Posted 5/12/2010 10:02 am
Updated 11 months ago
First Federal Bancshares of Arkansas Inc., based in Harrison, posted net income of $905,000 for the company's first quarter, which ended March 31. First Federal Bancshares is the holding company for publicly traded thrift, First Federal Bank.
The bank reported a net loss of $1.5 million for the first quarter of 2009.
Last month, the company revised its year-end losses to $46.7 million and it became public that the Office of Thrift Supervision had issued a cease-and-desist order which requires the company to raise its capital ratios.
For the first quarter of 2010, the company said the net income available to common shareholders was 14 cents per common share, up from a loss of 32 cents per share a year earlier.
The bank said the increase was due to an improvement in its net interest margin and a decrease in its loan loss provisions, including an increase in noninterest expenses.
Stockholders' equity per common share as of March 31 was $5.73, the company said.
"We continue to aggressively deal with our nonperforming assets with $4.6 million of real estate owned properties sold during the first quarter and another $4.5 million under contract to be sold in the second quarter," CEO Larry J. Brandt said in a prepared statement.
The bank had $696.9 million in assets as of March 31. Nonperforming assets were $80.2 million, or about 11.5 percent of the bank's total, compared with about 10.7 percent a year earlier.
The bank said the increase in nonperforming loans was mostly due to one loan with a net value of about $2.3 million.
The bank had $46.6 million in nonaccrual loans and $33.6 million in other real estate owned as of March 31.
"The level of nonaccrual loans and [real estate owned] is due primarily to land development loans, land loans, single-family loans and commercial real estate loans, reflecting the general slowdown in housing and the oversupply of lots and speculative homes in the Bank’s Northwest Arkansas market," the bank said in its earnings statement.
"In addition, we continue to focus on reducing our operating expenses to help sustain our profitability for the year," Brandt said. "Raising our capital levels by year-end continues to be a strategic priority for the Bank and we are currently looking at measures to achieve that goal. We continue to see improvements in the economy in Northwest Arkansas and Forbes magazine recently recognized Fayetteville as the 15th best metropolitan area in the United States for business and careers."
Shares of First Federal (Nasdaq: FFBH) were trading at $3.40 on Wednesday, unchanged from the close on Tuesday.