First Defiance Financial Corp. Announces 2012 First Quarter Earnings
- Net Income of $4.2 million for 2012 first quarter, up from $2.7 million in the first quarter of 2011
- Provision for Loan Losses of $3.5 million, up from $2.8 million in the first quarter of 2011
- Net Interest Margin of 3.78%, down from 2011 first quarter of 3.89%
DEFIANCE, Ohio, April 23, 2012 /PRNewswire/ -- First Defiance Financial Corp. (NASDAQ: FDEF) today announced that net income for its first quarter ended March 31, 2012 totaled $4.2 million, or $0.37 per diluted common share, compared to $2.7 million or $0.25 per diluted common share for the quarter ended March 31, 2011.
"We are encouraged by the improvement in net income results versus last year," said William J. Small, Chairman, President, and Chief Executive Officer of First Defiance Financial Corp. "However, we are still feeling the strain from the recent credit cycle and that had some negative impact on first quarter performance."
Credit Quality
The first quarter results include expense for provision for loan losses of $3.5 million, compared with $2.8 million for the same period in 2011 and $4.1 million in the fourth quarter of 2011.
Non-performing loans totaled $49.2 million at March 31, 2012, an increase from $45.6 million at March 31, 2011. The March 31, 2012 balance included $45.4 million of loans that are on non-accrual and another $3.8 million of loans that are still accruing but are considered non-performing because of changes in terms granted to borrowers. In addition, First Defiance had $3.4 million of real estate owned at March 31, 2012 compared to $9.2 million at March 31, 2011. For the first quarter of 2012, First Defiance recorded net charge-offs of $7.9 million, up from $3.4 million in the first quarter of 2011 but down from the fourth quarter level of $9.0 million. The allowance for loan loss as a percentage of total loans was 1.96% at March 31, 2012 compared with 2.77% at March 31, 2011.
"There were several positive indicators of overall improvement in asset quality during the first quarter including significant declines in delinquencies and in classified loans. The level of charge offs and non-performing loans were reflections of the difficult times that many businesses have gone through," said Small. "These elevated levels were not from any new credits, but were previously identified credits where additional reductions in value were recognized and, in some cases, changes in the way we treated credits based on regulatory guidance."
Net Interest Income flat compared to first quarter 2011
Net interest income of $17.2 million in the first quarter of 2012 was basically unchanged with the 2011 first quarter. Net interest margin was 3.78% for the 2012 first quarter compared to 3.89% in the first quarter of 2011. Yield on interest earning assets declined by 45 basis points, to 4.54% in the first quarter of 2012 from 4.99% in the 2011 first quarter. The cost of interest-bearing liabilities decreased by 35 basis points to 0.93% from 1.28%.
"The decline in our net interest margin for the quarter is noteworthy," said Small. "We will continue to look for additional pricing opportunities, as well as other ways to minimize the impact of the sustained low rate environment on our margin."
Non-Interest Income up from first quarter 2011
First Defiance's non-interest income for the 2012 first quarter was $8.4 million compared with $5.9 million in the first quarter of 2011. Service fees and other charges were $2.7 million in the first quarter of 2012, basically flat with the same period in 2011. Mortgage banking income increased to $2.4 million in the first quarter of 2012 from $1.3 million in the first quarter of 2011. Gains from the sale of mortgage loans increased in the first quarter of 2012 to $2.5 million from $726,000 in the first quarter of 2011. Mortgage loan servicing revenue was $844,000 in the first quarter of 2012 which was consistent with the 2011 first quarter of $845,000. Insurance and investment sales commissions increased to $2.5 million for the first quarter of 2012 compared to $1.7 million for the first quarter of 2011. The first quarter of 2012 includes the results of an insurance agency acquisition in July of 2011.
The lower mortgage rates in the first quarter of 2012 increased originations and also triggered a slight write down of previously recorded mortgage servicing rights ("MSR"). The Company had a negative change in the valuation adjustment in mortgage servicing assets of $79,000 in the first quarter of 2012 compared with a positive adjustment of $171,000 in the first quarter of 2011. The MSR negative valuation adjustment is a reflection of the decrease in the fair value of certain sectors of the Company's portfolio of MSRs 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.
Income from the sale of insurance and investment products increased to $2.5 million for the 2012 first quarter, from $1.7 million in the same period of 2011. First Defiance's insurance subsidiary, First Insurance Group of the Midwest, Inc., 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 the first quarter of 2012, First Insurance Group earned $504,000 of contingent income, compared to $329,000 recorded during the first quarter of 2011. First Insurance Group also benefitted from the July 2011 acquisition of a local insurance agency.
"We are pleased with the stability of our fee income stream in light of the many competitive and regulatory challenges," continued Mr. Small. "Mortgage production was the big contributor this quarter, but we believe the overall trend was strong."
Non-Interest Expenses
Total non-interest expense was $16.3 million for the first quarter of 2012, a decrease from $16.6 million in the first quarter of 2011.
Compensation and benefits increased to $8.5 million compared to $7.8 in the first quarter of 2011 and $8.1 in the fourth quarter of 2011. The increase in compensation and benefits expense is largely due to the insurance acquisition in July 2011 which added $407,000 in compensation and benefit expense to the first quarter of 2012. The Company also granted pay increases and accrued for bonus payments based on 2011 performance in the first quarter of 2012. FDIC insurance expense decreased to $669,000 in the first quarter of 2012 from $913,000 in the same period of 2011 as a result of the change in the rate assessment calculation in September 2011 under Dodd-Frank regulations. Other non-interest expense decreased to $3.3 million in the first quarter of 2012 from $4.1 million in the first quarter of 2011. Real estate owned expenses were $417,000 in the first quarter of 2012 compared to $718,000 in the same period of 2011. Also, there was no secondary market buy-back losses in the first quarter of 2012 compared to $228,000 in the first quarter of 2011. These losses were incurred as a result of underwriting issues identified after the loans were sold.
Total Assets at $2.14 Billion
Total assets at March 31, 2012 were $2.14 billion, compared to $2.06 billion at March 31, 2011. Net loans receivable (excluding loans held for sale) were $1.45 billion at March 31, 2012 and December 31, 2011, compared to $1.43 billion at March 31, 2011. Total cash and cash equivalents were $249.9 million at March 31, 2012 compared with $174.9 million at December 31, 2011 and $235.3 million at March 31, 2011. Also, at March 31, 2012, goodwill and other intangible assets totaled $67.3 million compared to $67.7 million at December 31, 2011 and $63.3 million at March 31, 2011.
Total deposits at March 31, 2012 were $1.67 billion compared with $1.60 billion at December 31, 2011, and $1.59 billion at March 31, 2011. Non-interest bearing deposits at March 31, 2012 were $265.7 million compared to $245.9 million at December 31, 2011 and $219.4 million at March 31, 2011. Total stockholders' equity was $281.4 million at March 31, 2012 compared to $278.1 million at December 31, 2011 and $263.1 million at the March 31, 2011.
Conference Call
First Defiance Financial Corp. will host a conference call at 11:00 a.m. (EDT) on Tuesday, April 24, 2012 to discuss the earnings results and business trends. The conference call may be accessed by calling 1-877-317-6789. A live webcast may be accessed at http://services.choruscall.com/links/fdef120424.html.
Audio replay of the Internet Web cast will be available at www.fdef.com until April 24, 2013 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 24, 2012 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 Group. First Federal operates 33 full service branches and 45 ATM locations in northwest Ohio, southeast Michigan and Fort Wayne, Indiana. First Insurance Group specializes in property and casualty and group health and life insurance, with six offices throughout northwest 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, 2011. 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) |
2012 |
2011 |
2011 |
|
| Assets |
||||
| Cash and cash equivalents |
||||
| Cash and amounts due from depository institutions |
$ 32,882 |
$ 31,931 |
$ 28,317 |
|
| Interest-bearing deposits |
217,000 |
143,000 |
207,000 |
|
| 249,882 |
174,931 |
235,317 |
||
| Securities |
||||
| Available-for sale, carried at fair value |
242,964 |
232,919 |
179,510 |
|
| Held-to-maturity, carried at amortized cost |
644 |
661 |
818 |
|
| 243,608 |
233,580 |
180,328 |
||
| Loans |
1,473,955 |
1,487,076 |
1,471,209 |
|
| Allowance for loan losses |
(28,833) |
(33,254) |
(40,798) |
|
| Loans, net |
1,445,122 |
1,453,822 |
1,430,411 |
|
| Loans held for sale |
11,201 |
13,841 |
13,421 |
|
| Mortgage servicing rights |
8,498 |
8,690 |
9,556 |
|
| Accrued interest receivable |
6,243 |
6,142 |
6,534 |
|
| Federal Home Loan Bank stock |
20,655 |
20,655 |
21,012 |
|
| Bank Owned Life Insurance |
36,128 |
35,908 |
35,216 |
|
| Office properties and equipment |
40,548 |
40,045 |
40,862 |
|
| Real estate and other assets held for sale |
3,408 |
3,628 |
9,150 |
|
| Goodwill |
61,525 |
61,525 |
57,556 |
|
| Core deposit and other intangibles |
5,776 |
6,151 |
5,784 |
|
| Deferred taxes |
- |
629 |
5,447 |
|
| Other assets |
9,670 |
8,643 |
11,358 |
|
| Total Assets |
$ 2,142,264 |
$ 2,068,190 |
$ 2,061,952 |
|
| Liabilities and Stockholders' Equity |
||||
| Non-interest-bearing deposits |
$ 265,716 |
$ 245,927 |
$ 219,374 |
|
| Interest-bearing deposits |
1,405,654 |
1,350,314 |
1,372,672 |
|
| Total deposits |
1,671,370 |
1,596,241 |
1,592,046 |
|
| Advances from Federal Home Loan Bank |
81,830 |
81,841 |
96,874 |
|
| Notes payable and other interest-bearing liabilities |
54,609 |
60,386 |
60,736 |
|
| Subordinated debentures |
36,083 |
36,083 |
36,083 |
|
| Advance payments by borrowers for tax and insurance |
1,316 |
1,402 |
825 |
|
| Deferred taxes |
404 |
- |
- |
|
| Other liabilities |
15,288 |
14,110 |
12,243 |
|
| Total liabilities |
1,860,900 |
1,790,063 |
1,798,807 |
|
| Stockholders' Equity |
||||
| Preferred stock, net of discount |
36,687 |
36,640 |
36,506 |
|
| Common stock, net |
127 |
127 |
127 |
|
| Common stock warrant |
878 |
878 |
878 |
|
| Additional paid-in-capital |
135,888 |
135,825 |
135,470 |
|
| Accumulated other comprehensive income |
3,937 |
3,997 |
411 |
|
| Retained earnings |
151,163 |
148,011 |
137,143 |
|
| Treasury stock, at cost |
(47,316) |
(47,351) |
(47,390) |
|
| Total stockholders' equity |
281,364 |
278,127 |
263,145 |
|
| Total Liabilities and Stockholders' Equity |
$ 2,142,264 |
$ 2,068,190 |
$ 2,061,952 |
|
| Consolidated Statements of Income (Unaudited) |
|||
| First Defiance Financial Corp. |
|||
| Three Months Ended |
|||
| March 31, |
|||
| (in thousands, except per share amounts) |
2012 |
2011 |
|
| Interest Income: |
|||
| Loans |
$ 18,650 |
$ 20,224 |
|
| Investment securities |
1,783 |
1,598 |
|
| Interest-bearing deposits |
92 |
101 |
|
| FHLB stock dividends |
229 |
235 |
|
| Total interest income |
20,754 |
22,158 |
|
| Interest Expense: |
|||
| Deposits |
2,369 |
3,594 |
|
| FHLB advances and other |
751 |
906 |
|
| Subordinated debentures |
331 |
326 |
|
| Notes Payable |
104 |
130 |
|
| Total interest expense |
3,555 |
4,956 |
|
| Net interest income |
17,199 |
17,202 |
|
| Provision for loan losses |
3,503 |
2,833 |
|
| Net interest income after provision for loan losses |
13,696 |
14,369 |
|
| Non-interest Income: |
|||
| Service fees and other charges |
2,671 |
2,617 |
|
| Mortgage banking income |
2,445 |
1,288 |
|
| Gain on sale of non-mortgage loans |
9 |
104 |
|
| Gain on sale of securities |
43 |
49 |
|
| Impairment on securities |
- |
(2) |
|
| Insurance and investment sales commissions |
2,536 |
1,655 |
|
| Trust income |
153 |
148 |
|
| Income from Bank Owned Life Insurance |
220 |
237 |
|
| Other non-interest income |
342 |
(151) |
|
| Total Non-interest Income |
8,419 |
5,945 |
|
| Non-interest Expense: |
|||
| Compensation and benefits |
8,465 |
7,834 |
|
| Occupancy |
1,788 |
1,852 |
|
| FDIC insurance premium |
669 |
913 |
|
| State franchise tax |
514 |
542 |
|
| Data processing |
1,169 |
1,061 |
|
| Amortization of intangibles |
375 |
344 |
|
| Other non-interest expense |
3,279 |
4,080 |
|
| Total Non-interest Expense |
16,259 |
16,626 |
|
| Income before income taxes |
5,856 |
3,688 |
|
| Income taxes |
1,703 |
1,028 |
|
| Net Income |
$ 4,153 |
$ 2,660 |
|
| Dividends Accrued on Preferred Shares |
(462) |
(462) |
|
| Accretion on Preferred Shares |
(46) |
(43) |
|
| Net Income Applicable to Common Shares |
$ 3,645 |
$ 2,155 |
|
| Earnings per common share: |
|||
| Basic |
$ 0.37 |
$ 0.25 |
|
| Diluted |
$ 0.37 |
$ 0.25 |
|
| Shares Outstanding: |
|||
| Basic |
9,726 |
8,519 |
|
| Diluted |
9,970 |
8,671 |
|
| Financial Summary and Comparison |
|||
| First Defiance Financial Corp. |
(Unaudited) |
||
| Three Months Ended |
|||
| March 31, |
|||
| (dollars in thousands, except per share data) |
2012 |
2011 |
% change |
| Summary of Operations |
|||
| Tax-equivalent interest income (1) |
$ 21,144 |
$ 22,501 |
(6.0)% |
| Interest expense |
3,555 |
4,956 |
(28.3) |
| Tax-equivalent net interest income (1) |
17,589 |
17,545 |
0.3 |
| Provision for loan losses |
3,503 |
2,833 |
23.6 |
| Tax-equivalent NII after provision for loan loss (1) |
14,086 |
14,712 |
(4.3) |
| Investment Securities gains |
43 |
49 |
- |
| Impairment losses on securities |
- |
(2) |
- |
| Non-interest income (excluding securities gains/losses) |
8,376 |
5,898 |
42.0 |
| Non-interest expense |
16,259 |
16,626 |
(2.2) |
| Income taxes |
1,703 |
1,028 |
65.7 |
| Net Income |
4,153 |
2,660 |
56.1 |
| Dividends Declared on Preferred Shares |
(462) |
(462) |
- |
| Accretion on Preferred Shares |
(46) |
(43) |
7.0 |
| Net Income Applicable to Common Shares |
3,645 |
2,155 |
69.1 |
| Tax equivalent adjustment (1) |
390 |
343 |
13.7 |
| At Period End |
|||
| Assets |
2,142,264 |
2,061,952 |
3.9 |
| Earning assets |
1,966,419 |
1,892,970 |
3.9 |
| Loans |
1,473,955 |
1,471,209 |
0.2 |
| Allowance for loan losses |
28,833 |
40,798 |
(29.3) |
| Deposits |
1,671,370 |
1,592,046 |
5.0 |
| Stockholders' equity |
281,364 |
263,145 |
6.9 |
| Average Balances |
|||
| Assets |
2,080,502 |
2,044,387 |
1.8 |
| Earning assets |
1,879,393 |
1,828,916 |
2.8 |
| Deposits and interest-bearing liabilities |
1,781,710 |
1,788,677 |
(0.4) |
| Loans |
1,456,807 |
1,457,736 |
(0.1) |
| Deposits |
1,610,275 |
1,590,617 |
1.2 |
| Stockholders' equity |
279,848 |
241,525 |
15.9 |
| Stockholders' equity / assets |
13.45% |
11.81% |
13.9 |
| Per Common Share Data |
|||
| Net Income |
|||
| Basic |
$ 0.37 |
$ 0.25 |
48.0 |
| Diluted |
0.37 |
0.25 |
44.0 |
| Dividends |
0.05 |
- |
NM |
| Market Value: |
|||
| High |
$ 17.76 |
$ 14.64 |
21.3 |
| Low |
14.41 |
11.89 |
21.2 |
| Close |
16.86 |
14.34 |
17.6 |
| Common Book Value |
25.06 |
23.22 |
7.9 |
| Tangible Common Book Value |
18.14 |
16.70 |
8.6 |
| Shares outstanding, end of period (000) |
9,728 |
9,724 |
0.0 |
| Performance Ratios (annualized) |
|||
| Tax-equivalent net interest margin (1) |
3.78% |
3.89% |
(2.9) |
| Return on average assets |
0.80% |
0.53% |
52.1 |
| Return on average equity |
5.97% |
4.47% |
33.6 |
| Efficiency ratio (2) |
62.62% |
70.92% |
(11.7) |
| Effective tax rate |
29.08% |
27.87% |
4.3 |
| Dividend payout ratio (basic) |
13.51% |
0.00% |
NM |
| (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) |
2012 |
2011 |
| Gain from sale of mortgage loans |
$ 2,544 |
$ 726 |
| Mortgage loan servicing revenue (expense): |
||
| Mortgage loan servicing revenue |
844 |
845 |
| Amortization of mortgage servicing rights |
(864) |
(454) |
| Mortgage servicing rights valuation adjustments |
(79) |
171 |
| (99) |
562 |
|
| Total revenue from sale and servicing of mortgage loans |
$ 2,445 |
$ 1,288 |
| Yield Analysis |
|||||||||||
| First Defiance Financial Corp. |
|||||||||||
| Three Months Ended March 31, |
|||||||||||
| (dollars in thousands) |
|||||||||||
| 2012 |
2011 |
||||||||||
| Average |
Yield |
Average |
Yield |
||||||||
| Balance |
Interest (1) |
Rate (2) |
Balance |
Interest (1) |
Rate (2) |
||||||
| Interest-earning assets: |
|||||||||||
| Loans receivable |
$ 1,456,807 |
$18,678 |
5.16% |
$1,457,736 |
$20,257 |
5.64% |
|||||
| Securities |
237,541 |
2,145 |
3.76% |
171,089 |
1,908 |
4.54% |
|||||
| Interest Bearing Deposits |
164,390 |
92 |
0.23% |
179,079 |
101 |
0.23% |
|||||
| FHLB stock |
20,655 |
229 |
4.46% |
21,012 |
235 |
4.54% |
|||||
| Total interest-earning assets |
1,879,393 |
21,144 |
4.54% |
1,828,916 |
22,501 |
4.99% |
|||||
| Non-interest-earning assets |
201,109 |
215,471 |
|||||||||
| Total assets |
$ 2,080,502 |
$2,044,387 |
|||||||||
| Deposits and Interest-bearing liabilities: |
|||||||||||
| Interest bearing deposits |
$ 1,365,021 |
$ 2,369 |
0.70% |
$1,370,007 |
$ 3,594 |
1.06% |
|||||
| FHLB advances and other |
81,834 |
751 |
3.69% |
107,750 |
906 |
3.41% |
|||||
| Other Borrowings |
53,403 |
104 |
0.78% |
54,079 |
130 |
0.97% |
|||||
| Subordinated debentures |
36,198 |
331 |
3.68% |
36,231 |
326 |
3.65% |
|||||
| Total interest-bearing liabilities |
1,536,456 |
3,555 |
0.93% |
1,568,067 |
4,956 |
1.28% |
|||||
| Non-interest bearing deposits |
245,254 |
- |
- |
220,610 |
- |
- |
|||||
| Total including non-interest-bearing demand deposits |
1,781,710 |
3,555 |
0.80% |
1,788,677 |
4,956 |
1.12% |
|||||
| Other non-interest-bearing liabilities |
18,944 |
14,185 |
|||||||||
| Total liabilities |
1,800,654 |
1,802,862 |
|||||||||
| Stockholders' equity |
279,848 |
241,525 |
|||||||||
| Total liabilities and stockholders' equity |
$ 2,080,502 |
$2,044,387 |
|||||||||
| Net interest income; interest rate spread |
$17,589 |
3.61% |
$17,545 |
3.71% |
|||||||
| Net interest margin (3) |
3.78% |
3.89% |
|||||||||
| Average interest-earning assets to average interest bearing liabilities |
122% |
117% |
|||||||||
| (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 |
|||||||||||
| (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 2012 |
4th Qtr 2011 |
3rd Qtr 2011 |
2nd Qtr 2011 |
1st Qtr 2011 |
| Summary of Operations |
|||||
| Tax-equivalent interest income (1) |
$ 21,144 |
$ 21,665 |
$ 22,052 |
$ 22,337 |
$ 22,501 |
| Interest expense |
3,555 |
3,754 |
4,019 |
4,457 |
4,956 |
| Tax-equivalent net interest income (1) |
17,589 |
17,911 |
18,033 |
17,880 |
17,545 |
| Provision for loan losses |
3,503 |
4,099 |
3,097 |
2,405 |
2,833 |
| Tax-equivalent NII after provision for loan losses (1) |
14,086 |
13,812 |
14,936 |
15,475 |
14,712 |
| Investment securities gains, including impairment |
43 |
169 |
- |
- |
47 |
| Non-interest income (excluding securities gains/losses) |
8,376 |
7,707 |
6,857 |
6,838 |
5,898 |
| Non-interest expense |
16,259 |
15,589 |
15,462 |
15,086 |
16,626 |
| Income taxes |
1,703 |
1,640 |
1,884 |
2,113 |
1,028 |
| Net income |
4,153 |
4,064 |
4,061 |
4,750 |
2,660 |
| Dividends Declared on Preferred Shares |
(462) |
(462) |
(463) |
(463) |
(462) |
| Accretion on Preferred Shares |
(46) |
(46) |
(45) |
(44) |
(43) |
| Net Income Applicable to Common Shares |
3,645 |
3,556 |
3,553 |
4,243 |
2,155 |
| Tax equivalent adjustment (1) |
390 |
395 |
386 |
364 |
343 |
| At Period End |
|||||
| Total assets |
$ 2,142,264 |
$ 2,068,190 |
$ 2,058,357 |
$ 2,045,690 |
$ 2,061,952 |
| Earning assets |
1,966,419 |
1,898,152 |
1,887,484 |
1,879,834 |
1,892,970 |
| Loans |
1,473,955 |
1,487,076 |
1,460,514 |
1,449,010 |
1,471,209 |
| Allowance for loan losses |
28,833 |
33,254 |
38,110 |
40,530 |
40,798 |
| Deposits |
1,671,370 |
1,596,241 |
1,589,980 |
1,573,500 |
1,592,046 |
| Stockholders' equity |
281,364 |
278,127 |
275,118 |
269,139 |
263,145 |
| Stockholders' equity / assets |
13.13% |
13.45% |
13.37% |
13.16% |
12.76% |
| Goodwill |
61,525 |
61,525 |
61,568 |
57,556 |
57,556 |
| Average Balances |
|||||
| Total assets |
$ 2,080,502 |
$ 2,067,881 |
$ 2,056,111 |
$ 2,065,100 |
$ 2,044,387 |
| Earning assets |
1,879,393 |
1,861,186 |
1,843,881 |
1,858,636 |
1,828,916 |
| Deposits and interest-bearing liabilities |
1,781,710 |
1,772,812 |
1,762,663 |
1,781,746 |
1,788,677 |
| Loans |
1,456,807 |
1,440,839 |
1,419,987 |
1,431,792 |
1,457,736 |
| Deposits |
1,610,275 |
1,594,938 |
1,583,173 |
1,591,786 |
1,590,617 |
| Stockholders' equity |
279,848 |
275,848 |
271,736 |
266,544 |
241,525 |
| Stockholders' equity / assets |
13.45% |
13.34% |
13.22% |
12.91% |
11.81% |
| Per Common Share Data |
|||||
| Net Income: |
|||||
| Basic |
$ 0.37 |
$ 0.37 |
$ 0.37 |
$ 0.44 |
$ 0.25 |
| Diluted |
0.37 |
0.36 |
0.36 |
0.43 |
0.25 |
| Dividends |
0.05 |
0.05 |
- |
- |
- |
| Market Value: |
|||||
| High |
$ 17.76 |
$ 15.39 |
$ 15.51 |
$ 15.00 |
$ 14.64 |
| Low |
14.41 |
13.00 |
12.60 |
13.22 |
11.89 |
| Close |
16.86 |
14.59 |
13.14 |
14.69 |
14.34 |
| Book Value |
25.06 |
24.74 |
24.43 |
23.83 |
23.22 |
| Shares outstanding, end of period (in thousands) |
9,728 |
9,726 |
9,726 |
9,724 |
9,724 |
| Performance Ratios (annualized) |
|||||
| Tax-equivalent net interest margin (1) |
3.78% |
3.83% |
3.89% |
3.86% |
3.89% |
| Return on average assets |
0.80% |
0.78% |
0.78% |
0.92% |
0.53% |
| Return on average equity |
5.97% |
5.85% |
5.93% |
7.15% |
4.47% |
| Efficiency ratio (2) |
62.62% |
60.85% |
62.12% |
61.03% |
70.92% |
| Effective tax rate |
29.08% |
28.75% |
31.69% |
30.79% |
27.87% |
| Common dividend payout ratio (basic) |
13.51% |
13.51% |
0.00% |
0.00% |
0.00% |
| (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. |
|||||
| Selected Quarterly Information |
|||||||||
| First Defiance Financial Corp. |
|||||||||
| (dollars in thousands, except per share data) |
1st Qtr 2012 |
4th Qtr 2011 |
3rd Qtr 2011 |
2nd Qtr 2011 |
1st Qtr 2011 |
||||
| Loan Portfolio Composition |
|||||||||
| One to four family residential real estate |
$ 202,132 |
$ 203,401 |
$ 189,669 |
$ 213,034 |
$ 218,599 |
||||
| Construction |
36,362 |
31,552 |
35,203 |
23,893 |
24,437 |
||||
| Commercial real estate |
790,168 |
775,992 |
766,459 |
735,212 |
746,899 |
||||
| Commercial |
326,904 |
349,053 |
339,128 |
336,598 |
341,614 |
||||
| Consumer finance |
17,647 |
18,887 |
19,701 |
20,384 |
20,862 |
||||
| Home equity and improvement |
114,891 |
122,143 |
124,956 |
127,962 |
128,810 |
||||
| Total loans |
1,488,104 |
1,501,028 |
1,475,116 |
1,457,083 |
1,481,221 |
||||
| Less: |
|||||||||
| Loans in process |
13,430 |
13,243 |
13,709 |
7,257 |
9,160 |
||||
| Deferred loan origination fees |
719 |
709 |
893 |
816 |
852 |
||||
| Allowance for loan loss |
28,833 |
33,254 |
38,110 |
40,530 |
40,798 |
||||
| Net Loans |
$ 1,445,122 |
$ 1,453,822 |
$ 1,422,404 |
$ 1,408,480 |
$ 1,430,411 |
||||
| Allowance for loan loss activity |
|||||||||
| Beginning allowance |
$ 33,254 |
$ 38,110 |
$ 40,530 |
$ 40,798 |
$ 41,080 |
||||
| Provision for loan losses |
3,503 |
4,099 |
3,097 |
2,405 |
2,833 |
||||
| Credit loss charge-offs: |
|||||||||
| One to four family residential real estate |
738 |
666 |
647 |
893 |
547 |
||||
| Commercial real estate |
4,496 |
6,738 |
2,622 |
1,517 |
2,273 |
||||
| Commercial |
2,666 |
1,423 |
2533 |
107 |
335 |
||||
| Consumer finance |
41 |
27 |
36 |
20 |
12 |
||||
| Home equity and improvement |
211 |
251 |
290 |
310 |
201 |
||||
| Total charge-offs |
8,152 |
9,105 |
6,128 |
2,847 |
3,368 |
||||
| Total recoveries |
228 |
150 |
611 |
174 |
253 |
||||
| Net charge-offs (recoveries) |
7,924 |
8,955 |
5,517 |
2,673 |
3,115 |
||||
| Ending allowance |
$ 28,833 |
$ 33,254 |
$ 38,110 |
$ 40,530 |
$ 40,798 |
||||
| Credit Quality |
|||||||||
| Non-accrual loans |
$ 45,351 |
$ 39,328 |
$ 48,297 |
$ 34,528 |
$ 40,948 |
||||
| Restructured loans, accruing |
3,820 |
3,380 |
2,934 |
6,242 |
4,619 |
||||
| Total non-performing loans (1) |
49,171 |
42,708 |
51,231 |
40,770 |
45,567 |
||||
| Real estate owned (REO) |
3,408 |
3,628 |
5,805 |
7,388 |
9,150 |
||||
| Total non-performing assets (2) |
$ 52,579 |
$ 46,336 |
$ 57,036 |
$ 48,158 |
$ 54,717 |
||||
| Net charge-offs |
7,924 |
8,955 |
5,517 |
2,673 |
3,115 |
||||
| Allowance for loan losses / loans |
1.96% |
2.24% |
2.61% |
2.80% |
2.77% |
||||
| Allowance for loan losses / non-performing assets |
54.84% |
71.77% |
66.82% |
84.16% |
74.56% |
||||
| Allowance for loan losses / non-performing loans |
58.64% |
77.86% |
74.39% |
99.41% |
89.53% |
||||
| Non-performing assets / loans plus REO |
3.56% |
3.11% |
3.89% |
3.31% |
3.70% |
||||
| Non-performing assets / total assets |
2.45% |
2.24% |
2.77% |
2.35% |
2.65% |
||||
| Net charge-offs / average loans (annualized) |
2.18% |
2.49% |
1.55% |
0.75% |
0.85% |
||||
| Deposit Balances |
|||||||||
| Non-interest-bearing demand deposits |
$ 265,716 |
$ 245,927 |
$ 239,594 |
$ 225,869 |
$ 219,374 |
||||
| Interest-bearing demand deposits and money market |
665,889 |
609,057 |
607,965 |
578,867 |
581,622 |
||||
| Savings deposits |
165,325 |
155,101 |
155,244 |
155,021 |
153,629 |
||||
| Retail time deposits less than $100,000 |
383,471 |
428,222 |
429,686 |
444,431 |
453,997 |
||||
| Retail time deposits greater than $100,000 |
183,420 |
147,298 |
143,477 |
146,655 |
150,859 |
||||
| National/Brokered time deposits |
7,549 |
10,636 |
14,014 |
22,657 |
32,565 |
||||
| Total deposits |
$ 1,671,370 |
$ 1,596,241 |
$ 1,589,980 |
$ 1,573,500 |
$ 1,592,046 |
||||
| (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 |
Non Accrual |
Troubled Debt |
| March 31, 2012 |
|||||
| One to four family residential real estate |
$ 202,132 |
$ 194,783 |
$ 1,865 |
$ 3,883 |
$ 1,601 |
| Construction |
36,362 |
36,203 |
- |
159 |
- |
| Commercial real estate |
790,168 |
754,140 |
945 |
33,065 |
2,018 |
| Commercial |
326,904 |
317,947 |
1,175 |
7,618 |
164 |
| Consumer finance |
17,647 |
17,542 |
100 |
5 |
- |
| Home equity and improvement |
114,891 |
113,041 |
1,192 |
621 |
37 |
| Total loans |
$ 1,488,104 |
$ 1,433,656 |
$ 5,277 |
$ 45,351 |
$ 3,820 |
| December 31, 2011 |
|||||
| One to four family residential real estate |
$ 203,401 |
$ 195,752 |
$ 2,120 |
$ 3,890 |
$ 1,639 |
| Construction |
31,552 |
31,552 |
- |
- |
- |
| Commercial real estate |
775,992 |
742,868 |
3,441 |
28,150 |
1,533 |
| Commercial |
349,053 |
341,666 |
334 |
6,884 |
169 |
| Consumer finance |
18,887 |
18,713 |
164 |
10 |
- |
| Home equity and improvement |
122,143 |
118,869 |
2,841 |
394 |
39 |
| Total loans |
$ 1,501,028 |
$ 1,449,420 |
$ 8,900 |
$ 39,328 |
$ 3,380 |
| March 31, 2011 |
|||||
| One to four family residential real estate |
$ 218,599 |
$ 208,863 |
$ 1,870 |
$ 5,366 |
$ 2,500 |
| Construction |
24,437 |
24,377 |
- |
60 |
- |
| Commercial real estate |
746,899 |
720,349 |
3,022 |
21,909 |
1,619 |
| Commercial |
341,614 |
327,277 |
996 |
13,156 |
185 |
| Consumer finance |
20,862 |
20,644 |
200 |
18 |
- |
| Home equity and improvement |
128,810 |
127,532 |
524 |
439 |
315 |
| Total loans |
$ 1,481,221 |
$ 1,429,042 |
$ 6,612 |
$ 40,948 |
$ 4,619 |
SOURCE First Defiance Financial Corp.
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