Exhibit 99
[LETTERHEAD]
PRESS RELEASE
Release Date: Further Information:
IMMEDIATE RELEASE Patrick J. Coyne
Chairman of the Board,
President and Chief
Executive Officer
-or-
William C. Marsh
Executive Vice President
Chief Financial Officer
October 18, 1996 Phone: 301/724-3363
FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND
ANNOUNCES FISCAL 1997 FIRST QUARTER NET INCOME IN LIGHT OF FEDERAL ASSESSMENT
Cumberland, MD, October 18, 1996 - First Financial Corporation of Western
Maryland (Nasdaq: FFWM), the holding company for First Federal Savings Bank of
Western Maryland, today announced consolidated net income for the quarter ended
September 30, 1996 of $1.2 MILLION or $0.56 per share before the one-time
special Savings Association Insurance Fund (SAIF) assessment, as compared to net
income of $801,000 or $0.37 per share for the quarter ended September 30, 1995.
The Corporation's normalized annualized return on average assets and return on
average equity increased to 1.47% and 11.75%, respectively, for the three months
ended September 30, 1996, compared to 0.97% and 8.25%, respectively, for the
same period in fiscal 1996.
Consolidated net income for the quarter ended September 30, 1996 was $43,000 or
$0.02 per share, after the one-time charge by the Federal Deposit Insurance
Corporation of $1.9 million ($1.2 million, net of income tax benefit) to
recapitalize the SAIF.
The previously disclosed one-time charge was assessed by the Federal government
effective September 30, 1996, against all savings institutions, like First
Federal, that are members of the SAIF in order to recapitalize the depleted
fund. Patrick J. Coyne, Chairman of the Board, President and Chief Executive
Officer of the Corporation and the Bank, stated that management has expected and
planned for the assessment and related payment. Mr. Coyne said, "The one-time
assessment will have a positive impact because it benefits our customers by
reducing the Bank's deposit insurance premiums going forward and enables First
Federal to be competitive with commercial banks in pricing deposit products."
Mr. Coyne also indicated that with the payment of the special assessment, the
uncertainty which had created negative perceptions and hindered all savings
institutions has now been removed. This should in itself translate into less
confusion for consumers and investors as well as improve the industry's
financial performance. Additionally, Mr. Coyne stated that although the charge
reduced first quarter fiscal 1997
PRESS RELEASE
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October 18, 1996
net earnings, the Corporation can expect a benefit of approximately $515,000
annually, before income taxes, due to reduced deposit insurance premiums.
The Corporation's improved core operating results for the first quarter can be
primarily attributed to a continued increase in net interest margin. The
Corporation's net interest income before provision for loan losses increased
$681,000 or 20.7% to $4.0 million for the quarter ended September 30, 1996,
compared to $3.3 million for the same quarter in fiscal 1996. This increase in
net interest income was primarily attributable to increased average loan
balances outstanding during the quarter compared to the same quarter last fiscal
year. Average loans outstanding increased $34.8 million or 15.1% to $265.7
million for the quarter ended September 30, 1996, from $230.9 million for the
same period in the prior fiscal year. The Corporation experienced quarterly
loan growth by originating and purchasing $51.1 million of new loans during the
three month period ended September 30, 1996.
The Corporation continues to maintain a strong capital position with a capital-
to-assets ratio well above regulatory requirements at 11.7% as of September 30,
1996. Total stockholders' equity and book value per share were $40.4 million
and $19.00 per share, respectively, at September 30, 1996.
Total assets increased to $345.5 million at September 30, 1996, compared to
$322.0 million at June 30, 1996. Contributing to the increase in assets was an
increase in total loans receivable of $27.3 million or 11.2% to $270.4 million
at September 30, 1996 from $243.1 million at June 30, 1996. Deposits increased
to $280.7 million at September 30, 1996 compared to $274.8 million at June 30,
1996.
Non-performing assets net of related reserves decreased $368,000 or 5.7% to
$6.1 million at September 30, 1996, compared to $6.4 million at June 30, 1996,
due to concerted efforts by management to work out problem loans and continue
the improvement of the Corporation's overall asset quality. Total loss reserves
as a percentage of non-performing assets was 135.1% at September 30, 1996.
As previously announced, the Corporation is in the process of identifying
potential acquirers in pursuit of a sale of the Corporation. Mr. Coyne
stated that "We are moving forward with this process in an orderly manner and
are hopeful that in the near term we will be able to provide a more specific
update. However, due to the confidential nature of this process, we are not
yet in a position to discuss this matter in any detail. Our goal has been
and remains to maximize stockholder value."
First Federal Savings Bank of Western Maryland is a federally chartered, FDIC-
insured stock savings bank which conducts its business through 10 offices
located within the greater Cumberland area, Hagerstown, Frostburg, Oakland and
Westernport, Maryland.
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October 18, 1996
FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND
SUMMARY OF FINANCIAL INFORMATION
QUARTER ENDED SEPTEMBER 30: 1996 1995
- --------------------------- ---- ----
Net income before income taxes and one-time
SAIF assessment $1,976,000 $1,313,000
Provision for income taxes 761,000 512,000
---------- ----------
Net income before one-time SAIF assessment 1,215,000 801,000
One-time SAIF assessment, net of income taxes 1,172,000 -
---------- ----------
Net income $ 43,000 $ 801,000
---------- ----------
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Provision for loan losses $ 75,000 $ 150,000
Net income per share:
Net income before one-time SAIF assessment $0.56 $0.37
One-time SAIF assessment, net of income taxes -0.54 -
----- -----
Net income per share $0.02 $0.37
----- -----
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Average shares outstanding 2,155,488 2,182,235
Annualized return on average assets:
Before one-time SAIF assessment 1.47% .97%
After one-time SAIF assessment .05% .97%
Annualized return on average stockholders' equity:
Before one-time SAIF assessment 11.75% 8.25%
After one-time SAIF assessment .42% 8.25%
09/30/96 06/30/96
-------- --------
Total assets $345,505,000 $321,994,000
Total loans $270,365,000 $243,113,000
Total deposits $280,705,000 $274,756,000
Total stockholders' equity $40,368,000 $41,707,000
Total shares outstanding 2,124,336 2,176,739
Book value per share $19.00 $19.16