FedFirst Financial Corporation (NASDAQ Capital:FFCO; the
“Company”), the parent company of First Federal Savings Bank, today
announced net income of $105,000 for the three months ended
September 30, 2009 compared to $66,000 for the three months ended
September 30, 2008. Basic and diluted earnings per share were $0.02
for the three months ended September 30, 2009 compared to $0.01 for
the three months ended September 30, 2008.
Year-to-date, the Company reported net income of $472,000
compared to $399,000 for the same period in the prior year. Basic
and diluted earnings per share were $0.08 for the nine months ended
September 30, 2009 compared to $0.07 for the nine months ended
September 30, 2008.
Mr. O’Brien, President and Chief Executive Officer of the
Company, stated, “We are encouraged that our plan of driving core
banking business through First Federal Savings Bank and growing
noninterest income through our insurance agency, Exchange
Underwriters, has continued to show positive results in the midst
of the economic challenges of 2009. Net income is up 18% for the
first nine months of 2009 compared to 2008. It is important to note
that in the current year we absorbed increased FDIC insurance
premiums of $459,000 compared to $20,000 during the same period of
2008. The drivers of this progress include:
- An improving net interest margin
of 2.97% in the current quarter compared to 2.66% for the same
quarter last year.
- A 9% increase in lower cost
deposits and 10% reduction in higher cost borrowings
year-to-date.
- A 13% increase in noninterest
income year-to-date comparing 2009 to 2008.”
Third Quarter
Results
Net interest income for the three months ended September 30,
2009 increased $233,000 to $2.4 million compared to $2.2 million
for the three months ended September 30, 2008. Interest rate spread
and net interest margin were 2.64% and 2.97%, respectively, for the
three months ended September 30, 2009 compared to 2.23% and 2.66%,
respectively, for the three months ended September 30, 2008. The
improvement in interest rate spread and net interest margin is
primarily attributable to lower costs on deposits coupled with
growth in the loan portfolio and a reduction in borrowings.
Noninterest income increased $124,000 to $706,000 for the three
months ended September 30, 2009 compared to $582,000 for the three
months ended September 30, 2008. The increase is primarily
attributable to an increase in insurance commissions due in part to
the acquisition of Allsurance Insurance Agency in March 2009.
Noninterest expense increased $277,000 for the three months
ended September 30, 2009 compared to the three months ended
September 30, 2008, primarily due to an increase in FDIC insurance
premiums as a result of a change in the assessment calculation. In
addition, compensation and employee benefits expense increased
$98,000 primarily related to the Allsurance Insurance Agency
acquisition in March 2009 and the hiring of additional commercial
lending personnel in the fourth quarter of the prior year.
Year-to-Date
Results
Net interest income for the nine months ended September 30, 2009
increased $840,000 to $6.9 million compared to $6.1 million for the
nine months ended September 30, 2008. Interest rate spread and net
interest margin were 2.51% and 2.84%, respectively, for the nine
months ended September 30, 2009 compared to 2.11% and 2.57% for the
nine months ended September 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 $690,000 for the nine months
ended September 30, 2009 compared to $539,000 for the nine months
ended September 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. In addition, although
charge-offs declined to $157,000 for the nine months ended
September 30, 2009 compared to $350,000 for the nine months ended
September 30, 2008, the provision increased to account for
potential losses of loans currently in nonaccrual and current
conditions in the housing and credit markets. Total nonaccrual
loans increased to $1.5 million at September 30, 2009 compared to
$858,000 at September 30, 2008. The increase in nonaccrual loans
over the prior year is primarily related to two multi-family
properties in our purchased secondary market portfolio.
Noninterest income increased $290,000 to $2.5 million for the
nine months ended September 30, 2009 compared to $2.2 million for
the nine months ended September 30, 2008. The increase was
primarily attributable to an increase of $292,000 in insurance
commissions as previously noted.
Noninterest expense increased $896,000 for the nine months ended
September 30, 2009 compared to the nine months ended September 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 paid $155,000 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. In addition, compensation
and employee benefits expense increased $246,000 as noted
above.
Balance Sheet
Review
Total assets at September 30, 2009 were $353.6 million, an
increase of $3.9 million from total assets of $349.8 million at
December 31, 2008. The increase in total assets was due to $10.8
million of loan growth, primarily in commercial real estate,
one-to-four family and home equity loans partially offset by sales
and paydowns of securities. In addition, in the first nine months
of 2009, deposits grew $15.7 million while borrowings decreased
$13.6 million.
In the second quarter of 2009, the Company adopted Financial
Accounting Standards Board Accounting Standard Codification (“ASC”)
320-10-35-33A through 35A, Recognition and Presentation of
Other-Than-Temporary Impairment (“OTTI”). This ASC 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 ASC
320-10-35-33A through 35A, 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 ASC 320-10-35-33A
through 35A, 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)
September
30, December 31, 2009 2008
Selected Financial Condition
Data:
Total assets $ 353,623 $ 349,761 Cash and cash equivalents 6,263
7,847 Securities available-for-sale 81,943 85,433 Loans receivable,
net 241,001 230,184 Deposits 188,454 172,804 Borrowings 118,773
132,410 Equity 41,972 39,424
(Unaudited)
(Unaudited) Three Months Ended Nine Months
Ended September 30, September 30, 2009
2008 2009 2008
Selected Operations Data:
Total interest income $ 4,509 $ 4,602 $ 13,563 $ 13,263 Total
interest expense 2,096 2,422 6,664
7,204 Net interest income 2,413 2,180 6,899 6,059 Provision for
loan losses 300 260 690 539 Net
interest income after provision for loan losses 2,113 1,920 6,209
5,520 Noninterest income 706 582 2,506 2,216 Noninterest expense
2,657 2,380 7,866 6,970
Income before income tax expense
and noncontrolling interest in net income of consolidated
subsidiary
162 122 849 766 Income tax expense 57 51 320
306
Net income before noncontrolling
interest in net income of consolidated subsidiary
105 71 529 460 Noncontrolling interest in net income of
consolidated subsidiary - 5 57 61 Net
income of FedFirst Financial Corporation $ 105 $ 66 $ 472 $ 399
Earnings per share - basic and diluted $ 0.02 $ 0.01 $ 0.08
$ 0.07 Weighted average shares outstanding - basic and diluted
6,103,999 5,905,927 6,078,456 5,968,648
Three
Months Ended Nine Months Ended September 30,
September 30, 2009 2008 2009
2008
Selected Financial Ratios(1):
Return on average assets 0.12 % 0.08 % 0.18 % 0.16 % Return on
average equity 1.02 0.65 1.55 1.26 Average interest-earning assets
to average interest-bearing liabilities 112.70 114.73 112.07 114.99
Average equity to average assets 11.75 11.81 11.62 12.70 Interest
rate spread 2.64 2.23 2.51 2.11 Net interest margin 2.97 2.66 2.84
2.57
Period Ended September 30,
December 31, 2009 2008 Allowance for loan
losses to total loans 0.95 % 0.76 % Allowance for loan losses to
nonperforming loans 154.11 283.96 Nonperforming loans to total
loans 0.62 0.27 Book value per share $ 6.63 $ 6.21
(1) Three and nine 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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