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FIRSTFED MICHIGAN REPORTS 21 PERCENT INCREASE IN 4TH QTR AND 1992 EARNINGS

 DETROIT, January 20, 1993 /PRNewswire/ -- FirstFed Michigan Corporation (NASDAQ-NMS: FFOM), the holding company of First Federal of Michigan, today reported net earnings of $9.2 million for the quarter ended December 31, 1992, compared to $7.6 million for the same period last year, an increase of 21 percent. On a per share basis, net earnings were $.81 ($.76 fully diluted) for 1992, compared with $.68 ($.64 fully diluted) for 1991.
 Net earnings for the year were $41.3 million, up 21 percent from $34.0 million for 1991. Net earnings per share were $3.67 ($3.42 fully diluted) for the year ended December 31, 1992, compared with $3.05 ($2.87 fully diluted) a year ago. The current year earnings include $7 million in the first quarter from the cumulative effect of a change in accounting for income taxes.
 "1992 was a very successful year for FirstFed," commented FirstFed Chairman C. Gene Harling, "as evidenced by record core earnings for both the fourth quarter and the full year, together with the highest level of single-family residential mortgage production in our history. The improvement in core earnings was achieved primarily through a 9 percent increase in net interest income and a 13 percent decrease in operating costs."
 "Our net yield at the end of 1992 reached 1.50 percent of earning assets," Mr. Harling continued. "Assuming a continuation of the current interest rate environment, our net yield and resulting core earnings should benefit in 1993 from the repricing of a substantial amount of relatively high-cost liabilities. Additionally, we will continue to aggressively pursue the containment of operating costs, which were .81 percent of average assets in 1992."
 During 1993, $399 million of fixed-rate FHLB advances, with an average rate of 10.09 percent, mature in the first six months and $140 million, with a rate of 12.21 percent, mature in the last six months. There are also $1.7 billion of retail and brokered certificates of deposit maturing in 1993 which bear an average rate of 4.71 percent. The ultimate impact on net interest income resulting from the repricing of these liabilities in 1993 will be dependent upon the levels of interest rates and mortgage prepayment activity as well as FirstFed's asset size.
 First Federal of Michigan, the company's thrift subsidiary, maintains regulatory capital ratios in excess of the required levels. At December 31, 1992, the thrift reported a tangible ratio of 4.83 percent, a core ratio of 5.30 percent, and a risk-based ratio of 14.85 percent.
 The company originated mortgage loans totaling $390 million during the fourth quarter of 1992, compared with $249 million in the same period last year. Originations for the year established a new record of $1.26 billion in mortgage loans, compared with $734 million in 1991. Totals for the quarter and the year included $90 million and $280 million, respectively, from refinancings of existing First Federal loans, compared to $47 million and $92 million, respectively, for the same periods last year.
 FirstFed's portfolio of loans and mortgage-backed securities remains primarily single-family residential, with 93 percent in one-to-four family lending. Commercial real estate totaled $470 million, or 5 percent of the portfolio.
 At December 31, 1992, nonperforming and restructured assets were $63.6 million, or .68 percent of total assets. FirstFed's nonperforming asset levels remain substantially below the industry average. Loan loss reserves were $30.2 million at the end of the year, a level FirstFed believes provides adequate protection against currently estimated credit losses.
 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, Virginia, operates eight offices in Virginia, and its Omni Savings Bank, FSB subsidiary has three offices in Columbia, South Carolina.
 FIRSTFED MICHIGAN CORPORATION
 Consolidated Statements of Operations
 Three Months Ended Year Ended
 December 31, December 31,
 1992 1991 1992 1991
 (in thousands, except per share data)
 Interest income:
 Loans $ 86,478 91,642 350,822 379,467
 Mortgage-backed
 securities 92,410 91,859 376,488 382,416
 Investments 11,252 26,450 57,752 139,432
 Total interest
 income.......... 190,140 209,951 785,062 901,315
 Interest expense:
 Deposits 54,452 66,226 245,143 266,483
 FHLB advances 35,256 42,017 150,172 191,271
 Other borrowings 69,143 73,660 278,766 341,481
 Total interest
 expense......... 158,851 181,903 674,081 799,235
 Net interest
 income.......... 31,289 28,048 110,981 102,080
 Provision for losses 1,500 1,492 6,000 7,225
 Net interest
 income after
 provision for
 losses.......... 29,789 26,556 104,981 94,855
 Other income (expense):
 Loan fees and
 service charges 330 535 1,639 9,425
 Other operating
 income 1,655 2,200 7,589 12,303
 Net gains on
 investment
 securities - 145 7,032 6,019
 Net gains on loans
 and mortgage-backed
 securities 789 3,634 7,800 21,760
 Real estate
 operations 240 25 901 (863)
 Total other
 income.......... 3,014 6,539 24,961 48,644
 General and administrative expenses:
 Compensation and
 employee benefits 9,826 10,367 39,657 45,148
 Office occupancy 2,087 2,104 8,425 8,752
 Federal deposit
 insurance 2,118 2,035 8,457 8,283
 Other 3,917 5,822 17,563 22,950
 Amortization of
 goodwill 770 930 3,243 3,720
 Total general and
 administrative
 expenses........ 18,718 21,258 77,345 88,853
 Earnings before
 federal income
 taxes, extra-
 ordinary items and
 cumulative effect
 of accounting
 change.......... 14,085 11,837 52,597 54,646
 Federal income taxes 4,905 4,210 18,300 20,540
 Earnings before
 extraordinary items
 and cumulative
 effect of
 accounting
 change.......... 9,180 7,627 34,297 34,106
 Extraordinary items,
 net of federal
 income tax effect - (33) - (66)
 Cumulative effect of
 change in accounting
 for income taxes - - 7,000 -
 Net earnings.....$ 9,180 7,594 41,297 34,040
 Net earnings per share:
 Primary:
 Earnings before
 extraordinary items
 and cumulative
 effect of
 accounting change $.81 .68 3.05 3.05
 Extraordinary items - - - -
 Cumulative effect of
 accounting change - - .62 -
 Net earnings .81 .68 3.67 3.05
 Fully diluted:
 Earnings before
 extraordinary items
 and cumulative
 effect of
 accounting change .76 .64 2.86 2.87
 Extraordinary items - - - -
 Cumulative effect of
 accounting change - - .56 -
 Net earnings .76 .64 3.42 2.87
 FIRSTFED MICHIGAN CORPORATION
 Consolidated Statements of Financial Condition
 December 31, December 31,
 1992 1991
 (in thousands)
 Assets
 Cash $ 46,460 51,728
 Federal funds sold and other - 3,487
 Investment securities:
 U.S. government and agency
 securities 269,070 265,241
 Collateralized mortgage
 obligations 95,048 606,103
 Corporate notes and
 commercial paper 136,354 211,248
 Other 52,110 64,106
 Total investment
 securities (fair
 value $568,365-
 1992, $1,162,721
 -1991)......... 552,582 1,146,698
 Investment securities held
 for sale (fair value
 $143,132) - 136,106
 Mortgage-backed securities
 (fair value $4,866,921-1992,
 $4,172,881-1991) 4,749,085 4,001,756
 Mortgage-backed securities
 held for sale (fair value
 $157,069) - 145,722
 Loans receivable:
 Real estate loans 3,517,861 3,356,549
 Other loans 143,372 172,362
 Total loans
 receivable...... 3,661,233 3,528,911
 Real estate loans held for
 sale (market value $10,394) - 10,394
 Accrued interest receivable 64,920 79,722
 Real estate held for sale 17,571 15,127
 Premises and equipment 50,669 54,717
 Federal Home Loan Bank stock,
 at cost 114,504 114,504
 Goodwill 44,058 52,679
 Federal income taxes
 refundable 32,797 19,534
 Other assets 65,472 54,095
 Total Assets......... $9,399,351 9,415,180
 Liabilities and Stockholders' Equity
 Deposits:
 Checking accounts $ 277,993 228,400
 Money market accounts 358,278 331,825
 Regular accounts 551,773 499,708
 Certificate accounts 2,257,178 2,718,283
 Total deposits... 3,445,222 3,778,216
 Advances from Federal Home
 Loan Bank 1,914,033 1,620,533
 Reverse repurchase
 agreements 3,032,025 2,993,353
 Other borrowings 227,759 216,716
 Accrued interest payable 131,528 164,117
 Advance payments by borrowers
 for taxes and insurance 35,550 31,433
 Liability for checks and
 money orders issued 59,832 62,210
 Other liabilities 45,670 75,764
 Total
 liabilities..... 8,891,619 8,942,342
 Stockholders' equity:
 Common stock, $.01 par
 value 111 111
 Paid-in capital 83,267 82,751
 Retained earnings 424,354 389,976
 Total stockholders'
 equity 507,732 472,838
 Total Liabilities and
 Stockholders'
 Equity.............. $9,399,351 9,415,180
 FIRSTFED MICHIGAN CORPORATION
 Statistical Data
 December 31, December 31,
 1992 1991
 (dollars in thousands, except per share data)
 Book value per share $45.37 42.44
 Shares outstanding 11,190,700 11,141,701
 Weighted average yield on (percent):
 Loans receivable 9.32 10.27
 Mortgage-backed
 securities 7.73 8.92
 Investments 6.72 7.52
 All interest-earning
 assets............ 8.31 9.23
 Weighted average cost of (percent):
 Deposits 6.19 6.99
 FHLB advances 7.36 10.21
 Other borrowings 8.16 9.14
 All interest-bearing
 liabilities....... 7.19 8.40
 Net yield on interest-
 earning assets (a)
 (percent)........... 1.50 1.28
 Regulatory capital ratios (percent):
 Tangible capital 4.83 4.32
 Core capital 5.30 4.89
 Risk-based capital 14.85 13.16
 Nonperforming assets $37,963 35,331
 Nonperforming and
 restructured assets 63,633 72,530
 Allowance for losses on loans 30,197 26,728
 Three Months Ended Year Ended
 December 31, December 31,
 1992 1991 1992 1991
 Return on average assets
 (annualized) (percent) .38 .32 .43 .34
 Return on average
 equity (annualized) 7.28 6.47 8.40 7.47
 Average equity to
 average assets 5.28 5.00 5.17 4.60
 Weighted average yield on (percent):
 Loans receivable 9.41 10.28 9.73 10.36
 Mortgage-backed
 securities 7.68 8.76 8.07 9.10
 Investment securities 6.29 7.87 6.40 7.95
 All interest-earning
 assets............ 8.27 9.22 8.56 9.37
 Weighted average cost of (percent):
 Deposits 6.24 7.05 6.69 7.27
 FHLB advances 7.55 10.30 9.04 10.42
 Other borrowings 8.13 9.13 8.31 9.41
 All interest-bearing
 liabilities....... 7.25 8.44 7.76 8.76
 Net yield on interest-
 earning assets (a)
 (percent)........... 1.40 1.23 1.21 1.06
 Average interest-
 earning assets $9,200 9,106 9,171 9,620
 (in millions)
 (a) The yields and costs include the annualized effect of the interest rate exchange positions and interest rate collar transaction.
 -0- 1/20/93
 /CONTACT: Ellen L. Batkie, Manager Investor Relations FirstFed Michigan Corporation, 313-965-1400/
 (FFOM)


CO: FirstFed Michigan Corporation ST: Michigan IN: FIN SU: ERN

JG -- DE017 -- 6890 01/20/93 12:37 EST
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