DOVER, Ohio, Aug. 7, 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 June 30, 2008 of $241,000, or diluted earnings per share of $.22, compared to the $435,000, or $.39 per diluted share, of net earnings reported for the comparable three-month period in 2007. The $194,000, or 44.6%, decrease in net earnings resulted from increases of $173,000, or 221.8%, in the provision for losses on loans and $142,000, or 13.6%, in general, administrative and other expenses and a decrease of $2,000, or 1.2%, in other income, which were partially offset by an increase of $24,000, or 1.5%, in net interest income and a decrease of $99,000, or 43.8%, in the provision for federal income taxes.
Net earnings for the fiscal year ended June 30, 2008 were $1.2 million, or diluted earnings per share of $1.08, compared to the $1.6 million, or $1.44 per diluted share, reported in fiscal 2007. The $453,000, or 27.9%, decrease in net earnings resulted from increases of $583,000, or 212.0%, in the provision for losses on loans and $277,000, or 6.4%, in general, administrative and other expenses, which were partially offset by increases of $168,000, or 2.6%, in net interest income and $6,000, or 1.0%, in other income and a decrease of $233,000, or 27.6%, in the provision for federal income tax.
The increase in the provision for losses on loans was based primarily on the overall decline in the real estate market and the economy in general. Over the twelve-month period, the allowance for loan losses increased by 59.4%, raising the coverage ratio from the June 30, 2007 level of .61% of net loans to .95% of net loans as of June 30, 2008. Net charge-offs for the twelve month period totaled $305,304, or .17%, 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 $985,000 at June 30, 2008, or .54%, of assets, well below the average for Ohio publicly traded commercial banks and thrifts (1.02% and 2.42% respectively) as of June 30, 2008.(1) First Federal is not, and has not, been involved in sub-prime lending.
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 during the 2008 fiscal year 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 $6,000 increase in other income resulted from increased fee income. The decrease in the provision for federal income tax resulted from the decrease in earnings before income tax year over year.
FFD Financial Corporation reported total assets of $181.7 million at June 30, 2008, an increase of 5.1% over the June 30, 2007 balance of $173.0 million. Cash and cash equivalents increased by 44.5% from the June 30, 2007 balance of $9.0 million, to $13.0 million at June 30, 2008. Loans receivable (net) increased by 1.9% from the June 30, 2007 balance of $153.3 million, to $156.2 million at June 30, 2008. Total liabilities increased by 5.6% from the June 30, 2007 balance of $154.9 million, to $163.6 million at June 30, 2008, and included deposits of $141.3 million, representing an increase of 1.0% over the June 30, 2007 balance of $140.0 million. Shareholders' equity amounted to $18.2 million at June 30, 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 $1.2 million, proceeds from the exercise of stock options, which were partially offset by a negative mark to market of investments available for sale, 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: Keefe, Bruyette & Woods, Inc. as of 6-30-08
FFD Financial Corporation
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
June 30, June 30,
ASSETS 2008 2007
(unaudited)
Cash and cash equivalents $ 13,049 $ 9,033
Investment securities 5,623 3,448
Mortgage-backed securities 323 364
Loans receivable, net 156,232 153,323
Loans held for sale -- 624
Other assets 6,511 6,202
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Total assets $ 181,738 $ 172,994
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LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 141,332 $ 139,922
Borrowings 20,595 13,131
Other liabilities 1,631 1,806
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Total liabilities 163,558 154,859
Shareholders' equity 18,180 18,135
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Total liabilities and
shareholders' equity $ 181,738 $ 172,994
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FFD Financial Corporation
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except share data)
Three months ended Fiscal year ended
June 30, June 30,
2008 2007 2008 2007
(unaudited) (unaudited) (unaudited)
Total interest income $ 2,791 $ 2,962 $11,815 $11,472
Total interest expense 1,155 1,350 5,144 4,969
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Net interest income 1,636 1,612 6,671 6,503
Provision for losses
on loans 251 78 858 275
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Net interest income
after provision
for losses on loans 1,385 1,534 5,813 6,228
Other income 168 170 586 580
General, administrative
and other expense 1,185 1,043 4,619 4,342
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Earnings before income
taxes 368 661 1,780 2,466
Federal income taxes 127 226 610 843
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NET EARNINGS $ 241 $ 435 $ 1,170 $ 1,623
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EARNINGS PER SHARE
Basic $ .22 $ .40 $ 1.08 $ 1.45
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Diluted $ .22 $ .39 $ 1.08 $ 1.44
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