FedFirst Financial Corporation (Nasdaq:FFCO) (the "Company"), the
parent company of First Federal Savings Bank (the "Bank"), today
announced net income of $463,000 for the three months ended
September 30, 2013 compared to $649,000 for the three months ended
September 30, 2012, a decrease of $186,000 or 28.7%. Diluted
earnings per share was $0.19 for the three months ended September
30, 2013 compared to $0.23 for the three months ended September 30,
2012, a decrease of $0.04 per share or 17.4%. The Company reported
net income of $1.8 million for the nine months ended September 30,
2013 compared to $1.7 million for the nine months ended September
30, 2012, an increase of $134,000 or 7.9%. Diluted earnings per
share was $0.75 for the nine months ended September 30, 2013
compared to $0.60 for the nine months ended September 30, 2012, an
increase of $0.15 per share or 25.0%.
"The low interest rate environment continues to present a
challenge for community banks and the ability to maintain our net
interest margin," said Patrick G. O'Brien, President and CEO. "The
uptick in rates in the third quarter helped to slow refinance
activity, which contributed to a 2.5% increase in the loan
portfolio in the quarter. We also continue to benefit from strong
results from our insurance agency subsidiary, Exchange
Underwriters. Offsetting these gains was a slight increase in
credit costs, which reflects the unevenness of the economic
recovery in our market area."
Third Quarter Results
Net interest income for the three months ended September 30,
2013 decreased $152,000, or 5.7%, to $2.5 million compared to $2.6
million for the three months ended September 30, 2012.
Modifications and payoffs of higher yielding loans and securities
due to the continued low interest rate environment resulted in a
$345,000 decline in interest income. This was partially offset by
interest rate reductions and decreases in average balances on
higher-cost deposits that resulted in a $116,000 decrease in
deposits expense and payoffs on borrowings that resulted in a
$77,000 decrease in borrowings expense.
The provision for loan losses was $200,000 for the three months
ended September 30, 2013 compared to $100,000 for the three
months ended September 30, 2012. In the current period, the
provision was impacted by an increase in special mention rated
loans and a change in the mix of the loan portfolio, including
growth in commercial loans.
Noninterest income increased $178,000, or 21.4%,
to $1.0 million for the three months ended September 30, 2013
compared to $830,000 for the three months ended September 30,
2012. Insurance commissions increased $193,000 primarily due to an
increase in commercial lines policies. Fees and service charge
income increased $28,000 primarily due to prepayment fees received
on payoffs of commercial loans. Income from bank-owned life
insurance decreased $37,000 primarily due to the recognition of
$33,000 in income from a policy of a former director who passed in
the prior period.
Noninterest expense increased $172,000, or 7.2%,
to $2.6 million for the three months ended September 30, 2013
compared to $2.4 million for the three months ended September
30, 2012. Compensation expense increased $79,000 primarily due to
increases in stock-based compensation and employee benefit
expenses. In addition, advertising expense increased $76,000
primarily related to Exchange Underwriters and real estate owned
expense increased $20,000 due to a writedown of a property in the
current period. This was partially offset by a $20,000 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 decreased $110,000 to $7.6 million for the
nine months ended September 30, 2013 compared to $7.7 million for
the nine months ended September 30, 2012. Interest rate reductions
and decreases in average balances on higher-cost deposits resulted
in a $506,000 decrease in deposits expense and payoffs on
borrowings resulted in a $312,000 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 $928,000 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 $365,000 for the nine
months ended September 30, 2013 compared to $310,000 for the
nine months ended September 30, 2012. In the current period, the
provision was impacted by an increase in special mention rated
loans and a change in the mix of the loan portfolio, including
growth in commercial loans. Net charge-offs were $58,000 for the
nine months ended September 30, 2013 compared to $317,000 for the
nine months ended September 30, 2012.
Noninterest income increased $818,000, or 32.2%,
to $3.4 million for the nine months ended September 30, 2013
compared to $2.5 million for the nine months ended September
30, 2012. In the current period, there was a $758,000 increase in
insurance commissions primarily due to an increase in commercial
lines policies and a $275,000 increase in contingency fees. In
addition, fees and service charge income increased $100,000
primarily due to prepayment fees received on payoffs of commercial
loans. Income from bank-owned life insurance decreased $45,000
primarily due to the recognition of $33,000 in income from a policy
of a former director who passed in the prior period.
Noninterest expense increased $455,000 , or 6.2%,
to $7.8 million for the nine months ended September 30, 2013
compared to $7.3 million for the nine months ended September
30, 2012. Compensation expense increased $385,000 primarily due to
the hiring of additional staff, higher employee commissions from an
increase in fee income on insurance policies, and an increase in
stock-based compensation. In addition, advertising expense
increased $264,000 primarily related to Exchange Underwriters. This
was partially offset by a $95,000 decrease in professional services
primarily due to costs associated with strategic planning analysis
and initiatives in the prior period and a $59,000 decrease in
occupancy expense and $40,000 decrease in amortization of
intangibles primarily due to fully depreciated and amortized
assets.
Balance Sheet Review
Total assets increased $3.8 million to $322.5 million
at September 30, 2013 compared to $318.8 million at December
31, 2012. Net loans increased $12.2 million to $261.7
million primarily as a result of growth in, commercial real estate,
commercial business loans and home equity loans, as well as
disbursements on commercial constructions loans, partially offset
by a decrease in residential mortgage and multi-family loans.
Securities available-for-sale decreased $13.6 million due to
paydowns and maturity of a municipal bond. Deposits
increased $10.8 million to $224.9 million principally in
interest and noninterest-bearing demand deposits, partially offset
by decreases in money market accounts and certificates of deposits.
Borrowings decreased $6.2 million to $42.5 million due to
a decrease in short-term borrowings and paydowns on amortizing
advances. Stockholders' equity decreased $30,000 to $53.3
million at September 30, 2013 primarily due to the purchase of
122,957 shares of the Company's common stock for $2.3 million and
$389,000 in dividend payments to stockholders partially offset by
$1.8 million of net income and a $486,000 increase in the
unrealized gain position of the security portfolio.
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) |
September 30, |
December 31, |
|
|
|
2013 |
2012 |
|
|
Selected Financial Condition
Data: |
|
|
|
|
Assets |
$ 322,513 |
$ 318,760 |
|
|
Cash and cash equivalents |
14,089 |
5,874 |
|
|
Securities available-for-sale |
28,969 |
42,582 |
|
|
Loans receivable, net |
261,737 |
249,530 |
|
|
Deposits |
224,868 |
214,057 |
|
|
Borrowings |
42,500 |
48,678 |
|
|
Stockholders' equity |
53,264 |
53,294 |
|
|
|
|
|
|
|
|
(Unaudited) |
(Unaudited) |
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
September 30, |
|
2013 |
2012 |
2013 |
2012 |
Selected Operations
Data: |
|
|
|
|
Total interest income |
$ 3,155 |
$ 3,500 |
$ 9,681 |
$ 10,609 |
Total interest expense |
658 |
851 |
2,053 |
2,871 |
Net interest income |
2,497 |
2,649 |
7,628 |
7,738 |
Provision for loan losses |
200 |
100 |
365 |
310 |
Net interest income after provision for loan
losses |
2,297 |
2,549 |
7,263 |
7,428 |
Noninterest income |
1,008 |
830 |
3,361 |
2,543 |
Noninterest expense |
2,551 |
2,379 |
7,755 |
7,300 |
Income before income tax expense and
noncontrolling interest in net income of consolidated
subsidiary |
754 |
1,000 |
2,869 |
2,671 |
Income tax expense |
273 |
346 |
966 |
946 |
Net income before noncontrolling interest in
net income of consolidated subsidiary |
481 |
654 |
1,903 |
1,725 |
Noncontrolling interest in net income of
consolidated subsidiary |
18 |
5 |
70 |
26 |
Net income of FedFirst Financial
Corporation |
$ 463 |
$ 649 |
$ 1,833 |
$ 1,699 |
|
|
|
|
|
Dividends per share |
$ 0.06 |
$ 0.04 |
$ 0.16 |
$ 0.11 |
Earnings per share - basic |
0.20 |
0.23 |
0.75 |
0.60 |
Earnings per share - diluted |
0.19 |
0.23 |
0.75 |
0.60 |
|
|
|
|
|
Weighted average shares outstanding -
basic |
2,373,378 |
2,867,983 |
2,428,692 |
2,836,388 |
Weighted average shares outstanding -
diluted |
2,407,398 |
2,871,313 |
2,460,099 |
2,839,577 |
|
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
September 30, |
|
2013 |
2012 |
2013 |
2012 |
Selected Financial
Ratios(1): |
|
|
|
|
Return on average assets |
0.59% |
0.78% |
0.77% |
0.67% |
Return on average equity |
3.44 |
4.31 |
4.49 |
3.81 |
Average interest-earning assets to average
interest-bearing liabilities |
128.69 |
128.74 |
128.06 |
127.88 |
Average equity to average assets |
17.05 |
18.07 |
17.18 |
17.66 |
Interest rate spread |
3.12 |
3.09 |
3.18 |
2.94 |
Net interest margin |
3.38 |
3.41 |
3.44 |
3.28 |
|
|
|
|
|
|
Period Ended |
|
|
|
September 30, |
December 31, |
|
|
|
2013 |
2012 |
|
|
Allowance for loan losses to total loans |
1.17% |
1.13% |
|
|
Allowance for loan losses to nonperforming
loans |
113.43 |
130.94 |
|
|
Nonperforming loans to total loans |
1.03 |
0.86 |
|
|
Nonperforming assets to total assets |
1.03 |
0.74 |
|
|
Nonperforming assets and troubled debt
restructurings performing under modified terms to total assets |
1.48 |
1.21 |
|
|
Net charge-offs to average loans |
0.02 |
0.21 |
|
|
Tier 1 (core) capital and tangible equity
(2) |
14.53 |
14.02 |
|
|
Tier 1 risk-based capital (2) |
22.15 |
22.55 |
|
|
Total risk-based capital (2) |
23.40 |
23.81 |
|
|
Book value per share |
$ 21.90 |
$ 20.98 |
|
|
Outstanding shares |
2,431,993 |
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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