Iowa First Bancshares Corp. Reports Third Quarter and Year-To-Date 2014 Financial Results and Dividend Payment

MUSCATINE, Iowa--(BUSINESS WIRE)--Iowa First Bancshares Corp. (OTCQB:IOFB) today reported financial results for both the third quarter and first three quarters of 2014. Net income of $1,161,000 for the quarter ended September 30, 2014, compared to net income of $997,000 for the quarter ended September 30, 2013, an increase of $164,000 or 16.4%. The increase in third quarter net income year-over-year of $164,000 was primarily attributable to higher net interest income, which rose $256,000 or 7.8%. Provision for loan losses expense was $30,000 in the third quarter of 2014, compared to no such expense in 2013. Noninterest income for the third quarter of 2014 was $76,000 or 9.2% more than the third quarter of 2013. Noninterest expense was within $2,000 when comparing the third quarter of 2014 and 2013. Due largely to higher pretax income, income tax expense increased $140,000 or 29.7%.

Basic and diluted earnings per share were $1.03 for the three months ended September 30, 2014, $.14 or 15.7% more than the same period in 2013.

The Company’s net income of $3,233,000 for the nine months ended September 30, 2014, compared with net income of $2,549,000 for the three quarters ended September 30, 2013, an increase of $684,000 or 26.8%. The primary factors contributing to this earnings increase included an increase of $836,000 (8.8%) in net interest income and the 2013 non-recurring $285,000 cost associated with the early redemption of trust preferred securities. Also contributing to the improvement in net income for the first nine months of 2014 compared to 2013 was $44,000 (1.7%) more noninterest income and $27,000 (0.3%) less noninterest expense. Partially offsetting the earnings improvements noted above was $60,000 more provision for loan losses and $448,000 (35.3%) higher income tax expense.

Basic and diluted earnings per share were $2.87 for the nine months ended September 30, 2014, an increase of $.60 or 26.4% from the same period in 2013. The Company’s annualized return on average assets for the first three quarters of 2014 and 2013 was .99% and .77%, respectively. The Company’s annualized return on average equity for the nine months ended September 30, 2014 and September 30, 2013 was 10.7% and 9.0%, respectively.

The Company's assets at September 30, 2014 totaled $429,427,000, a decrease of $880,000 (0.2%) from September 30, 2013. Gross loans outstanding increased $20,669,000 (6.2%) while total deposits decreased $4,276,000 (1.2%) over the past year. The allowance for loan losses totaled $4,690,000 at September 30, 2014, or 1.3% of gross loans outstanding.

The board of directors declared a $.285 per common share cash dividend to be paid to shareholders of record October 1, 2014. Annualized, the dividends paid by the Company result in a yield of 3.8% on the December 31, 2013 common stock price.

Iowa First Bancshares Corp. is a bank holding company headquartered in Muscatine, Iowa. The Company provides a wide array of banking and other financial services to individuals, businesses and governmental organizations through its two wholly-owned national banks located in Muscatine and Fairfield, Iowa.

This press release may contain forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and many factors could cause actual results to differ materially from the results anticipated or projected. Our ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements or that could have a material effect on the operations and future prospects of the Company include, but are not limited to: (1) credit quality deterioration or pronounced and sustained reduction in real estate or other collateral values could cause an increase in the allowance for loan losses and a reduction in net income; (2) our management’s ability to reduce and effectively manage interest rate risk and the impact of interest rates in general on the level and volatility of our net interest income; (3) changes in the economic environment, competition, or other factors that may affect our ability to acquire loans or influence the anticipated growth rate of loans and deposits and the quality of the loan portfolio and loan and deposit pricing; (4) fluctuations in the value of our investment securities; (5) governmental monetary and fiscal policies; (6) legislative, regulatory and tax law changes as well as changes in the scope and cost of Federal Deposit Insurance Corporation insurance and other fees; (7) the ability to attract and retain key executives and employees; (8) the sufficiency of the allowance for loan losses to absorb the amount of actual losses inherent in our loan portfolio; (9) our ability to adapt successfully to technological changes; (10) credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio; (11) the effects of competition from numerous sources; (12) the failure of assumptions underlying the establishment of allowances for loan losses and estimation of values of collateral and various other financial assets and liabilities; (13) volatility, duration and matching risks of rate-sensitive assets and liabilities as well as liquidity risk; (14) operational risks, including data processing system failure or fraud; (15) the costs, effects and outcomes of existing or future litigation; (16) changes in general economic or industry conditions, nationally or in the communities in which we conduct business; (17) changes in accounting policies and practices; and (18) other risks.