FedFirst Financial Corporation (NASDAQ Capital: FFCO; the
“Company”), the parent company of First Federal Savings Bank, today
announced net income of $48,000 for the three months ended June 30,
2009 compared to $65,000 for the three months ended June 30, 2008.
Basic and diluted earnings per share were $0.01 for the three
months ended June 30, 2009 and 2008.
Year-to-date, the Company reported net income of $367,000
compared to $333,000 for the same period in the prior year. Basic
and diluted earnings per share were $0.06 for the six months ended
June 30, 2009 and 2008.
Mr. O’Brien, President and Chief Executive Officer of the
Company, stated, “In spite of the significant impact on net income
as a result of the increased FDIC insurance premiums coupled with
an industry-wide special assessment, our net income increased for
the first six months of 2009 compared to 2008. In addition, we
remain encouraged by the progress of our Company in its core
business:
- Our net interest margin widened
24 basis points quarter to quarter primarily driven by an increase
in core deposits.
- We continue to buffer against
the effects of a turbulent economy through increases in our
allowance for loan losses where the allowance to total loans ratio
improved year-to-date from 0.76% to 0.90%.
- Our noninterest income grew 51%
quarter to quarter driven primarily through our insurance agency,
Exchange Underwriters.”
Second Quarter
Results
Net interest income for the three months ended June 30, 2009
increased $267,000 to $2.3 million compared to the three months
ended June 30, 2008. Interest rate spread and net interest margin
were 2.45% and 2.79%, respectively, for the three months ended June
30, 2009 compared to 2.10% and 2.55%, respectively, for the three
months ended June 30, 2008. The improvement in interest rate spread
and net interest margin is primarily attributed to the growth in
the loan portfolio coupled with lower costs on deposits.
Noninterest income increased $298,000 to $887,000 for the three
months ended June 30, 2009 compared to $589,000 for the three
months ended June 30, 2008. The increase is primarily attributable
to an increase in insurance commissions from commercial lines and
the acquisition of Allsurance Insurance Agency in March 2009. In
addition, we recognized a gain of $73,000 on the sale of securities
in the current period.
Noninterest expense increased $575,000 for the three months
ended June 30, 2009 compared to the three months ended June 30,
2008, primarily due to an increase in FDIC insurance premiums. In
the current period, the FDIC imposed an industry-wide special five
basis point assessment to cover losses in the Deposit Insurance
Fund. The Company accrued $156,000 for its portion of the special
assessment. Increased premiums were also the result of a change in
the assessment calculation and the Company’s depletion of credits
that were available to offset premiums.
Year-to-Date
Results
Net interest income for the six months ended June 30, 2009
increased $607,000 to $4.5 million compared to $3.9 million for the
six months ended June 30, 2008. Interest rate spread and net
interest margin were 2.44% and 2.77%, respectively, for the six
months ended June 30, 2009 compared to 2.05% and 2.53% for the six
months ended June 30, 2008. The improvement in interest rate spread
and net interest margin is primarily attributed to growth in the
loan portfolio coupled with lower costs on deposits.
The provision for loan losses was $390,000 for the six months
ended June 30, 2009 compared to $279,000 for the six months ended
June 30, 2008. The increase in the provision is primarily related
to growth and composition of the loan portfolio, predominantly in
commercial real estate and business, one-to-four family
residential, and home equity loans. Current conditions in the
housing and credit markets also contributed to the increase in the
provision. Charge-offs declined to $50,000 for the six months ended
June 30, 2009 compared to $220,000 for the six months ended June
30, 2008.
Noninterest income increased $166,000 to $1.8 million for the
six months ended June 30, 2009 compared to $1.6 for the six months
ended June 30, 2008. The increase was primarily attributable to an
increase of $183,000 in insurance commissions as previously
noted.
Noninterest expense increased $619,000 for the six months ended
June 30, 2009 compared to the six months ended June 30, 2008
primarily due to an increase in FDIC insurance premiums. In the
current period, the FDIC imposed an industry-wide special five
basis point assessment to cover losses in the Deposit Insurance
Fund as explained above. In addition, compensation expense
increased due to an increase in health care cost and additional
personnel from the acquisition of Allsurance Insurance Agency.
Balance Sheet
Review
Total assets at June 30, 2009 were $345.7 million, a decrease of
$4.1 million from total assets of $349.8 million at December 31,
2008. The decrease in total assets was due to sales and paydowns of
securities partially offset by $6.2 million of loan growth,
primarily in commercial real estate, commercial business and home
equity loans. In addition, in the first six months of 2009,
deposits grew $11.1 million while borrowings decreased $16.1
million.
In the second quarter of 2009, the Company adopted Financial
Accounting Standards Board Staff Position (“FSP”) Financial
Accounting Standard (“FAS”) 115-2 and FAS 124-2, Recognition and
Presentation of Other-Than-Temporary Impairments (“OTTI”). The FSP
requires the reclassification of noncredit-related OTTI recognized
in earnings prior to January 1, 2009 from retained earnings to
accumulated other comprehensive loss (“OCL”) as a cumulative effect
adjustment. During 2008, the Company recognized $4.8 million of
OTTI charges for private label mortgage backed securities. Upon
adoption of FSP FAS 115-2, the Company determined that $3.1 million
of the OTTI charges were credit related and $1.7 million of the
OTTI charges were non-credit related. We do not expect to sell
these securities and it is more likely than not that we will not be
required to sell the securities before recovery of their amortized
cost basis. Therefore, as a result of adopting FSP FAS 115-2, a
$1.1 million increase to retained earnings (net of $584,000 of
taxes) and a corresponding increase to accumulated OCL were
recorded as the cumulative effect adjustment for the
noncredit-related portion of OTTI losses previously recognized in
earnings.
FedFirst Financial Corporation is the parent company of First
Federal Savings Bank, a community-oriented financial institution
operating nine 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,
2009 2008
Selected Financial Condition
Data:
Total assets $ 345,710 $ 349,761 Cash and cash equivalents 7,571
7,847 Securities available-for-sale 76,505 85,433 Loans receivable,
net 236,348 230,184 Deposits 183,924 172,804 Borrowings 116,267
132,410 Equity 40,478 39,424
(Unaudited)
(Unaudited) Three Months Ended Six Months
Ended June 30, June 30, 2009
2008 2009 2008
Selected Operations Data:
Total interest income $ 4,484 $ 4,355 $ 9,054 $ 8,661 Total
interest expense 2,218 2,356 4,568
4,782 Net interest income 2,266 1,999 4,486 3,879 Provision for
loan losses 230 220 390 279 Net
interest income after provision for loan losses 2,036 1,779 4,096
3,600 Noninterest income 887 589 1,800 1,634 Noninterest expense
2,811 2,236 5,209 4,590
Income before income tax expense
and noncontrolling interest in net income of consolidated
subsidiary
112 132 687 644 Income tax expense 45 54 263
255
Net income before noncontrolling
interest in net income of consolidated subsidiary
67 78 424 389 Noncontrolling interest in net income of consolidated
subsidiary 19 13 57 56 Net income of
FedFirst Financial Corporation $ 48 $ 65 $ 367 $ 333
Earnings per share - basic and diluted $ 0.01 $ 0.01 $ 0.06 $ 0.06
Weighted average shares outstanding - basic 6,078,615 5,995,088
6,076,000 5,983,500 Weighted average shares outstanding - diluted
6,078,615 5,995,088 6,076,000 5,983,500
Three
Months Ended Six Months Ended June 30, June
30, 2009 2008 2009
2008
Selected Financial Ratios(1):
Return on average assets 0.06 % 0.08 % 0.21 % 0.20 % Return on
average equity 0.47 0.61 1.82 1.55 Average interest-earning assets
to average interest-bearing liabilities 112.42 114.98 111.75 115.12
Average equity to average assets 11.71 12.83 11.56 13.18 Interest
rate spread 2.45 2.10 2.44 2.05 Net interest margin 2.79 2.55 2.77
2.53
Period Ended June 30, December
31, 2009 2008 Allowance for loan
losses to total loans 0.90 % 0.76 % Allowance for loan losses to
nonperforming loans 122.76 283.96 Nonperforming loans to total
loans 0.73 0.27 Book value per share $ 6.40 $ 6.21
(1) Three and six months ended ratios are calculated on an
annualized basis.
Note: Certain items previously
reported may have been reclassified to conform with the current
reporting period’s format.
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