Pocahontas Bancorp (NASDAQ:PFSL)
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Pocahontas Bancorp, Inc. (Nasdaq-NMS:PFSL) announced
earnings for the second quarter of the fiscal year ending September
30, 2006.
Basic and diluted earnings per share were $0.14 for the quarter
ended March 31, 2006 compared to basic earnings per share of $0.10 and
diluted earnings per share of $0.09 for the same period last year. Net
income was $0.63 million for the quarter ended March 31, 2006,
compared to net income of $0.43 million for the quarter ended March
31, 2005.
Net interest income before provision for loan loss for the quarter
ended March 31, 2006 was $3.89 million compared to $4.16 million for
the quarter ended March 31, 2005, a decrease of $0.27 million. The
decrease was primarily due to a 37 basis point decrease in the net
interest rate spread to 2.33% for the quarter ended March 31, 2006
compared to 2.70% for the quarter ended March 31, 2005. Net interest
margin was 2.29% for the quarter ended March 31, 2006 compared to
2.55% for the quarter ended March 31, 2005.
There was a $0.31 million provision for loan losses for the
quarter ended March 31, 2006 compared to no provision for loan losses
for the quarter ended March 31, 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 March 31, 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 increased $0.53 million to $1.35 million for
the quarter ended March 31, 2006 compared to the quarter ended March
31, 2005. The increase in non-interest income was primarily due to a
$0.21 million gain on sale of securities during the quarter ended
March 31, 2006 compared to no gain for the quarter ended March 31,
2005 and no trading loss on equity securities during the quarter ended
March 31, 2006 compared to a $0.34 million trading loss on equity
securities for the quarter ended March 31, 2005.
Total operating expenses were $4.38 million for the quarter ended
March 31, 2006, compared to $4.33 million for the quarter ended March
31, 2005. The increase in total operating expense was primarily due to
the increases in REO and other repossessed assets and professional
fees, which were partially offset by a decrease in advertising.
Net income was $1.49 million for the six months ended March 31,
2006, compared to net income of $1.55 million for the six months ended
March 31, 2005. Basic and diluted earnings per share were $0.33 for
the six months ended March 31, 2006 compared to basic and diluted
earnings per share of $0.34 for the same period last year.
Net interest income before provision for loan loss for the six
months ended March 31, 2006 was $7.84 million compared to $8.53
million for the six months ended March 31, 2005, a decrease of $0.69
million. The decrease was primarily due to a 37 basis point decrease
in the net interest rate spread to 2.38% for the six months ended
March 31, 2006 compared to 2.75% for the six months ended March 31,
2005. Net interest margin was 2.32% for the six months ended March 31,
2006 compared to 2.63% for the six months ended March 31, 2005.
There was a $0.31 million provision for loan losses for the six
months ended March 31, 2006 compared to a $0.13 million provision for
loan losses for the six months ended March 31, 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 six months ended March 31, 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 increased $0.44 million to $2.81 million for
the six months ended March 31, 2006 from $2.37 million for the six
months ended March 31, 2005. The increase in non-interest income was
primarily due to a $0.27 million gain on the sale of securities and a
$0.19 million gain on the sale of loan servicing during the six months
ended March 31, 2006 compared to no gain on the sale of securities or
loan servicing for the six months ended March 31, 2005.
Total operating expenses were $8.70 million for the six months
ended March 31, 2006, compared to $8.43 million for the six months
ended March 31, 2005. The increase in total operating expense was
primarily due to the increases in compensation and benefits, occupancy
and equipment and other expenses, which were partially offset by a
decrease in advertising and donations. The Bank had 21 locations at
March 31, 2006 compared to 19 locations at March 31, 2005. Both
compensation and benefits and occupancy and equipment expenses
increased during the six-month period ended March 31, 2006 compared to
the same period last year as a result of the increase in branch
locations.
Total assets decreased 0.5% to $737.67 million at March 31, 2006
from $741.26 million at September 30, 2005. The decrease was primarily
the result of a $5.67 million decrease in total net loans and an $8.71
million decrease in cash, which were partially offset by an increase
in investment securities of $14.15 million. The yield on average
interest earning assets at March 31, 2006 was 5.69% compared to 5.44%
at September 30, 2005.
Investment balances increased $14.15 million during the six-month
period ended March 31, 2006 due primarily to investment purchases of
$34.44 million, which were partially offset by $19.08 million in
principal payments, calls and maturities and $2.90 million in
investment sales.
Total net loans receivable were $423.93 million at March 31, 2006
compared to $429.60 million at September 30, 2005. During the
six-month period ended March 31, 2006, proceeds from the sale of
mortgage loans held for sale were $22.25 million, compared to $24.20
million during the six-month period ended March 31, 2005. Total
nonperforming loans decreased 39.1% to $2.40 million at March 31, 2006
from $3.94 million at September 30, 2005.
Total deposits increased $14.16 million or 2.8% to $528.20 million
at March 31, 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 $13.17 million or 8.9% to $135.48 million at March
31, 2006 compared to $148.65 million at September 30, 2005.
Accrued expenses and other liabilities decreased $3.84 million at
March 31, 2006 to $3.23 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.
Stockholder's equity decreased $0.66 million at March 31, 2006 to
$51.71 million from $52.37 million at September 30, 2005. The decrease
in stockholders' equity at March 31, 2006, compared to September 30,
2005, was primarily due to the change in accumulated other
comprehensive loss on securities and dividends declared, which were
partially offset by net income for the six-month period ended March
31, 2006. Accumulated other comprehensive loss on securities decreased
$1.33 million to $3.84 million at March 31, 2006 compared to $2.52
million at September 30, 2005, the decrease in market value was due
entirely to changes in market interest rates and is considered a
temporary impairment.
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 21 offices located
primarily in Northeast Arkansas and Tulsa County, Oklahoma. Pocahontas
Bancorp's common stock is traded on the NASDAQ National 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.
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POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
March 31, September 30,
2006 2005
ASSETS
Cash $ 14,705,765 $ 23,411,451
Cash surrender value of life insurance 8,257,371 8,019,097
Securities held-to-maturity, at cost 140,492,855 129,952,373
Securities available-for-sale, at fair
value 103,070,552 99,460,045
Trading securities, at fair value - 3,126,044
Loans receivable, net 421,224,923 426,538,047
Loans receivable, held for sale 2,705,477 3,057,985
Accrued interest receivable 4,502,958 4,487,837
Premises and equipment, net 16,400,256 16,716,912
Federal Home Loan Bank stock, at cost 8,130,000 7,962,000
Goodwill 8,847,572 8,847,572
Core deposit premiums, net 4,836,717 5,323,319
Other assets 4,499,540 4,360,885
------------ ------------
TOTAL ASSETS $737,673,986 $741,263,567
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $528,199,424 $514,043,734
Federal Home Loan Bank advances 135,483,858 148,645,397
Deferred compensation 2,084,390 2,176,859
Accrued expenses and other liabilities 3,224,612 7,066,640
Trust preferred securities 16,973,066 16,962,683
------------ ------------
Total liabilities 685,965,350 688,895,313
------------ ------------
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 March 31, 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 (3,845,378) (2,517,282)
Retained earnings 24,758,112 24,013,522
------------ ------------
76,111,180 76,770,798
Treasury stock at cost, 2,960,775 shares,
at March 31, 2006 and September 30, 2005 (24,402,544) (24,402,544)
------------ ------------
Total stockholders' equity 51,708,636 52,368,254
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $737,673,986 $741,263,567
============ ============
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POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended Six Months Ended
March 31 March 31
2006 2005 2006 2005
INTEREST INCOME:
Loans receivable $6,983,801 $5,522,801 $13,884,967 $11,314,925
Investment
securities 2,786,064 3,201,417 5,336,402 6,187,410
---------- ---------- ----------- -----------
Total interest
income 9,769,865 8,724,218 19,221,369 17,502,335
INTEREST EXPENSE:
Deposits 4,005,888 2,934,733 7,834,648 5,730,537
Borrowed funds 1,472,168 1,280,508 2,766,246 2,554,017
Trust preferred
securities 401,375 351,875 776,722 693,273
---------- ---------- ----------- -----------
Total interest
expense 5,879,431 4,567,116 11,377,616 8,977,827
NET INTEREST INCOME 3,890,434 4,157,102 7,843,753 8,524,508
PROVISION FOR LOAN
LOSSES 310,000 - 310,000 125,000
---------- ---------- ----------- -----------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 3,580,434 4,157,102 7,533,753 8,399,508
NON-INTEREST INCOME:
Dividends 99,438 65,593 197,139 127,461
Fees and service
charges 766,498 769,876 1,580,226 1,563,580
Gain on sale of
loans 168,243 201,608 369,877 475,038
Gain on sale of
loan servicing (25,698) - 194,056 -
Gain on sale of
securities, net 211,936 - 265,959 -
Trading
gain/(loss), net - (338,408) 337 23,720
Other 131,625 120,032 199,383 179,691
---------- ---------- ----------- -----------
Total other
income 1,352,042 818,701 2,806,977 2,369,490
---------- ---------- ----------- -----------
OPERATING EXPENSE:
Compensation and
benefits 2,378,834 2,391,062 4,822,353 4,760,712
Occupancy and
equipment 762,698 766,139 1,498,892 1,434,672
Insurance premiums 89,323 85,882 198,396 176,341
Professional fees 333,018 280,496 584,377 537,253
Data processing 183,134 163,410 367,124 311,622
Advertising and
donations 150,790 253,783 290,288 420,528
Office supplies 82,402 65,175 155,570 117,929
REO and other
repossessed
assets 57,431 11,977 81,102 39,512
Other 341,681 307,421 698,747 626,692
---------- ---------- ----------- -----------
Total operating
expense 4,379,311 4,325,345 8,696,849 8,425,261
---------- ---------- ----------- -----------
INCOME BEFORE
INCOME TAXES 553,165 650,458 1,643,881 2,343,737
INCOME TAXES (77,500) 220,600 156,617 796,500
---------- ---------- ----------- -----------
NET INCOME $ 630,665 $ 429,858 $ 1,487,264 $ 1,547,237
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POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended Six Months Ended
March 31 March 31
2006 2005 2006 2005
OTHER
COMPREHENSIVE
INCOME (LOSS),
NET OF TAX:
Unrealized
holding gain
(loss) on
securities
available-for-
sale arising
during the
period $ (970,848) $(2,423,551) $(1,152,563) $(2,068,028)
Reclassification
adjustment for
gains included
in net income (139,877) - (175,533) -
----------- ----------- ----------- -----------
Other
comprehensive
income (loss) (1,110,725) (2,423,551) (1,328,096) (2,068,028)
----------- ----------- ----------- -----------
COMPREHENSIVE
INCOME (LOSS) $ (480,060) $(1,993,693) $ 159,168 $ (520,791)
=========== =========== =========== ===========
EARNINGS PER
SHARE:
Basic earnings
per share $ 0.14 $ 0.10 $ 0.33 $ 0.34
=========== =========== =========== ===========
Diluted earnings
per share $ 0.14 $ 0.09 $ 0.33 $ 0.34
=========== =========== =========== ===========
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