EXHIBIT 99.1
For Immediate Release Contact: William J. Small
Chairman, President and CEO
First Defiance Financial Corp.
(419) 782-5015
bsmall@first-fed.com
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FIRST DEFIANCE ANNOUNCES FIRST QUARTER EARNINGS
HIGHLIGHTS
o Gains from sale of mortgage loans totaled $1.8 million, a 242% increase
from 2002 first quarter.
o Net interest margin declines just 3 basis points from 2002 fourth quarter.
o Asset quality remains good, Company realizes net recoveries of $93,000.
o Total assets grow to $897 million.
o Acquisition of three branches expected to close in June.
DEFIANCE, OHIO (April 21, 2003) -
FlashResults
First Defiance Financial Corp. (Nasdaq: FDEF)
----
(Numbers in Thousands, Except Per Share Data)
1Q 2003 1Q 2002
Tax-equivalent Net Interest Income $6,661 $5,621
Net Income from Continuing Operations $2,718 $887
EPS from Continuing Operations $.43 $.14
Net Income $2,718 $2,708
Net Income per Share $.43 $.41
First Defiance Financial Corp. (NASDAQ: FDEF) today announced net income of
$2.7 million or $.43 per diluted share for the quarter ended March 31, 2003
compared to $2.7 million or $.41 per diluted share for the quarter ended March
31, 2002.
The March 2002 results include $2.0 million ($0.30 per share) of earnings
from discontinued operations related to the Company's former Leader Mortgage
Company subsidiary (The Leader), which was sold to US Bank effective April 1,
2002, and a $194,000 ($0.03 per share) after-tax charge related to a change in
the method of accounting for goodwill. Earnings
from continuing operations reported for the first quarter of 2002 were $887,000
or $.14 per share.
Increase due to gains from mortgage loan, security sales
The increase in income from continuing operations in 2003 compared to 2002
is due both to a large increase in gains from the sale of mortgage loans, and to
significant growth in interest-earning assets following the sale of The Leader.
Gains from the sale of mortgage loans totaled $1.8 million for the first quarter
of 2003 compared to $526,000 for the first quarter of 2002, an increase of 242%.
During the same period, net interest income increased to $6.4 million from $5.5
million due to a $97.9 million year-over-year increase in loans (from $500.0
million at March 31, 2002 to $597.9 million at March 31, 2003) and a $148.5
million increase in investment securities (from $51.5 million at March 31, 2002
to $200.0 million at March 31, 2003).
First Defiance also realized gains of $631,000 ($0.06 per share after tax)
from the sale of investment securities in the 2003 first quarter compared a loss
of $15,000 in the 2002 period.
"We had a very good quarter from an earnings standpoint due to our
continued strong mortgage origination volumes," said First Defiance Chairman,
President and CEO William J. Small. "Obviously these volumes are driven by the
historically low interest rate environment we've experienced over the last
several quarters. But in addition to the increased volumes, we have improved our
pipeline management significantly and have gotten substantially better pricing
in the secondary market than we were getting a year ago."
Net Interest Margin Declines Just 3 Basis Points from 2002 Fourth Quarter
On a tax-equivalent basis the net interest margin for the quarter ended
March 31, 2003 was 3.37% compared with 4.06% for the year earlier quarter.
However the material change in the Company's balance sheet between those two
periods resulting from the sale of The Leader makes that comparison less
meaningful. A better margin comparison is between the 2003 first quarter and the
2002 fourth quarter, where the margin was 3.40%.
The slightly lower quarter-to-quarter margin is in part due to a reduction
in total equity resulting from the repurchase of approximately 120,000 shares of
First Defiance stock by the Company during the 2003 first quarter and 343,000
shares during the 2002 fourth quarter. These repurchases impact margin because
the reduction in equity, which has no cost of funds associated with it, is
replaced with other funding sources. The tax-equivalent yields on interest
earning assets dropped 14 basis points from 6.16% in the 2002 fourth quarter to
6.02% in the 2003 first quarter while the cost of interest bearing liabilities
dropped 17 basis points from 3.21% to 3.04% between those same periods. Asset
yields and margins have been hampered in the short-run by continued run-off of
the Company's residential mortgage loan balances, which dropped from $157.7
million at the end of December 2002 to $150.0 million at the end of March 2003.
That decline was more than offset by increases in non-residential real estate
loans, which increased from $227.8 million at December 31, 2002 to $252.9
million at March 31, 2003.
However, a combination of adjustable rate loans repricing at lower rates and new
loans going on the books at relatively low rates has caused overall loan yields
to drop.
"We continue to be pleased with the growth we've had in our commercial loan
and non-residential real estate loan portfolios," continued Mr. Small. "While
many of our peer banks are reporting decreased loan demand, we continue to
experience strong demand in the commercial area. This is a testament to our
community bank philosophy and to our lenders who make that philosophy work. This
growth and the continuing change in the mix of our assets have helped us to
maintain our margins in an environment where banks are feeling extreme margin
pressure. Also, I need to point out that while our balances have grown
significantly, our credit quality numbers have improved."
Credit Quality Remains Good, Company Realizes $93,000 of Net Recoveries
The provision for loan losses was $335,000 in the first quarter of 2003
compared to $582,000 for the first quarter of 2002 despite significant growth in
loan balances. The lower provision was due in part to the Company's very low
loss experience in the 2003 first quarter, which showed net recoveries of
$93,000. During that quarter, First Defiance had charge-offs of just $75,000 and
recoveries of $168,000. By comparison, in the 2002 first quarter First Defiance
had total charge-offs of $250,000 and recoveries of $53,000. The loan loss
reserve increased to $7.9 million at March 31, 2003 from $7.5 million at
December 31, 2002. The loan loss reserve as a percentage of total loans
increased slightly to 1.34% at March 31, 2003 from 1.32% at December 31, 2002.
At March 31, 2003, non-performing assets totaled $2.8 million compared to $2.7
million at December 31, 2002 and $3.5 million at March 31, 2002. Non-performing
assets as a percentage of total assets was stable at 0.31% at both March 31,
2003 and December 31, 2002, a significant decrease from 0.55% at March 31, 2002.
For those same periods the allowance for loan losses to non-performing assets
was to 281.5% at March 31, 2003 compared to 274.5% at December 31, 2002 and
197.8% at March 31, 2002.
Total non-interest income for the 2003 first quarter was $4.8 million
compared with $2.4 million in the 2002 period from continuing operations. While
this increase is primarily due to the large increase in gain on mortgage loan
sales and the investment securities gains taken during the quarter, other
sources of non-interest income also increased in 2003. Excluding the loan and
security sales gains, non-interest income still increased by 23.3%. Service fees
increased by $187,000 or 23.4% to $985,000 in the first quarter of 2003 compared
to $798,000 for the first quarter of 2002 while insurance and investment
commission income grew by $43,000 or 4.9% to $926,000 in the 2003 first quarter
compared to $883,000 in the same 2002 period. Also First Defiance realized an
increase in the cash surrender value of bank-owned life insurance ("BOLI") of
$201,000 in the 2003 first quarter. The Company made its initial investment in
BOLI during the 2002 fourth quarter.
Non-interest expense increased during the 2003 first quarter to $7.0
million from $6.0 million in the same period of 2002. The largest increases were
in compensation and benefits, which increased by $404,000 to $3.7 million in the
2003 first quarter from $3.3 million in the same period of 2002, amortization of
mortgage servicing rights, which increased by $395,000 to $523,000 for the 2003
quarterly period from $128,000 in the 2002 first quarter, and mortgage
servicing rights impairment, which totaled $240,000 in the first quarter of 2003
compared to $96,000 in 2002. The 2002 non-interest expense also included
goodwill impairment of $200,000. There was no goodwill impairment in 2003.
Total Assets Increase; Capital Levels Remain High
At March 31, 2003, First Defiance had total assets of $896.6 million,
compared to $884.2 million at December 31, 2002. First Defiance's total loans,
total deposits, and total equity at March 31, 2003 were $597.9 million, $608.0
million and $120.1 million respectively, compared to $576.4 million, $599.6
million and $120.1 million, respectively, at December 31, 2002.
The growth in deposits occurred despite anticipated declines in national
and brokered certificates of deposit which were used to fund the operations of
The Leader. Local deposit balances at March 31, 2003 were $583.9 million
compared to $573.5 million at December 31, 2002. Most of the growth has been in
checking and money market deposit accounts which increased to $220.4 million at
March 31, 2003 from $214.3 million at December 31, 2002. The total balance in
checking and money market accounts at March 31, 2002 was just $189.0 million.
First Defiance's equity to assets and tangible equity to assets ratios were
13.4% and 13.0%, respectively at March 31, 2003. The Company's total capital
level was impacted by significant stock repurchase activity during the 2003
first quarter when First Defiance repurchased a total of 119,864 shares for an
average price of $19.66 per share.
Branch Acquisition Expected to Close in Second Quarter
First Defiance announced in the 2003 first quarter that it has agreed to
purchase branches located in Findlay, Ottawa and McComb, Ohio from RFC Banking
Company, a subsidiary of Rurban Financial Corp.
"We are enthusiastic about expanding our community banking model through
this acquisition," noted Mr. Small. "These branches fit very well within our
existing footprint in northwest Ohio. The transaction will make us a major
competitor in the very attractive Findlay area market and it gives us an
opportunity to branch in Ottawa, a market that we have long considered an
excellent expansion opportunity. We have been working very hard to prepare for
this extension of our First Federal Bank network and look forward to welcoming
these branches into the First Defiance family."
That transaction, which will increase First Defiance's loans by
approximately $100 million and its deposits by approximately $155 million, is
expected to close in June. Management estimates that the acquisition of those
branches will add approximately $.06 per share to earnings in 2003 and between
$.12 and $.15 per share to earnings in 2004.
Company Outlook
"Looking ahead, I think margin pressures will continue for all banks for
the rest of this year," continued Mr. Small. "We had earlier forecast that our
margin would increase throughout the year and would reach 3.70% by the 2003
fourth quarter. However, because of significant prepayments of our
mortgage-backed securities and continued low loan pricing, I believe the margin
will likely be at least 10 basis points less than that earlier forecast. I also
think that gains from the sale of mortgage loans will drop to more normal levels
as this refinance wave winds down."
"We are pleased with the progress we've made in the last year since we sold
The Leader," added Mr. Small. "However we also recognize that we need to
continue to find ways to effectively utilize our capital and grow earnings. The
branch acquisition is one step in the process but at the same time we will
continue to focus on identifying and taking advantage of opportunities to grow
both loans and deposits through geographic and product line expansion."
Conference Call
First Defiance Financial Corp. will host a conference call at 11:00 a.m.
(EST) on Tuesday, April 22, 2003 to discuss the earnings results and business
trends. The conference call may be accessed by calling 888-880-1525. The
passcode for the conference call is "First Defiance." The conference
identification number for the call is 9539817. Participants should be prepared
to provide both the passcode and conference identification number to access the
call.
Internet access to the call is also available (in listen-only mode) at the
following Web address:
http://www.firstcallevents.com/service/ajwz377598505gf12.html. The password for
the call is "First Defiance."
The audio replay of the Internet Web cast will be available at www.fdef.com
until May 22, 2003. ------------
First Defiance will host its Annual Meeting of Shareholders at 1:00 p.m.
EDT on Tuesday, April 22, 2003 in the training room of the Company's
headquarters at First Federal Bank of the Midwest, 601 Clinton St. in Defiance,
OH. The business of the meeting will include the election of three directors.
Mr. Small will report to shareholders on the Company's performance during 2002
and the first quarter of 2003 and provide an update on the Company's community
financial services strategy. A live webcast of the annual meeting (in
listen-only mode) will be available at the following Web address:
http://www.videonewswire.com/event.asp?id=13481. The Web cast will be archived
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at www.fdef.com until July 22, 2003.
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About First Defiance Financial Corp.
First Defiance Financial Corp., headquartered in Defiance, OH, is the
holding company for First Federal Bank of the Midwest and First Insurance and
Investments. First Federal operates 14 full service branches, one commercial
loan production office and 18 ATM locations in northwest Ohio. First Insurance
and Investments is the largest property and casualty insurance company in the
Defiance, OH area and it also specializes in life and group health insurance.
For more information, visit the company's Web site at www.fdef.com.
------------
-Financial Statements and Highlights Follow-
Safe Harbor Statement
Statements contained herein, including management's expectations, and Mr.
Small's comments, may not be based on historical facts and are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21B of the Securities Act of 1934, as amended. Actual
results could vary materially depending on risks and uncertainties inherent in
general and local banking, insurance and mortgage conditions, competitive
factors specific to markets in which the Company and its subsidiaries operate,
future interest rate levels, legislative and regulatory decisions or capital
market conditions. The Company assumes no responsibility to update this
information. For more details, please refer to the Company's SEC filings,
including its most recent Annual Report on Form 10-K and quarterly reports on
Form 10-Q.
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Consolidated Balance Sheets
First Defiance Financial Corp.
March 31, December 31, March 31,
(in thousands) 2003 2002 2002
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Assets
Cash and cash equivalents $ 25,475 $ 17,263 $ 32,589
Cash and amounts due from depository institutions 6,475 11,395 1,575
----------- ----------- -----------
Interest-bearing deposits 31,950 28,658 34,164
Securities
Available-for sale, carried at fair value 196,536 209,604 46,183
Held-to-maturity, carried at amortized costs 3,527 3,921 5,303
----------- ----------- -----------
200,063 213,525 51,486
Loans held for sale 11,391 15,336 --
Loans 594,431 568,537 506,473
Allowance for loan losses (7,924) (7,496) (6,933)
----------- ----------- -----------
Loans, net 597,898 576,377 499,540
Mortgage servicing rights 2,036 2,090 2,319
Accrued interest receivable 4,734 4,533 3,255
Federal Home Loan Bank stock and other interest-bearing assets 17,242 18,302 16,487
Bank Owned Life Insurance 15,345 15,144 --
Office properties and equipment 20,460 19,958 19,882
Real estate and other assets held for sale 59 206 194
Goodwill 3,658 3,636 3,529
Deferred taxes -- -- 342
Other assets 3,131 1,816 1,330
Assets held for sale -- -- 6,110
Assets of discontinued operations -- -- 493,872
----------- ----------- -----------
Total Assets $ 896,576 $ 884,245 $ 1,132,510
=========== =========== ===========
Liabilities and Stockholders' Equity
Non-interest-bearing deposits $ 47,673 $ 43,936 $ 28,349
Interest-bearing deposits 560,293 555,637 578,425
----------- ----------- -----------
Total deposits 607,966 599,573 606,774
Advances from Federal Home Loan Bank 156,147 149,096 237,699
Notes payable and other interest-bearing liabilities 1,997 4,308 21,939
Advance payments by borrowers for tax and insurance 169 316 220
Deferred taxes 2,017 2,299 --
Other liabilities 8,133 8,543 5,540
Liabilities associated with assets held for sale -- -- 6,037
Liabilities of discontinued operations -- -- 141,438
----------- ----------- -----------
Total liabilities 776,429 764,135 1,019,647
Stockholders' Equity
Preferred stock -- -- --
Common stock 63 64 69
Additional paid-in-capital 50,432 50,702 53,999
Stock acquired by ESOP (2,175) (2,387) (2,600)
Deferred compensation (25) (30) (69)
Accumulated other comprehensive income 6,068 6,455 508
Retained earnings 65,784 65,306 60,956
----------- ----------- -----------
Total stockholders' equity 120,147 120,110 112,863
----------- ----------- -----------
Total liabilities and stockholders' equity $ 896,576 $ 884,245 $ 1,132,510
=========== =========== ===========
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Consolidated Statements of Income (Unaudited)
First Defiance Financial Corp.
Three Months Ended
March 31,
---------
(in thousands, except per share amounts) 2003 2002
- ---------------------------------------------------------------------------------------
Interest Income:
Loans $ 9,338 $ 8,961
Investment securities 2,424 751
Interest-bearing deposits 29 17
------- -------
Total interest income 11,791 9,729
Interest Expense:
Deposits 3,534 3,928
FHLB advances and other 1,814 81
Notes Payable 9 192
------- -------
Total interest expense 5,357 4,201
------- -------
Net interest income 6,434 5,528
Provision for loan losses 335 582
------- -------
Net interest income after provision for loan losses 6,099 4,946
Non-interest Income:
Service fees and other charges 985 798
Dividends on stock and other interest income 169 181
Gain on sale of loans 1,800 526
Gain (loss) on sale of securities 631 (15)
Insurance commissions 926 883
Trust income 32 31
Income from Bank Owned Life Insurance 201 --
Other non-interest income 47 21
------- -------
Total Non-interest Income 4,791 2,425
Non-interest Expense:
Compensation and benefits 3,708 3,304
Occupancy 728 692
SAIF deposit insurance premiums 24 32
State franchise tax 281 294
Data processing 432 322
Amortization of mortgage servicing rights 523 128
Net impairment of mortgage servicing rights 240 96
Amortization of goodwill and other intangibles -- 200
Other non-interest expense 1,079 925
------- -------
Total Non-interest Expense 7,015 5,993
------- -------
Income before income taxes 3,875 1,378
Income taxes 1,157 491
------- -------
Income from continuing operations 2,718 887
Discontinued operations, net of tax -- 2,015
------- -------
Income before cumulative effect of a change in accounting principle 2,718 2,902
Cumulative effect in method of accounting for goodwill -- (194)
------- -------
Net income $ 2,718 $ 2,708
======= =======
Earnings per share:
Basic:
From continuing operations $ 0.45 $ 0.14
Discontinued operations, net of tax -- 0.31
Cumulative effect in method of accounting for goodwill -- (0.03)
Net income 0.45 0.42
Diluted:
From continuing operations 0.43 $ 0.14
Discontinued operations, net of tax -- 0.30
Cumulative effect in method of accounting for goodwill -- (0.03)
Net income 0.43 0.41
Average Shares Outstanding
Basic 6,074 6,442
Diluted 6,330 6,663
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Financial Summary and Comparison
First Defiance Financial Corp.
Three months ended
March 31,
---------
(in thousands, except per share data) 2003 2002 % change
- ------------------------------------------------------------------------------------------------------------
Summary of Operations
Tax-equivalent interest income (1) $ 12,018 $ 9,822 22.4
Interest expense 5,357 4,201 27.5
Tax-equivalent net interest income (1) 6,661 5,621 18.5
Provision for loan losses 335 582 (42.4)
Tax-equivalent NII after provision for loan loss (1) 6,326 5,039 25.5
Securities gains (losses) 631 (15) NM
Non-interest income-excluding securities gains ( losses) 4,160 2,440 70.5
Non-interest expense 7,015 5,993 17.1
Income taxes 1,157 491 135.6
Income from continuing operations 2,718 887 206.4
Tax equivalent adjustment (1) 227 93 144.1
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At Period End
Assets $ 896,576 $ 1,132,510 (20.8)
Total assets excluding those of discontinued
operations 896,576 638,638 40.4
Earning assets 821,678 569,088 44.4
Loans 594,431 506,473 17.4
Allowance for loan losses 7,924 6,933 14.3
Deposits 607,966 606,774 0.2
Stockholders' equity 120,147 112,863 6.5
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Average Balances
Assets $ 884,538 $ 1,150,103 (23.1)
Total assets excluding those of discontinued
operations 884,538 680,226 30.0
Earning assets 821,307 580,085 41.6
Deposits and interest-bearing liabilities 715,095 525,623 36.0
Loans 589,837 496,671 18.8
Deposits 593,863 524,633 13.2
Stockholders' equity 120,253 112,085 7.3
Stockholders' equity / assets of continuing operations 13.60% 16.48% (17.5)
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Per Common Share Data
Income from continuing operations
Basic $ 0.45 $ 0.14 221.4
Diluted 0.43 0.14 207.1
Dividends 0.15 0.13 15.4
Market Value:
High $ 20.67 $ 17.25 19.8
Low 18.21 15.12 20.4
Close 18.55 17.25 7.5
Book Value 18.93 16.43 15.2
Tangible Book Value 18.35 15.92 15.3
Shares outstanding, end of period (000) 6,347 6,869 (7.6)
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Performance Ratios (annualized-continuing operations only)
Tax-equivalent net interest margin (1) 3.37% 4.06% (17.0)
Return on average assets (2) 1.23 0.52 135.6
Return on average equity 9.04 3.17 185.6
Efficiency ratio (3) 64.84 74.48 (12.8)
Effective tax rate 29.86 35.63 (16.2)
Dividend payout ratio (basic) 33.33 92.86 (64.1)
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(1) Interest income on tax-exempt securities and loans has been adjusted to a
tax-equivalent basis using the statutory federal income tax rate of 35%
(2) Income from continuing operations divided by assets, excluding those of
discontinue operations.
(3) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent
net interest income plus non-interest income, excluding securities gains,
net and asset sales gains, net.
NM Percentage change not meaningful
Continuing Operations Yield Analysis
First Defiance Financial Corp.
Three Months Ended March 31
-------------------------------------------------------------------
2003 2002
Average Yield Average Yield
Balance Interest(1) Rate(2) Balance Interest(1) Rate(2)
------- ------------------- ------- ----------- -------
Interest-earning assets:
Loans receivable $ 589,837 $ 9,398 6.46% $ 496,671 $9,003 7.35%
Securities 206,645 2,591 5.09 53,499 802 6.08
Interest Bearing Deposits 6,865 29 1.71 13,607 17 .51
FHLB stock and other 17,960 169 3.82 16,308 181 4.50
----------- -------- ---- ----------- ------ ----
Total interest-earning assets 821,307 12,187 6.02 580,085 10,003 6.99
Non-interest-earning assets (including
assets of discontinued operations) 63,231 570,018
------ -------
Total assets $ 884,538 $1,150,103
=========== ==========
Deposits and Interest-
bearing liabilities (4):
Interest bearing deposits $ 555,524 $3.534 2.58% $ 496,495 $3,928 3.21%
FHLB advances and other 156,561 1,814 4.70 7,698 81 4.27
Warehouse and term notes payable 3,010 9 1.21 21,430 192 3.63
----------- -------- ---- ----------- ------ ----
Total interest-bearing liabilities 715,095 5,357 3.04 525,623 4,201 3.24
Non-interest bearing deposits 38,339 - - 28,138 - -
----------- -------- ---- ----------- ------ ----
Total including non-interest-
bearing demand deposits 753,434 5,357 2.88 553,761 4,201 3.08
Other non-interest-bearing liabilities 10,851 484,257
----------- ----------- ------ ----
(including liabilities of
discontinued operations )
Total liabilities 764,285 1,038,018
Stockholders' equity 120,253 112,085
----------- -----------
Total liabilities and stock-
holders' equity $ 884,538 $1,150,103
Net interest income; interest =========== ===========
rate spread $6,830 2.98% $5,802 3.75%
======== ==== ====== ====
Net interest margin (3) 3.37% 4.06%
==== ====
Average interest-earning assets to average
Interest-bearing liabilities 115% 110%
==== ====
---------------------------------------------
(1) Interest on certain tax exempt loans and securities is not taxable for
Federal income tax purposes. In order to compare the tax-exempt yields on
these assets to taxable yields, the interest earned on these assets is
adjusted to a pre-tax equivalent amount based on the marginal corporate
federal income tax rate of 35%.
(2) Annualized
(3) Net interest margin is net interest income divided by average
interest-earning assets.
(4) This analysis does not reflect borrowings to fund discontinued operations.
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Selected Quarterly Information
First Defiance Financial Corp.
(in thousands, except per share data) 1st Qtr 2003 4th Qtr 2002 3rd Qtr 2002 2nd Qtr 2002 1 st Qtr 2002
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Summary of Operations
Tax-equivalent interest income (1) $ 12,018 $ 12,518 $ 12,405 $ 2,097 $ 9,822
Interest expense 5,357 5,701 5,952 6,189 4,201
Tax-equivalent net interest income (1) 6,661 6,817 6,453 5,908 5,621
Provision for loan losses 335 328 386 156 582
Tax-equivalent NII after provision for loan losses (1) 6,326 6,489 6,067 5,752 5,039
Investment securities gains/(losses) 631 - 36 - (15)
Non-interest income (excluding securities gains/losses) 4,160 4,518 3,235 2,737 2,440
Non-interest expense 7,015 6,702 7,184 6,313 5,993
Income taxes 1,157 1,319 568 607 491
Income from continuing operations 2,718 2,765 1,382 1,386 887
Discontinued operations, net of tax - (494) - 7,332 2,015
Income before effect of a change in accounting principle - 2,271 - 8,718 2,902
Cumulative effect in method of accounting for goodwill - - - - (194)
Net income 2,718 2,271 1,382 8,718 2,708
Tax equivalent adjustment (1) 227 221 204 183 93
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At Period End
Total assets $ 896,576 $ 884,245 $ 863,749 $ 880,379 $1,132,510
Total assets excluding those of discontinued operations 896,576 884,245 863,749 880,379 638,638
Earning assets 821,678 819,599 809,061 821,679 569,088
Loans 594,431 583,873 553,465 522,526 506,473
Allowance for loan losses 7,924 7,496 7,256 7,028 6,933
Deposits 607,966 599,573 590,792 601,996 606,774
Stockholders' equity 120,147 120,110 124,888 112,188 112,863
Stockholders' equity / assets of continuing operations 13.40% 13.58% 14.46% 12.74% 17.68%
Goodwill 3,658 3,636 3,602 3,569 3,529
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Average Balances (2)
Total assets $ 884,538 $ 877,940 $ 872,808 $ 885,136 $ 1,150,103
Total assets excluding those of discontinued operations 884,538 877,940 872,808 885,136 680,226
Earning assets 821,307 818,903 815,924 830,516 580,085
Deposits and interest-bearing liabilities 715,095 743,588 696,039 741,922 553,761
Loans 589,837 560,363 535,149 511,238 496,671
Deposits 593,863 596,053 593,780 608,020 524,633
Stockholders' equity 120,253 121,519 123,491 119,166 112,085
Stockholders' equity / assets of continuing operations 13.60% 13.84% 14.15% 13.46% 16.48%
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Per Common Share Data
Basic:
From continuing operations $ 0.45 $ 0.45 $ 0.22 $ 0.22 $ 0.14
Discontinued operations, net of tax - (0.08) - 1.14 0.31
Cumulative effect in method of accounting for goodwill - - - - (0.03)
Net income 0.45 0.37 0.22 1.36 0.42
Diluted:
From continuing operations$ 0.45 $ 0.43 $ 0.21 $ 0.21 $ 0.14
Discontinued operations, net of tax - (0.08) - 1.09 0.30
Cumulative effect in method of accounting for goodwill - - - - (0.03)
Net income 0.45 0.35 0.21 1.30 0.41
Dividends 0.15 0.15 0.13 0.13 0.13
Market Value:
High $ 20.67 $ 19.70 $ 21.13 $ 21.44 $ 17.25
Low 18.21 15.78 16.96 16.97 15.12
Close 18.55 18.90 17.17 20.05 17.25
Book Value 18.93 18.73 18.54 17.94 16.43
Shares outstanding, end of period (000) 6,347 6,412 6,737 6,810 6,869
Performance Ratios (annualized- continuing operations only)
Tax-equivalent net interest margin 3.37% 3.40% 3.25% 3.06% 4.06%
Return on average assets (3) 1.23 1.26 0.63 0.63 0.52
Return on average equity 9.04 9.10 4.48 4.65 3.17
Efficiency ratio (4) 64.84 59.12 73.88 73.02 74.48
Effective tax rate 29.86 32.30 29.13 30.46 35.63
Dividend payout ratio (basic) 33.33 33.33 59.09 59.09 92.86
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(1) Interest income on tax-exempt securities and loans has been adjusted to a
tax-equivalent basis using the statutory federal income tax rate of 35%
(2) Average balances do not reflect borrowings to fund discontinued operations
(3) Income from continuing operations divided by assets, excluding assets of
discontinued operations
(4) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent
net interest income plus non-interest income, excluding securities gains,
net and asset sales gains, net.
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Selected Quarterly Information
First Defiance Financial Corp.
(in thousands, except per share data) 1st Qtr 2003 4th Qtr 2002 3rd Qtr 2002 2nd Qtr 2002 1 st Qtr 2002
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Loan Portfolio Composition
One to four family residential real estate $ 149,717 $ 157,691 $ 165,113 $ 165,072 $166,112
Construction 13,342 15,357 11,646 8,977 5,054
Commercial real estate 252,939 227,754 202,069 191,471 180,576
Commercial 106,650 104,070 96,537 80,844 80,904
Consumer finance 35,938 37,579 38,725 39,279 38,127
Home equity and improvement 53,860 49,889 46,577 43,990 39,075
Total loans 612,446 592,340 560,648 529,633 509,848
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Less:
Loans in process 5,407 7,255 6,049 6,028 2,315
Deferred loan origination fees 1,217 1,212 1,134 1,079 1,060
Allowance for loan loss 7,924 7,496 7,256 7,028 6,933
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Net Loans $597,898 $576,377 $546,209 $515,498 $499,540
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Allowance for loan loss activity
Beginning allowance $ 7,496 $ 7,256 $ 7,028 $ 6,933 $ 6,548
Provision for loan losses 335 328 386 156 582
Credit loss charge-offs:
One to four family residential real estate - 28 18 15 49
Commercial real estate - - 110 20 54
Commercial 25 16 20 - -
Consumer finance 50 86 64 93 147
Home equity and improvement - - - - -
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Total charge-offs 75 130 212 128 250
Total recoveries 168 42 54 67 53
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Net charge-offs/(recoveries) (93) 88 158 61 197
Ending allowance $ 7,924 $ 7,496 $ 7,256 $7,028 $ 6,933
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Credit Quality
Non-accrual loans $ 2,756 2,525 $ 3,287 $ 3,052 $ 3,311
Loans over 90 days past due and still accruing - - - - -
Total non-performing loans (1) 2,756 2,525 3,287 3,052 3,311
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Real estate owned (REO) 59 206 371 335 194
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Total non-performing assets (1) 2,815 2,731 3,658 3,387 3,505
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Net charge-offs (93) 88 158 61 197
Allowance for loan losses / loans 1.34% 1.32% 1.33% 1.35% 1.37%
Allowance for loan losses / non-performing assets 281.49 274.48 198.36 207.50 197.80
Allowance for loan losses / non-performing loans 287.52 296.87 220.75 230.28 209.39
Non-performing assets / loans plus REO 0.48 0.48 0.67 0.65 0.69
Non-performing assets/total assets of continuing operations 0.31 0.31 0.42 0.38 0.55
Net charge-offs / average loans ( annualized) (0.06) 0.06 0.12 0.05 0.16
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Deposit Balances
Non-interest-bearing demand deposits $ 47,673 $ 43,936 $ 34,542 $ 32,388 $ 28,349
Interest-bearing demand deposits and money market 172,740 170,354 165,405 165,606 160,695
Savings deposits 41,375 39,363 39,569 39,766 38,750
Time deposits less than $264,938 282,464 276,296 291,438 304,362
Time deposits greater than $ 81,240 63,456 74,980 72,798 74,618
------- ------- ------- ------- -------
Total deposits $607,966 $ 599,573 $ 590,792 $ 601,996 $ 606,774
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(1) Non-performing loans consist of non-accrual loans that are contractually
past due 90 days or more and loans that are deemed impaired under the
criteria of FASB Statement No. 114. Non-performing assets are
non-performing loans plus real estate and other assets acquired by
foreclosure or deed-in-lieu thereof.