CORRECTING and REPLACING First Federal Bancshares, Inc. Announces 2nd Quarter Earnings.Business Editors COLCHESTER, Ill.--(BUSINESS WIRE)--July 30, 2003 In BW5611 issued July 30, 2003, (IL-FIRST-FEDERAL-BANC) First Federal Bancshares, Inc. Announces 2nd Quarter Earnings, the Company announced diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the six months ended June 30, 2003 of $0.74 per share. The correct diluted earnings per share for the six months ended June 30, 2003 is $0.72 per share. The corrected release reads: FIRST FEDERAL BANCSHARES, INC. ANNOUNCES 2ND QUARTER EARNINGS First Federal Bancshares, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :FFBI FFBI Fistula First Breakthrough Initiative ), the holding company for First Federal Bank, announced net income of $788,000 or $.42 per share for the quarter ended June 30, 2003 compared to $485,000 or $.26 per share for the quarter ended June 30, 2002. Diluted earnings per share were $.40 per share and $.26 per share for both periods, respectively. The increase in net income is primarily a result of an increase in net interest income and noninterest income, offset by increases in noninterest expense and the income tax provision. Net income was $1.4 million or $.75 per share for the six months ended June 30, 2003, compared to $1.0 million, or $.54 per share for the six months ended June 30, 2002. Net interest income for the quarter ended June 30, 2003 totaled $2.0 million compared to $1.8 million for the prior year quarter. The increase in net interest income was primarily a result of an increase in the average balance of interest-earning assets and interest-bearing liabilities as a result of the Company's acquisition of PFSB PFSB Pharmaceutical and Food Safety Bureau (Japan) Bancorp, Inc. in November 2002, partially offset by a decrease in the net interest margin to 2.58% from 2.93% for the quarters ended June 30, 2003 and 2002, respectively. The decrease in the net interest margin was a result of the continued repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing of assets due to loan refinancings and paydowns on mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. combined with a decrease in the ratio of interest-earning assets to interest-bearing liabilities to 114.05% for the quarter ended June 30, 2003 from 120.65% for the quarter ended June 30, 2002. Noninterest income increased to $730,000 for the quarter ended June 30, 2003 compared to $101,000 for the prior year quarter. The increase was a result of a $216,000 increase in net gains on the sale of securities due to the sales of available for sale securities during the quarter. In addition, other income increased due to a $355,000 recovery related to certificates of deposit purchased through a broker who was charged by the SEC with securities fraud in connection with these certificates of deposit. This recovery represents 59.6% of the allowed claim. During the quarter ended December 31, 2001, the Company recorded an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. loss of $596,000 related to these certificates of deposit. There has been no indication at this time as to what amounts, if any, the Company might further recover in the future with respect to these certificates of deposit. The remainder of the increase in noninterest income was attributed to an increase of $22,000 in service charge income and an increase of $26,000 in other fee income, both due to the increase in deposit accounts acquired and the related fee income as a result of the PFSB acquisition. Noninterest expense increased to $1.5 million for the quarter ended June 30, 2003 from $1.1 million in the prior year's second quarter. The increase was primarily a result of increased compensation and benefits expense of $328,000 associated with an increase in the number of employees due to the PFSB acquisition and an increase in employee benefits expense including health insurance premiums and retirement funds, partially offset by a decrease in other noninterest expenses. Total assets were $337.5 million at June 30, 2003 compared to $316.4 million at December 31, 2002. The increase in total assets was largely due an increase of $41.7 million in securities, offset by a $7.1 million decrease in cash and cash equivalents resulting from the timing of called and purchased securities, and a decrease of $13.9 million in loans. Loans decreased primarily as a result of portfolio loans refinancing Refinancing An extension and/or increase in amount of existing debt. into the Federal Home Loan Bank Mortgage Partnership Finance fixed-rate program and also to other competitors due to the low interest rate environment. During the first quarter of 2003, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with FAS 115, the Company reevaluated the classification of the securities portfolio. As a result of the acquisition of PFSB, changes in the structure of the balance sheet, and for asset/liability management Asset/Liability Management A technique companies employ in coordinating the management of assets and liabilities so that an adequate return may be earned. Also known as "surplus management. purposes, management revised the Company policy to classify clas·si·fy tr.v. clas·si·fied, clas·si·fy·ing, clas·si·fies 1. To arrange or organize according to class or category. 2. To designate (a document, for example) as confidential, secret, or top secret. all securities as available- for-sale. Effective January 31, 2003, the Company reclassified all of its securities held-to-maturity to securities available-for-sale. The securities that were reclassified had a book value of $24.2 million and a fair value of $24.5 million as of that date. The reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of these securities resulted in a decrease in securities held-to-maturity of $24.5 million from December 31, 2002 to March 31, 2003, and the majority of the $35.2 million increase in available-for-sale securities during the same period. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. increased to $48.5 million at June 30, 2003 from $47.0 million at December 31, 2002. The increase was primarily a result of net income totaling $1.4 million, and an increase in the fair value of securities available-for-sale, net of tax, of $155,000. First Federal Bancshares, Inc. is headquartered in Colchester, Illinois Colchester is a city in McDonough County, Illinois, United States. The population was 1,493 at the 2000 census. The city is named after the provincial town of Colchester, England. with five additional full-service west-central Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. branches located in Quincy (2), Mt. Sterling, Macomb, and Bushnell, and three additional full-service northeastern Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. branches located in
Palmyra Palmyra, ancient city, SyriaPalmyra (pălmī`rə), ancient city of central Syria. A small modern village known as Tudmur is on the site. , Canton Canton, cities, United States Canton. 1 City (1990 pop. 13,922), Fulton co., W central Ill., in the corn belt; inc. 1849. It is a trade and industrial center for a coal and farm area. 2 Town (1990 pop. 18,530), Norfolk co. , and Kahoka. Financial highlights of the Company are attached. Statements contained in this news release that are not historical facts may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. ), which involve significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions for forward-looking statements contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, and is including this statement for purposes of invoking these safe harbor provisions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and the subsidiaries include, but are not limited to, changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including the U.S. treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. and the Federal Reserve Board, the quality or composition of the Company's loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. in the Company's market area, the possible short-term dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of potential acquisitions and accounting principles, policies and guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. . These risks and uncertainties should be considered in evaluating forward looking statements and undue reliance should not be placed on such statements.
FIRST FEDERAL BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION
June 30, December 31,
2003 2002
---- ----
(In thousands)
Selected Financial Condition Data
---------------------------------
Total assets $ 337,492 $ 316,400
Cash and cash equivalents 35,733 42,827
Loans receivable, net 136,371 150,269
Securities 157,778 116,033
Deposits 270,653 263,834
Advances from Federal Home Loan Bank 4,000 4,000
Stockholders' equity 48,466 47,031
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- -----
(In thousands)
Selected Operations Data
-------------------------
Total interest income $ 3,768 $ 3,240 $ 7,800 $ 6,516
Total interest expense 1,746 1,489 3,561 3,026
--------- --------- --------- ---------
Net interest income 2,022 1,751 4,239 3,490
Provision for loan losses - - - 7
--------- --------- --------- ---------
Net interest income
after provision for
loan losses 2,022 1,751 4,239 3,483
Noninterest income 730 101 928 209
Noninterest expense 1,472 1,097 2,895 2,078
--------- --------- --------- ---------
Income before taxes 1,280 755 2,272 1,614
Income tax provision 492 270 867 612
--------- --------- --------- ---------
Net income $ 788 $ 485 $ 1,405 $ 1,002
========= ========= ========= =========
Earnings per share
Basic $ .42 .26 .75 .54
Diluted .40 .26 .72 .53
Three months ended Six months ended
June 30, June 30,
Selected Financial Ratios (1) 2003 2002 2003 2002
----------------------------- ---- ---- ---- ----
Return on average assets .98% .80% .88% .83%
Return on average equity 6.56 4.43 5.89 4.57
Average equity to
average assets 14.86 18.00 14.88 18.12
Interest rate spread
during the period 2.27 2.42 2.41 2.41
Net interest margin 2.58 2.93 2.74 2.94
General and administrative
expenses to average assets 1.82 1.80 1.81 1.72
Efficiency ratio (2) 53.49 59.23 56.03 56.18
As of As of
June 30, 2003 June 30, 2002
------------- -------------
Non-performing assets to total assets .60 % .33 %
Book value per share (3) $ 25.07 $ 23.22
Number of shares outstanding 1,933,356 1,855,335
(1) All applicable quarterly ratios reflect annualized figures.
(2) Represents noninterest expense divided by net interest income plus
noninterest income.
(3) Represents total equity divided by actual number of shares
outstanding which is exclusive of treasury stock and unearned ESOP
shares.
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