FedFirst Financial Corporation (NASDAQ Capital: FFCO; the
“Company”), the parent company of First Federal Savings Bank (the
“Bank”), today announced net income of $594,000 for the three
months ended June 30, 2012 compared to $246,000 for the three
months ended June 30, 2011, an increase of $348,000 or 141.5%.
Basic and diluted earnings per share were $0.21 for the three
months ended June 30, 2012 compared to $0.08 for the three months
ended June 30, 2011, an increase of $0.13 per share or 162.5%. The
Company reported net income of $1.1 million for the six months
ended June 30, 2012 compared to $514,000 for the six months ended
June 30, 2011, an increase of $536,000 or 104.3%. Basic and diluted
earnings per share were $0.37 for the six months ended June 30,
2012 compared to basic and diluted earnings per share of $0.18 for
the six months ended June 30, 2011, an increase of $0.19 per share
or 105.6%.
Patrick G. O'Brien, President and CEO, stated, “We are
encouraged that the strategies we implemented in 2011 have
contributed to improved results. However, the continuance of a
historically low interest rate environment has and will put
pressure on our net interest margin. Thus, we continue to
examine strategies to create greater efficiency. On July 20,
2012, we announced that we intend to consolidate our Donora office
on October 26, 2012. With three offices in close proximity to
Donora, we concluded that we can continue to provide quality
customer services to the users of our Donora office while achieving
the expense savings of a more streamlined branch network.”
Second Quarter Results
Net interest income for the three months ended June 30, 2012
decreased $119,000, or 4.5%, to $2.5 million compared to $2.6
million for the three months ended June 30, 2011. Paydowns and
payoffs of higher yielding loans and securities resulted in a
$423,000 decline in interest income. This was partially offset by
interest rate reductions on deposits that resulted in a $190,000
decrease in deposits expense and payoffs on borrowings that
resulted in a $114,000 decrease in borrowings expense. Net interest
margin was 3.19% for the three months ended June 30, 2012 compared
to 3.31% for the three months ended June 30, 2011.
The provision for loan losses was $50,000 for the three months
ended June 30, 2012 compared to $200,000 for the three months ended
June 30, 2011. Despite an increase in net charge-offs, the
provision decreased primarily due to a reduction in specific
reserves after receiving an updated collateral appraisal. Net
charge-offs were $165,000 for the three months ended June 30, 2012
compared to $41,000 for the three months ended June 30, 2011.
Charge-offs in both periods were composed primarily of residential
mortgage loans. Total nonperforming loans at June 30, 2012 were
$3.0 million compared to $2.1 million at December 31, 2011.
Nonperforming loans at June 30, 2012 were comprised primarily of 12
residential mortgage loans totaling $2.4 million and two commercial
real estate loans totaling $453,000. The increase in nonperforming
loans was primarily in the purchased residential category.
Noninterest income increased $120,000 to $876,000 for the three
months ended June 30, 2012 compared to $756,000 for the three
months ended June 30, 2011. In the current period, a financed real
estate owned property was paid off which resulted in the
recognition of $66,000 of deferred income. There was also a $20,000
gain on the sale of real estate owned properties in the current
period compared to an $11,000 loss in the prior period. In
addition, fees and service charge income increased $28,000
primarily due to changes in the Bank’s fee structure and related
customer activity as well as the receipt of a prepayment penalty
from a commercial real estate loan payoff in the current
period.
Noninterest expense decreased $388,000, or 13.8%, to $2.4
million for the three months ended June 30, 2012 compared to $2.8
million for the three months ended June 30, 2011. Compensation
expense decreased $186,000 primarily due to the termination of the
Company’s supplemental executive retirement plan in the fourth
quarter of 2011 and a decrease in stock-based compensation expense
due to the final vesting of 2006 restricted stock awards and
options. Occupancy expense decreased $81,000 primarily due to fully
depreciated assets, a decrease in rent due to branch consolidation
in the prior year, and a decrease in office building maintenance
costs. In addition, professional services decreased $77,000
primarily due to costs associated with a branch facilities
assessment in the prior period.
Year-to-Date Results
Net interest income decreased $156,000 to $5.1 million for the
six months ended June 30, 2012 compared to $5.2 million for the six
months ended June 30, 2011. Paydowns and payoffs of higher yielding
loans and securities resulted in a $736,000 decline in interest
income. This was partially offset by interest rate reductions on
deposits that resulted in a $299,000 decrease in deposits expense
and payoffs on borrowings that resulted in a $281,000 decrease in
borrowings expense. Net interest margin was 3.21% for the six
months ended June 30, 2012 compared to 3.29% for the six months
ended June 30, 2011.
The provision for loan losses was $210,000 for the six months
ended June 30, 2012 compared to $450,000 for the six months ended
June 30, 2011. The provision decreased primarily due to a reduction
in specific reserves after receiving an updated collateral
appraisal. In addition, prior period adjustments to the qualitative
factors used in determining the allowance for loan losses resulted
in an increase in the provision in the previous period. Net
charge-offs were $320,000 for the six months ended June 30, 2012
compared to $280,000 for the six months ended June 30, 2011.
Charge-offs in both periods were composed primarily of residential
mortgage loans.
Noninterest income increased $125,000, or 7.9%, to $1.7 million
for the six months ended June 30, 2012 compared to $1.6 million for
the six months ended June 30, 2011. In the current period, a
financed real estate owned property was paid off which resulted in
the recognition of $66,000 of income that had previously been
deferred. In addition, fees and service charge income increased
$59,000 primarily due to changes in the Bank’s fee structure and
related customer activity as well as the receipt of prepayment
penalties from commercial real estate loan payoffs in the current
period.
Noninterest expense decreased $621,000, or 11.2%, to $4.9
million for the six months ended June 30, 2012 compared to $5.5
million for the six months ended June 30, 2011. Compensation
expense decreased $410,000 primarily due to the termination of the
Company’s supplemental executive retirement plan in the fourth
quarter of 2011 and a decrease in stock-based compensation expense
due to the final vesting of 2006 restricted stock awards and
options. Occupancy expense decreased $118,000 primarily due to
fully depreciated assets, a decrease in rent due to a branch
closing in the prior year, and a decrease in office building
maintenance costs. There was also a $45,000 decrease in insurance
premiums due to the Federal Deposit Insurance Corporation’s revised
assessment methodology implemented in the second quarter of 2011.
In addition, other miscellaneous expense decreased $62,000
primarily due to a decrease in real estate owned, postage and
advertising expenses.
Balance Sheet Review
Total assets increased $3.5 million to $338.8 million at June
30, 2012 compared to $335.3 million at December 31, 2011. Cash and
cash equivalents increased $8.2 million primarily due to a $7.7
million increase in deposits, principally in noninterest-bearing
demand deposits and money market accounts. Loans decreased $2.3
million primarily as a result of payoffs and paydowns on
one-to-four family mortgage and commercial business loans partially
offset by growth in home equity and commercial real estate loans.
Securities available-for-sale decreased $1.2 million due to calls
and paydowns, including a $2.0 million call of a Government
Sponsored Enterprise security and a $665,000 partial call of a
municipal bond, that was partially offset by the purchase of $9.3
million of securities, including $4.5 million in REMICs, $2.7
million in tax exempt municipal bonds, and $2.1 million in
mortgage-backed securities. In addition, borrowings decreased $3.4
million due to paydowns on amortizing advances and the payoff of a
$1.0 million matured advance.
About FedFirst Financial
Corporation
FedFirst Financial Corporation is the parent company of First
Federal Savings Bank, a community-oriented financial institution
operating eight 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, 2012 2011
Selected
Financial Condition Data:
Total assets $ 338,754 $ 335,274 Cash and cash equivalents 22,769
14,571 Securities available-for-sale 51,280 52,448 Loans
receivable, net 242,958 245,277 Deposits 229,219 221,540 Borrowings
45,881 49,289 Stockholders' equity 58,564 58,801
(Unaudited) (Unaudited) Three Months Ended
Six Months Ended June 30, June 30, 2012
2011 2012 2011
Selected
Operations Data:
Total interest income $ 3,490 $ 3,913 $ 7,109 $ 7,845 Total
interest expense 964 1,268 2,020
2,600 Net interest income 2,526 2,645 5,089
5,245 Provision for loan losses 50 200
210 450 Net interest income after
provision for loan losses 2,476 2,445 4,879 4,795 Noninterest
income 876 756 1,715 1,590 Noninterest expense 2,419
2,807 4,923 5,544
Income before income tax expense and
noncontrolling interest in net income of consolidated
subsidiary
933 394 1,671 841 Income tax expense 335 138
600 299
Net income before noncontrolling interest
in net income of consolidated subsidiary
598 256 1,071 542 Noncontrolling interest in net income of
consolidated subsidiary 4 10 21
28 Net income of FedFirst Financial
Corporation $ 594 $ 246 $ 1,050 $ 514
Dividends per share $ 0.04 $ 0.03 $ 0.07 $ 0.06 Earnings per
share - basic and diluted 0.21 0.08 0.37 0.18 Weighted
average shares outstanding - basic 2,868,095 2,909,733 2,838,487
2,906,665 Weighted average shares outstanding - diluted 2,871,148
2,917,007 2,841,503 2,912,103
Three Months Ended
Six Months Ended June 30, June 30, 2012
2011 2012 2011
Selected
Financial Ratios(1):
Return on average assets 0.70 % 0.28 % 0.62 % 0.30 % Return on
average equity 4.04 1.63 3.56 1.72 Average interest-earning assets
to average interest-bearing liabilities 127.92 122.07 127.46 121.39
Average equity to average assets 17.40 17.44 17.45 17.31 Interest
rate spread 2.85 2.96 2.87 2.95 Net interest margin 3.19 3.31 3.21
3.29
Period Ended June 30, December 31,
2012 2011 Allowance for loan losses to total loans
1.20 % 1.21 % Allowance for loan losses to nonperforming loans
100.37 144.43 Nonperforming loans to total loans 1.19 0.84
Nonperforming assets to total assets 0.95 0.80 Net charge-offs to
average loans 0.13 0.24 Tier 1 (core) capital and tangible equity
(2) 13.83 13.59 Tier 1 risk-based capital (2) 24.08 24.04 Total
risk-based capital (2) 25.34 25.30 Book value per share $ 20.24 $
19.88 Outstanding shares 2,893,542 2,957,302 (1) Three and
six months ended ratios are calculated on an annualized basis. (2)
Capital ratios are for First Federal Savings Bank only
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