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FIRSTFED MICHIGAN REPORTS 73 PERCENT INCREASE IN CORE EARNINGS

 DETROIT, October 20, 1993 /PRNewswire/ -- FirstFed Michigan Corporation (NASDAQ-NMS: FFOM), the holding company of First Federal of Michigan, today reported net earnings for the quarter ended September 30, 1993, of $9.2 million or $.49 per primary share ($.48 fully diluted). These results are after a $4.9 million write-off associated with the upcoming sale of First Federal's three branches in South Carolina. Without this nonrecurring charge, the third quarter net earnings would have been $14.1 million, or $.74 per share (primary and fully diluted). In the same quarter last year, FirstFed reported net earnings of $8.5 million, or $.50 per share ($.47 fully diluted). All per share amounts have been adjusted to reflect the 3-for-2 stock split distributed September 20, 1993.
 "The real news this quarter was in the continued strength of our core earnings," commented FirstFed Chairman C. Gene Harling. "Core earnings, or earnings before taxes excluding gains and losses on sales, were $17.0 million in the third quarter of 1993, up 73 percent over the $9.9 million reported in the third quarter of 1992. Core earnings for the year to date were $49.9 million, double the $24.5 million reported for the first three quarters last year.
 "We view the sale of the South Carolina branches, expected to be completed by year end, as another positive development during the quarter," Mr. Harling continued. "While this resulted in a one-time non-cash charge to earnings, it will not affect our regulatory capital. Additionally, the sale will benefit future operating earnings by approximately $1.4 million per year through the elimination of the goodwill amortization and the operating expenses associated with the branches."
 Net earnings for the nine months ended September 30, 1993, were $31.2 million, or $1.67 per share ($1.65 fully diluted). For the same period in 1992, net earnings, before the cumulative effect of a change in accounting for income taxes, were $25.1 million ($1.40 per fully diluted share). Again, per share amounts have been adjusted for the stock split.
 Stockholders' equity was $556 million at September 30, 1993, up from $508 million at the end of 1992. Tangible equity (stockholders' equity less goodwill) reached a new high of 5.52 percent of total assets at the end of the quarter, compared to 4.96 percent at December 31, 1992.
 The company originated mortgage loans totaling $239 million during the third quarter of 1993 and $764 million in the year to date, compared with $296 million and $873 million, respectively, in the same periods last year. Origination activity continued to reflect the high level of refinancings as borrowers responded to the low interest rate environment. Principal repayments in the combined loan and mortgage- backed securities portfolios were $730 million in the third quarter 1993 and $1.9 billion year to date, compared to $526 million and $1.8 billion, respectively, for the same periods in 1992. The 1993 year-to-date origination and repayment figures exclude approximately $50 million in loans where borrowers took advantage of First Federal's new interest rate modification program.
 In the present interest rate environment, it is the company's policy to securitize and sell its current conforming 20- to 30-year fixed-rate retail loan production. This sale activity generated gains of $3.7 million in 1993's third quarter and $3.9 million year to date.
 The company's First Federal of Michigan subsidiary is a Detroit- based savings and loan association with 68 offices in the lower peninsula of Michigan. Its retail profile includes over 315,000 retail deposit accounts and 85,000 loan customers. First Federal's Bay Savings Bank, FSB subsidiary, based in Newport News, Virginia, operates eight offices in i?a and, currently, three offices in Columbia, South Carolina.
 FIRSTFED MICHIGAN CORPORATION
 Consolidated Statements of Operations
 Three Months Ended Nine Months Ended
 September 30, September 30,
 1993 1992 1993 1992
 (in thousands, except per share data)
 Interest income:
 Loans $80,999 85,483 249,446 264,344
 MBS 90,470 96,082 275,421 284,078
 Investments 8,353 12,470 28,193 46,500
 Total interest
 income 179,822 194,035 553,060 594,922
 Interest expense:
 Deposits 49,187 61,189 151,376 190,691
 FHLB advances 27,956 35,650 94,125 114,916
 Borrowings 67,100 69,148 201,060 209,623
 Total interest
 expense 144,243 165,987 446,561 515,230
 Net interest
 income 35,579 28,048 106,499 79,692
 Pov for losses 750 1,500 2,250 4,500
 Net int inc
 after prov
 for losses 34,829 26,548 104,249 75,192
 Other income (expense):
 Loan fees and
 srv chgs 475 441 1,009 1,309
 Other operating
 income 2,042 2,083 5,721 5,934
 Net gains (losses)
 on invest secs
 and other (a) (4,384) -- (3,919) 7,032
 Net gains on
 lns and MBS 3,734 2,545 3,912 7,011
 Real estate
 operations 225 248 (680) 661
 Total other
 income 2,092 5,317 6,043 21,947
 Genl and admin exps:
 Comp/benefits 10,574 9,802 31,308 29,831
 Office occup 2,092 2,092 6,271 6,338
 Fed dep insur 2,475 2,118 5,661 6,339
 Other 4,590 4,608 14,725 13,646
 Amortization of
 goodwill 802 824 2,406 2,473
 Total genl and
 admin exps 20,533 19,444 60,371 58,627
 Earn before FIT
 and cum eff of
 acctg chng 16,388 12,421 49,921 38,512
 Fed inc taxes(a) 7,210 3,960 18,715 13,395
 Earn before
 cum eff of
 acctg chng 9,178 8,461 31,206 25,117
 Cum eff of chng
 in acctg for
 income taxes -- -- -- 7,000
 Net 32,117
 earnings (a) $9,178 8,461 31,206
 Earnings per share(b):
 Primary (c):
 Earn before cum
 eff of acctg
 change $.49 .50 1.67 1.49
 Cum eff of acctg
 change -- -- -- .41
 Net earnings .49 .50 1.67 1.90
 Fully diluted:
 Earn before cum
 eff of acctg
 change .48 .47 1.65 1.40
 Cum eff of acctg
 change -- -- -- .37
 Net earnings .48 .47 1.65 1.77
 Div per share(b) .12 .11 .35 .31
 (a) 1993 results include a $4.9 million ($.26 per share)
 after-tax nonrecurring charge, recognized in the third
 quarter, associated with a three-branch sale.
 (b) Prior period data has been adjusted to reflect
 the 3-for-2 stock split in the third quarter of 1993.
 (c) 1993 reflects a 1.2 million increase in shares
 outstanding (1.8 million after the stock split) due to the
 conversion of convertible debt during the first quarter
 of 1993; these shares were previously included only in the
 computation of fully diluted earnings per share.
 FIRSTFED MICHIGAN CORPORATION
 Consolidated Statements of Financial Condition
 Sept 30, Dec 31, Sept 30,
 1993 1992 1992
 (in thousands)
 Assets
 Cash $50,158 46,460 48,388
 Federal funds sold
 and other 12,000 -- 7,400
 Investment securities:
 U.S. govt and
 agency sec 269,056 269,070 267,137
 Corp notes and
 comml paper 42,819 136,354 180,020
 CMOs -- 95,048 216,489
 Other 112 52,110 108
 Tot invest sec
 (fair value
 $337,886 - 9/30/93) 311,987 552,582 663,754
 MBS (fair value
 $5,352,607
 - 9/30/93) 5,207,366 4,749,085 4,801,733
 MBS held for
 sale -- -- 6,252
 Loans receivable:
 Real estate lns 3,383,377 3,517,861 3,435,010
 Other loans 123,187 143,372 149,937
 Tot lns rec 3,506,564 3,661,233 3,584,947
 Real est lns rec
 held for sale 34,425 -- --
 Accd int receiv 58,993 64,920 62,447
 Real estate held
 for sale 16,072 17,571 17,402
 Premises/equip 48,484 50,669 51,469
 FHLB stock,
 at cost 114,504 114,504 114,504
 Goodwill 35,969 44,058 45,444
 Fedl inc taxes
 refundable 27,993 32,797 30,556
 Other assets 41,608 65,472 52,213
 $9,466,123 9,399,351 9,486,509
 Liabilities and
 Stockholders' Equity
 Deposits:
 Check accts $258,963 277,993 240,729
 Mny mrkt accts 375,601 358,278 348,646
 Reg accts 577,249 551,773 532,614
 Retail CDs 1,378,667 1,411,756 1,523,274
 Brokered CDs 682,958 845,422 921,970
 Tot deposits 3,273,438 3,445,222 3,567,233
 FHLB advances 1,891,200 1,914,033 1,728,533
 Reverse repurchase
 agreements 3,396,888 3,032,025 3,165,023
 Other borrowings 113,184 227,759 224,881
 Accd int pay 100,315 131,528 111,376
 Adv pay by borr
 for taxes and
 insurance 61,290 35,550 64,576
 Liab for chks
 and mny ord issued 21,488 59,832 37,061
 Other liab 52,004 45,670 87,770
 Total liab 8,909,807 8,891,619 8,986,453
 Stockholders' equity(a):
 Common stock 186 168 167
 Pd-in capital 107,020 83,210 82,926
 Retd earnings 449,110 424,354 416,963
 Tot stckhldrs' equity 556,316 507,732 500,056
 $9,466,123 9,399,351 9,486,509
 (a) Prior period data has been adjusted to reflect the
 3-for-2 stock split in the third quarter of 1993.
 FIRSTFED MICHIGAN CORPORATION
 Selected Statistical Data
 Sept 30, Dec 31, Sept 30,
 1993 1992 1992
 (dollars in thousands, except per share data)
 Consolidated equity
 ratio (pct) 5.88 5.40 5.27
 Tangible equity
 to assets (pct) 5.52 4.96 4.82
 Book value per
 share (a)(b) $29.87 30.25 29.87
 Tangible book value
 per share (a)(b) 27.94 27.62 27.16
 Shares O/S (a)(b) 18,621,884 16,786,050 16,740,605
 Reg cap ratios (pct):
 Tang capital 5.41 4.83 4.68
 Core capital 5.79 5.30 5.16
 Risk-based
 capital 16.24 14.85 14.39
 Nonperforming and
 restructured assets:
 Nonacc lns $16,956 21,300 18,095
 Forcl real est 15,547 16,663 16,377
 Total NPAs 32,503 37,963 34,472
 Restruct lns 21,924 25,670 41,344
 Total NPAs and
 restruct lns $54,427 63,633 75,816
 As a percent
 of total
 assets .57 .68 .80
 Allowance for losses
 on loans $30,322 30,197 29,239
 Employees (fte) 1,217 1,285 1,295
 Full serv branches 79 82 82
 Three Months Ended Nine Months Ended
 September 30, September 30,
 1993 1992 1993 1992
 ROAA (ann)
 (c) (pct) .38 .36 .43 .43
 ROAE (ann)
 (c) (pct) 6.63 6.83 7.75 8.30
 Avg equity to avg
 assets (pct) 5.77 5.20 5.58 5.14
 Average shares (a)(b):
 Primary 18,921,612 16,911,572 18,858,390 16,883,340
 Fully diluted 19,011,132 18,707,663 19,003,677 18,698,409
 (a) 1993 primary reflects an increase in shares outstanding
 of 1.2 million (1.8 million after the stock split) and
 stockholders' equity of $23.4 million due to the conversion
 of convertible debt during the first quarter of 1993.
 (b) Prior period data has been adjusted to reflect the
 3-for-2 stock split in the third quarter of 1993.
 (c) The cumulative effect of the change in accounting for
 income taxes of $7 million, recognized in the first quarter
 of 1992, has not been annualized.
 FIRSTFED MICHIGAN CORPORATION
 Yields and Costs Data During and at End of Period
 Three Months Ended Nine Months Ended
 YIELDS AND COSTS September 30, September 30,
 DURING PERIOD 1993 1992 1993 1992
 Weighted average
 yield (pct):
 Lns receiv 8.93 9.55 9.04 9.84
 MBS 7.01 7.97 7.25 8.21
 Inv secur 6.92 6.16 6.77 6.43
 All interest-earning
 assets 7.76 8.43 7.93 8.66
 Weighted average
 cost (pct):
 Deposits 5.84 6.57 5.96 6.81
 FHLB advances 6.00 8.94 6.51 9.61
 Other borrow 7.49 8.24 7.75 8.36
 All interest-bearing
 liabilities 6.54 7.65 6.79 7.92
 Net yield on
 interest-earning
 assets (a) 1.59 1.22 1.51 1.16
 Avg int-earn
 assets (in mil) $9,269 9,210 9,299 9,161
 YIELD AND COSTS AT Sept 30, Dec 31, Sept 30,
 END OF PERIOD 1993 1992 1992
 Weighted average
 yield (pct):
 Lns receiv 8.87 9.32 9.52
 MBS 7.01 7.73 8.00
 Inv secur 7.04 6.72 6.18
 All int-earn assets 7.74 8.31 8.44
 Weighted average
 cost (pct):
 Deposits 5.84 6.19 6.39
 FHLB advances 5.81 7.36 7.94
 Other borrowings 7.55 8.16 8.16
 All int-bear liab 6.53 7.19 7.39
 Net yield on
 int-earn assets (a) 1.60 1.50 1.47
 Interest-earning
 assets (in millions) $9,229 9,115 9,218
 (a) The yields and costs include the annualized effect of the
 interest rate exchange positions and interest rate collar
 transactions.
 FIRSTFED MICHIGAN CORPORATION
 Selected Statistical Data on Lending Portfolio
 Sept 30, Dec 31, Sept 30,
 1993 1992 1992
 (dollars in thousands)
 LOAN AND MBS PORTFOLIO
 By type of security:
 Single family $8,185,420 7,796,689 7,761,285
 Pct of total 94 93 92
 Multifamily 325,702 340,560 349,073
 Pct of total 4 4 4
 Other commercial 114,046 129,697 132,637
 Pct of total 1 1 2
 Other loans 123,187 143,372 149,937
 Pct of total 1 2 2
 Tot ln and
 MBS port $8,748,355 8,410,318 8,392,932
 By type of loan
 (percent of total):
 10-15 yr, fixed 64 55 52
 20-30 yr, fixed 15 18 19
 Adjustable rate 21 27 29
 Three Months Ended Nine Months Ended
 September 30, September 30,
 1993 1992 1993 1992
 (dollars in thousands)
 ACTIVITY IN LOAN AND MBS PORTFOLIO
 Mortgage loan
 originations:
 10-15 yr,fixed $121,325 155,557 432,312 448,983
 Pct of total 51 52 57 51
 20-30 yr,fixed 82,110 111,144 240,415 338,433
 Pct of total 34 38 31 39
 Adjustable 35,263 29,248 91,478 85,947
 Pct of total 15 10 12 10
 Total
 origin-
 ations $238,698 295,949 764,205 873,363
 Purchases:
 MBS $477,022 380,694 1,663,768 1,836,658
 Lns receiv 429 871 2,126 871
 Total purch 477,451 381,565 1,665,894 1,837,529
 Loans exchanged
 for MBS $115,421 -- 115,421 --
 Repayments:
 MBS $478,114 305,106 1,199,006 1,059,009
 Lns receiv 251,678 220,520 723,718 740,357
 Total repay $729,792 525,626 1,922,724 1,799,366
 Sales proceeds:
 MBS $118,667 21,001 118,667 122,776
 Lns receiv 9,067 10,309 21,012 49,970
 Total sales
 proceeds $127,734 31,310 139,679 172,746
 Loan origination
 fees deferred $6,322 7,067 17,309 20,546
 Loan orig costs
 capitalized $1,888 2,214 5,744 6,621
 FIRSTFED MICHIGAN CORPORATION
 Selected Maturity Data Through 1995
 September 30, 1993
 Fixed- Interest
 Retail Brokered Rate Rate
 Cert- Cert- FHLB Exchange
 Maturing In ificates ificates Advances Agreements (a)
 (dollars in millions)
 1993:
 Fourth quarter $479 $327 $75 $200 (b)
 Wght avg rate (pct):
 paid 3.45 4.63 12.31 4.56
 recd 3.25
 1994:
 First quarter $350 $239 -- $400 (b)
 Wght avg rate (pct):
 paid 3.65 4.78 -- 4.52
 recd 3.23
 Second quarter $146 $41 -- --
 Wght avg rate (pct):
 paid 4.23 6.23 -- --
 Third quarter $111 $10 $60 $50 (c)
 Wght avg rate (pct):
 paid 4.30 8.79 8.61 12.42
 recd 2.52
 Fourth quarter $47 $28 -- $100 (b)
 Wght avg rate (pct):
 paid 5.08 8.61 -- 4.52
 recd 3.25
 1995:
 First quarter $53 $38 $25 $85 (c)
 Wght avg rate (pct):
 paid 5.47 8.79 11.78 11.89
 recd 3.45
 Second quarter $43 -- -- 185 (c)
 Wght avg rate (pct):
 paid 5.00 -- -- 11.29
 recd 3.46
 Third quarter $30 -- $272 $350 (c)
 Wght avg rate (pct):
 paid 4.59 -- 10.32 9.98
 recd 3.39
 Fourth quarter $21 -- -- $536 (c)
 Wght avg rate (pct):
 paid 5.29 -- -- 10.28
 recd 3.46
 Total $1,280 $683 $432 $1,906
 Wght avg rate (pct):
 paid 3.92 5.25 10.51 8.34
 recd 3.34
 (a) Weighted average rates disclosed for interest rate exchange
 agreements are the rates in effect at September 30, 1993.
 (b) FirstFed is committed to pay interest at variable rates
 based upon COFI and receive interest at variable rates based
 upon LIBOR.
 (c) FirstFed is committed to pay interest at fixed rates and
 receive interest at variable rates based upon LIBOR.
 -0- 10/20/93
 /CONTACT: Ellen L. Batkie, Manager Investor Relations, of FirstFed Michigan Corporation, 313-965-5909/
 (FFOM)


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

SM -- DE024 -- 4643 10/20/93 14:01 EDT
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