Exhibit 99.1
 | NEWS RELEASE |
| | |
| Contact: | Donald P. Hileman |
| | President and CEO |
| | (419) 782-5104 |
| | dhileman@first-fed.com |
For Immediate Release
FIRST DEFIANCE FINANCIAL CORP. ANNOUNCES 2018
SECOND QUARTER EARNINGS
| · | Diluted earnings per share of $0.54 for 2018 second quarter, up from $0.41 in the 2017 second quarter |
| · | Net income of $11.1 million for 2018 second quarter, up from $8.3 million in the 2017 second quarter |
| · | Return on average assets of 1.48% for the 2018 second quarter, compared to 1.15% in the 2017 second quarter |
| · | Net interest margin of 3.95% for the 2018 second quarter, up from 3.89% in the 2017 second quarter |
| · | Loan growth of $27.0 million during 2018 second quarter |
| · | Non-performing assets of $20.1 million for 2018 second quarter, compared to $31.0 million for 2017 second quarter |
DEFIANCE, OHIO (July 16, 2018)– First Defiance Financial Corp. (NASDAQ: FDEF) announced today its unaudited financial results for the three and six-month periods ended June 30, 2018. All share data has beenadjusted to reflect First Defiance’s two-for-one stock splitannounced on June 22, 2018, to be issued on July 12, 2018.
Net income for the second quarter ended June 30, 2018, totaled $11.1 million, or $0.54 per diluted common share compared to $8.3 million or $0.41 per diluted common share for the quarter ended June 30, 2017. Earnings per diluted share for the second quarter 2018 were up $0.13, or 31.7% from the second quarter 2017, which included a positive impact from the lower corporate tax rate resulting from the Tax Cuts and Jobs Act enacted in December 2017, which improved earnings approximately $0.08 per diluted share for the second quarter 2018.
“Enhanced profitability, steady growth, and improved asset quality metrics from a year ago were all reflected in our very strong financial performance for the quarter,” said Donald P. Hileman, President and Chief Executive Officer of First Defiance Financial Corp. “Including the benefit of the lower corporate tax rate, our return on assets in the second quarter was 1.48%, up solidly from 1.15% in the second quarter last year. In addition, total assets have grown 5.2% over the last year; and non-accrual loans are down 40% from a year ago. Our outlook remains extremely positive for the rest of the year.”
Net Interest Income up Compared to Second Quarter 2017
Net interest income of $26.5 million in the second quarter of 2018 was up from $24.6 million in the second quarter of 2017. The increase was primarily due to the growth in earning assets supplemented by expansion in the net interest margin versus the second quarter last year. Net interest margin was 3.95% for the second and first quarter of 2018, but up from 3.89% in the second quarter of 2017. Yield on interest earning assets increased by 18 basis points, to 4.51% in the second quarter of 2018 from 4.33% in the second quarter of 2017. The cost of interest-bearing liabilities increased by 16 basis points in the second quarter of 2018 to 0.74% from 0.58% in the second quarter of 2017.
“As the Federal Reserve has increased rates over the last year, our net interest margin has remained strong despite the flattening of the yield curve. Combined with the steady organic growth of our balance sheet, we continue to generate solid growth in net interest income,” said Hileman. “Net interest income for the second quarter was up 7.8% over the second quarter last year, and our interest rate risk position remains well-balanced to future interest rate changes.”
Non-Interest Income up from Second Quarter 2017
First Defiance’s non-interest income for the second quarter of 2018 was $10.2 million compared with $10.1 million in the second quarter of 2017. The second quarter of 2018 had no gains or losses from the sale of securities gains or losses, while the second quarter 2017 included gains of $267,000 from the sale of securities.
Mortgage banking income was $2.0 million in the second quarter of 2018, up from $1.8 million in the second quarter of 2017. Mortgage originations totaled $80.5 million in the second quarter of 2018, up seasonally from the first quarter of 2018 and up from $64.2 million in the same quarter last year. Gains from the sale of mortgage loans increased in the second quarter of 2018 to $1.4 million from $1.3 million in the second quarter of 2017. Mortgage loan servicing revenue was $933,000 in the second quarter of 2018, up slightly from $924,000 in the second quarter of 2017. First Defiance had a positive change in the valuation adjustment in mortgage servicing assets of $47,000 in the second quarter of 2018 compared with a positive adjustment of $16,000 in the second quarter of 2017. In addition, gains on the sale of non-mortgages, which include SBA and FSA loans, totaled $43,000 in the second quarter 2018 compared to $90,000 in the second quarter of 2017.
For the second quarter of 2018, commissions from the sale of insurance products were $3.5 million, up from $3.3 million in the second quarter of 2017 primarily due to added commissions from the Corporate One Benefits Agency Inc. (“Corporate One”) merger. Service fees and other charges were $3.3 million in the second quarter of 2018, up from $3.2 million in the second quarter of 2017. Trust income was $522,000 in the second quarter of 2018, up 12.5% from $464,000 in the second quarter of 2017. Other non-interest income was $281,000 in the second quarter of 2018, down from $612,000 in the second quarter of 2017 mainly due to gains from the sale of real estate owned in the prior year period.
“Our non-interest income growth this quarter reflects continued contributions from all of our key business lines. Insurance commissions and bank service fees had strong gains compared to the second quarter of last year, which more than offset the decline in gains on sales of non-mortgage loans,” continued Hileman. “Total non-interest income, excluding securities gains, increased 3.5% over the second quarter of last year.”
Non-Interest Expenses up from Second Quarter 2017
Total non-interest expense was $22.7 million in the second quarter of 2018, an increase from $20.6 million in the second quarter of 2017. Compensation and benefits increased to $12.9 million in the second quarter of 2018, compared to $11.5 million in the second quarter of 2017. The increase in compensation and benefits versus the prior year reflects merit increases, additional increases to minimum pay levels, higher incentive compensation and increases in staff related to growth strategies. Other non-interest expense of $4.6 million in the second quarter of 2018 was up from $4.0 million in the second quarter of 2017.
Credit Quality
Non-performing loans totaled $18.3 million at June 30, 2018, a decrease from $30.4 million at June 30, 2017. In addition, First Defiance had $1.8 million of real estate owned at June 30, 2018, compared to $672,000 at June 30, 2017. Accruing troubled debt restructured loans were $15.5 million at June 30, 2018, compared with $10.5 million at June 30, 2017.
The second quarter 2018 results include net charge-offs of $369,000 and a provision for loan losses of $423,000 compared with net charge-offs of $2.0 million and a provision of $2.1 million for the same period in 2017.
The allowance for loan loss as a percentage of total loans was 1.15% at June 30, 2018, compared with 1.16% at March 31, 2018, and 1.15% at June 30, 2017.
“We were especially pleased with the decrease in our non-performing assets and improvements in our asset quality ratios this quarter,” said Hileman. “While non-performing assets at June 30, 2018, were only 0.66% of assets, noticeably down from 1.07% a year ago, we continue to work toward further improvements in this area.”
Year-To-Date Results
For the six-month period ended June 30, 2018, net income totaled $22.8 million, or $1.12 per diluted common share, compared to $13.5 million, or $0.68 per diluted common share for the six months ended June 30, 2017. The first six months of 2017 included approximately four months of operations of the Commercial Savings Bank (“CSB”) acquisition completed on February 24, 2017 and three months of operations from Corporate One acquired on April 1, 2017. In comparison, the first six months of 2018 results fully include the operations from both CSB and Corporate One. In addition, the first six months of 2017 includes merger and conversion expenses related to the acquisitions of $3.9 million, which had an after tax impact of $2.8 million, or $0.28 per diluted share.
Net interest income was $52.2 million for the first six months of 2018 compared with $46.3 million in the first six months of 2017. Average interest-earning assets increased to $2.69 billion in the first six months of 2018 compared to $2.47 billion in the first six months of 2017. Net interest margin for the first six months of 2018 was 3.95%, up 9 basis points from the 3.86% margin reported in the six-month period ended June 30, 2017.
The provision for loan losses in the first six months of 2018 was a credit provision of $672,000 compared to an expense of $2.2 million recorded during the first six months of 2017.
Non-interest income for the first six months of 2018 was $20.9 million compared to $20.7 million during the same period of 2017. The first six months of 2017 included a $1.5 million enhancement value gain related to the purchase of bank owned life insurance in the first quarter of 2017.
Service fees and other charges were $6.4 million for the first six months of 2018, up from $5.9 million during the same period of 2017. Mortgage banking income was $3.8 million for the first six months of 2018 compared with $3.6 million during the same period of 2017. Insurance commissions rose to $7.8 million for the first six months of 2018 compared with $6.8 million for the same period of 2017. Non-interest income for the first six months of 2018 included no gains or losses from the sale of securities compared with securities gains of $267,000 during the same period of 2017.
Non-interest expense was $45.9 million for the first six months of 2018, up from $43.8 million for the same period of 2017. Compensation and benefits expense was $26.1 million for the first six months of 2018 compared with $25.8 million during the same period of 2017. Expenses also included increases in occupancy of $306,000, data processing of $230,000, amortization of intangibles of $112,000 and other expenses of $1.2 million.
Total Assets at $3.0 Billion
Total assets at June 30, 2018, were $3.04 billion compared to $2.99 billion at December 31, 2017, and $2.89 billion at June 30, 2017. Net loans receivable (excluding loans held for sale) were $2.36 billion at June 30, 2018, compared to $2.32 billion at December 31, 2017, and $2.23 billion at June 30, 2017. Also, at June 30, 2018, goodwill and other intangible assets totaled $103.6 million compared to $104.3 million at December 31, 2017, and $104.7 million at June 30, 2017. Total deposits at June 30, 2018, were $2.49 billion compared with $2.44 billion at December 31, 2017, and $2.33 billion at June 30, 2017. Total stockholders’ equity was $386.9 million at June 30, 2018, compared to $373.3 million at December 31, 2017, and $361.4 million at June 30, 2017.
Dividend to be Paid August 24
The Board of Directors declared a quarterly cash dividend of $0.17 per common share payable August 24, 2018, to shareholders of record at the close of business on August 17, 2018. The dividend represents an annual dividend of 2.08 percent based on the First Defiance common stock closing price on July 13, 2018. First Defiance has approximately 20,396,178 common shares outstanding.
Conference Call
First Defiance Financial Corp. will host a conference call at 11:00 a.m. ET on Tuesday, July 17, 2018, to discuss the earnings results and business trends. The conference call may be accessed by calling 1-877-444-1726. In addition, a live webcast may be accessed athttps://services.choruscall.com/links/fdef180717.html.
The replay of the conference call Webcast will be available atwww.fdef.com until 9:00 a.m. ET on July 17, 2019.
First Defiance Financial Corp.
First Defiance Financial Corp. (NASDAQ:FDEF), headquartered in Defiance, Ohio, is the holding company for First Federal Bank of the Midwest and First Insurance Group. First Federal Bank operates 43 full-service branches and numerous ATM locations in northwest and central Ohio, southeast Michigan and northeast Indiana and a loan production office in Ann Arbor, Michigan. First Insurance Group is a full-service insurance agency with nine offices throughout northwest Ohio.
For more information, visit the company’s website atwww.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: changes in economic conditions, the nature, extent and timing of governmental actions and reforms, future movements of interest rates, the production levels of mortgage loan generation, the ability to continue to grow loans and deposits, the ability to benefit from a changing interest rate environment, the ability to sustain credit quality ratios at current or improved levels, the ability to sell real estate owned properties, continued strength in the market area for First Federal Bank of the Midwest, and the ability 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 First Defiance 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 our Securities and Exchange Commission (SEC) filings, including our Annual Report on Form 10-K for the year ended December 31, 2017. One or more of these factors have affected or could in the future affect First Defiance'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 First Defiance or any other persons, that our objectives and plans will be achieved. All forward-looking statements made in this news release are based on information presently available to the management of First Defiance. We assume no obligation to update any forward-looking statements.
As required by U.S. GAAP, First Defiance will evaluate the impact of subsequent events through the issuance date of its June 30, 2018 consolidated financial statements as part of its Quarterly Report on Form 10-Q to be filed with the SEC. Accordingly, subsequent events could occur that may cause First Defiance to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.
Consolidated Balance Sheets (Unaudited)
First Defiance Financial Corp.
| | | June 30, | | | December 31, | |
| (in thousands) | | 2018 | | | 2017 | |
| | | | | | | |
| Assets | | | | | | | | |
| Cash and cash equivalents | | | | | | | | |
| Cash and amounts due from depository institutions | | $ | 53,885 | | | $ | 58,693 | |
| Interest-bearing deposits | | | 53,000 | | | | 55,000 | |
| | | | 106,885 | | | | 113,693 | |
| Securities | | | | | | | | |
| Available-for sale, carried at fair value | | | 286,350 | | | | 260,650 | |
| Held-to-maturity, carried at amortized cost | | | 607 | | | | 648 | |
| | | | 286,957 | | | | 261,298 | |
| | | | | | | | | |
| Loans | | | 2,385,344 | | | | 2,348,713 | |
| Allowance for loan losses | | | (27,321 | ) | | | (26,683 | ) |
| Loans, net | | | 2,358,023 | | | | 2,322,030 | |
| Loans held for sale | | | 15,422 | | | | 10,435 | |
| Mortgage servicing rights | | | 9,948 | | | | 9,808 | |
| Accrued interest receivable | | | 9,475 | | | | 8,706 | |
| Federal Home Loan Bank stock | | | 15,989 | | | | 15,992 | |
| Bank Owned Life Insurance | | | 66,860 | | | | 66,230 | |
| Office properties and equipment | | | 40,444 | | | | 40,217 | |
| Real estate and other assets held for sale | | | 1,795 | | | | 1,532 | |
| Goodwill | | | 98,569 | | | | 98,569 | |
| Core deposit and other intangibles | | | 5,024 | | | | 5,703 | |
| Deferred taxes | | | 1,106 | | | | 231 | |
| Other assets | | | 23,092 | | | | 38,959 | |
| Total Assets | | $ | 3,039,589 | | | $ | 2,993,403 | |
| | | | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | | | |
| Non-interest-bearing deposits | | $ | 548,147 | | | $ | 571,360 | |
| Interest-bearing deposits | | | 1,940,981 | | | | 1,866,296 | |
| Total deposits | | | 2,489,128 | | | | 2,437,656 | |
| Advances from Federal Home Loan Bank | | | 85,722 | | | | 84,279 | |
| Notes payable and other interest-bearing liabilities | | | 6,899 | | | | 26,019 | |
| Subordinated debentures | | | 36,083 | | | | 36,083 | |
| Advance payments by borrowers for tax and insurance | | | 5,207 | | | | 2,925 | |
| Other liabilities | | | 29,630 | | | | 33,155 | |
| Total Liabilities | | | 2,652,669 | | | | 2,620,117 | |
| Stockholders’ Equity | | | | | | | | |
| Preferred stock | | | - | | | | - | |
| Common stock, net | | | 127 | | | | 127 | |
| Additional paid-in-capital | | | 160,847 | | | | 160,940 | |
| Accumulated other comprehensive income (loss) | | | (3,235 | ) | | | 217 | |
| Retained earnings | | | 279,122 | | | | 262,900 | |
| Treasury stock, at cost | | | (49,941 | ) | | | (50,898 | ) |
| Total stockholders’ equity | | | 386,920 | | | | 373,286 | |
| Total Liabilities and Stockholders’ Equity | | $ | 3,039,589 | | | $ | 2,993,403 | |
Consolidated Statements of Income (Unaudited)
First Defiance Financial Corp.
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| (in thousands, except per share amounts) | | 2018 | | | 2017 | | | 2018 | | | 2017 | |
| Interest Income: | | | | | | | | | | | | | | | | |
| Loans | | $ | 27,660 | | | $ | 25,318 | | | $ | 54,186 | | | $ | 47,288 | |
| Investment securities | | | 2,039 | | | | 1,752 | | | | 3,890 | | | | 3,507 | |
| Interest-bearing deposits | | | 373 | | | | 201 | | | | 670 | | | | 346 | |
| FHLB stock dividends | | | 227 | | | | 187 | | | | 458 | | | | 353 | |
| Total interest income | | | 30,299 | | | | 27,458 | | | | 59,204 | | | | 51,494 | |
| Interest Expense: | | | | | | | | | | | | | | | | |
| Deposits | | | 3,144 | | | | 2,170 | | | | 5,755 | | | | 3,966 | |
| FHLB advances and other | | | 282 | | | | 414 | | | | 601 | | | | 780 | |
| Subordinated debentures | | | 320 | | | | 229 | | | | 600 | | | | 443 | |
| Notes Payable | | | 6 | | | | 13 | | | | 14 | | | | 28 | |
| Total interest expense | | | 3,752 | | | | 2,826 | | | | 6,970 | | | | 5,217 | |
| Net interest income | | | 26,547 | | | | 24,632 | | | | 52,234 | | | | 46,277 | |
| Provision for loan losses | | | 423 | | | | 2,118 | | | | (672 | ) | | | 2,172 | |
| Net interest income after provision for loan losses | | | 26,124 | | | | 22,514 | | | | 52,906 | | | | 44,105 | |
| Non-interest Income: | | | | | | | | | | | | | | | | |
| Service fees and other charges | | | 3,296 | | | | 3,161 | | | | 6,427 | | | | 5,920 | |
| Mortgage banking income | | | 2,013 | | | | 1,830 | | | | 3,755 | | | | 3,568 | |
| Gain on sale of non-mortgage loans | | | 43 | | | | 90 | | | | 267 | | | | 90 | |
| Gain on sale of securities | | | - | | | | 267 | | | | - | | | | 267 | |
| Insurance commissions | | | 3,493 | | | | 3,294 | | | | 7,770 | | | | 6,752 | |
| Trust income | | | 522 | | | | 464 | | | | 1,074 | | | | 914 | |
| Income from Bank Owned Life Insurance | | | 566 | | | | 422 | | | | 966 | | | | 2,245 | |
| Other non-interest income | | | 281 | | | | 612 | | | | 658 | | | | 933 | |
| Total Non-interest Income | | | 10,214 | | | | 10,140 | | | | 20,917 | | | | 20,689 | |
| Non-interest Expense: | | | | | | | | | | | | | | | | |
| Compensation and benefits | | | 12,885 | | | | 11,473 | | | | 26,134 | | | | 25,808 | |
| Occupancy | | | 2,026 | | | | 1,954 | | | | 4,097 | | | | 3,791 | |
| FDIC insurance premium | | | 202 | | | | 353 | | | | 562 | | | | 643 | |
| Financial institutions tax | | | 531 | | | | 535 | | | | 1,062 | | | | 1,014 | |
| Data processing | | | 2,083 | | | | 2,019 | | | | 4,188 | | | | 3,958 | |
| Amortization of intangibles | | | 332 | | | | 334 | | | | 679 | | | | 567 | |
| Other non-interest expense | | | 4,606 | | | | 3,962 | | | | 9,194 | | | | 7,991 | |
| Total Non-interest Expense | | | 22,665 | | | | 20,630 | | | | 45,916 | | | | 43,772 | |
| Income before income taxes | | | 13,673 | | | | 12,024 | | | | 27,907 | | | | 21,022 | |
| Income taxes | | | 2,564 | | | | 3,677 | | | | 5,061 | | | | 7,534 | |
| Net Income | | $ | 11,109 | | | $ | 8,347 | | | $ | 22,846 | | | $ | 13,488 | |
| | | | | | | | | | | | | | | | | |
| Earnings per common share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.54 | | | $ | 0.41 | | | $ | 1.12 | | | $ | 0.69 | |
| Diluted | | $ | 0.54 | | | $ | 0.41 | | | $ | 1.12 | | | $ | 0.68 | |
| | | | | | | | | | | | | | | | | |
| Average Shares Outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 20,388 | | | | 20,294 | | | | 20,359 | | | | 19,586 | |
| Diluted | | | 20,492 | | | | 20,408 | | | | 20,466 | | | | 19,696 | |
Financial Summary and Comparison (Unaudited)
First Defiance Financial Corp.
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| (dollars in thousands, except per share data) | | 2018 | | | 2017 | | | % change | | | 2018 | | | 2017 | | | % change | |
| Summary of Operations | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income (2) | | $ | 30,550 | | | $ | 27,944 | | | | 9.3 | % | | $ | 59,693 | | | $ | 52,450 | | | | 13.8 | % |
| Interest expense | | | 3,752 | | | | 2,826 | | | | 32.8 | | | | 6,970 | | | | 5,217 | | | | 33.6 | |
| Tax-equivalent net interest income (2) | | | 26,798 | | | | 25,118 | | | | 6.7 | | | | 52,723 | | | | 47,233 | | | | 11.6 | |
| Provision for loan losses | | | 423 | | | | 2,118 | | | | NM | | | | (672 | ) | | | 2,172 | | | | NM | |
| Tax-equivalent NII after provision for loan loss (2) | | | 26,375 | | | | 23,000 | | | | 14.7 | | | | 53,395 | | | | 45,061 | | | | 18.5 | |
| Investment Securities gains | | | - | | | | 267 | | | | NM | | | | - | | | | 267 | | | | NM | |
| Non-interest income (excluding securities gains/losses) | | | 10,214 | | | | 9,873 | | | | 3.5 | | | | 20,917 | | | | 20,422 | | | | 2.4 | |
| Non-interest expense | | | 22,665 | | | | 20,630 | | | | 9.9 | | | | 45,916 | | | | 43,772 | | | | 4.9 | |
| Income taxes | | | 2,564 | | | | 3,677 | | | | (30.3 | ) | | | 5,061 | | | | 7,534 | | | | (32.8 | ) |
| Net Income | | | 11,109 | | | | 8,347 | | | | 33.1 | | | | 22,846 | | | | 13,488 | | | | 69.4 | |
| Tax equivalent adjustment (2) | | | 251 | | | | 486 | | | | (48.4 | ) | | | 489 | | | | 956 | | | | (48.8 | ) |
| At Period End | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | | 3,039,589 | | | | 2,890,507 | | | | 5.2 | | | | | | | | | | | | | |
| Earning assets | | | 2,756,712 | | | | 2,596,674 | | | | 6.2 | | | | | | | | | | | | | |
| Loans | | | 2,385,344 | | | | 2,254,435 | | | | 5.8 | | | | | | | | | | | | | |
| Allowance for loan losses | | | 27,321 | | | | 25,915 | | | | 5.4 | | | | | | | | | | | | | |
| Deposits | | | 2,489,128 | | | | 2,326,702 | | | | 7.0 | | | | | | | | | | | | | |
| Stockholders’ equity | | | 386,920 | | | | 361,430 | | | | 7.1 | | | | | | | | | | | | | |
| Average Balances | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | | 3,018,808 | | | | 2,908,483 | | | | 3.8 | | | | 2,998,336 | | | | 2,765,443 | | | | 8.4 | |
| Earning assets | | | 2,714,328 | | | | 2,591,397 | | | | 4.7 | | | | 2,689,216 | | | | 2,473,471 | | | | 8.7 | |
| Loans | | | 2,337,294 | | | | 2,238,061 | | | | 4.4 | | | | 2,326,805 | | | | 2,132,064 | | | | 9.1 | |
| Deposits and interest-bearing liabilities | | | 2,600,029 | | | | 2,516,024 | | | | 3.3 | | | | 2,582,782 | | | | 2,395,874 | | | | 7.8 | |
| Deposits | | | 2,487,430 | | | | 2,346,336 | | | | 6.0 | | | | 2,460,934 | | | | 2,227,986 | | | | 10.5 | |
| Stockholders’ equity | | | 381,165 | | | | 357,523 | | | | 6.6 | | | | 377,579 | | | | 335,983 | | | | 12.4 | |
| Stockholders’ equity / assets | | | 12.63 | % | | | 12.29 | % | | | 2.7 | | | | 12.59 | % | | | 12.15 | % | | | 3.7 | |
| Per Common Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.54 | | | $ | 0.41 | | | | 31.7 | | | $ | 1.12 | | | $ | 0.69 | | | | 62.3 | |
| Diluted | | | 0.54 | | | | 0.41 | | | | 31.7 | | | | 1.12 | | | | 0.68 | | | | 64.7 | |
| Dividends | | | 0.15 | | | | 0.125 | | | | 20.0 | | | | 0.30 | | | | 0.25 | | | | 20.0 | |
| Market Value: | | | | | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 33.72 | | | $ | 28.45 | | | | 18.5 | | | $ | 33.72 | | | $ | 28.45 | | | | 18.5 | |
| Low | | | 27.63 | | | | 24.39 | | | | 13.3 | | | | 25.51 | | | | 23.14 | | | | 10.3 | |
| Close | | | 33.53 | | | | 26.34 | | | | 27.3 | | | | 33.53 | | | | 26.34 | | | | 27.3 | |
| Common Book Value | | | 18.97 | | | | 17.81 | | | | 6.5 | | | | 18.97 | | | | 17.81 | | | | 6.5 | |
| Tangible Common Book Value (1) | | | 13.89 | | | | 12.66 | | | | 9.7 | | | | 13.89 | | | | 12.66 | | | | 9.7 | |
| Shares outstanding, end of period (000) | | | 20,396 | | | | 20,298 | | | | 0.5 | | | | 20,396 | | | | 20,298 | | | | 0.5 | |
| Performance Ratios (annualized) | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent net interest margin (2) | | | 3.95 | % | | | 3.89 | % | | | 1.6 | | | | 3.95 | % | | | 3.86 | % | | | 2.5 | |
| Return on average assets | | | 1.48 | % | | | 1.15 | % | | | 28.2 | | | | 1.54 | % | | | 0.98 | % | | | 56.2 | |
| Return on average equity | | | 11.69 | % | | | 9.36 | % | | | 24.8 | | | | 12.20 | % | | | 8.10 | % | | | 50.7 | |
| Efficiency ratio (3) | | | 61.24 | % | | | 58.96 | % | | | 3.9 | | | | 62.35 | % | | | 64.70 | % | | | (3.6 | ) |
| Effective tax rate | | | 18.75 | % | | | 30.58 | % | | | (38.7 | ) | | | 18.14 | % | | | 35.84 | % | | | (49.4 | ) |
| Dividend payout ratio (basic) | | | 27.78 | % | | | 30.49 | % | | | (8.9 | ) | | | 26.79 | % | | | 36.23 | % | | | (26.1 | ) |
| (1) | Tangible common book value = total stockholders' equity less the sum of goodwill, core deposit and other intangibles, and preferred stock divided by shares outstanding at the end of the period. |
| (2) | Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 21% in 2018 and 35% in 2017. |
| (3) | Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains or losses, net. |
NM Percentage change not meaningful
Income from Mortgage Banking
Revenue from sales and servicing of mortgage loans consisted of the following:
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| (dollars in thousands) | | 2018 | | | 2017 | | | 2018 | | | 2017 | |
| | | | | | | | | | | | | |
| Gain from sale of mortgage loans | | $ | 1,383 | | | $ | 1,293 | | | $ | 2,464 | | | $ | 2,377 | |
| Mortgage loan servicing revenue (expense): | | | | | | | | | | | | | | | | |
| Mortgage loan servicing revenue | | | 933 | | | | 924 | | | | 1,877 | | | | 1,858 | |
| Amortization of mortgage servicing rights | | | (350 | ) | | | (403 | ) | | | (669 | ) | | | (715 | ) |
| Mortgage servicing rights valuation adjustments | | | 47 | | | | 16 | | | | 83 | | | | 48 | |
| | | | 630 | | | | 537 | | | | 1,291 | | | | 1,191 | |
| Total revenue from sale and servicing of mortgage loans | | $ | 2,013 | | | $ | 1,830 | | | $ | 3,755 | | | $ | 3,568 | |
Yield Analysis
First Defiance Financial Corp.
| | | Three Months Ended June 30, | |
| | | (dollars in thousands) | |
| | | 2018 | | | 2017 | |
| | | Average | | | | | | Yield | | | Average | | | | | | Yield | |
| | | Balance | | | Interest(1) | | | Rate(2) | | | Balance | | | Interest(1) | | | Rate(2) | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans receivable | | $ | 2,337,294 | | | $ | 27,685 | | | | 4.75 | % | | $ | 2,238,061 | | | $ | 25,368 | | | | 4.55 | % |
| Securities | | | 280,131 | | | | 2,265 | | | | 3.20 | %(3) | | | 259,619 | | | | 2,188 | | | | 3.42 | %(3) |
| Interest Bearing Deposits | | | 80,914 | | | | 373 | | | | 1.85 | % | | | 77,725 | | | | 201 | | | | 1.04 | % |
| FHLB stock | | | 15,989 | | | | 227 | | | | 5.69 | % | | | 15,992 | | | | 187 | | | | 4.69 | % |
| Total interest-earning assets | | | 2,714,328 | | | | 30,550 | | | | 4.51 | % | | | 2,591,397 | | | | 27,944 | | | | 4.33 | % |
| Non-interest-earning assets | | | 304,480 | | | | | | | | | | | | 317,086 | | | | | | | | | |
| Total assets | | $ | 3,018,808 | | | | | | | | | | | $ | 2,908,483 | | | | | | | | | |
| Deposits and Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | $ | 1,933,409 | | | $ | 3,144 | | | | 0.65 | % | | $ | 1,785,895 | | | $ | 2,170 | | | | 0.49 | % |
| FHLB advances and other | | | 67,261 | | | | 282 | | | | 1.68 | % | | | 104,923 | | | | 414 | | | | 1.58 | % |
| Subordinated debentures | | | 36,198 | | | | 320 | | | | 3.55 | % | | | 36,156 | | | | 229 | | | | 2.54 | % |
| Notes payable | | | 9,140 | | | | 6 | | | | 0.26 | % | | | 28,609 | | | | 13 | | | | 0.18 | % |
| Total interest-bearing liabilities | | | 2,046,008 | | | | 3,752 | | | | 0.74 | % | | | 1,955,583 | | | | 2,826 | | | | 0.58 | % |
| Non-interest bearing deposits | | | 554,021 | | | | - | | | | - | | | | 560,441 | | | | - | | | | - | |
| Total including non-interest-bearing demand deposits | | | 2,600,029 | | | | 3,752 | | | | 0.58 | % | | | 2,516,024 | | | | 2,826 | | | | 0.45 | % |
| Other non-interest-bearing liabilities | | | 37,614 | | | | | | | | | | | | 34,936 | | | | | | | | | |
| Total liabilities | | | 2,637,643 | | | | | | | | | | | | 2,550,960 | | | | | | | | | |
| Stockholders' equity | | | 381,165 | | | | | | | | | | | | 357,523 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 3,018,808 | | | | | | | | | | | $ | 2,908,483 | | | | | | | | | |
| Net interest income; interest rate spread | | | | | | $ | 26,798 | | | | 3.77 | % | | | | | | $ | 25,118 | | | | 3.75 | % |
| Net interest margin (4) | | | | | | | | | | | 3.95 | % | | | | | | | | | | | 3.89 | % |
| Average interest-earning assets to average interest bearing liabilities | | | | | | | | | | | 133 | % | | | | | | | | | | | 133 | % |
| | | Six Months Ended June 30, | |
| | | 2018 | | | 2017 | |
| | | Average | | | | | | Yield | | | Average | | | | | | Yield | |
| | | Balance | | | Interest(1) | | | Rate | | | Balance | | | Interest(1) | | | Rate | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans receivable | | $ | 2,326,805 | | | $ | 54,236 | | | | 4.70 | % | | $ | 2,132,064 | | | $ | 47,390 | | | | 4.48 | % |
| Securities | | | 271,864 | | | | 4,329 | | | | 3.21 | % | | | 257,230 | | | | 4,361 | | | | 3.46 | %(3) |
| Interest Bearing Deposits | | | 74,557 | | | | 670 | | | | 1.81 | % | | | 68,904 | | | | 346 | | | | 1.01 | % |
| FHLB stock | | | 15,990 | | | | 458 | | | | 5.78 | % | | | 15,273 | | | | 353 | | | | 4.66 | % |
| Total interest-earning assets | | | 2,689,216 | | | | 59,693 | | | | 4.48 | % | | | 2,473,471 | | | | 52,450 | | | | 4.28 | % |
| Non-interest-earning assets | | | 309,120 | | | | | | | | | | | | 291,972 | | | | | | | | | |
| Total assets | | $ | 2,998,336 | | | | | | | | | | | $ | 2,765,443 | | | | | | | | | |
| Deposits and Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | $ | 1,911,199 | | | $ | 5,755 | | | | 0.61 | % | | $ | 1,706,318 | | | $ | 3,966 | | | | 0.47 | % |
| FHLB advances and other | | | 73,092 | | | | 601 | | | | 1.66 | % | | | 104,600 | | | | 780 | | | | 1.50 | % |
| Subordinated debentures | | | 36,195 | | | | 600 | | | | 3.34 | % | | | 36,153 | | | | 443 | | | | 2.46 | % |
| Notes payable | | | 12,561 | | | | 14 | | | | 0.22 | % | | | 27,135 | | | | 28 | | | | 0.21 | % |
| Total interest-bearing liabilities | | | 2,033,047 | | | | 6,970 | | | | 0.69 | % | | | 1,874,206 | | | | 5,217 | | | | 0.56 | % |
| Non-interest bearing deposits | | | 549,735 | | | | - | | | | - | | | | 521,668 | | | | - | | | | - | |
| Total including non-interest-bearing demand deposits | | | 2,582,782 | | | | 6,970 | | | | 0.54 | % | | | 2,395,874 | | | | 5,217 | | | | 0.44 | % |
| Other non-interest-bearing liabilities | | | 37,975 | | | | | | | | | | | | 33,586 | | | | | | | | | |
| Total liabilities | | | 2,620,757 | | | | | | | | | | | | 2,429,460 | | | | | | | | | |
| Stockholders' equity | | | 377,579 | | | | | | | | | | | | 335,983 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 2,998,336 | | | | | | | | | | | $ | 2,765,443 | | | | | | | | | |
| Net interest income; interest rate spread | | | | | | $ | 52,723 | | | | 3.79 | % | | | | | | $ | 47,233 | | | | 3.72 | % |
| Net interest margin (4) | | | | | | | | | | | 3.95 | % | | | | | | | | | | | 3.86 | % |
| Average interest-earning assets to average interest bearing liabilities | | | | | | | | | | | 132 | % | | | | | | | | | | | 132 | % |
| (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 21% in 2018 and 35% in 2017. |
| (3) | Securities yield = annualized interest income divided by the average balance of securities, excluding average unrealized gains/losses. |
| (4) | Net interest margin is tax equivalent net interest income divided by average interest-earning assets. |
Selected Quarterly Information
First Defiance Financial Corp.
| (dollars in thousands, except per share data) | | 2nd Qtr 2018 | | | 1st Qtr 2018 | | | 4th Qtr 2017 | | | 3rd Qtr 2017 | | | 2nd Qtr 2017 | |
| Summary of Operations | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income (1) | | $ | 30,550 | | | $ | 29,142 | | | $ | 29,009 | | | $ | 28,557 | | | $ | 27,944 | |
| Interest expense | | | 3,752 | | | | 3,218 | | | | 3,140 | | | | 3,074 | | | | 2,826 | |
| Tax-equivalent net interest income (1) | | | 26,798 | | | | 25,924 | | | | 25,869 | | | | 25,483 | | | | 25,118 | |
| Provision for loan losses | | | 423 | | | | (1,095 | ) | | | 314 | | | | 462 | | | | 2,118 | |
| Tax-equivalent NII after provision for loan losses (1) | | | 26,375 | | | | 27,019 | | | | 25,555 | | | | 25,021 | | | | 23,000 | |
| Investment securities gains, net of impairment | | | - | | | | - | | | | 160 | | | | 158 | | | | 267 | |
| Non-interest income (excluding securities gains/losses) | | | 10,214 | | | | 10,703 | | | | 9,737 | | | | 9,337 | | | | 9,873 | |
| Non-interest expense | | | 22,665 | | | | 23,251 | | | | 21,141 | | | | 20,440 | | | | 20,630 | |
| Income taxes | | | 2,564 | | | | 2,497 | | | | 4,430 | | | | 4,219 | | | | 3,677 | |
| Net income | | | 11,109 | | | | 11,737 | | | | 9,399 | | | | 9,381 | | | | 8,347 | |
| Tax equivalent adjustment (1) | | | 251 | | | | 237 | | | | 482 | | | | 476 | | | | 486 | |
| At Period End | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 3,039,589 | | | $ | 3,023,004 | | | $ | 2,993,403 | | | $ | 2,935,030 | | | $ | 2,890,507 | |
| Earning assets | | | 2,756,712 | | | | 2,748,338 | | | | 2,691,438 | | | | 2,633,996 | | | | 2,596,674 | |
| Loans | | | 2,385,344 | | | | 2,358,330 | | | | 2,348,713 | | | | 2,276,042 | | | | 2,254,435 | |
| Allowance for loan losses | | | 27,321 | | | | 27,267 | | | | 26,683 | | | | 26,341 | | | | 25,915 | |
| Deposits | | | 2,489,128 | | | | 2,491,801 | | | | 2,437,656 | | | | 2,360,675 | | | | 2,326,702 | |
| Stockholders’ equity | | | 386,920 | | | | 379,214 | | | | 373,286 | | | | 367,924 | | | | 361,430 | |
| Stockholders’ equity / assets | | | 12.73 | % | | | 12.54 | % | | | 12.47 | % | | | 12.54 | % | | | 12.50 | % |
| Goodwill | | | 98,569 | | | | 98,569 | | | | 98,569 | | | | 98,370 | | | | 98,318 | |
| Average Balances | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 3,018,808 | | | $ | 2,977,864 | | | $ | 2,968,445 | | | $ | 2,906,795 | | | $ | 2,908,483 | |
| Earning assets | | | 2,714,328 | | | | 2,664,114 | | | | 2,646,643 | | | | 2,590,463 | | | | 2,591,397 | |
| Loans | | | 2,337,294 | | | | 2,316,316 | | | | 2,279,358 | | | | 2,251,071 | | | | 2,238,061 | |
| Deposits and interest-bearing liabilities | | | 2,600,029 | | | | 2,565,537 | | | | 2,560,258 | | | | 2,507,805 | | | | 2,516,024 | |
| Deposits | | | 2,487,430 | | | | 2,434,440 | | | | 2,400,061 | | | | 2,338,817 | | | | 2,346,336 | |
| Stockholders’ equity | | | 381,165 | | | | 373,993 | | | | 369,366 | | | | 363,612 | | | | 357,523 | |
| Stockholders’ equity / assets | | | 12.63 | % | | | 12.56 | % | | | 12.44 | % | | | 12.51 | % | | | 12.29 | % |
| Per Common Share Data | | | | | | | | | | | | | | | | | | | | |
| Net Income: | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.54 | | | $ | 0.58 | | | $ | 0.47 | | | $ | 0.46 | | | $ | 0.41 | |
| Diluted | | | 0.54 | | | | 0.58 | | | | 0.46 | | | | 0.46 | | | | 0.41 | |
| Dividends | | | 0.15 | | | | 0.15 | | | | 0.125 | | | | 0.125 | | | | 0.125 | |
| Market Value: | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 33.72 | | | $ | 29.93 | | | $ | 28.46 | | | $ | 27.00 | | | $ | 28.45 | |
| Low | | | 27.63 | | | | 25.51 | | | | 25.14 | | | | 23.51 | | | | 24.39 | |
| Close | | | 33.53 | | | | 28.66 | | | | 25.99 | | | | 26.25 | | | | 26.34 | |
| Common Book Value | | | 18.97 | | | | 18.62 | | | | 18.38 | | | | 18.13 | | | | 17.81 | |
| Shares outstanding, end of period (in thousands) | | | 20,396 | | | | 20,364 | | | | 20,312 | | | | 20,298 | | | | 20,298 | |
| Performance Ratios (annualized) | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent net interest margin (1) | | | 3.95 | % | | | 3.95 | % | | | 3.88 | % | | | 3.91 | % | | | 3.89 | % |
| Return on average assets | | | 1.48 | % | | | 1.60 | % | | | 1.26 | % | | | 1.28 | % | | | 1.15 | % |
| Return on average equity | | | 11.69 | % | | | 12.73 | % | | | 10.10 | % | | | 10.24 | % | | | 9.36 | % |
| Efficiency ratio (2) | | | 61.24 | % | | | 63.48 | % | | | 59.37 | % | | | 58.70 | % | | | 58.96 | % |
| Effective tax rate | | | 18.75 | % | | | 17.54 | % | | | 32.03 | % | | | 31.02 | % | | | 30.58 | % |
| Common dividend payout ratio (basic) | | | 27.78 | % | | | 26.09 | % | | | 26.88 | % | | | 27.17 | % | | | 30.49 | % |
| (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 21% in 2018 and 35% in 2017. |
| (2) | Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains, net. |
Selected Quarterly Information
First Defiance Financial Corp.
| (dollars in thousands, except per share data) | | 2nd Qtr 2018 | | | 1st Qtr 2018 | | | 4th Qtr 2017 | | | 3rd Qtr 2017 | | | 2nd Qtr 2017 | |
| Loan Portfolio Composition | | | | | | | | | | | | | | | | | | | | |
| One to four family residential real estate | | $ | 307,480 | | | $ | 275,547 | | | $ | 274,862 | | | $ | 271,048 | | | $ | 276,578 | |
| Construction | | | 283,911 | | | | 251,944 | | | | 265,476 | | | | 244,920 | | | | 234,688 | |
| Commercial real estate | | | 1,283,698 | | | | 1,282,027 | | | | 1,235,221 | | | | 1,205,695 | | | | 1,182,087 | |
| Commercial | | | 489,296 | | | | 500,496 | | | | 526,142 | | | | 510,240 | | | | 515,004 | |
| Consumer finance | | | 29,724 | | | | 28,035 | | | | 29,109 | | | | 29,009 | | | | 28,860 | |
| Home equity and improvement | | | 129,868 | | | | 133,407 | | | | 135,457 | | | | 132,220 | | | | 130,429 | |
| Total loans | | | 2,523,977 | | | | 2,471,456 | | | | 2,466,267 | | | | 2,393,132 | | | | 2,367,646 | |
| Less: | | | | | | | | | | | | | | | | | | | | |
| Undisbursed loan funds | | | 136,563 | | | | 111,450 | | | | 115,972 | | | | 115,714 | | | | 112,000 | |
| Deferred loan origination fees | | | 2,070 | | | | 1,676 | | | | 1,582 | | | | 1,379 | | | | 1,211 | |
| Allowance for loan loss | | | 27,321 | | | | 27,267 | | | | 26,683 | | | | 26,341 | | | | 25,915 | |
| Net Loans | | $ | 2,358,023 | | | $ | 2,331,063 | | | $ | 2,322,030 | | | $ | 2,249,698 | | | $ | 2,228,520 | |
| | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan loss activity | | | | | | | | | | | | | | | | | | | | |
| Beginning allowance | | $ | 27,267 | | | $ | 26,683 | | | $ | 26,341 | | | $ | 25,915 | | | $ | 25,749 | |
| Provision for loan losses | | | 423 | | | | (1,095 | ) | | | 314 | | | | 462 | | | | 2,118 | |
| Credit loss charge-offs: | | | | | | | | | | | | | | | | | | | | |
| One to four family residential real estate | | | 78 | | | | 16 | | | | 170 | | | | 60 | | | | 0 | |
| Commercial real estate | | | 254 | | | | 55 | | | | 29 | | | | 0 | | | | 110 | |
| Commercial | | | 84 | | | | 97 | | | | 210 | | | | 64 | | | | 2,027 | |
| Consumer finance | | | 72 | | | | 31 | | | | 27 | | | | 20 | | | | 21 | |
| Home equity and improvement | | | 41 | | | | 117 | | | | 55 | | | | 92 | | | | 100 | |
| Total charge-offs | | | 529 | | | | 316 | | | | 491 | | | | 236 | | | | 2,258 | |
| Total recoveries | | | 160 | | | | 1,995 | | | | 519 | | | | 200 | | | | 306 | |
| Net charge-offs (recoveries) | | | 369 | | | | (1,679 | ) | | | (28 | ) | | | 36 | | | | 1,952 | |
| Ending allowance | | $ | 27,321 | | | $ | 27,267 | | | $ | 26,683 | | | $ | 26,341 | | | $ | 25,915 | |
| | | | | | | | | | | | | | | | | | | | | |
| Credit Quality | | | | | | | | | | | | | | | | | | | | |
| Total non-performing loans (1) | | $ | 18,340 | | | $ | 27,925 | | | $ | 30,715 | | | $ | 29,152 | | | $ | 30,359 | |
| Real estate owned (REO) | | | 1,795 | | | | 1,440 | | | | 1,532 | | | | 532 | | | | 672 | |
| Total non-performing assets (2) | | $ | 20,135 | | | $ | 29,365 | | | $ | 32,247 | | | $ | 29,684 | | | $ | 31,031 | |
| Net charge-offs (recoveries) | | | 369 | | | | (1,679 | ) | | | (28 | ) | | | 36 | | | | 1,952 | |
| | | | | | | | | | | | | | | | | | | | | |
| Restructured loans, accruing (3) | | | 15,834 | | | | 13,722 | | | | 13,770 | | | | 13,044 | | | | 10,521 | |
| | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses / loans | | | 1.15 | % | | | 1.16 | % | | | 1.14 | % | | | 1.16 | % | | | 1.15 | % |
| Allowance for loan losses / non-performing assets | | | 135.69 | % | | | 92.86 | % | | | 82.75 | % | | | 88.74 | % | | | 83.51 | % |
| Allowance for loan losses / non-performing loans | | | 148.97 | % | | | 97.64 | % | | | 86.87 | % | | | 90.36 | % | | | 85.36 | % |
| Non-performing assets / loans plus REO | | | 0.84 | % | | | 1.24 | % | | | 1.37 | % | | | 1.30 | % | | | 1.38 | % |
| Non-performing assets / total assets | | | 0.66 | % | | | 0.97 | % | | | 1.08 | % | | | 1.01 | % | | | 1.07 | % |
| Net charge-offs / average loans (annualized) | | | 0.06 | % | | | -0.29 | % | | | 0.00 | % | | | 0.01 | % | | | 0.35 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Deposit Balances | | | | | | | | | | | | | | | | | | | | |
| Non-interest-bearing demand deposits | | $ | 548,147 | | | $ | 550,742 | | | $ | 571,360 | | | $ | 519,911 | | | $ | 520,778 | |
| Interest-bearing demand deposits and money market | | | 1,021,445 | | | | 1,055,416 | | | | 1,005,519 | | | | 989,514 | | | | 967,834 | |
| Savings deposits | | | 297,870 | | | | 306,510 | | | | 302,022 | | | | 296,230 | | | | 288,643 | |
| Retail time deposits less than $250,000 | | | 547,871 | | | | 512,746 | | | | 504,912 | | | | 504,277 | | | | 499,298 | |
| Retail time deposits greater than $250,000 | | | 73,795 | | | | 66,387 | | | | 53,843 | | | | 50,743 | | | | 50,149 | |
| Total deposits | | $ | 2,489,128 | | | $ | 2,491,801 | | | $ | 2,437,656 | | | $ | 2,360,675 | | | $ | 2,326,702 | |
| (1) | Non-performing loans consist of non-accrual loans. |
| (2) | Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof. |
| (3) | Accruing restructured loans are loans with known credit problems that are not contractually past due and therefore are not included in non-performing loans. |
Loan Delinquency Information
First Defiance Financial Corp.
| (dollars in thousands) | | Total Balance | | | Current | | | 30 to 89 days
past due | | | Non Accrual
Loans | |
| | | | | | | | | | | | | |
| June 30, 2018 | | | | | | | | | | | | | | | | |
| One to four family residential real estate | | $ | 307,480 | | | $ | 303,263 | | | $ | 1,806 | | | $ | 2,411 | |
| Construction | | | 283,911 | | | | 283,911 | | | | - | | | | - | |
| Commercial real estate | | | 1,283,698 | | | | 1,273,236 | | | | 222 | | | | 10,240 | |
| Commercial | | | 489,296 | | | | 483,574 | | | | 577 | | | | 5,145 | |
| Consumer finance | | | 29,724 | | | | 29,438 | | | | 221 | | | | 65 | |
| Home equity and improvement | | | 129,868 | | | | 128,234 | | | | 1,155 | | | | 479 | |
| Total loans | | | 2,523,977 | | | $ | 2,501,656 | | | $ | 3,981 | | | $ | 18,340 | |
| | | | | | | | | | | | | | | | | |
| December 31, 2017 | | | | | | | | | | | | | | | | |
| One to four family residential real estate | | $ | 274,862 | | | $ | 269,624 | | | $ | 2,201 | | | $ | 3,037 | |
| Construction | | | 265,476 | | | | 265,476 | | | | - | | | | - | |
| Commercial real estate | | | 1,235,221 | | | | 1,215,980 | | | | 1,022 | | | | 18,219 | |
| Commercial | | | 526,142 | | | | 515,874 | | | | 1,427 | | | | 8,841 | |
| Consumer finance | | | 29,109 | | | | 28,728 | | | | 353 | | | | 28 | |
| Home equity and improvement | | | 135,457 | | | | 131,986 | | | | 2,881 | | | | 590 | |
| Total loans | | $ | 2,466,267 | | | $ | 2,427,668 | | | $ | 7,884 | | | $ | 30,715 | |
| | | | | | | | | | | | | | | | | |
| June 30, 2017 | | | | | | | | | | | | | | | | |
| One to four family residential real estate | | $ | 276,578 | | | $ | 270,729 | | | $ | 2,710 | | | $ | 3,139 | |
| Construction | | | 234,688 | | | | 234,445 | | | | - | | | | 243 | |
| Commercial real estate | | | 1,182,087 | | | | 1,161,810 | | | | 1,370 | | | | 18,907 | |
| Commercial | | | 515,004 | | | | 506,996 | | | | 545 | | | | 7,463 | |
| Consumer finance | | | 28,860 | | | | 28,594 | | | | 215 | | | | 51 | |
| Home equity and improvement | | | 130,429 | | | | 128,668 | | | | 1,205 | | | | 556 | |
| Total loans | | $ | 2,367,646 | | | $ | 2,331,242 | | | $ | 6,045 | | | $ | 30,359 | |
