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FIRSTFED REPORTS 1992 NET EARNINGS

 SANTA MONICA, Calif., Feb. 1 /PRNewswire/ -- FirstFed Financial Corp. (NYSE: FED), holding company for First Federal Bank of California, today announced net earnings of $22.1 million or $2.04 per share of common stock for the year ended Dec. 31, 1992, compared to $28.4 million or $2.61 per share for the prior year.
 1992 net earnings were impacted by increased provisions for loan losses which totaled $41.4 million for the year compared with $11.8 million for 1991. Core earnings remained strong throughout the period.
 William S. Mortensen, chairman and chief executive officer of FirstFed, commented, "Although 1992 earnings decreased compared to the prior year, the results are the third-highest in the company's history." He continued: "The company ended the year with strong financial ratios and statistics while operating in a very difficult economic climate. We are particularly pleased that the bank was able to achieve a risk-based capital ratio of 10.39 percent at the end of the year." A risk-based capital ratio in excess of 10 percent places the bank in the highest category of well-capitalized thrifts.
 Net earnings for the fourth quarter of 1992 were $6.7 million or $0.62 per share, an increase over the $4.2 million or $0.39 per share for the fourth quarter of 1991. Fourth quarter results improved compared to the prior year because of a lower effective tax rate. The bank implemented a new accounting standard in 1992 which permits the recognition of state and federal tax benefits for additions to its book loss reserves. Fourth quarter provisions for loan losses were $6.7 million, comparable to $6.3 million for the fourth quarter of 1991.
 The provisions for loan losses during 1992 were based on management's evaluation of the current economic climate. The largest provisions were recorded during the third quarter of 1992 following declines in certain property values primarily resulting from the second quarter civil unrest in Southern California. The ratio of loan loss allowances to loans with loss exposure increased to 0.93 percent at the end of 1992 from 0.41 percent at the end of 1991.
 1992 loan charge-offs were $27.5 million compared with $6.8 million in 1991. Fourth quarter loan charge-offs were $8.9 million in 1992, compared with $5.3 million in the same period of 1991.
 Non-performing assets were $90.3 million or 2.62 percent of total assets at Dec. 31, 1992, slightly less than $96.2 million or 2.76 percent of total assets at Sept. 30, 1992. At Dec. 31, 1991, non-performing assets were 1.97 percent of total assets. Depending on the length and severity of the current economic recession in Southern California, banks remain vulnerable to possible further increases in non-performing assets.
 Real estate operations (resulting from the sale and operation of foreclosed properties) produced net gains of $2.6 million for the year and $173,000 for the fourth quarter of 1992. This compares to a net loss of $1.3 million for the prior year and a gain of $31,000 for the fourth quarter of 1991. The gains generally represent recoveries of reserves previously provided. The bank sold $26.4 million in foreclosed real estate during the fourth quarter of 1992 and $84.0 million for the entire year. This compares with sales of $6.3 million and $23.1 million for the fourth quarter and entire year of 1991, respectively.
 The net interest margin, the difference between the bank's yield on earning assets and its cost of funds, was 2.96 percent for 1992 compared to 2.97 percent for 1991. For the fourth quarter, the net interest margin was 2.84 percent in 1992 compared to 3.05 percent in 1991. Interest rates continued to decrease throughout the quarter and year ended Dec. 31, 1992, but at a slower rate than in the previous periods. The decrease in the margin during the fourth quarter of 1992 is because of the bank's cost of funds not dropping as quickly as the index to which its loans are tied.
 Net interest income, the bank's primary source of core earnings, increased to $104.1 million during 1992 from $100.8 million in 1991 based on growth in earning assets. Increases in net interest income were offset by increased non-performing loans and accelerated amortization of deferred servicing gains because of loan payoffs.
 Results for 1992 include a $4.1 million tax benefit as a result of implementing Statement of Financial Accounting Standards No. 109 ("SFAS No. 109"). Also, the bank's effective tax rate decreased substantially compared to the prior year because SFAS No. 109 entitles the bank to the recognition of state and federal tax benefits for additions to its book loan loss reserves.
 The bank maintains a reserve for interest on potential tax adjustments by the IRS. The potential adjustments relate to industry-wide issues raised by the IRS during tax audits. Litigation may be involved before the issues are resolved. As of the end of 1992, the total interest reserve stood at $5.7 million, $3.4 million was recorded during 1992.
 The bank acquired seven retail savings branches from the Resolution Trust Corporation during 1992 which brought total deposits to $2.0 billion and total retail branches to 24 at the end of 1992. $191.0 million in net new deposits resulted from the acquired branches and $80.4 million in net new deposits were generated by the previously existing branch system.
 Two new regional loan centers were opened late in 1992 in anticipation of increased loan demand in 1993 and thereafter. Despite the addition of seven savings branches and two loan centers, the ratio of expenses to total assets did not increase significantly during 1992. The ratio of expenses to total assets for 1992 was 1.36 percent compared with 1.28 percent in 1991.
 Total new loans originated were $840.8 million for 1992 compared with $647.3 million in 1991. 82 percent of new loans and 97 percent of the total loan portfolio were adjustable at the end of 1992. These percentages reflect the bank's continuing emphasis on the origination and retention of adjustable rate mortgages.
 The company continued its stock buy-back program during 1992 and repurchased 279,900 shares of FirstFed stock at an average price of $16.42 per share. Management believes that repurchasing its own stock is an excellent investment for the company and plans to continue its policy, depending on stock market conditions.
 First Federal Bank of California was included in the most recent edition of the best-selling book, "The 100 Best Companies to Work for in America." The bank was lauded for its congenial, family-like atmosphere, employee participation in profitability, advancement of women and ethnic diversity. Mortensen stated: "I believe that these factors contribute to high employee morale and employee turnover ratios of less than one-third the norm for banks. This helps to explain the company's solid performance in difficult times."
 FirstFed Financial Corp. is the holding company for First Federal Bank of California. The company has 24 full-service savings offices and eight loan offices in Southern California.
 FIRSTFED FINANCIAL CORP.
 Key Financial Results Are Highlighted Below
 Three Months Ended
 Dec. 31,
 1992 1991
 Net earnings $6,655,000 $4,219,000
 Earnings per
 share
 Primary $0.62 $0.39
 Fully diluted $0.62 $0.39
 Book value
 Per share $19.98 $18.28
 Weighted average
 shares outstanding
 Primary 10,674,306 10,896,384
 Fully diluted 10,724,092 10,913,197
 Assets $3,446,573,000 $3,287,059,000
 Loans $3,246,396,000 $2,995,846,000
 Deposits $1,982,745,000 $1,740,103,000
 Borrowings $1,196,241,000 $1,280,372,000
 Stockholders'
 Equity $207,511,000 $190,176,000
 Loan originations $209,953,000 $153,369,000
 Net interest income $25,112,000 $26,383,000
 Non-performing
 assets to
 Total assets 2.62 pct 1.97 pct
 Net worth to assets
 ratio 6.02 pct 5.79 pct
 Tangible capital ratio 5.98 pct 5.70 pct
 Core capital ratio 6.09 pct 5.70 pct
 Risk-based capital
 ratio 10.39 pct 9.36 pct
 Interest rate spread
 during the period 2.84 pct 3.09 pct
 Percent adjustable
 mortgages 97.50 pct 95.90 pct
 Expense ratios:
 Percent gross income 18.02 pct 14.47 pct
 Percent average assets 1.30 pct 1.29 pct
 One year "Gap" percent
 of assets 11.55 pct 11.60 pct
 Return on average
 assets 0.77 pct 0.51 pct
 Return on average
 equity 12.99 pct 8.99 pct
 12 Months Ended
 Dec. 31,
 1992 1991
 Net earnings $22,104,000 $28,427,000
 Earnings per
 share
 Primary $2.04 $2.61
 Fully diluted $2.04 $2.61
 Book value
 Per share $19.98 $18.28
 Weighted average
 shares outstanding
 Primary 10,856,300 10,889,603
 Fully diluted 10,856,815 10,907,635
 Assets $3,446,573,000 $3,287,059,000
 Loans $3,246,396,000 $2,995,846,000
 Deposits $1,982,745,000 $1,740,103,000
 Borrowings $1,196,241,000 $1,280,372,000
 Stockholders'
 Equity $207,511,000 $190,176,000
 Loan originations $840,755,000 $647,254,000
 Net interest
 income $104,102,000 $100,774,000
 Non-performing
 assets to
 Total assets 2.62 pct 1.97 pct
 Net worth to assets
 ratio 6.02 pct 5.79 pct
 Tangible capital ratio 5.98 pct 5.70 pct
 Core capital ratio 6.09 pct 5.70 pct
 Risk-based capital
 ratio 10.39 pct 9.36 pct
 Interest rate spread
 during the period 2.96 pct 2.97 pct
 Percent adjustable
 mortgages 97.50 pct 95.90 pct
 Expense ratios:
 Percent gross income 17.20 pct 13.33 pct
 Percent average assets 1.36 pct 1.28 pct
 One year GAP percent
 of assets 11.55 pct 11.60 pct
 Return on average
 assets 0.65 pct 0.90 pct
 Return on average
 equity 11.12 pct 16.17 pct
 FIRSTFED FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Financial Condition
 Dec. 31, 1992 and 1991
 (In thousands)
 Assets 1992 1991
 Cash $23,985 $61,575
 Securities purchased
 under agreements to
 resell --- 95,000
 U.S. Government and
 other securities,
 at cost (market of
 $44,059 and $16,991) 43,736 16,172
 Loans receivable 2,461,766 2,322,232
 Mortgage-backed
 securities (market of
 $706,827 and $540,958) 693,072 519,499
 Loans and mortgage-
 backed securities held
 for sale (market of
 $92,899 and $159,445) 91,558 154,115
 Accrued interest and
 dividends receivable 23,016 28,798
 Real estate 43,702 25,786
 Office properties and
 equipment, net 9,520 8,748
 Investment in Federal
 Home Loan Bank Stock,
 at cost 35,542 28,220
 Other assets 20,676 26,914
 Total $3,446,573 $3,287,059
 Liabilities
 Deposits $1,982,745 $1,740,103
 Federal Home Loan
 Bank advances and
 other borrowings 1,196,241 1,280,372
 Income taxes payable --- 2,203
 Deferred income taxes 17,783 28,836
 Accrued expenses and
 other liabilities 42,293 45,369
 Total 3,229,062 3,096,883
 Contingent Liabilities
 Stockholders' Equity
 Common stock, par value,
 $.01 per share;
 authorized 25,000,000
 shares; issued
 11,180,221 and
 10,921,891 shares,
 outstanding 10,383,701
 and 10,405,271 shares 112 109
 Additional capital 24,524 23,674
 Retained earnings -
 substantially
 restricted 195,698 173,594
 Loan to employee
 stock ownership plan (2,991) (1,965)
 Treasury stock, at cost,
 796,520 shares and
 516,620 shares (9,832) (5,236)
 Subtotal 207,511 190,176
 Total $3,446,573 $3,287,059
 FIRSTFED FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Operations
 Years Ended Dec. 31, 1992, 1991 and 1990
 (In thousands)
 1992 1991 1990
 Interest income:
 Interest on loans $249,104 $287,909 $281,289
 Interest and
 dividends on
 investments 6,508 8,621 10,147
 Total interest
 income 255,612 296,530 291,436
 Interest expense:
 Interest on
 deposits 87,802 115,627 130,591
 Interest on
 borrowings 63,708 80,129 77,226
 Total interest
 expense 151,510 195,756 207,817
 Net interest income 104,102 100,774 83,619
 Provision for loan
 losses 41,384 11,833 4,126
 Net interest income
 after provision for
 loan losses 62,718 88,941 79,493
 Other income
 (expense):
 Loan and other fees 5,863 5,972 5,580
 Gain on sale of loans
 and securities 2,098 1,133 453
 Gain (loss) from real
 estate operations,
 net 2,604 (1,319) (74)
 Other operating
 income 2,069 1,273 1,066
 Total other income 12,634 7,059 7,025
 Non-interest expense:
 Salaries and employee
 benefits 23,453 21,545 20,769
 Occupancy expense,
 net 6,642 5,714 5,286
 Advertising expense 2,235 1,731 1,579
 Federal deposit
 insurance 4,156 3,890 3,205
 Other operating
 expense 9,639 7,602 8,516
 Total non-interest
 expense 46,125 40,482 39,355
 Earnings before income
 tax provision 29,227 55,518 47,163
 Income tax provision 11,198 27,091 20,112
 Earnings before
 cumulative effect of
 change in accounting
 principle 18,029 28,427 27,051
 Cumulative effect of
 change in accounting
 principle 4,075 --- ---
 Net earnings $22,104 $28,427 $27,051
 Primary earnings per
 share $2.04 $2.61 $2.49
 Fully diluted earnings
 per share $2.04 $2.61 $2.49
 FIRSTFED FINANCIAL CORP.
 Dec. 31, 1992 Quarter Results
 (Dollars in thousands, unaudited)
 Current Quarter Same Qtr. Prior Year
 Interest income $58,700 $68,846
 Investment income 1,481 1,966
 Deposit expense 20,235 26,343
 Borrowing expense 14,834 18,086
 Net interest income 25,112 26,383
 Loan fees 451 474
 Loan servicing fees 987 971
 Real estate operations 173 31
 Gain on sale of loans 334 291
 Other income 369 298
 Total other income 2,314 2,065
 Compensation 5,380 5,541
 Occupancy 1,640 1,470
 Other expenses 4,088 3,469
 Total expenses 11,108 10,480
 Goodwill amortization 154 67
 Loss provision 6,723 6,263
 Pretax income 9,441 11,638
 Tax provision 2,786 7,419
 Net income $6,655 $4,219
 EPS (fully diluted) $0.62 $0.39
 Loan originations $207,953 $153,369
 Assets $3,446,573 $3,287,059
 Loans receivable
 (incl. MBS) $3,246,396 $2,995,846
 Real estate $43,702 $28,798
 Goodwill $3,997 $2,428
 Cash and securities $67,721 $172,747
 Deposits $1,982,745 $1,740,103
 Borrowings $1,196,241 $1,280,372
 Ending equity $207,511 $190,176
 Book value per share $19.98 $18.28
 Return on average assets .77 pct .51 pct
 Return on average equity 12.99 pct 8.99 pct
 Non-performing items $90,285 $64,812
 Loan loss reserves $32,974 $13,389
 Total loan servicing
 portfolio $4,203,441 $4,109,928
 One year GAP 11.55 pct 11.60 pct
 Employees 468 395
 Branches 24 18
 Shares outstanding
 (not in 000s) 10,383,701 10,405,271
 Dividends --- ---
 Stock price (period-end) $19.25 $22.37
 Loans serviced for others $891,484 $1,052,980
 Tangible capital ratio 5.98 pct 5.70 pct
 Core capital ratio 6.09 pct 5.70 pct
 Risk-based capital ratio 10.39 pct 9.36 pct
 -0- 2/1/93
 /CONTACT: Martin Gottleib, executive VP of FirstFed Financial Corp., 310-319-6000/
 (FED)


CO: FirstFed Financial Corp. ST: California IN: FIN SU: ERN

EH-BP -- LA017 -- 1378 02/01/93 12:30 EST
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