FedFirst Financial Corporation (Nasdaq:FFCO) (the "Company"), the
parent company of First Federal Savings Bank (the "Bank"), today
announced net income of $576,000 for the three months ended June
30, 2013 compared to $594,000 for the three months ended June 30,
2012, a decrease of $18,000 or 3.0%. Diluted earnings per share was
$0.23 for the three months ended June 30, 2013 compared to $0.21
for the three months ended June 30, 2012, an increase of $0.02 per
share or 9.5%. The Company reported net income of $1.4 million for
the six months ended June 30, 2013 compared to $1.1 million for the
six months ended June 30, 2012, an increase of $320,000 or 30.5%.
Diluted earnings per share was $0.55 for the six months ended June
30, 2013 compared to $0.37 for the six months ended June 30, 2012,
an increase of $0.18 per share or 48.6%.
"We are pleased to report continued strong performance for the
second quarter," said Patrick G. O'Brien, President and CEO. "While
loan growth remains challenging, we have nevertheless been
successful in improving our net interest margin over the prior
year. In addition to operational gains, we have also been focused
on managing our capital to drive returns to shareholders. This
quarter saw a 50% increase in our quarterly dividend and the
improvement in earnings per share and book value per share is a
reflection of our share repurchase activity."
Second Quarter Results
Net interest income for the three months ended June 30, 2013
increased $75,000, or 3.0%, to $2.6 million compared to $2.5
million for the three months ended June 30, 2012. Interest rate
reductions and decreases in average balances on higher-cost
deposits resulted in a $172,000 decrease in deposits expense and
payoffs on borrowings resulted in a $111,000 decrease in borrowings
expense. This was partially offset by modifications and payoffs of
higher yielding loans and securities due to the continued low
interest rate environment that resulted in a $208,000 decline in
interest income. Interest income on loans included the effect of a
one-time receipt in the current period of $115,000 upon payoff of
an impaired, nonaccrual commercial real estate loan. Interest
received while the loan was on nonaccrual was applied to principal
and was not recognized to income until payoff.
The provision for loan losses was $165,000 for the three months
ended June 30, 2013 compared to $50,000 for the three months ended
June 30, 2012. In the current period, the provision was impacted by
a change in the mix of the loan portfolio, including an increase in
commercial loans. In the prior period, there was a $170,000
reduction in specific reserves after receiving an updated
collateral appraisal on an impaired loan. Net charge-offs were
$38,000 for the three months ended June 30, 2013 compared to
$165,000 for the three months ended June 30, 2012.
Noninterest income increased $228,000, or 26.6%, to $1.1 million
for the three months ended June 30, 2013 compared to $856,000 for
the three months ended June 30, 2012. Insurance commissions
increased $177,000 primarily due to an increase in
commercial-related policies. Fees and service charge income
increased $44,000 primarily due to prepayment fees received on
commercial loans.
Noninterest expense increased $193,000, or 8.0%, to $2.6 million
for the three months ended June 30, 2013 compared to $2.4 million
for the three months ended June 30, 2012. Compensation expense
increased $163,000 primarily due to the hiring of additional staff
and increases in stock-based compensation and employee benefit
expenses. In addition, advertising expense increased $86,000
primarily related to a cooperative marketing agreement that was
signed by Exchange Underwriters, Inc. ("Exchange Underwriters").
This was partially offset by a $22,000 decrease in occupancy
expenses and $18,000 decrease in amortization of intangibles
primarily due to fully depreciated and amortized assets.
Year-to-Date Results
Net interest income for the six months ended June 30, 2013
increased $42,000 and remained at approximately $5.1 million
compared to the six months ended June 30, 2012. Interest rate
reductions and decreases in average balances on higher-cost
deposits resulted in a $390,000 decrease in deposits expense and
payoffs on borrowings resulted in a $235,000 decrease in borrowings
expense. This was partially offset by modifications and payoffs of
higher yielding loans and securities due to the continued low
interest rate environment that resulted in a $583,000 decline in
interest income. Interest income on loans included the effect of a
one-time receipt in the current period of $115,000 upon payoff of
an impaired, nonaccrual commercial real estate loan. Interest
received while the loan was on nonaccrual was applied to principal
and was not recognized to income until payoff.
The provision for loan losses was $165,000 for the six months
ended June 30, 2013 compared to $210,000 for the six months ended
June 30, 2012. The provision decreased primarily due to a decrease
in charge-offs. Net charge-offs were $61,000 for the six months
ended June 30, 2013 compared to $320,000 for the six months ended
June 30, 2012. In addition, in the prior period, there was a
$170,000 reduction in specific reserves after receiving an updated
collateral appraisal on an impaired loan.
Noninterest income increased $640,000, or 37.4%, to $2.4 million
for the six months ended June 30, 2013 compared to $1.7 million for
the six months ended June 30, 2012. In the current period, there
was a $565,000 increase in insurance commissions primarily due to
an increase in commercial-related policies and a $259,000 increase
in contingency fees. In addition, fees and service charge income
increased $72,000 primarily due to prepayment fees received on
commercial loans.
Noninterest expense increased $283,000, or 5.8%, to $5.2 million
for the six months ended June 30, 2013 compared to $4.9 million for
the six months ended June 30, 2012. Compensation expense increased
$306,000 primarily due to the hiring of additional staff and an
increase in stock-based compensation. In addition, advertising
expense increased $188,000 primarily related to a cooperative
marketing agreement that was signed by Exchange Underwriters. This
was partially offset by a $97,000 decrease in professional services
primarily due to costs associated with strategic planning analysis
and initiatives in the prior period and a $39,000 decrease in
occupancy expense primarily due to fully depreciated assets.
Balance Sheet Review
Total assets decreased $4.4 million to $314.4 million at June
30, 2013 compared to $318.8 million at December 31, 2012.
Securities available-for-sale decreased $11.0 million due to
paydowns and a $700,000 maturity of a municipal bond. Net loans
increased $5.8 million to $255.4 million primarily as a result of
growth in home equity loans, commercial real estate, and commercial
business loans, as well as disbursements on commercial
constructions loans, partially offset by a decrease in residential
mortgage loans. Deposits increased $9.0 million to $223.0 million
principally in interest and noninterest-bearing demand deposits,
partially offset by decreases in money market accounts and
certificates of deposits. Borrowings decreased $13.8 million to
$34.9 million due to a $12.0 million decrease in short-term
borrowings and paydowns on amortizing advances. Stockholders'
equity increased $347,000 to $53.6 million at June 30, 2013
primarily due to $1.4 million of net income partially offset by the
purchase of 55,152 shares of the Company's common stock for
$992,000 and $246,000 in quarterly dividend payments to
stockholders.
About FedFirst Financial Corporation
FedFirst Financial Corporation is the parent company of First
Federal Savings Bank, a community-oriented financial institution
operating seven full-service branch locations in southwestern
Pennsylvania. First Federal offers a broad array of retail and
commercial lending and deposit services and provides commercial and
personal insurance services through Exchange Underwriters, Inc.,
its 80% owned subsidiary. Financial highlights of the Company are
attached.
Statements contained in this news release that are not
historical facts may constitute forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of
1995 and such forward-looking statements are subject to significant
risks and uncertainties. The Company intends such forward-looking
statements to be covered by the safe harbor provisions contained in
the Act. 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 its
subsidiaries include, but are not limited to, changes in market
interest rates, general economic conditions, changes in federal and
state regulation, actions by our competitors, loan delinquency
rates and our ability to control costs and expenses and other
factors that may be described in the Company's annual report on
Form 10-K as filed with the Securities and Exchange Commission.
These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed
on such statements.
FEDFIRST FINANCIAL
CORPORATION |
SELECTED FINANCIAL
INFORMATION |
|
|
|
|
|
|
(Unaudited) |
|
|
|
(In thousands, except share and per share
data) |
June 30, |
December 31, |
|
|
|
2013 |
2012 |
|
|
Selected Financial Condition
Data: |
|
|
|
|
Assets |
$ 314,370 |
$ 318,760 |
|
|
Cash and cash equivalents |
8,844 |
5,874 |
|
|
Securities available-for-sale |
31,617 |
42,582 |
|
|
Loans receivable, net |
255,362 |
249,530 |
|
|
Deposits |
223,028 |
214,057 |
|
|
Borrowings |
34,877 |
48,678 |
|
|
Stockholders' equity |
53,641 |
53,294 |
|
|
|
|
|
|
|
|
(Unaudited) |
(Unaudited) |
|
Three Months
Ended |
Six Months
Ended |
|
June 30, |
June 30, |
|
2013 |
2012 |
2013 |
2012 |
Selected Operations
Data: |
|
|
|
|
Total interest income |
$ 3,282 |
$ 3,490 |
$ 6,526 |
$ 7,109 |
Total interest expense |
681 |
964 |
1,395 |
2,020 |
Net interest income |
2,601 |
2,526 |
5,131 |
5,089 |
Provision for loan losses |
165 |
50 |
165 |
210 |
Net interest income after provision for loan
losses |
2,436 |
2,476 |
4,966 |
4,879 |
Noninterest income |
1,084 |
856 |
2,353 |
1,713 |
Noninterest expense |
2,592 |
2,399 |
5,204 |
4,921 |
Income before income tax expense and
noncontrolling interest in net income of consolidated
subsidiary |
928 |
933 |
2,115 |
1,671 |
Income tax expense |
342 |
335 |
693 |
600 |
Net income before noncontrolling interest in
net income of consolidated subsidiary |
586 |
598 |
1,422 |
1,071 |
Noncontrolling interest in net income of
consolidated subsidiary |
10 |
4 |
52 |
21 |
Net income of FedFirst Financial
Corporation |
$ 576 |
$ 594 |
$ 1,370 |
$ 1,050 |
|
|
|
|
|
Dividends per share |
$ 0.06 |
$ 0.04 |
$ 0.10 |
$ 0.07 |
Earnings per share - basic |
0.24 |
0.21 |
0.56 |
0.37 |
Earnings per share - diluted |
0.23 |
0.21 |
0.55 |
0.37 |
|
|
|
|
|
Weighted average shares outstanding -
basic |
2,446,186 |
2,884,156 |
2,450,894 |
2,846,518 |
Weighted average shares outstanding -
diluted |
2,479,834 |
2,887,210 |
2,478,222 |
2,849,534 |
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
June 30, |
June 30, |
|
2013 |
2012 |
2013 |
2012 |
Selected Financial
Ratios(1): |
|
|
|
|
Return on average assets |
0.72% |
0.70% |
0.86% |
0.62% |
Return on average equity |
4.18 |
4.04 |
5.01 |
3.56 |
Average interest-earning assets to average
interest-bearing liabilities |
128.26 |
127.92 |
127.74 |
127.46 |
Average equity to average assets |
17.32 |
17.40 |
17.25 |
17.45 |
Interest rate spread |
3.25 |
2.85 |
3.20 |
2.87 |
Net interest margin |
3.51 |
3.19 |
3.47 |
3.21 |
|
|
|
|
|
|
Period
Ended |
|
|
|
June 30, |
December 31, |
|
|
|
2013 |
2012 |
|
|
Allowance for loan losses to total loans |
1.12% |
1.13% |
|
|
Allowance for loan losses to nonperforming
loans |
149.43 |
130.94 |
|
|
Nonperforming loans to total loans |
0.75 |
0.86 |
|
|
Nonperforming assets to total assets |
0.84 |
0.74 |
|
|
Nonperforming assets and troubled debt
restructurings performing under modified terms to total assets |
1.36 |
1.21 |
|
|
Net charge-offs to average loans |
0.02 |
0.21 |
|
|
Tier 1 (core) capital and tangible equity
(2) |
14.71 |
14.02 |
|
|
Tier 1 risk-based capital (2) |
22.79 |
22.55 |
|
|
Total risk-based capital (2) |
24.04 |
23.81 |
|
|
Book value per share |
$ 21.46 |
$ 20.98 |
|
|
Outstanding shares |
2,499,892 |
2,540,341 |
|
|
|
|
|
|
|
(1) Ratios are calculated on an annualized
basis. |
|
|
|
|
(2) Capital ratios are for First Federal
Savings Bank only |
|
|
|
|
|
|
|
|
|
Note: |
|
|
|
|
Certain items previously reported
may have been reclassified to conform with the current reporting
period's format. |
CONTACT: Patrick G. O'Brien
Telephone: (724) 684-6800
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