DOVER, Ohio, April 30, 2008 (PRIME NEWSWIRE) -- FFD Financial Corporation (Nasdaq:FFDF), parent company of First Federal Community Bank of Dover, Ohio, reported net earnings for the three months ended March 31, 2008, of $159,000, or diluted earnings per share of $.15, compared to the $347,000, or $.31 per diluted share, of net earnings reported for the comparable three-month period in 2007. The $188,000, or 54.2%, decrease in net earnings resulted from increases of $313,000, or 329.5%, in the provision for losses on loans and $51,000, or 4.6%, in general, administrative and other expenses, which were partially offset by increases of $47,000, or 2.9%, in net interest income, $31,000, or 24.8%, in other income and a decrease of $98,000, or 54.1%, in the provision for federal income taxes.
Net earnings for the nine months ended March 31, 2008, were $929,000, or diluted earnings per share of $.85, compared to the $1.2 million, or $1.03 per diluted share, of net earnings reported for the comparable nine-month period in 2007. The $259,000, or 21.8%, decrease in net earnings resulted from increases of $410,000, or 208.1%, in the provision for losses on loans and $135,000, or 4.1%, in general, administrative and other expenses, which were partially offset by increases of $141,000, or 2.9%, in net interest income, $11,000, or 2.4%, in other income and a decrease of $134,000, or 21.7%, in the provision for federal income tax.
The increase in the provision for losses on loan was based primarily on the decline in the real estate market and the economy in general. Over the nine-month period, the allowance for loan losses increased by 37.4%, raising the coverage ratio from the June 30, 2007 level of .60% of total loans to .80% of total loans as of March 31, 2008. Charge-offs for the ninth-month period totaled $258,005, or .15%, of average assets. Although charge-offs have increased during this fiscal year, they were relatively low given the difficult overall economic environment. Non-performing assets were $1.3 million at March 31, 2008, or .75%, of assets, well below the average for Ohio publicly traded commercial banks and thrifts (1.05% and 1.79% respectively) as of 3-31-08.(1) First Federal is not and has not been involved in sub-prime lending. The charge-offs experienced in the third quarter were primarily related to commercial loans and one commercial real estate loan.
The increase in net interest income was primarily due to increases in average balances of loans receivable, which were partially offset by increases in average deposit balances and the cost of new and repricing deposits. Borrowing costs decreased period to period due to the decrease in the average borrowing costs outweighing the increase in the average balance of borrowings. The increase in general, administrative and other expense was due primarily to growth in the Corporation's operations year over year. The $11,000 increase in other income resulted from increased fee income.
FFD Financial Corporation reported total assets of $179.9 million at March 31, 2008, an increase of 4.0% over the June 30, 2007 balance of $173.0 million. Cash and cash equivalents increased by 6.0% from the June 30, 2007 balance of $9.0 million to $9.6 million at March 31, 2008. Loans receivable, net increased by 3.8% from the June 30, 2007, balance of $153.3 million to $159.1 million at March 31, 2008. Total liabilities increased by 4.4% from the June 30, 2007, balance of $154.9 million to $161.7 million at March 31, 2008, and included deposits of $139.8 million, representing a decrease of 0.1% over the June 30, 2007, balance of $140.0 million. Shareholders' equity amounted to $18.2 million at March 31, 2008, an increase from the $18.1 million total at June 30, 2007. The increase in shareholders' equity was primarily attributable to net earnings of $929,000, a positive mark to market of investments available for sale and proceeds from the exercise of stock options, which were partially offset by the cost of previously announced share repurchases and payments of quarterly dividends. First Federal continues to maintain strong capital ratios, well exceeding regulatory requirements.
FFD Financial Corporation is traded on the NASDAQ Capital Market under the symbol FFDF. First Federal Community Bank has full service offices in downtown Dover, downtown New Philadelphia, on the Boulevard in Dover and in Sugarcreek. The Corporation maintains an interactive web site at www.onlinefirstfed.com
(1) Source: SNL Financial as of 3-31-08
FFD Financial Corporation
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
March 31, June 30,
ASSETS 2008 2007
(unaudited)
Cash and cash equivalents $ 9,572 $ 9,033
Investment securities 4,740 3,448
Mortgage-backed securities 328 364
Loans receivable, net 159,135 153,282
Loans held for sale 226 624
Other assets 5,894 6,243
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Total assets $179,895 $172,994
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LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $139,789 $139,922
Borrowings 20,696 13,055
Other liabilities 1,219 1,882
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Total liabilities 161,704 154,859
Shareholders' equity 18,191 18,135
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Total liabilities and shareholders' equity $179,895 $172,994
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FFD Financial Corporation
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except share data)
Three months ended Nine months ended
March 31, March 31,
2008 2007 2008 2007
(unaudited) (unaudited)
Total interest income $ 2,906 $ 2,873 $ 8,980 $ 8,469
Total interest expense 1,263 1,277 3,989 3,619
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Net interest income 1,643 1,596 4,991 4,850
Provision for losses on loans 408 95 607 197
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Net interest income after
provision for losses
on loans 1,235 1,501 4,384 4,653
Other income 156 125 462 451
General, administrative
and other expense 1,149 1,098 3,434 3,299
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Earnings before income taxes 242 528 1,412 1,805
Federal income taxes 83 181 483 617
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NET EARNINGS $ 159 $ 347 $ 929 $ 1,188
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EARNINGS PER SHARE
Basic $ .15 $ .32 $ .86 $ 1.04
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Diluted $ .15 $ .31 $ .85 $ 1.03
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