $1.43 million for the quarter ended
March 31, 2004, a decrease of $1.00 million or 69.9%. Basic earnings
per share were $0.10 and diluted earnings per share were $0.09 for the
quarter ended March 31, 2005 compared to basic earnings per share of
$0.32 and diluted earnings per share of $0.31 for the same period last
year.
Net interest income before provision for loan loss for the quarter
ended March 31, 2005 was $4.16 million compared to $5.03 million for
the quarter ended March 31, 2004, a decrease of $0.87 million or
17.3%. The decrease was primarily due to a 41 basis point decrease in
the net interest rate spread to 2.77% for the quarter ended March 31,
2005 compared to 3.18% for the quarter ended March 31, 2004.
There was no provision for loan losses for the quarter ended March
31, 2005 compared to $0.35 million for the quarter ended March 31,
2004. 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 March 31,
2005 and 2004 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 $0.79 million or 49.1% to $0.82
million for the quarter ended March 31, 2005 compared to the quarter
ended March 31, 2004. The decrease in non-interest income was
primarily due to a $0.34 million trading loss on equity securities
during the quarter ended March 31, 2005 compared to a $0.29 million
trading gain on equity securities during the quarter ended March 31,
2004. A subdued refinancing environment during the quarter ended March
31, 2005 resulted in a decreased number of loans originated and
subsequently sold which resulted in the lower gain on sale of loans.
Gain on sale of loans decreased to $0.20 million for the quarter ended
March 31, 2005 from $0.25 million for the same period a year ago. The
quarter ended March 31, 2004 included a $0.14 million one time gain on
the sale of branches.
Total operating expenses were $4.33 million for the quarter ended
March 31, 2005, compared to $4.11 million for the quarter ended March
31, 2004. The increase in operating expenses was primarily due to a
$0.18 million increase in advertising and donations, as the Company
hired an outside advertising firm instead of handling advertising
internally.
Net income was $1.55 million for the six months ended March 31,
2005, compared to net income of $2.80 million for the six months ended
March 31, 2004, a decrease of $1.25 million or 44.7%. Basic and
diluted earnings per share were $0.34 for the six months ended March
31, 2005 compared to basic earnings per share of $0.62 and diluted
earnings per share of $0.61 for the same period last year.
Net interest income before provision for loan loss for the six
months ended March 31, 2005 was $8.53 million compared to $10.02
million for the six months ended March 31, 2004, a decrease of $1.49
million or 14.9%. The decrease was primarily due to a 28 basis point
decrease in the net interest rate spread to 2.82% for the six months
ended March 31, 2005 compared to 3.10% for the six months ended March
31, 2004 and a 35 basis point decrease in the net interest margin to
2.66% for the six months ended March 31, 2005 from 3.01% for the six
months ended March 31, 2004.
Provision for loan losses for the six months ended March 31, 2005
was $0.13 million compared to $0.50 million for the six months ended
March 31, 2004. 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 six months ended
March 31, 2005 and 2004 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 $0.61 million or 20.4% to $2.37
million for the six months ended March 31, 2005 compared to the six
months ended March 31, 2004. The decrease in non-interest income was
primarily due to $0.42 million decrease in trading gain on equity
securities during the six months ended March 31, 2005 compared to the
six months ended March 31, 2004. A subdued refinancing environment
during the six months ended March 31, 2005 resulted in a decreased
number of loans originated and subsequently sold which resulted in the
lower gain on sale of loans. Gain on sale of loans decreased to $0.48
million for the six months ended March 31, 2005 from $0.60 million for
the same period a year ago. The six months ended March 31, 2004
included a $0.14 million one-time gain on the sale of branches.
Total operating expenses were $8.43 million for the six months
ended March 31, 2005, and $8.25 million for the six months ended March
31, 2004. The increase in operating expenses is primarily due to a
$0.28 million increase in advertising and donations, as the Company
hired an outside advertising firm instead of handling advertising
internally; professional fees increased $0.07 million for the six
months ended March 31, 2005 compared to the same period a year ago.
These increases were partially offset by a decrease in expenses on REO
and other repossessed assets during the six months ended March 31,
2005.
Total assets increased $12.64 million or 1.8% to $732.55 million
at March 31, 2005 compared to balances at September 30, 2004. The
increase was primarily the result of a net increase in investment
securities of $53.04 million or 21.5%, which was partially offset by a
$22.36 million or 63.5% decrease in cash and a $21.86 million or 5.7%
decrease in total net loans. The yield on average interest earning
assets at March 31, 2005 was 5.46% compared to 5.50% at September 30,
2004.
Investment securities increased as the result of the purchase of
$78.03 million of securities, partially offset by the call of $0.50
million of securities, principal payments and maturities of $21.16
million and $3.42 million decrease in market value.
Total net loans receivable were $361.95 million at March 31, 2005
compared to $383.81 million at September 30, 2004. During the
six-month period ended March 31, 2005, proceeds from the sale of
mortgage loans held for sale were $24.20 million, compared to $32.66
million sold during the six months ended March 31, 2004. Total
nonperforming loans decreased 6.9% to $4.35 million at March 31, 2005
from $4.67 million at September 30, 2004.
Total deposits increased $9.65 million or 2.0% to $500.73 million
at March 31, 2005 compared to balances at September 30, 2004. The
increase in deposits was primarily the result of offering more
competitive interest rates on a diverse product base in our market
area. Total Federal Home Loan Bank advances increased $4.28 million or
2.8% to $158.18 million at March 31, 2005 compared to $153.90 million
at September 30, 2004.
Pocahontas Bancorp, Inc. is a unitary thrift holding company,
which owns First Community Bank, a federally chartered savings and
loan. First Community Bank conducts business from 18 offices located
primarily in Northeast Arkansas. Pocahontas Bancorp's common stock is
traded on the NASDAQ National Market under the symbol PFSL.
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POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
March 31, September 30,
2005 2004
ASSETS
Cash $12,856,239 $35,218,491
Cash surrender value of life insurance 7,925,501 7,684,251
Securities held-to-maturity, at cost 138,314,318 86,200,660
Securities available-for-sale, at fair
value 161,563,993 160,633,022
Trading securities, at fair value 2,905,919 1,982,365
Loans receivable, net 360,278,949 382,316,096
Loans receivable, held for sale 1,673,903 1,494,200
Accrued interest receivable 3,985,636 4,196,103
Premises and equipment, net 15,650,086 13,762,438
Federal Home Loan Bank stock, at cost 8,032,600 7,925,900
Goodwill 8,847,572 8,847,572
Core deposit premiums 5,809,921 6,296,523
Other assets 4,701,337 3,350,292
------------- -------------
TOTAL ASSETS $732,545,974 $719,907,913
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $500,730,675 $491,078,533
Federal Home Loan Bank advances 158,183,028 153,896,869
Deferred compensation 2,273,772 2,430,094
Accrued expenses and other liabilities 3,488,574 3,059,676
Trust preferred securities 16,952,300 16,941,917
------------- -------------
Total liabilities 681,628,349 667,407,089
STOCKHOLDERS' EQUITY:
Common stock, 76,024 76,024
Additional paid-in capital 57,447,655 57,447,655
Unearned ESOP shares (2,435,931) (2,116,198)
Accumulated other comprehensive loss, net (2,785,113) (717,085)
Retained earnings 23,017,534 22,212,972
------------- -------------
75,320,169 76,903,368
Less Treasury stock, at cost (24,402,544) (24,402,544)
------------- -------------
Total stockholders' equity 50,917,625 52,500,824
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $732,545,974 $719,907,913
============= =============
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(LOSS) (UNAUDITED)
Three Months Ended Six Months Ended
March 31 March 31
2005 2004 2005 2004
INTEREST INCOME:
Loans receivable $5,522,801 $5,946,192 $11,314,925 $12,159,899
Investment
securities 3,201,417 3,196,538 6,187,410 6,436,348
----------- ----------- ------------ ------------
Total interest
income 8,724,218 9,142,730 17,502,335 18,596,247
INTEREST EXPENSE:
Deposits 2,934,733 2,964,550 5,730,537 6,407,451
Borrowed funds 1,280,508 826,328 2,554,017 1,544,372
Trust preferred
securities 351,875 315,375 693,273 629,569
----------- ----------- ------------ ------------
Total interest
expense 4,567,116 4,106,253 8,977,827 8,581,392
NET INTEREST INCOME 4,157,102 5,036,477 8,524,508 10,014,855
0
PROVISION FOR LOAN
LOSSES - 350,000 125,000 500,000
----------- ----------- ------------ ------------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 4,157,102 4,686,477 8,399,508 9,514,855
OTHER INCOME:
Fees and service
charges 769,876 745,435 1,563,580 1,535,957
Gain on sale of
loans 201,608 252,340 475,038 602,421
Gain on sale of
securities, net - 52,458 - 39,535
Trading gains
(losses), net (338,408) 287,231 23,720 440,453
Gain on sale of
branches - 139,334 - 139,334
Other 185,625 129,720 307,152 221,984
----------- ----------- ------------ ------------
Total other income 818,701 1,606,518 2,369,490 2,979,684
----------- ----------- ------------ ------------
OPERATING EXPENSE:
Compensation and
benefits 2,391,062 2,359,192 4,760,712 4,771,207
Occupancy and
equipment 766,139 723,091 1,434,672 1,451,849
Insurance
premiums 85,882 92,894 176,341 163,280
Professional fees 280,496 240,268 537,253 468,707
Data processing 163,410 172,209 311,622 338,702
Advertising and
donations 253,783 71,674 420,528 142,041
Office supplies 65,175 50,996 117,929 120,871
REO and other
repossessed
assets 11,977 112,875 39,512 177,665
Other 307,421 290,836 626,692 611,831
----------- ----------- ------------ ------------
Total operating
expense 4,325,345 4,114,035 8,425,261 8,246,153
----------- ----------- ------------ ------------
INCOME BEFORE
INCOME TAXES 650,458 2,178,960 2,343,737 4,248,386
INCOME TAXES 220,600 747,069 796,500 1,451,000
----------- ----------- ------------ ------------
NET INCOME $429,858 $1,431,891 $1,547,237 $2,797,386
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(LOSS) (UNAUDITED)
Three Months Ended Six Months Ended
March 31 March 31
2005 2004 2005 2004
OTHER COMPREHENSIVE
INCOME (LOSS), NET
OF TAX:
Unrealized holding
gain (loss) on
securities
available for-
sale arising
during the period $(2,423,551) $1,582,539 $(2,068,028) $894,378
Reclassification
adjustment for
gains included in
net income - (34,622) - (26,093)
------------ ----------- ------------ -----------
Other comprehensive
income (loss) (2,423,551) 1,547,917 (2,068,028) 868,285
------------ ----------- ------------ -----------
COMPREHENSIVE
INCOME (LOSS) $(1,993,693) $2,979,808 $(520,791) $3,665,671
============ =========== ============ ===========
EARNINGS PER SHARE:
Basic earnings
per share $0.10 $0.32 $0.34 $0.62
============ =========== ============ ===========
Diluted earnings
per share $0.09 $0.31 $0.34 $0.61
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