Exhibit 99.1
| | | | |
| For Release: April 22, 2008 | | | | For Further Information: |
| | | | Steven R. Lewis, President & CEO |
| | | | David W. Gifford, CFO |
| | | | (330) 373-1221 |
First Place Financial Corp. Reports Quarterly Net Income of $4.8 Million
Board of Directors Maintains Quarterly Dividend
Highlights
| | • | | Net income for the third quarter of fiscal 2008 was $4.8 million, up from a net loss of $3.1 million in the second quarter of fiscal 2008. |
| | • | | Net income for the nine months ended March 31, 2008 was $7.9 million and core earnings for the same period were $12.2 million. |
| | • | | Commercial loans grew $40 million during the current quarter or at an annualized rate of 13.6% and now account for 46% of portfolio loans. |
| | • | | Total capital as a percent of assets increased to 9.54% at March 31, 2008 from 9.45% at December 31, 2007. |
| | • | | The Board of Directors maintained the quarterly cash dividend at $0.17 per share. |
Summary
Warren, Ohio — April 22, 2008 — First Place Financial Corp. (Nasdaq: FPFC) reported net income of $4.8 million for the quarter ended March 31, 2008, a decrease of $1.7 million from net income of $6.5 million for the quarter ended March 31, 2007. The decrease was primarily due to an increase of $3.3 million in the provision for loan losses, partially offset by an increase of $2.1 million in mortgage banking gains. Earnings per share for the current quarter were $0.30 compared with $0.38 for the same quarter in the prior year. Return on average equity for the current quarter was 6.11% compared with 8.02% for the prior year quarter. Return on average tangible equity for the current quarter was 9.25% compared with 11.71% for the quarter ended March 31, 2007.
Net income of $4.8 million for the quarter ended March 31, 2008, increased $7.9 million from a net loss of $3.1 million for the quarter ended December 31, 2007. The increase in net income was due to decreases in impairment of securities and merger costs and increases in mortgage banking gains and gains on the sale of loan servicing rights. Diluted earnings per share were $0.30 for the current quarter compared to losses per share of $0.20 for the preceding quarter ended December 31, 2007. Return on average equity for the current quarter was 6.11% compared with -3.93% for the preceding quarter ended December 31, 2007.
For the nine months ended March 31, 2008, the Company reported net income of $7.9 million compared with $20.0 million for the same period in the prior year, or a decrease of 60.6%. Diluted earnings per share were $0.48 for the first nine months of fiscal 2008 compared with $1.16 for the same period in the prior year, or a decline of 58.6%. Return on average assets and return on average equity for the nine months ended March 31, 2008 were 0.32% and 3.29% respectively, down from 0.87% and 8.29% for the nine months ended March 31, 2007.
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Core earnings are a supplementary financial measure computed using methods other than generally accepted accounting principles (GAAP) that exclude certain unusual or nonrecurring items of revenue or expense. There were no differences between GAAP net income and core earnings for the three months ended March 31, 2008 or for the three months ended March 31, 2007. There were differences between net income and core earnings for the nine months ended March 31, 2008 but not for the nine months ended March 31, 2007. Both the $5.9 million pre-tax charge for the impairment of securities and the $0.8 million pre-tax charge for merger expenses in the nine months ended March 31, 2008 have been excluded from core earnings. For additional information on core earnings, see the Explanation of Certain Non-GAAP Measures beginning on page five of this release and the Reconciliation of GAAP Net Income to Core Earnings on page nine.
Core earnings for the nine months ended March 31, 2008 were $12.2 million compared with $20.0 million for the nine months ended March 31, 2007, or a decrease of 38.9%. Core diluted earnings per share were $0.75 for the first nine months of fiscal 2008 compared with $1.16 for the first nine months of fiscal 2007. Core return on average equity for the first nine months of the current year was 5.11% compared with 8.29% for the first nine months of the prior year. Core return on average tangible equity for the first nine months of the current year was 7.70% compared with 12.24% for the first nine months in the prior year.
Commenting on these results, Steven R. Lewis, President and CEO, stated, “We are pleased to report a return to profitability this quarter after reporting a net loss in the December 2007 quarter. We reported progress from the preceding quarter in each major income statement category, net interest income, provision for loan losses, noninterest income and noninterest expense. Asset quality continues to be our greatest challenge due to continued weakness in the midwest economy. We responded to this weakness by building our allowance for loan losses to 1.10% of loans up from 1.00% last quarter. At the same time we were able to increase capital in absolute terms, as a percent of assets and on a per share basis. We continue to remain well capitalized by regulatory standards.”
Revenue
Net interest income for the third quarter of fiscal 2008 was $21.8 million, an increase of $0.3 million or 1.5% over the third quarter of fiscal 2007. This increase was the net result of a 6.7% increase in average earning assets in the current quarter compared with the same quarter in the prior year partially offset by a decline in the net interest margin of 17 basis points to 2.98% for the current quarter from 3.15% for the same quarter in the prior year. The decrease in the net interest margin from the same quarter in the prior year is the result of experiencing an inverted yield curve for substantially all of fiscal 2007 and the impact of 300 basis points in Federal Reserve short-term interest rate decreases between September 2007 and March 2008 as First Place is modestly asset sensitive for periods less than six months. Net interest margin for the current quarter of 2.98% was up 6 basis points from the preceding quarter in spite of 200 basis points in rate reductions in the federal funds rate set by the Federal Reserve Board during the quarter. First Place achieved success by passing along market rate reductions to deposit customers during the quarter as other financial institutions followed similar strategies.
Noninterest income for the third quarter of fiscal 2008 was $9.9 million, an increase of $2.1 million or 27.6% compared with the same quarter in the prior year. The majority of this increase was due to mortgage banking gains of $3.9 million compared with gains of $1.8 million in the same quarter in the prior year. The increase in mortgage banking gains was due to increases of $1.0 million due to the adoption of Staff Accounting Bulletin 109 issued by the Securities and Exchange Commission and $1.1 million primarily due to an increase in the volume of loans sold. Staff Accounting Bulletin 109 repealed Staff Accounting Bulletin 105 and resulted in full recognition of loan commitment derivatives when issued. This resulted in recognizing mortgage banking gains at the time of issuing the commitment rather than when the loan was sold and effectively resulted in recognizing approximately four months worth of mortgage banking revenue during the current quarter. The volume of loan sales in the current quarter was $329 million, up $129 million from sales of $200 million in the same quarter in the prior year. Other significant changes in noninterest income in the current quarter compared with the same quarter in the prior
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year include a $0.5 million increase in net gains on the sale of loan servicing rights and a $0.7 million increase in service charge income, partially offset by a decrease of $0.9 million in loan servicing income. The gain on loan servicing rights was due to the resolution of certain contingencies related to the September 2007 sale of loan servicing rights. Service charge income increased due to the impact of the Flint, Michigan branches acquired in April 2007, the banking office of HBLS Bank in Hicksville, Ohio acquired in October 2007 and due to the effectiveness of procedural changes in the way service charges on deposit accounts are levied. The decrease in loan servicing income was due to a $0.2 million increase in impairment of loan servicing rights recorded in the current quarter compared with impairment recorded in the same quarter in the prior year and a $0.7 million decrease in net loan servicing revenue due to the sale of approximately 50% of the servicing portfolio in September 2007.
Noninterest Expense
Noninterest expense for the third quarter of fiscal year 2008 was $20.0 million, an increase of $1.6 million or 8.6% compared with the same quarter in the prior year. Salaries and employee benefit costs increased $0.5 million or 5.5% and occupancy and equipment costs increased $0.6 million or 21.5% both primarily related to the seven Flint, Michigan retail banking offices acquired as of April 27, 2007 and the banking office of HBLS Bank acquired as of October 31, 2007. Real estate owned expense increased $0.3 million related to an increase in the volume of properties added to real estate owned in recent months. Noninterest expense as a percent of average assets was 2.45% for the quarter ended March 31, 2008, up from 2.43% for the same quarter in the prior year.
Noninterest expense for the third quarter of fiscal 2008 of $20.0 million decreased $2.5 million or 11.1% from $22.5 million for the preceding quarter of fiscal 2008. The decrease was primarily due to decreases in real estate owned expense, merger expense and marketing. Noninterest expense as a percent of average assets decreased to 2.45% in the current quarter compared with 2.76% for the preceding quarter.
Asset Quality
Nonperforming assets, which is comprised of nonperforming loans and real estate owned, were $70.7 million at March 31, 2008, or 2.15% of total assets, up $30.0 million from $40.7 million or 1.26% of total assets at June 30, 2007. Nonperforming loans were $57.5 million at March 31, 2008, or 2.20% of total loans up $23.5 million from $34.0 million or 1.35% of total assets at June 30, 2007. Real estate owned was $13.2 million at March 31, 2008 up $6.5 million from $6.7 million at June 30, 2007. At March 31, 2008, nonperforming assets increased $14.8 million due to increases of $11.2 million in nonperforming loans and $3.6 million in real estate owned compared with December 31, 2007. First Place works with borrowers to avoid foreclosure if at all possible. Furthermore, if it becomes inevitable that a borrower will not be able to retain ownership of their property, First Place often seeks a deed in lieu of foreclosure. This has resulted in real estate owned growing more rapidly, on a percentage basis, than nonperforming loans in the current quarter. Single family residential properties represented $9.2 million of the $13.2 million balance of real estate owned at March 31, 2008.
Net charge-offs were $2.2 million in the current quarter which was an increase of $1.2 million over net charge-offs of $1.0 million in the prior year quarter but a decrease of $3.1 million from net charge-offs of $5.3 million in the preceding quarter. Each quarter management performs a review of all classified commercial loans and a review of the historic loss rates on residential and consumer loans. This information is combined with an analysis of current market and projected economic conditions in order to determine the overall allowance for loan losses. Based on this analysis, a provision for loan losses of $4.7 million was recorded for the quarter ended March 31, 2008. That provision was a $3.3 million increase over the provision of $1.4 million recorded in the quarter ended March 31, 2007 and a $0.5 million decrease from the provision of $5.2 million recorded in the preceding quarter. The allowance for loan losses increased $2.5 million to $28.9 million at March 31, 2008, from $26.4 million at December 31, 2007. The ratio of the allowance for loan losses to total loans was 1.10% at March 31, 2008, compared with 1.00% at December 31, 2007, 1.03% at June 30, 2007 and 0.98% at March 31, 2007. The increase in the allowance as a percent of loans in the current quarter is consistent with the increase in nonperforming loans during the quarter. Another factor considered in determining the level of the allowance is the type of collateral.
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Of the total nonperforming loans at March 31, 2008, 99% were secured by real estate. Real estate loans are generally well secured and if these loans do default, the actual losses are often only a fraction of the total loan amount.
Steven Lewis commented, “Our increase in nonperforming assets is a result of the state of the economy in the midwest. As the current recession continues, additional borrowers have been affected by economic conditions and problem loans have continued to increase. In response to these unique market conditions, we have increased our allowance for loan losses to fully recognize the credit costs associated with our delinquent and nonperforming loans. We have also acted aggressively by changing credit and collection procedures including but not limited to limiting new residential construction loans, eliminating our riskiest residential lending programs and increasing the resources we have allocated to collection and workout efforts in proportion to the increase in problem loans. We remain committed to reducing nonperforming assets in the coming months.”
Balance Sheet Activity
Assets were $3.289 billion at March 31, 2008, compared with $3.226 billion at June 30, 2007, an increase of $63 million or 1.9%. The acquisition of HBLS Bank on October 31, 2007 accounted for $48 million of the increase in total assets. Total portfolio loans were $2.616 billion at March 31, 2008, an increase of $108 million from June 30, 2007. Commercial loans increased $166 million during the first nine months of fiscal 2008, or 21.1% annualized, to $1.213 billion. Commercial loans now account for 46.4% of the loan portfolio up from 41.7% at June 30, 2007. Mortgage and construction loans decreased $62 million during the first nine months of the current fiscal year and consumer loans increased $4 million during the same period. Securities available for sale declined $10 million to $276 million for the nine months ended March 31, 2008 primarily due to securities which matured and were not replaced. Loans held for sale declined $11 million to $85 million at March 31, 2008 down from $96 million at June 30, 2007.
Deposits totaled $2.329 billion at March 31, 2008, an increase of $88 million since June 30, 2007. This increase included $40 million in deposits acquired as part of HBLS Bank in October 2007. Total borrowings increased $21 million to $615 million at March 31, 2008, compared with June 30, 2007.
Shareholders’ equity remains strong; it was $314 million at March 31, 2008, down $12 million from June 30, 2007. The decline was primarily due to $14 million of treasury stock purchases during the first six months of fiscal 2008. During the six months ended December 31, 2007, First Place purchased 880,086 treasury shares at an average price of $16.04 per share. There were no treasury stock purchases during the current quarter and the board authorizations to purchase treasury stock have expired. Shareholders’ equity as a percent of assets was 9.54% at March 31, 2008, up from 9.45% at December 31, 2007 and down from 10.11% at June 30, 2007. Tangible equity to assets increased to 6.53% at March 31, 2008 up from 6.42% at December 31, 2007 but down from 6.99% at June 30, 2007. First Place Bank remains well capitalized under regulatory capital standards.
Steven Lewis noted, “We continue to grow commercial loans bringing more balance, higher yields and more business customers with multiple relationships into our loan portfolio. In the current quarter we were able to fund this growth with increases in savings accounts and certificates of deposit at favorable rates resulting in an increase in our net interest margin. While total assets did not increase during the quarter we have strengthened First Place by increasing both total capital and tangible capital as a percent of assets. It only makes sense to maintain strong capital ratios in these turbulent financial times.”
Pending Acquisition
On April 2, 2008 First Place announced that it has signed a definitive agreement to acquire OC Financial Inc., a Dublin, Ohio financial holding company that owns Ohio Central Savings. Ohio Central Savings has approximately $64 million in assets and operates full service banking branches in Dublin, and Cleveland Heights, Ohio. The transaction is expected to be marginally accretive to capital and contribute positively to First Place’s earnings per share, excluding one-time merger-related costs, in its subsequent fiscal year ending June 30, 2009. The transaction is expected to close late in the second calendar quarter of 2008 pending regulatory approval, the approval of OC Financial’s shareholders and satisfaction of other customary closing conditions.
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Board Actions
At its regular meeting held April 22, 2008, the Board of Directors declared a per share cash dividend of $0.17 payable on May 8, 2008, to shareholders of record as of the close of business on April 24, 2008. This dividend is at the same level as the dividends declared in January 2008 and October 2007.
About First Place Financial Corp.
First Place Financial Corp. is a $3.3 billion financial services holding company based in Warren, Ohio. First Place Financial Corp. operates 43 retail locations, 2 business financial service centers and 20 loan production offices through the First Place Bank and the Franklin Bank division of First Place Bank. Additional affiliates of First Place Financial Corp. include First Place Insurance Agency, Ltd.; Coldwell Banker First Place Real Estate, Ltd.; TitleWorks Agency, LLC and APB Financial Group, Ltd., an employee benefit consulting firm and specialist in wealth management services for businesses and consumers. Information about First Place Financial Corp. may be found on the Company’s web site:www.firstplacebank.com.
Explanation of Certain Non-GAAP Measures
This press release contains certain financial information determined by methods other than in accordance with Generally Accepted Accounting Principles (GAAP). Specifically, we have provided financial measures that are based on core earnings rather than net income. Ratios and other financial measures with the word “core” in their title were computed using core earnings rather than net income. Core earnings excludes merger, integration and restructuring expense; extraordinary income or expense; income or expense from discontinued operations; and income, expense, gains and losses that are not reflective of ongoing operations or that we do not expect to reoccur. Similarly, core noninterest expense or core noninterest income exclude the pretax impact of those same items that impact noninterest income or noninterest expense. We believe that this information is useful to both investors and to management and can aid them in understanding the Company’s current performance, performance trends and financial condition. While core earnings can be useful in evaluating current performance and projecting current trends into the future, we do not believe that core earnings are a substitute for GAAP net income. We encourage investors and others to use core earnings as a supplemental tool for analysis and not as a substitute for GAAP net income. Our non-GAAP measures may not be comparable to the non-GAAP measures of other companies. In addition, future results of operations may include nonrecurring items that would not be included in core earnings. A reconciliation from GAAP net income to the non-GAAP measure of core earnings is shown in the consolidated financial highlights on page nine.
Forward-Looking Statements
When used in this press release, or future press releases or other public or shareholder communications, in filings by First Place Financial Corp. (the Company) with the Securities and Exchange Commission or in oral statements made with the approval of an authorized executive officer, words or phrases such as “will likely result,” “expect,” “will continue,” “anticipate,” “estimate,” “project,” “believe,” “should,” “may,” “will,” “plan,” 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
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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.
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FIRST PLACE FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Three months ended
March 31, | | Percent
Change | | | Nine months ended
March 31, | | Percent
Change | |
(Dollars in thousands, except share data) | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Interest income | | $ | 47,421 | | | $ | 46,406 | | 2.2 | % | | $ | 144,812 | | | $ | 138,725 | | 4.4 | % |
Interest expense | | | 25,586 | | | | 24,889 | | 2.8 | | | | 80,047 | | | | 73,574 | | 8.8 | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income | | | 21,835 | | | | 21,517 | | 1.5 | | | | 64,765 | | | | 65,151 | | (0.6 | ) |
| | | | | | |
Provision for loan losses | | | 4,680 | | | | 1,425 | | 228.4 | | | | 11,836 | | | | 4,215 | | 180.8 | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses | | | 17,155 | | | | 20,092 | | (14.6 | ) | | | 52,929 | | | | 60,936 | | (13.1 | ) |
| | | | | | |
Noninterest income | | | | | | | | | | | | | | | | | | | | |
Service charges on deposit accounts | | | 2,145 | | | | 1,433 | | 49.7 | | | | 6,206 | | | | 4,449 | | 39.5 | |
Net gains on sale of securities | | | 8 | | | | — | | N/M | | | | 737 | | | | 84 | | N/M | |
Impairment of securities | | | — | | | | — | | — | | | | (5,900 | ) | | | — | | N/M | |
Mortgage banking gains | | | 3,938 | | | | 1,774 | | 122.0 | | | | 6,859 | | | | 5,503 | | 24.6 | |
Gain on sale of loan servicing rights | | | 490 | | | | — | | N/M | | | | 1,961 | | | | — | | N/M | |
Loan servicing income (loss) | | | (411 | ) | | | 482 | | (185.3 | ) | | | (267 | ) | | | 953 | | (128.0 | ) |
Other income - bank | | | 1,624 | | | | 1,638 | | (0.9 | ) | | | 4,969 | | | | 5,380 | | (7.6 | ) |
Insurance commission income | | | 1,072 | | | | 925 | | 15.9 | | | | 2,730 | | | | 2,590 | | 5.4 | |
Other income - non-bank | | | 1,070 | | | | 1,535 | | (30.3 | ) | | | 3,546 | | | | 4,244 | | (16.4 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 9,936 | | | | 7,787 | | 27.6 | | | | 20,841 | | | | 23,203 | | (10.2 | ) |
| | | | | | |
Noninterest expense | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 10,083 | | | | 9,554 | | 5.5 | | | | 30,719 | | | | 27,326 | | 12.4 | |
Occupancy and equipment | | | 3,459 | | | | 2,846 | | 21.5 | | | | 9,627 | | | | 8,588 | | 12.1 | |
Professional fees | | | 649 | | | | 713 | | (9.0 | ) | | | 2,154 | | | | 2,158 | | (0.2 | ) |
Loan expenses | | | 592 | | | | 295 | | 100.7 | | | | 1,476 | | | | 1,632 | | (9.6 | ) |
Marketing | | | 453 | | | | 453 | | — | | | | 2,126 | | | | 1,749 | | 21.6 | |
Merger, integration & restructuring | | | — | | | | — | | — | | | | 790 | | | | — | | N/M | |
State and local taxes | | | 191 | | | | 298 | | (35.9 | ) | | | 722 | | | | 788 | | (8.4 | ) |
Amortization of intangible assets | | | 1,104 | | | | 1,058 | | 4.3 | | | | 3,327 | | | | 3,203 | | 3.9 | |
Real estate owned expense | | | 550 | | | | 246 | | 123.6 | | | | 2,690 | | | | 540 | | 398.1 | |
Other expense | | | 2,891 | | | | 2,933 | | (1.4 | ) | | | 9,225 | | | | 8,770 | | 5.2 | |
| | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | 19,972 | | | | 18,396 | | 8.6 | | | | 62,856 | | | | 54,754 | | 14.8 | |
| | | | | | |
Income before income tax expense | | | 7,119 | | | | 9,483 | | (24.9 | ) | | | 10,914 | | | | 29,385 | | (62.9 | ) |
Income tax expense | | | 2,350 | | | | 3,016 | | (22.1 | ) | | | 3,038 | | | | 9,386 | | (67.6 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 4,769 | | | $ | 6,467 | | (26.3 | )% | | $ | 7,876 | | | $ | 19,999 | | (60.6 | )% |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | |
SHARE DATA: | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share | | $ | 0.30 | | | $ | 0.38 | | (21.1 | )% | | $ | 0.49 | | | $ | 1.18 | | (58.5 | )% |
Diluted earnings per share | | $ | 0.30 | | | $ | 0.38 | | (21.1 | ) | | $ | 0.48 | | | $ | 1.16 | | (58.6 | ) |
Cash dividends per share | | $ | 0.170 | | | $ | 0.155 | | 9.7 | | | $ | 0.495 | | | $ | 0.450 | | 10.0 | |
Average shares outstanding - basic | | | 15,968,711 | | | | 17,006,416 | | (6.1 | ) | | | 16,180,416 | | | | 16,961,642 | | (4.6 | ) |
Average shares outstanding - diluted | | | 15,998,585 | | | | 17,214,117 | | (7.1 | ) | | | 16,259,477 | | | | 17,194,556 | | (5.4 | ) |
N/M – Not meaningful
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FIRST PLACE FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
| | | | | | | | | | | | | | | |
| | | Mar 31,
2008 | | Dec 31,
2007 | | Sept 30,
2007 | | June 30,
2007 | | Mar 31,
2007 |
| | | | | |
| (Dollars in thousands) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | | | (Unaudited) |
ASSETS | | | | | | | | | | | | | | | |
Cash and due from banks | | $ | 52,351 | | $ | 47,268 | | $ | 54,866 | | $ | 77,226 | | $ | 57,177 |
Interest-bearing deposits in other banks | | | 5,049 | | | 13,583 | | | 19,496 | | | 9,989 | | | 1,273 |
Securities available for sale | | | 275,519 | | | 267,709 | | | 268,610 | | | 285,242 | | | 267,305 |
Loans held for sale | | | 85,372 | | | 72,547 | | | 60,646 | | | 96,163 | | | 109,079 |
Loans | | | | | | | | | | | | | | | |
Mortgage and construction | | | 1,018,083 | | | 1,081,719 | | | 1,095,060 | | | 1,079,788 | | | 1,059,526 |
Commercial | | | 1,212,947 | | | 1,173,115 | | | 1,070,159 | | | 1,046,893 | | | 1,001,661 |
Consumer | | | 384,629 | | | 393,383 | | | 383,229 | | | 381,011 | | | 360,103 |
| | | | | | | | | | | | | | | |
Total loans | | | 2,615,659 | | | 2,648,217 | | | 2,548,448 | | | 2,507,692 | | | 2,421,290 |
Less allowance for loan losses | | | 28,874 | | | 26,360 | | | 26,165 | | | 25,851 | | | 23,844 |
| | | | | | | | | | | | | | | |
Loans, net | | | 2,586,785 | | | 2,621,857 | | | 2,522,283 | | | 2,481,841 | | | 2,397,446 |
Federal Home Loan Bank stock | | | 34,523 | | | 34,100 | | | 33,209 | | | 33,209 | | | 33,209 |
Premises and equipment, net | | | 50,902 | | | 51,568 | | | 46,415 | | | 45,639 | | | 41,535 |
Goodwill | | | 91,978 | | | 91,835 | | | 91,692 | | | 91,692 | | | 88,296 |
Core deposit and other intangibles | | | 13,998 | | | 15,108 | | | 15,587 | | | 16,678 | | | 14,429 |
Other assets | | | 92,507 | | | 88,699 | | | 89,791 | | | 88,534 | | | 85,648 |
| | | | | | | | | | | | | | | |
Total assets | | $ | 3,288,984 | | $ | 3,304,274 | | $ | 3,202,595 | | $ | 3,226,213 | | $ | 3,095,397 |
| | | | | | | | | | | | | | | |
| | | | | |
LIABILITIES | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | |
Noninterest-bearing checking | | $ | 227,994 | | $ | 228,019 | | $ | 226,710 | | $ | 242,068 | | $ | 229,179 |
Interest-bearing checking | | | 155,941 | | | 157,742 | | | 145,925 | | | 154,941 | | | 141,355 |
Savings | | | 453,609 | | | 432,644 | | | 403,630 | | | 390,462 | | | 327,236 |
Money market | | | 362,711 | | | 391,027 | | | 394,748 | | | 404,248 | | | 453,673 |
Certificates of deposit | | | 1,128,340 | | | 1,090,411 | | | 1,060,222 | | | 1,048,977 | | | 952,615 |
| | | | | | | | | | | | | | | |
Total deposits | | | 2,328,595 | | | 2,299,843 | | | 2,231,235 | | | 2,240,696 | | | 2,104,058 |
Short-term borrowings | | | 150,214 | | | 222,471 | | | 224,736 | | | 195,249 | | | 223,761 |
Long-term debt | | | 464,371 | | | 436,518 | | | 384,450 | | | 397,914 | | | 398,535 |
Other liabilities | | | 32,106 | | | 33,353 | | | 39,466 | | | 66,167 | | | 38,896 |
| | | | | | | | | | | | | | | |
Total liabilities | | | 2,975,286 | | | 2,992,185 | | | 2,879,887 | | | 2,900,026 | | | 2,765,250 |
| | | | | |
SHAREHOLDERS’ EQUITY | | | 313,698 | | | 312,089 | | | 322,708 | | | 326,187 | | | 330,147 |
| | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 3,288,984 | | $ | 3,304,274 | | $ | 3,202,595 | | $ | 3,226,213 | | $ | 3,095,397 |
| | | | | | | | | | | | | | | |
- 8 -
FIRST PLACE FINANCIAL CORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | As of or for the three months ended | | | As of or for the
nine months
ended
March 31, | |
(Dollars in thousands except per share data) | | 3/31/08 | | | 12/31/07 | | | 9/30/07 | | | 6/30/07 | | | 3/31/07 | | |
| | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | | | 4th Qtr | | | 3rd Qtr | | |
| | FY 2008 | | | FY 2008 | | | FY 2008 | | | FY 2007 | | | FY 2007 | | | 2008 | | | 2007 | |
EARNINGS (GAAP) | | | | | | | | | | | | | | | | | | | | | | |
Tax equivalent net interest income | | $ | 22,246 | | | 21,930 | | | 21,746 | | | 22,211 | | | 21,875 | | | 65,922 | | | 66,240 | |
Net interest income | | $ | 21,835 | | | 21,558 | | | 21,372 | | | 21,854 | | | 21,517 | | | 64,765 | | | 65,151 | |
Provision for loan losses | | $ | 4,680 | | | 5,195 | | | 1,961 | | | 3,176 | | | 1,425 | | | 11,836 | | | 4,215 | |
Noninterest income | | $ | 9,936 | | | 714 | | | 10,191 | | | 9,085 | | | 7,787 | | | 20,841 | | | 23,203 | |
Noninterest expense | | $ | 19,972 | | | 22,455 | | | 20,429 | | | 19,442 | | | 18,396 | | | 62,856 | | | 54,754 | |
Net income (loss) | | $ | 4,769 | | | (3,147 | ) | | 6,254 | | | 5,625 | | | 6,467 | | | 7,876 | | | 19,999 | |
Basic earnings (loss) per share | | $ | 0.30 | | | (0.20 | ) | | 0.38 | | | 0.33 | | | 0.38 | | | 0.49 | | | 1.18 | |
Diluted earnings (loss) per share | | $ | 0.30 | | | (0.20 | ) | | 0.38 | | | 0.33 | | | 0.38 | | | 0.48 | | | 1.16 | |
| | | | | | | |
PERFORMANCE RATIOS(annualized)(GAAP) | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets | | | 0.59 | % | | (0.39 | )% | | 0.78 | % | | 0.72 | % | | 0.85 | % | | 0.32 | % | | 0.87 | % |
Return on average equity | | | 6.11 | % | | (3.93 | )% | | 7.72 | % | | 6.84 | % | | 8.02 | % | | 3.29 | % | | 8.29 | % |
Return on average tangible assets | | | 0.61 | % | | (0.40 | )% | | 0.81 | % | | 0.75 | % | | 0.88 | % | | 0.34 | % | | 0.90 | % |
Return on average tangible equity | | | 9.25 | % | | (5.91 | )% | | 11.60 | % | | 10.15 | % | | 11.71 | % | | 4.96 | % | | 12.24 | % |
Net interest margin, fully tax equivalent | | | 2.98 | % | | 2.92 | % | | 2.94 | % | | 3.07 | % | | 3.15 | % | | 2.94 | % | | 3.12 | % |
Efficiency ratio | | | 62.06 | % | | 99.17 | % | | 63.97 | % | | 62.12 | % | | 62.02 | % | | 72.45 | % | | 61.22 | % |
Noninterest expense as a percent of average assets | | | 2.45 | % | | 2.76 | % | | 2.55 | % | | 2.49 | % | | 2.43 | % | | 2.59 | % | | 2.38 | % |
| | | | | | | |
RECONCILIATION OF NET INCOME TO CORE EARNINGS | | | | | | | | | | | | | | | | | | | | | | |
GAAP net income (loss) | | $ | 4,769 | | | (3,147 | ) | | 6,254 | | | 5,625 | | | 6,467 | | | 7,876 | | | 19,999 | |
Impairment of securities | | $ | — | | | 3,835 | | | — | | | — | | | — | | | 3,835 | | | — | |
Merger, integration and restructuring, net of tax | | $ | — | | | 514 | | | — | | | 487 | | | — | | | 514 | | | — | |
Core earnings | | $ | 4,769 | | | 1,202 | | | 6,254 | | | 6,112 | | | 6,467 | | | 12,225 | | | 19,999 | |
| | | | | | | |
CORE EARNINGS | | | | | | | | | | | | | | | | | | | | | | |
Core earnings | | $ | 4,769 | | | 1,202 | | | 6,254 | | | 6,112 | | | 6,467 | | | 12,225 | | | 19,999 | |
Basic core earnings per share | | $ | 0.30 | | | 0.07 | | | 0.38 | | | 0.36 | | | 0.38 | | | 0.76 | | | 1.18 | |
Core diluted earnings per share | | $ | 0.30 | | | 0.07 | | | 0.38 | | | 0.36 | | | 0.38 | | | 0.75 | | | 1.16 | |
| | | | | | | |
CORE PERFORMANCE RATIOS(annualized) | | | | | | | | | | | | | | | | | | | | | | |
Core return on average assets | | | 0.59 | % | | 0.15 | % | | 0.78 | % | | 0.78 | % | | 0.85 | % | | 0.50 | % | | 0.87 | % |
Core return on average equity | | | 6.11 | % | | 1.50 | % | | 7.72 | % | | 7.44 | % | | 8.02 | % | | 5.11 | % | | 8.29 | % |
Core return on average tangible assets | | | 0.61 | % | | 0.15 | % | | 0.81 | % | | 0.81 | % | | 0.88 | % | | 0.52 | % | | 0.90 | % |
Core return on average tangible equity | | | 9.25 | % | | 2.26 | % | | 11.60 | % | | 11.03 | % | | 11.71 | % | | 7.70 | % | | 12.24 | % |
Core net interest margin, fully tax equivalent | | | 2.98 | % | | 2.92 | % | | 2.94 | % | | 3.07 | % | | 3.15 | % | | 2.94 | % | | 3.12 | % |
Core efficiency ratio | | | 62.06 | % | | 75.90 | % | | 63.97 | % | | 59.73 | % | | 62.02 | % | | 66.98 | % | | 61.22 | % |
Core noninterest expense as a percent of average assets | | | 2.45 | % | | 2.66 | % | | 2.55 | % | | 2.39 | % | | 2.43 | % | | 2.55 | % | | 2.38 | % |
- 9 -
FIRST PLACE FINANCIAL CORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | As of or for the three months ended | | | As of or for the
nine months ended
March 31, | |
| | | 3/31/08 | | | 12/31/07 | | | 9/30/07 | | | 6/30/07 | | | 3/31/07 | | |
| | | 3rd Qtr | | | 2nd Qtr | | | 1st Qtr | | | 4th Qtr | | | 3rd Qtr | | |
(Dollars in thousands except per share data) | | FY 2008 | | | FY 2008 | | | FY 2008 | | | FY 2007 | | | FY 2007 | | | 2008 | | | 2007 | |
CAPITAL | | | | | | | | | | | | | | | | | | | | | | |
Equity to total assets at end of period | | | 9.54 | % | | 9.45 | % | | 10.08 | % | | 10.11 | % | | 10.67 | % | | 9.54 | % | | 10.67 | % |
Tangible equity to tangible assets | | | 6.53 | % | | 6.42 | % | | 6.96 | % | | 6.99 | % | | 7.60 | % | | 6.53 | % | | 7.60 | % |
Book value per share | | $ | 19.11 | | | 19.01 | | | 19.24 | | | 18.92 | | | 18.88 | | | 19.11 | | | 18.88 | |
Tangible book value per share | | $ | 12.65 | | | 12.50 | | | 12.85 | | | 12.64 | | | 13.01 | | | 12.65 | | | 13.01 | |
Period-end market value per share | | $ | 13.00 | | | 13.99 | | | 17.70 | | | 21.12 | | | 21.45 | | | 13.00 | | | 21.45 | |
Dividends declared per common share | | $ | 0.170 | | | 0.170 | | | 0.155 | | | 0.155 | | | 0.155 | | | 0.495 | | | 0.45 | |
Common stock dividend payout ratio | | | 56.67 | % | | N/M | | | 40.79 | % | | 46.97 | % | | 40.79 | % | | 103.13 | % | | 38.79 | % |
Period-end common shares outstanding (000) | | | 16,418 | | | 16,416 | | | 16,770 | | | 17,236 | | | 17,486 | | | 16,418 | | | 17,486 | |
Average basic shares outstanding (000) | | | 15,969 | | | 16,096 | | | 16,475 | | | 16,934 | | | 17,006 | | | 16,180 | | | 16,961 | |
Average diluted shares outstanding (000) | | | 15,999 | | | 16,096 | | | 16,590 | | | 17,106 | | | 17,214 | | | 16,259 | | | 17,195 | |
| | | | | | | |
ASSET QUALITY | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs (recoveries) | | $ | 2,165 | | | 5,254 | | | 1,647 | | | 1,169 | | | 1,006 | | | 9,066 | | | 2,690 | |
Annualized net charge-offs (recoveries) to average loans | | | 0.33 | % | | 0.80 | % | | 0.26 | % | | 0.19 | % | | 0.17 | % | | 0.46 | % | | 0.15 | % |
Nonperforming loans (NPLs) | | $ | 57,480 | | | 46,322 | | | 36,832 | | | 33,962 | | | 27,630 | | | 57,480 | | | 27,630 | |
NPLs as a percent of total loans | | | 2.20 | % | | 1.75 | % | | 1.45 | % | | 1.35 | % | | 1.14 | % | | 2.20 | % | | 1.14 | % |
Nonperforming assets (NPAs) | | $ | 70,692 | | | 55,914 | | | 46,848 | | | 40,678 | | | 32,732 | | | 70,692 | | | 32,732 | |
NPAs as a percent of total assets | | | 2.15 | % | | 1.69 | % | | 1.46 | % | | 1.26 | % | | 1.06 | % | | 2.15 | % | | 1.06 | % |
Allowance for loan losses | | $ | 28,874 | | | 26,360 | | | 26,165 | | | 25,851 | | | 23,844 | | | 28,874 | | | 23,844 | |
Allowance for loan losses as a percent of loans | | | 1.10 | % | | 1.00 | % | | 1.03 | % | | 1.03 | % | | 0.98 | % | | 1.10 | % | | 0.98 | % |
Allowance for loan losses as a percent of NPLs | | | 50.23 | % | | 56.91 | % | | 71.46 | % | | 76.12 | % | | 86.30 | % | | 50.23 | % | | 86.30 | % |
| | | | | | | |
MORTGAGE BANKING | | | | | | | | | | | | | | | | | | | | | | |
Mortgage originations | | $ | 335,700 | | | 282,400 | | | 330,700 | | | 356,300 | | | 233,200 | | | 948,800 | | | 763,900 | |
Net gains on sale of loans | | $ | 3,938 | | | 1,065 | | | 1,856 | | | 1,737 | | | 1,774 | | | 6,859 | | | 5,503 | |
Mortgage servicing portfolio | | $ | 1,357,944 | | | 1,228,283 | | | 1,062,742 | | | 2,095,607 | | | 2,035,437 | | | 1,357,944 | | | 2,035,437 | |
Mortgage servicing rights | | $ | 13,402 | | | 11,721 | | | 10,876 | | | 20,785 | | | 20,092 | | | 13,402 | | | 20,092 | |
Mortgage servicing rights valuation (loss) recovery | | $ | (145 | ) | | (305 | ) | | — | | | 70 | | | 76 | | | (450 | ) | | 41 | |
Mortgage servicing rights / Mortgage servicing portfolio | | | 0.99 | % | | 0.95 | % | | 1.02 | % | | 0.99 | % | | 0.99 | % | | 0.99 | % | | 0.99 | % |
| | | | | | | |
END OF PERIOD BALANCES | | | | | | | | | | | | | | | | | | | | | | |
Assets | | $ | 3,288,984 | | | 3,304,274 | | | 3,202,595 | | | 3,226,213 | | | 3,095,397 | | | 3,288,984 | | | 3,095,397 | |
Deposits | | $ | 2,328,595 | | | 2,299,843 | | | 2,231,235 | | | 2,240,696 | | | 2,104,058 | | | 2,328,595 | | | 2,104,058 | |
Shareholders’ equity | | $ | 313,698 | | | 312,089 | | | 322,708 | | | 326,187 | | | 330,147 | | | 313,698 | | | 330,147 | |
Tangible shareholders’ equity | | $ | 207,722 | | | 205,146 | | | 215,429 | | | 217,817 | | | 227,422 | | | 207,722 | | | 227,422 | |
| | | | | | | |
AVERAGE BALANCES | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 2,625,799 | | | 2,613,435 | | | 2,551,278 | | | 2,503,590 | | | 2,439,627 | | | 2,596,732 | | | 2,412,491 | |
Loans held for sale | | $ | 74,675 | | | 60,112 | | | 82,538 | | | 93,719 | | | 81,204 | | | 72,434 | | | 107,056 | |
Earning assets | | $ | 3,007,062 | | | 2,989,442 | | | 2,939,959 | | | 2,898,204 | | | 2,819,160 | | | 2,981,229 | | | 2,824,112 | |
Assets | | $ | 3,276,830 | | | 3,236,941 | | | 3,185,983 | | | 3,134,562 | | | 3,067,951 | | | 3,233,093 | | | 3,063,138 | |
Deposits | | $ | 2,323,244 | | | 2,279,620 | | | 2,225,830 | | | 2,193,083 | | | 2,095,705 | | | 2,276,060 | | | 2,092,668 | |
Shareholders’ equity | | $ | 313,888 | | | 318,909 | | | 322,372 | | | 329,652 | | | 326,873 | | | 318,406 | | | 321,556 | |
Tangible shareholders’ equity | | $ | 207,400 | | | 211,933 | | | 214,555 | | | 220,330 | | | 223,944 | | | 211,310 | | | 217,662 | |
- 10 -
