Exhibit 99.1
 | NEWS RELEASE | |
| | Contact: | William J. Small | |
| | | Chairman, President and CEO | |
| | | (419) 782-5015 | |
| | | bsmall@first-fed.com | |
| | | | |
For Immediate Release
FIRST DEFIANCE ANNOUNCES 2006
THIRD QUARTER EARNINGS
DEFIANCE, OHIO (October 16, 2006) - First Defiance Financial Corp. (NASDAQ: FDEF) today announced that net income for its third fiscal quarter ended September 30, 2006 totaled $3.82 million, or $0.53 per diluted share, compared to $3.63 million or $0.50 per diluted share for the third quarter ended September 30, 2005. The 2005 quarterly results include $97,000 of expenses related to the 2005 acquisitions of ComBanc, Inc. (“ComBanc”) and the Genoa Savings and Loan Company (“Genoa”). Core operating results, which exclude the after tax impact of such acquisition-related costs, were $3.69 million or $0.51 per diluted share for the third quarter of 2005.
For the nine months ended September 30, 2006 First Defiance had net income of $11.6 million or $1.62 per diluted share compared to $8.5 million or $1.20 per diluted share for the first nine months of 2005. Excluding acquisition-related charges of $3.5 million recorded in conjunction with the Genoa and Combanc acquisitions, earnings for the first nine months of 2005 were $10.8 million or $1.52 per diluted share.
“Our third quarter results were solid but they also illustrate the challenges the banking industry is facing,” said William J. Small, Chairman, President and Chief Executive Officer of First Defiance. “As expected, our net interest margin declined 10 basis points this quarter from the second quarter, to 3.59%. This margin decline has resulted in a level of net interest income that is essentially flat between the 2005 and 2006 third quarter periods. Increases in our non-interest income of more than 25% over last year’s third quarter have helped to offset the impact of the margin compression.”
Net Interest Income Unchanged Despite Margin Reduction
Net interest income for both of the quarters ended September 30, 2006 and September 30, 2005 was $12.2 million. Average interest earning assets increased by $88.6 million to $1.36 billion for the quarter ended September 30, 2006 from $1.28 billion for the same three month period in 2005. During those same periods, average interest-bearing liabilities increased by $83.2 million (to $1.25 billion for the 2006 third quarter from $1.16 billion for the 2005 period). However, the yields on those interest-earning assets increased by .80% (from 6.25% for the quarter ended September 30, 2005 to 7.05% for the three month period ended September 30, 2006) while the cost of interest-bearing liabilities was up 1.15% period-over-period (from 2.63% in the 2005 third quarter to 3.78% in 2006).
Net interest margin for the quarter ended September 30, 2006 was 3.59%, a 26 basis point decline from the 2005 third quarter margin of 3.85% and a 10 basis point drop from the 2006 second quarter margin of 3.69%. The interest-rate spread dropped to 3.27% in the 2006 third quarter from 3.62% in the same period in 2005 and from 3.39% in the 2006 second quarter.
“Margin pressure continues to be a huge challenge that we’ll face for at least the rest of the year because our funding costs tend to lag the repricing of our loans,” said Mr. Small. “For example, in the just completed quarter, our average loan rates were up 19 basis points while the average interest-bearing deposit rate jumped by 35 basis points. This situation will continue as our certificate of deposit portfolio, which is substantial, will continue to price up for the next several months as the rates on maturing CDs are below current rate levels. We don’t think loan rates will move up much higher than the levels they’re at today. As a result, I think the margin for the fourth quarter will probably be somewhere around 3.50%.”
Provision for Loan Losses in Line, Non-Performing Loans Increased
Non-performing assets increased to $10.0 million at September 30, 2006 from $8.9 million at June 30, 2006 and $5.4 million at December 31, 2005. The increase in the third quarter was due to a number of relatively small individual loans falling 90 days delinquent as of September 30. Management is monitoring the status of all past due loans and believes the allowance for loan losses is sufficient to cover any potential losses associated with those loans.
The loan loss provision recorded in the 2006 third quarter totaled $373,000, a slight increase over the 2005 third quarter provision of $368,000. The allowance for loan losses at September 30, 2006 totaled $14.3 million, an increase of $59,000 over the balance at June 30, 2006. Total net charge-offs in the 2006 third quarter were $314,000 compared to $204,000 in the 2005 third quarter.
“On an annualized basis, our charge-offs were 0.10% of average loans, which is consistent with our recent experience and which remains low compared to Federal Deposit Insurance Corporation (“FDIC”) published statistics,” said Mr. Small. “While I ‘m not pleased that our level of non-performing assets has increased over the last six months, I am confident that our allowance for loan losses is adequate and that our credit monitoring and collection efforts are appropriate. While the process of working out of some of these credit situations can be time-consuming, we expect to see gradual improvement in the level of non-performing assets over the next several quarters.”
Fee Income Improvement Continues
Total non-interest income increased by $1.1 million to $5.1 million in the 2006 third quarter, compared with $4.0 million in the same period in 2005, an increase of 26.0%. The vast majority of the increase is due to fees charged to checking account customers for an overdraft privilege product that was implemented in March of 2006. Checking overdraft income has increased by $972,000 between the third quarter of 2005 and the third quarter of 2006. The 2006 third quarter non-interest income also included a pre-tax gain of $115,000 related to First Federal Bank’s former facility on Woodlawn Avenue in Napoleon, Ohio which was sold in September
2006. The branch that previously occupied that facility was relocated to a higher traffic area in the Napoleon market during the 2006 second quarter.
“Non-interest income growth continues to be vital to our success,” said Mr. Small, “This is even more evident because of the margin pressure we’re experiencing. The overdraft privilege product has exceeded all expectations and we are continuing to explore other ways to enhance non-interest income in order to decrease our dependence on net-interest margin.”
Non-Interest Expenses Up Due to Growth
Non-interest expense increased to $11.1 million for the 2006 third quarter compared to $10.5 million for the same period in 2005. The 2005 amount included $97,000 of acquisition-related charges. Excluding those items, non-interest expense increased by $692,000, or 6.7% between the 2005 and 2006 third quarters. Compensation and benefits increased by $153,000, or 2.5%. Other significant expense increases between the 2005 and 2006 third quarters include data processing costs (up $90,000), printing and office supplies (up $68,000), advertising (up $49,000) and audit and examination fees (up $42,000). The majority of these expense increases relate to the Company’s overall growth initiatives. Also, First Defiance incurred $108,000 of fees in the 2006 third quarter to the overdraft privilege vendor, a new item in 2006. Such fees will be paid for a two-year period which ends in March 2008. In addition, bad-check charges, which are due primarily to risks associated with the overdraft privilege program, were up by $81,000 in the 2006 third quarter compared to the third quarter of 2005.
Year-To-Date Results
For the nine-month period ended September 30, 2006, net interest income totaled $36.8 million, a $2.1 million increase from the first nine months of 2005. The net interest margin for the year-to-date period ended September 30, 2006 was 3.71%, down 14 basis points from the 3.85% margin realized in the same nine-month period in 2005.
The provision for loan losses for the nine month period ended September 30, 2006 was $1.4 million, a $374,000 increase from the 2005 provision of $1.1 million for the first nine months. The year-to-date increase was primarily the result of a higher level of provision expense recorded in the 2006 second quarter in response to a specific credit going into foreclosure.
Non-interest income for the first nine months of 2006 was $14.7 million compared to $12.2 million during the same period of 2005. The increase is especially significant considering that the 2005 amounts include securities gains of $1.2 million. The 2006 results include the second-quarter non-recurring gain of $400,000 from the sale of the Company’s credit card portfolio, along with the $115,000 gain from the sale of the Woodlawn Avenue branch facility recorded in the third quarter. Most of the increase is in service fees and other charges, which are at $6.7 million for the first nine months of 2006 compared to $4.0 million during the same period in 2005. In addition to the increase in service fees, attributable primarily to the implementation of the overdraft privilege product, insurance and investment sales commission income increased by $414,000 between 2005 and 2006.
Non-interest expense declined to $32.6 million for the first nine months of 2006 from $33.3 million in 2005. However, excluding $3.5 million of acquisition related charges recorded
in the first nine months of 2005, non-interest expenses were up by $2.8 million, or 9.5%. Compensation and benefits increased by $674,000 year over year, to $18.3 million for the first nine months of 2006 from $17.6 million in the same period in 2005. Other significant increases in non-interest expense included occupancy costs (up $369,000 to $3.8 million), data processing costs (up $356,000 to $2.8 million), advertising costs (up $254,000 to $998,000), audit and examination fees (up $154,000 to $667,000), and postage costs (up $139,000 to $540,000). The increases in compensation and occupancy are generally due to the fact that 2005 included less than six full months of operations related to the Genoa acquisition which closed early in the 2005 second quarter. Also $252,000 in expense associated with the overdraft privilege product (a new expense item) were recorded through September 30, 2006, and the expense for charge-offs of bad checks and overdrawn checking accounts increased by $115,000 to $255,000 in 2006 due to the overdraft privilege product.
Total Assets Exceed $1.5 Billion
Total assets increased to $1.525 billion at September 30, 2006, an increase from $1.46 billion at December 31, 2005. Net loans receivable (excluding loans available for sale) were $1.22 billion at September 30, 2006 compared to $1.16 billion at December 31, 2005. Deposits over that time period increased to $1.13 billion at September 30, 2006 from $1.07 billion at December 31, 2005. Retail deposits (excluding brokered Certificates of Deposit) at September 30, 2006 were $1.09 billion compared to $1.03 billion at December 31, 2005. Total shareholders’ equity increased to $158.2 million at September 30, 2006 compared to $151.2 million at the end of 2005. Also at September 30, 2006, goodwill and other intangible assets totaled $38.7 million compared to $39.2 million at December 31, 2005.
“Core deposit and fee income growth are two areas that are critical to our success, and we are making steady progress in both areas,” stated Mr. Small. “We are very excited about some upcoming initiatives in the non-interest checking area that should help bolster our commercial checking balances. At the same time, we are also seeing continued growth in our fee income and we believe that there are additional opportunities in that area as well.”
“We also remain focused on improving our asset quality ratios,” continued Mr. Small. “We are not satisfied with the recent increase in our non-performing asset totals and while I believe we have more than adequate allowances for these loans, it will take effort on the part of our loan and credit department staff to improve these ratios to our satisfaction.”
Conference Call
First Defiance Financial Corp. will host a conference call at 11:00 a.m. (EDT) on Tuesday, October 17, 2006 to discuss the earnings results and business trends. The conference call may be accessed by calling 877-407-0782. The conference identification number for the call is 215477 Participants should be prepared to provide the conference identification number to join the call.
Internet access to the call is also available (in listen-only mode) at the following Web address: http://www.vcall.com/IC/CEPage.asp?ID=109554
The audio replay of the Internet Webcast will be available at www.fdef.com until Thursday, November 30, 2006.
About First Defiance Financial Corp.
First Defiance Financial Corp., headquartered in Defiance, Ohio, is the holding company for First Federal Bank of the Midwest and First Insurance & Investments. First Federal operates 26 full service branches and 36 ATM locations in northwest Ohio. First Insurance & Investments is the largest property and casualty insurance agency in the Defiance, Ohio area, also specializing in life and group health insurance and financial planning.
For more information, visit the company’s Web site at www.fdef.com.
-Financial Statements and Highlights Follow-
Safe Harbor Statement
This news release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 B of the Securities Act of 1934, as amended, which are intended to be safe harbors created thereby. Those statements may include, but are not limited to, all statements regarding intent, beliefs, expectations, projections, forecasts and plans of First Defiance Financial Corp. and its management, and specifically include statements regarding: future movements of interest rates and particularly 10-year Treasury notes, the production levels of mortgage loan generation, the ability to continue to grow loans and deposits, the ability to benefit from a rising interest rate environment, the ability to sustain credit quality ratios at current or improved levels, the ability to sell REO properties, continued strength in the market area for First Federal Bank of the Midwest, and the ability of the Company to grow in existing and adjacent markets. These forward-looking statements involve numerous risks and uncertainties, including those inherent in general and local banking, insurance and mortgage conditions, competitive factors specific to markets in which the Company and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions or capital market conditions and other risks and uncertainties detailed from time to time in the Company’s Securities and Exchange Commission (SEC) filings, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. One or more of these factors have affected or could in the future affect the Company’s business and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this news release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other persons, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this news release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.
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Consolidated Balance Sheets | | | | | | | |
First Defiance Financial Corp. | | | | | | | |
| | | | | | | | |
| | | September 30, | | December 31, | | September 30, | |
(in thousands) | 2006 | | 2005 | | 2005 | |
| | | | | | | | |
Assets | | | | | | | | | | |
| Cash and cash equivalents | | | | | | | | | | |
| Cash and amounts due from depository institutions | | $ | 41,742 | | $ | 44,066 | | $ | 36,447 | |
| Interest-bearing deposits | | | - | | | 5,190 | | | 3,587 | |
| | | | 41,742 | | | 49,256 | | | 40,034 | |
| Securities | | | | | | | | | | |
| Available-for sale, carried at fair value | | | 118,429 | | | 113,079 | | | 113,664 | |
| Held-to-maturity, carried at amortized cost | | | 1,588 | | | 1,775 | | | 1,939 | |
| | | | 120,017 | | | 114,854 | | | 115,603 | |
| | | | | | | | | | | |
| Loans | | | 1,236,712 | | | 1,178,154 | | | 1,145,413 | |
| Allowance for loan losses | | | (14,298 | ) | | (13,673 | ) | | (13,624 | ) |
| Loans, net | | | 1,222,414 | | | 1,164,481 | | | 1,131,789 | |
| Loans held for sale | | | 3,669 | | | 5,282 | | | 8,153 | |
| Mortgage servicing rights | | | 5,430 | | | 5,063 | | | 4,924 | |
| Accrued interest receivable | | | 7,430 | | | 6,207 | | | 6,037 | |
| Federal Home Loan Bank stock and other interest-bearing assets | | | 18,309 | | | 17,544 | | | 17,293 | |
| Bank Owned Life Insurance | | | 25,076 | | | 24,346 | | | 19,122 | |
| Office properties and equipment | | | 34,893 | | | 32,429 | | | 32,283 | |
| Real estate and other assets held for sale | | | 3,026 | | | 404 | | | 170 | |
| Goodwill | | | 35,124 | | | 35,084 | | | 35,345 | |
| Core deposit and other intangibles | | | 3,577 | | | 4,117 | | | 4,134 | |
| Other assets | | | 3,972 | | | 2,015 | | | 2,690 | |
Total Assets | | $ | 1,524,679 | | $ | 1,461,082 | | $ | 1,417,577 | |
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Liabilities and Stockholders’ Equity | | | | | | | | | | |
| Non-interest-bearing deposits | | $ | 102,664 | | $ | 103,498 | | $ | 92,720 | |
| Interest-bearing deposits | | | 1,027,862 | | | 966,003 | | | 978,337 | |
| Total deposits | | | 1,130,526 | | | 1,069,501 | | | 1,071,057 | |
| Advances from Federal Home Loan Bank | | | 176,442 | | | 180,960 | | | 164,051 | |
| Notes payable and other interest-bearing liabilities | | | 23,607 | | | 25,748 | | | 21,192 | |
| Subordinated debentures | | | 20,619 | | | 20,619 | | | - | |
| Advance payments by borrowers for tax and insurance | | | 393 | | | 605 | | | 411 | |
| Deferred taxes | | | 1,050 | | | 795 | | | 1,201 | |
| Other liabilities | | | 13,887 | | | 11,638 | | | 10,381 | |
Total liabilities | | | 1,366,524 | | | 1,309,866 | | | 1,268,293 | |
| Stockholders’ Equity | | | | | | | | | | |
| Preferred stock | | | - | | | - | | | - | |
| Common stock, net | | | 117 | | | 117 | | | 118 | |
| Additional paid-in-capital | | | 110,147 | | | 108,628 | | | 108,362 | |
| Stock acquired by ESOP | | | (627 | ) | | (1,053 | ) | | (1,053 | ) |
| Deferred compensation | | | (2 | ) | | (2 | ) | | (3 | ) |
| Accumulated other comprehensive income (loss) | | | (67 | ) | | (22 | ) | | 254 | |
| Retained earnings | | | 117,912 | | | 112,041 | | | 110,355 | |
| Treasury stock, at cost | | | (69,325 | ) | | (68,493 | ) | | (68,749 | ) |
Total stockholders’ equity | | | 158,155 | | | 151,216 | | | 149,284 | |
Total liabilities and stockholders’ equity | | $ | 1,524,679 | | $ | 1,461,082 | | $ | 1,417,577 | |
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Consolidated Statements of Income (Unaudited) | | | | | | | | | |
First Defiance Financial Corp. | | | | | | | | | |
| | | Three Months Ended | | Nine Months Ended | |
| | | September 30, | | September 30, | |
(in thousands, except per share amounts) | 2006 | | 2005 | | 2006 | | 2005 | |
| Interest Income: | | | | | | | | | | | | | |
| Loans | | $ | 22,341 | | $ | 18,395 | | $ | 63,605 | | $ | 50,203 | |
| Investment securities | | | 1,482 | | | 1,255 | | | 4,240 | | | 3,979 | |
| Interest-bearing deposits | | | 7 | | | 72 | | | 145 | | | 277 | |
| FHLB stock dividends | | | 262 | | | 210 | | | 765 | | | 579 | |
| Total interest income | | | 24,092 | | | 19,932 | | | 68,755 | | | 55,038 | |
| Interest Expense: | | | | | | | | | | | | | |
| Deposits | | | 9,140 | | | 5,539 | | | 23,835 | | | 14,395 | |
| FHLB advances and other | | | 2,256 | | | 2,059 | | | 6,778 | | | 5,650 | |
| Subordinated debentures | | | 343 | | | - | | | 962 | | | - | |
| Notes Payable | | | 144 | | | 117 | | | 403 | | | 313 | |
| Total interest expense | | | 11,883 | | | 7,715 | | | 31,978 | | | 20,358 | |
| Net interest income | | | 12,209 | | | 12,217 | | | 36,777 | | | 34,680 | |
| Provision for loan losses | | | 373 | | | 368 | | | 1,438 | | | 1,064 | |
| Net interest income after provision for loan losses | | | 11,836 | | | 11,849 | | | 35,339 | | | 33,616 | |
| Non-interest Income: | | | | | | | | | | | | | |
| Service fees and other charges | | | 2,580 | | | 1,511 | | | 6,658 | | | 4,023 | |
| Mortgage banking income | | | 923 | | | 1,087 | | | 2,544 | | | 2,471 | |
| Gain on sale of non-mortgage loans | | | 63 | | | - | | | 500 | | | - | |
| Gain on sale of securities | | | - | | | 86 | | | - | | | 1,222 | |
| Insurance and investment sales commissions | | | 981 | | | 966 | | | 3,643 | | | 3,229 | |
| Trust income | | | 76 | | | 91 | | | 232 | | | 229 | |
| Income from Bank Owned Life Insurance | | | 250 | | | 184 | | | 730 | | | 541 | |
| Other non-interest income | | | 187 | | | 91 | | | 395 | | | 444 | |
| Total Non-interest Income | | | 5,060 | | | 4,016 | | | 14,702 | | | 12,159 | |
| Non-interest Expense: | | | | | | | | | | | | | |
| Compensation and benefits | | | 6,211 | | | 6,058 | | | 18,251 | | | 17,577 | |
| Occupancy | | | 1,278 | | | 1,197 | | | 3,793 | | | 3,424 | |
| State franchise tax | | | 331 | | | 290 | | | 995 | | | 865 | |
| Acquisition related charges | | | - | | | 97 | | | - | | | 3,457 | |
| Data processing | | | 903 | | | 813 | | | 2,760 | | | 2,404 | |
| Amortization of intangibles | | | 180 | | | 214 | | | 539 | | | 541 | |
| Other non-interest expense | | | 2,188 | | | 1,827 | | | 6,291 | | | 4,992 | |
| Total Non-interest Expense | | | 11,091 | | | 10,496 | | | 32,629 | | | 33,260 | |
| Income before income taxes | | | 5,805 | | | 5,369 | | | 17,412 | | | 12,515 | |
| Income taxes | | | 1,982 | | | 1,742 | | | 5,785 | | | 3,989 | |
| Net income | | $ | 3,823 | | $ | 3,627 | | $ | 11,627 | | $ | 8,526 | |
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| Earnings per share: | | | | | | | | | | | | | |
| Basic | | $ | 0.54 | | $ | 0.52 | | $ | 1.66 | | $ | 1.25 | |
| Diluted | | $ | 0.53 | | $ | 0.50 | | $ | 1.62 | | $ | 1.20 | |
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| Core operating earnings per share*: | | | | | | | | | | | | | |
| Basic | | $ | 0.54 | | $ | 0.53 | | $ | 1.66 | | $ | 1.58 | |
| Diluted | | $ | 0.53 | | $ | 0.51 | | $ | 1.62 | | $ | 1.52 | |
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| Average Shares Outstanding: | | | | | | | | | | | | | |
| Basic | | | 7,032 | | | 6,966 | | | 7,020 | | | 6,835 | |
| Diluted | | | 7,146 | | | 7,213 | | | 7,161 | | | 7,091 | |
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| * - See Non-GAAP Disclosure Reconciliations | | | | | | | | | | | | | |
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Financial Summary and Comparison | | | | | | | | | | | | | |
First Defiance Financial Corp. | | | | | | | | | | | | | |
| | | Three months ended or at | | Nine months ended | |
| | | September 30, | | September 30, | |
(dollars in thousands, except per share data) | | 2006 | | 2005 | | % change | | 2006 | | 2005 | | % change | |
Summary of Operations | | | | | | | | | | | | | | | | | | | |
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| Tax-equivalent interest income (1) | | | 24,240 | | | 20,079 | | | 20.7 | | | 69,202 | | | 55,516 | | | 24.7 | |
| Interest expense | | | 11,883 | | | 7,715 | | | 54.0 | | | 31,978 | | | 20,358 | | | 57.1 | |
| Tax-equivalent net interest income (1) | | | 12,357 | | | 12,364 | | | (0.1 | ) | | 37,224 | | | 35,158 | | | 5.9 | |
| Provision for loan losses | | | 373 | | | 368 | | | 1.4 | | | 1,438 | | | 1,064 | | | 35.2 | |
| Tax-equivalent NII after provision for loan loss (1) | | | 11,984 | | | 11,996 | | | (0.1 | ) | | 35,786 | | | 34,094 | | | 5.0 | |
| Securities gains | | | - | | | 86 | | | (100.0 | ) | | - | | | 1,222 | | | (100.0 | ) |
| Non-interest income-excluding securities gains | | | 5,060 | | | 3,930 | | | 28.8 | | | 14,702 | | | 10,937 | | | 34.4 | |
| Non-interest expense | | | 11,091 | | | 10,496 | | | 5.7 | | | 32,629 | | | 33,260 | | | (1.9 | ) |
| Non-interest expense-excluding non-core charges | | | 11,091 | | | 10,399 | | | 6.7 | | | 32,629 | | | 29,803 | | | 9.5 | |
| One time acquisition related charges | | | - | | | 97 | | | NM | | | - | | | 3,457 | | | NM | |
| Income taxes | | | 1,982 | | | 1,742 | | | 13.8 | | | 5,785 | | | 3,989 | | | 45.0 | |
| Net Income | | | 3,823 | | | 3,627 | | | 5.4 | | | 11,627 | | | 8,526 | | | 36.4 | |
| Core operating earnings (2) | | | 3,823 | | | 3,690 | | | 3.6 | | | 11,627 | | | 10,773 | | | 7.9 | |
| Tax equivalent adjustment (1) | | | 148 | | | 147 | | | 0.7 | | | 447 | | | 478 | | | (6.5 | ) |
At Period End | | | | | | | | | | | | | | | | | | | |
| Assets | | | 1,524,679 | | | 1,417,577 | | | 7.6 | | | | | | | | | | |
| Earning assets | | | 1,378,707 | | | 1,290,049 | | | 6.9 | | | | | | | | | | |
| Loans | | | 1,236,712 | | | 1,145,413 | | | 8.0 | | | | | | | | | | |
| Allowance for loan losses | | | 14,298 | | | 13,624 | | | 4.9 | | | | | | | | | | |
| Deposits | | | 1,130,526 | | | 1,071,057 | | | 5.6 | | | | | | | | | | |
| Stockholders’ equity | | | 158,155 | | | 149,284 | | | 5.9 | | | | | | | | | | |
Average Balances | | | | | | | | | | | | | | | | | | | |
| Assets | | | 1,512,644 | | | 1,411,424 | | | 7.2 | | | 1,488,779 | | | 1,343,078 | | | 10.8 | |
| Earning assets | | | 1,363,714 | | | 1,275,117 | | | 6.9 | | | 1,342,146 | | | 1,221,714 | | | 9.9 | |
| Deposits and interest-bearing liabilities | | | 1,340,020 | | | 1,250,513 | | | 7.2 | | | 1,319,138 | | | 1,190,503 | | | 10.8 | |
| Loans | | | 1,225,456 | | | 1,136,526 | | | 7.8 | | | 1,204,142 | | | 1,069,943 | | | 12.5 | |
| Deposits | | | 1,124,397 | | | 1,046,287 | | | 7.5 | | | 1,093,469 | | | 1,005,482 | | | 8.8 | |
| Stockholders’ equity | | | 156,017 | | | 149,332 | | | 4.5 | | | 154,293 | | | 143,290 | | | 7.7 | |
| Stockholders’ equity / assets | | | 10.31 | % | | 10.58 | % | | (2.5 | ) | | 10.36 | % | | 10.67 | % | | (2.9 | ) |
Per Common Share Data | | | | | | | | | | | | | | | | | | | |
| Net Income | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.54 | | $ | 0.52 | | | 3.8 | | $ | 1.66 | | $ | 1.25 | | | 32.8 | |
| Diluted | | | 0.53 | | | 0.50 | | | 6.0 | | $ | 1.62 | | | 1.20 | | | 35.0 | |
| Core operating earnings (2) | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.54 | | $ | 0.53 | | | 2.6 | | $ | 1.66 | | $ | 1.58 | | | 4.8 | |
| Diluted | | $ | 0.53 | | $ | 0.51 | | | 4.9 | | $ | 1.62 | | | 1.52 | | | 6.8 | |
| Dividends | | | 0.24 | | | 0.22 | | | 9.1 | | | 0.72 | | | 0.66 | | | 9.1 | |
| Market Value: | | | | | | | | | | | | | | | | | | | |
| High | | $ | 28.69 | | $ | 31.44 | | | (8.7 | ) | $ | 30.29 | | $ | 31.44 | | | (3.7 | ) |
| Low | | | 25.18 | | | 26.21 | | | (3.9 | ) | | 25.09 | | | 25.29 | | | (0.8 | ) |
| Close | | | 28.53 | | | 27.43 | | | 4.0 | | | 28.53 | | | 27.43 | | | 4.0 | |
| Book Value | | | 22.16 | | | 21.14 | | | 4.8 | | | 21.68 | | | 21.14 | | | 2.6 | |
| Tangible Book Value | | | 16.74 | | | 15.55 | | | 7.7 | | | 16.22 | | | 15.55 | | | 4.3 | |
| Shares outstanding, end of period (000) | | | 7,140 | | | 7,060 | | | 1.1 | | | 7,140 | | | 7,060 | | | 1.1 | |
| Performance Ratios (annualized) | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent net interest margin (1) | | | 3.59 | % | | 3.85 | % | | (6.7 | ) | | 3.71 | % | | 3.85 | % | | (3.7 | ) |
| Return on average assets --GAAP | | | 1.00 | % | | 1.03 | % | | (2.7 | ) | | 1.04 | % | | 0.85 | % | | 22.8 | |
| Return on average assets -- Core Operating | | | 1.00 | % | | 1.05 | % | | (4.4 | ) | | 1.04 | % | | 1.07 | % | | (2.4 | ) |
| Return on average equity -- GAAP | | | 9.72 | % | | 9.72 | % | | 0.0 | | | 10.08 | % | | 7.93 | % | | 27.1 | |
| Return on average equity -- Core Operating | | | 9.72 | % | | 9.88 | % | | (1.6 | ) | | 10.08 | % | | 10.02 | % | | 0.6 | |
| Efficiency ratio (3) -- GAAP | | | 63.68 | % | | 64.42 | % | | (1.2 | ) | | 62.84 | % | | 72.16 | % | | (12.9 | ) |
| Efficiency ratio (3) -- Core Operating | | | 63.68 | % | | 63.82 | % | | (0.2 | ) | | 62.84 | % | | 64.66 | % | | (2.8 | ) |
| Effective tax rate | | | 34.14 | % | | 32.45 | % | | 5.2 | | | 33.22 | % | | 31.87 | % | | 4.2 | |
| Dividend payout ratio (basic) | | | 44.44 | % | | 42.31 | % | | 5.1 | | | 43.37 | % | | 52.80 | % | | (17.9 | ) |
| (1) Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35% |
| (2) Core operating earnings = Net income plus after-tax effect of acquisition related and other one-time charges. See Non-GAAP Disclosure Reconciliation |
(3) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains, net and asset sales gains, net. |
| |
| NM Percentage change not meaningful |
| | | | | | |
Non-GAAP Disclosure Reconciliations | | | | | |
First Defiance Financial Corp. | | | | | |
| | | | | | |
| Core operating earnings are net income adjusted to exclude discontinued operations, merger, integration and restructuring expenses and the results of certain significant transactions not representative of ongoing operations. |
| | | Three months ended | | Nine months ended | |
| | | September 30, | | September 30, | |
(dollars in thousands, except per share data) | | 2006 | | 2005 | | 2006 | | 2005 | |
Core Operating Earnings | | | | | | | | | |
| | | | | | | | | | |
| Net Income | | $ | 3,823 | | $ | 3,627 | | $ | 11,627 | | $ | 8,526 | |
| | | | | | | | | | | | | | |
| Acquisition related charges | | | - | | | 97 | | | - | | | 3,457 | |
| Tax effect | | | - | | | (34 | ) | | - | | | (1,210 | ) |
| After-tax non-operating items | | | - | | | 63 | | | - | | | 2,247 | |
| Core operating earnings | | $ | 3,823 | | $ | 3,690 | | $ | 11,627 | | $ | 10,773 | |
| Acquisition related charges in 2005 reflect charges associated with the acquisition of ComBanc, Inc. and Genoa Savings and Loan Company. |
| Core Operating earnings is used as the numerator to calculate core operating return on average assets, core operating return on average equity and core operating earnings per share. Additionally, non-operating items are deducted from non-interest expense in the numerator and non-interest income in the denominator of the core operating efficiency ratio disclosed in the tables. Comparable information on a GAAP basis is also provided in the tables. |
Income from Mortgage Banking | | | | | | | | | |
| | | | | | | | | | |
| Revenue from sales and servicing of mortgage loans consisted of the following: | | | | | | | |
| | | Three months ended | | Nine months ended | |
| | | September 30, | | September 30, | |
(dollars in thousands) | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | |
| Gain from sale of mortgage loans | | $ | 688 | | $ | 705 | | $ | 1,808 | | $ | 1,682 | |
| Mortgage loan servicing revenue (expense): | | | | | | | | | | | | | |
| Mortgage loan servicing revenue | | | 405 | | | 359 | | | 1,165 | | | 1,036 | |
| Amortization of mortgage servicing rights | | | (154 | ) | | (217 | ) | | (455 | ) | | (613 | ) |
| Mortgage servicing rights valuation adjustments | | | (16 | ) | | 240 | | | 26 | | | 366 | |
| | | | 235 | | | 382 | | | 736 | | | 789 | |
| Total revenue from sale and servicing of mortgage loans | | $ | 923 | | $ | 1,087 | | $ | 2,544 | | $ | 2,471 | |
| | | | | | | | | | | | | | |
| | |
| | | | | | | | | | | | | | |
Yield Analysis | | | | | | | | | | | | | |
First Defiance Financial Corp. | | | | | | | | | | | | | |
| | | Three Months Ended September 30, | |
| | | 2006 | | 2005 | |
| | | Average | | | | Yield | | Average | | | | Yield | |
| | | Balance | | Interest(1) | | Rate(2) | | Balance | | Interest(1) | | Rate(2) | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | |
| Loans receivable | | $ | 1,225,456 | | $ | 22,346 | | | 7.23 | % | $ | 1,136,526 | | $ | 18,402 | | | 6.42 | % |
| Securities | | | 119,628 | | | 1,625 | | | 5.35 | % | | 113,832 | | | 1,395 | | | 4.91 | % |
| Interest Bearing Deposits | | | 580 | | | 7 | | | 4.79 | % | | 7,674 | | | 72 | | | 3.72 | % |
| FHLB stock | | | 18,050 | | | 262 | | | 5.76 | % | | 17,085 | | | 210 | | | 4.88 | % |
| Total interest-earning assets | | | 1,363,714 | | | 24,240 | | | 7.05 | % | | 1,275,117 | | | 20,079 | | | 6.25 | % |
| Non-interest-earning assets | | | 148,930 | | | | | | | | | 136,307 | | | | | | | |
| Total assets | | $ | 1,512,644 | | | | | | | | $ | 1,411,424 | | | | | | | |
Deposits and Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | $ | 1,030,433 | | $ | 9,140 | | | 3.52 | % | $ | 958,590 | | $ | 5,539 | | | 2.29 | % |
| FHLB advances and other | | | 175,255 | | | 2,256 | | | 5.11 | % | | 184,333 | | | 2,059 | | | 4.43 | % |
| Other Borrowings | | | 19,749 | | | 144 | | | 2.89 | % | | 19,893 | | | 117 | | | 2.33 | % |
| Subordinated debentures | | | 20,619 | | | 343 | | | 6.60 | % | | - | | | - | | | 0.00 | % |
| Total interest-bearing liabilities | | | 1,246,056 | | | 11,883 | | | 3.78 | % | | 1,162,816 | | | 7,715 | | | 2.63 | % |
| Non-interest bearing deposits | | | 93,964 | | | - | | | - | | | 87,697 | | | - | | | - | |
| Total including non-interest-bearing demand deposits | | | 1,340,020 | | | 11,883 | | | 3.52 | % | | 1,250,513 | | | 7,715 | | | 2.45 | % |
| Other non-interest-bearing liabilities | | | 16,607 | | | | | | | | | 11,579 | | | | | | | |
| Total liabilities | | | 1,356,627 | | | | | | | | | 1,262,092 | | | | | | | |
| Stockholders' equity | | | 156,017 | | | | | | | | | 149,332 | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 1,512,644 | | | | | | | | $ | 1,411,424 | | | | | | | |
| Net interest income; interest rate spread | | | | | $ | 12,357 | | | 3.27 | % | | | | $ | 12,364 | | | 3.62 | % |
| Net interest margin (3) | | | | | | | | | 3.59 | % | | | | | | | | 3.85 | % |
| Average interest-earning assets to average interest bearing liabilities | | | | | | | | | 109 | % | | | | | | | | 110 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | Nine Months Ended September 30, | |
| | | 2006 | | 2005 | |
| | | Average | | | | Yield | | Average | | | | Yield | |
| | | Balance | | Interest(1) | | Rate(2) | | Balance | | Interest(1) | | Rate(2) | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | |
| Loans receivable | | $ | 1,204,142 | | $ | 63,622 | | | 7.06 | % | $ | 1,069,943 | | $ | 50,220 | | | 6.28 | % |
| Securities | | | 116,215 | | | 4,670 | | | 5.38 | % | | 124,091 | | | 4,440 | | | 4.85 | % |
| Interest Bearing Deposits | | | 3,992 | | | 145 | | | 4.86 | % | | 11,643 | | | 277 | | | 3.18 | % |
| FHLB stock | | | 17,797 | | | 765 | | | 5.75 | % | | 16,037 | | | 579 | | | 4.83 | % |
| Total interest-earning assets | | | 1,342,146 | | | 69,202 | | | 6.89 | % | | 1,221,714 | | | 55,516 | | | 6.08 | % |
| Non-interest-earning assets | | | 146,633 | | | | | | | | | 121,364 | | | | | | | |
| Total assets | | $ | 1,488,779 | | | | | | | | $ | 1,343,078 | | | | | | | |
Deposits and Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | $ | 999,977 | | $ | 23,835 | | | 3.19 | % | $ | 920,838 | | $ | 14,395 | | | 2.09 | % |
| FHLB advances and other | | | 185,826 | | | 6,778 | | | 4.88 | % | | 167,225 | | | 5,650 | | | 4.52 | % |
| Other Borrowings | | | 19,224 | | | 403 | | | 2.80 | % | | 17,796 | | | 313 | | | 2.35 | % |
| Subordinated debentures | | | 20,619 | | | 962 | | | 6.24 | % | | - | | | - | | | 0.00 | % |
| Total interest-bearing liabilities | | | 1,225,646 | | | 31,978 | | | 3.49 | % | | 1,105,859 | | | 20,358 | | | 2.46 | % |
| Non-interest bearing deposits | | | 93,492 | | | - | | | - | | | 84,644 | | | - | | | - | |
| Total including non-interest-bearing demand deposits | | | 1,319,138 | | | 31,978 | | | 3.24 | % | | 1,190,503 | | | 20,358 | | | 2.29 | % |
| Other non-interest-bearing liabilities | | | 15,348 | | | | | | | | | 9,285 | | | | | | | |
| Total liabilities | | | 1,334,486 | | | | | | | | | 1,199,788 | | | | | | | |
| Stockholders' equity | | | 154,293 | | | | | | | | | 143,290 | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 1,488,779 | | | | | | | | $ | 1,343,078 | | | | | | | |
| Net interest income; interest rate spread | | | | | $ | 37,224 | | | 3.40 | % | | | | $ | 35,158 | | | 3.61 | % |
| Net interest margin (3) | | | | | | | | | 3.71 | % | | | | | | | | 3.85 | % |
| Average interest-earning assets to average interest bearing liabilities | | | | | | | | | 110 | % | | | | | | | | 110 | % |
| | | | | | | | | | | | | | | | | | | | |
(1) Interest on certain tax exempt loans and securities is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 35%. |
| (2) Annualized |
| (3) Net interest margin is net interest income divided by average interest-earning assets. |
| | | | | | | | | | | | |
Selected Quarterly Information | | | | | | | | | | | |
First Defiance Financial Corp. | | | | | | | | | | | |
| | | | | | | | | | | | |
(dollars in thousands, except per share data) | | 3rd Qtr 2006 | | 2nd Qtr 2006 | | 1st Qtr 2006 | | 4th Qtr 2005 | | 3rd Qtr 2005 | |
Summary of Operations | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income (1) | | $ | 24,240 | | $ | 23,107 | | $ | 21,853 | | $ | 21,283 | | $ | 20,079 | |
| Interest expense | | | 11,883 | | | 10,694 | | | 9,400 | | | 8,535 | | | 7,715 | |
| Tax-equivalent net interest income (1) | | | 12,357 | | | 12,413 | | | 12,453 | | | 12,748 | | | 12,364 | |
| Provision for loan losses | | | 373 | | | 683 | | | 383 | | | 378 | | | 368 | |
| Tax-equivalent NII after provision for loan losses (1) | | | 11,984 | | | 11,730 | | | 12,070 | | | 12,370 | | | 11,996 | |
| Investment securities gains | | | - | | | - | | | - | | | - | | | 86 | |
| Non-interest income (excluding securities gains/losses) | | | 5,060 | | | 5,127 | | | 4,515 | | | 3,768 | | | 3,930 | |
| Non-interest expense | | | 11,091 | | | 10,795 | | | 10,742 | | | 10,684 | | | 10,496 | |
| Acquisition and other non-core charges | | | - | | | - | | | - | | | 20 | | | 97 | |
| Income taxes | | | 1,982 | | | 1,955 | | | 1,848 | | | 1,864 | | | 1,742 | |
| Net income | | | 3,823 | | | 3,953 | | | 3,851 | | | 3,444 | | | 3,627 | |
| Core operating earnings (2) | | | 3,823 | | | 3,953 | | | 3,851 | | | 3,457 | | | 3,690 | |
| Tax equivalent adjustment (1) | | | 148 | | | 154 | | | 144 | | | 146 | | | 147 | |
At Period End | | | | | | | | | | | | | | | | |
| Total assets | | $ | 1,524,679 | | $ | 1,514,666 | | $ | 1,478,190 | | $ | 1,461,082 | | $ | 1,417,577 | |
| Earning assets | | | 1,378,707 | | | 1,377,560 | | | 1,344,189 | | | 1,321,024 | | | 1,290,049 | |
| Loans | | | 1,236,712 | | | 1,237,464 | | | 1,207,582 | | | 1,178,154 | | | 1,145,413 | |
| Allowance for loan losses | | | 14,298 | | | 14,239 | | | 13,848 | | | 13,673 | | | 13,624 | |
| Deposits | | | 1,130,526 | | | 1,110,750 | | | 1,081,795 | | | 1,069,501 | | | 1,071,057 | |
| Stockholders’ equity | | | 158,155 | | | 154,312 | | | 154,045 | | | 151,216 | | | 149,284 | |
| Stockholders’ equity / assets | | | 10.37 | % | | 10.19 | % | | 10.42 | % | | 10.35 | % | | 10.53 | % |
| Goodwill | | | 35,124 | | | 35,124 | | | 35,084 | | | 35,084 | | | 35,345 | |
Average Balances (3) | | | | | | | | | | | | | | | | |
| Total assets | | $ | 1,512,644 | | $ | 1,494,535 | | $ | 1,459,158 | | $ | 1,429,953 | | $ | 1,411,424 | |
| Earning assets | | | 1,363,714 | | | 1,346,630 | | | 1,316,096 | | | 1,290,007 | | | 1,275,117 | |
| Deposits and interest-bearing liabilities | | | 1,340,020 | | | 1,325,344 | | | 1,292,046 | | | 1,265,623 | | | 1,250,513 | |
| Loans | | | 1,225,456 | | | 1,209,263 | | | 1,177,707 | | | 1,149,937 | | | 1,136,526 | |
| Deposits | | | 1,124,397 | | | 1,090,331 | | | 1,065,677 | | | 1,058,660 | | | 1,046,287 | |
| Stockholders’ equity | | | 156,017 | | | 154,260 | | | 152,602 | | | 150,063 | | | 149,332 | |
| Stockholders’ equity / assets | | | 10.31 | % | | 10.32 | % | | 10.46 | % | | 10.49 | % | | 10.58 | % |
Per Common Share Data | | | | | | | | | | | | | | | | |
| Net Income: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.54 | | $ | 0.56 | | $ | 0.55 | | $ | 0.49 | | $ | 0.52 | |
| Diluted | | | 0.53 | | | 0.55 | | | 0.54 | | | 0.48 | | | 0.50 | |
| Core operating earnings (2) | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.54 | | $ | 0.56 | | $ | 0.55 | | $ | 0.49 | | $ | 0.53 | |
| Diluted | | | 0.53 | | | 0.55 | | | 0.54 | | | 0.48 | | | 0.51 | |
| Dividends | | | 0.24 | | | 0.24 | | | 0.24 | | | 0.24 | | | 0.22 | |
| Market Value: | | | | | | | | | | | | | | | | |
| High | | $ | 28.69 | | $ | 30.29 | | $ | 28.88 | | $ | 30.06 | | $ | 31.44 | |
| Low | | | 25.18 | | | 25.09 | | | 25.39 | | | 25.56 | | | 26.21 | |
| Close | | | 28.53 | | | 26.35 | | | 26.34 | | | 27.09 | | | 27.43 | |
| Book Value | | | 22.16 | | | 21.68 | | | 21.51 | | | 21.31 | | | 21.14 | |
| Shares outstanding, end of period (in thousands) | | | 7,140 | | | 7,117 | | | 7,165 | | | 7,085 | | | 7,060 | |
Performance Ratios (annualized) | | | | | | | | | | | | | | | | |
| Tax-equivalent net interest margin (1) | | | 3.59 | % | | 3.69 | % | | 3.84 | % | | 3.92 | % | | 3.85 | % |
| Return on average assets -- GAAP | | | 1.00 | % | | 1.06 | % | | 1.07 | % | | 0.96 | % | | 1.03 | % |
| Return on average assets -- Core operating | | | 1.00 | % | | 1.06 | % | | 1.07 | % | | 0.96 | % | | 1.05 | % |
| Return on average equity -- GAAP | | | 9.72 | % | | 10.28 | % | | 10.23 | % | | 9.11 | % | | 9.72 | % |
| Return on average equity -- Core operating | | | 9.72 | % | | 10.28 | % | | 10.23 | % | | 9.14 | % | | 9.88 | % |
| Efficiency ratio (3) -- GAAP | | | 63.68 | % | | 61.55 | % | | 63.31 | % | | 64.69 | % | | 64.42 | % |
| Efficiency ratio -- Core operating | | | 63.68 | % | | 61.55 | % | | 63.31 | % | | 64.57 | % | | 63.82 | % |
| Effective tax rate | | | 34.14 | % | | 33.09 | % | | 32.43 | % | | 35.12 | % | | 32.45 | % |
| Dividend payout ratio (basic) | | | 44.44 | % | | 42.86 | % | | 43.64 | % | | 48.98 | % | | 42.31 | % |
| (1) Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35% |
| (2) See Non-GAAP Disclosure Reconciliation |
| (3) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains, net and asset sales gains, net. |
| | |
Selected Quarterly Information | | | | | | | | | | | |
First Defiance Financial Corp. | | | | | | | | | | | |
| | | | | | | | | | | | |
(dollars in thousands, except per share data) | 3rd Qtr 2006 | | 2nd Qtr 2006 | | 1st Qtr 2006 | | 4th Qtr 2005 | | 3rd Qtr 2005 | |
Loan Portfolio Composition | | | | | | | | | | | | | | | | |
| One to four family residential real estate | | $ | 260,028 | | $ | 270,493 | | $ | 268,380 | | $ | 275,497 | | $ | 272,283 | |
| Construction | | | 16,578 | | | 19,912 | | | 18,462 | | | 21,173 | | | 22,434 | |
| Commercial real estate | | | 568,346 | | | 549,345 | | | 544,342 | | | 551,983 | | | 524,305 | |
| Commercial | | | 231,232 | | | 236,845 | | | 215,279 | | | 171,289 | | | 167,990 | |
| Consumer finance | | | 46,969 | | | 49,593 | | | 52,530 | | | 55,297 | | | 57,018 | |
| Home equity and improvement | | | 120,883 | | | 116,250 | | | 112,927 | | | 113,000 | | | 111,234 | |
| Total loans | | | 1,244,036 | | | 1,242,438 | | | 1,211,920 | | | 1,188,239 | | | 1,155,264 | |
| Less: | | | | | | | | | | | | | | | | |
| Loans in process | | | 6,118 | | | 9,111 | | | 7,443 | | | 8,782 | | | 8,601 | |
| Deferred loan origination fees | | | 1,206 | | | 1,397 | | | 1,265 | | | 1,303 | | | 1,250 | |
| Allowance for loan loss | | | 14,298 | | | 14,239 | | | 13,848 | | | 13,673 | | | 13,624 | |
| Net Loans | | $ | 1,222,414 | | $ | 1,217,691 | | $ | 1,189,364 | | $ | 1,164,481 | | $ | 1,131,789 | |
| | | | | | | | | | | | | | | | | |
Allowance for loan loss activity | | | | | | | | | | | | | | | | |
| Beginning allowance | | $ | 14,239 | | $ | 13,848 | | $ | 13,673 | | $ | 13,624 | | $ | 13,460 | |
| Provision for loan losses | | | 373 | | | 683 | | | 383 | | | 378 | | | 368 | |
| Reserve from acquisitions | | | | | | | | | | | | | | | - | |
| Reclassification between allowance for loan loss and | | | | | | | | | | | | | | | | |
| purchase loan discount on prior quarter acquisition | | | | | | | | | | | | | | | | |
| Credit loss charge-offs: | | | | | | | | | | | | | | | | |
| One to four family residential real estate | | | 58 | | | 23 | | | 188 | | | 150 | | | 32 | |
| Commercial real estate | | | 134 | | | 173 | | | 57 | | | 25 | | | 134 | |
| Commercial | | | 85 | | | 13 | | | 17 | | | 55 | | | 65 | |
| Consumer finance | | | 67 | | | 135 | | | 95 | | | 121 | | | 74 | |
| Home equity and improvement | | | 48 | | | 21 | | | 32 | | | 25 | | | - | |
| Total charge-offs | | | 392 | | | 365 | | | 389 | | | 376 | | | 305 | |
| Total recoveries | | | 78 | | | 73 | | | 181 | | | 47 | | | 101 | |
| Net charge-offs (recoveries) | | | 314 | | | 292 | | | 208 | | | 329 | | | 204 | |
| Ending allowance | | $ | 14,298 | | $ | 14,239 | | $ | 13,848 | | $ | 13,673 | | $ | 13,624 | |
| | | | | | | | | | | | | | | | | |
Credit Quality | | | | | | | | | | | | | | | | |
| Non-accrual loans | | $ | 6,934 | | $ | 5,504 | | $ | 3,856 | | $ | 4,952 | | $ | 6,720 | |
| Loans over 90 days past due and still accruing | | | - | | | - | | | - | | | - | | | - | |
| Total non-performing loans (1) | | | 6,934 | | | 5,504 | | | 3,856 | | | 4,952 | | | 6,720 | |
| Real estate owned (REO) | | | 3,026 | | | 3,434 | | | 3,710 | | | 404 | | | 168 | |
| Total non-performing assets (1) | | $ | 9,960 | | $ | 8,938 | | $ | 7,566 | | $ | 5,356 | | $ | 6,888 | |
| Net charge-offs | | | 314 | | | 292 | | | 208 | | | 329 | | | 204 | |
| | | | | | | | | | | | | | | | | |
| Allowance for loan losses / loans | | | 1.16 | % | | 1.16 | % | | 1.15 | % | | 1.16 | % | | 1.18 | % |
| Allowance for loan losses / non-performing assets | | | 143.55 | % | | 159.31 | % | | 183.03 | % | | 255.28 | % | | 197.79 | % |
| Allowance for loan losses / non-performing loans | | | 206.20 | % | | 258.70 | % | | 359.13 | % | | 276.11 | % | | 202.74 | % |
| Non-performing assets / loans plus REO | | | 0.80 | % | | 0.72 | % | | 0.63 | % | | 0.45 | % | | 0.60 | % |
| Non-performing assets / total assets | | | 0.66 | % | | 0.59 | % | | 0.51 | % | | 0.37 | % | | 0.49 | % |
| Net charge-offs / average loans (annualized) | | | 0.10 | % | | 0.10 | % | | 0.07 | % | | 0.11 | % | | 0.07 | % |
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Deposit Balances | | | | | | | | | | | | | | | | |
| Non-interest-bearing demand deposits | | $ | 102,664 | | $ | 95,468 | | $ | 94,515 | | $ | 103,498 | | $ | 92,720 | |
| Interest-bearing demand deposits and money market | | | 300,680 | | | 307,077 | | | 295,873 | | | 276,558 | | | 262,544 | |
| Savings deposits | | | 73,518 | | | 76,603 | | | 80,826 | | | 82,766 | | | 88,994 | |
| Retail time deposits less than $100,000 | | | 469,939 | | | 442,915 | | | 437,609 | | | 408,384 | | | 424,607 | |
| Retail time deposits greater than $100,000 | | | 141,889 | | | 132,566 | | | 135,655 | | | 161,305 | | | 139,752 | |
| National/Brokered time deposits | | | 41,836 | | | 56,121 | | | 37,317 | | | 36,990 | | | 62,440 | |
| Total deposits | | $ | 1,130,526 | | $ | 1,110,750 | | $ | 1,081,795 | | $ | 1,069,501 | | $ | 1,071,057 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| (1) Non-performing loans consist of non-accrual loans that are contractually past due 90 days or more and loans that are deemed impaired under the criteria of FASB Statement No. 114. Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof. |
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