Exhibit 99.1
FOR IMMEDIATE RELEASE For Additional Information:
Connie Ayres LaPlante
Treasurer
(740) 588-2265
FIRST FEDERAL BANCORP, INC. REPORTS
THIRD QUARTER EARNINGS
ZANESVILLE, Ohio (July 17, 2003) First Federal Bancorp, Inc. (NASDAQ:
FFBZ), today reported results for the three months and nine months ended
June 30, 2003.
Net income was $388,000, or $0.12 per diluted share, for the third quarter
2003 compared with $563,000, or $0.17 per diluted share, for the same
period last year. The third quarter 2003 results were impacted by a
$314,000 one-time expense to fund termination of the defined benefit plan
for First Federal Savings Bank of Eastern Ohio ("First Federal").
Excluding this one-time expense, net income would have been $0.18 per
diluted share for the third quarter 2003.
J. William Plummer, President and Chief Executive Officer, stated, "First
Federal's loan portfolio grew for the second consecutive quarter compared
to the same period a year ago, despite persistent weakness in the national
economy. Our emphasis on commercial loans for small businesses as well as
home equity loans and variable rate mortgages for consumers is achieving
positive results. This improved loan mix contributed to the higher net
interest margin, which was 3.76% for the third quarter 2003."
Mr. Plummer continued, "Our credit quality remains strong. We increased
the provision for loan losses, consistent with our loan policy, to reflect
the growth in variable rate mortgages compared to a year ago. Achievements
in other areas during the third quarter were offset by the higher provision
for loan losses combined with the one-time expense. Nonetheless, we are
encouraged by the progress that is being realized through targeted loan and
deposit growth as well as higher non-interest income."
Third Quarter Results
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Net interest income rose to $2,157,000 for the third quarter 2003 from
$2,116,000 for the same period last year. Net interest margin improved due
to the increase in interest earning assets and the more favorable mix of
total loans. First Federal's loan portfolio was $202,168,000 at June 30,
2003 compared with $195,526,000 at year-end 2002. A substantial portion of
the growth during this period was in commercial loans, non-residential real
estate loans, and home equity loans. These increases help to diversify
First Federal's loan portfolio and are expected to also benefit results in
future periods.
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Non-interest income more than doubled to $618,000 for the third quarter
2003 from $306,000 a year ago. This was due to a significant increase in
fixed rate mortgage loans that resulted in an $180,000 increase in gains on
the sale of those loans. All of First Federal's fixed rate residential
mortgage loans are sold to the secondary mortgage market. Additionally,
there was a $132,000 increase in other fee income for the third quarter
2003 versus last year.
Non-interest expense rose to $1,998,000 for the third quarter 2003 from
$1,538,000 for the same period last year. This increase was primarily due
to the $314,000 one-time additional expense to fund termination of First
Federal's defined benefit plan.
Nine-Month Results
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Net income was $1,306,000 for the first nine months of 2003 compared with
$1,698,000 a year ago. Earnings per diluted share were $0.39 for the 2003
year-to-date period versus $0.51 last year. Excluding the one-time
expense, net income per diluted share would have been $0.45 for the nine
months ended June 30, 2003.
Net interest income was $6,358,000 for the nine months ended June 30, 2003
or 5.0% below the $6,689,000 for the same period last year. This
particularly reflected the reductions in interest rates during the past
year. Net interest income began to improve during the third quarter 2003,
benefiting from an increase in higher yielding assets and a more favorable
deposit mix.
Non-interest income increased 6.1% to $1,278,000 for the 2003 year-to-date
period compared to the prior year. Key factors included substantially
higher gains on sale of mortgage loans and other fee income.
Non-interest expense was $5,387,000 for the nine months ended June 30, 2003
or 6.5% higher than the same period last year. This was principally due to
the $314,000 one-time expense.
Balance Sheet
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Total deposits increased slightly during the quarter to $164,253,000at June
30, 2003 compared with $157,688,000 at year-end 2002. The deposit mix
particularly benefited from an increase in amount of lower rate non-
certificate of deposits accounts compared with certificate of deposit
accounts.
Total assets rose to $235,115,000 at June 30, 2003 from $226,451,000 at
September 30, 2002, an increase of 3.8%. Net loans receivable were
$202,168,000 at June 30, 2003, reflecting a 3.4% increase over year-end
2002. Return on average assets was 0.77% for the first nine months of 2003
versus 0.98% for the same period last year. Excluding the one-time
expense, the return on average assets was 0.89% for the nine months ended
June 30, 2003.
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Total shareholders' equity improved to $21,712,000, or $6.47 per diluted
common share, at June 30, 2003. The return on average common shareholders
equity was 8.11% for the first nine months of 2003 compared to 10.94% a
year ago. Excluding the third quarter 2003 one-time expense, the return on
average common shareholders' equity was 9.38% for the nine months ended
June 30, 2003.
Asset Quality
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First Federal's non-performing asset ratio remains well below the average
for industry peers. Non-performing assets were 0.20% of total assets at
June 30, 2003 compared with 0.19% on the same date last year. This ratio
has benefited from First Federal's emphasis on prompt collection of
delinquencies, especially automobile loans. The loan loss reserve was 0.79%
of total loans outstanding at June 30, 2003 compared with 0.84% on the same
date a year ago.
First Federal Bancorp, Inc. is the parent company of First Federal Savings
Bank of Eastern Ohio, whose primary markets include Coshocton, Guernsey,
Licking, Morgan, Muskingum, Perry, and Tuscarawas counties. Additional
information is available by contacting Connie Ayres LaPlante, Treasurer,
First Federal Bancorp, Inc., at (740) 588-2265. Detailed investor
information is available on the Company's website at
www.firstfedonline.com.
Statements made in this press release that are not historical facts are
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are subject to risks
and uncertainties, which could cause actual results to differ materially
from estimated results. Such risks and uncertainties are detailed in the
Company's filings with the Securities and Exchange Commission. All
forward-looking statements made in this press release are based on
information presently available to management. The Company assumes no
obligation to update any forward-looking statements.
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FIRST FEDERAL BANCORP, INC.
FINANCIAL HIGHLIGHTS
(In Thousands, except per share amounts)
At June 30, At Sept. 30,
2003 2002
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(Unaudited)
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Selected Financial Condition Data:
Assets $235,115 $226,451
Loans Receivable - Net $202,168 $195,526
Mortgage-Backed Securities $ 348 $ 416
Investment Securities $ 8,686 $ 9,694
FHLB Stock $ 4,736 $ 4,591
Deposits $164,253 $157,688
Total Equity $ 21,712 $ 21,294
Total Equity Per Share $ 6.47 $ 6.30
Three Months Ended Nine Months Ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<s> <c> <c> <c>
Selected Operations Data:
Total Interest Income $ 3,463 $ 3,788 $ 10,569 $ 12,071
Total Interest Expense 1,306 1,672 4,211 5,382
---------- ---------- ---------- ----------
Net Interest Income $ 2,157 $ 2,116 $ 6,358 $ 6,689
Provision For Loan Losses 186 16 256 221
---------- ---------- ---------- ----------
Net Interest Income After Provision
For Loan Losses $ 1,971 $ 2,100 $ 6,102 $ 6,468
Noninterest Income 618 306 1,278 1,204
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Noninterest Expense 1,998 1,538 5,387 5,058
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Income Before Income Tax $ 591 $ 868 $ 1,993 $ 2,614
Provision For Income Tax 203 305 687 916
---------- ---------- ---------- ----------
Net Income $ 388 $ 563 $ 1,306 $ 1,698
========== ========== ========== ==========
Earnings Per Share:
Basic $ .12 $ .17 $ .40 $ .53
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Diluted $ .12 $ .17 $ .39 $ .51
========== ========== ========== ==========
Weighted Average Common and
Common Equivalent Shares:
Basic 3,218,695 3,245,989 3,237,021 3,180,299
========== ========== ========== ==========
Diluted 3,333,350 3,376,424 3,353,731 3,348,350
========== ========== ========== ==========
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FIRST FEDERAL BANCORP, INC.
FINANCIAL HIGHLIGHTS
(In Thousands)
(Unaudited)
At or for the Three Months At or for the Nine Months
Ended June 30, Ended June 30,
2003 2002 2003 2002
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Selected Financial Ratios And Other Data:
<s> <c> <c> <c>
Performance Ratios (Annualized):
Return on Average Assets .68% .98% .77% .98%
Return on Average Equity 7.19% 10.66% 8.11% 10.94%
Interest Rate Spread:
Average During Period 3.83% 3.81% 3.80% 3.94%
At End of Period 3.99% 3.95% 3.98% 4.14%
Net Interest Margin 3.76% 3.68% 3.74% 3.87%
Noninterest Expense to Average Assets 3.48% 2.68% 3.17% 2.93%
Quality Ratios:
Nonperforming Assets to Total Assets
at End of Period .20% .19% .20% .19%
Efficiency Ratio 67.62% 59.14% 65.57% 60.09%
Capital Ratios:
Total Equity to Total Assets at End of Period 9.23% 9.19% 9.23% 9.43%
Average Interest-earning Assets to
Average Interest-bearing Liabilities 106.72% 104.65% 106.57% 106.18%
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