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FIRSTFED ANNOUNCES SECOND QUARTER EARNINGS FOR 1992

 FIRSTFED ANNOUNCES SECOND QUARTER EARNINGS FOR 1992
 SANTA MONICA, Calif., July 28 /PRNewswire/ -- FirstFed Financial


Corp., holding company for First Federal Bank of California, today announced net earnings of $8.0 million or $0.73 per share of common stock for the second quarter of 1992. These results represent an 18 percent increase from $6.8 million or $0.62 per share of common stock for the first quarter of 1992 and a 3 percent decrease from $8.2 million or $0.75 per share for the second quarter of 1991. All per-share comparisons are based on shares outstanding after adjustment for the 5-for-4 stock split declared Sept. 26, 1991, and distributed Oct. 31, 1991.
 On a year-to-date comparative basis, net earnings dropped 8 percent to $14.7 million or $1.35 per share for the first six months of 1992 from $16.0 million or $1.47 per share for the same period last year.
 The decrease in earnings compared to the prior year was the result of further additions to loan loss reserves during the first six months, offset by continued improvement in net interest income.
 William S. Mortensen, chairman and chief executive officer of FirstFed, commented, "Our core earnings continue to be at record levels, but loan losses have increased due to worsening economic conditions creating the need for additional loan loss provisions."
 The bank recorded a provision for loan losses of $5.8 million during the second quarter. The bank's ratio of general loan loss reserves to loans with loss exposure increased slightly to .60 percent at the end of the quarter. Charge-offs during the second quarter were $4.3 million, down from $5.1 million in the first quarter and up from $477,000 during the same period of the prior year. The increase in charge-offs is due primarily to identified losses on loans secured by multifamily properties with high vacancy rates.
 Loan loss provisions for the first six months of 1992 totaled $16.6 million, $10.7 million of which was booked during the first quarter upon the completion of the bank's annual examination by the Office of Thrift Supervision. Charge-offs during the first six months of 1992 were $9.4 million compared to $515,000 for the first six months of 1991.
 Non-performing assets increased to 2.96 percent at June 30, 1992, from 1.27 percent at June 30, 1991, and 1.97 percent at Dec. 31, 1991, because of delinquencies and foreclosures on both single-family and multifamily loans.
 The bank is continuing to evaluate the impact of the current weakness in the Southern California economy on its loan portfolio and loan loss reserves. More specifically, the bank believes that the Southern California real estate market has not yet stabilized.
 Net interest income improved by 12 percent on a quarterly comparative basis and 13 percent on a semi-annual comparative basis, because of declines in interest rates. Although 97 percent of the bank's loans are adjustable monthly, decreasing interest rates reduced the bank's cost of funds faster than the yield on its portfolio. The interest rate spread increased to 3.15 percent for the second quarter of 1992 from 2.91 percent for the same quarter of the last year. Year-to-date spreads increased to 3.07 percent for the first six months of 1992 from 2.82 percent for the same period of the prior year.
 Interest rate spreads for the first six months were impacted by a first quarter accrual of $1.7 million for interest on potential federal tax adjustments. The potential adjustments relate to industry-wide tax issues with the Internal Revenue Service that may involve litigation. Approximately $150,000 per month is being accrued to keep the interest charge current.
 Real estate operations resulted in net gains of $845,000 for the second quarter and $1.2 million for the six months. These gains generally represent recoveries of reserves previously provided by management.
 Results for the first six months include a $3.0 million tax benefit recorded during the first quarter as a result of implementing Statement of Financial Accounting Standards No. 109.
 Loan originations reached $237.0 million for the second quarter, a 37 percent improvement over $172.6 million for the same quarter of the prior year, and a 29 percent increase over $183.9 million for the first quarter of 1992. The bank increased its loan agent staff during the first half of the year to help bolster loan originations. Approximately 56 percent of the new loans originated were made to borrowers for the purpose of refinancing their existing debt. Adjustable rate mortgages comprised 80 percent of loans originated.
 The bank substantially exceeded the 7.20 percent risk-based capital requirement at June 30, 1992. The bank's risk-based capital ratio was 9.28 percent at the end of the quarter. The downward adjustment from 9.60 percent at the end of the previous quarter was because of the fact that certain multifamily loans were reclassified from the 50 percent risk weight to the 100 percent risk weight category because of a decrease in the occupancy level of the underlying collateral. The tangible capital and core capital ratios stood at 5.8 percent and 5.92 percent respectively at the end of the second quarter, compared to regulatory requirements of 1.5 percent and 3 percent respectively.
 Mortensen stated that the bank's management continues to focus on resolving problem loan situations and on producing long-term, sustained earnings for stockholders. He commented, "With non- performing assets at the highest level ever, much management time and effort is being dedicated to pursuing ways to return problem assets to interest-earning status so that they will not be a drain on future earnings."
 FirstFed Financial Corp. is the holding company for First Federal Bank of California. The company has 25 savings offices and six loan offices in Southern California.
 FIRSTFED FINANCIAL CORP.
 Key Financial Results Are Highlighted Below
 Three Months Ended
 June 30,
 1992 1991
 Net Earnings $7,972,000 $8,200,000
 Earnings per share:
 Primary $0.73 $0.75
 Fully diluted $0.73 $0.75
 Book value per share $19.45 $17.23
 Weighted average shares
 outstanding:
 Primary 10,925,981 10,898,790
 Fully diluted 10,926,055 10,898,811
 Assets $3,406,267,000 $3,149,588,000
 Loans $3,128,260,000 $2,868,840,000
 Deposits $1,883,263,000 $1,680,696,000
 Borrowings $1,244,010,000 $1,202,794,000
 Stockholders' equity $203,301,000 $177,279,000
 Loan originations $237,028,000 $172,615,000
 Net interest income $27,911,000 $24,888,000
 Non-performing assets
 to total assets 2.96 pct 1.27 pct
 Net worth to assets ratio 5.97 pct 5.63 pct
 Tangible capital ratio 5.80 pct 5.58 pct
 Core capital ratio 5.92 pct 5.58 pct
 Risk-based capital ratio 9.28 pct 9.24 pct
 Interest rate spread during
 the period 3.15 pct 2.91 pct
 Percent adjustable mortgages 96.80 pct 95.39 pct
 Expense ratios:
 Percent gross income 17.09 pct 13.91 pct
 Percent average assets 1.40 pct 1.40 pct
 One year "gap" percent
 of assets 13.34 pct 9.72 pct
 Return on assets 0.95 pct 1.06 pct
 Return on equity 15.94 pct 18.93 pct
 Six Months Ended
 June 30,
 1992 1991
 Net Earnings $14,746,000 $15,962,000
 Earnings per share:
 Primary $1.35 $1.47
 Fully diluted $1.35 $1.47
 Book value per share $19.45 $17.23
 Weighted average shares
 outstanding:
 Primary 10,927,697 10,861,084
 Fully diluted 10,927,709 10,888,399
 Assets $3,406,267,000 $3,149,588,000
 Loans $3,128,260,000 $2,868,840,000
 Deposits $1,883,263,000 $1,680,696,000
 Borrowings $1,244,010,000 $1,202,794,000
 Stockholders' equity $203,301,000 $177,279,000
 Loan originations $420,880,000 $292,131,000
 Net interest income $54,108,000 $47,911,000
 Non-performing assets
 to total assets 2.96 pct 1.27 pct
 Net worth to assets ratio 5.97 pct 5.63 pct
 Tangible capital ratio 5.80 pct 5.58 pct
 Core capital ratio 5.92 pct 5.58 pct
 Risk-based capital ratio 9.28 pct 9.24 pct
 Interest rate spread during
 the period 3.07 pct 2.82 pct
 Percent adjustable mortgages 96.80 pct 95.39 pct
 Expense ratios:
 Percent gross income 16.33 pct 13.68 pct
 Percent average assets 1.37 pct 1.38 pct
 One year "gap" percent
 of assets 13.34 pct 9.72 pct
 Return on assets 0.88 pct 1.04 pct
 Return on equity 14.99 pct 18.85 pct
 NOTE: All per share figures have been adjusted for the 5-for-4 stock split declared Sept. 26, 1991.
 FIRSTFED FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Financial Condition
 (In thousands)
 June 30, Dec. 31,
 1992 1991
 (unaudited)
 Assets:
 Cash and cash equivalents $144,312 $156,575
 U.S. Government and other
 securities, at cost
 (market of $16,837
 and $16,991) 16,160 16,172
 Loans receivable 2,479,545 2,322,232
 Mortgage-backed securities
 (market of $578,043
 and $540,958) 562,256 519,499
 Loans and mortgage-backed
 securities held for sale
 (market of $89,457
 and $159,445 86,459 154,115
 Accrued interest and
 dividends receivable 24,849 28,798
 Real estate 26,908 25,786
 Office properties and
 equipment, net 9,733 8,748
 Investment in Federal Home
 Loan Bank stock, at cost 29,842 28,220
 Other assets 26,203 26,914
 Total $3,406,267 $3,287,059
 Liabilities:
 Deposits $1,883,263 $1,740,103
 Federal Home Loan Bank
 advances and other
 borrowings 1,244,010 1,280,372
 Income taxes payable 30,197 31,039
 Accrued expenses and
 other liabilities 45,496 45,369
 Total 3,202,966 3,096,883
 Contingent Liabilities:
 Stockholders' Equity
 Common stock, par value $.01
 per share; authorized 25,000,000
 shares; issued to 10,982,487
 and 10,921,891 shares,
 outstanding 10,453,367 and
 10,405,271 shares 110 109
 Additional capital 23,955 23,674
 Retained earnings --
 substantially restricted 188,340 173,594
 Loan to employee stock
 ownership plan (3,611) (1,965)
 Treasury stock, at cost,
 529,120 and 516,620 shares (5,493) (5,236)
 Subtotal 203,301 190,176
 Total $3,406,267 $3,287,059
 FIRSTFED FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Operations
 (Unaudited)
 (In thousands)
 Three Months Ended Six Months Ended
 June 30, June 30,
 1992 1991 1992 1991
 Interest income:
 Interest on loans $64,076 $74,257 $130,143 $147,584
 Interest and
 dividends on
 investments 1,724 2,163 3,641 4,477
 Total interest
 income 65,800 76,420 133,784 152,061
 Interest expense:
 Interest on deposits 22,757 29,293 46,224 61,192
 Interest on
 borrowings 15,132 22,239 33,452 42,958
 Total interest
 expense 37,889 51,532 79,676 104,150
 Net interest income 27,911 24,888 54,108 47,911
 Provision for
 loan losses 5,847 1,004 16,563 2,207
 Net interest income
 after provision for
 loan losses 22,064 23,884 37,545 45,704
 Other income
 (expense):
 Loan and other fees 1,328 1,558 3,020 3,028
 Gain on sale of loans 770 153 1,149 574
 Real estate operations,
 net 845 (600) 1,181 (665)
 Other operating income 427 278 893 583
 Total other income 3,370 1,389 6,243 3,520
 Non-interest expense 11,818 10,823 22,870 21,277
 Earnings before
 income taxes 13,616 14,450 20,918 27,947
 Income tax provision 5,644 6,250 6,172 11,985
 Net earnings $7,972 $8,200 $14,746 $15,962
 Primary earnings
 per share(a) $0.73 $0.75 $1.35 $1.47
 Fully diluted earnings
 per share(a) $0.73 $0.75 $1.35 $1.47
 (a) 1991 per share figures have been adjusted for the 5-for-4 stock split declared Sept. 26, 1991.
 -0- 7/28/92
 /CONTACT: Martin Gottlieb, executive VP of FirstFed Financial, 310-319-6000/ CO: FirstFed Financial Corp. ST: California IN: FIN SU: ERN


BP-EH -- LA014 -- 3836 07/28/92 08:37 EDT
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