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FIRSTFED REPORTS THIRD QUARTER EARNINGS FOR 1993

 SANTA MONICA, Calif., Oct. 25 /PRNewswire/ -- FirstFed Financial Corp. (NYSE: FED), holding company of First Federal Bank of California, today reported third quarter net earnings of $3.6 million, or $0.34 per share, of common stock. This compares to net earnings of $703,000, or $0.06 per share, for the third quarter of 1992 and net earnings of $8.3 million, or $0.78 per share, for the second quarter of 1993. The decrease in quarterly net earnings from the second quarter of 1993 was primarily due to an increase in loan loss provisions.
 "The third quarter earnings are directly attributable to the bank's successful effort in reducing non-performing assets, as management continued to liquidate problem assets in spite of the weak Southern California real estate market. This weak market resulted in the bank establishing higher than expected reserves in order to close these real estate sales," said William S. Mortensen, chairman and chief executive officer. Mortensen continued, "The bank's ability to reduce its non- performing assets ratio from 4.14 percent in the prior quarter to 3.47 percent as of Sept. 30, 1993, indicates the progress the bank is making in reducing the burden that these assets place on the bank."
 The company recorded a net loss of $4.4 million, or $0.42 per share, for the first nine months of 1993, compared to net earnings of $15.4 million, or $1.42 per share, for the first nine months of 1992. Results for the first nine months of the year were impacted by a $16.4 million loss recorded during the first quarter when a large provision for loan losses was recorded to increase the overall level of general valuation allowances. Core earnings have remained strong throughout 1992 and 1993, and for the first nine months of 1993 were $47.7 million.
 General valuation allowances increased to 1.50 percent of total loans with loss exposure at the end of the third quarter from 0.95 percent at the same time last year. At Sept. 30, 1993, the general valuation allowance was $46.9 million, compared to $52.5 million at the end of the second quarter; this decrease is consistent with the reduction in non-performing assets. Non-performing assets dropped to 3.47 percent of total assets at the end of the third quarter from 4.14 percent of total assets at the end of the previous quarter. The lower level of non-performing assets resulted from a decrease in loans delinquent more than 90 days at the end of the third quarter and the sale of real estate. The non-performing assets ratio at the end of the third quarter of 1992 was 2.76 percent.
 Provisions for loan losses fluctuate based on loan charge-off experience and amounts deemed necessary to cover anticipated loan losses in the future. Charge-offs (including transfers to specific reserves) during the third quarter of 1993 increased to $17.3 million from $8.7 million in the second quarter of 1993 and $9.2 million in the third quarter of 1992. Charge-offs have increased due to further deterioration in the Southern California real estate market. Total charge-offs for the first nine months of 1993 were $38.5 million, compared with $18.6 million for the first nine months of 1992.
 As noted, the bank aggressively marketed foreclosed properties held for sale in order to return its assets to interest-earning status. $34.2 million in real estate was sold during the third quarter of 1993, compared with sales of $22.9 million during the second quarter of 1993 and sales of $26.6 million during the third quarter of the prior year. On a year-to-date basis, $67.9 million in real estate was sold during the first nine months of 1993, compared with $50.2 million during the first nine months of 1992.
 Net interest income for the third quarter of 1993 was slightly higher than the third quarter of 1992 primarily due to an accounting adjustment. The interest rate margin was 2.99 percent, compared to 2.80 percent for the same quarter last year. Net interest income decreased for the first nine months of 1993, compared to the same period of the prior year due to higher levels of non-performing assets. The interest rate margin for the first nine months of 1993 fell to 2.79 percent from 2.98 percent for the same period last year.
 The continuing availability of fixed-rate loans at low interest rates impacted the bank's level of loan originations, which decreased 20 percent during the third quarter of 1993, compared to the third quarter of 1992. It is management's belief that only with a high level of adjustable loans can a financial institution remain viable in a changing interest rate environment. At Sept. 30, 1993, adjustable rate loans comprised 98 percent of the bank's portfolio.
 However, to accommodate current market demands, take advantage of the bank's loan origination capabilities and generate loan servicing income, a major new mortgage banking program was introduced early in the fourth quarter of 1993. The marriage of mortgage banking and portfolio products offers a substantial marketing advantage to the bank, and it is anticipated that loan origination volume will increase in the months ahead.
 Savings deposits at the end of the third quarter increased 13 percent from the level one year ago due primarily to deposits acquired through national brokerage firms. The bank enters into brokered deposit arrangements pursuant to a waiver obtained from the FDIC. The bank exceeded all regulatory capital ratios at the end of the third quarter. The risk-based capital ratio increased to 9.92 percent at the end of third quarter of 1993 from 9.47 percent at the end of the second quarter of 1993 and 9.51 percent at the end of the third quarter of last year. The tangible and core capital ratios were both 5.43 percent at the end of the third quarter.
 Regarding the third quarter results, Mortensen stated, "The bank continues to enjoy strong core earnings while continuing its progress toward reducing non-performing assets." He further stated, "With the creation of the mortgage banking unit, the bank should be able to more effectively compete with other lending institutions in Southern California and increase the volume of new loans originated."
 Key financial results are highlighted below.
 FIRSTFED FINANCIAL CORP.
 Financial Summary
 Three Months Ended Sept. 30,
 1993 1992
 Net earnings (loss) $3,629,000 $703,000
 Earnings per share:
 Primary $0.34 $0.06
 Fully diluted $0.34 $0.06
 Book value per share $19.37 $19.48
 Weighted average shares
 outstanding:
 Primary 10,660,168 10,862,049
 Fully diluted 10,666,384 10,865,412
 Assets $3,655,587,000 $3,176,822,000
 Loans $3,297,034,000 $3,128,260,000
 Deposits $2,126,385,000 $1,873,922,000
 Borrowings $1,278,141,000 $1,342,591,000
 Stockholders'
 equity $203,263,000 $202,345,000
 Loan originations $167,000,000 $209,922,000
 Net interest income $26,289,000 $24,882,000
 Non-performing assets
 to total assets 3.47 pct 2.76 pct
 Net worth to assets ratio 5.56 pct 5.81 pct
 Tangible capital ratio 5.43 pct 5.65 pct
 Core capital ratio 5.43 pct 5.76 pct
 Risk-based capital ratio 9.92 pct 9.51 pct
 Interest rate spread
 during the period 2.99 pct 2.80 pct
 Percent adjustable
 mortgages 98.25 pct 97.02 pct
 Expense ratios:
 Percent gross income 18.52 pct 18.25 pct
 Percent average assets 1.26 pct 1.39 pct
 One year "Gap" percent
 of assets 13.11 pct 11.50 pct
 Return on assets 0.40 pct 0.08 pct
 Return on equity 7.21 pct 1.39 pct
 Nine Months Ended Sept. 30,
 1993 1992
 Net earnings (loss) ($4,445,000) $15,449,000
 Earnings per share:
 Primary ($0.42) $1.42
 Fully diluted ($0.42) $1.42
 Book value per share $19.37 $19.48
 Weighted average
 shares outstanding:
 Primary 10,673,832 10,912,514
 Fully diluted 10,669,049 10,912,522
 Assets $3,655,587,000 $3,483,822,000
 Loans $3,297,034,000 $3,176,075,000
 Deposits $2,126,385,000 $1,873,922,000
 Borrowings $1,278,141,000 $1,342,591,000
 Stockholders'
 equity $203,263,000 $202,345,000
 Loan originations $539,338,000 $630,802,000
 Net interest income $74,946,000 $78,990,000
 Non-performing assets
 to total assets 3.47 pct 2.76 pct
 Net worth to assets ratio 5.56 pct 5.81 pct
 Tangible capital ratio 5.53 pct 5.65 pct
 Core capital ratio 5.53 pct 5.76 pct
 Risk-based capital ratio 9.92 pct 9.51 pct
 Interest rate spread
 during the period 2.79 pct 2.98 pct
 Percent adjustable
 mortgages 98.25 pct 97.02 pct
 Expense ratios:
 Percent gross income 18.73 pct 16.94 pct
 Percent average assets 1.28 pct 1.38 pct
 One year "Gap" percent
 of assets 13.11 pct 11.50 pct
 Return on assets (0.17)pct 0.61 pct
 Return on equity (2.89)pct 10.50 pct
 FIRSTFED FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Financial Condition
 (In thousands)
 Sept. 30, Dec. 31,
 1993 1992
 (Unaudited)
 Assets
 Cash and cash
 equivalents $83,513 $23,985
 U.S. Government and
 other securities,
 at cost (market of
 $109,470 and $44,059) 108,267 43,736
 Loans receivable 2,578,987 2,461,766
 Mortgage-backed
 securities (market of
 $719,451 and $706,827) 705,285 693,072
 Loans and mortgage-
 backed securities held
 for sale (market of
 $12,976 and $92,899) 12,762 91,558
 Accrued interest and
 dividends receivable 22,039 23,016
 Real estate (insubstance
 foreclosures of $35,882
 and $19,459) 76,645 43,702
 Office properties and
 equipment, net 9,070 9,520
 Investment in Federal Home
 Loan Bank stock, at cost 38,603 35,542
 Other assets 20,416 20,676
 Total $3,655,587 $3,446,573
 Liabilities
 Deposits $2,126,385 $1,982,745
 Federal Home Loan
 Bank advances and
 other borrowings 665,000 705,150
 Securities sold under
 agreements to
 repurchase 613,141 491,091
 Income taxes payable 13,046 17,783
 Accrued expenses and
 other liabilities 34,752 42,293
 Total 3,452,324 3,239,062
 Contingent Liabilities
 Stockholders' Equity
 Common stock, par value,
 $.01 per share;
 authorized 25,000,000
 shares; issued
 11,288,777 and
 11,180,221 shares,
 outstanding 10,492,257
 and 10,383,701 shares 113 112
 Additional capital 24,817 24,524
 Retained earnings --
 substantially
 restricted 191,253 195,698
 Loan to employee stock
 ownership plan (3,088) (2,991)
 Treasury stock, at cost,
 796,520 shares (9,832) (9,832)
 Subtotal 203,263 207,511
 Total $3,655,587 $3,446,573
 FIRSTFED FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Operations
 (Unaudited)
 (In thousands)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Interest income:
 Interest on loans $56,680 $60,261 $167,476 $190,404
 Interest and
 dividends on
 investments 2,195 1,386 6,172 5,027
 Total interest
 income 58,875 61,647 173,648 195,431
 Interest expense:
 Interest on deposits 19,253 21,343 57,350 67,567
 Interest on
 borrowings 13,333 15,422 41,352 48,874
 Total interest
 expense 32,586 36,765 98,702 116,441
 Net interest income 26,289 24,882 74,946 78,990
 Provision for loan
 losses 11,590 18,098 57,562 34,661
 Net interest income
 after provision for
 loan losses 14,699 6,784 17,384 44,329
 Other income (expense):
 Loan and other fees 1,518 1,405 4,859 4,425
 Gain on sale of loans
 and mortgage-backed
 securities 1,103 615 4,005 1,764
 Real estate
 operations, net (141) 1,250 (457) 2,431
 Other operating income 484 807 1,298 1,700
 Total other income 2,964 4,077 9,705 10,320
 Non-interest expense 11,453 11,993 34,350 34,863
 Earnings (loss) before
 income tax provision and
 cumulative effect of
 change in accounting
 principle 6,210 (1,132) (7,261) 19,786
 Income tax provision
 (benefits) 2,581 (1,835) (2,816) 7,412
 Earnings (loss) before
 cumulative effect of
 change in accounting
 principle 3,629 703 (4,445) 12,374
 Cumulative effect of
 change in accounting
 principle --- --- --- 3,075
 Net earnings (loss) $3,629 $703 ($4,445) $15,449
 Earnings (loss)
 per share $0.34 $0.06 ($0.42) $1.42
 -0- 10/25/93
 /CONTACT: Martin Gottleib, executive VP of FirstFed Financial, 310-319-6000/
 (FED)


CO: FirstFed Financial Corp. ST: California IN: FIN SU: ERN

LM-JL -- LA020 -- 6128 10/25/93 08:35 EDT
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Date:Oct 25, 1993
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