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FIRSTFED MICHIGAN EARNS $34 MILLION IN 1991

 FIRSTFED MICHIGAN EARNS $34 MILLION IN 1991
 DETROIT, Jan. 16 /PRNewswire/ -- FirstFed Michigan Corporation


(NASDAQ-NMS: FFOM), the holding company of First Federal of Michigan, today reported net earnings of $34.0 million for the year ended Dec. 31, 1991, compared with $9.2 million for the same period in 1990. On a per-share basis, net earnings were $3.05 ($2.87 fully diluted) for the current year and $.83 for last year.
 Year-to-date net earnings brought FirstFed's stockholders' equity to $472.8 million, up from $440.3 million at the end of 1990. Book value per share increased to $42.44 from $39.58. Book value calculated without goodwill results in a tangible book value per share of $37.71 at year-end 1991.
 At Dec. 31, 1991, First Federal of Michigan, the company's thrift subsidiary, exceeded the regulatory capital requirements of the Office of Thrift Supervision (OTS) that are currently in effect with a tangible ratio of 4.32 percent, a core ratio of 4.89 percent, and a risk-based ratio of 13.16 percent.
 In commenting on the 1991 results, FirstFed Chairman C. Gene Harling said, "In today's difficult operating environment, it is gratifying to report that progress was made in FirstFed's operations. Specifically, our capital is at the highest level in our corporate history, we were able to generate an increase in core earnings despite a $1.2 billion reduction in assets, our assets continue to perform substantially better than industry averages from a credit quality standpoint, and, lastly, mortgage originations increased 25 percent."
 Net earnings for the fourth quarter of 1991 were $7.6 million, or $.68 per share ($.64 fully diluted). The company reported a loss in the fourth quarter of 1990 of $13.3 million, or $1.19 per share, due primarily to a non-recurring charge resulting from a change in accounting for certain deferred hedging positions.
 Net interest income for the entire year was $102.1 million, unchanged from the previous year, even though average interest-earning assets declined 12 percent, to $9.6 billion during 1991 from $11.0 billion during 1990. General and administrative expenses were $88.9 million in 1991 and $92.6 million in 1990. The decrease is, in large part, attributable to on-going efforts to contain costs.
 The company originated mortgage loans totaling $734 million during 1991, up 25 percent from $586 million in the same period last year. For the fourth quarter, $249 million in originations in 1991 compared with $119 million in 1990.
 FirstFed's portfolio of loans and mortgage-backed securities remains primarily single-family residential, with 91 percent in one-to-four family lending. Commercial real estate represents $533 million, or 7 percent of the portfolio.
 At Dec. 31, 1991, non-performing assets were $35.3 million. There were also $37.2 million in modified commercial real estate loans, classified as troubled debt restructurings, which were all current at the end of the year. FirstFed's non-performing asset levels, as a percent of assets, remain substantially below the industry average. Loan loss reserves were $26.7 million at the end of the year, a level FirstFed believes provides adequate protection against currently estimated credit losses.
 On Oct. 23, 1991, the company reported that its principal subsidiary, First Federal of Michigan, had been requested to enter into an agreement with the OTS, its primary regulator. It was reported at that time the agreement would, among other things, limit First Federal of Michigan's asset growth and require maintenance of its present tangible capital level.
 The formal Agreement has recently been executed by First Federal and the OTS under which it has been agreed that thrift assets will not exceed $9.5 billion and a minimum tangible capital ratio of 4.00 percent will be maintained. As of Dec. 31, 1991, thrift assets totaled $9.1 billion and the tangible capital ratio was 4.32 percent. Additionally, the Agreement requires, among other things, that First Federal submit to the OTS, for review and approval, certain policy documents including its Business Plan which will encompass strategies and targets related to future profitability, interest rate risk exposure and the percentage of assets funded by sources other than retail savings deposits.
 The company's First Federal of Michigan subsidiary is a Detroit- based savings and loan association with 71 offices in the lower peninsula of Michigan. First Federal's Bay Savings Bank, FSB subsidiary, based in Newport News, Va., operates eight offices in Virginia, and its Omni Savings Bank, FSB subsidiary has three offices in Columbia, S.C.
 FIRSTFED MICHIGAN CORPORATION
 Consolidated Statements of Operations
 Three Months Ended Year Ended
 Dec. 31, Dec. 31,
 1991 1990 1991 1990
 (in thousands, except
 per share data)
 Interest income:
 Loans $ 91,642 100,919 379,467 414,542
 Mortgage-backed
 securities 91,859 99,598 382,416 428,116
 Investments 26,450 52,388 139,432 189,399
 Total interest
 income 209,951 252,905 901,315 1,032,057
 Interest expense:
 Deposits 66,226 73,582 266,483 335,392
 FHLB Advances 42,017 52,305 191,271 218,828
 Borrowings 73,660 102,518 341,481 375,785
 Total interest
 expense 181,903 228,405 799,235 930,005
 Net interest income 28,048 24,500 102,080 102,052
 Provision for losses 1,492 1,397 7,225 6,043
 Net interest income
 after provision
 for losses 26,556 23,103 94,855 96,009
 Other income (expense):
 Loan fees and
 service charges 535 4,937 9,425 22,330
 Other operating income 2,200 2,529 12,303 14,307
 Net gains (losses)
 on investment
 securities 145 (33,396) 6,019 (33,396)
 Net gains on loans and
 mortgage-backed
 securities 3,634 3,585 21,760 8,845
 Real estate operations 25 759 (863) 2,423
 Total other
 income (expense) 6,539 (21,586) 48,644 14,509
 General and
 administrative expenses:
 Compensation and
 employee benefits 10,367 10,106 45,148 45,437
 Office
 occupancy 2,104 2,281 8,752 9,137
 Federal deposit
 insurance 2,035 2,198 8,283 8,729
 Other 5,822 4,928 22,950 23,650
 Amortization of
 goodwill 930 970 3,720 5,693
 Total general
 and administrative
 expenses 21,258 20,483 88,853 92,646
 Earnings (loss)
 before federal income
 taxes and
 extraordinary items 11,837 (18,966) 54,646 17,872
 Federal income
 taxes 4,210 (6,130) 20,540 6,850
 Earnings (loss)
 before extraordinary
 items 7,627 (12,836) 34,106 11,022
 Extraordinary items,
 net of federal income
 tax effect (33) (414) (66) (1,811)
 Net earnings
 (loss) $ 7,594 (13,250) 34,040 9,211
 Earnings (loss)
 per share:
 Primary:
 Earnings (loss)
 before extraordinary
 items $.68 (1.15) 3.05 .99
 Net earnings
 (loss) .68 (1.19) 3.05 .83
 Fully diluted:
 Earnings (loss)
 before extraordinary
 items .64 (1.15) 2.87 .99
 Net earnings (loss) .64 (1.19) 2.87 .83
 FIRSTFED MICHIGAN CORPORATION
 Consolidated Statements of Financial Condition
 Dec. 31, 1991 Dec. 31, 1990
 (in thousands)
 Assets
 Cash $ 51,728 55,005
 Federal funds sold and other 3,487 60,000
 Investment securities:
 U.S. government and
 agency securities 265,241 407,127
 Collateralized mortgage
 obligations 606,103 915,473
 Corporate notes and
 commercial paper 211,248 317,421
 Other 64,106 25,100
 Total investment
 securities (market
 value $1,162,721-1991,
 $1,654,653-1990) 1,146,698 1,665,121
 Investment securities held
 for sale (market value
 $143,132-1991, $724,800-1990) 136,106 724,800
 Mortgage-backed securities
 (market value $4,172,881-1991,
 $3,746,807-1990) 4,001,756 3,713,177
 Mortgage-backed securities
 held for sale (market value
 $157,069-1991, $249,686-1990) 145,722 243,657
 Loans receivable:
 Real estate loans 3,356,549 3,614,378
 Other loans 172,362 198,572
 Total loans receivable 3,528,911 3,812,950
 Real estate loans receivable
 held for sale
 (market value $10,394-1991) 10,394 ---
 Accrued interest receivable 79,722 92,903
 Real estate 15,127 16,907
 Premises and equipment 54,717 60,249
 Federal Home Loan Bank stock,
 at cost 114,504 114,204
 Goodwill 52,679 56,399
 Federal income taxes refundable 19,534 7,841
 Other assets 54,095 52,551
 $9,415,180 10,675,764
 Liabilities and
 Stockholders' Equity
 Deposits:
 Checking accounts $ 228,400 213,343
 Money market accounts 331,825 311,389
 Regular accounts 499,708 468,115
 Certificate accounts 2,718,283 2,666,292
 Total deposits 3,778,216 3,659,139
 Advances from Federal
 Home Loan Bank 1,620,533 1,927,033
 Reverse repurchase agreements 2,993,353 3,963,793
 Other borrowings 216,716 236,788
 Accrued interest payable 164,117 249,236
 Advance payments by borrowers
 for taxes and insurance 31,433 31,115
 Liability for checks and
 money orders issued 62,210 80,928
 Other liabilities 75,764 87,419
 Total liabilities 8,942,342 10,235,451
 Stockholders' equity:
 Common stock, $.01 par value 111 111
 Paid-in capital 82,751 82,597
 Retained earnings 389,976 357,605
 Total stockholders' equity 472,838 440,313
 $9,415,180 10,675,764
 FIRSTFED MICHIGAN CORPORATION
 Statistical Data
 Dec. 31, 1991 Dec. 31, 1990
 (in thousands, except
 per share data)
 Book value per share $42.44 39.58
 Shares outstanding 11,141,701 11,125,124
 Weighted average yield on:
 Loans receivable 10.27 pct 10.40 pct
 Mortgage-backed securities 8.92 9.56
 Investments 7.52 8.40
 All interest-earning assets 9.23 9.58
 Weighted average cost of:
 Deposits 6.99 pct 7.60 pct
 FHLB advances 10.21 10.40
 Borrowings 9.14 9.11
 All interest-bearing liabilities 8.40 8.80
 Net yield on interest-earning assets 1.28 pct 1.25 pct
 Cumulative repricing gap as a percent
 of interest-earning assets:
 Six month 11.00 pct 7.00 pct
 One year 14.00 2.00
 Five year 3.00 (3.00)
 Nonperforming assets $35,331 31,388
 Nonperforming and restructured
 assets 72,530 31,388
 Allowance for losses on loans 26,728 23,052
 Three Months Ended Year Ended
 Dec. 31, Dec. 31,
 1991 1990 1991 1990
 Return on average
 assets (annualized) .32 pct (.48) pct .34 pct .08 pct
 Return on average
 equity (annualized) 6.47 (11.68) 7.47 2.06
 Average equity to
 average assets 5.00 4.11 4.60 3.96
 Weighted average
 yield on:
 Loans receivable 10.28 pct 10.37 pct 10.36 pct 10.30 pct
 Mortgage-backed
 securities 8.76 9.55 9.10 9.55
 Investments 7.87 7.92 7.95 7.69
 All interest-earning
 assets 9.22 9.45 9.37 9.41
 Weighted average
 cost of:
 Deposits 7.05 pct 7.80 pct 7.27 pct 8.08 pct
 FHLB advances 10.30 10.41 10.42 10.29
 Borrowings 9.13 9.35 9.41 8.97
 All interest-bearing
 liabilities 8.44 8.98 8.76 8.89
 Net yield on
 interest-earning assets 1.23 pct .92 pct 1.06 pct .93 pct
 Average interest-earning
 assets $9,106 10,709 9,620 10,970
 (in millions)
 -0- 1/16/92
 /CONTACT: Ellen L. Batkie of First Federal of Michigan, 313-965-1400, Ext. 2386/
 (FFOM) CO: FirstFed Michigan Corporation ST: Michigan IN: FIN SU: ERN


SM-JG -- DE026 -- 0730 01/16/92 17:04 EST
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Date:Jan 16, 1992
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