EXHIBIT 1
FINANCIAL EARNINGS RELEASE
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FIRST SHENANGO BANCORP, INC.
First Federal Plaza, 25 N. Mill Street, New Castle, PA 16101
Contacts: Francis A. Bonadio, President and Chief Executive Officer
Lonny D. Robinson, Vice President, Chief Financial Officer
and Treasurer
Phone: 412-654-6605
FAX: 412-658-2971
FOR IMMEDIATE, RELEASE
FIRST SHENANGO BANCORP, INC. ANNOUNCES FIRST QUARTER EARNINGS
NEW CASTLE, PA, April 23, 1998 --First Shenango Bancorp, Inc., the holding
company for First Federal Savings Bank of New Castle, today reported net
income for the first quarter ended March 31, 1998, of $889,000 compared to net
income of $1,137,000 for the first quarter ended March 31, 1997. Diluted
earnings per share for the 1998 quarter were $0.43 versus $0.56 for the 1997
quarter. For the 1998 quarter, the return on average assets and return on
average equity were 0.93% and 7.48%, respectively, compared to 1.15%, and
10.68% for the 1997 quarter. Expenses of $165,000 relating to the pending
merger of First Shenango with FirstFederal Financial Services Corp (NASDAQ:
"FFSW"), which was announced February 9, 1998, negatively impacted the 1998
quarter. Without these expenses, some of which are not deductible for federal
income taxes, net income would have been $1,024,000, return on average equity
8.61% and return on average assets 1.07%. As previously announced, the merger
is expected to be consummated in the third quarter, pending First Shenango and
FirstFederal Financial shareholder approval, regulatory approval and other
customary conditions of closing. Employee Stock Ownership Plan expenses
increased $49,000 due to the Company's higher stock price in 1998. A reduction
in net interest income also contributed to the decline in net income,
primarily due to declines in the average balances in the investment and
consumer loan portfolios, partially offset by a reduction in interest-bearing
liabilities due to the repayment of FHLB borrowings. Increases in mortgage
loans outstanding offset lower automobile loan balances, however, at generally
lower interest rates.
Total shareholders' equity was $48,292,000 at March 31, 1998, an increase of
$430,000 from $47,862,000 at December 31, 1997.
At March 31, 1998, First Shenango's assets totalled $403,146,000 compared to
$374,972,000 al December 31, 1997.
First Shenango Bancorp is the holding company for First Federal Savings Bank
of New Castle, which operates four full-service offices in Lawrence County,
Pennsylvania. The Company's stock is traded under the symbol "SHEN" on the
Nasdaq National Market.
-Continued-
FIRST SHENANGO BANCORP, INC. (SHEN)
FINANCIAL HIGHLIGHTS (Unaudited)
Three Months Ended
March 31,
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INCOME STATEMENT DATA 1998 1997
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Interest income $6,965,000 $7,433,000
Interest expense 3,890,000 4,245,000
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Net interest income before provision for loan losses 3,075,000 3,188,000
Provision for loan losses 155,000 185,000
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Net interest income after provision for loan losses 2,920,000 3,003,000
Net gain on sale of investments and loans 1,000 0
Other non-interest income 190,000 204,000
Non-interest expense 1,723,000 1,463,000
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Income before income taxes 1,388,000 1,744,000
Income taxes 499,000 607,000
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Net income $ 889,000 $1,137,000
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Three Months Ended
March 31,
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COMMON SHARE DATA (PER SHARE BASIS) 1998 1997
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Basic earnings per share $ 0.44 $ 0.58
Diluted earnings per share $ 0.43 $ 0.56
Cash dividend declared $ 0.15 $ 0.12
BALANCE SHEET DATA March 31, 1998 December 31, 1997
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Total assets $403,146,000 $374,972,000
Loans receivable, net $253,228,000 $256,006,000
Investment securities $116,074,000 $ 94,659,000
Deposits $275,393,000 $275,221,000
Shareholders' equity $ 48,292,000 $ 47,862,000
Common shares outstanding (net of treasury shares) 2,069,007 2,069,007
Book value per common share outstanding $ 23.34 $ 23.13
-Continued-
FIRST SHENANGO BANCORP, INC. (SHEN)
FINANCIAL HIGHLIGHTS (Unaudited)
Three Months Ended
March 31,
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AVERAGE BALANCES 1998 1997
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Interest-earning assets $376,499,000 $393,786,000
Assets 386,744,000 402,866,000
Interest-bearing liabilities 328,495,000 351,728,000
Shareholders' equity 48,206,000 43,176,000
Three Months Ended
March 31,
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RATIOS(1) 1998 1997
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Return on average assets 0.93% 1.15%
Return on average equity 7.48% 10.68%
Net interest margin to average assets(2) 3.45% 3.42%
Operating expense to average assets 1.81% 1.47%
Efficiency ratio 52.89% 43.15%
Average interest-earning assets to average
interest-bearing liabilities 114.61% 111.96%
Average equity to average assets 12.46% 10.72%
(1) With the exception of end-of-period ratios, all ratios are based on monthly
average balances and are annualized where appropriate.
(2) Computed on a fully taxable-equivalent basis.
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