FedFirst Financial Corporation (Nasdaq:FFCO) (the "Company"), the
parent company of First Federal Savings Bank (the "Bank"), today
announced net income of $402,000 for the three months ended
December 31, 2013 compared to $556,000 for the three months ended
December 31, 2012, a decrease of $154,000 or 27.7%. Diluted
earnings per share was $0.17 for the three months ended December
31, 2013 compared to $0.20 for the three months ended December 31,
2012, a decrease of $0.03 per share or 15.0%. The Company reported
net income of $2.2 million for the year ended December 31, 2013
compared to $2.3 million for the year ended December 31, 2012,
a decrease of $20,000 or 0.9%. Diluted earnings per share was
$0.91 for the year ended December 31, 2013 compared to $0.80 for
the year ended December 31, 2012, an increase of $0.11 per
share or 13.8%.
"We are pleased to announce another year of strong results
highlighted by an improved net interest margin from controlling
interest rates in a challenging low interest rate environment and
an increase in insurance commissions," said Patrick G. O'Brien,
President and CEO. "While charge-offs declined, robust commercial
loan growth fueled a rise in provision for loan losses.
Shareholders benefited from the operational success as well as
continued repurchases of common stock which increased book value
per share to $22.00 and the increase in our quarterly dividend to
$0.06 per share. The strong results also contributed to our ability
to declare a $0.25 per share special dividend today. A focus of
FedFirst Financial is building shareholder value through
operational success, payment of dividends and our share repurchase
program and this special dividend reinforces that focus."
Fourth Quarter Results
Net interest income for the three months ended December 31, 2013
remained at approximately $2.6 million compared to the three
months ended December 31, 2012. Interest rate reductions and
decreases in average balances on higher-cost deposits resulted in
an $83,000 decrease in interest expense on deposits and the
payoff of higher-cost long-term borrowings replaced at short-term,
lower rates resulted in a $37,000 decrease in interest expense
on borrowings. In addition, loan volume resulted in a $40,000
increase in interest income on loans. This was partially offset by
a $143,000 decline in interest income on securities from
paydowns.
The provision for loan losses was $375,000 for the three
months ended December 31, 2013. There was no provision for loan
losses for the three months ended December 31, 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. In addition, net charge-offs
for the three months ended December 31, 2013 were $260,000 compared
to $205,000 for the three months ended December 31, 2012.
Noninterest income increased $24,000, or 2.6%,
to $956,000 for the three months ended December 31, 2013
compared to $932,000 for the three months ended December 31,
2012 primarily due to fees and service charge income, which
increased $26,000 from prepayment fees received on payoffs of
commercial loans. Insurance commissions were $717,000 for the three
months ended December 31, 2013 and were comparative to $713,000 for
the three months ended December 31, 2012. Insurance commissions
included $24,000 of contingency fees for the three months ended
December 31, 2013 compared to $72,000 for the three months ended
December 31, 2012.
Noninterest expense decreased $94,000, or 3.6%, and
remained at approximately $2.6 million for the three months
ended December 31, 2013 compared to the three months ended December
31, 2012. For the three months ended December 31, 2013, the Company
recognized $119,000 of real estate owned income primarily due to
gains on the sale of properties compared to $39,000 of real estate
owned expense for the three months ended December 31, 2012. This
was partially offset by a $30,000 increase in compensation expense
primarily due to increases in stock-based compensation and employee
benefit expenses.
Year-to-Date Results
Net interest income decreased $91,000 to $10.2 million
for the year ended December 31, 2013 compared to $10.3 million
for the year ended December 31, 2012. Paydowns resulted in a
$628,000 decline in interest income on securities. In
addition, modifications and payoffs of higher yielding loans due to
the low interest rate environment resulted in a $397,000 decline in
interest income on loans despite an increase in average loans.
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 decrease in interest income
was partially offset by interest rate reductions and decreases in
average balances on higher-cost deposits, which resulted in
a $589,000 decrease in interest expense on deposits, and the
payoff of higher-cost long-term borrowings replaced at short-term,
lower rates, which resulted in a $349,000 decrease in interest
expense on borrowings.
The provision for loan losses was $740,000 for the year
ended December 31, 2013 compared to $310,000 for the year
ended December 31, 2012. In 2013, 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 $318,000 for the year ended December 31, 2013
compared to $522,000 for the year ended December 31, 2012.
Noninterest income increased $842,000, or 24.2%,
to $4.3 million for the year ended December 31, 2013 compared
to $3.5 million for the year ended December 31, 2012. In 2013,
there was a $762,000 increase in insurance commissions primarily
due to an increase in commercial lines policies and a $228,000
increase in contingency fees. In addition, fees and service charge
income increased $126,000 primarily due to prepayment fees received
on payoffs of commercial loans. Income from bank-owned life
insurance decreased $46,000 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 $361,000, or 3.6%,
to $10.3 million for the year ended December 31, 2013 compared
to $9.9 million for the year ended December 31, 2012.
Compensation expense increased $415,000 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 $277,000
primarily related to Exchange Underwriters. This was partially
offset by the recognition of $105,000 of real estate owned income
primarily due to gains on the sale of a properties in the current
period compared to $58,000 of real estate owned expense in the
prior period. Additionally, there was a $107,000 decrease in
professional services primarily due to costs associated with
strategic planning analysis and initiatives in the prior period and
a $58,000 decrease in amortization of intangibles and $33,000
decrease in occupancy expense primarily due to fully depreciated
and amortized assets.
Balance Sheet Review
Total assets increased $267,000 to $319.0 million at
December 31, 2013 compared to $318.8 million at December 31,
2012. Net loans increased $19.3 million to $268.8 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 $15.8 million
primarily due to paydowns. Deposits increased $5.2 million
to $219.2 million principally in interest and
noninterest-bearing demand deposits, partially offset by decreases
in money market accounts and certificates of deposits. Borrowings
decreased $3.1 million to $45.6 million due to the payoff
of higher-cost long-term borrowings and paydowns on amortizing
advances that were replaced with short-term borrowings at lower
rates. Stockholders' equity decreased $1.4 million
to $51.9 million at December 31, 2013 compared to $53.3
million at December 31, 2012 primarily due to the purchase of
213,157 shares of the Company's common stock for $4.1 million and
$528,000 in dividend payments to stockholders partially offset by
$2.2 million of net income and a $450,000 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 |
|
|
|
|
|
(In thousands, except share and per share
data) |
(Unaudited) December 31,
2013 |
December 31, 2012 |
|
|
|
|
|
|
|
Selected Financial Condition
Data: |
|
|
|
|
Assets |
$ 319,027 |
$ 318,760 |
|
|
Cash and cash equivalents |
5,552 |
5,874 |
|
|
Securities available-for-sale |
26,772 |
42,582 |
|
|
Loans receivable, net |
268,812 |
249,530 |
|
|
Deposits |
219,232 |
214,057 |
|
|
Borrowings |
45,591 |
48,678 |
|
|
Stockholders' equity |
51,851 |
53,294 |
|
|
|
|
|
|
|
|
(Unaudited) |
(Unaudited) |
|
Three
Months Ended December 31, |
Year Ended
December 31, |
|
2013 |
2012 |
2013 |
2012 |
Selected Operations
Data: |
|
|
|
|
Total interest income |
$ 3,239 |
$ 3,340 |
$ 12,920 |
$ 13,949 |
Total interest expense |
641 |
761 |
2,694 |
3,632 |
Net interest income |
2,598 |
2,579 |
10,226 |
10,317 |
Provision for loan losses |
375 |
-- |
740 |
310 |
Net interest income after provision for loan
losses |
2,223 |
2,579 |
9,486 |
10,007 |
Noninterest income |
956 |
932 |
4,317 |
3,475 |
Noninterest expense |
2,550 |
2,644 |
10,305 |
9,944 |
Income before income tax expense and
noncontrolling interest in net income of consolidated
subsidiary |
629 |
867 |
3,498 |
3,538 |
Income tax expense |
220 |
305 |
1,186 |
1,251 |
Net income before noncontrolling
interest in net income of consolidated subsidiary |
409 |
562 |
2,312 |
2,287 |
Noncontrolling interest in net income of
consolidated subsidiary |
7 |
6 |
77 |
32 |
Net income of FedFirst Financial
Corporation |
$ 402 |
$ 556 |
$ 2,235 |
$ 2,255 |
|
|
|
|
|
Dividends per share - regular |
$ 0.06 |
$ 0.04 |
$ 0.22 |
$ 0.15 |
Dividends per share - special |
-- |
0.25 |
-- |
0.25 |
Earnings per share - basic |
0.17 |
0.20 |
0.93 |
0.81 |
Earnings per share - diluted |
0.17 |
0.20 |
0.91 |
0.80 |
|
|
|
|
|
Weighted average shares outstanding -
basic |
2,326,630 |
2,773,814 |
2,405,295 |
2,799,765 |
Weighted average shares outstanding -
diluted |
2,374,628 |
2,778,046 |
2,449,252 |
2,803,101 |
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
Year Ended December
31, |
|
2013 |
2012 |
2013 |
2012 |
Selected Financial
Ratios(1): |
|
|
|
|
Return on average assets |
0.51 % |
0.70 % |
0.71 % |
0.68 % |
Return on average equity |
3.03 |
3.92 |
4.14 |
3.84 |
Average interest-earning assets to average
interest-bearing liabilities |
128.68 |
129.31 |
128.21 |
128.22 |
Average equity to average assets |
16.80 |
17.86 |
17.08 |
17.71 |
Interest rate spread |
3.26 |
3.16 |
3.20 |
2.99 |
Net interest margin |
3.51 |
3.46 |
3.46 |
3.32 |
|
|
|
|
|
|
Period
Ended |
|
|
|
December 31,
2013 |
December 31,
2012 |
|
|
Allowance for loan losses to total loans |
1.17 % |
1.13 % |
|
|
Allowance for loan losses to nonperforming
loans |
136.41 |
130.94 |
|
|
Nonperforming loans to total loans |
0.86 |
0.86 |
|
|
Nonperforming assets to total assets |
0.80 |
0.74 |
|
|
Nonperforming assets and troubled debt
restructurings performing under modified terms to total
assets |
1.54 |
1.21 |
|
|
Net charge-offs to average loans |
0.12 |
0.21 |
|
|
Tier 1 (core) capital and tangible equity
(2) |
14.06 |
14.02 |
|
|
Tier 1 risk-based capital (2) |
20.59 |
22.55 |
|
|
Total risk-based capital (2) |
21.84 |
23.81 |
|
|
Book value per share |
$ 22.00 |
$ 20.98 |
|
|
Outstanding shares |
2,357,293 |
2,540,341 |
|
|
|
|
|
|
|
(1) Ratios are calculated on an annualized
basis. |
|
|
|
|
(2) Capital ratios are for First Federal
Savings Bank only. |
|
|
|
|
CONTACT: Patrick G. O'Brien
Telephone: (724) 684-6800
Fedfirst Financial (NASDAQ:FFCO)
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