Pocahontas Bancorp (NASDAQ:PFSL)
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Pocahontas Bancorp, Inc. (Nasdaq-NMS:PFSL) announced
earnings for the third quarter of the fiscal year ending September 30,
2005. Net income was $0.84 million for the quarter ended June 30,
2005, compared to net income of $0.93 million for the quarter ended
June 30, 2004, a decrease of $0.09 million or 9.7%. Basic earnings per
share were $0.19 and diluted earnings per share were $0.18 for the
quarter ended June 30, 2005 compared to basic earnings per share of
$0.21 and diluted earnings per share of $0.20 for the same period last
year.
Net interest income before provision for loan loss for the quarter
ended June 30, 2005 was $4.20 million compared to $4.76 million for
the quarter ended June 30, 2004, a decrease of $0.56 million or 11.8%.
The decrease was primarily due to a 32 basis point decrease in the net
interest rate spread to 2.66% for the quarter ended June 30, 2005
compared to 2.98% for the quarter ended June 30, 2004.
There was no provision for loan losses for the quarter ended June
30, 2005 compared to $0.65 million for the quarter ended June 30,
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 June 30,
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 increased $0.44 million or 34.1% to $1.73
million for the quarter ended June 30, 2005 compared to the quarter
ended June 30, 2004. The increase in non-interest income was primarily
due to a $0.22 million increase in gain on sale of securities for the
quarter ended June 30, 2005 compared to the same period last year and
a $0.02 million trading loss on equity securities during the quarter
ended June 30, 2005 compared to a $0.20 million trading loss for the
quarter ended June 30, 2004. A subdued refinancing environment during
the quarter ended June 30, 2005 resulted in lower gain on sale of
loans. Gain on sale of loans decreased to $0.26 million for the
quarter ended June 30, 2005 from $0.32 million for the same period a
year ago.
Total operating expenses were $4.65 million for the quarter ended
June 30, 2005, compared to $3.99 million for the quarter ended June
30, 2004. The increase in operating expenses was primarily due to a
$0.15 million increase in compensation expenses and a $0.19 million
increase in advertising and donations expense, as the Company hired an
outside advertising firm instead of handling advertising internally.
Net income was $2.38 million for the nine months ended June 30,
2005, compared to net income of $3.72 million for the nine months
ended June 30, 2004, a decrease of $1.34 million or 36.0%. Basic
earnings per share were $0.53 and diluted earnings per share were
$0.52 for the nine months ended June 30, 2005 compared to basic
earnings per share of $0.83 and diluted earnings per share of $0.81
for the same period last year.
Net interest income before provision for loan loss for the nine
months ended June 30, 2005 was $12.72 million compared to $14.77
million for the nine months ended June 30, 2004, a decrease of $2.05
million or 13.9%. The decrease was primarily due to a 29 basis point
decrease in the net interest rate spread to 2.76% for the nine months
ended June 30, 2005 compared to 3.05% for the nine months ended June
30, 2004 and a 36 basis point decrease in the net interest margin to
2.62% for the nine months ended June 30, 2005 from 2.98% for the nine
months ended June 30, 2004.
Provision for loan losses for the nine months ended June 30, 2005
was $0.12 million compared to $1.15 million for the nine months ended
June 30, 2004. The decrease in provision for loan losses for the nine
months ended June 30, 2005 was primarily due to a decrease in
nonperforming loans compared to the same period last year. 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 nine months ended June 30, 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 $0.17 million or 3.9% to $4.10
million for the nine months ended June 30, 2005 compared to the nine
months ended June 30, 2004. The decrease in non-interest income was
primarily due to decreases in net trading gains, gain on sale of loans
and gain on sale of branches, partially offset by a $0.18 million
increase in gain on sale of securities. The trading gain on equity
securities decreased $0.23 million to $0.01 million for the nine
months ended June 30, 2005 compared to the nine months ended June 30,
2004. A subdued refinancing environment during the nine months ended
June 30, 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 $0.73 million for the nine months
ended June 30, 2005 from $0.93 million for the same period a year ago.
The nine months ended June 30, 2004 included a $0.14 million one-time
gain on the sale of branches.
Total operating expenses were $13.08 million for the nine months
ended June 30, 2005, and $12.24 million for the nine months ended June
30, 2004. The increase in operating expenses was primarily due to a
$0.47 million increase in advertising and donations expense, as the
Company hired an outside advertising firm instead of handling
advertising internally; professional fees increased $0.19 million and
compensation expenses increased $0.14 million for the nine months
ended June 30, 2005 compared to the same period a year ago. These
increases were partially offset by a $0.10 million decrease in
expenses on REO and other repossessed assets during the nine months
ended June 30, 2005.
Total assets increased $1.36 million or 0.2% to $721.27 million at
June 30, 2005 from $719.91 million at September 30, 2004. The increase
was primarily the result of an increase in total net loans of $6.64
million and a $2.32 million increase in premises and equipment, which
were partially offset by a decrease in investment securities of $6.13
million and a $3.84 million decrease in cash. The yield on average
interest earning assets at June 30, 2005 was 5.47% compared to 5.50%
at September 30, 2004.
Investment securities decreased at June 30, 2005 as the result of
the sale of $48.61 million of securities, the call of $0.50 million of
securities, principal payments and maturities of $33.69 million and
$0.73 million decrease in market value, partially offset by investment
purchases of $78.03 million.
Total net loans receivable were $390.45 million at June 30, 2005
compared to $383.81 million at September 30, 2004. During the
nine-month period ended June 30, 2005, proceeds from the sale of
mortgage loans held for sale were $37.82 million, compared to $49.41
million sold during the nine months ended June 30, 2004. Total
nonperforming loans decreased 23.8% to $3.56 million at June 30, 2005
from $4.67 million at September 30, 2004.
Total deposits increased $5.74 million or 1.2% to $496.82 million
at June 30, 2005 compared to $491.08 million 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 decreased $5.19 million or
3.4% to $148.71 million at June 30, 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)
----------------------------------------------------------------------
June 30, September 30,
2005 2004
------------- -------------
ASSETS
Cash $ 31,374,129 $ 35,218,491
Cash surrender value of life insurance 7,971,569 7,684,251
Securities held-to-maturity, at cost 133,689,828 86,200,660
Securities available-for-sale, at fair
value 107,019,019 160,633,022
Trading securities, at fair value 2,889,507 1,982,365
Loans receivable, net 387,694,987 382,316,096
Loans receivable, held for sale 2,758,854 1,494,200
Accrued interest receivable 4,183,960 4,196,103
Premises and equipment, net 16,077,180 13,762,438
Federal Home Loan Bank stock, at cost 8,955,700 7,925,900
Goodwill 8,847,572 8,847,572
Core deposit premiums 5,566,620 6,296,523
Other assets 4,238,779 3,350,292
------------- -------------
TOTAL ASSETS $721,267,704 $719,907,913
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $496,822,895 $491,078,533
Federal Home Loan Bank advances 148,709,693 153,896,869
Deferred compensation 2,224,188 2,430,094
Accrued expenses and other liabilities 3,958,679 3,059,676
Trust preferred securities 16,957,491 16,941,917
------------- -------------
Total liabilities 668,672,946 667,407,089
STOCKHOLDERS' EQUITY:
Common stock, 76,024 76,024
Additional paid-in capital 57,447,655 57,447,655
Unearned ESOP shares (2,567,788) (2,116,198)
Accumulated other comprehensive loss, net (1,442,861) (717,085)
Retained earnings 23,484,272 22,212,972
------------- -------------
76,997,302 76,903,368
Less Treasury stock, at cost (24,402,544) (24,402,544)
------------- -------------
Total stockholders' equity 52,594,758 52,500,824
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $721,267,704 $719,907,913
============= =============
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME (LOSS) (UNAUDITED)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
June 30 June 30
---------------------- ------------------------
2005 2004 2005 2004
---------- ---------- ----------- -----------
INTEREST INCOME:
Loans receivable $5,876,659 $5,881,534 $17,191,584 $18,041,432
Investment
securities 3,181,993 2,821,660 9,369,404 9,258,008
---------- ---------- ----------- -----------
Total interest
income 9,058,652 8,703,194 26,560,988 27,299,440
INTEREST EXPENSE:
Deposits 3,122,294 2,645,527 8,852,830 9,052,977
Borrowed funds 1,376,226 980,608 3,930,244 2,524,980
Trust preferred
securities 363,597 318,636 1,056,870 948,205
---------- ---------- ----------- -----------
Total interest
expense 4,862,117 3,944,771 13,839,944 12,526,162
NET INTEREST INCOME 4,196,535 4,758,423 12,721,044 14,773,278
PROVISION FOR LOAN
LOSSES - 650,000 125,000 1,150,000
---------- ---------- ----------- -----------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 4,196,535 4,108,423 12,596,044 13,623,278
OTHER INCOME:
Fees and service
charges 808,673 719,908 2,372,253 2,255,865
Gain on sale of
loans 258,390 323,199 733,428 925,620
Gain on sale of
securities, net 564,290 343,832 564,290 383,367
Trading gain
(losses), net (16,227) (199,031) 7,492 241,421
Gain (loss) on
sale of branches - (2,500) - 136,834
Other 118,987 104,512 426,139 326,497
---------- ---------- ----------- -----------
Total other
income 1,734,113 1,289,920 4,103,602 4,269,604
---------- ---------- ----------- -----------
OPERATING EXPENSE:
Compensation and
benefits 2,508,409 2,359,372 7,269,121 7,130,579
Occupancy and
equipment 645,067 642,741 2,079,739 2,094,590
Insurance premiums 95,559 85,398 271,899 248,678
Professional fees 251,862 130,166 789,116 598,872
Data processing 167,173 173,805 478,796 512,507
Advertising and
donations 312,342 122,836 732,870 264,877
Office supplies 140,996 58,617 258,925 179,488
REO and other
repossessed
assets 132,981 91,849 172,494 269,515
Other 398,483 331,026 1,025,174 942,857
---------- ---------- ----------- -----------
Total operating
expense 4,652,872 3,995,810 13,078,134 12,241,963
---------- ---------- ----------- -----------
INCOME BEFORE
INCOME TAXES 1,277,776 1,402,533 3,621,512 5,650,919
INCOME TAXES 439,700 476,000 1,236,200 1,927,000
---------- ---------- ----------- -----------
NET INCOME $ 838,076 $ 926,533 $ 2,385,312 $ 3,723,919
POCAHONTAS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME (LOSS) (UNAUDITED)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
June 30 June 30
------------------------ -----------------------
2005 2004 2005 2004
----------- ----------- ---------- -----------
OTHER COMPREHENSIVE
INCOME (LOSS),
NET OF TAX:
Unrealized
holding gain
(loss) on
securities
available for-
sale arising
during the
period $ (969,820) $(5,238,515) $1,098,208 $(4,344,136)
Reclassification
adjustment for
gains included
in net income (372,431) (226,929) (372,431) (253,022)
----------- ----------- ---------- -----------
Other
comprehensive
income (loss) (1,342,251) (5,465,444) 725,777 (4,597,158)
----------- ----------- ---------- -----------
COMPREHENSIVE
INCOME (LOSS) $ (504,175) $(4,538,911) $3,111,089 $ (873,239)
=========== =========== ========== ===========
EARNINGS PER SHARE:
Basic earnings
per share $ 0.19 $ 0.21 $ 0.53 $ 0.83
=========== =========== ========== ===========
Diluted earnings
per share $ 0.18 $ 0.20 $ 0.52 $ 0.81
=========== =========== ========== ===========
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