FedFirst Financial Corporation (NASDAQ Capital: FFCO; the
“Company”), the parent company of First Federal Savings Bank (the
“Bank”), today announced net income of $649,000 for the three
months ended September 30, 2012 compared to $290,000 for the three
months ended September 30, 2011, an increase of $359,000 or 123.8%.
Basic and diluted earnings per share were $0.23 for the three
months ended September 30, 2012 compared to $0.10 for the three
months ended September 30, 2011, an increase of $0.13 per share or
130.0%. The Company reported net income of $1.7 million for the
nine months ended September 30, 2012 compared to $804,000 for the
nine months ended September 30, 2011, an increase of $895,000 or
111.3%. Basic and diluted earnings per share were $0.60 for the
nine months ended September 30, 2012 compared to basic and diluted
earnings per share of $0.28 for the nine months ended September 30,
2011, an increase of $0.32 per share or 114.3%.
“While the uncertain economic environment and intense
competition create challenging headwinds, we are very pleased with
the strong results we posted this quarter,” said Patrick G.
O'Brien, President and CEO. “Net interest income edged down
slightly, but we were able to balance the reduction in the loan and
investment portfolios with modifications to our deposit rate
structure and pay-offs of borrowings that allowed us to achieve a
net interest margin that was consistent with the prior year.
Noninterest income increased over the prior year primarily due to
higher income from our insurance activities, and adjustments to our
compensation arrangements and branch structure reduced noninterest
expense.”
Third Quarter Results
Net interest income for the three months ended September 30,
2012 decreased $56,000, or 2.1%, to $2.6 million compared to $2.7
million for the three months ended September 30, 2011. Paydowns and
payoffs of higher yielding loans and securities resulted in a
$404,000 decline in interest income. This was partially offset by
interest rate reductions on deposits that resulted in a $238,000
decrease in deposits expense and payoffs on borrowings that
resulted in a $110,000 decrease in borrowings expense.
The provision for loan losses was $100,000 for the three months
ended September 30, 2012 compared to $325,000 for the three months
ended September 30, 2011. The provision decreased primarily due to
a decline in charge-offs. Net recoveries were $3,000 for the three
months ended September 30, 2012 compared to net charge-offs of
$200,000 for the three months ended September 30, 2011.
Noninterest income increased $103,000, or 14.2%, to $830,000 for
the three months ended September 30, 2012 compared to $727,000 for
the three months ended September 30, 2011 primarily due to an
$80,000 increase in insurance commissions. In addition, the death
of a former director in the current period resulted in the
recognition of $33,000 in income from a bank-owned life insurance
policy.
Noninterest expense decreased $310,000, or 11.5%, to $2.4
million for the three months ended September 30, 2012 compared to
$2.7 million for the three months ended September 30, 2011.
Compensation expense decreased $154,000 primarily due to the
termination of the Company’s supplemental executive retirement plan
in the fourth quarter of 2011. Occupancy expense decreased $79,000
primarily due to fully depreciated assets and a decrease in rent
due to branch consolidation in the prior year. In addition,
professional services decreased $57,000 primarily due to costs
associated with a branch facilities assessment in the prior
period.
Year-to-Date Results
Net interest income decreased $212,000 to $7.7 million for the
nine months ended September 30, 2012 compared to $8.0 million for
the nine months ended September 30, 2011. Paydowns and payoffs of
higher yielding loans and securities resulted in a $1.1 million
decline in interest income. This was partially offset by interest
rate reductions on deposits that resulted in a $537,000 decrease in
deposits expense and payoffs on borrowings that resulted in a
$391,000 decrease in borrowings expense.
The provision for loan losses was $310,000 for the nine months
ended September 30, 2012 compared to $775,000 for the nine months
ended September 30, 2011. In the prior period, adjustments to the
qualitative factors used in determining the allowance for loan
losses contributed to the larger provision amount. Net charge-offs
were $317,000 for the nine months ended September 30, 2012 compared
to $480,000 for the nine months ended September 30, 2011.
Noninterest income increased $212,000, or 9.1%, to $2.5 million
for the nine months ended September 30, 2012 compared to $2.3
million for the nine months ended September 30, 2011. In the
current period, there was an $82,000 increase in insurance
commissions and 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 $43,000 primarily due to changes in the Bank’s fee
structure and related customer activity and the death of a former
director in the current period resulted in the recognition of
$33,000 in income from a bank-owned life insurance policy.
Noninterest expense decreased $947,000, or 11.5%, to $7.3
million for the nine months ended September 30, 2012 compared to
$8.2 million for the nine months ended September 30, 2011.
Compensation expense decreased $564,000 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 restricted stock
awards and options. Occupancy expense decreased $197,000 primarily
due to fully depreciated assets and a decrease in rent due to a
branch consolidation in the prior year. Federal Deposit Insurance
Corporation’s insurance premiums decreased $47,000 due to the
revised assessment methodology implemented in the second quarter of
2011. Professional services decreased $61,000 primarily due to
costs associated with a branch facilities assessment in the prior
period. Other miscellaneous expense decreased $98,000 primarily due
to a decrease in real estate owned, postage and employee-related
expenses.
Balance Sheet Review
Total assets decreased $13.6 million to $321.6 million at
September 30, 2012 compared to $335.3 million at December 31, 2011.
Securities available-for-sale decreased $3.9 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 $10.9
million of securities, including $6.1 million in REMICs, $2.7
million in tax exempt municipal bonds, and $2.1 million in
mortgage-backed securities. Net loans decreased $3.7 million
primarily as a result of payoffs and paydowns on one-to-four family
mortgage and commercial business loans partially offset by growth
in commercial real estate and home equity loans. In addition,
borrowings decreased $11.5 million due to the payoff of $8.0
million of matured advances and paydowns on amortizing advances.
Deposits decreased $1.5 million principally in certificates of
deposit partially offset by an increase in noninterest-bearing and
interest-bearing demand deposits.
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, 2012 2011
Selected
Financial Condition Data:
Total assets $ 321,625 $ 335,274 Cash and cash equivalents 10,517
14,571 Securities available-for-sale 48,582 52,448 Loans
receivable, net 241,582 245,277 Deposits 220,031 221,540 Borrowings
37,833 49,289 Stockholders' equity 58,864 58,801
(Unaudited) (Unaudited) Three Months Ended
Nine Months Ended September 30, September 30,
2012 2011 2012
2011
Selected
Operations Data:
Total interest income $ 3,500 $ 3,904 $ 10,609 $ 11,749 Total
interest expense 851 1,199 2,871 3,799
Net interest income 2,649 2,705 7,738 7,950 Provision for loan
losses 100 325 310 775 Net interest
income after provision for loan losses 2,549 2,380 7,428 7,175
Noninterest income 830 727 2,543 2,331 Noninterest expense
2,379 2,689 7,300 8,247 Income before income
tax expense and noncontrolling interest in net income of
consolidated subsidiary 1,000 418 2,671 1,259 Income tax expense
346 133 946 432 Net income before
noncontrolling interest in net income of consolidated subsidiary
654 285 1,725 827 Noncontrolling interest in net income (loss) of
consolidated subsidiary 5 (5 ) 26 23
Net income of FedFirst Financial Corporation $ 649 $ 290 $ 1,699 $
804 Dividends per share $ 0.04 $ 0.03 $ 0.11 $ 0.09 Earnings
per share - basic and diluted 0.23 0.10 0.60 0.28 Weighted
average shares outstanding - basic 2,867,983 2,912,853 2,836,388
2,909,045 Weighted average shares outstanding - diluted 2,871,313
2,922,052 2,839,577 2,918,012
Three Months Ended
Nine Months Ended September 30, September 30,
2012 2011 2012
2011
Selected
Financial Ratios(1):
Return on average assets 0.78 % 0.34 % 0.67 % 0.31 % Return on
average equity 4.31 1.89 3.81 1.78 Average interest-earning assets
to average interest-bearing liabilities 128.74 123.45 127.88 122.08
Average equity to average assets 18.07 17.85 17.66 17.49 Interest
rate spread 3.09 3.06 2.94 2.98 Net interest margin 3.41 3.41 3.28
3.33
Period Ended September 30, December
31, 2012 2011 Allowance for loan
losses to total loans 1.24 % 1.21 % Allowance for loan losses to
nonperforming loans 113.51 144.43 Nonperforming loans to total
loans 1.09 0.84 Nonperforming assets to total assets 0.91 0.80 Net
charge-offs to average loans 0.13 0.24 Tier 1 (core) capital and
tangible equity (2) 14.80 13.59 Tier 1 risk-based capital (2) 24.76
24.04 Total risk-based capital (2) 26.01 25.30 Book value per share
$ 20.55 $ 19.88 Outstanding shares 2,864,100 2,957,302 (1)
Three and nine months ended 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.
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