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FFY FINANCIAL REPORTS FY93 NET INCOME AT $4.7 MILLION; POINTS TO GAIN IN NET INTEREST INCOME OFFSET BY FUNDING OF LOAN RESERVE;

 NOTES THAT JUNE IPO ADDED $64 MILLION TO YEAR-END BALANCE SHEET;
 4TH QUARTER NET INCOME UP 8 PERCENT
 YOUNGSTOWN, Ohio, Aug. 4 /PRNewswire/ -- FFY Financial Corp. (NASDAQ-NMS: FFYF) today reported net income for its fiscal year ended June 30, 1993, of $4.7 million compared with $5.3 million in the prior year, with a 13.0 percent gain in net interest income offset by additional funding of the allowance for loan losses. Due to the addition of $64 million raised in the company's initial public offering and 4.7 percent expansion of the deposit base, total assets at year-end were $573.4 million, up from $489.5 million a year ago. Year-end capital ratios were four or more times regulatory minimums.
 For the fourth quarter ended June 30, 1993, net income was $1.9 million, up 8.3 percent from $1.7 million in the comparable prior period, and up 18.4 percent from the third quarter of fiscal 1993. Net interest income rose 20.9 percent from last year's fourth quarter, more than offsetting a $117,000 rise in the provision for loan losses and an increase in the effective federal income tax rate.


GROWTH OF CORE BUSINESS CONTINUES
 Commenting on the results, Charles Shellogg Jr., president and chief operating officer, said, "Over the past several years, we have sought to enhance our earnings by maintaining asset quality and a high level of capital as well as controlling expenses. Moreover, because of our core profitability, we have been able to implement a long-term strategic plan for expanding our deposit base, which represents the core value of our franchise.
 "Fiscal 1993 results confirm the benefits of our strategies despite a higher loan loss provision, the bulk of which was incurred in the second quarter. The impact of our strategies is even more clearly illustrated in the fourth quarter when the provision for loan losses was more in line with ongoing expectations."
 Discussing FFY's core business strategies, Shellogg said, "As interest rates declined over the past 12-18 months, we implemented programs to expand our core deposit base by delaying, when possible, reduction in deposit rates. As a result of our marketing programs, deposits climbed 4.7 percent to $447.1 million at year-end, but we were able to reduce interest expense by 8.5 percent due to the generally lower interest rate environment. The gain in deposit balances would have been even greater, but our depositors withdrew about $20 million to purchase FFY common stock in the conversion from a mutual to a stock savings bank.
 "Loan growth kept pace with deposit growth, as total loans increased 7.8 per cent to $332.4 million. We were also able to invest the new funds at reasonable rates of return in U.S. Government and agency securities and interest income remained relatively unchanged when compared with the prior year. As a consequence, net interest income rose 13.0 percent over last year and the net interest margin remained nearly unchanged at 3.72 percent."


ASSET QUALITY REMAINS STRONG
 Commenting on FFY's asset quality, Jeffrey L. Francis, vice president and treasurer, said, "Our asset quality remains among the best in the industry. Between 1989 and 1993, net charge-offs have averaged only 0.04 percent of average loans. Non-performing assets have remained relatively stable, ending the year at $6.6 million, or 1.15 percent of total assets versus $6.5 million, or 1.33 percent a year ago.
 "Nonetheless, during this past year, management determined that our historic practice of establishing loan loss provisions based on past experience might not provide the best indication of probable and reasonable estimable future losses under certain circumstances. As a result, we are giving greater emphasis to other factors, including the uncertain economic outlook, current information regarding our loan portfolio, the regulators' increasingly stringent view of adequate reserve levels, and the growing reserve ratios being maintained by peer institutions," Francis noted.
 "Although there was no material change in the non-performing asset ratio in fiscal 1993, based on our refined approach, we increased our allowance for loan losses by $1.8 million, to approximately 37.1 percent of non-performing loans from 9.2 percent a year ago." Francis stated, "The increase in the allowance for loan losses to $2.4 million from $0.6 million was the primary reason that net income for the year was below last year's level."


OPERATING EXPENSES REMAIN STABLE
 For the fourth quarter and fiscal year, non-interest expense remained stable as a percent of average assets at 1.78 percent and 1.81 percent, respectively, versus 1.75 percent and 1.93 percent for the comparable prior periods. Francis commented, "We have been able to control expenses by holding employment constant while increasing revenue, centralizing the purchasing function and changing vendors where appropriate."


INITIAL PUBLIC OFFERING RAISES $64 MILLION
 Francis noted, "The $64 million raised in the initial public offering was available to FFY for investment purposes for only two days in fiscal 1993 and had essentially no impact on earnings despite its inclusion in year-end balances for assets and equity. Since the offering, however, FFY loaned $5.3 million to a newly established employee stock ownership plan and added the remaining proceeds from the offering to general funds. Initially, we are investing the funds in short- and intermediate-term U.S. Government and agency securities and mortgage-backed securities.
 "FFY Financial has the financial strength to pursue a variety of investment opportunities. We are carefully evaluating our alternatives so that we best enhance our ability to provide services to the public and generate value for our shareholders," Francis concluded.
 FFY Financial, a holding company, operates nine retail banking offices through First Federal Savings Bank of Youngstown, a federally chartered savings bank. In conjunction with the initial public offering, First Federal converted from a mutual savings bank to a stock savings bank. First Federal is a community-oriented financial institution; deposits are gathered from the general public and invested primarily in first mortgages on owner-occupied, one- to four-family residences, and investment securities. FFY Financial is traded on the NASDAQ National Market System under the symbol FFYF.
 NOTE: FFY Financial common stock was outstanding for only two days during the fiscal year ended June 30, 1993. As a result, traditional earnings per share calculations, based on averaged weighted shares outstanding, are not meaningful for fiscal 1992 and 1993. FFY issued 6,630,000 shares in its initial public offering on June 28, 1993.
 FFY FINANCIAL CORPORATION
 SELECTED OPERATIONS DATA:
 (Dollars in thousands) Three Months Ended June 30,
 1993 1992 Pct Change
 Total interest income $10,526 $10,401 1
 Total interest expense 5,333 6,107 (13)
 Net interest income 5,193 4,294 21
 Provision for loan losses (credit) 96 (21) NM
 Net interest income after
 provision for loan losses (credit) 5,097 4,315 18
 Service charges 72 73 (1)
 Gain on sale of securities 0 0 NM
 Other non-interest income 72 71 1
 Total non-interest expense (2,417) (2,118) 14
 Income before federal income taxes 2,824 2,341 21
 Federal income taxes 974 633 54
 Net income $1,850 $1,708 8
 Year Ended June 30,
 1993 1992 Pct Change
 Total interest income $41,777 $41,738 0
 Total interest expense 22,948 25,070 (8)
 Net interest income 18,829 16,668 13
 Provision for loan losses (credit) 1,908 355 437
 Net interest income after
 provision for loan losses (credit) 16,921 16,313 4
 Service charges 282 262 8
 Gain on sale of securities 2 0 NM
 Other non-interest income 271 214 27
 Total non-interest expense (9,450) (8,891) 6
 Income before federal income taxes 8,026 7,898 2
 Federal income taxes 3,342 2,638 27
 Net income $4,684 $5,260 (11)
 SELECTED FINANCIAL CONDITION DATA:
 (Dollars in thousands)
 June 30, 1993 June 30, 1992 Pct Change
 Total assets $573,436 $489,497 17
 Loans receivable, net 332,449 308,341 8
 Investment securities 169,544 148,368 14
 Deposits 447,071 426,971 5
 Total borrowings 2,823 3,111 (9)
 Stockholders' equity 112,461 51,958 116
 SELECTED FINANCIAL RATIOS AND OTHER DATA:
 (In percentages, except Capital Ratios:
 Ratio of average interest-earnings assets
 to average interest-bearing liabilities)
 Three Months Ended Year Ended
 June 30, June 30,
 1993 1992 1993 1992
 Performance Ratios:
 Return on assets (ratio
 of net income to
 average total assets) 1.36(B) 1.41(B) .90 1.14
 Interest rate spread
 information:
 Average during period 3.49(B) 3.09(B) 3.25 3.13
 End of period 2.74 2.67 2.75 2.67
 Net interest margin(A) 3.94(B) 3.66(B) 3.72 3.73
 Ratio of operating expense
 to average total assets 1.78(B) 1.75(B) 1.81 1.93
 Return on equity (ratio of
 net income to average
 equity) 12.78(B) 13.32(B) 8.62 10.71
 Liquidity ratio 49.31 40.23 49.31 40.23
 Quality Ratios:
 Non-performing assets to
 total assets at end
 of period 1.15 1.33 1.15 1.33
 Allowance for
 loan losses to
 non-performing assets 37.09 9.22 37.09 9.22
 Provision for loan losses
 to total loans
 receivable, net 0.12(B) (0.03)(B) 0.57 0.12
 Capital Ratios:
 Equity to total assets
 at end of period 19.61 10.61 19.61 10.61
 Average equity to
 average assets 10.67 10.62 10.42 10.68
 Ratio of average
 interest-earnings assets
 to average interest-
 bearing liabilities 1.11 X 1.11 X 1.10 X 1.11 X
 Regulatory capital ratios:
 Tangible capital --
 1.50 pct required 14.63 10.52 14.63 10.52
 Core capital --
 3.00 pct required 14.63 10.52 14.63 10.52
 Risk-based capital --
 8.00 pct required 35.46 22.03 35.46 22.03
 (A) Net interest income divided by average interest earnings assets.
 (B) Annualized.
 -0- 8/4/93
 /CONTACT: Jeffrey L. Francis, vice president and treasurer of FFY Financial Corp., 216-726-3396, or Heather Wietzel, vice president of The Financial Relations Board, 312-266-7800, for FFY Financial Corp./
 (FFYF)


CO: FFY Financial Corp. ST: Ohio IN: FIN SU: ERN

AR -- CL013 -- 9436 08/04/93 14:11 EDT
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Date:Aug 4, 1993
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