Exhibit 99.1
For Additional Information: FOR IMMEDIATE RELEASE
Connie Ayres LaPlante
Treasurer
740-588-2265
FIRST FEDERAL BANCORP REPORTS
THIRD QUARTER EARNINGS
ZANESVILLE, Ohio (July 27, 2004) First Federal Bancorp, Inc. (NASDAQ:
FFBZ), today reported results for the three months and nine months ended
June 30, 2004.
J. William Plummer, President and Chief Executive Officer, stated, "We are
pleased with the Bank's growth in assets during the three months ended June
30, 2004. This marked the sixth consecutive quarter of an increase in net
loans outstanding versus the prior year. Our third quarter 2004 results
reflected the impact of lower interest rates versus the prior year and a
reduction in non-interest expenses compared to a year ago due to a one-time
expense in the third quarter 2003. We remain focused on targeted asset
growth, maintaining strong credit quality, and achieving improved long-term
performance."
Third Quarter Results
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Net interest income was $2,130,000 for the three months ended June 30, 2004
versus $2,157,000 a year ago. This 1.3% decline was impacted by an
increase in variable rate mortgages in the loan portfolio and a shift in
savings to lower yielding accounts from certificates of deposit during the
past year. As a result, net interest margin declined to 3.35% for the
third quarter 2004 from 3.76% the prior year.
Non-interest income declined to $411,000 for the third quarter 2004 from
$618,000 last year. This was principally due to a $186,000 reduction in
gain on loans sold due to a reduction in loans originated for sale during
the third quarter 2004. Service charges on deposit accounts increased
$44,000 for the third quarter 2004 compared to a year ago, while other fee
income was $65,000 below the prior year due to a gain from the sale of a
building during the third quarter 2003.
Non-interest expense was $1,678,000 for the third quarter 2004 or $320,000
below the same period last year. This difference was primarily due to a
$314,000 one-time expense recorded in the third quarter 2003 to fund
termination of First Federal's defined benefit plan. Salaries and
benefits, attributable to normal pay increases, and professional fees were
higher for the third quarter 2004 compared to a year ago.
Net income increased to $415,000 for the three months ended June 30, 2004
from $388,000 for the same period last year. Net income per diluted share
was $0.12 for both periods.
Nine-Month Results
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Net interest income was $6,365,000 for the nine months ended June 30, 2004
compared to $6,358,000 for the same period last year. A decline in
interest rates on deposits combined with a shift in savings to lower
yielding accounts offset a reduction in interest income that resulted from
lower interest rates compared to last year.
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Non-interest income rose 8.6% to $1,388,000 for the first nine months of
fiscal 2004. This was due to the recovery of mortgage servicing rights
impairment on loans sold in the secondary market, increases in service
charges on deposits and other fee income, and other income.
Non-interest expense was $5,222,000 for the first nine months of fiscal
2004 versus $5,387,000 last year. This year-over-year difference was
principally due to a $314,000 one-time expense recorded in the third
quarter 2003 which was partially offset by higher salaries and benefits due
to annual pay increases as well as additional costs for professional fees
during the fiscal 2004 year-to-date period.
Net income was $1,315,000 for the first nine months of fiscal 2004 compared
to $1,306,000 for the same period last year. Net income per diluted share
was $0.39 for the nine months ended June 30, 2004 and 2003, respectively.
Balance Sheet
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Total deposits rose 8.7% to $178,775,000 at June 30, 2004 compared to
$164,447,000 at year-end fiscal 2003. This was principally due to an
increase in jumbo deposits, which exceed $100,000 per account, as well as
higher balances for various checking account products.
Total assets increased 10.1% to $258,197,000 at June 30, 2004 from
$234,528,000 at September 30, 2003. Most of this increase was due to
growth in net loans outstanding, which rose 9.9% to $225,857,000 at June
30, 2004 compared to September 30, 2003. Approximately one-half of the
June 30, 2004 increase compared to September 30, 2003 was represented by
residential real estate loans, followed by higher consumer automobile
loans, non-residential real estate and commercial loans, home equity loans
and other consumer loans. Return on average assets was 0.65% for third
quarter 2004 versus 0.68% for the same period last year.
Total shareholders' equity improved to $22,913,000 at June 30, 2004, which
represents $6.80 per diluted common share compared to $6.59 at year-end
2003. The return on average common shareholders' equity rose to 7.28% for
third quarter 2004 versus 7.19% a year ago.
Asset Quality
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First Federal's asset quality remains favorable compared to industry peers.
Non-performing assets to total assets were 0.41% at June 30, 2004 versus
0.31% at June 30, 2003. The loan loss allowance was 0.81% of net loans
outstanding at June 30, 2004 compared to 0.79% on the same date in 2003.
Share Repurchase Program
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The stock repurchase program approved by the Board of Directors in 2002
expired on June 30, 2004. During this period 74,700 shares were
repurchased at an average price of $7.55 per share. At June 30, 2004 there
were 3,286,221 common shares outstanding.
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.
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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.
FIRST FEDERAL BANCORP, INC.
FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
At June 30, At Sept. 30,
2004 2003
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Selected Financial Condition Data:
Assets $258,197 $234,528
Loans, net $225,857 $205,478
Mortgage-backed securities $237 $303
Investment securities $7,677 $8,168
FHLB stock $4,928 $4,783
Deposits $178,775 $164,447
Total equity $22,913 $22,078
Total equity per share $6.80 $6.59
Three Months Ended Nine Months Ended
June 30, June 30,
2004 2003 2004 2003
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Selected Operations Data:
Total interest income $ 3,380 $ 3,463 $ 10,091 $ 10,569
Total interest expense 1,250 1,306 3,726 4,211
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Net interest income $ 2,130 $ 2,157 $ 6,365 $ 6,358
Provision for loan losses 229 186 522 256
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Net interest income after provision
for loan losses $ 1,901 $ 1,971 $ 5,843 $ 6,102
Noninterest income 411 618 1,388 1,278
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Noninterest expense 1,678 1,998 5,222 5,387
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Income before income tax $ 634 $ 591 $ 2,009 $ 1,993
Provision for income tax 219 203 694 687
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Net income $ 415 $ 388 $ 1,315 $ 1,306
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Earnings per share:
Basic $ .13 $ .12 $ .40 $ .40
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Diluted $ .12 $ .12 $ .39 $ .39
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Weighted average common and common
equivalent shares:
Basic 3,286,214 3,218,695 3,271,363 3,237,021
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Diluted 3,376,195 3,333,350 3,371,231 3,353,731
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FIRST FEDERAL BANCORP, INC.
FINANCIAL HIGHLIGHTS
At or for the Three Months At or for the Nine Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
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Selected Financial Ratios And Other Data:
Performance Ratios (Annualized):
Return on average assets 0.65% 0.68% 0.71% 0.77%
Return on average equity 7.28% 7.19% 7.80% 8.11%
Interest rate spread:
Average during period 3.40% 3.83% 3.76% 3.80%
Net interest margin 3.35% 3.76% 3.45% 3.74%
Noninterest expense to average assets 2.64% 3.48% 2.83% 3.17%
Quality Ratios:
Nonperforming assets to total assets at end of period 0.41% 0.31% 0.41% 0.31%
Efficiency ratio 61.58% 67.62% 63.03% 65.57%
Loan loss allowance to net loans at end of period 0.81% 0.79% 0.81% 0.79%
Capital Ratios:
Total equity to total assets at end of period 8.87% 9.23% 8.87% 9.23%
Average interest-earning assets to
average interest-bearing Liabilities 106.95% 106.72% 107.35% 106.57%
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