Iowa First Bancshares Corp. Reports First Quarter Financial Results and Dividend Payment

Iowa First Bancshares Corp. (OTC Pink: IOFB) today reported operating results for the three month period ended March 31, 2018. Consolidated net income totaled $733,000 compared to net income of $393,000 for the same period last year, an increase of $340,000 or 86.5%. Comparing first quarter 2018 and first quarter 2017 results: net interest income decreased $29,000 or 0.8%; provision for loan losses decreased $540,000 or 50.0%; noninterest income declined by $22,000 or 2.6%; noninterest expense increased $119,000 or 4.0%; and income tax expense increased $30,000 or 16.0%.

Basic and diluted earnings per share were $.65 for the three months ended March 31, 2018, an increase of $.30 from the same period in 2017. The Company’s annualized return on average assets for the first quarter of 2018 and 2017 was .62% and .33%, respectively. The Company’s annualized return on average equity for the first quarter of 2018 and 2017 was 6.4% and 3.5%, respectively.

Total assets at March 31, 2018 were nearly $477.7 million, an increase of approximately $7.7 million (1.6%) from March 31, 2017. Deposits totaled $407.6 million, an increase of approximately $9.0 million (2.3%) when comparing the end of the first quarter of 2018 to 2017. Gross loans outstanding at March 31, 2018, decreased $7.6 million (1.9%), compared to March 31, 2017.

The allowance for loan losses totaled $5.75 million at March 31, 2018, or 1.44% of gross loans outstanding compared to 1.13% of gross loans at March 31, 2017. Net loans charged-off during the first quarter of 2018 and 2017 totaled $478,000 and $1,160,000, respectively. The vast majority of first quarter 2018 net charge-offs have been in the agriculture loan portfolio. Nonaccrual loans totaled $7.6 million or 1.9% of gross outstanding loans at March 31, 2018, a substantial increase from $2.4 million or .6% of gross outstanding loans at March 31, 2017. This disappointing increase in nonaccrual loans has occurred primarily at the Fairfield subsidiary bank and partially accounts for the decline in consolidated net interest margin from 3.47% for the year ended December 31, 2017 to 3.40% during the first quarter of 2018. At March 31, 2018, approximately 48% of nonaccrual loans are in the agriculture loan portfolio and approximately 30% are in the commercial and industrial loan portfolio. The remaining nonaccrual loans are in commercial and residential real estate and consumer loans. Management is focused on improving the quality of the overall loan portfolio and reducing the amount of nonaccrual loans. Realistically, however, it will likely take several quarters of hard work to reduce this nonaccrual loan total to a more acceptable level.