First Defiance Announces 2010 First Quarter Earnings
DEFIANCE, Ohio, April 19 /PRNewswire-FirstCall/ --
- Net Income of $1.5 million or $.12 per common share for 2010 first quarter
- Provision for Loan Losses of $6.9 million reflects improvement over fourth quarter of 2009
- Net Interest Income increased by $1.0 million or 6.5% over 2009 first quarter
- Net Interest Margin of 3.85%, up from 2009 first quarter
- Other-Than-Temporary Impairment of $70,000 recognized on certain investment securities
First Defiance Financial Corp. (Nasdaq: FDEF) today announced that net income for its first quarter ended March 31, 2010 totaled $1.5 million, or $0.12 per diluted common share, compared to $3.4 million or $0.36 per diluted common share for the quarter ended March 31, 2009.
"Additional provision expense, primarily related to a few larger credits, pulled down our first quarter earnings," said William J. Small, Chairman, President and Chief Executive Officer of First Defiance Financial Corp. "Our core banking operation continues to perform as expected and we are further encouraged by some national and local economic indicators that are showing signs of stabilization. However, we felt it was prudent to provide the additional reserves based on the information available to us."
Credit Quality
The first quarter results include expense for provision for loan losses of $6.9 million, compared with $2.7 million for the same period in 2009 and $8.5 million in the fourth quarter of 2009.
Non-performing loans totaled $40.6 million at March 31, 2010, a decrease from $47.9 million at December 31, 2009 and up from $36.7 million at March 31, 2009. The March 31, 2010 balance included $33.6 million of loans that are on non-accrual and another $7.0 million of loans considered non-performing because of changes in terms granted to borrowers, although the loans are still accruing interest. In addition, First Defiance had $12.8 million of Real Estate Owned at March 31, 2010 and $7.8 million at March 31, 2009. For the first quarter of 2010, First Defiance recorded net charge-offs of $4.5 million, which represented 1.14% of average loans outstanding (annualized) for the quarter.
"The economic challenges of the country and our market area are reflected in our quarterly results," said Mr. Small. "We recorded a provision for loan losses of $6.9 million in the first quarter. However, we did have a decrease in non-performing loans and I believe we are getting closer to seeing a change in the pattern of declining collateral values. We have worked diligently to identify and address stressed and underperforming credits and proactively work to identify all potential problems and mitigate our losses as much as possible."
Net Interest Margin up from 2009 First Quarter
Net interest income increased to $17.1 million for the first quarter of 2010, a 6.5% increase from the 2009 first quarter. Net interest margin was 3.85% for the 2010 first quarter compared to 3.82% in the fourth quarter of 2009 and 3.71% in the first quarter of 2009. Yield on interest earning assets declined in the 2010 first quarter by 38 basis points, to 5.39% from 5.77%, while the cost of interest-bearing liabilities and non-interest-bearing demand deposits decreased by 53 basis points, to 1.59% from 2.12%.
"We have been able to react to the market environment and stress disciplined pricing," commented Mr. Small. "However, while the overall margin was even with last quarter, I believe we will encounter ongoing challenges in the current low rate environment."
Investment Portfolio
The Other-Than-Temporary Impairment (OTTI) charge recognized by First Defiance in the first quarter of 2010 totaled $70,000, compared with $672,000 in the first quarter of 2009. The 2010 OTTI charge related to two Trust Preferred Collateralized Debt Obligations (CDOs) investments with a remaining book value of $1.1 million and a market value of $277,000.
First Defiance has other Trust Preferred CDO investments with a book value of $2.7 million and market values of $1.3 million at March 31, 2010. Two of these investments with a book value of $2.0 million and a market value of $1.0 million continue to pay principal and interest payments in accordance with the contractual terms of the securities. Management has not deemed the impairment in value of these two CDO investments to be Other-Than-Temporary and therefore has not recognized the reduction in value of those investments in earnings. The third investment with a book value of $751,000 and a market value of $295,000 has been written down with OTTI charge in prior periods however the first quarter of 2010 analysis did not result in additional OTTI for this investment.
Non-Interest Income
First Defiance's non-interest income for the 2010 first quarter remained relatively flat at $6.8 million compared with $6.8 million in the first quarter of 2009. Service fees and other charges were $3.2 million in the first quarter of 2010, compared with $3.1 million in the first quarter of 2009. Mortgage banking declined to $1.8 million in the first quarter of 2010 from $2.7 million in the first quarter of 2009. Gains from the sale of mortgage loans decreased in the first quarter of 2010 to $1.2 million from $2.8 million in the first quarter of 2009. Also, mortgage loan servicing revenue increased to $748,000 in the 2010 first quarter from $689,000 in the first quarter of 2009. The decreases in gains were partially offset by expense decreases of $531,000 for the amortization of mortgage servicing rights.
The company had a positive change in the valuation adjustment in mortgage servicing assets of $321,000 in the first quarter of 2010 compared with $169,000 in the first quarter of 2009. The MSR positive valuation adjustment is a reflection of the increase in the fair value of certain sectors of the Company's portfolio of mortgage servicing rights for these periods. The interest rate environment that gives rise to increased mortgage origination activity also typically causes increases in MSR amortization and impairment, creating a natural hedge in the mortgage banking line of business.
"We are pleased with the stability of our fee income stream in light of the many competitive and regulatory challenges," continued Mr. Small. "We did not have the high volume of mortgage refinances in the first quarter of 2010 that we had in 2009, due to the low mortgage interest rate environment at that time. However, we were able to offset most of the reduction in gain on mortgage sale revenue. Our retail network is focused on providing quality customer service and we remain a leading originator of mortgages in our market."
Income from the sale of insurance products decreased to $1.1 million for the 2010 first quarter, from $1.5 million in the same period of 2009. First Defiance's insurance subsidiary, First Insurance and Investments, typically recognizes contingent revenues during the first quarter. These revenues are bonuses paid by insurance carriers when the Company achieves certain loss ratios or growth targets. In 2010, First Insurance earned $91,000 of contingent income, compared to $431,000 recorded during the first quarter of 2009.
Non-Interest Expenses
Total non-interest expense for First Defiance decreased to $14.8 million for the quarter ended March 31, 2010, from the $15.0 million of non-interest expense for the quarter ended March 31, 2009. Compensation and benefits decreased by $908,000 or 12% compared to the 2009 first quarter. FDIC insurance expense increased to $1.0 million in the first quarter of 2010 from $567,000 in the same period of 2009, primarily as a result of the FDIC rate increases and 2009 special assessments. Occupancy expense decreased $289,000 or 14% compared to the 2009 first quarter. Other non-interest expense increased to $3.3 million in the first quarter of 2010 from $3.0 million in the first quarter of 2009, primarily due to increases in credit and collection expenses.
Total Assets at $2.06 Billion
Total assets at March 31, 2010 were $2.06 billion, compared to $2.01 billion at March 31, 2009. Net loans receivable (excluding loans held for sale) were $1.54 billion at March 31, 2010 compared to $1.56 billion at March 31, 2009. Total Cash and Cash equivalents were $154.7 million at March 31, 2010 compared with $111.6 million at March 31, 2009, an increase of $43.1 million. Total deposits at March 31, 2010 were $1.60 billion compared to $1.54 billion at March 31, 2009, an increase of $59.3 million. Non-interest bearing deposits at March 31, 2010 were $187.2 million compared to $163.9 million at March 31, 2009. Total stockholders' equity was $235.7 million at March 31, 2010 compared to $230.6 million at March 31, 2009. Also at March 31, 2010, goodwill and other intangible assets totaled $63.0 million compared to $64.5 million at March 31, 2009.
Conference Call
First Defiance Financial Corp. will host a conference call at 11:00 a.m. (EDT) on Tuesday, April 20, 2010 to discuss the earnings results and business trends. The conference call may be accessed by calling 1-800-860-2442.
A live webcast may be accessed at http://www.talkpoint.com/viewer/starthere.asp?Pres=129947.
The audio replay of the Internet Web cast will be available at www.fdef.com until Wednesday, April 28, 2010 at 9:00 a.m.
Annual Meeting of Shareholders
First Defiance Financial Corp. will host its Annual Meeting of Shareholders at 2:00 p.m. on Tuesday, April 20, 2010 at the First Federal Bank operations center at 25600 Elliott Road in Defiance. Following the meeting, the audio replay, slide presentation and transcript will be available at the Company's Web site at www.fdef.com.
First Defiance Financial Corp.
First Defiance Financial Corp., headquartered in Defiance, Ohio, is the holding company for First Federal Bank of the Midwest and First Insurance & Investments. First Federal operates 33 full service branches and 45 ATM locations in northwest Ohio, southeast Michigan and Fort Wayne, Indiana. First Insurance & Investments specializes in property and casualty and group health and life insurance, with offices in Defiance and Bowling Green, Ohio.
For more information, visit the company's Web site at www.fdef.com.
Financial Statements and Highlights Follow-
Safe Harbor Statement
This news release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 B of the Securities Act of 1934, as amended, which are intended to be safe harbors created thereby. Those statements may include, but are not limited to, all statements regarding intent, beliefs, expectations, projections, forecasts and plans of First Defiance Financial Corp. and its management, and specifically include statements regarding: changes in economic conditions, the nature, extent and timing of governmental actions and reforms, future movements of interest rates, the production levels of mortgage loan generation, the ability to continue to grow loans and deposits, the ability to benefit from a changing interest rate environment, the ability to sustain credit quality ratios at current or improved levels, the ability to sell OREO properties, continued strength in the market area for First Federal Bank of the Midwest, and the ability of the Company to grow in existing and adjacent markets. These forward-looking statements involve numerous risks and uncertainties, including those inherent in general and local banking, insurance and mortgage conditions, competitive factors specific to markets in which the Company and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions or capital market conditions and other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission (SEC) filings, including the Company's Annual Report on Form 10-K for the year ended December 31, 2009. One or more of these factors have affected or could in the future affect the Company's business and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this news release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other persons, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this news release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.
Consolidated Balance Sheets |
||||||
First Defiance Financial Corp. |
||||||
(Unaudited) |
||||||
March 31, |
December 31, |
March 31, |
||||
(in thousands) |
2010 |
2009 |
2009 |
|||
Assets |
||||||
Cash and cash equivalents |
||||||
Cash and amounts due from depository institutions |
$ 28,678 |
$ 29,613 |
$ 27,523 |
|||
Interest-bearing deposits |
125,980 |
91,503 |
84,050 |
|||
154,658 |
121,116 |
111,573 |
||||
Securities |
||||||
Available-for sale, carried at fair value |
146,448 |
137,458 |
122,633 |
|||
Held-to-maturity, carried at amortized cost |
1,887 |
1,920 |
853 |
|||
148,335 |
139,378 |
123,486 |
||||
Loans |
1,576,602 |
1,617,122 |
1,585,897 |
|||
Allowance for loan losses |
(38,980) |
(36,547) |
(25,694) |
|||
Loans, net |
1,537,622 |
1,580,575 |
1,560,203 |
|||
Loans held for sale |
12,357 |
10,346 |
23,588 |
|||
Mortgage servicing rights |
9,283 |
8,958 |
6,957 |
|||
Accrued interest receivable |
7,405 |
6,851 |
8,004 |
|||
Federal Home Loan Bank stock |
21,376 |
21,376 |
21,376 |
|||
Bank Owned Life Insurance |
30,555 |
30,804 |
28,806 |
|||
Office properties and equipment |
42,830 |
43,597 |
47,360 |
|||
Real estate and other assets held for sale |
12,768 |
13,527 |
7,839 |
|||
Goodwill |
56,585 |
56,585 |
56,585 |
|||
Core deposit and other intangibles |
6,450 |
6,888 |
7,953 |
|||
Deferred taxes |
3,525 |
3,289 |
910 |
|||
Other assets |
15,026 |
14,233 |
6,022 |
|||
Total Assets |
$ 2,058,775 |
$ 2,057,523 |
$ 2,010,662 |
|||
Liabilities and Stockholders’ Equity |
||||||
Non-interest-bearing deposits |
$ 187,231 |
$ 189,132 |
$ 163,855 |
|||
Interest-bearing deposits |
1,412,353 |
1,391,094 |
1,376,380 |
|||
Total deposits |
1,599,584 |
1,580,226 |
1,540,235 |
|||
Advances from Federal Home Loan Bank |
126,917 |
146,927 |
146,957 |
|||
Notes payable and other interest-bearing liabilities |
44,883 |
48,398 |
38,884 |
|||
Subordinated debentures |
36,083 |
36,083 |
36,083 |
|||
Advance payments by borrowers for tax and insurance |
397 |
665 |
474 |
|||
Other liabilities |
15,256 |
11,138 |
17,421 |
|||
Total liabilities |
1,823,120 |
1,823,437 |
1,780,054 |
|||
Stockholders’ Equity |
||||||
Preferred stock, net of discount |
36,334 |
36,293 |
36,172 |
|||
Common stock, net |
127 |
127 |
127 |
|||
Common stock warrant |
878 |
878 |
878 |
|||
Additional paid-in-capital |
140,725 |
140,677 |
140,510 |
|||
Accumulated other comprehensive income (loss) |
316 |
(158) |
(2,084) |
|||
Retained earnings |
129,906 |
128,900 |
127,643 |
|||
Treasury stock, at cost |
(72,631) |
(72,631) |
(72,638) |
|||
Total stockholders’ equity |
235,655 |
234,086 |
230,608 |
|||
Total liabilities and stockholders’ equity |
$ 2,058,775 |
$ 2,057,523 |
$ 2,010,662 |
|||
Consolidated Statements of Income (Unaudited) |
||||
First Defiance Financial Corp. |
||||
Three Months Ended |
||||
March 31, |
||||
(in thousands, except per share amounts) |
2010 |
2009 |
||
Interest Income: |
||||
Loans |
$ 22,397 |
$ 23,377 |
||
Investment securities |
1,452 |
1,492 |
||
Interest-bearing deposits |
61 |
14 |
||
FHLB stock dividends |
219 |
239 |
||
Total interest income |
24,129 |
25,122 |
||
Interest Expense: |
||||
Deposits |
5,398 |
7,183 |
||
FHLB advances and other |
1,218 |
1,319 |
||
Subordinated debentures |
323 |
426 |
||
Notes Payable |
105 |
157 |
||
Total interest expense |
7,044 |
9,085 |
||
Net interest income |
17,085 |
16,037 |
||
Provision for loan losses |
6,889 |
2,746 |
||
Net interest income after provision for loan losses |
10,196 |
13,291 |
||
Non-interest Income: |
||||
Service fees and other charges |
3,158 |
3,086 |
||
Mortgage banking income |
1,807 |
2,714 |
||
Gain on sale of non-mortgage loans |
37 |
55 |
||
Gain on securities |
6 |
- |
||
Impairment on securities |
(70) |
(672) |
||
Insurance and investment sales commissions |
1,109 |
1,523 |
||
Trust income |
122 |
102 |
||
Income from Bank Owned Life Insurance |
480 |
59 |
||
Other non-interest income |
117 |
(63) |
||
Total Non-interest Income |
6,766 |
6,804 |
||
Non-interest Expense: |
||||
Compensation and benefits |
6,457 |
7,365 |
||
Occupancy |
1,828 |
2,117 |
||
FDIC insurance premium |
1,046 |
567 |
||
State franchise tax |
563 |
501 |
||
Data processing |
1,196 |
1,054 |
||
Amortization of intangibles |
437 |
391 |
||
Other non-interest expense |
3,305 |
3,001 |
||
Total Non-interest Expense |
14,832 |
14,996 |
||
Income before income taxes |
2,130 |
5,099 |
||
Income taxes |
624 |
1,691 |
||
Net Income |
$ 1,506 |
$ 3,408 |
||
Dividends Accrued on Preferred Shares |
(463) |
(463) |
||
Accretion on Preferred Shares |
(40) |
(38) |
||
Net Income Applicable to Common Shares |
$ 1,003 |
$ 2,907 |
||
Earnings per common share: |
||||
Basic |
$ 0.12 |
$ 0.36 |
||
Diluted |
$ 0.12 |
$ 0.36 |
||
Average Shares Outstanding: |
||||
Basic |
8,117 |
8,117 |
||
Diluted |
8,142 |
8,117 |
||
Financial Summary and Comparison |
||||
First Defiance Financial Corp. |
||||
(Unaudited) |
||||
Three Months Ended |
||||
March 31, |
||||
(dollars in thousands, except per share data) |
2010 |
2009 |
% change |
|
Summary of Operations |
||||
Tax-equivalent interest income (1) |
24,427 |
25,379 |
(3.8) |
|
Interest expense |
7,044 |
9,085 |
(22.5) |
|
Tax-equivalent net interest income (1) |
17,383 |
16,294 |
6.7 |
|
Provision for loan losses |
6,889 |
2,746 |
150.9 |
|
Tax-equivalent NII after provision for loan loss (1) |
10,494 |
13,548 |
(22.5) |
|
Gains on Securities |
6 |
- |
NM |
|
Impairment losses on securities |
(70) |
(672) |
(89.6) |
|
Non-interest income-excluding securities gains/losses |
6,830 |
7,476 |
(8.6) |
|
Non-interest expense |
14,832 |
14,996 |
(1.1) |
|
Income taxes |
624 |
1,691 |
(63.1) |
|
Net Income |
1,506 |
3,408 |
(55.8) |
|
Dividends Declared on Preferred Shares |
(463) |
(463) |
- |
|
Accretion on Preferred Shares |
(40) |
(38) |
5.3 |
|
Net Income Applicable to Common Shares |
1,003 |
2,907 |
(65.5) |
|
Tax equivalent adjustment (1) |
298 |
257 |
16.0 |
|
At Period End |
||||
Assets |
2,058,775 |
2,010,662 |
2.4 |
|
Earning assets |
1,884,650 |
1,838,397 |
2.5 |
|
Loans |
1,576,602 |
1,585,897 |
(0.6) |
|
Allowance for loan losses |
38,980 |
25,694 |
51.7 |
|
Deposits |
1,599,584 |
1,540,235 |
3.9 |
|
Stockholders’ equity |
235,655 |
230,608 |
2.2 |
|
Average Balances |
||||
Assets |
2,048,506 |
1,984,985 |
3.2 |
|
Earning assets |
1,831,867 |
1,782,019 |
2.8 |
|
Deposits and interest-bearing liabilities |
1,798,408 |
1,736,933 |
3.5 |
|
Loans |
1,560,405 |
1,596,592 |
(2.3) |
|
Deposits |
1,576,140 |
1,514,059 |
4.1 |
|
Stockholders’ equity |
235,492 |
230,099 |
2.3 |
|
Stockholders’ equity / assets |
11.50% |
11.59% |
(0.8) |
|
Per Common Share Data |
||||
Net Income |
||||
Basic |
$ 0.12 |
$ 0.36 |
(66.7) |
|
Diluted |
0.12 |
0.36 |
(66.7) |
|
Dividends |
- |
0.17 |
(100.0) |
|
Market Value: |
||||
High |
$ 12.33 |
$ 8.95 |
37.8 |
|
Low |
9.20 |
3.76 |
144.7 |
|
Close |
10.12 |
6.08 |
66.4 |
|
Book Value |
24.45 |
23.95 |
2.1 |
|
Tangible Book Value |
16.68 |
15.90 |
4.9 |
|
Shares outstanding, end of period (000) |
8,117 |
8,117 |
- |
|
Performance Ratios (annualized) |
||||
Tax-equivalent net interest margin (1) |
3.85% |
3.71% |
4.0 |
|
Return on average assets |
0.30% |
0.70% |
(57.3) |
|
Return on average equity |
2.59% |
6.02% |
(56.9) |
|
Efficiency ratio (2) |
61.26% |
63.09% |
(2.9) |
|
Effective tax rate |
29.30% |
33.16% |
(11.7) |
|
Dividend payout ratio (basic) |
0.00% |
47.22% |
(100.0) |
|
(1) Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35% |
||||
(2) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains or losses, net. |
||||
NM Percentage change not meaningful |
||||
Income from Mortgage Banking |
|||
Revenue from sales and servicing of mortgage loans consisted of the following: |
|||
Three months ended |
|||
March 31, |
|||
(dollars in thousands) |
2010 |
2009 |
|
Gain from sale of mortgage loans |
$ 1,164 |
$ 2,813 |
|
Mortgage loan servicing revenue (expense): |
|||
Mortgage loan servicing revenue |
748 |
689 |
|
Amortization of mortgage servicing rights |
(426) |
(957) |
|
Mortgage servicing rights valuation adjustments |
321 |
169 |
|
643 |
(99) |
||
Total revenue from sale and servicing of mortgage loans |
$ 1,807 |
$ 2,714 |
|
Yield Analysis |
||||||||||||
First Defiance Financial Corp. |
||||||||||||
Three Months Ended March 31, |
||||||||||||
(dollars in thousands) |
||||||||||||
2010 |
2009 |
|||||||||||
Average |
Yield |
Average |
Yield |
|||||||||
Balance |
Interest(1) |
Rate(2) |
Balance |
Interest(1) |
Rate(2) |
|||||||
Interest-earning assets: |
||||||||||||
Loans receivable |
$ 1,560,405 |
$ 22,436 |
5.83% |
$ 1,596,592 |
$ 23,405 |
5.95% |
||||||
Securities |
141,646 |
1,711 |
4.96% |
119,314 |
1,721 |
5.78% |
||||||
Interest Bearing Deposits |
108,440 |
61 |
0.23% |
44,737 |
14 |
0.13% |
||||||
FHLB stock |
21,376 |
219 |
4.15% |
21,376 |
239 |
4.53% |
||||||
Total interest-earning assets |
1,831,867 |
24,427 |
5.41% |
1,782,019 |
25,379 |
5.77% |
||||||
Non-interest-earning assets |
216,639 |
202,966 |
||||||||||
Total assets |
$ 2,048,506 |
$ 1,984,985 |
||||||||||
Deposits and Interest-bearing liabilities: |
||||||||||||
Interest bearing deposits |
$ 1,391,945 |
$ 5,398 |
1.57% |
$ 1,348,178 |
$ 7,183 |
2.16% |
||||||
FHLB advances and other |
141,759 |
1,218 |
3.48% |
147,091 |
1,319 |
3.64% |
||||||
Other Borrowings |
44,280 |
105 |
0.96% |
39,532 |
157 |
1.61% |
||||||
Subordinated debentures |
36,229 |
323 |
3.62% |
36,251 |
426 |
4.77% |
||||||
Total interest-bearing liabilities |
1,614,213 |
7,044 |
1.77% |
1,571,052 |
9,085 |
2.35% |
||||||
Non-interest bearing deposits |
184,195 |
- |
- |
165,881 |
- |
- |
||||||
Total including non-interest-bearing demand deposits |
1,798,408 |
7,044 |
1.59% |
1,736,933 |
9,085 |
2.12% |
||||||
Other non-interest-bearing liabilities |
14,606 |
17,953 |
||||||||||
Total liabilities |
1,813,014 |
1,754,886 |
||||||||||
Stockholders' equity |
235,492 |
230,099 |
||||||||||
Total liabilities and stockholders' equity |
$ 2,048,506 |
$ 1,984,985 |
||||||||||
Net interest income; interest rate spread |
$ 17,383 |
3.64% |
$ 16,294 |
3.42% |
||||||||
Net interest margin (3) |
3.85% |
3.71% |
||||||||||
Average interest-earning assets to average interest bearing liabilities |
113% |
113% |
||||||||||
(1) Interest on certain tax exempt loans and securities is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 35%. |
||||||||||||
(2) Annualized |
||||||||||||
(3) Net interest margin is net interest income divided by average interest-earning assets. |
||||||||||||
Selected Quarterly Information |
||||||
First Defiance Financial Corp. |
||||||
(dollars in thousands, except per share data) |
1st Qtr 2010 |
4th Qtr 2009 |
3rd Qtr 2009 |
2nd Qtr 2009 |
1st Qtr 2009 |
|
Summary of Operations |
||||||
Tax-equivalent interest income (1) |
$ 24,427 |
$ 25,434 |
$ 25,796 |
$ 25,117 |
$ 25,379 |
|
Interest expense |
7,044 |
7,614 |
7,914 |
8,643 |
9,085 |
|
Tax-equivalent net interest income (1) |
17,383 |
17,820 |
17,882 |
16,474 |
16,294 |
|
Provision for loan losses |
6,889 |
8,470 |
8,051 |
3,965 |
2,746 |
|
Tax-equivalent NII after provision for loan losses (1) |
10,494 |
9,350 |
9,831 |
12,509 |
13,548 |
|
Investment securities gains (losses), including impairment |
(64) |
(1,394) |
(840) |
(750) |
(672) |
|
Non-interest income (excluding securities gains/losses) |
6,830 |
6,970 |
6,396 |
9,109 |
7,476 |
|
Non-interest expense |
14,832 |
14,609 |
14,786 |
16,133 |
14,996 |
|
Income taxes |
624 |
(525) |
(37) |
1,539 |
1,691 |
|
Net income |
1,506 |
555 |
329 |
2,901 |
3,408 |
|
Dividends Declared on Preferred Shares |
(463) |
(447) |
(473) |
(468) |
(463) |
|
Accretion on Preferred Shares |
(40) |
(41) |
(40) |
(40) |
(38) |
|
Net Income Applicable to Common Shares |
1,003 |
67 |
(184) |
2,393 |
2,907 |
|
Tax equivalent adjustment (1) |
298 |
287 |
309 |
295 |
257 |
|
At Period End |
||||||
Total assets |
$ 2,058,775 |
$ 2,057,523 |
$ 2,018,598 |
$ 2,023,563 |
$ 2,010,662 |
|
Earning assets |
1,884,650 |
1,879,725 |
1,845,134 |
1,846,689 |
1,838,397 |
|
Loans |
1,576,602 |
1,617,122 |
1,623,627 |
1,610,460 |
1,585,897 |
|
Allowance for loan losses |
38,980 |
36,547 |
31,248 |
25,840 |
25,694 |
|
Deposits |
1,599,584 |
1,580,226 |
1,543,085 |
1,553,144 |
1,540,235 |
|
Stockholders’ equity |
235,655 |
234,086 |
234,529 |
232,683 |
230,608 |
|
Stockholders’ equity / assets |
11.45% |
11.38% |
11.62% |
11.50% |
11.47% |
|
Goodwill |
56,585 |
56,585 |
56,585 |
56,585 |
56,585 |
|
Average Balances |
||||||
Total assets |
$ 2,048,506 |
$ 2,058,219 |
$ 2,029,970 |
$ 2,027,760 |
$ 1,984,985 |
|
Earning assets |
1,831,867 |
1,852,401 |
1,826,400 |
1,828,272 |
1,782,019 |
|
Deposits and interest-bearing liabilities |
1,798,408 |
1,805,090 |
1,778,223 |
1,778,848 |
1,736,933 |
|
Loans |
1,560,405 |
1,600,265 |
1,613,529 |
1,592,513 |
1,596,592 |
|
Deposits |
1,576,140 |
1,572,399 |
1,550,369 |
1,552,533 |
1,514,059 |
|
Stockholders’ equity |
235,492 |
235,152 |
234,241 |
231,397 |
230,099 |
|
Stockholders’ equity / assets |
11.50% |
11.43% |
11.54% |
11.41% |
11.59% |
|
Per Common Share Data |
||||||
Net Income: |
||||||
Basic |
$ 0.12 |
$ 0.01 |
$ (0.02) |
$ 0.29 |
$ 0.36 |
|
Diluted |
0.12 |
0.01 |
(0.02) |
0.29 |
0.36 |
|
Dividends |
- |
- |
0.04 |
0.09 |
0.17 |
|
Market Value: |
||||||
High |
$ 12.33 |
$ 18.93 |
$ 18.33 |
$ 14.25 |
$ 8.95 |
|
Low |
9.20 |
10.06 |
12.00 |
6.10 |
3.76 |
|
Close |
10.12 |
11.29 |
14.91 |
13.00 |
6.08 |
|
Book Value |
24.45 |
24.26 |
24.32 |
24.10 |
23.85 |
|
Shares outstanding, end of period (in thousands) |
8,117 |
8,118 |
8,118 |
8,118 |
8,117 |
|
Performance Ratios (annualized) |
||||||
Tax-equivalent net interest margin (1) |
3.85% |
3.82% |
3.88% |
3.61% |
3.71% |
|
Return on average assets |
0.30% |
0.11% |
0.06% |
0.57% |
0.70% |
|
Return on average equity |
2.59% |
0.94% |
0.56% |
5.03% |
6.02% |
|
Efficiency ratio (2) |
61.26% |
58.93% |
60.90% |
63.06% |
63.09% |
|
Effective tax rate |
29.30% |
-1750.00% |
-12.67% |
34.66% |
33.16% |
|
Common dividend payout ratio (basic) |
0.00% |
0.00% |
-200.00% |
29.31% |
47.22% |
|
(1) Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35% |
||||||
(2) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains, net and asset sales gains, net. |
||||||
Selected Quarterly Information |
||||||||||
First Defiance Financial Corp. |
||||||||||
(dollars in thousands, except per share data) |
1st Qtr 2010 |
4th Qtr 2009 |
3rd Qtr 2009 |
2nd Qtr 2009 |
1st Qtr 2009 |
|||||
Loan Portfolio Composition |
||||||||||
One to four family residential real estate |
$ 222,099 |
$ 227,592 |
$ 233,958 |
$ 238,000 |
$ 241,119 |
|||||
Construction |
46,369 |
48,626 |
53,605 |
44,670 |
50,534 |
|||||
Commercial real estate |
797,448 |
806,889 |
802,434 |
768,636 |
764,841 |
|||||
Commercial |
352,923 |
379,408 |
371,881 |
382,434 |
350,070 |
|||||
Consumer finance |
31,719 |
34,105 |
36,416 |
38,074 |
38,676 |
|||||
Home equity and improvement |
144,826 |
147,977 |
150,379 |
151,213 |
156,668 |
|||||
Total loans |
1,595,384 |
1,644,597 |
1,648,673 |
1,623,027 |
1,601,908 |
|||||
Less: |
||||||||||
Loans in process |
17,794 |
26,494 |
23,957 |
11,602 |
14,954 |
|||||
Deferred loan origination fees |
988 |
981 |
1,089 |
965 |
1,057 |
|||||
Allowance for loan loss |
38,980 |
36,547 |
31,248 |
25,840 |
25,694 |
|||||
Net Loans |
$ 1,537,622 |
$ 1,580,575 |
$ 1,592,379 |
$ 1,584,620 |
$ 1,560,203 |
|||||
Allowance for loan loss activity |
||||||||||
Beginning allowance |
36,547 |
$ 31,248 |
$ 25,840 |
$ 25,694 |
$ 24,592 |
|||||
Provision for loan losses |
6,889 |
8,470 |
8,051 |
3,965 |
2,746 |
|||||
Credit loss charge-offs: |
||||||||||
One to four family residential real estate |
326 |
884 |
744 |
505 |
148 |
|||||
Commercial real estate |
3,191 |
1,912 |
1,152 |
2,066 |
669 |
|||||
Commercial |
735 |
354 |
658 |
950 |
702 |
|||||
Consumer finance |
25 |
75 |
39 |
83 |
123 |
|||||
Home equity and improvement |
399 |
134 |
196 |
301 |
130 |
|||||
Total charge-offs |
4,676 |
3,359 |
2,789 |
3,905 |
1,772 |
|||||
Total recoveries |
220 |
188 |
146 |
86 |
128 |
|||||
Net charge-offs (recoveries) |
4,456 |
3,171 |
2,643 |
3,819 |
1,644 |
|||||
Ending allowance |
$ 38,980 |
$ 36,547 |
$ 31,248 |
$ 25,840 |
$ 25,694 |
|||||
Credit Quality |
||||||||||
Non-accrual loans |
$ 33,567 |
$ 41,191 |
$ 35,490 |
$ 35,528 |
$ 29,473 |
|||||
Restructured loans, accruing |
7,023 |
6,715 |
4,574 |
4,845 |
7,199 |
|||||
Total non-performing loans (1) |
40,590 |
47,906 |
40,064 |
40,373 |
36,672 |
|||||
Real estate owned (REO) |
12,768 |
13,527 |
9,352 |
8,567 |
7,839 |
|||||
Total non-performing assets (2) |
$ 53,358 |
$ 61,433 |
$ 49,416 |
$ 48,940 |
$ 44,511 |
|||||
Net charge-offs |
4,456 |
3,171 |
2,643 |
3,819 |
1,644 |
|||||
Allowance for loan losses / loans |
2.47% |
2.26% |
1.92% |
1.60% |
1.62% |
|||||
Allowance for loan losses / non-performing assets |
73.05% |
59.49% |
63.23% |
52.80% |
57.73% |
|||||
Allowance for loan losses / non-performing loans |
96.03% |
76.29% |
78.00% |
64.00% |
70.06% |
|||||
Non-performing assets / loans plus REO |
3.36% |
3.77% |
3.03% |
3.02% |
2.79% |
|||||
Non-performing assets / total assets |
2.59% |
2.99% |
2.45% |
2.42% |
2.21% |
|||||
Net charge-offs / average loans (annualized) |
1.14% |
0.79% |
0.66% |
0.96% |
0.41% |
|||||
Deposit Balances |
||||||||||
Non-interest-bearing demand deposits |
$ 187,231 |
$ 189,132 |
$ 174,145 |
$ 180,035 |
$ 163,855 |
|||||
Interest-bearing demand deposits and money market |
525,311 |
499,575 |
477,566 |
456,177 |
413,104 |
|||||
Savings deposits |
138,364 |
130,156 |
132,333 |
135,821 |
132,590 |
|||||
Retail time deposits less than $100,000 |
539,313 |
550,172 |
544,957 |
568,595 |
608,811 |
|||||
Retail time deposits greater than $100,000 |
161,071 |
163,838 |
166,787 |
165,401 |
171,588 |
|||||
National/Brokered time deposits |
48,294 |
47,353 |
47,297 |
47,115 |
50,287 |
|||||
Total deposits |
$ 1,599,584 |
$ 1,580,226 |
$ 1,543,085 |
$ 1,553,144 |
$ 1,540,235 |
|||||
(1) Non-performing loans consist of non-accrual loans that are contractually past due 90 days or more and loans that are deemed impaired. |
||||||||||
(2) Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof. |
||||||||||
Loan Delinquency Information |
||||||
First Defiance Financial Corp. |
||||||
(dollars in thousands) |
Total Balance |
Current |
30 to 89 days past due |
Non Accrual Loans |
Troubled Debt Restructuring |
|
March 31, 2010 |
||||||
One to four family residential real estate |
$ 222,099 |
$ 207,733 |
$ 4,749 |
$ 6,572 |
$ 3,045 |
|
Construction |
46,369 |
46,129 |
65 |
175 |
- |
|
Commercial real estate |
797,448 |
768,334 |
6,962 |
18,241 |
3,911 |
|
Commercial |
352,923 |
338,513 |
6,866 |
7,498 |
46 |
|
Consumer finance |
31,719 |
31,490 |
170 |
59 |
- |
|
Home equity and improvement |
144,826 |
142,598 |
1,185 |
1,022 |
21 |
|
Total loans |
$ 1,595,384 |
$ 1,534,797 |
$ 19,997 |
$ 33,567 |
$ 7,023 |
|
December 31, 2009 |
||||||
One to four family residential real estate |
$ 227,592 |
$ 215,211 |
$ 4,331 |
$ 5,349 |
$ 2,701 |
|
Construction |
48,626 |
47,951 |
- |
675 |
- |
|
Commercial real estate |
806,889 |
775,603 |
3,280 |
24,042 |
3,964 |
|
Commercial |
379,408 |
367,592 |
1,151 |
10,615 |
50 |
|
Consumer finance |
34,105 |
33,669 |
377 |
59 |
- |
|
Home equity and improvement |
147,977 |
145,481 |
2,045 |
451 |
- |
|
Total loans |
$ 1,644,597 |
$ 1,585,507 |
$ 11,184 |
$ 41,191 |
$ 6,715 |
|
September 30, 2009 |
||||||
One to four family residential real estate |
$ 233,958 |
$ 221,077 |
$ 4,637 |
$ 5,839 |
$ 2,405 |
|
Construction |
53,605 |
53,340 |
71 |
194 |
- |
|
Commercial real estate |
802,434 |
765,469 |
11,570 |
23,279 |
2,116 |
|
Commercial |
371,881 |
363,739 |
2,525 |
5,564 |
53 |
|
Consumer finance |
36,416 |
35,913 |
454 |
49 |
- |
|
Home equity and improvement |
150,379 |
147,031 |
2,783 |
565 |
- |
|
Total loans |
$ 1,648,673 |
$ 1,586,569 |
$ 22,040 |
$ 35,490 |
$ 4,574 |
|
March 31, 2009 |
||||||
One to four family residential real estate |
$ 241,119 |
$ 229,418 |
$ 4,201 |
$ 6,167 |
$ 1,333 |
|
Construction |
50,534 |
50,112 |
297 |
125 |
- |
|
Commercial real estate |
764,841 |
728,777 |
13,140 |
18,450 |
4,474 |
|
Commercial |
350,070 |
341,582 |
3,111 |
4,008 |
1,369 |
|
Consumer finance |
38,676 |
38,318 |
301 |
57 |
- |
|
Home equity and improvement |
156,668 |
153,183 |
2,796 |
666 |
23 |
|
Total loans |
$ 1,601,908 |
$ 1,548,589 |
$ 23,846 |
$ 29,473 |
$ 7,199 |
|
SOURCE First Defiance Financial Corp.
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