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PRESS RELEASE FOR IMMEDIATE RELEASE
Contact: John G. Robinson
Telephone: (724) 684-6800
FEDFIRST FINANCIAL CORPORATION
ANNOUNCES SECOND QUARTER 2008 RESULTS
MONESSEN, PA-- July 31, 2008- FedFirst Financial Corporation (NASDAQ
Capital: FFCO; the "Company"), the parent company of First Federal Savings Bank,
today announced net income of $65,000 for the three months ended June 30, 2008
compared to a net loss of $58,000 for the three months ended June 30, 2007.
Basic and diluted earnings (loss) per share were $0.01 for the three months
ended June 30, 2008 compared to $(0.01) for the three months ended June 30,
2007.
Year-to-date, the Company reported net income of $333,000 compared to a
net loss of $1.0 million for the same period in the prior year. Basic and
diluted earnings (loss) per share were $0.06 for the six months ended June 30,
2008 compared to $(0.16) for the same period in the prior year. Year-to-date
results for 2007 include the effects of the previously disclosed restructuring
of the securities portfolio which resulted in the recognition of a $1.4 million
loss.
Mr. Robinson, President and Chief Executive Officer of the Company,
stated, "Amid the unstable conditions in the financial industry, we have
continued to execute our plan to prudently build our core banking business. We
are pleased with our growth in net interest income, noninterest income, deposits
and loans."
SECOND QUARTER RESULTS
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Net interest income for the three months ended June 30, 2008 increased
$349,000 to $2.0 million as compared to the three months ended June 30, 2007.
Interest rate spread and net interest margin were 2.10% and 2.55% for the three
months ended June 30, 2008 compared to 1.97% and 2.55% for the three months
ended June 30, 2007, respectively. The improvement in interest rate spread is
primarily attributed to the growth in the loan and securities portfolio coupled
with lower costs on deposits and borrowings.
The provision for loan losses was $220,000 for the three months ended June
30, 2008 compared to $30,000 for the three months ended June 30, 2007. The
increase in the provision is primarily related to growth in the commercial,
one-to-four family residential, and home equity portion of the loan portfolio as
well as current economic conditions in the housing and credit markets. Net
charge-offs were $49,000 for the three months ended June 30, 2008. There were no
charge-offs for the three months ended June 30, 2007.
Noninterest income increased $73,000 to $589,000 for the three months
ended June 30, 2008 compared to $516,000 for the three months ended June 30,
2007. The change is primarily attributed to an increase of $53,000 in insurance
commissions.
Noninterest expense increased $31,000 to $2.2 million for the three months
ended June 30, 2008 as compared to the three months ended June 30, 2007. The
increase is primarily related to additional occupancy costs related to the
opening of the Washington office in June 2007.
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YEAR-TO-DATE RESULTS
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Net interest income for the six months ended June 30, 2008 increased
$715,000 to $3.9 million compared to $3.2 million for the six months ended June
30, 2007. Net interest spread and net interest margin improved to 2.05% and
2.53%, respectively for the six months ended June 30, 2008 compared to 1.84% and
2.40%, respectively for the six months ended June 30, 2007. The improvement in
interest rate spread and net interest margin is primarily attributed to growth
in loans and securities. The securities restructuring in April 2007 and the
Company's decision in March 2008 to sell several securities that were likely to
be called and purchase mortgage-backed securities improved the overall yield on
securities. In addition, the Company's maturing short-term certificates of
deposits repriced at lower interest rates and borrowing rates have declined in
the current economic environment.
The provision for loan losses was $279,000 for the six months ended June
30, 2008 compared to $75,000 for the six months ended June 30, 2007. The
increase in the provision is primarily related to growth in the commercial,
one-to-four family residential, and home equity portion of the loan portfolio as
well as current economic conditions in the housing and credit markets. Net
charge-offs were $220,000 for the six months ended June 30, 2008. There were no
charge-offs for the six months ended June 30, 2007.
Noninterest income increased $1.8 million to $1.6 million for the six
months ended June 30, 2008 compared to a net loss of $134,000 the six months
ended June 30, 2007. The increase was primarily attributable to a $1.4 million
loss recorded as a result of the securities restructuring which was completed in
the prior period. In addition, insurance commissions increased $182,000 compared
to the prior period and the Company recognized a gain of $156,000 on the sales
of securities in the current period.
Noninterest expense increased $171,000 to $4.6 million for the six months
ended June 30, 2008 as compared to the six months ended June 30, 2007. The
increase is primarily related to increased occupancy costs for the six months
ended June 30, 2008 in connection with the opening of the Washington office in
June 2007.
Total assets were $335.7 million at June 30, 2008 compared to $305.3
million at December 31, 2007. The increase in total assets was primarily from
purchases of securities and loan growth in one-to-four family real estate,
commercial real estate and home equity loans, which was primarily funded from
borrowings and deposits. Year-to-date as part of the Company's stock repurchase
program, the Company has purchased 121,125 shares at a weighted-average price of
$8.13 per share.
FedFirst Financial Corporation is the parent company of First Federal
Savings Bank, a community-oriented financial institution operating nine
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.
* * * * *
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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-K 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
<Table>
<Caption>
(Unaudited)
(In thousands, except share and per share data) June 30, December 31,
2008 2007
------------ ------------
SELECTED FINANCIAL CONDITION DATA:
- ---------------------------------
Total assets $ 335,654 $ 305,273
Cash and cash equivalents 7,283 5,552
Securities available-for-sale 96,245 89,073
Loans receivable, net 207,253 187,954
Deposits 168,557 155,558
Borrowings 120,908 101,074
Equity $ 40,857 $ 43,773
</Table>
<Table>
<Caption>
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
SELECTED OPERATIONS DATA:
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Total interest income $ 4,355 $ 3,708 $ 8,661 $ 7,346
Total interest expense 2,356 2,058 4,782 4,182
---------- ---------- ---------- ----------
Net interest income 1,999 1,650 3,879 3,164
Provision for loan losses 220 30 279 75
---------- ---------- ---------- ----------
Net interest income after provision
for loan losses 1,779 1,620 3,600 3,089
Noninterest income 589 516 1,634 (134)
Noninterest expense 2,236 2,205 4,590 4,419
Minority interest in net income of
consolidated subsidiary 13 7 56 38
---------- ---------- ---------- ----------
Income (loss) before income tax expense (benefit) 119 (76) 588 (1,502)
Income tax expense (benefit) 54 (18) 255 (475)
---------- ---------- ---------- ----------
Net income (loss) $ 65 $ (58) $ 333 $ (1,027)
========== ========== ========== ==========
Earnings (loss) per share - basic and diluted $ 0.01 $ (0.01) $ 0.06 $ (0.16)
Weighted average shares outstanding - basic 5,995,088 6,444,010 5,983,500 6,414,977
Weighted average shares outstanding - diluted 5,995,088 6,448,038 5,983,500 6,419,483
</Table>
<Table>
<Caption>
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
SELECTED FINANCIAL RATIOS(1):
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Return on average assets 0.08 % (0.08)% 0.20 % (0.73)%
Return on average equity 0.61 (0.51) 1.55 (4.45)
Average interest-earning assets to average
interest-bearing liabilities 114.98 118.14 115.12 117.83
Average equity to average assets 12.83 16.60 13.18 16.44
Interest rate spread 2.10 1.97 2.05 1.84
Net interest margin 2.55 % 2.55 % 2.53 % 2.40 %
</Table>
<Table>
<Caption>
Period Ended
June 30, December 31,
2008 2007
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Allowance for loan losses to total loans 0.70% 0.76%
Allowance for loan losses to nonperforming loans 201.33 113.74
Nonperforming loans to total loans 0.35% 0.67%
</Table>
(1) Three months and six 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.