Exhibit 99
 | NEWS RELEASE | |||
| Contact: | William J. Small Chairman, President and CEO (419) 782-5015 bsmall@first-fed.com | |||
For Immediate Release
FIRST DEFIANCE ANNOUNCES 2009
THIRD QUARTER EARNINGS
| • | Net Income of $329,000 for 2009 third quarter, even with $322,000 in the third quarter of 2008 |
| • | Provision for Loan Losses of $8.1 million |
| • | Other-Than-Temporary Impairment of $994,000 recognized on certain investment securities |
| • | Charge of $772,000 on previously recorded Mortgage Servicing Rights |
| • | Third quarter loan growth of $7.8 million |
DEFIANCE, OHIO (October 19, 2009) – First Defiance Financial Corp. (NASDAQ: FDEF) today announced that net income for its third quarter ended September 30, 2009 totaled $329,000, or ($0.02) per diluted common share, compared to $322,000 or $0.04 per diluted common share for the quarter ended September 30, 2008.
For the nine month period ended September 30, 2009, First Defiance earned $6.6 million or $0.63 per diluted common share compared to $6.5 million or $0.83 per diluted common share for the nine month period ended September 30, 2008. Excluding the after-tax cost of $700,000 of acquisition-related charges from the 2008 results, First Defiance earned $7.1 million or $0.91 per diluted common share for the first nine months of 2008.
“The impact of the economic environment continues to be reflected in our results for the third quarter,” said William J. Small, Chairman, President, and Chief Executive Officer of First Defiance Financial Corp. “Most core operating metrics were again very solid; however, higher provision expense and additional expenses related to collections and OREO had a negative effect on earnings. Through all of this, net income remained flat with the third quarter 2008 due primarily to better net interest margin and a larger loan base this year compared to September 30, 2008.”
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Credit Quality
The third quarter 2009 results include expense for provision for loan losses of $8.1 million, compared with $4.9 million in the same period in 2008 and $4.0 million in the second quarter of 2009. “In light of the continued environment of high unemployment, as well as the continued uncertainty of the commercial real estate market, we believe it is prudent to build general reserves,” said Small. “This decision drove the provision expense increase in the third quarter.” The allowance for loan loss as a percentage of average total loans increased to 1.92% at September 30, 2009 from 1.60% at June 30, 2009 and 1.47% at September 30, 2008.
Non-performing loans totaled $40.1 million at September 30, 2009, down slightly from $40.4 million at June 30, 2009. The September 30, 2009 balance included $35.5 million of loans that are on non-accrual or 90 days past due and another $4.6 million of loans considered non-performing because of changes in terms granted to borrowers although the loans are still accruing interest. In addition, First Defiance had $9.4 million of Real Estate Owned at September 30, 2009. For the third quarter of 2009, First Defiance recorded net charge-offs of $2.6 million, which represented 0.66% of average loans outstanding (annualized) for the quarter, down from 0.96% in the second quarter of 2009.
“Asset quality continues to be a drag on earnings in this economy,” Small said. “However, our delinquency numbers improved in the third quarter over the second quarter results and we hope this indicates a positive trend. We also saw a reduction in charge offs in the linked quarters. We continue to devote significant resources to the monitoring and early recognition of any weaknesses in the portfolio. While we are not seeing new specific loan problems arise in the portfolio, we are focused on the overall economic environment we are operating in. The overall reserve build was appropriate based on our general view regarding the near term direction of the economy.”
Investment Portfolio
The Other-Than-Temporary Impairment (OTTI) charge recognized by First Defiance in the third quarter of 2009 totaled $994,000. The OTTI charge for the quarter related to one security with a book value of $163,000 at June 30, 2009 which was written down to zero in the third quarter, and four other Trust Preferred Collateralized Debt Obligations (CDOs) with a remaining book value of $2.2 million. First Defiance also has another CDO investment that had an OTTI charge in the first quarter of 2009, which has a remaining book value of $243,000 and market value of $170,000 at September 30, 2009, which has seen positive upward movement in its discounted cash flows and resulted in no additional OTTI charge for the current and previous quarter. OTTI charges are due to the deterioration of the underlying collateral and relate to the credit component of the security.
First Defiance also has other Trust Preferred CDO investments with a total book value of $2.9 million and market value of $1.2 million at September 30, 2009. The decline in value of those investments is primarily due to the overall lack of liquidity in the CDO market. These investments continue to pay principal and interest payments in accordance with the contractual terms of the securities. Management has not deemed the impairment in value of these CDO investments to be Other-Than-Temporary, and, therefore, has not recognized the reduction in value of those investments in earnings.
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Net Interest Margin
Net interest income increased to $17.6 million in the third quarter of 2009 compared to $16.4 million in the 2008 third quarter, and was up from $16.2 million for the second quarter of 2009. Net interest margin was 3.88% for the 2009 third quarter compared to 3.61% in the second quarter of 2009 and 3.81% in the third quarter of 2008. Yield on interest earning assets declined by 58 basis points, to 5.60% in the third quarter of 2009 from 6.18% in the 2008 third quarter while the cost of interest-bearing liabilities and non-interest-bearing demand deposits decreased by 62 basis points, to 1.77% from 2.39%.
“Our disciplined pricing strategy resulted in the improved net interest margin,” said Small. “We will continue to focus on managing the margin and adjusting our pricing strategy in this challenging rate environment.”
Non-Interest Income
Non-interest income for the 2009 third quarter increased to $5.6 million from $4.1 million in the third quarter of 2008. Loss on investment securities, net of gains of $154,000, for the third quarter of 2009 was $840,000, which included $994,000 of OTTI charges compared with a loss of $2.1 million in the third quarter of 2008 related to OTTI charges. Mortgage banking income decreased to $980,000 in the third quarter of 2009, from $1.0 million for the same period in 2008. Gains from the sale of mortgage loans increased in the third quarter of 2009 to $1.5 million from $624,000 in the third quarter of 2008. Mortgage loan servicing revenue increased slightly for the 2009 third quarter compared to 2008. The increases in gains and servicing revenue were offset by expense increases of $246,000 for the amortization of mortgage servicing rights and increases of $736,000 for valuation adjustments.
First Defiance recorded a charge of $772,000 on mortgage servicing rights (MSR) valuation adjustment in the third quarter of 2009 compared with a charge of $36,000 in the third quarter of 2008. The MSR valuation adjustment is a reflection of the decrease in the fair value of certain sectors of the Company’s portfolio of mortgage servicing rights.
“Other Than Temporary Impairment charges and the adjustment to the valuation of the mortgage serving rights more than offset the large increase in the gain on sale of mortgages this quarter, but we increased non-interest income $1.5 million over the third quarter 2008,” commented Small. “We did see a reduction in mortgage originations compared to the first two quarters of 2009, a trend we expect to continue, but originations are still ahead of the 2008 pace.”
Non-Interest Expenses
Total non-interest expense was $14.8 million for the quarter ended September 30, 2009, a decrease from the $15.2 million of non-interest expense, which included $20,000 of acquisition related charges recognized in the 2008 third quarter.
Compensation and benefits decreased by $1.4 million or 18%, compared to 2008 third quarter. The decrease is primarily due to adjustments in performance based variable compensation. FDIC insurance expense increased to $649,000 in the third quarter of 2009 from
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$327,000 in the same period of 2008 as a result of the FDIC rate increases and higher insured deposits. Other non-interest expense increased to $3.7 million in the third quarter of 2009 from $2.8 million in the third quarter of 2008. Credit, collection and OREO-related costs increased $777,000 over the third quarter of 2008. Deferred compensation expense increased $462,000 from the third quarter of 2008. These increases were partially offset by decreases in marketing, credit card servicing charges and miscellaneous other operating expenses.
Year-To-Date Results
For the nine month period ended September 30, 2009, net interest income totaled $49.8 million, compared with $46.2 million in the first nine months of 2008. Average interest-earning assets increased to $1.81 billion for the nine months of 2009 compared to $1.63 billion for the first nine months of 2008. Net interest margin for the first nine months of 2009 was 3.73%, down 10 basis points from the 3.83% margin reported in the nine month period ended September 30, 2008.
The provision for loan losses for the nine months of 2009 was $14.8 million, compared to $8.8 million recorded during the first nine months of 2008.
Non-interest income for the first nine months of 2009 was $20.7 million compared to $16.3 million during the same period of 2008. Most of the non-interest income increase was in mortgage banking, which increased 112% to $7.7 million for the first nine months of 2009 compared to $3.6 million in the first nine months of 2008. In addition, service fees and other charges were $10.0 million for the first nine months of 2009 compared to $9.8 million during the first nine months of 2008. Non-interest income for the first nine month period of 2009 was reduced by $2.5 million of OTTI charges recognized for impaired investment securities.
Non-interest expense increased to $45.9 million for the first nine months of 2009 from $44.2 million in 2008. Excluding one-time acquisition-related charges of $1.0 million, non-interest expense was $43.2 million for the first nine months of 2008. For the nine months ending September 30, 2009 compared to the same period in 2008, FDIC insurance expense increased by $1.9 million due to increases in the assessment rates, a 2009 special assessment of $900,000 recorded in the second quarter and full utilization early in the 2008 first quarter of credits issued by the FDIC. Credit, collection and OREO-related costs have increased $1.9 million. Year to date 2008 non-interest expense included the $752,000 of expense associated with losses related to a former investment advisor.
“We are proceeding cautiously in this tentative environment,” said Small. “We believe that we will see indications of improvement in the national and local economies, but we realize there are still many challenges out there for certain sectors. We also are monitoring the Washington scene for new regulatory initiatives and potential FDIC premium increases and additional assessments.”
Total Assets at $2.02 Billion
Total assets at September 30, 2009 were $2.02 billion, compared to $1.96 billion at December 31, 2008. Net loans receivable (excluding loans held for sale) were $1.59 billion at September 30, 2009 compared to $1.59 billion at December 31, 2008. Total cash and cash
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equivalents were $77.3 million at September 30, 2009 compared with $46.1 million at December 31, 2008, an increase of $31.1 million. Total deposits at September 30, 2009 were $1.54 billion compared to $1.47 billion at December 31, 2008, an increase of $73.2 million. Non-interest bearing deposits at September 30, 2009 were $174.1 million compared to $176.1 million at December 31, 2008. Total stockholders’ equity was $234.5 million at September 30, 2009 compared to $229.2 million at the December 31, 2008. Also at September 30, 2009, goodwill and other intangible assets totaled $63.8 million compared to $64.9 million at December 31, 2008.
Conference Call
First Defiance Financial Corp. will host a conference call at 11:00 a.m. (EDT) on Tuesday, October 20th 2009 to discuss the earnings results and business trends. The conference call may be accessed by calling 1-800-860-2442. A live webcast may be accessed at http://www.talkpoint.com/viewer/starthere.asp?Pres=127665.
Audio replay of the Internet Web cast will be available atwww.fdef.com until Wednesday November 4th, 2009 at 9:00 a.m.
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 35 full service branches and 47 ATM locations in northwest Ohio, southeast Michigan and Fort Wayne, Indiana. First Insurance & Investments specializes in property and casualty and group health and life insurance, with offices in Defiance and Bowling Green, Ohio.
For more information, visit the company’s Web site 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 OREO 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, 2008. 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
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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.
| (Unaudited) | ||||||||||||
| (in thousands) | September 30, 2009 | December 31, 2008 | September 30, 2008 | |||||||||
Assets | ||||||||||||
Cash and cash equivalents | ||||||||||||
Cash and amounts due from depository institutions | $ | 30,207 | $ | 40,980 | $ | 34,230 | ||||||
Interest-bearing deposits | 47,109 | 5,172 | 358 | |||||||||
| 77,316 | 46,152 | 34,588 | ||||||||||
Securities | ||||||||||||
Available-for sale, carried at fair value | 126,985 | 117,575 | 113,036 | |||||||||
Held-to-maturity, carried at amortized cost | 1,697 | 886 | 978 | |||||||||
| 128,682 | 118,461 | 114,014 | ||||||||||
Loans | 1,623,627 | 1,617,235 | 1,596,327 | |||||||||
Allowance for loan losses | (31,248 | ) | (24,592 | ) | (23,445 | ) | ||||||
Loans, net | 1,592,379 | 1,592,643 | 1,572,882 | |||||||||
Loans held for sale | 24,340 | 10,960 | 9,363 | |||||||||
Mortgage servicing rights | 8,350 | 6,611 | 9,335 | |||||||||
Accrued interest receivable | 8,110 | 7,293 | 8,672 | |||||||||
Federal Home Loan Bank stock | 21,376 | 21,376 | 21,376 | |||||||||
Bank Owned Life Insurance | 30,585 | 28,747 | 29,174 | |||||||||
Office properties and equipment | 46,372 | 47,756 | 47,379 | |||||||||
Real estate and other assets held for sale | 9,352 | 7,000 | 4,776 | |||||||||
Goodwill | 56,585 | 56,585 | 56,830 | |||||||||
Core deposit and other intangibles | 7,242 | 8,344 | 8,771 | |||||||||
Deferred taxes | 1,305 | 336 | — | |||||||||
Other assets | 6,604 | 5,136 | 4,866 | |||||||||
Total Assets | $ | 2,018,598 | $ | 1,957,400 | $ | 1,922,026 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Non-interest-bearing deposits | $ | 174,145 | $ | 176,063 | $ | 158,139 | ||||||
Interest-bearing deposits | 1,368,940 | 1,293,849 | 1,277,665 | |||||||||
Total deposits | 1,543,085 | 1,469,912 | 1,435,804 | |||||||||
Advances from Federal Home Loan Bank | 146,937 | 156,067 | 173,581 | |||||||||
Notes payable and other interest-bearing liabilities | 43,280 | 49,454 | 70,238 | |||||||||
Subordinated debentures | 36,083 | 36,083 | 36,083 | |||||||||
Advance payments by borrowers for tax and insurance | 492 | 652 | 496 | |||||||||
Deferred taxes | — | — | 1,469 | |||||||||
Other liabilities | 14,192 | 16,073 | 14,679 | |||||||||
Total liabilities | 1,784,069 | 1,728,241 | 1,732,350 | |||||||||
Stockholders’ Equity | ||||||||||||
Preferred stock- including warrants and amortization of discount on preferred shares | 37,000 | 37,000 | — | |||||||||
Preferred stock discount | (748 | ) | (867 | ) | — | |||||||
Common stock, net | 127 | 127 | 127 | |||||||||
Common stock warrant | 878 | 878 | — | |||||||||
Additional paid-in-capital | 140,622 | 140,449 | 140,360 | |||||||||
Accumulated other comprehensive income (loss) | 446 | (1,904 | ) | (4,933 | ) | |||||||
Retained earnings | 128,835 | 126,114 | 126,760 | |||||||||
Treasury stock, at cost | (72,631 | ) | (72,638 | ) | (72,638 | ) | ||||||
Total stockholders’ equity | 234,529 | 229,159 | 189,676 | |||||||||
Total liabilities and stockholders’ equity | $ | 2,018,598 | $ | 1,957,400 | $ | 1,922,026 | ||||||
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Consolidated Statements of Income (Unaudited)
First Defiance Financial Corp.
| (in thousands, except per share amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Interest Income: | ||||||||||||||||
Loans | $ | 23,766 | $ | 24,902 | $ | 70,229 | $ | 72,220 | ||||||||
Investment securities | 1,422 | 1,435 | 4,388 | 4,382 | ||||||||||||
Interest-bearing deposits | 41 | 5 | 89 | 119 | ||||||||||||
FHLB stock dividends | 258 | 301 | 726 | 797 | ||||||||||||
Total interest income | 25,487 | 26,643 | 75,432 | 77,518 | ||||||||||||
Interest Expense: | ||||||||||||||||
Deposits | 6,163 | 7,658 | 20,206 | 23,851 | ||||||||||||
FHLB advances and other | 1,267 | 1,603 | 3,865 | 4,803 | ||||||||||||
Subordinated debentures | 344 | 461 | 1,139 | 1,445 | ||||||||||||
Notes Payable | 140 | 555 | 433 | 1,217 | ||||||||||||
Total interest expense | 7,914 | 10,277 | 25,643 | 31,316 | ||||||||||||
Net interest income | 17,573 | 16,366 | 49,789 | 46,202 | ||||||||||||
Provision for loan losses | 8,051 | 4,907 | 14,762 | 8,761 | ||||||||||||
Net interest income after provision for loan losses | 9,522 | 11,459 | 35,027 | 37,441 | ||||||||||||
Non-interest Income: | ||||||||||||||||
Service fees and other charges | 3,577 | 3,717 | 9,989 | 9,756 | ||||||||||||
Mortgage banking income | 980 | 1,011 | 7,677 | 3,627 | ||||||||||||
Gain on sale of non-mortgage loans | 151 | 134 | 251 | 177 | ||||||||||||
Loss on securities | (840 | ) | (2,051 | ) | (2,262 | ) | (2,564 | ) | ||||||||
Insurance and investment sales commissions | 1,129 | 1,179 | 3,945 | 4,381 | ||||||||||||
Trust income | 101 | 114 | 306 | 343 | ||||||||||||
Income from Bank Owned Life Insurance | 201 | 224 | 338 | 751 | ||||||||||||
Other non-interest income | 257 | (188 | ) | 475 | (166 | ) | ||||||||||
Total Non-interest Income | 5,556 | 4,140 | 20,719 | 16,305 | ||||||||||||
Non-interest Expense: | ||||||||||||||||
Compensation and benefits | 6,551 | 7,980 | 21,501 | 22,421 | ||||||||||||
Occupancy | 1,860 | 1,949 | 5,901 | 5,562 | ||||||||||||
FDIC insurance premium | 649 | 327 | 2,713 | 792 | ||||||||||||
State franchise tax | 571 | 533 | 1,668 | 1,540 | ||||||||||||
Acquisition related charges | — | 20 | — | 1,032 | ||||||||||||
Data processing | 1,100 | 1,221 | 3,330 | 3,384 | ||||||||||||
Amortization of intangibles | 355 | 424 | 1,101 | 1,035 | ||||||||||||
Other non-interest expense | 3,700 | 2,779 | 9,701 | 8,458 | ||||||||||||
Total Non-interest Expense | 14,786 | 15,233 | 45,915 | 44,224 | ||||||||||||
Income before income taxes | 292 | 366 | 9,831 | 9,522 | ||||||||||||
Income taxes | (37 | ) | 44 | 3,193 | 3,046 | |||||||||||
Net Income | $ | 329 | $ | 322 | $ | 6,638 | $ | 6,476 | ||||||||
Dividends Accrued on Preferred Shares | (473 | ) | — | (1,403 | ) | — | ||||||||||
Accretion on Preferred Shares | (40 | ) | — | (118 | ) | — | ||||||||||
Net Income Applicable to Common Shares | $ | (184 | ) | $ | 322 | $ | 5,117 | $ | 6,476 | |||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | (0.02 | ) | $ | 0.04 | $ | 0.63 | $ | 0.83 | |||||||
Diluted | $ | (0.02 | ) | $ | 0.04 | $ | 0.63 | $ | 0.83 | |||||||
Core operating earnings per common share*: | ||||||||||||||||
Basic | $ | (0.02 | ) | $ | 0.04 | $ | 0.63 | $ | 0.91 | |||||||
Diluted | $ | (0.02 | ) | $ | 0.04 | $ | 0.63 | $ | 0.91 | |||||||
Average Shares Outstanding: | ||||||||||||||||
Basic | 8,117 | 8,113 | 8,117 | 7,813 | ||||||||||||
Diluted | 8,117 | 8,123 | 8,172 | 7,842 | ||||||||||||
*-See Non-GAAP Disclosure Reconciliations
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Financial Summary and Comparison
First Defiance Financial Corp.
| (Unaudited) Three Months Ended September 30, | (Unaudited) Nine Months Ended September 30, | |||||||||||||||||||||
| (dollars in thousands, except per share data) | 2009 | 2008 | % change | 2009 | 2008 | % change | ||||||||||||||||
Summary of Operations | ||||||||||||||||||||||
Tax-equivalent interest income (1) | 25,796 | 26,876 | (4.0 | ) | 76,293 | 78,171 | (2.4 | ) | ||||||||||||||
Interest expense | 7,914 | 10,277 | (23.0 | ) | 25,643 | 31,316 | (18.1 | ) | ||||||||||||||
Tax-equivalent net interest income (1) | 17,882 | 16,599 | 7.7 | 50,650 | 46,855 | 8.1 | ||||||||||||||||
Provision for loan losses | 8,051 | 4,907 | 64.1 | 14,762 | 8,761 | 68.5 | ||||||||||||||||
Tax-equivalent NII after provision for loan loss (1) | 9,831 | 11,692 | (15.9 | ) | 35,888 | 38,094 | (5.8 | ) | ||||||||||||||
Securities losses | (840 | ) | (2,051 | ) | (59.0 | ) | (2,262 | ) | (2,564 | ) | (11.8 | ) | ||||||||||
Non-interest income-excluding securities losses | 6,396 | 6,191 | 3.3 | 22,981 | 18,869 | 21.8 | ||||||||||||||||
Non-interest expense | 14,786 | 15,233 | (2.9 | ) | 45,915 | 44,224 | 3.8 | |||||||||||||||
Non-interest expense-excluding non-core charges | 14,786 | 15,213 | (2.8 | ) | 45,915 | 43,192 | 6.3 | |||||||||||||||
One time acquisition related charges | - | 20 | NM | - | 1,032 | NM | ||||||||||||||||
Income taxes | (37 | ) | 44 | (184.1 | ) | 3,193 | 3,046 | 4.8 | ||||||||||||||
Net Income | 329 | 322 | 2.2 | 6,638 | 6,476 | 2.5 | ||||||||||||||||
Dividends Declared on Preferred Shares | (473 | ) | - | NM | (1,403 | ) | - | NM | ||||||||||||||
Accretion on Preferred Shares | (40 | ) | - | NM | (118 | ) | - | NM | ||||||||||||||
Net Income Applicable to Common Shares | (184 | ) | 322 | (157.1 | ) | 5,117 | 6,476 | (21.0 | ) | |||||||||||||
Core operating earnings (2) | 329 | 335 | (1.8 | ) | 6,638 | 7,147 | (7.1 | ) | ||||||||||||||
Tax equivalent adjustment (1) | 309 | 233 | 32.6 | 861 | 653 | 31.9 | ||||||||||||||||
At Period End | ||||||||||||||||||||||
Assets | 2,018,598 | 1,922,026 | 5.0 | |||||||||||||||||||
Earning assets | 1,845,134 | 1,741,438 | 6.0 | |||||||||||||||||||
Loans | 1,623,627 | 1,596,327 | 1.7 | |||||||||||||||||||
Allowance for loan losses | 31,248 | 23,445 | 33.3 | |||||||||||||||||||
Deposits | 1,543,085 | 1,435,804 | 7.5 | |||||||||||||||||||
Stockholders’ equity | 234,529 | 189,676 | 23.6 | |||||||||||||||||||
Average Balances | ||||||||||||||||||||||
Assets | 2,029,970 | 1,928,987 | 5.2 | 2,014,238 | 1,824,197 | 10.4 | ||||||||||||||||
Earning assets | 1,826,400 | 1,727,343 | 5.7 | 1,812,230 | 1,630,873 | 11.1 | ||||||||||||||||
Deposits and interest-bearing liabilities | 1,778,223 | 1,712,212 | 3.9 | 1,764,667 | 1,611,785 | 9.5 | ||||||||||||||||
Loans | 1,613,529 | 1,585,489 | 1.8 | 1,600,878 | 1,485,455 | 7.8 | ||||||||||||||||
Deposits | 1,550,369 | 1,437,273 | 7.9 | 1,538,986 | 1,365,631 | 12.7 | ||||||||||||||||
Stockholders’ equity | 234,241 | 194,452 | 20.5 | 231,912 | 187,330 | 23.8 | ||||||||||||||||
Stockholders’ equity / assets | 11.54 | % | 10.08 | % | 14.5 | 11.51 | % | 10.27 | % | 12.1 | ||||||||||||
Per Common Share Data | ||||||||||||||||||||||
Net Income | ||||||||||||||||||||||
Basic | $ | (0.02 | ) | $ | 0.04 | (150.0 | ) | $ | 0.63 | $ | 0.83 | (24.1 | ) | |||||||||
Diluted | (0.02 | ) | 0.04 | (150.0 | ) | 0.63 | 0.83 | (24.1 | ) | |||||||||||||
Core operating earnings (2) | ||||||||||||||||||||||
Basic | $ | (0.02 | ) | $ | 0.04 | (154.9 | ) | $ | 0.63 | $ | 0.91 | (31.1 | ) | |||||||||
Diluted | (0.02 | ) | 0.04 | (155.0 | ) | 0.63 | 0.91 | (31.3 | ) | |||||||||||||
Dividends | 0.04 | 0.26 | (84.6 | ) | 0.295 | 0.78 | (62.2 | ) | ||||||||||||||
Market Value: | ||||||||||||||||||||||
High | $ | 18.33 | $ | 17.66 | 3.8 | $ | 18.33 | $ | 22.51 | (18.6 | ) | |||||||||||
Low | 12.00 | 10.00 | 20.0 | 3.76 | 10.00 | (62.4 | ) | |||||||||||||||
Close | 14.91 | 11.01 | 35.4 | 14.91 | 11.01 | 35.4 | ||||||||||||||||
Book Value | 24.32 | 23.37 | 4.1 | 24.32 | 23.37 | 4.1 | ||||||||||||||||
Tangible Book Value | 16.45 | 15.29 | 7.6 | 16.45 | 15.29 | 7.6 | ||||||||||||||||
Shares outstanding, end of period (000) | 8,118 | 8,117 | 0.0 | 8,118 | 8,117 | 0.0 | ||||||||||||||||
Performance Ratios (annualized) | ||||||||||||||||||||||
Tax-equivalent net interest margin (1) | 3.88 | % | 3.81 | % | 1.8 | 3.73 | % | 3.83 | % | (2.6 | ) | |||||||||||
Return on average assets -GAAP | 0.06 | % | 0.07 | % | (3.2 | ) | 0.44 | % | 0.47 | % | (7.1 | ) | ||||||||||
Return on average assets -Core Operating | 0.06 | % | 0.07 | % | (6.9 | ) | 0.44 | % | 0.52 | % | (15.8 | ) | ||||||||||
Return on average equity- GAAP | 0.56 | % | 0.66 | % | (15.4 | ) | 3.83 | % | 4.62 | % | (17.1 | ) | ||||||||||
Return on average equity- Core Operating | 0.56 | % | 0.69 | % | (18.7 | ) | 3.83 | % | 5.10 | % | (24.9 | ) | ||||||||||
Efficiency ratio (3) -GAAP | 60.90 | % | 66.84 | % | (8.9 | ) | 62.36 | % | 67.29 | % | (7.3 | ) | ||||||||||
Efficiency ratio (3) -Core Operating | 60.90 | % | 66.75 | % | (8.8 | ) | 62.36 | % | 65.72 | % | (5.1 | ) | ||||||||||
Effective tax rate | -12.67 | % | 12.02 | % | (205.4 | ) | 32.48 | % | 31.99 | % | 1.5 | |||||||||||
Dividend payout ratio (basic) | -200.00 | % | 650.00 | % | (130.8 | ) | 46.83 | % | 93.98 | % | (50.2 | ) | ||||||||||
| (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 or losses, net. |
NM Percentage change not meaningful
9
Non-GAAP Disclosure Reconciliations
First Defiance Financial Corp.
Management believes that the presentation of the non-GAAP financial measures in this release assists investors when comparing results period-to-period in a more meaningful and consistent manner and provides a better measure of results for First Defiance’s ongoing operations.
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.
| Core Operating Earnings | Three months ended September 30, | Nine Months Ended September 30, | ||||||||||||
| (dollars in thousands, except per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||
Net Income | $ | 329 | $ | 322 | $ | 6,638 | $ | 6,476 | ||||||
Acquisition related charges | - | 20 | - | 1,032 | ||||||||||
Tax effect | - | (7 | ) | - | (361 | ) | ||||||||
After-tax non-operating items | - | 13 | - | 671 | ||||||||||
Core operating earnings | $ | 329 | $ | 335 | $ | 6,638 | $ | 7,147 | ||||||
Acquisition related charges in 2008 reflect charges associated with the acquisition of Pavilion Bancorp.
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:
| (dollars in thousands) | Three months ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Gain from sale of mortgage loans | $ | 1,541 | $ | 624 | $ | 7,276 | $ | 2,808 | ||||||||
Mortgage loan servicing revenue (expense): | ||||||||||||||||
Mortgage loan servicing revenue | 725 | 691 | 2,109 | 1,839 | ||||||||||||
Amortization of mortgage servicing rights | (514 | ) | (268 | ) | (2,625 | ) | (1,008 | ) | ||||||||
Mortgage servicing rights valuation adjustments | (772 | ) | (36 | ) | 917 | (12 | ) | |||||||||
| (561 | ) | 387 | 401 | 819 | ||||||||||||
Total revenue from sale and servicing of mortgage loans | $ | 980 | $ | 1,011 | $ | 7,677 | $ | 3,627 | ||||||||
10
Yield Analysis
First Defiance Financial Corp.
| Three Months Ended September 30, | ||||||||||||||||||
| 2009 | 2008 | |||||||||||||||||
| Average Balance | Interest(1) | Yield Rate(2) | Average Balance | Interest(1) | Yield Rate(2) | |||||||||||||
Interest-earning assets: | ||||||||||||||||||
Loans receivable | $ | 1,613,529 | $ | 23,812 | 5.85 | % | $ | 1,585,489 | $ | 24,934 | 6.26 | % | ||||||
Securities | 130,673 | 1,685 | 5.08 | % | 118,502 | 1,636 | 5.31 | % | ||||||||||
Interest Bearing Deposits | 60,822 | 41 | 0.27 | % | 2,231 | 5 | 0.89 | % | ||||||||||
FHLB stock | 21,376 | 258 | 4.79 | % | 21,121 | 301 | 5.67 | % | ||||||||||
Total interest-earning assets | 1,826,400 | 25,796 | 5.60 | % | 1,727,343 | 26,876 | 6.18 | % | ||||||||||
Non-interest-earning assets | 203,570 | 201,644 | ||||||||||||||||
Total assets | $ | 2,029,970 | $ | 1,928,987 | ||||||||||||||
Deposits and Interest-bearing liabilities: | ||||||||||||||||||
Interest bearing deposits | $ | 1,374,441 | $ | 6,163 | 1.78 | % | $ | 1,268,016 | $ | 7,658 | 2.40 | % | ||||||
FHLB advances and other | 146,941 | 1,267 | 3.42 | % | 174,343 | 1,603 | 3.66 | % | ||||||||||
Other Borrowings | 44,685 | 140 | 1.24 | % | 64,368 | 555 | 3.43 | % | ||||||||||
Subordinated debentures | 36,228 | 344 | 3.77 | % | 36,228 | 461 | 5.06 | % | ||||||||||
Total interest-bearing liabilities | 1,602,295 | 7,914 | 1.96 | % | 1,542,955 | 10,277 | 2.65 | % | ||||||||||
Non-interest bearing deposits | 175,928 | - | - | 169,257 | - | - | ||||||||||||
Total including non-interest-bearing demand deposits | 1,778,223 | 7,914 | 1.77 | % | 1,712,212 | 10,277 | 2.39 | % | ||||||||||
Other non-interest-bearing liabilities | 17,506 | 22,323 | ||||||||||||||||
Total liabilities | 1,795,729 | 1,734,535 | ||||||||||||||||
Stockholders’ equity | 234,241 | 194,452 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,029,970 | $ | 1,928,987 | ||||||||||||||
Net interest income; interest rate spread | $ | 17,882 | 3.64 | % | $ | 16,599 | 3.53 | % | ||||||||||
Net interest margin (3) | 3.88 | % | 3.81 | % | ||||||||||||||
Average interest-earning assets to average interest bearing liabilities | 114 | % | 112 | % | ||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||||
| 2009 | 2008 | |||||||||||||||||
| Average Balance | Interest(1) | Yield Rate(2) | Average Balance | Interest(1) | Yield Rate(2) | |||||||||||||
Interest-earning assets: | ||||||||||||||||||
Loans receivable | $ | 1,600,878 | $ | 70,333 | 5.87 | % | $ | 1,485,455 | $ | 72,297 | 6.50 | % | ||||||
Securities | 126,883 | 5,145 | 5.36 | % | 118,908 | 4,959 | 5.50 | % | ||||||||||
Interest Bearing Deposits | 63,093 | 89 | 0.19 | % | 6,311 | 119 | 2.52 | % | ||||||||||
FHLB stock | 21,376 | 726 | 4.54 | % | 20,199 | 797 | 5.27 | % | ||||||||||
Total interest-earning assets | 1,812,230 | 76,293 | 5.61 | % | 1,630,873 | 78,172 | 6.40 | % | ||||||||||
Non-interest-earning assets | 202,008 | 193,324 | ||||||||||||||||
Total assets | $ | 2,014,238 | $ | 1,824,197 | ||||||||||||||
Deposits and Interest-bearing liabilities: | ||||||||||||||||||
Interest bearing deposits | $ | 1,366,645 | $ | 20,206 | 1.98 | % | $ | 1,210,631 | $ | 23,851 | 2.63 | % | ||||||
FHLB advances and other | 146,994 | 3,865 | 3.52 | % | 161,891 | 4,803 | 3.96 | % | ||||||||||
Other Borrowings | 42,446 | 433 | 1.36 | % | 48,018 | 1,217 | 3.39 | % | ||||||||||
Subordinated debentures | 36,241 | 1,139 | 4.19 | % | 36,245 | 1,445 | 5.33 | % | ||||||||||
Total interest-bearing liabilities | 1,592,326 | 25,643 | 2.15 | % | 1,456,785 | 31,316 | 2.87 | % | ||||||||||
Non-interest bearing deposits | 172,341 | - | - | 155,000 | - | - | ||||||||||||
Total including non-interest-bearing demand deposits | 1,764,667 | 25,643 | 1.94 | % | 1,611,785 | 31,316 | 2.60 | % | ||||||||||
Other non-interest-bearing liabilities | 17,659 | 25,082 | ||||||||||||||||
Total liabilities | 1,782,326 | 1,636,867 | ||||||||||||||||
Stockholders’ equity | 231,912 | 187,330 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,014,238 | $ | 1,824,197 | ||||||||||||||
Net interest income; interest rate spread | $ | 50,650 | 3.46 | % | $ | 46,856 | 3.53 | % | ||||||||||
Net interest margin (3) | 3.73 | % | 3.83 | % | ||||||||||||||
Average interest-earning assets to average interest bearing liabilities | 114 | % | 112 | % | ||||||||||||||
| (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. |
11
Selected Quarterly Information
First Defiance Financial Corp.
| (dollars in thousands, except per share data) | 3rd Qtr 2009 | 2nd Qtr 2009 | 1st Qtr 2009 | 4th Qtr 2008 | 3rd Qtr 2008 | |||||||||||||||
Summary of Operations | ||||||||||||||||||||
Tax-equivalent interest income (1) | $ | 25,796 | $ | 25,117 | $ | 25,379 | $ | 26,188 | $ | 26,876 | ||||||||||
Interest expense | 7,914 | 8,643 | 9,085 | 9,952 | 10,277 | |||||||||||||||
Tax-equivalent net interest income (1) | 17,882 | 16,474 | 16,294 | 16,236 | 16,599 | |||||||||||||||
Provision for loan losses | 8,051 | 3,965 | 2,746 | 3,824 | 4,907 | |||||||||||||||
Tax-equivalent NII after provision for loan losses (1) | 9,831 | 12,509 | 13,548 | 12,412 | 11,692 | |||||||||||||||
Investment securities gains (losses) | (840 | ) | (750 | ) | (672 | ) | (596 | ) | (2,051 | ) | ||||||||||
Non-interest income (excluding securities gains/losses) | 6,396 | 9,109 | 7,476 | 3,360 | 6,191 | |||||||||||||||
Non-interest expense | 14,786 | 16,133 | 14,996 | 13,571 | 15,233 | |||||||||||||||
Acquisition and other on-time charges | - | - | - | 85 | 20 | |||||||||||||||
Income taxes | (37 | ) | 1,539 | 1,691 | 482 | 44 | ||||||||||||||
Net income | 329 | 2,901 | 3,408 | 880 | 322 | |||||||||||||||
Dividends Declared on Preferred Shares | (473 | ) | (468 | ) | (463 | ) | (134 | ) | - | |||||||||||
Accretion on Preferred Shares | (40 | ) | (40 | ) | (38 | ) | (11 | ) | - | |||||||||||
Net Income Applicable to Common Shares | (184 | ) | 2,393 | 2,907 | 735 | 322 | ||||||||||||||
Core operating earnings (2) | 329 | 2,901 | 3,408 | 935 | 335 | |||||||||||||||
Tax equivalent adjustment (1) | 309 | 295 | 257 | 243 | 233 | |||||||||||||||
At Period End | ||||||||||||||||||||
Total assets | $ | 2,018,598 | $ | 2,023,563 | $ | 2,010,662 | $ | 1,957,400 | $ | 1,922,026 | ||||||||||
Earning assets | 1,845,134 | 1,846,689 | 1,838,397 | 1,773,204 | 1,741,438 | |||||||||||||||
Loans | 1,623,627 | 1,610,460 | 1,585,897 | 1,617,235 | 1,596,327 | |||||||||||||||
Allowance for loan losses | 31,248 | 25,840 | 25,694 | 24,592 | 23,445 | |||||||||||||||
Deposits | 1,543,085 | 1,553,144 | 1,540,235 | 1,469,912 | 1,435,804 | |||||||||||||||
Stockholders’ equity | 234,529 | 232,683 | 230,608 | 229,159 | 189,676 | |||||||||||||||
Stockholders’ equity / assets | 11.62 | % | 11.50 | % | 11.47 | % | 11.71 | % | 9.87 | % | ||||||||||
Goodwill | 56,585 | 56,585 | 56,585 | 56,585 | 56,830 | |||||||||||||||
Average Balances | ||||||||||||||||||||
Total assets | $ | 2,029,970 | $ | 2,027,760 | $ | 1,984,985 | $ | 1,938,461 | $ | 1,928,987 | ||||||||||
Earning assets | 1,826,400 | 1,828,272 | 1,782,019 | 1,730,284 | 1,727,343 | |||||||||||||||
Deposits and interest-bearing liabilities | 1,778,223 | 1,778,848 | 1,736,933 | 1,718,315 | 1,712,212 | |||||||||||||||
Loans | 1,613,529 | 1,592,513 | 1,596,592 | 1,591,144 | 1,585,489 | |||||||||||||||
Deposits | 1,550,369 | 1,552,533 | 1,514,059 | 1,466,366 | 1,437,273 | |||||||||||||||
Stockholders’ equity | 234,241 | 231,397 | 230,099 | 201,499 | 194,452 | |||||||||||||||
Stockholders’ equity / assets | 11.54 | % | 11.41 | % | 11.59 | % | 10.39 | % | 10.08 | % | ||||||||||
Per Common Share Data | ||||||||||||||||||||
Net Income: | ||||||||||||||||||||
Basic | $ | (0.02 | ) | $ | 0.29 | $ | 0.36 | $ | 0.09 | $ | 0.04 | |||||||||
Diluted | (0.02 | ) | 0.29 | 0.36 | 0.09 | 0.04 | ||||||||||||||
Core operating earnings (2) | ||||||||||||||||||||
Basic | (0.02 | ) | 0.29 | 0.36 | 0.10 | 0.04 | ||||||||||||||
Diluted | (0.02 | ) | 0.29 | 0.36 | 0.10 | 0.04 | ||||||||||||||
Dividends | 0.04 | 0.085 | 0.17 | 0.17 | 0.26 | |||||||||||||||
Market Value: | ||||||||||||||||||||
High | $ | 18.33 | $ | 14.25 | $ | 8.95 | $ | 14.50 | $ | 17.66 | ||||||||||
Low | 12.00 | 6.10 | 3.76 | 6.00 | 10.00 | |||||||||||||||
Close | 14.91 | 13.00 | 6.08 | 7.73 | 11.01 | |||||||||||||||
Book Value | 24.32 | 24.10 | 23.85 | 23.67 | 23.37 | |||||||||||||||
Shares outstanding, end of period (in thousands) | 8,118 | 8,118 | 8,117 | 8,117 | 8,117 | |||||||||||||||
Performance Ratios (annualized) | ||||||||||||||||||||
Tax-equivalent net interest margin (1) | 3.88 | % | 3.61 | % | 3.71 | % | 3.72 | % | 3.81 | % | ||||||||||
Return on average assets -GAAP | 0.06 | % | 0.57 | % | 0.70 | % | 0.18 | % | 0.07 | % | ||||||||||
Return on average assets -Core Operating | 0.06 | % | 0.57 | % | 0.70 | % | 0.19 | % | 0.07 | % | ||||||||||
Return on average equity- GAAP | 0.56 | % | 5.03 | % | 6.02 | % | 1.74 | % | 0.66 | % | ||||||||||
Return on average equity- Core Operating | 0.56 | % | 5.03 | % | 6.02 | % | 1.85 | % | 0.69 | % | ||||||||||
Efficiency ratio (3) -GAAP | 60.90 | % | 63.06 | % | 63.09 | % | 69.25 | % | 66.84 | % | ||||||||||
Efficiency ratio (3) -Core Operating | 60.90 | % | 63.06 | % | 63.09 | % | 68.82 | % | 66.75 | % | ||||||||||
Effective tax rate | -12.67 | % | 34.66 | % | 33.16 | % | 35.39 | % | 12.02 | % | ||||||||||
Common dividend payout ratio (basic) | -200.00 | % | 29.31 | % | 47.22 | % | 188.89 | % | 650.00 | % | ||||||||||
| (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. |
12
Selected Quarterly Information
First Defiance Financial Corp.
| (dollars in thousands, except per share data) | 3rd Qtr 2009 | 2nd Qtr 2009 | 1st Qtr 2009 | 4th Qtr 2008 | 3rd Qtr 2008 | |||||||||||||||
Loan Portfolio Composition | ||||||||||||||||||||
One to four family residential real estate | $ | 233,958 | $ | 238,000 | $ | 241,119 | $ | 251,807 | $ | 250,244 | ||||||||||
Construction | 53,605 | 44,670 | 50,534 | 72,938 | 75,822 | |||||||||||||||
Commercial real estate | 802,434 | 768,636 | 764,841 | 755,740 | 746,676 | |||||||||||||||
Commercial | 371,881 | 382,434 | 350,070 | 356,574 | 353,453 | |||||||||||||||
Consumer finance | 36,416 | 38,074 | 38,676 | 41,012 | 41,964 | |||||||||||||||
Home equity and improvement | 150,379 | 151,213 | 156,668 | 161,106 | 158,992 | |||||||||||||||
Total loans | 1,648,673 | 1,623,027 | 1,601,908 | 1,639,177 | 1,627,151 | |||||||||||||||
Less: | ||||||||||||||||||||
Loans in process | 23,957 | 11,602 | 14,954 | 20,892 | 29,794 | |||||||||||||||
Deferred loan origination fees | 1,089 | 965 | 1,057 | 1,050 | 1,030 | |||||||||||||||
Allowance for loan loss | 31,248 | 25,840 | 25,694 | 24,592 | 23,445 | |||||||||||||||
Net Loans | $ | 1,592,379 | $ | 1,584,620 | $ | 1,560,203 | $ | 1,592,643 | $ | 1,572,882 | ||||||||||
Allowance for loan loss activity | ||||||||||||||||||||
Beginning allowance | 25,840 | 25,694 | 24,592 | $ | 23,445 | $ | 20,578 | |||||||||||||
Provision for loan losses | 8,051 | 3,965 | 2,746 | 3,824 | 4,907 | |||||||||||||||
Reserve from acquisitions | — | — | — | — | 121 | |||||||||||||||
Credit loss charge-offs: | ||||||||||||||||||||
One to four family residential real estate | 744 | 505 | 148 | 369 | 478 | |||||||||||||||
Commercial real estate | 1,152 | 2,066 | 669 | 1,480 | 1,495 | |||||||||||||||
Commercial | 658 | 950 | 702 | 593 | — | |||||||||||||||
Consumer finance | 39 | 83 | 123 | 224 | 73 | |||||||||||||||
Home equity and improvement | 196 | 301 | 130 | 57 | 216 | |||||||||||||||
Total charge-offs | 2,789 | 3,905 | 1,772 | 2,723 | 2,262 | |||||||||||||||
Total recoveries | 146 | 86 | 128 | 46 | 101 | |||||||||||||||
Net charge-offs (recoveries) | 2,643 | 3,819 | 1,644 | 2,677 | 2,161 | |||||||||||||||
Ending allowance | $ | 31,248 | $ | 25,840 | $ | 25,694 | $ | 24,592 | $ | 23,445 | ||||||||||
Credit Quality | ||||||||||||||||||||
Non-accrual loans | $ | 35,490 | $ | 35,528 | $ | 29,473 | $ | 28,017 | $ | 24,630 | ||||||||||
Restructured loans, accruing | 4,574 | 4,845 | 7,199 | 6,250 | 905 | |||||||||||||||
Total non-performing loans (1) | 40,064 | 40,373 | 36,672 | 34,267 | 25,535 | |||||||||||||||
Real estate owned (REO) | 9,352 | 8,567 | 7,839 | 7,000 | 4,776 | |||||||||||||||
Total non-performing assets (2) | $ | 49,416 | $ | 48,940 | $ | 44,511 | $ | 41,267 | $ | 30,311 | ||||||||||
Net charge-offs | 2,643 | 3,819 | 1,644 | 2,677 | 2,161 | |||||||||||||||
Allowance for loan losses / loans | 1.92 | % | 1.60 | % | 1.62 | % | 1.52 | % | 1.47 | % | ||||||||||
Allowance for loan losses / non-performing assets | 63.23 | % | 52.80 | % | 57.73 | % | 59.59 | % | 77.35 | % | ||||||||||
Allowance for loan losses / non-performing loans | 78.00 | % | 64.00 | % | 70.06 | % | 71.77 | % | 91.82 | % | ||||||||||
Non-performing assets / loans plus REO | 3.03 | % | 3.02 | % | 2.79 | % | 2.54 | % | 1.89 | % | ||||||||||
Non-performing assets / total assets | 2.45 | % | 2.42 | % | 2.21 | % | 2.11 | % | 1.58 | % | ||||||||||
Net charge-offs / average loans (annualized) | 0.66 | % | 0.96 | % | 0.41 | % | 0.67 | % | 0.55 | % | ||||||||||
Deposit Balances | ||||||||||||||||||||
Non-interest-bearing demand deposits | $ | 174,145 | $ | 180,035 | $ | 163,855 | $ | 176,063 | $ | 158,139 | ||||||||||
Interest-bearing demand deposits and money market | 477,566 | 456,177 | 413,104 | 374,488 | 365,251 | |||||||||||||||
Savings deposits | 132,333 | 135,821 | 132,590 | 132,145 | 145,019 | |||||||||||||||
Retail time deposits less than $100,000 | 544,957 | 568,595 | 608,811 | 578,245 | 557,643 | |||||||||||||||
Retail time deposits greater than $100,000 | 166,787 | 165,401 | 171,588 | 170,485 | 177,848 | |||||||||||||||
National/Brokered time deposits | 47,297 | 47,115 | 50,287 | 38,486 | 31,904 | |||||||||||||||
Total deposits | $ | 1,543,085 | $ | 1,553,144 | $ | 1,540,235 | $ | 1,469,912 | $ | 1,435,804 | ||||||||||
| (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. |
| (2) | Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof. |
13
Loan Delinquency Information
First Defiance Financial Corp.
| (dollars in thousands) | Total Balance | Current | 30 to 89 days past due | Non Accrual Loans | Troubled Debt Restructuring | ||||||||||
September 30, 2009 | |||||||||||||||
One to four family residential real estate | $ | 233,958 | $ | 221,077 | $ | 4,637 | $ | 5,839 | $ | 2,405 | |||||
Construction | 53,605 | 53,340 | 71 | 194 | - | ||||||||||
Commercial real estate | 802,434 | 765,469 | 11,570 | 23,279 | 2,116 | ||||||||||
Commercial | 371,881 | 363,739 | 2,525 | 5,564 | 53 | ||||||||||
Consumer finance | 36,416 | 35,913 | 454 | 49 | - | ||||||||||
Home equity and improvement | 150,379 | 147,031 | 2,783 | 565 | - | ||||||||||
Total loans | $ | 1,648,673 | $ | 1,586,569 | $ | 22,040 | $ | 35,490 | $ | 4,574 | |||||
June 30, 2009 | |||||||||||||||
One to four family residential real estate | $ | 238,000 | $ | 223,846 | $ | 5,594 | $ | 5,541 | $ | 3,019 | |||||
Construction | 44,670 | 44,416 | 194 | 60 | - | ||||||||||
Commercial real estate | 768,636 | 727,983 | 13,212 | 25,672 | 1,769 | ||||||||||
Commercial | 382,434 | 375,007 | 3,781 | 3,589 | 57 | ||||||||||
Consumer finance | 38,074 | 37,595 | 440 | 39 | - | ||||||||||
Home equity and improvement | 151,213 | 147,975 | 2,611 | 627 | - | ||||||||||
Total loans | $ | 1,623,027 | $ | 1,556,822 | $ | 25,832 | $ | 35,528 | $ | 4,845 | |||||
December 31, 2008 | |||||||||||||||
One to four family residential real estate | $ | 251,807 | $ | 241,446 | $ | 4,676 | $ | 4,584 | $ | 1,101 | |||||
Construction | 72,938 | 72,814 | 52 | 72 | - | ||||||||||
Commercial real estate | 755,740 | 728,150 | 5,406 | 19,979 | 2,205 | ||||||||||
Commercial | 356,574 | 349,078 | 1,671 | 2,881 | 2,944 | ||||||||||
Consumer finance | 41,012 | 40,428 | 515 | 69 | - | ||||||||||
Home equity and improvement | 161,106 | 155,650 | 5,024 | 432 | - | ||||||||||
Total loans | $ | 1,639,177 | $ | 1,587,566 | $ | 17,344 | $ | 28,017 | $ | 6,250 | |||||
September 30, 2008 | |||||||||||||||
One to four family residential real estate | $ | 250,244 | $ | 239,889 | $ | 4,053 | $ | 5,400 | $ | 902 | |||||
Construction | 75,822 | 74,232 | 101 | 1,489 | - | ||||||||||
Commercial real estate | 746,676 | 726,013 | 6,914 | 13,749 | - | ||||||||||
Commercial | 353,453 | 348,504 | 1,371 | 3,575 | 3 | ||||||||||
Consumer finance | 41,964 | 41,341 | 473 | 150 | - | ||||||||||
Home equity and improvement | 158,992 | 156,645 | 2,080 | 267 | - | ||||||||||
Total loans | $ | 1,627,151 | $ | 1,586,624 | $ | 14,992 | $ | 24,630 | $ | 905 | |||||
14