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PRESS RELEASE FOR IMMEDIATE RELEASE
Contact: John G. Robinson
Telephone: (724) 684-6800
FEDFIRST FINANCIAL CORPORATION
ANNOUNCES FOURTH QUARTER 2005 RESULTS
MONESSEN, PA--February 2, 2006-- FedFirst Financial Corporation (NASDAQ
SmallCap: FFCO; the "Company"), the parent company of First Federal Savings
Bank, today announced a net loss of $505,000 for the quarter ended December 31,
2005 compared to a net loss of $1.3 million for the quarter ended December 31,
2004. Net loss for the year ended December 31, 2005 was $102,000 compared to a
net loss of $883,000 for the year ended December 31, 2004.
The loss for the quarter primarily resulted from a one-time pre-tax charge
of approximately $687,000 of compensation and benefits expense related to the
previously disclosed termination of employment of the former Chief Financial
Officer during the period.
Net interest income increased $342,000, or 27.0%, to $1.6 million for the
quarter ended December 31, 2005 from $1.3 million for the same period last year.
The increase in net interest income was a result of an increase in the net
interest spread and the net interest margin to 2.02% and 2.47%, respectively,
for the quarter ended December 31, 2005 compared to 1.68% and 1.81%,
respectively, for the quarter ended December 31, 2004. The overall improvement
is primarily attributable to a balance sheet restructuring in November 2004,
which included the prepayment of $33.5 million of FHLB advances having a
weighted average interest rate of 5.43%.
Noninterest income increased $624,000 to $482,000 for the quarter ended
December 31, 2005 compared to the same period in 2004. The quarter ended
December 31, 2004 included a $558,000 net loss on the sale of securities related
to the balance sheet restructuring in November 2004.
Noninterest expense decreased to $2.6 million for the quarter ended
December 31, 2005 compared to $3.6 million for the same period in 2004. Although
the balance reflects a favorable change, the current period compensation and
benefits costs include the previously disclosed charges related to the
termination of the former Chief Financial Officer and expense from the Employee
Stock Ownership Plan (ESOP). Also, the Company incurred additional expenses from
marketing our new on-line banking products and expenses associated with being a
public company. The December 31, 2004 quarter includes a $1.9 million FHLB
prepayment penalty fee which was incurred as part of the balance sheet
restructuring transaction in November 2004.
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Net interest income for the year ended December 31, 2005 was $6.4 million
compared to $4.8 million for the prior year period. The 32.4% increase in net
interest income was primarily a result of an increase in the net interest spread
and the net interest margin to 2.03% and 2.41%, respectively, for the year ended
December 31, 2005 compared to 1.49% and 1.62%, respectively, for the year ended
December 31, 2004.
Noninterest income increased to $2.2 million for the year ended December
31, 2005 compared to $1.6 million for the same period in 2004. The increase was
primarily from the change in net loss on sales of securities. The Company
incurred a loss of $1,000 in the current year compared to $507,000 for the year
ended December 31, 2004.
Noninterest expense increased to $8.5 million for the year ended December
31, 2005 compared to $8.2 million for the same period in 2004. In addition to
items noted for the quarters ended December 31, 2005 and 2004, the current year
includes expenses related to the Retirement Agreement that was entered into with
the former President and Chief Executive Officer recorded during the third
quarter of 2005, which included pre-tax charges of approximately $410,000 of
compensation and benefits expense and $38,000 of legal fees. Conversely, the
year ended December 31, 2004 results include a recovery of $247,000 of
previously accrued expenses due to the termination of a post-retirement health
plan during the second quarter of 2004.
Total assets were $276.1 million at December 31, 2005 compared to $270.3
million at December 31, 2004. The growth in total assets for the period was
primarily due to an increase in net loans receivable of $14.5 million that
resulted from the purchases of residential mortgage loans totaling approximately
$19.5 million, funded with a portion of the proceeds from the Company's public
offering in April 2005.
FedFirst Financial Corporation is the parent company of First Federal
Savings Bank, a community-oriented financial institution operating seven
full-service branch locations in southwestern Pennsylvania offering a broad
array of retail and commercial lending and deposit services and providing
commercial and personal insurance services through Exchange Underwriters, Inc.,
its 80% owned subsidiary. Financial highlights of the Company are attached.
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Statements contained in this news release that are not historical facts
may constitute forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995 and such forward-looking statements are
subject to significant risks and uncertainties. The Company intends such
forward-looking statements to be covered by the safe harbor provisions contained
in the Act. The Company's ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Factors which could have a
material adverse effect on the operations and future prospects of the Company
and its subsidiaries include, but are not limited to, changes in market interest
rates, general economic conditions, changes in federal and state regulation,
actions by our competitors, loan delinquency rates and our ability to control
costs and expenses and other factors that may be described in the Company's
annual report on Form 10-KSB as filed with the Securities and Exchange
Commission. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements.
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FEDFIRST FINANCIAL CORPORATION
SELECTED FINANCIAL INFORMATION (Unaudited)
(In thousands) DECEMBER 31, DECEMBER 31,
2005 2004
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SELECTED FINANCIAL CONDITION DATA:
Total assets $ 276,071 $ 270,325
Cash and cash equivalents 6,332 6,715
Securities available-for-sale 77,947 86,307
Loans receivable, net 171,162 156,708
Deposits 124,897 137,389
Federal Home Loan Bank advances 102,404 110,416
Equity $ 45,295 $ 19,969
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2005 2004 2005 2004
-------------- ------------- ------------ ------------
SELECTED OPERATIONS DATA:
Total interest income $ 3,385 $ 3,343 $ 13,431 $ 13,907
Total interest expense 1,775 2,075 7,047 9,086
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Net interest income 1,610 1,268 6,384 4,821
Provision for loan losses 35 - 85 144
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Net interest income after provision
for loan losses 1,575 1,268 6,299 4,677
Noninterest income 482 (142) 2,214 1,639
Noninterest expense 2,608 3,556 8,489 8,191
Minority interest in net (loss) income
of consolidated subsidiary (7) (7) 38 38
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Loss before income tax (544) (2,423) (14) (1,913)
Income tax (benefit) (39) (1,079) 88 (1,030)
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Net loss $ (505) $ (1,344) $ (102) $ (883)
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QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2005 2004 2005 2004
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SELECTED FINANCIAL RATIOS(1):
Return on average assets (0.73)% (1.82)% (0.04)% (0.28)%
Return on average equity (4.34) (25.50) (0.26) (4.13)
Average interest-earning assets to
average interest-bearing liabilities 116.38 104.45 114.12 104.38
Average equity to to average assets 16.89 7.17 14.08 6.86
Interest rate spread 2.02 1.68 2.03 1.49
Net interest margin 2.47 1.81 2.41 1.62
YEAR ENDED
DECEMBER 31, DECEMBER 31,
2005 2004
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Allowance for loan losses to total loans 0.46 % 0.45 %
Allowance for loan losses to nonperforming loans 294.12 214.58
Nonperforming loans to total loans 0.16 0.21
(1) Quarterly ratios are calculated on an annualized basis.