Iowa First Bancshares Corp. studies monetary outcomes and dividend cost for the primary quarter

MUSCATINE, Iowa – (BUSINESS WIRE) – Iowa First Bancshares Corp. (OTC Pink: IOFB) (“Iowa First” or the “Company”), the holding company of First National Bank of Muscatine and First National Bank of Fairfield, today announced financial results for the three month period ended March 31, 2021. Net income for the quarter ended March 31, 2021 was $ 475,000, compared to net income of $ 765,000 for the quarter ended March 31, 2020, a decrease of $ 290,000, or 37.9%. The $ 290,000 year-over-year decrease in net income for the first quarter was primarily due to lower net interest income, which decreased $ 384,000. Other factors affecting Iowa First’s results for the first quarter included a provision for loan losses of $ 150,000, noninterest income of $ 141,000, noninterest expense of $ 19,000, and income tax expense of $ 84,000.

Iowa First continues to have a strong capital position, as evidenced by the total risk-based capital ratio as of March 31, 2021 of 18.2%. Basic and diluted earnings per share for the three months ended March 31, 2021 were $ 0.42, down $ 0.26, or 38%, from the same period in 2020. The company’s annualized return on average assets for the first quarter of 2021 and 2020 were 0.37% and 0.66%, respectively. The company’s annualized return on equity for the three months ended March 31, 2021 and March 31, 2020 were 3.8% and 6.2%, respectively.

Total assets were $ 547,967,000 as of March 31, 2021, an increase of $ 93,459,000, or 20.6%, from March 31, 2020. Gross loans outstanding decreased $ 26,053,000, or 7.4%. while deposits grew $ 93,210,000, or 23.9% year over year. The allowance for loan losses as of March 31, 2021 totaled $ 6,493,000, or 2.00% of gross loans outstanding. Net borrowings collected in the first quarters of 2021 and 2020 totaled $ 60,000 and $ 32,000, respectively. Unaccounted loans were $ 9.8 million, or 3.0% of gross loans outstanding as of March 31, 2021, a decrease of $ 14.6 million, or 4.2%, as of September 30, 2020. Focus at the Fairfield subsidiary on improving the quality of the entire loan portfolio and reducing the number of loans not based on accruals.

Both Iowa First banks remain very active under the PPP loan program set up by the Small Business Administration to help businesses and farmers try to survive the coronavirus pandemic. PPP loans outstanding as of March 31, 2021 totaled $ 21 million, resulting from 412 loans with the two banks. Around 700 loans totaling nearly $ 40 million have been granted since the program began in 2020.

In the first quarter of 2021, Debra R. Lins was elected President and CEO of the First National Bank of Muscatine, replacing retired President and CEO D. Scott Ingstad, who served in that role for over thirty years. During her forty year banking career, Debra served as President and CEO of two banks in her home state of Wisconsin for over twenty years and received numerous awards for her banking achievements. Before becoming CEO of Muscatine, she served the bank as Chief Credit Officer in an advisory capacity for eight months.

The Board of Directors declared a quarterly cash dividend of $ 0.15 per share payable to shareholders of record on May 3, 2021 on May 25, 2021. On an annual basis, this dividend corresponds to a yield of 1.66% compared to the share price on December 31, 2020. Iowa First Bancshares Corp. has paid a cash dividend to shareholders every year since 1989.

about us

Iowa First Bancshares Corp. is a bank holding company headquartered in Muscatine, Iowa. The company provides a wide range of banking and other financial services to individuals, businesses and government organizations through its two wholly owned state banks in Muscatine and Fairfield, Iowa.

Special note on forward-looking statements

This press release contains and future oral and written statements by the company and its management may contain forward-looking statements regarding the company’s financial condition, results of operations, plans, goals, future performance and business. Investors are cautioned that all forward-looking statements involve risks and uncertainties and that many factors could cause actual results to differ materially from those expected or projected. Our ability to predict results or the actual effects of future plans or strategies is inherently uncertain. In addition, all statements in this document, including forward-looking statements, speak only as of the date of their publication, and the company undertakes no obligation to update any statements in light of new information or future events. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements or that could have a material impact on the company’s business and future prospects include, but are not limited to: (1) the effects of the COVID 19 Pandemic, including its potential impact on the economic environment, the Company’s customers and its business operations, and any changes in laws, regulations or orders of any federal, state or local government in connection with the pandemic; (2) A deterioration in credit quality or a pronounced and persistent decrease in the value of real estate or other collateral could lead to an increase in loan loss provisions and a decrease in net income. (3) the ability of our management 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 (including the effects of the LIBOR exit); (4) changes in economic conditions, competition, or other factors that may affect our ability to acquire credit or affect the expected rate of growth of credits and deposits and the quality of the credit portfolio and pricing of credits and deposits; (5) fluctuations in the value of our securities; (6) state monetary and fiscal policy; (7) legal, regulatory and tax law changes; (8) the ability to attract and retain key executives and employees; (9) sufficient allowance for credit losses to absorb the amount of actual losses inherent in our credit portfolio; (10) our ability to adapt successfully to changes in technology; (11) Credit exposure from concentrations (by geographic area and industry) within our credit portfolio; (12) the effects of competition from multiple sources; (13) volatility, duration and matching risks of interest rate sensitive assets and liabilities as well as liquidity risk; (14) operational risks, including failure or fraud of the data processing system; (15) the costs, effects and results of existing or future litigation; (16) changes in general economic or industrial conditions at the national level or in the communities in which we do business; and (17) changes in accounting policies and practices (including as a result of the future implementation of the current Impairment Standard for Expected Credit Loss (CECL) that will change the entity’s estimate of credit loss).