Premier Financial (PFC) 8-K Results of Operations and Financial Condition

Exhibit 99.1

	NEWS RELEASE
	Contact:	Donald P. Hileman President and CEO (419)782-5104 dhileman@first-fed.com

For Immediate Release

FIRST DEFIANCE FINANCIAL CORP. REPORTS

RECORD FULL YEAR EARNINGS OF $2.48 PER SHARE FOR 2019

• Earnings per diluted share of $0.63 for 2019 fourth quarter, up from $0.59 per share in the 2018 fourth quarter

• Net income of $12.5 million for 2019 fourth quarter, compared to $12.1 million in the 2018 fourth quarter

• Loan growth of $112 million during the 2019 fourth quarter

• Deposit growth of $110 million during the 2019 fourth quarter

• Non-performing loans of $13.5 million for 2019 fourth quarter, compared to $19.0 million for the 2018 fourth quarter

DEFIANCE, OHIO (January 20, 2020)– First Defiance Financial Corp. (NASDAQ: FDEF) announced today that net income for the fiscal year ended December 31, 2019, totaled $49.4 million, or $2.48 per diluted common share, compared to $46.2 million, or $2.26 per diluted common share, for the year ended December 31, 2018. For the fourth quarter of 2019, First Defiance earned $12.5 million, or $0.63 per diluted common share, compared to $12.1 million, or $0.59 per diluted common share for the fourth quarter of 2018. The fourth quarter of 2018 results included an increase of $806,000pre-tax ($636,000after-tax), or $0.03 per diluted share, from an immaterial accounting correction related to the company’s deferred compensation plan. The year-over-year comparisons are impacted by merger-related costs in the current year’s results, which had anafter-tax cost of $1.1 million, or $0.05 per diluted share, for the full year and $697,000, or $0.03 per diluted share, for the fourth quarter.

“With fourth quarter earnings per share up 12% over last year, excluding merger costs, we are proud to announce record earnings performance for our seventh consecutive year,” said Donald P. Hileman, President and Chief Executive Officer of First Defiance. “Our balance sheet and earnings growth, along with continued asset quality improvement, allowed us to finish the year strong. We are pleased with our position as we start 2020 and prepared to close our strategic merger with United Community Financial Corp.”

Net interest income up compared to fourth quarter 2018

Net interest income of $29.5 million in the fourth quarter of 2019 was up from $28.5 million in the fourth quarter of 2018. The increase was primarily due to the growth in earning assets offset partly by compression in the net interest margin versus the fourth quarter last year. The net interest margin was 3.80% for the fourth quarter, down from 3.88% for the third quarter of 2019 and 4.02% in the fourth quarter of 2018. Yield on interest earning assets decreased by six basis points, to 4.67% in the fourth quarter of 2019 from 4.73% in the fourth quarter of 2018. The cost of interest-bearing liabilities increased by 20 basis points in the fourth quarter of 2019 to 1.15% from 0.95% in the fourth quarter of 2018.

1

“Our solid loan and core deposit growth helped generate an increase in net interest income despite margin compression,” said Hileman. “Annualized growth rates of 17% for loans and 16% for deposits in the fourth quarter provided the momentum we like to see as we begin a new year.”

Non-interest income up from fourth quarter 2018

First Defiance’snon-interest income for the fourth quarter of 2019 was $11.8 million compared to $8.4 million in the fourth quarter of 2018. Results for the fourth quarter of 2019 included a $324,000 increase in deferred compensation plan assets compared to a $690,000 decrease for the same period in 2018 due to stock market performance.

Mortgage banking income was $2.7 million in the fourth quarter of 2019, up from $1.4 million in the fourth quarter of 2018 due to higher volumes. Mortgage originations totaled $106.5 million in the fourth quarter of 2019 compared to $60.9 million in the same quarter last year. As a result of the higher volumes, gains from the sale of mortgage loans increased in the fourth quarter of 2019 to $2.0 million from $758,000 in the fourth quarter of 2018. Mortgage loan servicing revenue was $978,000in the fourth quarter of 2019, consistent with $978,000 in the fourth quarter of 2018. First Defiance had a positive change in the valuation adjustment in mortgage servicing assets of $223,000in the fourth quarter of 2019 compared to a positive adjustment of $41,000 in the fourth quarter of 2018.

For the fourth quarter of 2019, service fees and other charges were $3.7 million, up from $3.3 million in the fourth quarter of 2018; and commissions from the sale of insurance products were $3.1 million, consistent with $3.1 million in the fourth quarter of 2018. Trust income was $746,000in the fourth quarter of 2019, up from $503,000 in the fourth quarter of 2018. The fourth quarter of 2019 included gains of $13,000from the sale of securities compared to gains of $97,000 in the fourth quarter of 2018.

Othernon-interest income for the fourth quarter of 2019 was a positive $1.1 million compared to a negative $494,000 for the fourth quarter of 2018, primarily due to the change in deferred compensation plan assets described above. Excluding the impact of this item, othernon-interest income for fourth quarter 2019 would be $767,000 compared to $196,000 in the fourth quarter of 2018.

Non-interest expenses up from fourth quarter 2018

Non-interest expense totaled $24.8 million in the fourth quarter of 2019 compared to $21.2 million in the fourth quarter of 2018. The comparison includes aone-time $806,000 reduction in expenses from the accounting correction to the company’s deferred compensation plan in the fourth quarter of 2018. Additionally, the fourth quarter of 2019 included a $321,000 increase in deferred compensation plan expense compared to a $1.3 million decrease in the fourth quarter of 2018 due to stock market performance in the relative periods.

Compensation and benefits in the fourth quarter of 2019 was $14.6 million, an increase of $1.1 million compared to the fourth quarter of 2018. Occupancy expense was $2.3 million in the fourth quarter of 2019, down $113,000from the fourth quarter of 2018. Data processing cost was $1.8 millionin the fourth quarter of 2019, down $443,000from the fourth quarter of 2018. In addition, acquisition-related costs totaled $882,000 in the fourth quarter of 2019 compared to none in the prior year.

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Othernon-interest expense was $4.2 million in the fourth quarter of 2019 compared to $2.0 million (or $2.8 million excluding the benefit from the deferred compensation accounting correction) in the fourth quarter of 2018. Additionally, results for the fourth quarter of 2018 included a $1,052,000 decrease in deferred compensation plan liabilities compared to a $321,000 increase for the same period in 2019 due to stock market performance. Excluding the impact of these items, othernon-interest expense for fourth quarter 2019 would be $3.9 million compared to $3.9 million in the fourth quarter of 2018.

Credit quality

Non-performing loans totaled $13.5 million at December 31, 2019, a decrease from $19.0 million at December 31, 2018. In addition, real estate owned totaled $100,000 at December 31, 2019, down from $1.2 million at December 31, 2018. Accruing troubled debt restructured loans were $8.4 million at December 31, 2019, a decrease from $11.6 million at December 31, 2018.

The fourth quarter of 2019 results include net charge-offs of $91,000and a provision for loan losses of $1.1 millioncompared with net recoveries of $220,000 and a provision of $472,000 for the same period in 2018. The allowance for loan loss as a percentage of total loans was 1.12% at December 31, 2019, compared with 1.13% at September 30, 2019, and 1.12% at December 31, 2018.

“Ournon-performing assets to total assets atyear-end improved significantly from the prior year to 0.39%, and net recoveries were $7,000 in 2019,” said Hileman. “A heightened, strategic focus in asset quality played a significant role in this achievement. A continuation of these efforts in 2020 is anticipated to lead to additional reductions in ournon-performing assets.”

Annual results

Net income for the full year ended on December 31, 2019, totaled $49.4 million, or $2.48 per diluted common share, compared to $46.2 million, or $2.26 per diluted common share for 2018. The year 2018 included a benefit of $806,000 from an accounting correction, which had anafter-tax impact of $636,000 or $0.03 per diluted share. The year 2019 included acquisition-related expenses, which had anafter-tax impact of $1.1 million or $0.05 per diluted share.

Net interest income for 2019 totaled $115.6 million, compared with $108.3 million for 2018. Average interest-earning assets increased to $2.97 billion for 2019, compared to $2.74 billion in 2018. Net interest margin for 2019 was 3.93%, down five basis points from the 3.98% margin for 2018. The provision for loan losses for 2019 was $2.9 million, compared to $1.2 million for 2018.

Non-interest income for the year 2019 was $45.0 million, compared to $39.2 million in 2018. Service fees and other charges were $14.0 million for 2019, up from $13.1 million in 2018. Mortgage banking income increased to $9.5 million for 2019 from $7.1 million in 2018. Gains on the sale ofnon-mortgage loans were $226,000 for 2019, compared to $317,000 in 2018. Insurance commissions were $14.1 million for 2019, consistent with $14.1 million in 2018.Non-interest income for 2019 included $24,000 of net securities gains compared to $173,000 of net securities gains for 2018.

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Non-interest expense increased to $97.1 million in 2019 from $89.4 million in 2018. Included innon-interest expense for 2019 were acquisition-related expenses of $1.4 million. Compensation and benefits expense was $57.2 million for 2019 compared to $52.6 million for 2018. Expenses also included decreases in data processing expense of $500,000 and FDIC insurance premiums of $537,000, partly offset by an increase in occupancy expense of $386,000. Othernon-interest expense was $17.6 million in 2019 compared to $15.2 million (or $16.0 million excluding the benefit from the deferred compensation accounting correction) in 2018.

Total assets at $3.47 billion

Total assets at December 31, 2019, were $3.47 billion compared to $3.18 billion at December 31, 2018. Net loans receivable (excluding loans held for sale) were $2.75 billion at December 31, 2019, compared to $2.51 billion at December 31, 2018. Also, at December 31, 2019, goodwill and other intangible assets totaled $103.8 million compared to $103.0 million at December 31, 2018.

Total deposits at December 31, 2019, were $2.87 billion compared with $2.62 billion at December 31, 2018. Total stockholders’ equity was $426.2 million at December 31, 2019, compared to $399.6 million at December 31, 2018. The change in stockholders’ equity fromyear-end 2018 was impacted by the company’s repurchase of 515,000 shares of its common stock for $15.1 million during the first quarter of 2019. During the quarter ended June 30, 2019, the company announced a new 500,000 share repurchase plan authorization with all such shares available for repurchase as of December 31, 2019.

Dividend to be paid February 21

The Board of Directors declared a quarterly cash dividend of $0.22 per common share payable February 21, 2020, to shareholders of record at the close of business on February 14, 2020. The dividend represents an annual dividend of 2.82% based on the First Defiance common stock closing price on January 17, 2020. First Defiance has approximately 19,730,000 common shares outstanding.

Conference call

First Defiance will host a conference call at 11:00 a.m. ET on Tuesday, January 21, 2020, to discuss the earnings results and business trends. The conference call may be accessed by calling1-877-444-1726. A live webcast may also be accessed athttps://services.choruscall.com/links/fdef200121.html.

The replay of the conference call webcast will be available at www.fdef.com until 9:00 a.m. ET on Wednesday, January 20, 2021.

First Defiance Financial Corp.

First Defiance Financial Corp. (NASDAQ:FDEF), headquartered in Defiance, Ohio, is the holding company for First Federal Bank of the Midwest and First Insurance Group. First Federal Bank operates 44 full-service branches in northwest and central Ohio, southeast Michigan and northeast Indiana and a loan production office in Ann Arbor, Michigan. First Insurance Group is a full-service insurance agency with nine offices throughout northwest Ohio.

For more information, visit the company’s website atwww.fdef.com.

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Financial Statements and Highlights Follow

Safe Harbor Statement

This news release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 B of the Securities Act of 1934, as amended, which are intended to be safe harbors created thereby. Those statements may include, but are not limited to, all statements regarding intent, beliefs, expectations, projections, forecasts and plans of First Defiance Financial Corp. and its management, and specifically include statements regarding: changes in economic conditions, the nature, extent and timing of governmental actions and reforms, future movements of interest rates, the production levels of mortgage loan generation, the ability to continue to grow loans and deposits, the ability to benefit from a changing interest rate environment, the ability to sustain credit quality ratios at current or improved levels, the ability to sell real estate owned properties, continued strength in the market area for First Federal Bank of the Midwest, and the ability to grow in existing and adjacent markets. These forward-looking statements involve numerous risks and uncertainties, including those inherent in general and local banking, insurance and mortgage conditions, competitive factors specific to markets in which First Defiance and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions or capital market conditions and other risks and uncertainties detailed from time to time in our Securities and Exchange Commission (SEC) filings, including our Annual Report on Form10-K for the year ended December 31, 2018. One or more of these factors have affected or could in the future affect First Defiance’s business and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this news release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by First Defiance or any other persons, that our objectives and plans will be achieved. All forward-looking statements made in this news release are based on information presently available to the management of First Defiance. We assume no obligation to update any forward-looking statements. As required by U.S. GAAP, First Defiance will evaluate the impact of subsequent events through the issuance date of its December 31, 2019 consolidated financial statements as part of its Annual Report on Form10-K to be filed with the SEC. Accordingly, subsequent events could occur that may cause First Defiance to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.

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Consolidated Balance Sheets (Unaudited)

First Defiance Financial Corp.

(in thousands)	December 31, 2019			December 31, 2018
Assets
Cash and cash equivalents
Cash and amounts due from depository institutions	$	46,254		$	55,962
Interest-bearing deposits		85,000			43,000
		131,254			98,962
Securities
Available-for sale, carried at fair value		283,448			294,076
Held-to-maturity, carried at amortized cost		—			526
		283,448			294,602
Loans		2,777,564			2,540,039
Allowance for loan losses		(31,243	)		(28,331	)
Loans, net		2,746,321			2,511,708
Loans held for sale		18,008			6,613
Mortgage servicing rights		10,267			10,119
Accrued interest receivable		10,244			9,641
Federal Home Loan Bank stock		11,915			14,217
Bank Owned Life Insurance		75,544			67,660
Office properties and equipment		39,563			40,670
Real estate and other assets held for sale		100			1,205
Goodwill		100,069			98,569
Core deposit and other intangibles		3,772			4,391
Other assets		38,487			23,365
Total Assets	$	3,468,992		$	3,181,722
Liabilities and Stockholders’ Equity
Non-interest-bearing deposits	$	630,359		$	607,198
Interest-bearing deposits		2,239,966			2,013,684
Total deposits		2,870,325			2,620,882
Advances from Federal Home Loan Bank		85,063			85,189
Notes payable and other interest-bearing liabilities		2,999			5,741
Subordinated debentures		36,083			36,083
Advance payments by borrowers for tax and insurance		5,491			3,652
Deferred taxes		1,326			264
Other liabilities		41,538			30,322
Total Liabilities		3,042,825			2,782,133
Stockholders’ Equity
Preferred stock		—			—
Common stock, net		127			127
Additionalpaid-in-capital		161,955			161,593
Accumulated other comprehensive income (loss)		4,595			(2,148	)
Retained earnings		329,934			295,588
Treasury stock, at cost		(70,444	)		(55,571	)
Total stockholders’ equity		426,167			399,589
Total Liabilities and Stockholders’ Equity	$	3,468,992		$	3,181,722

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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)	2019		2018			2019		2018
Interest Income:
Loans	$	33,695	$	30,841		$	130,853	$	114,398
Investment securities		1,889		2,167			8,183		8,134
Interest-bearing deposits		537		325			1,395		1,270
FHLB stock dividends		120		217			653		915
Total interest income		36,241		33,550			141,084		124,717
Interest Expense:
Deposits		5,999		4,389			22,613		13,897
FHLB advances and other		431		318			1,443		1,261
Subordinated debentures		311		347			1,354		1,281
Notes Payable		2		4			25		23
Total interest expense		6,743		5,058			25,435		16,462
Net interest income		29,498		28,492			115,649		108,255
Provision for loan losses		1,084		472			2,905		1,176
Net interest income after provision for loan losses		28,414		28,020			112,744		107,079
Non-interest Income:
Service fees and other charges		3,693		3,338			14,028		13,100
Mortgage banking income		2,683		1,445			9,483		7,077
Gain on sale ofnon-mortgage loans		11		17			226		317
Gain on sale of securities		13		97			24		173
Insurance commissions		3,123		3,061			14,118		14,085
Trust income		746		503			2,255		2,091
Income from Bank Owned Life Insurance		456		402			2,158		1,767
Othernon-interest income		1,091		(494	)		2,664		598
TotalNon-interest Income		11,816		8,369			44,956		39,208
Non-interest Expense:
Compensation and benefits		14,631		13,550			57,175		52,566
Occupancy		2,277		2,390			9,027		8,641
FDIC insurance premium		208		204			484		1,021
Financial institutions tax		526		525			2,193		2,118
Data processing		1,763		2,206			8,055		8,555
One time acquisition related charges		882		—			1,422		—
Amortization of intangibles		281		314			1,120		1,312
Othernon-interest expense		4,192		2,021			17,587		15,199
TotalNon-interest Expense		24,760		21,210			97,063		89,412
Income before income taxes		15,470		15,179			60,637		56,875
Income taxes		2,953		3,082			11,267		10,626
Net Income	$	12,517	$	12,097		$	49,370	$	46,249
Earnings per common share:
Basic	$	0.63	$	0.60		$	2.49	$	2.27
Diluted	$	0.63	$	0.59		$	2.48	$	2.26
Average Shares Outstanding:
Basic		19,792		20,313			19,844		20,358
Diluted		19,895		20,404			19,931		20,449

7

Financial Summary and Comparison (Unaudited)

First Defiance Financial Corp.

	Three Months Ended December 31,									Twelve Months Ended December 31,
(dollars in thousands, except per share data)	2019			2018			% change			2019			2018			% change
Summary of Operations
Tax-equivalent interest income (2)	$	36,473		$	33,808			7.9	%	$	142,051		$	125,721			13.0	%
Interest expense		6,743			5,058			33.3			25,435			16,462			54.5
Tax-equivalent net interest income (2)		29,730			28,750			3.4			116,616			109,259			6.7
Provision for loan losses		1,084			472			129.7			2,905			1,176			147.0
Tax-equivalent NII after provision for loan loss (2)		28,646			28,278			1.3			113,711			108,083			5.2
Investment securities gains		13			97			(86.6	)		24			173			(86.1	)
Non-interest income (excluding securities gains/losses)		11,803			8,272			42.7			44,932			39,035			15.1
Non-interest expense		24,760			21,210			16.7			97,063			89,412			8.6
Income taxes		2,953			3,082			(4.2	)		11,267			10,626			6.0
Net Income		12,517			12,097			3.5			49,370			46,249			6.7
Tax equivalent adjustment (2)		232			258			(10.1	)		967			1,004			(3.7	)
At Period End
Assets		3,468,992			3,181,722			9.0
Earning assets		3,175,935			2,898,471			9.6
Loans		2,777,564			2,540,039			9.4
Allowance for loan losses		31,243			28,331			10.3
Deposits		2,870,325			2,620,882			9.5
Stockholders’ equity		426,167			399,589			6.7
Average Balances
Assets		3,425,097			3,138,202			9.1			3,283,780			3,048,525			7.7
Earning assets		3,107,224			2,831,866			9.7			2,969,662			2,741,215			8.3
Loans		2,688,519			2,474,221			8.7			2,597,864			2,382,941			9.0
Deposits and interest-bearing liabilities		2,954,049			2,705,736			9.2			2,830,244			2,626,004			7.8
Deposits		2,830,043			2,594,635			9.1			2,717,224			2,507,553			8.4
Stockholders’ equity		420,352			392,701			7.0			406,286			384,305			5.7
Stockholders’ equity / assets		12.27	%		12.51	%		(1.9	)		12.37	%		12.61	%		(1.9	)
Per Common Share Data
Net Income
Basic	$	0.63		$	0.60			5.0		$	2.49		$	2.27			9.7
Diluted		0.63			0.59			6.8			2.48			2.26			9.7
Dividends		0.22			0.17			29.4			0.79			0.64			23.4
Market Value:
High	$	32.39		$	31.09			4.2		$	32.39		$	31.09			4.2
Low		27.77			22.78			21.9			24.12			22.78			5.9
Close		31.32			24.51			27.8			31.32			24.51			27.8
Common Book Value		21.60			19.81			9.0			21.60			19.81			9.0
Tangible Common Book Value (1)		16.34			14.71			11.1			16.34			14.71			11.1
Shares outstanding, end of period (000)		19,730			20,171			(2.2	)		19,730			20,171			(2.2	)
Performance Ratios (annualized)
Tax-equivalent net interest margin (2)		3.80	%		4.02	%		(5.4	)		3.93	%		3.98	%		(1.2	)
Return on average assets		1.45	%		1.53	%		(5.2	)		1.50	%		1.52	%		(0.9	)
Return on average equity		11.81	%		12.22	%		(3.3	)		12.15	%		12.03	%		1.0
Efficiency ratio (3)		59.62	%		57.29	%		4.1			60.08	%		60.29	%		(0.3	)
Effective tax rate		19.09	%		20.30	%		(6.0	)		18.58	%		18.68	%		(0.5	)
Dividend payout ratio (basic)		34.92	%		28.33	%		23.2			31.73	%		28.19	%		12.5

(1) Tangible common book value = total stockholders’ equity less the sum of goodwill, core deposit and other intangibles, and preferred stock divided by shares outstanding at the end of the period.

(2) Interest income ontax-exempt securities and loans has been adjusted to atax-equivalent basis using the statutory federal income tax rate of 21%

(3) Efficiency ratio =Non-interest expense divided by sum oftax-equivalent net interest income plusnon-interest income, excluding securities gains or losses, net.

NM Percentage change not meaningful

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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)	2019			2018			2019			2018
Gain from sale of mortgage loans	$	2,035		$	758		$	7,706		$	4,502
Mortgage loan servicing revenue (expense):
Mortgage loan servicing revenue		978			978			3,820			3,784
Amortization of mortgage servicing rights		(553	)		(332	)		(1,809	)		(1,341	)
Mortgage servicing rights valuation adjustments		223			41			(234	)		132
		648			687			1,777			2,575
Total revenue from sale and servicing of mortgage loans	$	2,683		$	1,445		$	9,483		$	7,077

9

Yield Analysis

First Defiance Financial Corp.

	Three Months Ended December 31, (dollars in thousands)
	2019							2018
	Average Balance		Interest(1)		Yield Rate(2)			Average Balance		Interest(1)		Yield Rate(2)
Interest-earning assets:
Loans receivable	$	2,688,519	$	33,716		4.98	%	$	2,474,221	$	30,867		4.95	%
Securities		287,172		2,100		2.96	%  (3)		289,233		2,399		3.22	%  (3)
Interest Bearing Deposits		119,618		537		1.78	%		54,195		325		2.38	%
FHLB stock		11,915		120		4.00	%		14,217		217		6.06	%
Total interest-earning assets		3,107,224		36,473		4.67	%		2,831,866		33,808		4.73	%
Non-interest-earning assets		317,873							306,336
Total assets	$	3,425,097						$	3,138,202
Deposits and Interest-bearing liabilities:
Interest bearing deposits	$	2,205,673	$	5,999		1.08	%	$	2,002,541	$	4,389		0.87	%
FHLB advances and other		85,291		431		2.00	%		69,782		318		1.81	%
Subordinated debentures		36,083		311		3.42	%		36,083		347		3.82	%
Notes payable		2,632		2		0.30	%		5,236		4		0.30	%
Total interest-bearing liabilities		2,329,679		6,743		1.15	%		2,113,642		5,058		0.95	%
Non-interest bearing deposits		624,370		—		—			592,094		—		—
Total includingnon-interest-bearing demand deposits		2,954,049		6,743		0.91	%		2,705,736		5,058		0.74	%
Othernon-interest-bearing liabilities		50,696							39,765
Total liabilities		3,004,745							2,745,501
Stockholders’ equity		420,352							392,701
Total liabilities and stockholders’ equity	$	3,425,097						$	3,138,202
Net interest income; interest rate spread			$	29,730		3.52	%			$	28,750		3.78	%
Net interest margin (4)						3.80	%						4.02	%
Average interest-earning assets to average interest bearing liabilities						133	%						134	%
	Twelve Months Ended December 31,
	2019							2018
	Average Balance		Interest(1)		Yield Rate			Average Balance		Interest(1)		Yield Rate
Interest-earning assets:
Loans receivable	$	2,597,864	$	130,943		5.04	%	$	2,382,941	$	114,500		4.80	%
Securities		294,027		9,060		3.08	%  (3)		279,867		9,036		3.23	%  (3)
Interest Bearing Deposits		65,424		1,395		2.13	%		63,261		1,270		2.01	%
FHLB stock		12,347		653		5.29	%		15,146		915		6.04	%
Total interest-earning assets		2,969,662		142,051		4.78	%		2,741,215		125,721		4.59	%
Non-interest-earning assets		314,118							307,310
Total assets	$	3,283,780						$	3,048,525
Deposits and Interest-bearing liabilities:
Interest bearing deposits	$	2,122,439	$	22,613		1.07	%	$	1,945,114	$	13,897		0.71	%
FHLB advances and other		73,013		1,443		1.98	%		73,421		1,261		1.72	%
Subordinated debentures		36,083		1,354		3.75	%		36,083		1,281		3.55	%
Notes payable		3,924		25		0.64	%		8,947		23		0.26	%
Total interest-bearing liabilities		2,235,459		25,435		1.14	%		2,063,565		16,462		0.80	%
Non-interest bearing deposits		594,785		—		—			562,439		—		—
Total includingnon-interest-bearing demand deposits		2,830,244		25,435		0.90	%		2,626,004		16,462		0.63	%
Othernon-interest-bearing liabilities		47,250							38,216
Total liabilities		2,877,494							2,664,220
Stockholders’ equity		406,286							384,305
Total liabilities and stockholders’ equity	$	3,283,780						$	3,048,525
Net interest income; interest rate spread			$	116,616		3.64	%			$	109,259		3.79	%
Net interest margin (4)						3.93	%						3.98	%
Average interest-earning assets to average interest bearing liabilities						133	%						133	%

(1) Interest on certain tax exempt loans and securities is not taxable for Federal income tax purposes. In order to compare thetax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to apre-tax equivalent amount based on the marginal corporate federal income tax rate of 21%.

(2) Annualized.

(3) Securities yield = annualized interest income divided by the average balance of securities, excluding average unrealized gains/losses.

(4) Net interest margin is tax equivalent net interest income divided by average interest-earning assets.

10

Selected Quarterly Information

First Defiance Financial Corp.

(dollars in thousands, except per share data)	4th Qtr 2019			3rd Qtr 2019			2nd Qtr 2019			1st Qtr 2019			4th Qtr 2018
Summary of Operations
Tax-equivalent interest income (1)	$	36,473		$	35,922		$	35,490		$	34,166		$	33,808
Interest expense		6,743			6,791			6,252			5,649			5,058
Tax-equivalent net interest income (1)		29,730			29,131			29,238			28,517			28,750
Provision for loan losses		1,084			1,327			282			212			472
Tax-equivalent NII after provision for loan losses (1)		28,646			27,804			28,956			28,305			28,278
Investment securities gains, net of impairment		13			11			—			—			97
Non-interest income (excluding securities gains/losses)		11,803			11,831			10,486			10,813			8,272
Non-interest expense		24,760			23,203			24,235			24,866			21,210
Income taxes		2,953			3,033			2,759			2,523			3,082
Net income		12,517			13,171			12,199			11,482			12,097
Tax equivalent adjustment (1)		232			239			249			247			258
At Period End
Total assets	$	3,468,992		$	3,350,724		$	3,277,552		$	3,221,249		$	3,181,722
Earning assets		3,175,935			3,045,659			2,980,243			2,934,860			2,898,471
Loans		2,777,564			2,665,300			2,624,219			2,548,968			2,540,039
Allowance for loan losses		31,243			30,250			28,934			28,164			28,331
Deposits		2,870,325			2,760,615			2,680,637			2,685,792			2,620,882
Stockholders’ equity		426,167			418,046			407,216			395,789			399,589
Stockholders’ equity / assets		12.29	%		12.48	%		12.42	%		12.29	%		12.56	%
Goodwill		100,069			100,069			98,569			98,569			98,569
Average Balances
Total assets	$	3,425,097		$	3,303,013		$	3,223,997		$	3,183,012		$	3,138,202
Earning assets		3,107,224			2,985,498			2,914,587			2,871,340			2,831,866
Loans		2,688,519			2,624,314			2,561,341			2,517,283			2,474,221
Deposits and interest-bearing liabilities		2,954,049			2,843,079			2,781,216			2,742,626			2,705,736
Deposits		2,830,043			2,718,632			2,678,060			2,642,158			2,594,635
Stockholders’ equity		420,352			411,041			398,612			395,138			392,701
Stockholders’ equity / assets		12.27	%		12.44	%		12.36	%		12.41	%		12.51	%
Per Common Share Data
Net Income:
Basic	$	0.63		$	0.67		$	0.62		$	0.57		$	0.60
Diluted		0.63			0.66			0.61			0.57			0.59
Dividends		0.22			0.19			0.19			0.19			0.17
Market Value:
High	$	32.39		$	29.44		$	30.44		$	31.30		$	31.09
Low		27.77			25.50			26.59			24.12			22.78
Close		31.32			28.97			28.57			28.74			24.51
Common Book Value		21.60			21.19			20.65			20.08			19.81
Shares outstanding, end of period (in thousands)		19,730			19,729			19,723			19,713			20,171
Performance Ratios (annualized)
Tax-equivalent net interest margin (1)		3.80	%		3.88	%		4.03	%		4.03	%		4.02	%
Return on average assets		1.45	%		1.58	%		1.52	%		1.46	%		1.53	%
Return on average equity		11.81	%		12.71	%		12.28	%		11.78	%		12.22	%
Efficiency ratio (2)		59.62	%		56.65	%		61.01	%		63.22	%		57.29	%
Effective tax rate		19.09	%		18.72	%		18.44	%		18.01	%		20.30	%
Common dividend payout ratio (basic)		34.92	%		28.36	%		30.65	%		33.33	%		28.33	%

(1) Interest income ontax-exempt securities and loans has been adjusted to atax-equivalent basis using the statutory federal income tax rate of 21%.

(2) Efficiency ratio =Non-interest expense divided by sum oftax-equivalent net interest income plusnon-interest income, excluding securities gains, net.

11

Selected Quarterly Information

First Defiance Financial Corp.

(dollars in thousands, except per share data)	4th Qtr 2019			3rd Qtr 2019			2nd Qtr 2019			1st Qtr 2019			4th Qtr 2018
Loan Portfolio Composition
One to four family residential real estate	$	324,773		$	330,369		$	322,123		$	321,644		$	322,686
Construction		305,305			308,061			335,847			304,241			265,772
Commercial real estate		1,506,026			1,430,919			1,411,463			1,394,500			1,404,810
Commercial		578,071			537,806			530,528			509,627			509,577
Consumer finance		37,649			36,644			35,350			34,262			34,405
Home equity and improvement		122,864			123,871			125,860			124,450			128,152
Total loans		2,874,688			2,767,670			2,761,171			2,688,724			2,665,402
Less:
Undisbursed loan funds		94,865			100,260			134,794			137,742			123,293
Deferred loan origination fees		2,259			2,110			2,158			2,014			2,070
Allowance for loan loss		31,243			30,250			28,934			28,164			28,331
Net Loans	$	2,746,321		$	2,635,050		$	2,595,285		$	2,520,804		$	2,511,708
Allowance for loan loss activity
Beginning allowance	$	30,250		$	28,934		$	28,164		$	28,331		$	27,639
Provision for loan losses		1,084			1,327			282			212			472
Credit loss charge-offs:
One to four family residential real estate		258			74			11			172			31
Commercial real estate		—			—			15			—			30
Commercial		436			25			13			187			15
Consumer finance		34			80			33			142			105
Home equity and improvement		136			12			64			33			75
Total charge-offs		864			191			136			534			256
Total recoveries		773			180			624			155			476
Net charge-offs (recoveries)		91			11			(488	)		379			(220	)
Ending allowance	$	31,243		$	30,250		$	28,934		$	28,164		$	28,331
Credit Quality
Totalnon-performing loans (1)	$	13,459		$	14,677		$	15,334		$	17,645		$	19,016
Real estate owned (REO)		100			—			—			941			1,205
Totalnon-performing assets (2)	$	13,559		$	14,677		$	15,334		$	18,586		$	20,221
Net charge-offs (recoveries)		91			11			(488	)		379			(220	)
Restructured loans, accruing (3)		8,427			10,334			10,308			11,908			11,573
Allowance for loan losses / loans		1.12	%		1.13	%		1.10	%		1.10	%		1.12	%
Allowance for loan losses /non-performing assets		230.42	%		206.10	%		188.69	%		151.53	%		140.11	%
Allowance for loan losses /non-performing loans		232.13	%		206.10	%		188.69	%		159.61	%		148.99	%
Non-performing assets / loans plus REO		0.49	%		0.55	%		0.58	%		0.73	%		0.80	%
Non-performing assets / total assets		0.39	%		0.44	%		0.47	%		0.58	%		0.64	%
Net charge-offs / average loans (annualized)		0.01	%		0.00	%		-0.08	%		0.06	%		-0.04	%
Deposit Balances
Non-interest-bearing demand deposits	$	630,359		$	604,129		$	584,735		$	586,033		$	607,198
Interest-bearing demand deposits and money market		1,198,012			1,124,208			1,088,694			1,107,511			1,040,471
Savings deposits		303,166			294,594			304,051			300,244			292,829
Retail time deposits less than $250,000		631,253			634,737			610,345			601,012			591,822
Retail time deposits greater than $250,000		107,535			102,947			92,812			90,992			88,562
Total deposits	$	2,870,325		$	2,760,615		$	2,680,637		$	2,685,792		$	2,620,882

(1) Non-performing loans consist ofnon-accrual loans.

(2) Non-performing assets arenon-performing loans plus real estate and other assets acquired by foreclosure ordeed-in-lieu thereof.

(3) Accruing restructured loans are loans with known credit problems that are not contractually past due and therefore are not included innon-performing loans.

12

Loan Delinquency Information

First Defiance Financial Corp.

(dollars in thousands)	Total Balance		Current		30 to 89 days past due		Non Accrual Loans
December 31, 2019
One to four family residential real estate	$	324,773	$	321,058	$	1,298	$	2,417
Construction		305,305		305,305		—		—
Commercial real estate		1,506,026		1,497,845		546		7,635
Commercial		578,071		574,593		519		2,959
Consumer finance		37,649		37,444		205		—
Home equity and improvement		122,864		121,211		1,205		448
Total loans	$	2,874,688	$	2,857,456	$	3,773	$	13,459
September 30, 2019
One to four family residential real estate	$	330,369	$	325,573	$	1,787	$	3,009
Construction		308,061		308,061		—		—
Commercial real estate		1,430,919		1,414,694		8,012		8,213
Commercial		537,806		534,321		516		2,969
Consumer finance		36,644		36,413		231		—
Home equity and improvement		123,871		122,103		1,282		486
Total loans	$	2,767,670	$	2,741,165	$	11,828	$	14,677
December 31, 2018
One to four family residential real estate	$	322,686	$	317,740	$	1,306	$	3,640
Construction		265,772		265,772		—		—
Commercial real estate		1,404,810		1,394,211		242		10,357
Commercial		509,577		504,884		193		4,500
Consumer finance		34,405		34,079		200		126
Home equity and improvement		128,152		126,188		1,571		393
Total loans	$	2,665,402	$	2,642,874	$	3,512	$	19,016

13