Exhibit 99.1
For release: July 22, 2010 | For further information contact: |
| | Steven R. Lewis, President & CEO |
| | David W. Gifford, CFO |
| | (330) 373-1221 |
First Place Financial Corp. Reports Fourth Quarter Net Loss of $11.9 Million; Nonperforming
Loans Continue to Decrease
Highlights
| · | Net loss for the fourth quarter of fiscal 2010 was $11.9 million. After deducting preferred stock dividends and discount accretion, the loss attributable to common shareholders was $13.0 million. |
| · | First Place continued to aggressively address troubled assets in the commercial loan portfolio, contributing to a $14 million, or 12.3%, reduction in nonperforming loans and a ratio of nonperforming loans to total loans that declined to 4.20% from 4.72% a quarter earlier. |
| · | Capital remains strong as the total risk-based capital ratio at the Bank level was 12.91% at June 30, 2010, compared with 13.03% at March 31, 2010, and well above the 10.00% threshold required to be well capitalized for regulatory purposes. |
| · | The Company has filed with the SEC for withdrawal of its Form S-1 Registration Statement to sell additional common stock due to unfavorable market conditions. |
| · | First Place continues to effectively manage its deposit costs, resulting in an increase in the net interest margin to 3.73% from 3.70% in the prior quarter and 3.06% in the year-ago quarter. |
| · | The continuation of favorable long-term interest rates and the addition of experienced mortgage loan officers resulted in an increase in mortgage loan sales producing related gains of $6.1 million, up $2.3 million from the quarter ended June 30, 2009. |
Summary
Warren, Ohio – July 22, 2010 – First Place Financial Corp. (Nasdaq: FPFC) today reported a net loss of $11.9 million for the quarter ended June 30, 2010, compared with a net loss of $12.7 million for the quarter ended June 30, 2009. The improvement is attributable to increases of $3.9 million in net interest income and $2.9 million in noninterest income, coupled with a reduction of $0.6 million in the provision for loan losses. These items were partially offset by an increase of $1.5 million in noninterest expense and a decrease of $5.1 million in income tax benefits. Included in income taxes for the current quarter is a $4.1 million charge taken to increase the valuation allowance on deferred tax assets that are not being recognized at this time. In future periods, the Company anticipates it will have a minimal tax provision until such time as it is able to reverse the deferred tax asset allowance. After deducting preferred stock dividends and discount accretion of $1.1 million from the net loss of $11.9 million, the loss attributable to common shareholders for the quarter was $13.0 million. On a per common share basis, the loss for the current quarter was $0.78, compared with a loss of $0.83 for the same quarter in the prior year. Return on average assets and return on average equity for the current quarter were (1.49%) and (18.40%), respectively, compared with (1.52%) and (17.61%), respectively, for the year-ago quarter.
The net loss of $11.9 million for the quarter ended June 30, 2010, represents a reduction of $1.1 million from the net loss of $13.0 million for the quarter ended March 31, 2010. The reduction in net loss is due primarily to a decrease of $12.1 million in the provision for loan losses, offset in part by an increase of $5.9 million in noninterest expense and declines of $2.8 million in noninterest income and $2.7 million in income tax benefits. The loss per common share for the current quarter was $0.78, compared with a loss of $0.85 for the preceding quarter. Return on average assets and return on average equity for the current quarter were (1.49%) and (18.40%), respectively, compared with (1.64%) and (19.28%), respectively, for the preceding quarter.
For the fiscal year ended June 30, 2010, the Company reported a net loss of $30.3 million, compared with a net loss of $110.4 million for the fiscal year ended June 30, 2009. Results for the prior year include $93.7 million of goodwill impairment. Other factors contributing to the year-over-year change include a $43.6 million increase in the provision for loan losses, a $10.5 million increase in noninterest expense (excluding goodwill impairment), and a $4.6 million reduction in income tax benefits. These items were partially offset by increases of $26.9 million in noninterest income and $18.2 million in net interest income. After deducting preferred stock dividends and discount accretion of $4.3 million from the net loss of $30.3 million, the loss attributable to common shareholders was $34.6 million. On a per common share basis, the loss for the current fiscal year was $2.08, compared with a loss of $6.75 for the prior fiscal year. Return on average assets and return on average equity for the current fiscal year were (0.94%) and (11.10%), respectively, compared with (3.31%) and (38.62%), respectively, for the fiscal year ended June 30, 2009.
Core earnings, a supplementary financial measure computed using methods other than U. S. Generally Accepted Accounting Principles (“GAAP”), exclude certain unusual or nonrecurring revenue or expense items. There was no difference between net GAAP results and core results for the quarter ended June 30, 2010. For the quarter ended June 30, 2009, the core loss excludes merger, integration and restructuring charges of $16 thousand after tax. For the fiscal year ended June 30, 2010, the core loss excludes merger, integration and restructuring charges of $0.2 million after tax. For the prior fiscal year, the core loss excludes goodwill impairment of $92.1 million after tax, and merger, integration and restructuring charges of $0.7 million after tax. The core loss for the fiscal year ended June 30, 2010, was $30.1 million, compared with a core loss of $17.6 million for the fiscal year ended June 30, 2009. For additional information on core results, see the section entitled GAAP to Non-GAAP Reconciliations (Unaudited) on pages 12 and 13.
Commenting on these results, Steven R. Lewis, President and Chief Executive Officer, stated, “Improving asset quality continues to be our top priority. This quarter we brought a number of commercial loans to resolution that had been delinquent for several quarters. As a result of this success, nonaccrual commercial loans are down 24% from last quarter and total delinquent loans are down for the third consecutive quarter and at their lowest level since March 31, 2009. At the same time, we have continued to successfully manage other aspects of our banking business, including our net interest margin and mortgage banking gains, which both reached their highest level in the past five quarters.”
Revenue
Net interest income for the quarter ended June 30, 2010, was $27.5 million, up $3.9 million, or 16.3%, from $23.7 million for the quarter ended June 30, 2009. The improvement reflects a 67 basis point increase in the net interest margin to 3.73% for the current quarter from 3.06% for the same quarter in the prior year. The higher net interest margin is largely attributable to lower funding costs as higher costing certificates of deposit originated in prior periods continue to mature and reprice at current market rates. Average earning assets decreased by $150 million, or 4.8%, from the year-ago quarter.
Compared with the quarter ended March 31, 2010, net interest income increased by $0.4 million. The impact of a 3 basis point increase in the net interest margin more than offset a slight reduction in the volume of average earning assets.
Noninterest income for the quarter ended June 30, 2010, was $11.4 million, representing an increase of $2.9 million, or 34.6%, from $8.5 million for the quarter ended June 30, 2009. The growth is due primarily to an increase of $2.3 million in mortgage banking gains. In addition, results for the year-ago quarter include $1.2 million of securities impairment.
The increase in mortgage banking gains reflects a significantly higher volume of loans sold in the current quarter compared with the same quarter last year, as well as a higher margin on loans sold in the current quarter. Loans sold in the current quarter totaled $576 million, compared with $429 million for the fourth quarter of 2009.
Compared with the quarter ended March 31, 2010, noninterest income decreased by $2.8 million, or 20.0%. The decrease is due primarily to reductions of $2.1 million in other income, $0.7 million in loan servicing income and $0.7 million in net gains on the sales of securities.
Mr. Lewis commented, “The significant improvement in our net interest margin over the past twelve months reflects the efforts we have made to reshape our deposit mix to improve our profitability. Also, thanks to another strong performance in mortgage banking this quarter, we achieved a record level of mortgage banking gains this fiscal year, an increase of more than 40% over fiscal 2009, our previous record year. During the current quarter, we sold our affiliate, APB Financial Group, Ltd., which provides financial planning services to corporations and high-net-worth individuals as we are now providing many of these services through First Place Bank. This reorganization is part of the ongoing development and refinement of our Wealth Management business.”
Noninterest Expense
Noninterest expense for the quarter ended June 30, 2010, was $32.5 million, representing an increase of $1.5 million, or 4.8%, from $31.0 million for the quarter ended June 30, 2009. The higher level of noninterest expense is due primarily to increases of $1.7 million in salaries and employee benefits, $1.7 million in other expense (primarily related to real estate held for investment and state and local taxes) and $1.4 million in loan expenses. The overall increase in noninterest expense was partially offset by decreases of $2.5 million in real estate owned expense and $1.6 million in FDIC insurance premiums. The decrease in FDIC insurance premiums stems from a one-time special assessment of $1.6 million recorded during the year-ago quarter. Noninterest expense as a percentage of average assets rose to 4.07% for the quarter ended June 30, 2010, from 3.72% for the same quarter in the prior year.
Compared with the quarter ended March 31, 2010, noninterest expense increased by $5.9 million, or 22.0%. The growth is due primarily to increases of $2.3 million in real estate owned expense, $1.1 million in salaries and employee benefits, $1.1 million in other expense (primarily related to real estate held for investment) and $0.9 million in loan expenses. The higher level of real estate owned expense reflects the efforts being made to bring troubled assets to resolution. Noninterest expense as a percentage of average assets increased to 4.07% in the current quarter from 3.36% for the quarter ended March 31, 2010.
There was no difference between GAAP noninterest expense and core noninterest expense for the quarter ended June 30, 2010. For the quarter ended June 30, 2009, core noninterest expense excludes merger, integration and restructuring charges of $25 thousand. For the fiscal year ended June 30, 2010, core noninterest expense excludes merger, integration and restructuring charges of $0.3 million. For the prior fiscal year, core noninterest expense excludes goodwill impairment of $93.7 million, and merger, integration and restructuring charges of $1.1 million. Core noninterest expense for the fiscal year ended June 30, 2010, was $108.4 million, compared with $97.1 million for fiscal year ended June 30, 2009. The increase reflects higher costs associated with lending activities, salaries and employee benefits, and a variety of other expense components. Core noninterest expense as a percentage of average assets increased to 3.37% for the fiscal year ended June 30, 2010, from 2.91% for the prior fiscal year.
Asset Quality
Delinquent loans, which are comprised of loans past due 30 to 89 days and nonaccrual loans, totaled $129 million at June 30, 2010, down $21 million from $150 million at March 31, 2010. Nonperforming assets, which are comprised of nonperforming loans and real estate owned, totaled $133 million at June 30, 2010, or 4.21% of total assets, down $15 million from $148 million, or 4.61%, at March 31, 2010. Nonperforming loans totaled $98 million at June 30, 2010, or 4.20% of total loans, down $14 million from $112 million, or 4.72%, at March 31, 2010. The significant reductions in nonperforming assets and nonperforming loans are attributable to continued efforts to resolve problem assets as rapidly as possible. Additionally, First Place is working closely with its customers to understand their financial difficulties, identify viable solutions and minimize the potential for loss. In that regard, First Place has modified the terms of select loans that have demonstrated sustained payment capability and continue to accrue interest. Real estate owned was $35 million at June 30, 2010, down from $36 million at March 31, 2010. Single family residential properties represented $16 million of the $35 million balance of real estate owned at June 30, 2010. For additional information on delinquent loans and nonperforming assets, see the section entitled Asset Quality Data (Unaudited) on page 11.
Net charge-offs were $26 million for the current quarter, down $5 million from net charge-offs of $31 million for the preceding quarter ended March 31, 2010. Net charge-offs for the current quarter consisted of $3 million in mortgage and construction loans, $21 million in commercial loans and $2 million in consumer loans. Management performs an ongoing assessment of the overall credit risk within the loan portfolio, including an analysis of estimated probable credit losses. Based on this analysis, a provision for loan losses of $19.0 million was recorded for the quarter ended June 30, 2010. The provision represents a $12.1 million decrease from the provision of $31.1 million recorded for the quarter ended March 31, 2010, and a $0.6 million decrease from the provision of $19.6 million recorded for the quarter ended June 30, 2009. The allowance for loan losses was $46 million at June 30, 2010, compared with $53 million at March 31, 2010, and $40 million at June 30, 2009. The ratio of the allowance for loan losses to total loans was 1.96% at June 30, 2010, compared with 2.22% at March 31, 2010, and 1.60% at June 30, 2009. The allowance for loan losses was 46.55% of nonperforming loans at June 30, 2010, compared with 47.00% at March 31, 2010. The decreases from the prior quarter in both the allowance and the allowance as a percentage of total loans are consistent with the reduction in risk in the portfolios indicated by the reduction in nonperforming loans. At the end of the last fiscal year and in prior quarters, the Company discussed the possibility of incurring a loss on a $7 million lending relationship involving fraudulent collateral. The outstanding balance has been resolved through a combination of recovery on an insurance policy and charge-off. No further losses on that lending relationship are anticipated. Of the total nonperforming loans at June 30, 2010, 95% were secured by real estate. Real estate loans are generally well secured and if these loans should default, the majority of the loan balance, net of any charge-offs, is usually recovered by liquidating the real estate.
Mr. Lewis commented, “We continue to focus on asset quality. In April, we indicated that we were going to continue to aggressively pursue the resolution of problem assets through the June quarter and that we projected continued reductions in our nonperforming loans. While our charge-offs this quarter remain high by historical standards, we are encouraged by the improvement we experienced in most of our credit metrics, including reductions in our charge-offs, delinquent loans, nonperforming loans and nonperforming assets. We will continue to aggressively execute our asset resolution strategies and anticipate continued success in reducing nonperforming assets.”
Balance Sheet Activity
Assets totaled $3.154 billion at June 30, 2010, compared with $3.209 billion at March 31, 2010, representing a decrease of $55 million or 1.7%. The reduction is due primarily to decreases of $97 million in loans held for sale and $34 million in portfolio loans, partially offset by an $85 million increase in interest-bearing deposits. Portfolio loans totaled $2.335 billion at June 30, 2010. During the current quarter, commercial loans decreased by $29 million to $1.210 billion and consumer loans decreased by $4 million to $341 million, while mortgage and construction loans were essentially unchanged. Commercial loans now account for 51.8% of the loan portfolio, down from 52.3% at March 31, 2010.
Deposits totaled $2.470 billion at June 30, 2010, representing a decrease of $27 million from $2.497 billion at March 31, 2010. The decrease in deposits is due primarily to a decline of $30 million in the Company’s wholesale and brokered certificates of deposit, offset in part by a $3 million increase in retail deposits. Within the retail branch network, increases in money market, savings and checking accounts were substantially offset by a reduction in certificates of deposit. Total borrowings decreased by $28 million to $414 million at June 30, 2010, from $442 million at March 31, 2010. Proceeds from the sales of loans held for sale were used to payoff higher-rate borrowings. The decrease in these borrowings, along with the maturity of higher costing certificates of deposit originated in prior periods contributed to the increase in net interest margin.
At June 30, 2010, total equity was $253 million, down $12 million from $265 million at March 31, 2010. The total equity to total assets ratio was 8.04% at June 30, 2010, down from 8.25% at March 31, 2010. The tangible total equity to tangible assets ratio was 7.78% at June 30, 2010, down from 7.99% at March 31, 2010. The reductions in both total equity and the related ratios resulted primarily from the net loss of $11.9 million recorded for the current quarter.
Of the $73 million in funds received from the U.S. Treasury’s Capital Purchase Program during the quarter ended March 31, 2009, the Company has contributed $50 million to the capital of First Place Bank. The total risk-based capital ratio at the Bank level was 12.91% at June 30, 2010, down from 13.03% at March 31, 2010, but well above the 10.00% required to be well capitalized for regulatory purposes. First Place Bank exceeded the well capitalized requirements by $66 million at June 30, 2010. The Bank was well capitalized under regulatory capital standards prior to the receipt of the U.S. Treasury’s Capital Purchase Program funds and has continued to be well capitalized ever since.
Earlier today, the Company announced that due to unfavorable market conditions it has filed with the SEC for withdrawal of its Form S-1 Registration Statement to sell additional common stock. The Registration Statement was filed in June 2010 as part of an offensive strategy designed to build shareholder value by pursuing strategic growth opportunities. The Company further indicated that it has not ruled out selling additional common stock in the future if market conditions improve, and management is able to effectively deploy the capital to support such opportunities.
Mr. Lewis noted, “Given the disruptions in the financial markets over the past two years and impending changes in bank regulations, we have carefully monitored and maintained appropriate levels of both liquidity and capital. In this environment, it is imperative that we strike a careful balance between effectively managing risk and doing our part to help the communities we serve regain their financial viability. We continue to be dedicated to building shareholder value and will continue to develop and execute strategies to achieve that goal. We believe that our recent improvements in asset quality and our continued improvements in the net interest margin and mortgage banking have positioned us to exit this recession not only as a survivor, but as a company with a solid future.”
Board Actions
At its regular meeting held on July 20, 2010, the Board of Directors confirmed its current position of not paying dividends on the Company’s common stock. Mr. Lewis stated, “The Board of Directors and management believe this action is prudent and proactive given the near-term challenges in today’s economic environment. This decision was based on our current financial performance, our perception of the need to maintain a strong capital position to weather the economic storm and our desire to build capital to retire our preferred stock when beneficial to our shareholders. Our capital ratios remain strong and we will work to make sure they remain so.”
Conference Call
Steven R. Lewis, President and Chief Executive Officer of First Place Financial Corp., and David W. Gifford, Chief Financial Officer, along with members of the Company’s executive team, will provide an overview of fourth quarter fiscal 2010 performance and business highlights in a conference call and simultaneous webcast to be held at 10 a.m. eastern time, Friday, July 23, 2010. The conference call can be accessed by dialing 877-407-0783 or 201-689-8564. The webcast can be accessed live at our website, www.firstplacebank.com, along with the release and supporting financial information. The webcast replay and downloadable pod cast will be archived on the Company’s website for one month. In addition, the recorded version of the conference call can be accessed by phone from 12 p.m. eastern time, July 23, 2010, through midnight August 11, 2010, by dialing 877-660-6853 Account #286, ID #339361.
About First Place Financial Corp.
First Place Financial Corp. is a $3.2 billion financial services holding company based in Warren, Ohio. It operates 43 retail locations, 2 business financial service centers and 20 loan production offices through its principal subsidiary, First Place Bank. Additional affiliates include First Place Holdings, Inc., the holding company for the Company’s nonbank affiliates, including First Place Insurance Agency, Ltd., First Place Real Estate, Ltd. and Title Works Agency, LLC. Information about First Place Financial Corp. may be found on the Company’s web site: www.firstplacebank.com.
Forward-Looking Statements
When used in this press release, or future press releases or other public or shareholder communications, in filings by the Company with the Securities and Exchange Commission or in oral statements made with the approval of an authorized executive officer, the words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “believe,” “should,” “may,” “will,” “plan,” or variations of such terms or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the Company’s actual results to be materially different from those indicated. Such statements are subject to certain risks and uncertainties, including changes in economic conditions in the market areas the Company conducts business, which could materially impact credit quality trends; changes in laws, regulations or policies of regulatory agencies; fluctuations in interest rates; demand for loans in the market areas the Company conducts business; and competition, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
First Place Financial Corp.
Consolidated Statements of Financial Condition (Unaudited)
| | | June 30, | | | March 31, | | | Dec. 31, | | | Sept. 30, | | | June 30, | |
| (Dollars in thousands) | | 2010 | | | 2010 | | | 2009 | | | 2009 | | | 2009 | |
| | | | | | | | | | | | | | | | |
| ASSETS | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 33,223 | | | $ | 30,907 | | | $ | 29,805 | | | $ | 34,869 | | | $ | 38,321 | |
| Interest-bearing deposits in other banks | | | 110,426 | | | | 25,159 | | | | 55,857 | | | | 28,595 | | | | 56,614 | |
| Securities, at fair value | | | 249,542 | | | | 255,047 | | | | 283,525 | | | | 276,470 | | | | 276,600 | |
| Loans held for sale, at fair value | | | 233,927 | | | | 330,568 | | | | 281,861 | | | | 285,760 | | | | 376,406 | |
| Loans: | | | | | | | | | | | | | | | | | | | | |
| Mortgage and construction | | | 783,882 | | | | 784,152 | | | | 817,640 | | | | 845,421 | | | | 851,281 | |
| Commercial | | | 1,209,555 | | | | 1,238,881 | | | | 1,248,834 | | | | 1,243,408 | | | | 1,244,515 | |
| Consumer | | | 341,380 | | | | 345,450 | | | | 354,443 | | | | 361,108 | | | | 372,648 | |
| Total loans | | | 2,334,817 | | | | 2,368,483 | | | | 2,420,917 | | | | 2,449,937 | | | | 2,468,444 | |
| Less allowance for loan losses | | | 45,675 | | | | 52,554 | | | | 52,473 | | | | 50,643 | | | | 39,580 | |
| Loans, net | | | 2,289,142 | | | | 2,315,929 | | | | 2,368,444 | | | | 2,399,294 | | | | 2,428,864 | |
| Federal Home Loan Bank stock | | | 35,041 | | | | 35,041 | | | | 35,041 | | | | 35,041 | | | | 36,221 | |
| Premises and equipment, net | | | 49,163 | | | | 49,787 | | | | 50,661 | | | | 51,352 | | | | 52,222 | |
| Goodwill | | | 1,016 | | | | 885 | | | | 885 | | | | 885 | | | | 885 | |
| Core deposit and other intangible assets | | | 7,761 | | | | 8,452 | | | | 9,163 | | | | 9,891 | | | | 10,639 | |
| Real estate owned | | | 34,639 | | | | 36,239 | | | | 30,726 | | | | 33,123 | | | | 36,790 | |
| Other assets | | | 109,705 | | | | 120,614 | | | | 113,155 | | | | 90,102 | | | | 90,905 | |
| Total assets | | $ | 3,153,585 | | | $ | 3,208,628 | | | $ | 3,259,123 | | | $ | 3,245,382 | | | $ | 3,404,467 | |
| | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing checking | | $ | 265,765 | | | $ | 262,394 | | | $ | 252,009 | | | $ | 236,378 | | | $ | 238,417 | |
| Interest-bearing checking | | | 260,134 | | | | 260,297 | | | | 242,588 | | | | 180,106 | | | | 173,376 | |
| Savings | | | 412,740 | | | | 408,172 | | | | 404,353 | | | | 406,434 | | | | 400,424 | |
| Money market deposit accounts | | | 372,391 | | | | 345,221 | | | | 342,970 | | | | 335,116 | | | | 291,131 | |
| Certificates of deposit | | | 1,159,061 | | | | 1,221,173 | | | | 1,224,850 | | | | 1,172,835 | | | | 1,332,253 | |
| Total deposits | | | 2,470,091 | | | | 2,497,257 | | | | 2,466,770 | | | | 2,330,869 | | | | 2,435,601 | |
| Short-term borrowings | | | 35,742 | | | | 63,337 | | | | 158,827 | | | | 288,292 | | | | 323,458 | |
| Long-term debt | | | 378,577 | | | | 378,878 | | | | 348,977 | | | | 335,162 | | | | 335,159 | |
| Other liabilities | | | 15,758 | | | | 4,292 | | | | 6,968 | | | | 12,821 | | | | 28,770 | |
| Total liabilities | | | 2,900,168 | | | | 2,943,764 | | | | 2,981,542 | | | | 2,967,144 | | | | 3,122,988 | |
| | | | | | | | | | | | | | | | | | | | | |
| SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | |
| Preferred stock | | | 69,837 | | | | 69,653 | | | | 69,473 | | | | 69,296 | | | | 69,198 | |
| Common stock | | | 181 | | | | 181 | | | | 181 | | | | 181 | | | | 181 | |
| Additional paid-in capital | | | 218,478 | | | | 218,418 | | | | 218,385 | | | | 218,348 | | | | 218,310 | |
| Retained (deficit) earnings | | | (17,193 | ) | | | (4,173 | ) | | | 9,936 | | | | 10,018 | | | | 17,193 | |
| Unearned employee stock ownership plan shares | | | (2,701 | ) | | | (2,805 | ) | | | (2,908 | ) | | | (3,012 | ) | | | (3,116 | ) |
| Treasury stock | | | (19,274 | ) | | | (19,274 | ) | | | (19,274 | ) | | | (19,274 | ) | | | (19,274 | ) |
| Accumulated other comprehensive income (loss), net | | | 4,089 | | | | 2,864 | | | | 1,788 | | | | 2,681 | | | | (1,013 | ) |
| Total shareholders’ equity | | | 253,417 | | | | 264,864 | | | | 277,581 | | | | 278,238 | | | | 281,479 | |
| Total liabilities and shareholders’ equity | | $ | 3,153,585 | | | $ | 3,208,628 | | | $ | 3,259,123 | | | $ | 3,245,382 | | | $ | 3,404,467 | |
| | | | | | | | | | | | | | | | | | | | | |
| Period-end common shares outstanding | | | 16,974,056 | | | | 16,973,270 | | | | 16,973,270 | | | | 16,973,270 | | | | 16,973,270 | |
First Place Financial Corp.
Consolidated Statements of Income (Unaudited)
| | | Three months ended | | | | | | Twelve months ended | | | | |
| | | June 30, | | | Percent | | | June 30, | | | Percent | |
| (Dollars in thousands, except per share data) | | 2010 | | | 2009 | | | Change | | | 2010 | | | 2009 | | | Change | |
| | | | | | | | | | | | | | | | | | | |
| Interest income | | $ | 37,970 | | | $ | 41,523 | | | | (8.6 | ) | | $ | 157,198 | | | $ | 171,888 | | | | (8.5 | ) |
| Interest expense | | | 10,456 | | | | 17,872 | | | | (41.5 | ) | | | 49,357 | | | | 82,294 | | | | (40.0 | ) |
| Net interest income | | | 27,514 | | | | 23,651 | | | | 16.3 | | | | 107,841 | | | | 89,594 | | | | 20.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Provision for loan losses | | | 19,000 | | | | 19,620 | | | | (3.2 | ) | | | 86,600 | | | | 42,984 | | | | 101.5 | |
| Net interest income after provision for loan losses | | | 8,514 | | | | 4,031 | | | | 111.2 | | | | 21,241 | | | | 46,610 | | | | (54.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges and fees on deposit accounts | | | 2,966 | | | | 2,936 | | | | 1.0 | | | | 12,023 | | | | 10,214 | | | | 17.7 | |
| Electronic banking fees | | | 973 | | | | 806 | | | | 20.7 | | | | 3,516 | | | | 3,025 | | | | 16.2 | |
| Net gains (losses) on sales of securities | | | - | | | | (10 | ) | | | (100.0 | ) | | | 651 | | | | 310 | | | | 110.0 | |
| Other-than-temporary impairment of securities | | | - | | | | (1,159 | ) | | | (100.0 | ) | | | - | | | | (1,159 | ) | | | (100.0 | ) |
| Change in fair value of trading securities | | | 157 | | | | 69 | | | | 127.5 | | | | 572 | | | | (12,284 | ) | | | N/M | |
| Mortgage banking gains | | | 6,091 | | | | 3,772 | | | | 61.5 | | | | 20,677 | | | | 14,465 | | | | 42.9 | |
| Gains on sales of loan servicing rights | | | - | | | | - | | | | - | | | | 689 | | | | - | | | | N/M | |
| Loan servicing income (expense) | | | 39 | | | | (568 | ) | | | N/M | | | | 1,537 | | | | (2,561 | ) | | | N/M | |
| Insurance commission income | | | 999 | | | | 1,076 | | | | (7.2 | ) | | | 4,447 | | | | 4,180 | | | | 6.4 | |
| Other income | | | 154 | | | | 1,533 | | | | (90.0 | ) | | | 5,281 | | | | 6,346 | | | | (16.8 | ) |
| Total noninterest income | | | 11,379 | | | | 8,455 | | | | 34.6 | | | | 49,393 | | | | 22,536 | | | | 119.2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest expense | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 13,056 | | | | 11,340 | | | | 15.1 | | | | 45,899 | | | | 43,158 | | | | 6.4 | |
| Occupancy and equipment | | | 3,647 | | | | 3,410 | | | | 7.0 | | | | 14,669 | | | | 13,831 | | | | 6.1 | |
| Professional fees | | | 1,384 | | | | 901 | | | | 53.6 | | | | 4,206 | | | | 3,386 | | | | 24.2 | |
| Loan expenses | | | 2,547 | | | | 1,175 | | | | 116.8 | | | | 7,295 | | | | 3,414 | | | | 113.7 | |
| Marketing | | | 899 | | | | 705 | | | | 27.5 | | | | 2,758 | | | | 2,128 | | | | 29.6 | |
| Federal deposit insurance premiums | | | 1,463 | | | | 3,039 | | | | (51.9 | ) | | | 5,722 | | | | 5,429 | | | | 5.4 | |
| Merger, integration and restructuring charges | | | - | | | | 25 | | | | (100.0 | ) | | | 297 | | | | 1,134 | | | | (73.8 | ) |
| Goodwill impairment | | | - | | | | - | | | | - | | | | - | | | | 93,741 | | | | (100.0 | ) |
| Amortization of intangible assets | | | 691 | | | | 766 | | | | (9.8 | ) | | | 2,879 | | | | 3,144 | | | | (8.4 | ) |
| Real estate owned expense | | | 3,585 | | | | 6,105 | | | | (41.3 | ) | | | 8,250 | | | | 9,679 | | | | (14.8 | ) |
| Other expense | | | 5,201 | | | | 3,534 | | | | 47.2 | | | | 16,746 | | | | 12,915 | | | | 29.7 | |
| Total noninterest expense | | | 32,473 | | | | 31,000 | | | | 4.8 | | | | 108,721 | | | | 191,959 | | | | (43.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss before income tax benefit | | | (12,580 | ) | | | (18,514 | ) | | | (32.1 | ) | | | (38,087 | ) | | | (122,813 | ) | | | (69.0 | ) |
| Income tax benefit | | | (656 | ) | | | (5,795 | ) | | | (88.7 | ) | | | (7,824 | ) | | | (12,379 | ) | | | (36.8 | ) |
| Net loss | | | (11,924 | ) | | | (12,719 | ) | | | (6.3 | ) | | | (30,263 | ) | | | (110,434 | ) | | | (72.6 | ) |
| Less preferred stock dividends and discount accretion | | | 1,095 | | | | 1,081 | | | | 1.3 | | | | 4,368 | | | | 1,297 | | | | 236.8 | |
| Loss attributable to common shareholders | | $ | (13,019 | ) | | | (13,800 | ) | | | (5.7 | ) | | $ | (34,631 | ) | | $ | (111,731 | ) | | | (69.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| SHARE DATA | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic loss per common share | | $ | (0.78 | ) | | $ | (0.83 | ) | | | (6.0 | ) | | $ | (2.08 | ) | | $ | (6.75 | ) | | | (69.2 | ) |
| Diluted loss per common share | | | (0.78 | ) | | | (0.83 | ) | | | (6.0 | ) | | | (2.08 | ) | | | (6.75 | ) | | | (69.2 | ) |
| Cash dividends declared per common share | | | - | | | | 0.01 | | | | (100.0 | ) | | | 0.01 | | | | 0.19 | | | | (94.7 | ) |
| Average common shares outstanding - basic | | | 16,636,341 | | | | 16,580,439 | | | | 0.3 | | | | 16,614,836 | | | | 16,563,736 | | | | 0.3 | |
| Average common shares outstanding - diluted | | | 16,636,341 | | | | 16,580,439 | | | | 0.3 | | | | 16,614,836 | | | | 16,563,736 | | | | 0.3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| N/M – Not meaningful | | | | | | | | | | | | | | | | | | | | | | | | |
First Place Financial Corp.
Consolidated Financial Highlights (Unaudited)
| | | As of or for the three months ended | | | As of or for the | |
| | | 6/30/2010 | | | 3/31/2010 | | | 12/31/2009 | | | 9/30/2009 | | | 6/30/2009 | | | twelve months ended | |
| | | 4th Qtr | | | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | | | 4th Qtr | | | June 30, | |
(Dollars in thousands, except per share data) | | FY 2010 | | | FY 2010 | | | FY 2010 | | | FY 2010 | | | FY 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | | | | | | | | | | |
| RESULTS OF OPERATIONS | | | | | | | | | | | | | | | | | | | | | |
| Fully taxable equivalent net interest income | | $ | 27,869 | | | $ | 27,462 | | | $ | 28,016 | | | $ | 25,907 | | | $ | 24,016 | | | $ | 109,254 | | | $ | 91,124 | |
| Taxable equivalent adjustment | | | 355 | | | | 355 | | | | 354 | | | | 349 | | | | 365 | | | | 1,413 | | | | 1,530 | |
| Net interest income | | | 27,514 | | | | 27,107 | | | | 27,662 | | | | 25,558 | | | | 23,651 | | | | 107,841 | | | | 89,594 | |
| Noninterest income | | | 11,379 | | | | 14,222 | | | | 12,050 | | | | 11,742 | | | | 8,455 | | | | 49,393 | | | | 22,536 | |
| Noninterest expense | | | 32,473 | | | | 26,622 | | | | 25,301 | | | | 24,325 | | | | 31,000 | | | | 108,721 | | | | 191,959 | |
| Pre-tax, pre-provision income (loss) | | | 6,420 | | | | 14,707 | | | | 14,411 | | | | 12,975 | | | | 1,106 | | | | 48,513 | | | | (79,829 | ) |
| Provision for loan losses | | | 19,000 | | | | 31,100 | | | | 14,000 | | | | 22,500 | | | | 19,620 | | | | 86,600 | | | | 42,984 | |
| Net income (loss) | | | (11,924 | ) | | | (13,018 | ) | | | 593 | | | | (5,914 | ) | | | (12,719 | ) | | | (30,263 | ) | | | (110,434 | ) |
| Loss attributable to common shareholders | | | (13,019 | ) | | | (14,110 | ) | | | (497 | ) | | | (7,005 | ) | | | (13,800 | ) | | | (34,631 | ) | | | (111,731 | ) |
| Basic loss per common share | | | (0.78 | ) | | | (0.85 | ) | | | (0.03 | ) | | | (0.42 | ) | | | (0.83 | ) | | | (2.08 | ) | | | (6.75 | ) |
| Diluted loss per common share | | | (0.78 | ) | | | (0.85 | ) | | | (0.03 | ) | | | (0.42 | ) | | | (0.83 | ) | | | (2.08 | ) | | | (6.75 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| PERFORMANCE RATIOS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | (1.49 | )% | | | (1.64 | )% | | | 0.07 | % | | | (0.73 | )% | | | (1.52 | )% | | | (0.94 | )% | | | (3.31 | )% |
| Return on average equity | | | (18.40 | ) | | | (19.28 | ) | | | 0.85 | | | | (8.38 | ) | | | (17.61 | ) | | | (11.10 | ) | | | (38.62 | ) |
| Return on average tangible assets (a) | | | (1.50 | ) | | | (1.65 | ) | | | 0.07 | | | | (0.73 | ) | | | (1.53 | ) | | | (0.94 | ) | | | (3.37 | ) |
| Return on average tangible equity (a) | | | (19.07 | ) | | | (19.99 | ) | | | 0.88 | | | | (8.72 | ) | | | (18.36 | ) | | | (11.53 | ) | | | (48.76 | ) |
| Efficiency ratio | | | 82.74 | | | | 63.87 | | | | 63.15 | | | | 64.61 | | | | 95.47 | | | | 68.53 | | | | 168.89 | |
| Noninterest expense to average assets | | | 4.07 | | | | 3.36 | | | | 3.12 | | | | 2.99 | | | | 3.72 | | | | 3.38 | | | | 5.76 | |
| Loans to deposits ratio | | | 94.52 | | | | 94.84 | | | | 98.14 | | | | 105.11 | | | | 101.35 | | | | 94.52 | | | | 101.35 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| YIELDS/RATES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Yield on loans | | | 5.38 | % | | | 5.39 | % | | | 5.36 | % | | | 5.46 | % | | | 5.46 | % | | | 5.40 | % | | | 5.74 | % |
| Yield on investments | | | 3.42 | | | | 3.78 | | | | 4.59 | | | | 4.75 | | | | 4.40 | | | | 4.09 | | | | 4.45 | |
| Yield on interest-earning assets | | | 5.13 | | | | 5.20 | | | | 5.27 | | | | 5.38 | | | | 5.34 | | | | 5.25 | | | | 5.59 | |
| Cost of interest-bearing deposits | | | 1.16 | | | | 1.27 | | | | 1.45 | | | | 1.93 | | | | 2.26 | | | | 1.45 | | | | 2.63 | |
| Cost of borrowings | | | 3.78 | | | | 3.74 | | | | 3.30 | | | | 3.68 | | | | 3.96 | | | | 3.61 | | | | 4.30 | |
| Cost of interest-bearing liabilities | | | 1.58 | | | | 1.69 | | | | 1.84 | | | | 2.27 | | | | 2.58 | | | | 1.85 | | | | 2.96 | |
| Interest rate spread | | | 3.55 | | | | 3.51 | | | | 3.43 | | | | 3.11 | | | | 2.76 | | | | 3.40 | | | | 2.63 | |
| Net interest margin, fully taxable equivalent | | | 3.73 | | | | 3.70 | | | | 3.65 | | | | 3.38 | | | | 3.06 | | | | 3.61 | | | | 2.94 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CORE PERFORMANCE MEASURES (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core income (loss) | | $ | (11,924 | ) | | $ | (13,018 | ) | | $ | 593 | | | $ | (5,721 | ) | | $ | (12,703 | ) | | $ | (30,070 | ) | | $ | (17,558 | ) |
| Core loss attributable to common shareholders | | | (13,019 | ) | | | (14,110 | ) | | | (497 | ) | | | (6,812 | ) | | | (13,784 | ) | | | (34,438 | ) | | | (18,855 | ) |
| Core basic loss per common share | | | (0.78 | ) | | | (0.85 | ) | | | (0.03 | ) | | | (0.41 | ) | | | (0.83 | ) | | | (2.07 | ) | | | (1.14 | ) |
| Core diluted loss per common share | | | (0.78 | ) | | | (0.85 | ) | | | (0.03 | ) | | | (0.41 | ) | | | (0.83 | ) | | | (2.07 | ) | | | (1.14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | (1.49 | )% | | | (1.64 | )% | | | 0.07 | % | | | (0.70 | )% | | | (1.52 | )% | | | (0.93 | )% | | | (0.53 | )% |
| Return on average equity | | | (18.40 | ) | | | (19.28 | ) | | | 0.85 | | | | (8.10 | ) | | | (17.58 | ) | | | (11.03 | ) | | | (6.14 | ) |
| Return on average tangible assets | | | (1.50 | ) | | | (1.65 | ) | | | 0.07 | | | | (0.70 | ) | | | (1.53 | ) | | | (0.94 | ) | | | (0.54 | ) |
| Return on average tangible equity | | | (19.07 | ) | | | (19.99 | ) | | | 0.88 | | | | (8.44 | ) | | | (18.34 | ) | | | (11.45 | ) | | | (7.75 | ) |
| Efficiency ratio | | | 82.74 | | | | 63.87 | | | | 63.15 | | | | 63.82 | | | | 95.39 | | | | 68.34 | | | | 85.42 | |
| Noninterest expense to average assets | | | 4.07 | | | | 3.36 | | | | 3.12 | | | | 2.95 | | | | 3.71 | | | | 3.37 | | | | 2.91 | |
First Place Financial Corp.
Consolidated Financial Highlights Continued (Unaudited)
| | | As of or for the three months ended | | | As of or for the | |
| | | 6/30/2010 | | | 3/31/2010 | | | 12/31/2009 | | | 9/30/2009 | | | 6/30/2009 | | | twelve months ended | |
| | | 4th Qtr | | | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | | | 4th Qtr | | | June 30, | |
(Dollars in thousands, except per share data) | | FY 2010 | | | FY 2010 | | | FY 2010 | | | FY 2010 | | | FY 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | | | | | | | | | | |
| MORTGAGE BANKING | | | | | | | | | | | | | | | | | | | | | |
| Mortgage originations | | $ | 527,999 | | | $ | 391,390 | | | $ | 511,869 | | | $ | 457,964 | | | $ | 636,561 | | | $ | 1,889,222 | | | $ | 1,909,629 | |
| Mortgage banking gains | | | 6,091 | | | | 5,845 | | | | 4,832 | | | | 3,909 | | | | 3,772 | | | | 20,677 | | | | 14,465 | |
| Mortgage servicing portfolio | | | 2,858,758 | | | | 2,638,459 | | | | 2,520,768 | | | | 2,340,400 | | | | 2,052,135 | | | | 2,858,758 | | | | 2,052,135 | |
| Mortgage servicing rights | | | 28,720 | | | | 26,844 | | | | 25,430 | | | | 22,964 | | | | 20,114 | | | | 28,720 | | | | 20,114 | |
| Mortgage servicing rights valuation recovery (loss) | | | (375 | ) | | | 370 | | | | 576 | | | | (112 | ) | | | 185 | | | | 459 | | | | (952 | ) |
| Mortgage servicing rights to mortgage servicing portfolio | | | 1.00 | % | | | 1.02 | % | | | 1.01 | % | | | 0.98 | % | | | 0.98 | % | | | 1.00 | % | | | 0.98 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CAPITAL | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total equity to total assets at end of period | | | 8.04 | % | | | 8.25 | % | | | 8.52 | % | | | 8.57 | % | | | 8.27 | % | | | 8.04 | % | | | 8.27 | % |
| Tangible total equity to tangible assets at end of period (a) | | | 7.78 | | | | 7.99 | | | | 8.23 | | | | 8.27 | | | | 7.96 | | | | 7.78 | | | | 7.96 | |
| Tangible common equity to tangible assets at end of period (a) | | | 5.56 | | | | 5.81 | | | | 6.10 | | | | 6.13 | | | | 5.92 | | | | 5.56 | | | | 5.92 | |
| Tier 1 risk-based capital (First Place Bank) | | | 11.66 | | | | 11.78 | | | | 11.88 | | | | 11.42 | | | | 11.23 | | | | 11.66 | | | | 11.23 | |
| Total risk-based capital (First Place Bank) | | | 12.91 | | | | 13.03 | | | | 13.14 | | | | 12.67 | | | | 12.37 | | | | 12.91 | | | | 12.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Book value per common share | | $ | 10.82 | | | $ | 11.50 | | | $ | 12.26 | | | $ | 12.31 | | | $ | 12.51 | | | $ | 10.82 | | | $ | 12.51 | |
| Tangible book value per common share (a) | | | 10.30 | | | | 10.95 | | | | 11.67 | | | | 11.68 | | | | 11.83 | | | | 10.30 | | | | 11.83 | |
| Period-end market value per common share | | | 3.00 | | | | 3.99 | | | | 2.77 | | | | 2.95 | | | | 3.11 | | | | 3.00 | | | | 3.11 | |
| Dividends declared per common share | | | - | | | | - | | | | - | | | | 0.01 | | | | 0.01 | | | | 0.01 | | | | 0.19 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AVERAGE BALANCES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 2,351,319 | | | $ | 2,390,360 | | | $ | 2,449,890 | | | $ | 2,457,983 | | | $ | 2,520,156 | | | $ | 2,412,676 | | | $ | 2,596,561 | |
| Earning assets | | | 2,995,713 | | | | 3,012,611 | | | | 3,042,454 | | | | 3,041,204 | | | | 3,145,979 | | | | 3,023,127 | | | | 3,103,886 | |
| Assets | | | 3,202,184 | | | | 3,213,153 | | | | 3,222,340 | | | | 3,232,235 | | | | 3,346,646 | | | | 3,217,543 | | | | 3,334,601 | |
| Deposits | | | 2,506,380 | | | | 2,474,953 | | | | 2,359,470 | | | | 2,409,542 | | | | 2,502,267 | | | | 2,437,193 | | | | 2,486,112 | |
| Total equity | | | 259,919 | | | | 273,815 | | | | 276,524 | | | | 280,136 | | | | 289,768 | | | | 272,626 | | | | 285,926 | |
| Tangible total equity | | | 250,829 | | | | 264,129 | | | | 266,121 | | | | 268,997 | | | | 277,872 | | | | 262,542 | | | | 226,490 | |
| Common equity | | | 190,171 | | | | 204,249 | | | | 207,123 | | | | 210,867 | | | | 220,607 | | | | 203,131 | | | | 265,844 | |
| Tangible common equity (a) | | | 181,081 | | | | 194,563 | | | | 196,720 | | | | 199,728 | | | | 208,711 | | | | 193,047 | | | | 206,408 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ASSET QUALITY (b) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs | | $ | 25,879 | | | $ | 31,019 | | | $ | 12,170 | | | $ | 11,437 | | | $ | 15,806 | | | $ | 80,505 | | | $ | 31,620 | |
| Nonperforming loans | | | 98,120 | | | | 111,819 | | | | 138,042 | | | | 126,740 | | | | 103,228 | | | | 98,120 | | | | 103,228 | |
| Nonperforming assets | | | 132,759 | | | | 148,058 | | | | 168,768 | | | | 159,863 | | | | 140,018 | | | | 132,759 | | | | 140,018 | |
| Allowance for loan losses | | | 45,675 | | | | 52,554 | | | | 52,473 | | | | 50,643 | | | | 39,580 | | | | 45,675 | | | | 39,580 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annualized net charge-offs to average loans | | | 4.41 | % | | | 5.26 | % | | | 1.97 | % | | | 1.85 | % | | | 2.52 | % | | | 3.34 | % | | | 1.22 | % |
| Nonperforming loans to total loans | | | 4.20 | | | | 4.72 | | | | 5.70 | | | | 5.17 | | | | 4.18 | | | | 4.20 | | | | 4.18 | |
| Nonperforming assets to total assets | | | 4.21 | | | | 4.61 | | | | 5.18 | | | | 4.93 | | | | 4.11 | | | | 4.21 | | | | 4.11 | |
| Allowance for loan losses to total loans | | | 1.96 | | | | 2.22 | | | | 2.17 | | | | 2.07 | | | | 1.60 | | | | 1.96 | | | | 1.60 | |
| Allowance for loan losses to nonperforming loans | | | 46.55 | | | | 47.00 | | | | 38.01 | | | | 39.96 | | | | 38.34 | | | | 46.55 | | | | 38.34 | |
| (a) | See the GAAP to Non-GAAP reconciliations. |
| (b) | See Asset Quality Data (Unaudited) for additional detail. |
First Place Financial Corp.
Asset Quality Data (Unaudited)
| | | As of or for the three months ended | | | As of or for the | |
| | | 6/30/2010 | | | 3/31/2010 | | | 12/31/2009 | | | 9/30/2009 | | | 6/30/2009 | | | twelve months ended | |
| | | 4th Qtr | | | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | | | 4th Qtr | | | June 30, | |
| (Dollars in thousands) | | FY 2010 | | | FY 2010 | | | FY 2010 | | | FY 2010 | | | FY 2009 | | | 2010 | |
| | | | | | | | | | | | | | | | | | | |
| DELINQUENT LOANS | | | | | | | | | | | | | | | | | | |
| Loans past due 30-89 days: | | | | | | | | | | | | | | | | | | |
| Mortgage and construction | | $ | 22,321 | | | $ | 22,579 | | | $ | 25,181 | | | $ | 28,264 | | | $ | 29,086 | | | $ | 22,321 | |
| Commercial | | | 7,244 | | | | 16,180 | | | | 8,440 | | | | 24,477 | | | | 15,226 | | | | 7,244 | |
| Consumer | | | 6,677 | | | | 4,738 | | | | 5,032 | | | | 5,874 | | | | 4,559 | | | | 6,677 | |
| Total loans past due 30-89 days | | | 36,242 | | | | 43,497 | | | | 38,653 | | | | 58,615 | | | | 48,871 | | | | 36,242 | |
| Loans on nonaccrual status: | | | | | | | | | | | | | | | | | | | | | | | | |
| Mortgage and construction | | | 52,406 | | | | 56,130 | | | | 65,990 | | | | 61,833 | | | | 48,999 | | | | 52,406 | |
| Commercial | | | 31,489 | | | | 41,324 | | | | 52,387 | | | | 42,983 | | | | 35,756 | | | | 31,489 | |
| Consumer | | | 8,972 | | | | 9,496 | | | | 15,546 | | | | 14,968 | | | | 13,998 | | | | 8,972 | |
| Total nonaccrual loans | | | 92,867 | | | | 106,950 | | | | 133,923 | | | | 119,784 | | | | 98,753 | | | | 92,867 | |
| Total delinquent loans | | $ | 129,109 | | | $ | 150,447 | | | $ | 172,576 | | | $ | 178,399 | | | $ | 147,624 | | | $ | 129,109 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Delinquent loans to total loans | | | 5.53 | % | | | 6.35 | % | | | 7.13 | % | | | 7.28 | % | | | 5.98 | % | | | 5.53 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NONPERFORMING ASSETS | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 92,867 | | | $ | 106,950 | | | $ | 133,923 | | | $ | 119,784 | | | $ | 98,753 | | | $ | 92,867 | |
| Troubled debt restructurings accruing interest (a) | | | 5,253 | | | | 4,869 | | | | 4,119 | | | | 6,956 | | | | 4,475 | | | | 5,253 | |
| Total nonperforming loans | | | 98,120 | | | | 111,819 | | | | 138,042 | | | | 126,740 | | | | 103,228 | | | | 98,120 | |
| Real estate owned | | | 34,639 | | | | 36,239 | | | | 30,726 | | | | 33,123 | | | | 36,790 | | | | 34,639 | |
| Total nonperforming assets | | $ | 132,759 | | | $ | 148,058 | | | $ | 168,768 | | | $ | 159,863 | | | $ | 140,018 | | | $ | 132,759 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonperforming loans to total loans | | | 4.20 | % | | | 4.72 | % | | | 5.70 | % | | | 5.17 | % | | | 4.18 | % | | | 4.20 | % |
| Nonperforming assets to total assets | | | 4.21 | | | | 4.61 | | | | 5.18 | | | | 4.93 | | | | 4.11 | | | | 4.21 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| SUMMARY OF CHANGES IN NONPERFORMING LOANS | | | | | | | | | | | | | | | | | | | | | | | | |
| Beginning balance | | $ | 111,819 | | | $ | 138,042 | | | $ | 126,740 | | | $ | 103,228 | | | $ | 69,190 | | | $ | 103,228 | |
| New nonperforming loans | | | 32,132 | | | | 30,308 | | | | 41,365 | | | | 48,146 | | | | 66,195 | | | | 151,951 | |
| Loans charged-off | | | (17,131 | ) | | | (26,889 | ) | | | (8,949 | ) | | | (7,271 | ) | | | (11,091 | ) | | | (60,240 | ) |
| Nonperforming loans otherwise resolved | | | (28,700 | ) | | | (29,642 | ) | | | (21,114 | ) | | | (17,363 | ) | | | (21,066 | ) | | | (96,819 | ) |
| Ending balance | | $ | 98,120 | | | $ | 111,819 | | | $ | 138,042 | | | $ | 126,740 | | | $ | 103,228 | | | $ | 98,120 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| SUMMARY OF CHANGES IN REAL ESTATE OWNED | | | | | | | | | | | | | | | | | | | | | | | | |
| Beginning balance | | $ | 36,239 | | | $ | 30,726 | | | $ | 33,123 | | | $ | 36,790 | | | $ | 34,969 | | | $ | 36,790 | |
| Properties acquired | | | 7,059 | | | | 13,323 | | | | 6,135 | | | | 6,108 | | | | 13,394 | | | | 32,625 | |
| Valuation adjustments | | | (3,643 | ) | | | (1,022 | ) | | | (1,412 | ) | | | (703 | ) | | | (4,236 | ) | | | (6,780 | ) |
| Properties sold | | | (5,016 | ) | | | (6,788 | ) | | | (7,120 | ) | | | (9,072 | ) | | | (7,337 | ) | | | (27,996 | ) |
| Ending balance | | $ | 34,639 | | | $ | 36,239 | | | $ | 30,726 | | | $ | 33,123 | | | $ | 36,790 | | | $ | 34,639 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | | | | | | | | | | |
| Beginning balance | | $ | 52,554 | | | $ | 52,473 | | | $ | 50,643 | | | $ | 39,580 | | | $ | 35,766 | | | $ | 39,580 | |
| Provision for loan losses | | | 19,000 | | | | 31,100 | | | | 14,000 | | | | 22,500 | | | | 19,620 | | | | 86,600 | |
| Loans charged-off | | | (26,015 | ) | | | (31,123 | ) | | | (12,289 | ) | | | (11,515 | ) | | | (15,982 | ) | | | (80,942 | ) |
| Recoveries | | | 136 | | | | 104 | | | | 119 | | | | 78 | | | | 176 | | | | 437 | |
| Ending balance | | $ | 45,675 | | | $ | 52,554 | | | $ | 52,473 | | | $ | 50,643 | | | $ | 39,580 | | | $ | 45,675 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Annualized net charge-offs to average loans | | | 4.41 | % | | | 5.26 | % | | | 1.97 | % | | | 1.85 | % | | | 2.52 | % | | | 3.34 | % |
| Allowance for loan losses to total loans | | | 1.96 | | | | 2.22 | | | | 2.17 | | | | 2.07 | | | | 1.60 | | | | 1.96 | |
| Allowance for loan losses to nonperforming loans | | | 46.55 | | | | 47.00 | | | | 38.01 | | | | 39.96 | | | | 38.34 | | | | 46.55 | |
| (a) | Troubled debt restructurings accruing interest are loans that were accruing interest at the time of restructuring and have been in compliance with their modified terms for a period of less than six months. |
First Place Financial Corp.
GAAP to Non-GAAP Reconciliations (Unaudited)
The table below presents certain performance measures that exclude merger, integration and restructuring charges, and goodwill impairment (i.e., core performance measures). Management believes that eliminating the effects of significant items that are generally nonrecurring facilitates the analysis of financial results and trends by presenting them on a more comparable basis. The table also shows computations of tangible equity and tangible assets and certain related ratios, all of which are considered to be non-GAAP financial measures. The tangible common equity to tangible assets ratio in particular has become a focus of some investors and management believes this ratio may assist in analyzing the Company’s capital position, absent the effects of intangible assets and preferred stock.
The table also reconciles GAAP performance measures to the corresponding non-GAAP measures. Although these non-GAAP financial measures are frequently used by investors in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of results reported under GAAP. Because not all companies use identical calculations, the non-GAAP measures presented in the following table may not be comparable to those reported by other companies.
| | | | | | As of or for the three months ended | | | | | | As of or for the | |
| | | 6/30/2010 | | | 3/31/2010 | | | 12/31/2009 | | | 9/30/2009 | | | 6/30/2009 | | | twelve months ended | |
| | | 4th Qtr | | | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | | | 4th Qtr | | | June 30, | |
(Dollars in thousands, except per share data) | | FY 2010 | | | FY 2010 | | | FY 2010 | | | FY 2010 | | | FY 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | | | | | | | | | | |
| NET LOSS | | | | | | | | | | | | | | | | | | | | | |
| Net income (loss) (GAAP) | | $ | (11,924 | ) | | $ | (13,018 | ) | | $ | 593 | | | $ | (5,914 | ) | | $ | (12,719 | ) | | $ | (30,263 | ) | | $ | (110,434 | ) |
| Goodwill impairment, net of tax | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 92,139 | |
| Merger, integration and restructuring charges, net of tax | | | - | | | | - | | | | - | | | | 193 | | | | 16 | | | | 193 | | | | 737 | |
| Core income (loss) (non-GAAP) | | | (11,924 | ) | | | (13,018 | ) | | | 593 | | | | (5,721 | ) | | | (12,703 | ) | | | (30,070 | ) | | | (17,558 | ) |
| Preferred stock dividends and discount accretion | | | 1,095 | | | | 1,092 | | | | 1,090 | | | | 1,091 | | | | 1,081 | | | | 4,368 | | | | 1,297 | |
| Core loss attributable to common shareholders (non-GAAP) | | $ | (13,019 | ) | | $ | (14,110 | ) | | $ | (497 | ) | | $ | (6,812 | ) | | $ | (13,784 | ) | | $ | (34,438 | ) | | $ | (18,855 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic loss per common share (GAAP) | | $ | (0.78 | ) | | $ | (0.85 | ) | | $ | (0.03 | ) | | $ | (0.42 | ) | | $ | (0.83 | ) | | $ | (2.08 | ) | | $ | (6.75 | ) |
| Diluted loss per common share (GAAP) | | | (0.78 | ) | | | (0.85 | ) | | | (0.03 | ) | | | (0.42 | ) | | | (0.83 | ) | | | (2.08 | ) | | | (6.75 | ) |
| Core basic loss per common share (non-GAAP) | | | (0.78 | ) | | | (0.85 | ) | | | (0.03 | ) | | | (0.41 | ) | | | (0.83 | ) | | | (2.07 | ) | | | (1.14 | ) |
| Core diluted loss per common share (non-GAAP) | | | (0.78 | ) | | | (0.85 | ) | | | (0.03 | ) | | | (0.41 | ) | | | (0.83 | ) | | | (2.07 | ) | | | (1.14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST EXPENSE/EFFICIENCY RATIO | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest expense (GAAP) | | $ | 32,473 | | | $ | 26,622 | | | $ | 25,301 | | | $ | 24,325 | | | $ | 31,000 | | | $ | 108,721 | | | $ | 191,959 | |
| Goodwill impairment | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (93,741 | ) |
| Merger, integration and restructuring charges | | | - | | | | - | | | | - | | | | (297 | ) | | | (25 | ) | | | (297 | ) | | | (1,134 | ) |
| Core noninterest expense (non-GAAP) | | $ | 32,473 | | | $ | 26,622 | | | $ | 25,301 | | | $ | 24,028 | | | $ | 30,975 | | | $ | 108,424 | | | $ | 97,084 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Efficiency ratio (a) | | | 82.74 | % | | | 63.87 | % | | | 63.15 | % | | | 64.61 | % | | | 95.47 | % | | | 68.53 | % | | | 168.89 | % |
| Core efficiency ratio (b) | | | 82.74 | | | | 63.87 | | | | 63.15 | | | | 63.82 | | | | 95.39 | | | | 68.34 | | | | 85.42 | |
| Noninterest expense to average assets | | | 4.07 | | | | 3.36 | | | | 3.12 | | | | 2.99 | | | | 3.72 | | | | 3.38 | | | | 5.76 | |
| Core noninterest expense to average assets | | | 4.07 | | | | 3.36 | | | | 3.12 | | | | 2.95 | | | | 3.71 | | | | 3.37 | | | | 2.91 | |
First Place Financial Corp.
GAAP to Non-GAAP Reconciliations Continued (Unaudited)
| | | As of or for the three months ended | | | As of or for the | |
| | | 6/30/2010 | | | 3/31/2010 | | | 12/31/2009 | | | 9/30/2009 | | | 6/30/2009 | | | twelve months ended | |
| | | 4th Qtr | | | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | | | 4th Qtr | | | June 30, | |
| (Dollars in thousands, except per share data) | | FY 2010 | | | FY 2010 | | | FY 2010 | | | FY 2010 | | | FY 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | | | | | | | | | | |
| TANGIBLE EQUITY AND TANGIBLE ASSETS (PERIOD END) | | | | | | | | | | | | | | | | | | | | | |
| Total shareholders' equity (GAAP) | | $ | 253,417 | | | $ | 264,864 | | | $ | 277,581 | | | $ | 278,238 | | | $ | 281,479 | | | $ | 253,417 | | | $ | 281,479 | |
| Less: Intangible assets | | | (8,777 | ) | | | (9,337 | ) | | | (10,048 | ) | | | (10,776 | ) | | | (11,524 | ) | | | (8,777 | ) | | | (11,524 | ) |
| Tangible total equity (non-GAAP) | | | 244,640 | | | | 255,527 | | | | 267,533 | | | | 267,462 | | | | 269,955 | | | | 244,640 | | | | 269,955 | |
| Less: Preferred stock | | | (69,837 | ) | | | (69,653 | ) | | | (69,473 | ) | | | (69,296 | ) | | | (69,198 | ) | | | (69,837 | ) | | | (69,198 | ) |
| Tangible common equity (non-GAAP) | | $ | 174,803 | | | $ | 185,874 | | | $ | 198,060 | | | $ | 198,166 | | | $ | 200,757 | | | $ | 174,803 | | | $ | 200,757 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total assets (GAAP) | | $ | 3,153,585 | | | $ | 3,208,628 | | | $ | 3,259,123 | | | $ | 3,245,382 | | | $ | 3,404,467 | | | $ | 3,153,585 | | | $ | 3,404,467 | |
| Less: Intangible assets | | | (8,777 | ) | | | (9,337 | ) | | | (10,048 | ) | | | (10,776 | ) | | | (11,524 | ) | | | (8,777 | ) | | | (11,524 | ) |
| Tangible total assets (non-GAAP) | | $ | 3,144,808 | | | $ | 3,199,291 | | | $ | 3,249,075 | | | $ | 3,234,606 | | | $ | 3,392,943 | | | $ | 3,144,808 | | | $ | 3,392,943 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tangible total equity to tangible assets | | | 7.78 | % | | | 7.99 | % | | | 8.23 | % | | | 8.27 | % | | | 7.96 | % | | | 7.78 | % | | | 7.96 | % |
| Tangible common equity to tangible assets | | | 5.56 | | | | 5.81 | | | | 6.10 | | | | 6.13 | | | | 5.92 | | | | 5.56 | | | | 5.92 | |
| Tangible book value per common share | | $ | 10.30 | | | $ | 10.95 | | | $ | 11.67 | | | $ | 11.68 | | | $ | 11.83 | | | $ | 10.30 | | | $ | 11.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| TANGIBLE EQUITY AND TANGIBLE ASSETS (AVERAGE) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total shareholders' equity (GAAP) | | $ | 259,919 | | | $ | 273,815 | | | $ | 276,524 | | | $ | 280,136 | | | $ | 289,768 | | | $ | 272,626 | | | $ | 285,926 | |
| Less: Intangible assets | | | (9,090 | ) | | | (9,686 | ) | | | (10,403 | ) | | | (11,139 | ) | | | (11,896 | ) | | | (10,084 | ) | | | (59,436 | ) |
| Tangible total equity (non-GAAP) | | | 250,829 | | | | 264,129 | | | | 266,121 | | | | 268,997 | | | | 277,872 | | | | 262,542 | | | | 226,490 | |
| Less: Preferred stock | | | (69,748 | ) | | | (69,566 | ) | | | (69,401 | ) | | | (69,269 | ) | | | (69,161 | ) | | | (69,495 | ) | | | (20,082 | ) |
| Tangible common equity (non-GAAP) | | $ | 181,081 | | | $ | 194,563 | | | $ | 196,720 | | | $ | 199,728 | | | $ | 208,711 | | | $ | 193,047 | | | $ | 206,408 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total assets (GAAP) | | $ | 3,202,184 | | | $ | 3,213,153 | | | $ | 3,222,340 | | | $ | 3,232,235 | | | $ | 3,346,646 | | | $ | 3,217,543 | | | $ | 3,334,601 | |
| Less: Intangible assets | | | (9,090 | ) | | | (9,686 | ) | | | (10,403 | ) | | | (11,139 | ) | | | (11,896 | ) | | | (10,084 | ) | | | (59,436 | ) |
| Tangible total assets (non-GAAP) | | $ | 3,193,094 | | | $ | 3,203,467 | | | $ | 3,211,937 | | | $ | 3,221,096 | | | $ | 3,334,750 | | | $ | 3,207,459 | | | $ | 3,275,165 | |
| (a) | Noninterest expense divided by the sum of fully taxable equivalent net interest income and noninterest income. |
| (b) | Core noninterest expense divided by the sum of fully taxable equivalent net interest income and noninterest income. |
