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[LOGO] FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND
118 BALTIMORE STREET / CUMBERLAND, MARYLAND 21502-2366 / 301/724-3363
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
August 1, 1996 Phone: 301/724-3363
FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND ANNOUNCES
NET INCOME OF $3.6 MILLION FOR FISCAL 1996
Cumberland, MD, August 1, 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 year
ended June 30, 1996 of $3.6 MILLION or $1.65 per share, as compared to a net
loss of $1.2 million or $0.56 per share for the prior fiscal year.
The Corporation's return on average assets and return on average equity were
above industry averages at 1.09% and 8.97%, respectively, for the year ended
June 30, 1996. Fiscal 1996 results represent record core earnings for the
Corporation as net income before income taxes and accounting changes was $5.9
million for fiscal 1996 compared to a loss of $2.0 million in fiscal 1995, and
income of $3.8 million and $3.4 million in fiscal 1994 and fiscal 1993,
respectively.
For the fourth quarter ended June 30, 1996, the Corporation realized
consolidated net income of $999,000 or $0.46 per share, compared to a net loss
of $1.2 million or $0.54 per share for the same period in the prior fiscal
year. The prior year quarterly and annual net losses were primarily the
result of the Corporation incurring $5.5 million in provisions for loan losses
in the third and fourth quarters of fiscal 1995.
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August 1, 1996
Total stockholders' equity and book value per share increased to $41.7 million
and $19.16 per share, respectively, at June 30, 1996, as compared to $38.5
million and $18.06 per share, respectively, at June 30, 1995. Total assets
minimally decreased to $322.0 million at June 30, 1996 from $329.4 million at
June 30, 1995. This decrease in assets reflects management's ongoing efforts
to reduce the Corporation's cost of funds and enhance net interest margin by
planned decreases in higher costing certificates of deposit in order to
position the Corporation for the utilization of more favorable sources of
funding for future growth.
Improvements in core operating results for fiscal 1996, included an increase
of $1.0 million or 7.6% in net interest income, to $14.4 million in fiscal
1996, from $13.4 million in fiscal 1995 and a reduction in operating expenses
of $1.4 million or 12.9%, to $9.3 million in fiscal 1996, from $10.6 million
in fiscal 1995. Contributing to the increase in net interest income was an
improvement in the Corporation's net interest margin to 4.52% for fiscal 1996,
up from 4.11% in fiscal 1995. This increase in net interest margin can be
attributed to a strategic realignment of the Corporation's securities
portfolio achieved during fiscal 1996 by reinvesting underperforming
securities and securities with significant pre-payment risk into higher
yielding government agency securities and loans, a planned reduction in
deposit costs and increased average loan balances from fiscal 1995 to fiscal
1996. New loan production for fiscal 1996 was $98.4 million resulting in a
net increase in loans receivable of $20.0 million or 9.0% to $243.1 million at
June 30, 1996 from $223.1 million at June 30, 1995.
During fiscal 1996, the Corporation continued its steady progress in reducing
the level of problem assets. Non-performing assets decreased $1.2 million or
16.0% to $6.4 million at June 30, 1996 from $7.6 million at June 30, 1995.
Total loan loss and real estate owned reserves represented 121.4% of non-
performing assets at June 30, 1996.
Patrick J. Coyne, Chairman of the Board, President and Chief Executive Officer
of the Corporation and the Bank, stated that the continued improvement in the
Corporation's profitability can be directly attributed to management's efforts
to improve the asset/liability mix and all aspects of operations. These
efforts have been part of ongoing initiatives, implemented during the second
half of fiscal 1995, to enhance shareholder value and improve customer
service. The initiatives include: the previously announced stock repurchase
program; offering new and improved loan and deposit products designed to meet
the specific needs of customers in the Bank's market areas; modernizing the
Corporation's data processing capabilities; streamlining internal processes
and procedures in order to improve the efficiency of operations; providing
training to the Corporation's staff; and maintaining continued involvement in
community organizations and activities.
Mr. Coyne further stated that he is pleased with the fiscal 1996 results and
the overall improvement of the Corporation's financial and operational
performance, and noted that the continued balance sheet strength, loan growth
momentum, enhanced asset/liability mix and improved operating activities
provide a solid base for growth and continued favorable performance trends.
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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August 1, 1996
FIRST FINANCIAL CORPORATION OF WESTERN MARYLAND
SUMMARY OF OPERATING RESULTS
FISCAL YEAR ENDED JUNE 30: 1996 1995
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Net income (loss) before income taxes $ 5,871,000 $(1,984,000)
Provision for (benefit from) income taxes $ 2,271,000 $ (765,000)
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Net income (loss) $ 3,600,000 $(1,219,000)
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Provision for loan losses $600,000 $5,985,000
Net income (loss) per share $1.65 $(0.56)
Average shares outstanding 2,180,269 2,174,825
Return on average assets 1.09% NA
Return on average stockholders' equity 8.97% NA
QUARTER ENDED JUNE 30: 1996 1995
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Net income (loss) before income taxes $ 1,629,000 $(1,937,000)
Provision for (benefit from) income taxes $ 630,000 $ (747,000)
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Net income (loss) $ 999,000 $(1,190,000)
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Provision for loan losses $150,000 $2,772,000
Net income (loss) per share $0.46 $(0.54)
Average shares outstanding 2,197,178 2,185,079
Annualized return on average assets 1.23% NA
Annualized return on average stockholders' equity 9.66% NA
06/30/96 06/30/95
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Total assets $321,994,000 $329,375,000
Total loans $243,113,000 $223,066,000
Total deposits $274,756,000 $283,360,000
Total stockholders' equity $41,707,000 $38,470,000
Total shares outstanding 2,176,739 2,130,212
Book value per share $19.16 $18.06