Exhibit 99
 | NEWS RELEASE | |||
| Contact: | William J. Small | |||
| Chairman, President and CEO | ||||
| (419) 782-5104 | ||||
| bsmall@first-fed.com | ||||
For Immediate Release
FIRST DEFIANCE FINANCIAL CORP. ANNOUNCES 2009
FOURTH QUARTER AND FULL YEAR EARNINGS
| • | Net Income of $1.6 million for 2009 fourth quarter, compared with $880,000 in the fourth quarter of 2008 |
| • | Provision for Loan Losses of $7.0 million for the fourth quarter |
| • | Other-Than-Temporary Impairment of $1.4 million recognized on certain investment securities |
| • | Recapture of $397,000 valuation allowance on Mortgage Servicing Rights |
| • | Deposit growth of $37.1 million in the fourth quarter |
DEFIANCE, OHIO (January 18, 2010) – First Defiance Financial Corp. (NASDAQ: FDEF) today announced that net income for the fiscal year ended December 31, 2009 totaled $8.3 million, or $.76 per diluted common share compared to $7.4 million or $.91 per diluted common share for the year ended December 31, 2008. The 2008 twelve month results included $1.1 million of acquisition-related charges associated with the March 14, 2008 acquisition of Pavilion Bancorp of Adrian, Michigan (Pavilion) and its subsidiary the Bank of Lenawee. Excluding the after-tax impact of those charges, First Defiance had earnings of $8.1 million, or $1.00 per diluted common share for the twelve months ended December 31, 2008. For the fourth quarter ended December 31, 2009, First Defiance earned $1.6 million or $0.14 per diluted common share compared to $880,000 or $0.09 per diluted common share for the fourth quarter of 2008.
“Despite the very difficult operating environment in 2009, the company remained profitable for the quarter and the full year of 2009,” said William J. Small, Chairman, President, and Chief Executive Officer of First Defiance Financial Corp. “Our fundamental operating metrics were again very solid; however the persistent weakness in the economy and the resulting impact on asset quality is reflected in our results for the fourth quarter. Higher provision expense and additional expenses related to collections and OREO as well as charges relating to the closure of two branch office facilities had a negative effect on earnings for the quarter.”
Credit Quality
The fourth quarter 2009 results include expense for provision for loan losses of $7.0 million, compared with $3.8 million in the same period in 2008 and $8.1 million in the third quarter of 2009. “In light of the high unemployment environment, as well as the uncertainty of
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the commercial real estate market, we believe it is prudent to continue to build general reserves,” said Small. “This decision drove the provision expense increase in the fourth quarter.” The allowance for loan loss as a percentage of average total loans increased to 2.17% at December 31, 2009 from 1.92% at September 30, 2009 and 1.52% at December 31, 2008.
Non-performing loans totaled $47.9 million at December 31, 2009, up from $40.1 million at September 30, 2009. The December 31, 2009 balance included $41.2 million of loans that are on non-accrual or 90 days past due and another $6.7 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 $13.5 million of Real Estate Owned at December 31, 2009. For the fourth quarter of 2009, First Defiance recorded net charge-offs of $3.2 million, which represented 0.79% of average loans outstanding (annualized) for the quarter, compared with 0.66% in the third quarter of 2009 and 0.67% in the fourth quarter of 2008.
“Asset quality continues to have an impact on earnings in this economy,” Small said. “However, our delinquency numbers improved in the fourth quarter over the third quarter results and with two consecutive quarters of improvement we hope this indicates a positive trend. We also saw a slight increase 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 categories of loan problems arise in the portfolio, we are focused on the wider economic environment in which we operate. The overall reserve build was appropriate based on our general view regarding the near term direction of the local, regional and national economy.”
Investment Portfolio
The Other-Than-Temporary Impairment (OTTI) charge recognized by First Defiance in the fourth quarter of 2009 totaled $1.4 million. The OTTI charge for the quarter related to three securities which were written down to a total fair value of $25,000 in the fourth quarter, and one other Trust Preferred Collateralized Debt Obligation (CDO) with a remaining book value of $243,000 and a market value of $141,000 at December 31, 2009. The company also has one CDO that has had prior OTTI but did not have additional charges in the fourth quarter with a book value of $751,000 and a market value of $284,000 at December 31, 2009.
First Defiance has other Trust Preferred CDO investments that have not had OTTI charges with a total book value of $2.9 million and market value of $1.1 million at December 31, 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.
Net Interest Margin
Net interest income increased to $17.5 million in the fourth quarter of 2009 compared to $16.0 million in the 2008 fourth quarter, and was basically flat with the third quarter of 2009 which was $17.6 million. Net interest margin was 3.82% for the 2009 fourth quarter compared to 3.88% in the third quarter of 2009 and 3.72% in the fourth quarter of 2008. Yield on interest earning assets declined by 55 basis points, to 5.45% in the fourth quarter of 2009 from 6.00% in
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the 2008 fourth quarter, while the cost of interest-bearing liabilities and non-interest-bearing demand deposits decreased by 63 basis points, to 1.67% from 2.30%.
“We have a very disciplined pricing strategy that resulted in the stable net interest margin for the quarter,” said Small. “We will continue to focus on managing the margin and will adjust our pricing strategy as needed.”
Non-Interest Income
Non-interest income for the 2009 fourth quarter increased to $5.6 million from $2.8 million in the fourth quarter of 2008. Loss on investment securities, net of gains of $5,000, for the fourth quarter of 2009, was $1.4 million, compared with a loss of $596,000 in the fourth quarter of 2008. Mortgage banking income increased to $2.1 million in the fourth quarter of 2009, from a loss of $636,000 for the same period in 2008. Gains from the sale of mortgage loans decreased slightly in the fourth quarter of 2009 to $1.5 million from $1.6 million in the fourth quarter of 2008. Mortgage loan servicing revenue increased $2.8 million over the fourth quarter of 2008.
First Defiance recorded a recapture of $397,000 on mortgage servicing rights (MSR) valuation adjustment in the fourth quarter of 2009, compared with a charge of $2.7 million in the fourth quarter of 2008. The MSR valuation adjustment is a reflection of the increase in the fair value of certain sectors of the Company’s portfolio of mortgage servicing rights.
“The large increase in mortgage banking income this quarter compared to the fourth quarter of 2008 more than offset the increase in the Other Than Temporary Impairment charges this quarter,” commented Small. “We did see a reduction in mortgage originations compared to the first three quarters of 2009, a trend we expect to continue, but originations still out paced 2008.”
Non-Interest Expenses
Total non-interest expense was $14.5 million for the quarter ended December 31, 2009, an increase from the $13.6 million of non-interest expense, which included $85,000 of acquisition-related charges recognized in the 2008 fourth quarter.
Compensation and benefits decreased by $150,000 compared to the 2008 fourth quarter. FDIC insurance expense increased to $637,000 in the fourth quarter of 2009 from $290,000 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 fourth quarter of 2009 from $2.8 million in the fourth quarter of 2008. The fourth quarter of 2009 included approximately $652,000 of write- downs and charges for two branch office facilities that are in process of closing and one branch relocation. Credit, collection and OREO-related costs were $651,000 in the quarter, a $235,000 increase over the fourth quarter of 2008. Legal, consulting and other professional service fees were $575,000 in the quarter, an increase of $234,000 over the fourth quarter of 2008. Deferred compensation expense increased $331,000 from the fourth quarter of 2008. These increases were partially offset by a recovery of $175,000 on a previously recorded loss relating to an investment advisor and decreases in marketing, credit card servicing charges and miscellaneous other operating expenses.
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Annual Results
On an annual basis, earnings for 2009 were $8.3 million, an increase of $902,000 from $7.4 million in 2008. Net interest income for 2009 totaled $67.3 million, a $5.1 million or 8.2% increase over 2008. Average interest-earning assets increased to $1.8 billion for 2009 compared to $1.7 billion in 2008. Net interest margin for 2009 was 3.76%, compared with 3.80% for 2008.
The provision for loan losses for 2009 was $21.7 million, compared to $12.6 million in 2008.
Non-interest income for the twelve month period ended December 31, 2009 was $26.3 million compared to $19.1 million during the same period of 2008. The 2009 results include securities losses of $3.7 million recognized, of which $3.9 million relate to OTTI charges recognized for impaired investment securities partially offset by $284,000 of gains on the sale of securities compared with losses of $3.2 million in 2008 related to OTTI. Service fees and other charges were $13.5 million for the year compared to $13.3 million during 2008. Mortgage banking income for 2009 was $9.7 million, an increase of $6.8 million over 2008 primarily due to an increase of $4.4 million from gain on sale and $4 million due to the impact of positive valuation adjustment in 2009 on Mortgage Servicing Rights.
Non-interest expense increased to $60.4 million for the full year of 2009 from $57.8 million in 2008. Excluding the acquisition-related charges in 2008 of $1.1 million, non-interest expense increased by 6.5%. FDIC insurance expense increased by $2.3 million in large part due to the FDIC special assessment and increased assessments based on higher balances of insured deposits.
Non-interest expense also includes $3.4 million of credit, collection and OREO-related costs compared with $1.3 million in 2008. Costs associated with the branch facilities closure and relocation were $652,000 in 2009. The year over year change in expense relating to deferred compensation was $1.05 million. During 2009 the company recovered $190,000 associated with losses related to a former investment advisor compared with an expense of $727,000 in 2008.
Dividends
The Board of Directors has decided not to declare a cash dividend for the fourth quarter of 2009. “We expect elevated levels of nonperforming loans and loan loss provisions for the near term as well as other challenges posed by the current economic and regulatory environment,” said Small. “Therefore, we believe that this is a time to conserve capital. We believe that the fundamentals of the Company remain sound, but it will take some time to work through the problem credits precipitated by the recession and current real estate downturn. As we get these troubled assets worked through the system we expect to return to levels of profitability more consistent with the past.”
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Total Assets at $2.06 Billion
Total assets at December 31, 2009 were $2.06 billion, compared to $1.96 billion at December 31, 2008. Net loans receivable (excluding loans held for sale) were $1.58 billion at December 31, 2009 compared to $1.59 billion at December 31, 2008. Total cash and cash equivalents were $121.1 million at December 31, 2009 compared with $46.1 million at December 31, 2008, an increase of $75.0 million. Total deposits at December 31, 2009 were $1.58 billion compared to $1.47 billion at December 31, 2008, an increase of $110.3 million. Non-interest bearing deposits at December 31, 2009 were $189.1 million compared to $176.1 million at December 31, 2008. Total stockholders’ equity was $235.2 million at December 31, 2009 compared to $229.2 million at the December 31, 2008. Also at December 31, 2009, goodwill and other intangible assets totaled $63.5 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. (EST) on Tuesday, January 19, 2010 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=128810.
Audio replay of the Internet Web cast will be available at www.fdef.com until January 27, 2010 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
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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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2009. One or more of these factors have affected or could in the future affect the Company’s business and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this news release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other persons, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this news release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.
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Consolidated Balance Sheets
First Defiance Financial Corp.
| (Unaudited) | ||||||||
(in thousands) | December 31, 2009 | December 31, 2008 | ||||||
Assets | ||||||||
Cash and cash equivalents | ||||||||
Cash and amounts due from depository institutions | $ | 29,613 | $ | 40,980 | ||||
Interest-bearing deposits | 91,503 | 5,172 | ||||||
| 121,116 | 46,152 | |||||||
Securities | ||||||||
Available-for sale, carried at fair value | 137,458 | 117,575 | ||||||
Held-to-maturity, carried at amortized cost | 1,920 | 886 | ||||||
| 139,378 | 118,461 | |||||||
Loans | 1,617,122 | 1,617,235 | ||||||
Allowance for loan losses | (35,047 | ) | (24,592 | ) | ||||
Loans, net | 1,582,075 | 1,592,643 | ||||||
Loans held for sale | 10,346 | 10,960 | ||||||
Mortgage servicing rights | 8,958 | 6,611 | ||||||
Accrued interest receivable | 6,851 | 7,293 | ||||||
Federal Home Loan Bank stock | 21,376 | 21,376 | ||||||
Bank Owned Life Insurance | 30,804 | 28,747 | ||||||
Office properties and equipment | 43,597 | 47,756 | ||||||
Real estate and other assets held for sale | 13,527 | 7,000 | ||||||
Goodwill | 56,585 | 56,585 | ||||||
Core deposit and other intangibles | 6,887 | 8,344 | ||||||
Deferred taxes | 1,630 | 336 | ||||||
Other assets | 14,234 | 5,136 | ||||||
Total Assets | $ | 2,057,364 | $ | 1,957,400 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Non-interest-bearing deposits | $ | 189,132 | $ | 176,063 | ||||
Interest-bearing deposits | 1,391,094 | 1,293,849 | ||||||
Total deposits | 1,580,226 | 1,469,912 | ||||||
Advances from Federal Home Loan Bank | 146,927 | 156,067 | ||||||
Notes payable and other interest-bearing liabilities | 48,398 | 49,454 | ||||||
Subordinated debentures | 36,083 | 36,083 | ||||||
Advance payments by borrowers for tax and insurance | 665 | 652 | ||||||
Other liabilities | 9,914 | 16,073 | ||||||
Total liabilities | 1,822,213 | 1,728,241 | ||||||
Stockholders’ Equity | ||||||||
Preferred stock, net of discount | 36,293 | 36,133 | ||||||
Common stock, net | 127 | 127 | ||||||
Common stock warrant | 878 | 878 | ||||||
Additional paid-in-capital | 140,675 | 140,449 | ||||||
Accumulated other comprehensive income (loss) | (158 | ) | (1,904 | ) | ||||
Retained earnings | 129,967 | 126,114 | ||||||
Treasury stock, at cost | (72,631 | ) | (72,638 | ) | ||||
Total stockholders’ equity | 235,151 | 229,159 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 2,057,364 | $ | 1,957,400 | ||||
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Consolidated Statements of Income (Unaudited)
First Defiance Financial Corp.
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
(in thousands, except per share amounts) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Interest Income: | ||||||||||||||||
Loans | $ | 23,473 | $ | 24,301 | $ | 93,702 | $ | 96,522 | ||||||||
Investment securities | 1,385 | 1,375 | 5,773 | 5,756 | ||||||||||||
Interest-bearing deposits | 60 | 4 | 149 | 123 | ||||||||||||
FHLB stock dividends | 229 | 265 | 955 | 1,062 | ||||||||||||
Total interest income | �� | 25,147 | 25,945 | 100,579 | 103,463 | |||||||||||
Interest Expense: | ||||||||||||||||
Deposits | 5,896 | 7,503 | 26,102 | 31,354 | ||||||||||||
FHLB advances and other | 1,249 | 1,572 | 5,114 | 6,375 | ||||||||||||
Subordinated debentures | 332 | 462 | 1,471 | 1,907 | ||||||||||||
Notes Payable | 137 | 415 | 570 | 1,632 | ||||||||||||
Total interest expense | 7,614 | 9,952 | 33,257 | 41,268 | ||||||||||||
Net interest income | 17,533 | 15,993 | 67,322 | 62,195 | ||||||||||||
Provision for loan losses | 6,970 | 3,824 | 21,732 | 12,585 | ||||||||||||
Net interest income after provision for loan losses | 10,563 | 12,169 | 45,590 | 49,610 | ||||||||||||
Non-interest Income: | ||||||||||||||||
Service fees and other charges | 3,514 | 3,512 | 13,503 | 13,268 | ||||||||||||
Mortgage banking income | 2,070 | (636 | ) | 9,747 | 2,990 | |||||||||||
Gain on sale of non-mortgage loans | 13 | 3 | 264 | 180 | ||||||||||||
Gain on sale or call of securities | 5 | 3 | 284 | 22 | ||||||||||||
Impairment on securities | (1,399 | ) | (599 | ) | (3,940 | ) | (3,182 | ) | ||||||||
Insurance and investment sales commissions | 1,076 | 1,115 | 5,021 | 5,496 | ||||||||||||
Trust income | 109 | 104 | 415 | 448 | ||||||||||||
Income from Bank Owned Life Insurance | 219 | (428 | ) | 557 | 323 | |||||||||||
Other non-interest income | (31 | ) | (310 | ) | 444 | (476 | ) | |||||||||
Total Non-interest Income | 5,576 | 2,764 | 26,295 | 19,069 | ||||||||||||
Non-interest Expense: | ||||||||||||||||
Compensation and benefits | 6,258 | 6,408 | 27,759 | 28,829 | ||||||||||||
Occupancy | 1,951 | 1,922 | 7,852 | 7,484 | ||||||||||||
FDIC insurance premium | 637 | 290 | 3,350 | 1,082 | ||||||||||||
State franchise tax | 326 | 411 | 1,994 | 1,951 | ||||||||||||
Acquisition related charges | — | 85 | — | 1,117 | ||||||||||||
Data processing | 1,211 | 1,274 | 4,541 | 4,658 | ||||||||||||
Amortization of intangibles | 355 | 424 | 1,456 | 1,459 | ||||||||||||
Other non-interest expense | 3,732 | 2,757 | 13,433 | 11,214 | ||||||||||||
Total Non-interest Expense | 14,470 | 13,571 | 60,385 | 57,794 | ||||||||||||
Income before income taxes | 1,669 | 1,362 | 11,500 | 10,885 | ||||||||||||
Income taxes | 49 | 482 | 3,241 | 3,528 | ||||||||||||
Net Income | $ | 1,620 | $ | 880 | $ | 8,259 | $ | 7,357 | ||||||||
Dividends Declared on Preferred Shares | (447 | ) | (134 | ) | (1,850 | ) | (134 | ) | ||||||||
Accretion on Preferred Shares | (42 | ) | (11 | ) | (160 | ) | (11 | ) | ||||||||
Net Income Applicable to Common Shares | $ | 1,131 | $ | 735 | $ | 6,249 | $ | 7,212 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.14 | $ | 0.09 | $ | 0.77 | $ | 0.91 | ||||||||
Diluted | $ | 0.14 | $ | 0.09 | $ | 0.76 | $ | 0.91 | ||||||||
Core operating earnings per common share*: | ||||||||||||||||
Basic | $ | 0.14 | $ | 0.10 | $ | 0.77 | $ | 1.01 | ||||||||
Diluted | $ | 0.14 | $ | 0.10 | $ | 0.76 | $ | 1.00 | ||||||||
Average Shares Outstanding: | ||||||||||||||||
Basic | 8,117 | 8,117 | 8,117 | 7,889 | ||||||||||||
Diluted | 8,265 | 8,117 | 8,196 | 7,919 | ||||||||||||
* - See Non-GAAP Disclosure Reconciliations
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Financial Summary and Comparison
First Defiance Financial Corp.
| (Unaudited) Three Months Ended December 31, | (Unaudited) Twelve Months Ended December 31, | |||||||||||||||||||||
(dollars in thousands, except per share data) | 2009 | 2008 | % change | 2009 | 2008 | % change | ||||||||||||||||
Summary of Operations | ||||||||||||||||||||||
Tax-equivalent interest income (1) | 25,434 | 26,188 | (2.9 | ) | 101,727 | 104,360 | (2.5 | ) | ||||||||||||||
Interest expense | 7,614 | 9,952 | (23.5 | ) | 33,257 | 41,268 | (19.4 | ) | ||||||||||||||
Tax-equivalent net interest income (1) | 17,820 | 16,236 | 9.8 | 68,470 | 63,092 | 8.5 | ||||||||||||||||
Provision for loan losses | 6,970 | 3,824 | 82.3 | 21,732 | 12,585 | 72.7 | ||||||||||||||||
Tax-equivalent NII after provision for loan loss (1) | 10,850 | 12,412 | (12.6 | ) | 46,738 | 50,507 | (7.5 | ) | ||||||||||||||
Gain on sale or call of securities | 5 | 3 | 66.7 | 284 | 22 | 1,190.9 | ||||||||||||||||
Impairment losses on securities | (1,399 | ) | (599 | ) | 133.6 | (3,940 | ) | (3,160 | ) | 24.7 | ||||||||||||
Non-interest income-excluding securities losses | 6,970 | 3,360 | 107.4 | 29,951 | 22,207 | 34.9 | ||||||||||||||||
Non-interest expense | 14,470 | 13,571 | 6.6 | 60,385 | 57,794 | 4.5 | ||||||||||||||||
Non-interest expense-excluding non-core charges | 14,470 | 13,486 | 7.3 | 60,385 | 56,677 | 6.5 | ||||||||||||||||
Acquisition related charges | — | 85 | NM | — | 1,117 | NM | ||||||||||||||||
Income taxes | 49 | 482 | (89.8 | ) | 3,241 | 3,528 | (8.1 | ) | ||||||||||||||
Net Income | 1,620 | 880 | 84.1 | 8,259 | 7,357 | 12.3 | ||||||||||||||||
Dividends Declared on Preferred Shares | (447 | ) | (134 | ) | 233.6 | (1,850 | ) | (134 | ) | 1,280.6 | ||||||||||||
Accretion on Preferred Shares | (42 | ) | (11 | ) | 281.8 | (160 | ) | (11 | ) | 1,354.5 | ||||||||||||
Net Income Applicable to Common Shares | 1,131 | 735 | 53.9 | 6,249 | 7,212 | (13.4 | ) | |||||||||||||||
Core operating earnings (2) | 1,620 | 935 | 73.3 | 8,259 | 8,083 | 2.2 | ||||||||||||||||
Tax equivalent adjustment (1) | 287 | 243 | 18.1 | 1,148 | 897 | 28.0 | ||||||||||||||||
At Period End | ||||||||||||||||||||||
Assets | 2,057,364 | 1,957,400 | 5.1 | |||||||||||||||||||
Earning assets | 1,879,725 | 1,773,204 | 6.0 | |||||||||||||||||||
Loans | 1,617,122 | 1,617,235 | (0.0 | ) | ||||||||||||||||||
Allowance for loan losses | 35,047 | 24,592 | 42.5 | |||||||||||||||||||
Deposits | 1,580,226 | 1,469,912 | 7.5 | |||||||||||||||||||
Stockholders’ equity | 235,151 | 229,159 | 2.6 | |||||||||||||||||||
Average Balances | ||||||||||||||||||||||
Assets | 2,058,218 | 1,938,461 | 6.2 | 2,025,233 | 1,852,345 | 9.3 | ||||||||||||||||
Earning assets | 1,852,418 | 1,730,284 | 7.1 | 1,822,277 | 1,655,725 | 10.1 | ||||||||||||||||
Deposits and interest-bearing liabilities | 1,805,090 | 1,718,315 | 5.1 | 1,774,772 | 1,638,426 | 8.3 | ||||||||||||||||
Loans | 1,600,281 | 1,591,144 | 0.6 | 1,600,729 | 1,511,877 | 5.9 | ||||||||||||||||
Deposits | 1,572,399 | 1,466,366 | 7.2 | 1,547,339 | 1,390,815 | 11.3 | ||||||||||||||||
Stockholders’ equity | 235,164 | 201,499 | 16.7 | 232,722 | 190,872 | 21.9 | ||||||||||||||||
Stockholders’ equity / assets | 11.43 | % | 10.39 | % | 10.0 | 11.49 | % | 10.30 | % | 11.6 | ||||||||||||
Per Common Share Data | ||||||||||||||||||||||
Net Income | ||||||||||||||||||||||
Basic | $ | 0.14 | $ | 0.09 | 55.6 | $ | 0.77 | $ | 0.91 | (15.4 | ) | |||||||||||
Diluted | 0.14 | 0.09 | 55.6 | 0.76 | 0.91 | (16.5 | ) | |||||||||||||||
Core operating earnings (2) | ||||||||||||||||||||||
Basic | $ | 0.14 | $ | 0.10 | 43.2 | $ | 0.77 | $ | 1.01 | (23.5 | ) | |||||||||||
Diluted | 0.14 | 0.10 | 40.6 | 0.76 | 1.00 | (23.9 | ) | |||||||||||||||
Dividends | — | 0.17 | NM | 0.295 | 0.95 | (68.9 | ) | |||||||||||||||
Market Value: | ||||||||||||||||||||||
High | $ | 18.93 | $ | 14.50 | 30.6 | $ | 18.93 | $ | 22.51 | (15.9 | ) | |||||||||||
Low | 10.06 | 6.00 | 67.7 | 3.76 | 6.00 | (37.3 | ) | |||||||||||||||
Close | 11.29 | 7.73 | 46.1 | 11.29 | 7.73 | 46.1 | ||||||||||||||||
Book Value | 24.39 | 23.67 | 3.0 | 24.39 | 23.67 | 3.0 | ||||||||||||||||
Tangible Book Value | 16.57 | 15.67 | 5.7 | 16.57 | 15.67 | 5.7 | ||||||||||||||||
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) | 3.82 | % | 3.72 | % | 2.7 | 3.76 | % | 3.80 | % | (1.3 | ) | |||||||||||
Return on average assets -GAAP | 0.31 | % | 0.18 | % | 72.9 | 0.41 | % | 0.40 | % | 2.7 | ||||||||||||
Return on average assets -Core Operating | 0.31 | % | 0.19 | % | 62.7 | 0.41 | % | 0.44 | % | (6.5 | ) | |||||||||||
Return on average equity- GAAP | 2.73 | % | 1.74 | % | 57.3 | 3.55 | % | 3.85 | % | (7.9 | ) | |||||||||||
Return on average equity- Core Operating | 2.73 | % | 1.85 | % | 48.1 | 3.55 | % | 4.23 | % | (16.2 | ) | |||||||||||
Efficiency ratio (3) -GAAP | 58.37 | % | 69.25 | % | (15.7 | ) | 61.35 | % | 67.75 | % | (9.4 | ) | ||||||||||
Efficiency ratio (3) -Core Operating | 58.37 | % | 68.82 | % | (15.2 | ) | 61.35 | % | 66.45 | % | (7.7 | ) | ||||||||||
Effective tax rate | 2.94 | % | 35.39 | % | (91.7 | ) | 28.18 | % | 32.41 | % | (13.0 | ) | ||||||||||
Dividend payout ratio (basic) | 0.00 | % | 188.89 | % | NM | 38.31 | % | 104.40 | % | (63.3 | ) | |||||||||||
| (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 December 31, | Twelve Months Ended December 31, | ||||||||||||
(dollars in thousands, except per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||
Net Income | $ | 1,620 | $ | 880 | $ | 8,259 | $ | 7,357 | ||||||
Acquisition related charges | — | 85 | — | 1,117 | ||||||||||
Tax effect | — | (30 | ) | — | (391 | ) | ||||||||
After-tax non-operating items | — | 55 | — | 726 | ||||||||||
Core operating earnings | $ | 1,620 | $ | 935 | $ | 8,259 | $ | 8,083 | ||||||
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:
| Three months ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
(dollars in thousands) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Gain from sale of mortgage loans | $ | 1,468 | $ | 1,587 | $ | 8,744 | $ | 4,395 | ||||||||
Mortgage loan servicing revenue (expense): | ||||||||||||||||
Mortgage loan servicing revenue | 751 | 698 | $ | 2,860 | 2,537 | |||||||||||
Amortization of mortgage servicing rights | (546 | ) | (258 | ) | $ | (3,171 | ) | (1,266 | ) | |||||||
Mortgage servicing rights valuation adjustments | 397 | (2,663 | ) | $ | 1,314 | (2,676 | ) | |||||||||
| 602 | (2,223 | ) | 1,003 | (1,405 | ) | |||||||||||
Total revenue from sale and servicing of mortgage loans | $ | 2,070 | $ | (636 | ) | $ | 9,747 | $ | 2,990 | |||||||
10
Yield Analysis
First Defiance Financial Corp.
| Three Months Ended December 31, | ||||||||||||||||||
| 2009 | 2008 | |||||||||||||||||
| Average Balance | Interest(1) | Yield Rate(2) | Average Balance | Interest(1) | Yield Rate(2) | |||||||||||||
Interest-earning assets: | ||||||||||||||||||
Loans receivable | $ | 1,600,281 | $ | 23,517 | 5.83 | % | $ | 1,591,144 | $ | 24,329 | 6.08 | % | ||||||
Securities | 134,576 | 1,628 | 4.82 | % | 115,165 | 1,590 | 5.20 | % | ||||||||||
Interest Bearing Deposits | 96,185 | 60 | 0.25 | % | 2,599 | 4 | 0.61 | % | ||||||||||
FHLB stock | 21,376 | 229 | 4.25 | % | 21,376 | 265 | 4.93 | % | ||||||||||
Total interest-earning assets | 1,852,418 | 25,434 | 5.45 | % | 1,730,284 | 26,188 | 6.00 | % | ||||||||||
Non-interest-earning assets | 205,800 | 208,177 | ||||||||||||||||
Total assets | $ | 2,058,218 | $ | 1,938,461 | ||||||||||||||
Deposits and Interest-bearing liabilities: | ||||||||||||||||||
Interest bearing deposits | $ | 1,383,370 | $ | 5,896 | 1.69 | % | $ | 1,293,560 | $ | 7,503 | 2.31 | % | ||||||
FHLB advances and other | 146,930 | 1,249 | 3.37 | % | 155,954 | 1,572 | 4.01 | % | ||||||||||
Other Borrowings | 49,649 | 137 | 1.09 | % | 59,760 | 415 | 2.76 | % | ||||||||||
Subordinated debentures | 36,112 | 332 | 3.65 | % | 36,235 | 462 | 5.07 | % | ||||||||||
Total interest-bearing liabilities | 1,616,061 | 7,614 | 1.87 | % | 1,545,509 | 9,952 | 2.56 | % | ||||||||||
Non-interest bearing deposits | 189,029 | — | — | 172,806 | — | — | ||||||||||||
Total including non-interest-bearing demand deposits | 1,805,090 | 7,614 | 1.67 | % | 1,718,315 | 9,952 | 2.30 | % | ||||||||||
Other non-interest-bearing liabilities | 17,964 | 18,647 | ||||||||||||||||
Total liabilities | 1,823,054 | 1,736,962 | ||||||||||||||||
Stockholders’ equity | 235,164 | 201,499 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,058,218 | $ | 1,938,461 | ||||||||||||||
Net interest income; interest rate spread | $ | 17,820 | 3.58 | % | $ | 16,236 | 3.44 | % | ||||||||||
Net interest margin (3) | 3.82 | % | 3.72 | % | ||||||||||||||
Average interest-earning assets to average interest bearing liabilities | 115 | % | 112 | % | ||||||||||||||
| Twelve Months Ended December 31, | ||||||||||||||||||
| 2009 | 2008 | |||||||||||||||||
| Average Balance | Interest(1) | Yield Rate(2) | Average Balance | Interest(1) | Yield Rate(2) | |||||||||||||
Interest-earning assets: | ||||||||||||||||||
Loans receivable | $ | 1,600,729 | $ | 93,850 | 5.86 | % | $ | 1,511,877 | $ | 96,627 | 6.39 | % | ||||||
Securities | 128,806 | 6,773 | 5.23 | % | 117,972 | 6,548 | 5.43 | % | ||||||||||
Interest Bearing Deposits | 71,366 | 149 | 0.21 | % | 5,383 | 123 | 2.28 | % | ||||||||||
FHLB stock | 21,376 | 955 | 4.47 | % | 20,493 | 1,062 | 5.18 | % | ||||||||||
Total interest-earning assets | 1,822,277 | 101,727 | 5.58 | % | 1,655,725 | 104,360 | 6.30 | % | ||||||||||
Non-interest-earning assets | 202,956 | 196,620 | ||||||||||||||||
Total assets | $ | 2,025,233 | $ | 1,852,345 | ||||||||||||||
Deposits and Interest-bearing liabilities: | ||||||||||||||||||
Interest bearing deposits | $ | 1,370,826 | $ | 26,102 | 1.90 | % | $ | 1,231,363 | $ | 31,354 | 2.55 | % | ||||||
FHLB advances and other | 146,978 | 5,114 | 3.48 | % | 160,407 | 6,375 | 3.97 | % | ||||||||||
Other Borrowings | 44,247 | 570 | 1.29 | % | 50,962 | 1,632 | 3.20 | % | ||||||||||
Subordinated debentures | 36,208 | 1,471 | 4.06 | % | 36,242 | 1,907 | 5.26 | % | ||||||||||
Total interest-bearing liabilities | 1,598,259 | 33,257 | 2.08 | % | 1,478,974 | 41,268 | 2.79 | % | ||||||||||
Non-interest bearing deposits | 176,513 | — | — | 159,452 | — | — | ||||||||||||
Total including non-interest-bearing demand deposits | 1,774,772 | 33,257 | 1.87 | % | 1,638,426 | 41,268 | 2.52 | % | ||||||||||
Other non-interest-bearing liabilities | 17,739 | 23,047 | ||||||||||||||||
Total liabilities | 1,792,511 | 1,661,473 | ||||||||||||||||
Stockholders’ equity | 232,722 | 190,872 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,025,233 | $ | 1,852,345 | ||||||||||||||
Net interest income; interest rate spread | $ | 68,470 | 3.50 | % | $ | 63,092 | 3.51 | % | ||||||||||
Net interest margin (3) | 3.76 | % | 3.80 | % | ||||||||||||||
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) | 4th Qtr 2009 | 3rd Qtr 2009 | 2nd Qtr 2009 | 1st Qtr 2009 | 4th Qtr 2008 | |||||||||||||||
Summary of Operations | ||||||||||||||||||||
Tax-equivalent interest income (1) | $ | 25,434 | $ | 25,796 | $ | 25,117 | $ | 25,379 | $ | 26,188 | ||||||||||
Interest expense | 7,614 | 7,914 | 8,643 | 9,085 | 9,952 | |||||||||||||||
Tax-equivalent net interest income (1) | 17,820 | 17,882 | 16,474 | 16,294 | 16,236 | |||||||||||||||
Provision for loan losses | 6,970 | 8,051 | 3,965 | 2,746 | 3,824 | |||||||||||||||
Tax-equivalent NII after provision for loan losses (1) | 10,850 | 9,831 | 12,509 | 13,548 | 12,412 | |||||||||||||||
Investment securities gains (losses), including impairment | (1,394 | ) | (840 | ) | (750 | ) | (672 | ) | (596 | ) | ||||||||||
Non-interest income (excluding securities gains/losses) | 6,970 | 6,396 | 9,109 | 7,476 | 3,360 | |||||||||||||||
Non-interest expense | 14,470 | 14,786 | 16,133 | 14,996 | 13,571 | |||||||||||||||
Acquisition related charges | — | — | — | — | 85 | |||||||||||||||
Income taxes | 49 | (37 | ) | 1,539 | 1,691 | 482 | ||||||||||||||
Net income | 1,620 | 329 | 2,901 | 3,408 | 880 | |||||||||||||||
Dividends Declared on Preferred Shares | (447 | ) | (473 | ) | (468 | ) | (463 | ) | (134 | ) | ||||||||||
Accretion on Preferred Shares | (42 | ) | (40 | ) | (40 | ) | (38 | ) | (11 | ) | ||||||||||
Net Income Applicable to Common Shares | 1,131 | (184 | ) | 2,393 | 2,907 | 735 | ||||||||||||||
Core operating earnings (2) | 1,620 | 329 | 2,901 | 3,408 | 935 | |||||||||||||||
Tax equivalent adjustment (1) | 287 | 309 | 295 | 257 | 243 | |||||||||||||||
At Period End | ||||||||||||||||||||
Total assets | $ | 2,057,364 | $ | 2,018,598 | $ | 2,023,563 | $ | 2,010,662 | $ | 1,957,400 | ||||||||||
Earning assets | 1,879,725 | 1,845,134 | 1,846,689 | 1,838,397 | 1,773,204 | |||||||||||||||
Loans | 1,617,122 | 1,623,627 | 1,610,460 | 1,585,897 | 1,617,235 | |||||||||||||||
Allowance for loan losses | 35,047 | 31,248 | 25,840 | 25,694 | 24,592 | |||||||||||||||
Deposits | 1,580,226 | 1,543,085 | 1,553,144 | 1,540,235 | 1,469,912 | |||||||||||||||
Stockholders’ equity | 235,151 | 234,529 | 232,683 | 230,608 | 229,159 | |||||||||||||||
Stockholders’ equity / assets | 11.43 | % | 11.62 | % | 11.50 | % | 11.47 | % | 11.71 | % | ||||||||||
Goodwill | 56,585 | 56,585 | 56,585 | 56,585 | 56,585 | |||||||||||||||
Average Balances | ||||||||||||||||||||
Total assets | $ | 2,058,218 | $ | 2,029,970 | $ | 2,027,760 | $ | 1,984,985 | $ | 1,938,461 | ||||||||||
Earning assets | 1,852,418 | 1,826,400 | 1,828,272 | 1,782,019 | 1,730,284 | |||||||||||||||
Deposits and interest-bearing liabilities | 1,805,090 | 1,778,223 | 1,778,848 | 1,736,933 | 1,718,315 | |||||||||||||||
Loans | 1,600,281 | 1,613,529 | 1,592,513 | 1,596,592 | 1,591,144 | |||||||||||||||
Deposits | 1,572,399 | 1,550,369 | 1,552,533 | 1,514,059 | 1,466,366 | |||||||||||||||
Stockholders’ equity | 235,164 | 234,241 | 231,397 | 230,099 | 201,499 | |||||||||||||||
Stockholders’ equity / assets | 11.43 | % | 11.54 | % | 11.41 | % | 11.59 | % | 10.39 | % | ||||||||||
Per Common Share Data | ||||||||||||||||||||
Net Income: | ||||||||||||||||||||
Basic | $ | 0.14 | $ | (0.02 | ) | $ | 0.29 | $ | 0.36 | $ | 0.09 | |||||||||
Diluted | 0.14 | (0.02 | ) | 0.29 | 0.36 | 0.09 | ||||||||||||||
Core operating earnings (2) | ||||||||||||||||||||
Basic | 0.14 | (0.02 | ) | 0.29 | 0.36 | 0.10 | ||||||||||||||
Diluted | 0.14 | (0.02 | ) | 0.29 | 0.36 | 0.10 | ||||||||||||||
Dividends | 0.00 | 0.04 | 0.085 | 0.17 | 0.17 | |||||||||||||||
Market Value: | ||||||||||||||||||||
High | $ | 18.93 | $ | 18.33 | $ | 14.25 | $ | 8.95 | $ | 14.50 | ||||||||||
Low | 10.06 | 12.00 | 6.10 | 3.76 | 6.00 | |||||||||||||||
Close | 11.29 | 14.91 | 13.00 | 6.08 | 7.73 | |||||||||||||||
Book Value | 24.39 | 24.32 | 24.10 | 23.85 | 23.67 | |||||||||||||||
Shares outstanding, end of period (in thousands) | 8,118 | 8,118 | 8,118 | 8,117 | 8,117 | |||||||||||||||
Performance Ratios (annualized) | ||||||||||||||||||||
Tax-equivalent net interest margin (1) | 3.82 | % | 3.88 | % | 3.61 | % | 3.71 | % | 3.72 | % | ||||||||||
Return on average assets -GAAP | 0.31 | % | 0.06 | % | 0.57 | % | 0.70 | % | 0.18 | % | ||||||||||
Return on average assets -Core Operating | 0.31 | % | 0.06 | % | 0.57 | % | 0.70 | % | 0.19 | % | ||||||||||
Return on average equity- GAAP | 2.73 | % | 0.56 | % | 5.03 | % | 6.02 | % | 1.74 | % | ||||||||||
Return on average equity- Core Operating | 2.73 | % | 0.56 | % | 5.03 | % | 6.02 | % | 1.85 | % | ||||||||||
Efficiency ratio (3) -GAAP | 58.37 | % | 60.90 | % | 63.06 | % | 63.09 | % | 69.25 | % | ||||||||||
Efficiency ratio (3) -Core Operating | 58.37 | % | 60.90 | % | 63.06 | % | 63.09 | % | 68.82 | % | ||||||||||
Effective tax rate | 2.94 | % | -12.67 | % | 34.66 | % | 33.16 | % | 35.39 | % | ||||||||||
Common dividend payout ratio (basic) | 0.00 | % | -200.00 | % | 29.31 | % | 47.22 | % | 188.89 | % | ||||||||||
| (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 or losses, net. |
12
Selected Quarterly Information
First Defiance Financial Corp.
(dollars in thousands, except per share data) | 4th Qtr 2009 | 3rd Qtr 2009 | 2nd Qtr 2009 | 1st Qtr 2009 | 4th Qtr 2008 | |||||||||||||||
Loan Portfolio Composition | ||||||||||||||||||||
One to four family residential real estate | $ | 227,592 | $ | 233,958 | $ | 238,000 | $ | 241,119 | $ | 251,807 | ||||||||||
Construction | 48,626 | 53,605 | 44,670 | 50,534 | 72,938 | |||||||||||||||
Commercial real estate | 806,889 | 802,434 | 768,636 | 764,841 | 755,740 | |||||||||||||||
Commercial | 379,408 | 371,881 | 382,434 | 350,070 | 356,574 | |||||||||||||||
Consumer finance | 34,105 | 36,416 | 38,074 | 38,676 | 41,012 | |||||||||||||||
Home equity and improvement | 147,977 | 150,379 | 151,213 | 156,668 | 161,106 | |||||||||||||||
Total loans | 1,644,597 | 1,648,673 | 1,623,027 | 1,601,908 | 1,639,177 | |||||||||||||||
Less: | ||||||||||||||||||||
Loans in process | 26,494 | 23,957 | 11,602 | 14,954 | 20,892 | |||||||||||||||
Deferred loan origination fees | 981 | 1,089 | 965 | 1,057 | 1,050 | |||||||||||||||
Allowance for loan loss | 35,047 | 31,248 | 25,840 | 25,694 | 24,592 | |||||||||||||||
Net Loans | $ | 1,582,075 | $ | 1,592,379 | $ | 1,584,620 | $ | 1,560,203 | $ | 1,592,643 | ||||||||||
Allowance for loan loss activity | ||||||||||||||||||||
Beginning allowance | 31,248 | 25,840 | 25,694 | 24,592 | $ | 23,445 | ||||||||||||||
Provision for loan losses | 6,970 | 8,051 | 3,965 | 2,746 | 3,824 | |||||||||||||||
Credit loss charge-offs: | ||||||||||||||||||||
One to four family residential real estate | 884 | 744 | 505 | 148 | 369 | |||||||||||||||
Commercial real estate | 1,912 | 1,152 | 2,066 | 669 | 1,480 | |||||||||||||||
Commercial | 354 | 658 | 950 | 702 | 593 | |||||||||||||||
Consumer finance | 75 | 39 | 83 | 123 | 224 | |||||||||||||||
Home equity and improvement | 134 | 196 | 301 | 130 | 57 | |||||||||||||||
Total charge-offs | 3,359 | 2,789 | 3,905 | 1,772 | 2,723 | |||||||||||||||
Total recoveries | 188 | 146 | 86 | 128 | 46 | |||||||||||||||
Net charge-offs (recoveries) | 3,171 | 2,643 | 3,819 | 1,644 | 2,677 | |||||||||||||||
Ending allowance | $ | 35,047 | $ | 31,248 | $ | 25,840 | $ | 25,694 | $ | 24,592 | ||||||||||
Credit Quality | ||||||||||||||||||||
Non-accrual loans | $ | 41,191 | $ | 35,490 | $ | 35,528 | $ | 29,473 | $ | 28,017 | ||||||||||
Restructured loans, accruing | 6,715 | 4,574 | 4,845 | 7,199 | 6,250 | |||||||||||||||
Total non-performing loans (1) | 47,906 | 40,064 | 40,373 | 36,672 | 34,267 | |||||||||||||||
Real estate owned (REO) | 13,527 | 9,352 | 8,567 | 7,839 | 7,000 | |||||||||||||||
Total non-performing assets (2) | $ | 61,433 | $ | 49,416 | $ | 48,940 | $ | 44,511 | $ | 41,267 | ||||||||||
Net charge-offs | 3,171 | 2,643 | 3,819 | 1,644 | 2,677 | |||||||||||||||
Allowance for loan losses / loans | 2.17 | % | 1.92 | % | 1.60 | % | 1.62 | % | 1.52 | % | ||||||||||
Allowance for loan losses / non-performing assets | 57.05 | % | 63.23 | % | 52.80 | % | 57.73 | % | 59.59 | % | ||||||||||
Allowance for loan losses / non-performing loans | 73.16 | % | 78.00 | % | 64.00 | % | 70.06 | % | 71.77 | % | ||||||||||
Non-performing assets / loans plus REO | 3.77 | % | 3.03 | % | 3.02 | % | 2.79 | % | 2.54 | % | ||||||||||
Non-performing assets / total assets | 2.99 | % | 2.45 | % | 2.42 | % | 2.21 | % | 2.11 | % | ||||||||||
Net charge-offs / average loans (annualized) | 0.79 | % | 0.66 | % | 0.96 | % | 0.41 | % | 0.67 | % | ||||||||||
Deposit Balances | ||||||||||||||||||||
Non-interest-bearing demand deposits | $ | 189,132 | $ | 174,145 | $ | 180,035 | $ | 163,855 | $ | 176,063 | ||||||||||
Interest-bearing demand deposits and money market | 499,575 | 477,566 | 456,177 | 413,104 | 374,488 | |||||||||||||||
Savings deposits | 130,156 | 132,333 | 135,821 | 132,590 | 132,145 | |||||||||||||||
Retail time deposits less than $100,000 | 550,172 | 544,957 | 568,595 | 608,811 | 578,245 | |||||||||||||||
Retail time deposits greater than $100,000 | 163,838 | 166,787 | 165,401 | 171,588 | 170,485 | |||||||||||||||
National/Brokered time deposits | 47,353 | 47,297 | 47,115 | 50,287 | 38,486 | |||||||||||||||
Total deposits | $ | 1,580,226 | $ | 1,543,085 | $ | 1,553,144 | $ | 1,540,235 | $ | 1,469,912 | ||||||||||
| (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 | ||||||||||
December 31, 2009 | |||||||||||||||
One to four family residential real estate | $ | 227,592 | $ | 215,211 | $ | 4,331 | $ | 5,349 | $ | 2,701 | |||||
Construction | 48,626 | 47,951 | — | 675 | — | ||||||||||
Commercial real estate | 806,889 | 775,603 | 3,280 | 24,042 | 3,964 | ||||||||||
Commercial | 379,408 | 367,592 | 1,151 | 10,615 | 50 | ||||||||||
Consumer finance | 34,105 | 33,669 | 377 | 59 | — | ||||||||||
Home equity and improvement | 147,977 | 145,481 | 2,045 | 451 | — | ||||||||||
Total loans | $ | 1,644,597 | $ | 1,585,507 | $ | 11,184 | $ | 41,191 | $ | 6,715 | |||||
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 | |||||
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 | |||||
14