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Press Release FOR IMMEDIATE RELEASE
Contact: John G. Robinson
Telephone: (724) 684-6800
FEDFIRST FINANCIAL CORPORATION
ANNOUNCES FOURTH QUARTER 2006 RESULTS
MONESSEN, PA--January 31, 2007- FedFirst Financial Corporation (NASDAQ
Capital: FFCO; the "Company"), the parent company of First Federal Savings
Bank, today announced a net loss of $34,000 for the quarter ended December
31, 2006 compared to a net loss of $505,000 for the quarter ended December
31, 2005. Net income for the year ended December 31, 2006 was $409,000
compared to a net loss of $102,000 for the year ended December 31, 2005.
Basic and diluted earnings per share were $(0.01) and $(0.08) for the
quarters ended December 31, 2006 and 2005, respectively. Basic and diluted
earnings per share for the year ended December 31, 2006 was $0.06. Earnings
per share data for the year ended December 31, 2005 is not presented since
the Company was wholly owned by FedFirst Financial MHC prior to the
completion of its initial public offering on April 6, 2005.
FOURTH QUARTER EARNINGS
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Net interest income remained comparable at $1.6 million for the quarters
ended December 31, 2006 and 2005. Net interest rate spread and net interest
margin continued to compress and were 1.76% and 2.31%, respectively, for the
quarter ended December 31, 2006 compared to 2.02% and 2.47%, respectively, for
the quarter ended December 31, 2005. Interest income increased $324,000 or
9.6% to $3.7 million compared to $3.4 million for the same quarter last year
due to an increase in loans and yields on securities. Interest expense
increased $377,000 to $2.2 million due to an increase in the cost of funds to
attract and retain deposits and the replacement of maturing lower cost FHLB
advances.
Noninterest income decreased $12,000 to $470,000 for the quarter ended
December 31, 2006 compared to the same period in 2005. The decrease was
primarily attributable to a decrease in fee and service charge income, which
includes prepayment penalties on mortgage loans, as well as a decrease in
income from bank owned life insurance, which was partially offset by an
increase in insurance commission income.
Noninterest expense decreased $605,000 to $2.0 million for the quarter
ended December 31, 2006 compared to $2.6 million for the same period in 2005.
Noninterest expense for the prior period included approximately $687,000 of
compensation and benefits expense related to the termination of employment of
the former Chief Financial Officer.
YEAR TO DATE EARNINGS
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Net interest income totaled $6.2 million for the year ended December
31, 2006 compared to $6.4 million for the same period last year. Net
interest spread and net interest margin were 1.88% and 2.39%, respectively,
for the year ended December 31, 2006 compared to 2.03% and 2.41%,
respectively, for the year ended December 31, 2005.
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Noninterest income totaled $2.2 million at December 31, 2006 which is
comparable to the same period last year. Although comparable, the
composition from the prior year changed with an increase of $66,000 in
insurance commissions and gains of $33,000 and $29,000 related to the sale of
real estate owned and the sale of a majority of the student loan portfolio,
respectively. These increases were partially offset by a decrease in fees
and service charges primarily related to prepayment penalties received on
mortgage loans.
Noninterest expense decreased to $7.6 million for the year ended
December 31, 2006 compared to $8.5 million for the same period in 2005. As
noted above in the quarterly results, the prior period results includes
compensation and benefits expense related to the termination of employment of
the former Chief Financial Officer and approximately $450,000 of expenses
related to the Retirement Agreement entered into with the former President
and CEO which occurred in the third quarter of 2005.
FINANCIAL CONDITION
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Total assets were $283.5 million at December 31, 2006 compared to
$276.2 million at December 31, 2005. The increase in total assets was
primarily the result of an increase of $5.1 million in securities and an
increase of $3.6 million in loans. We also experienced deposit growth of
$18.6 million from year end which was primarily in short term certificates.
The growth in deposits has allowed us to decrease our FHLB advances by $13.1
million. Mr. John G. Robinson, President and Chief Executive Officer of the
Company, stated, "Our balance sheet is beginning to positively reshape as our
transition to a proactive sales culture takes effect. We look forward to
continued growth in 2007, which will include significant investments in our
infrastructure allowing us to better serve our customers."
FedFirst Financial Corporation is the parent company of First Federal
Savings Bank, a community-oriented financial institution operating eight
full-service branch locations in southwestern Pennsylvania. First Federal
offers a broad array of retail and commercial lending and deposit services
and provides commercial and personal insurance services through Exchange
Underwriters, Inc., its 80% owned subsidiary. Financial highlights of the
Company are attached.
* * * * *
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
(In thousands, except share and per share and per share data)
DECEMBER 31, DECEMBER 31,
2006 2005
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SELECTED FINANCIAL CONDITION DATA:
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Total assets $ 283,484 $ 276,176
Cash and cash equivalents 4,432 6,332
Securities available-for-sale 83,045 77,947
Loans receivable, net 174,718 171,162
Deposits 143,495 124,897
Federal Home Loan Bank advances 89,323 102,404
Equity $ 46,411 $ 45,400
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2006 2005 2006 2005
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SELECTED OPERATIONS DATA:
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Total interest income $ 3,709 $ 3,385 $ 13,869 $ 13,431
Total interest expense 2,152 1,775 7,663 7,047
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Net interest income 1,557 1,610 6,206 6,384
Provision for loan losses $ 15 $ 35 $ 84 $ 85
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Net interest income after provision for
loan losses 1,542 1,575 6,122 6,299
Noninterest income 470 482 2,240 2,214
Noninterest expense 2,003 2,608 7,630 8,489
Minority interest in net income (loss)
of consolidated subsidiary $ 4 $ (7) $ 51 $ 38
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Income (loss) before income tax expense (benefit) 5 (544) 681 (14)
Income tax expense (benefit) $ 39 $ (39) $ 272 $ 88
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Net (loss) income $ (34) $ (505) $ 409 $ (102)
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Earnings per share - basic and diluted (0.01) (0.08) 0.06 N/A
Weighted average shares outstanding - basic 6,385,692 6,367,691 6,379,211 N/A
Weighted average shares outstanding - diluted 6,389,704 6,367,691 6,429,565 N/A
Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
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SELECTED FINANCIAL RATIOS(1):
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Return on average assets (0.05)% (0.73)% 0.15 % (0.04)%
Return on average equity (0.30) (4.33) 0.89 (0.26)
Average interest-earning assets to average
interest-bearing liabilities 117.36 116.38 117.39 114.12
Average equity to to average assets 16.20 16.91 16.75 14.10
Interest rate spread 1.76 2.02 1.88 2.03
Net interest margin 2.31 % 2.47 % 2.39 % 2.41 %
YEAR ENDED
DECEMBER 31, DECEMBER 31,
2006 2005
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Allowance for loan losses to total loans 0.49 % 0.46 %
Allowance for loan losses to nonperforming loans 112.86 295.20
Nonperforming loans to total loans 0.43 % 0.16 %
(1) Three months ended ratios are calculated on an annualized basis.
NOTE:
Certain items previously reported may have been reclassified to conform with the
current reporting period's format.