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FIRSTFED ANNOUNCES EARNINGS INCREASE FOR 1991

 FIRSTFED ANNOUNCES EARNINGS INCREASE FOR 1991
 SANTA MONICA, Calif., Feb. 11 /PRNewswire/ -- FirstFed Financial


Corp. (NYSE: FED), holding company of First Federal Bank of California, today announced net earnings of $28.4 million or $2.61 per share of common stock for the year ended Dec. 31, 1991. These results represent a 5 percent increase over $27.1 million or $2.49 per share for the prior year. All per share comparisons are based on shares outstanding after adjustment for the five-for-four stock split declared Sept. 26, 1991, and distributed Oct. 31, 1991.
 The increase in earnings resulted from increased net interest income on improved net interest margins throughout 1991 and continuing cost control efforts. The rise in earnings was moderated by the decision of management to add substantially to the company's specific loan loss reserves.
 Net earnings reported for the fourth quarter of 1991 were $4.2 million or $0.39 per share, a 32 percent decrease from $6.2 million or $0.57 per share for the fourth quarter of 1990. Substantial additions to the bank's loan loss reserves were taken during the fourth quarter because management was conservative in setting up specific reserves on selected multi-family loans.
 William S. Mortensen, chairman and chief executive officer of FirstFed, commented, "Although 1991 earnings fell short of our goal for the year, it should be noted that this level of earnings is the highest ever recorded in the bank's history." He added, "We are especially pleased that we were able to maintain this level of earnings during difficult economic conditions." The company's 1991 return on assets ratio of 0.9 percent and return on equity ratio of 16.2 percent are among the best in the thrift industry.
 Declining interest rates throughout the quarter and year-to-date periods helped sustain earnings momentum. The bank benefits during periods of declining interest rates because its cost of funds is impacted by market interest rates sooner than the index to which the loans are tied. Net interest spread, the difference between the bank's yield on earning assets and its cost of funds, improved to 2.97 percent for 1991 from 2.62 percent the year before and to 3.09 percent for the fourth quarter from 2.81 percent for the same quarter of last year. The contractual margin on the loan portfolio was 2.60 percent at Dec. 31, 1991.
 During 1991, a total of $11.8 million was added to total loan loss reserves with $6.8 million in actual loan charge-offs. The greatest level of loan loss reserve activity occurred during the fourth quarter when $6.3 million was added to loan loss reserves and $5.3 million in charge-offs were taken. The increased charge-offs, particularly during the fourth quarter, were the result of specific reserves on multi-family loans in areas where vacancies had increased since the loans were originated. The $5 million net increase in loan loss reserves for the year brought total reserves at Dec. 31, 1991 to $13.9 million or 0.41 percent of the $3.4 billion of loans on which the bank had loss exposure at Dec. 31, 1991.
 Net losses of $1.3 million on real estate operations resulted from valuation adjustments due to declining real estate values primarily on properties acquired in the first half of 1991.
 Non-performing assets were $64.8 million or 1.97 percent of total assets at Dec. 31, 1991, representing an increase from $54.8 million or 1.67 percent of total assets at the end of the third quarter of 1991 and $24.9 million or 0.82 percent of total assets at the end of the prior year. In addition to loans classified as non-performing, at Dec. 31, 1991, the bank had $10.1 million in current loans and $5.1 million in loans which were less than 90 days delinquent that had been identified as potential problem loans by the bank's asset classification committee.
 Demand for the bank's adjustable rate loan products was down during 1991 because of a general slowdown in real estate sales transactions and the availability of fixed rate loans at low interest rates. Loan originations dropped to $647.3 million for 1991, 29 percent less than $907.0 million for the prior year. On a fourth quarter comparative basis, loan originations dropped 10 percent to $153.4 million from $170.3 million for the same quarter of the year before.
 The bank substantially exceeds all fully phased-in regulatory capital requirements as of Dec. 31, 1991. The most stringent requirement, the risk-based capital ratio, reached 9.36 percent at Dec. 31, 1991, up from 8.62 percent at the end of last year. Core and tangible capital ratios were at 5.7 percent.
 FirstFed's expense-to-assets ratio for the year ended Dec. 31, 1991, improved to 1.28 percent of total assets from 1.40 percent for the year before because of management's continuing efforts at cost containment. The fourth quarter expense ratio of 1.29 percent of total assets was slightly more than 1.26 percent for the same quarter of 1990 primarily as a result of higher federal deposit insurance premiums on increased average savings balances.
 The Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corp. (FDIC) regularly examine the operations and accounting practices of thrifts for compliance with federal regulations. The examination of the bank as of Dec. 31, 1991, began on Jan. 6, 1992. It is not expected that the results of the examinations will be known until the end of the first quarter of 1992.
 Mortensen summarized 1991 results and the outlook for 1992, stating, "The bank had great results for 1991 despite the general recession and its impact on California real estate. With our strong capital position and core earnings capabilities we still expect to reach our $35 million net earnings goal for 1992."
 FIRSTFED FINANCIAL CORP.
 Key Financial Results
 Three Months Ended
 Dec. 31,
 1991 1990
 Net earnings $4,219,000 $6,186,000
 Earnings per share:
 Primary $0.39 $0.57
 Fully diluted $0.39 $0.57
 Book value per share $18.28 $15.81
 Weighted average
 shares outstanding:
 Primary 10,896,384 10,763,463
 Fully diluted 10,913,197 10,778,550
 Assets $3,287,059,000 $3,051,808,000
 Loans $2,995,846,000 $2,736,458,000
 Deposits $1,740,103,000 $1,739,653,000
 Borrowings $1,280,372,000 $1,062,804,000
 Stockholders' equity $190,176,000 $161,438,000
 Loan originations $153,369,000 $170,313,000
 Net interest income $26,383,000 $22,140,000
 Non-performing assets
 to total assets 1.97 pct. 0.82 pct.
 Net worth to assets ratio 5.79 pct. 5.29 pct.
 Tangible capital ratio 5.70 pct. 5.26 pct.
 Core capital ratio 5.70 pct. 5.26 pct.
 Risk-based capital ratio 9.36 pct. 8.62 pct.
 Interest rate spread during
 the period 3.09 pct. 2.81 pct.
 Pct. adjustable mortgages 95.09 pct. 95.00 pct.
 Expense ratios:
 Percent gross income 14.47 pct. 12.14 pct.
 Percent average assets 1.29 pct. 1.26 pct.
 One year "gap"
 percent of assets 11.60 pct. 7.91 pct.
 Return on average assets 0.51 pct. 0.83 pct.
 Return on average equity 8.99 pct. 15.66 pct.
 12 Months Ended
 Dec. 31,
 1991 1990
 Net earnings $28,427,000 $27,051,000
 Earnings per share:
 Primary $2.61 $2.49
 Fully diluted $2.61 $2.49
 Book value per share $18.28 $15.81
 Weighted average
 shares outstanding:
 Primary 10,889,603 10,867,973
 Fully diluted 10,907,635 10,868,021
 Assets $3,287,059,000 $3,051,808,000
 Loans $2,995,846,000 $2,736,458,000
 Deposits $1,740,103,000 $1,739,653,000
 Borrowings $1,280,372,000 $1,062,804,000
 Stockholders' equity $190,176,000 $161,438,000
 Loan originations $647,254,000 $907,030,000
 Net interest income $100,774,000 $83,619,000
 Non-performing assets
 to total assets 1.97 pct. 0.82 pct.
 Net worth to assets ratio 5.79 pct. 5.29 pct.
 Tangible capital ratio 5.70 pct. 5.26 pct.
 Core capital ratio 5.70 pct. 5.26 pct.
 Risk-based capital ratio 9.36 pct. 8.62 pct.
 Interest rate spread
 during the period 2.97 pct. 2.62 pct.
 Percent adjustable mortgages 95.09 pct. 95.00 pct.
 Expense ratios:
 Percent gross income 13.33 pct. 13.19 pct.
 Percent average assets 1.28 pct. 1.40 pct.
 One year "gap" percent
 of assets 11.60 pct. 7.91 pct.
 Return on average assets 0.90 pct. .96 pct.
 Return on average equity 16.17 pct. 18.25 pct.
 FIRSTFED FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Financial Condition
 Dec. 31, 1991 and 1990
 (In thousands)
 Assets: 1991 1990
 Cash $61,575 $137,873
 Certificate of deposit --- 4,228
 Securities purchased under
 agreements to resell 95,000 60,000
 U.S. government and other
 securities, at cost (market of
 $16,991 and $12,173) 16,172 12,025
 Loans receivable 2,322,232 2,116,576
 Mortgage-backed securities
 (market of $540,958
 and $527,658) 519,499 521,384
 Loans and mortgage-backed
 securities held for sale (market
 of $159,445 and $99,610) 154,115 98,498
 Accrued interest and dividends
 receivable 28,798 28,410
 Real estate 25,786 10,599
 Office properties and equipment, net 8,748 8,324
 Investment in Federal Home Loan
 Bank stock, at cost 28,220 26,284
 Other assets 26,914 27,607
 Total $3,287,059 $3,051,808
 Liabilities:
 Deposits $1,740,103 $1,739,653
 Federal Home Loan Bank
 advances and other borrowings 1,280,372 1,062,804
 Income taxes payable 2,203 2,432
 Deferred income taxes 28,836 29,082
 Accrued expenses and other
 liabilities 45,369 56,399
 Total 3,096,883 2,890,370
 Contingent Liabilities
 Stockholders' Equity:
 Common stock, par value $.01
 per share; authorized 25,000,000
 shares; issued 10,921,891 and
 10,727,589 shares, outstanding
 10,405,271 and 10,210,969 shares 109 86
 Additional capital 23,674 23,350
 Retained earnings - substantially
 restricted 173,594 145,167
 Loan to employee stock
 ownership plan (1,965) (1,929)
 Treasury stock, at cost,
 516,620 shares (5,236) (5,236)
 Sub-total 190,176 161,438
 Total $3,287,059 $3,051,808
 FIRSTFED FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Operations
 Years ended Dec. 31, 1991, and 1990 and 1989
 (In thousands)
 1991 1990 1989
 Interest income:
 Interest on loans $287,909 $281,289 $234,825
 Interest and dividends
 on investments 8,621 10,147 10,276
 Total interest income 296,530 291,436 245,101
 Interest expense:
 Interest on deposits 115,627 130,591 119,404
 Interest on borrowings 80,129 77,226 65,655
 Total interest expense 195,756 207,817 185,059
 Net interest income 100,774 83,619 60,042
 Provision for loan losses 11,833 4,126 824
 Net interest income after
 provision for loan losses 88,941 79,493 59,218
 Other revenue (expense):
 Loan and other fees 5,972 5,580 4,833
 Gain on sale of loans
 and securities 1,133 453 2,187
 Loss from real estate
 operations, net (1,319) (74) (143)
 Other operating income 1,273 1,066 1,086
 Total 96,000 86,518 67,181
 Non-interest expense:
 Salaries and employee benefits 21,545 20,769 17,820
 Occupancy expense, net 5,714 5,286 4,958
 Advertising expense 1,731 1,579 1,168
 Federal deposit insurance 3,890 3,205 2,742
 Other operating expense 7,602 8,516 6,129
 Total non-interest expense 40,482 39,355 32,817
 Earnings before income tax
 provision 55,518 47,163 34,364
 Income tax provision 27,091 20,112 13,862
 Net earnings $28,427 $27,051 $20,502
 Primary earnings per share $2.61 $2.49 $1.88
 Fully diluted earnings per share $2.61 $2.49 $1.88
 -0- 2/11/92
 /CONTACT: Martin Gottlieb, executive VP of FirstFed Financial Corp., 310-319-6000/
 (FED) CO: FirstFed Financial Corp. ST: California IN: FIN SU: ERN


SE-JL -- LA001 -- 8647 02/11/92 08:32 EST
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