First Defiance Financial Corp. Announces 2013 First Quarter Earnings

  • Net Income of $5.6 million for 2013 first quarter, up from $4.2 million in the first quarter of 2012
  • Provision for Loan Losses of $425,000, down from $3.5 million in the first quarter of 2012
  • Net Interest Margin of 3.78%, flat with the first quarter of 2012

DEFIANCE, Ohio--()--First Defiance Financial Corp. (NASDAQ: FDEF) today announced that net income for its first quarter ended March 31, 2013 totaled $5.6 million, or $0.55 per diluted common share, compared to $4.2 million or $0.37 per diluted common share for the quarter ended March 31, 2012.

“We are encouraged by the improvement in net income results versus last year and the continuation of the momentum built in the latter part of 2012,” said William J. Small, Chairman, President, and Chief Executive Officer of First Defiance Financial Corp. “However, we are still feeling the strain from the recent economic cycle, which has impacted loan growth and has caused some drag on first quarter performance.”

Credit Quality

The first quarter results include expense for provision for loan losses of $425,000, compared with $3.5 million for the same period in 2012 and $2.6 million in the fourth quarter of 2012.

Non-performing loans totaled $35.3 million at March 31, 2013, a decrease from $45.4 million at March 31, 2012. In addition, First Defiance had $4.3 million of real estate owned at March 31, 2013 compared to $3.4 million at March 31, 2012. Accruing troubled debt restructured loans were $28.0 million at March 31, 2013 compared with $3.8 million at March 31, 2012. For the first quarter of 2013, First Defiance recorded net charge-offs of $677,000, down from $7.9 million in the first quarter of 2012 and down from the fourth quarter level of $2.2 million. The allowance for loan loss as a percentage of total loans was 1.76% at March 31, 2013 compared with 1.96% at March 31, 2012.

“There were several positive indicators of overall improvement in asset quality during the first quarter including significant declines in net charge-offs and in classified loans. The levels of charge-offs and provision expense were reflections of the improvement in credit quality,” said Small. “We see this as an overall improving trend developing in those categories as the economy stabilizes.”

Net Interest Income down compared to first quarter 2012

Net interest income of $16.5 million in the first quarter of 2013 was down from $17.2 in the first quarter of 2012. Net interest margin was flat at 3.78% for the first quarter of 2013 compared to the first quarter of 2012. Yield on interest earning assets declined by 32 basis points, to 4.22% in the first quarter of 2013 from 4.54% in the first quarter of 2012. The cost of interest-bearing liabilities decreased by 39 basis points in the first quarter of 2013 to 0.54% from 0.93% in the first quarter of 2012.

“The stability of the net interest margin for the quarter is noteworthy,” said Small. “The low interest rates and low loan demand present significant challenges to margin management. We will continue to look for additional opportunities to maintain our margin, as well as other ways to minimize the impact of the sustained low rate environment.”

Non-Interest Income up from first quarter 2012

First Defiance’s non-interest income for the first quarter of 2013 was $9.0 million compared with $8.4 million in the first quarter of 2012. Mortgage banking income increased to $2.8 million in the first quarter of 2013, up from $2.4 million in the first quarter of 2012. Gains from the sale of mortgage loans decreased in the first quarter of 2013 to $2.2 million from $2.5 million in the first quarter of 2012. Mortgage loan servicing revenue was $870,000 in the first quarter of 2013, which was up slightly from $844,000 in the first quarter of 2012. Service fees and other charges were $2.4 million in the first quarter of 2013, down from $2.7 million in the first quarter of 2012.

The continuing low rate environment helped contribute to solid first quarter of 2013 mortgage originations, although they were down slightly from the first quarter of 2012. The Company had a positive change in the valuation adjustment in mortgage servicing assets (“MSR”) of $473,000 in the first quarter of 2013 compared with a negative adjustment of $79,000 in the first quarter of 2012. The MSR positive valuation adjustment is a reflection of the increase in fair value of certain sectors of the Company’s portfolio of MSRs. The increase was driven by a slight increase in market rates in the quarter which also contributed to lower amortization of servicing rights.

Income from the sale of insurance and investment products increased to $3.0 million for the first quarter of 2013, from $2.5 million in the first quarter of 2012. First Defiance’s insurance subsidiary, First Insurance Group of the Midwest, Inc., typically recognizes contingent revenues during the first quarter. These revenues are bonuses paid by insurance carriers when the Company achieves certain loss ratios or growth targets. In the first quarter of 2013, First Insurance Group earned $944,000 of contingent income, compared to $504,000 during the first quarter of 2012.

We are pleased with the ongoing strong mortgage banking contribution as well as the improvement in the overall insurance operations income stream,” continued Mr. Small. “Mortgage production maintained its intensity in this quarter, with robust activity carrying into the second quarter.”

Non-Interest Expenses

Total non-interest expense was $17.2 million in the first quarter of 2013, an increase from $16.3 million in the first quarter of 2012.

Compensation and benefits increased to $8.8 million in the first quarter of 2013 compared to $8.5 in the first quarter of 2012. The Company granted pay increases and accrued for bonus payments based on meeting 2013 targeted performance in the first quarter of 2013. Other non-interest expense increased to $3.9 million in the first quarter of 2013 from $3.3 million in the first quarter of 2012. An accrual for estimated secondary market buy-back losses of $581,000 was established in the first quarter of 2013 compared to no losses accrued in the first quarter of 2012. These losses were accrued and expensed as of March 31, 2013 based on an estimated exposure to repurchase requests resulting from notifications received from Fannie Mae’s post-foreclosure review process during the first quarter of 2013.

Total Assets at $2.04 Billion

Total assets at March 31, 2013 were $2.04 billion, compared to $2.14 billion at March 31, 2012. Net loans receivable (excluding loans held for sale) were $1.48 billion at March 31, 2013, compared to $1.45 billion at March 31, 2012. Total cash and cash equivalents were $156.3 million at March 31, 2013 compared with $136.8 million at December 31, 2012 and $249.9 million at March 31, 2012. Also, at March 31, 2013, goodwill and other intangible assets totaled $65.9 million compared to $66.3 million at December 31, 2012 and $67.3 million at March 31, 2012.

Total deposits at March 31, 2013 were $1.66 billion compared with $1.67 billion at December 31, 2012, and $1.67 billion at March 31, 2012. Non-interest bearing deposits at March 31, 2013 were $291.8 million compared to $315.1 million at December 31, 2012 and $265.7 million at March 31, 2012. Total stockholders’ equity was $262.6 million at March 31, 2013 compared to $258.1 million at December 31, 2012 and $281.4 million at March 31, 2012.

Conference Call

First Defiance Financial Corp. will host a conference call at 11:00 a.m. (EDT) on Tuesday, April 23, 2013 to discuss the earnings results and business trends. The conference call may be accessed by calling 1-888-317-6016. A live webcast may be accessed at http://services.choruscall.com/links/fdef130423.html.

Audio replay of the Internet Webcast will be available at www.fdef.com until April 23, 2014 at 9:00 a.m.

Annual Meeting of Shareholders

First Defiance Financial Corp. will host its Annual Meeting of Shareholders at 2:00 p.m. on Tuesday, April 23, 2013 at the First Federal Bank operations center at 25600 Elliott Road in Defiance. Following the meeting, the audio replay, slide presentation and transcript will be available at the Company’s Website at www.fdef.com.

First Defiance Financial Corp.

First Defiance Financial Corp., headquartered in Defiance, Ohio, is the holding company for First Federal Bank of the Midwest and First Insurance Group. First Federal operates 33 full service branches and 42 ATM locations in northwest Ohio, southeast Michigan and Fort Wayne, Indiana. First Insurance Group is a full service insurance agency with six offices throughout northwest Ohio.

For more information, visit the company’s Web site at www.fdef.com.

Financial Statements and Highlights Follow

Safe Harbor Statement

This news release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 B of the Securities Act of 1934, as amended, which are intended to be safe harbors created thereby. Those statements may include, but are not limited to, all statements regarding intent, beliefs, expectations, projections, forecasts and plans of First Defiance Financial Corp. and its management, and specifically include statements regarding: changes in economic conditions, the nature, extent and timing of governmental actions and reforms, future movements of interest rates, the production levels of mortgage loan generation, the ability to continue to grow loans and deposits, the ability to benefit from a changing interest rate environment, the ability to sustain credit quality ratios at current or improved levels, the ability to sell real estate owned properties, continued strength in the market area for First Federal Bank of the Midwest, and the ability of the Company to grow in existing and adjacent markets. These forward-looking statements involve numerous risks and uncertainties, including those 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 and other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission (SEC) filings, including the Company's Annual Report on Form 10-K for the year ended December 31, 2012. One or more of these factors have affected or could in the future affect the Company's business and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this news release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other persons, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this news release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.

     
Consolidated Balance Sheets
First Defiance Financial Corp. (Unaudited)
 
March 31, December 31, March 31,
(in thousands)   2013   2012   2012
 
Assets
Cash and cash equivalents
Cash and amounts due from depository institutions $ 31,342 $ 45,832 $ 32,882
Interest-bearing deposits   125,000     91,000     217,000  
156,342 136,832 249,882
Securities
Available-for sale, carried at fair value 196,132 194,101 242,964
Held-to-maturity, carried at amortized cost   492     508     644  
196,624 194,609 243,608
 
Loans 1,507,008 1,525,257 1,473,955
Allowance for loan losses   (26,459 )   (26,711 )   (28,833 )
Loans, net 1,480,549 1,498,546 1,445,122
Loans held for sale 10,761 22,064 11,201
Mortgage servicing rights 8,379 7,833 8,498
Accrued interest receivable 6,025 5,594 6,243
Federal Home Loan Bank stock 19,354 20,655 20,655
Bank Owned Life Insurance 42,061 41,832 36,128
Office properties and equipment 39,218 39,663 40,548
Real estate and other assets held for sale 4,313 3,805 3,408
Goodwill 61,525 61,525 61,525
Core deposit and other intangibles 4,402 4,738 5,776
Deferred taxes 301 78 -
Other assets   9,557     9,174     9,670  
Total Assets $ 2,039,411   $ 2,046,948   $ 2,142,264  
 
Liabilities and Stockholders’ Equity
Non-interest-bearing deposits $ 291,765 $ 315,132 $ 265,716
Interest-bearing deposits   1,364,583     1,352,340     1,405,654  
Total deposits 1,656,348 1,667,472 1,671,370
Advances from Federal Home Loan Bank 12,784 12,796 81,830
Notes payable and other interest-bearing liabilities 52,747 51,702 54,609
Subordinated debentures 36,083 36,083 36,083
Advance payments by borrowers for tax and insurance 1,366 1,473 1,316
Deferred taxes - - 404
Other liabilities   17,440     19,294     15,288  
Total liabilities 1,776,768 1,788,820 1,860,900
Stockholders’ Equity
Preferred stock, net of discount - - 36,687
Common stock, net 127 127 127
Common stock warrant 878 878 878
Additional paid-in-capital 136,406 136,046 135,888
Accumulated other comprehensive income 3,808 4,274 3,937
Retained earnings 168,082 164,103 151,163
Treasury stock, at cost   (46,658 )   (47,300 )   (47,316 )
Total stockholders’ equity   262,643     258,128     281,364  
Total Liabilities and Stockholders’ Equity $ 2,039,411   $ 2,046,948   $ 2,142,264  
 
Consolidated Statements of Income (Unaudited)
First Defiance Financial Corp.
  Three Months Ended

March 31,

(in thousands, except per share amounts)   2013   2012
Interest Income:  
Loans $ 16,796 $ 18,650
Investment securities 1,403 1,783
Interest-bearing deposits 58 92
FHLB stock dividends   219   229  
Total interest income 18,476 20,754
Interest Expense:
Deposits 1,647 2,369
FHLB advances and other 90 751
Subordinated debentures 152 331
Notes Payable   60   104  
Total interest expense   1,949   3,555  
Net interest income 16,527 17,199
Provision for loan losses   425   3,503  
Net interest income after provision for loan losses 16,102 13,696
Non-interest Income:
Service fees and other charges 2,385 2,671
Mortgage banking income 2,830 2,445
Gain on sale of non-mortgage loans 15 9
Gain on sale of securities 53 43
Insurance and investment sales commissions 3,036 2,536
Trust income 163 153
Income from Bank Owned Life Insurance 229 220
Other non-interest income   251   342  
Total Non-interest Income 8,962 8,419
Non-interest Expense:
Compensation and benefits 8,798 8,465
Occupancy 1,654 1,788
FDIC insurance premium 656 669
State franchise tax 629 514
Data processing 1,181 1,169
Amortization of intangibles 336 375
Other non-interest expense   3,945   3,279  
Total Non-interest Expense   17,199   16,259  
Income before income taxes 7,865 5,856
Income taxes   2,306   1,703  
Net Income $ 5,559 $ 4,153  
 
Dividends Accrued on Preferred Shares - (462 )
Accretion on Preferred Shares - (46 )
Redemption of Preferred Shares   -   -  
 
Net Income Applicable to Common Shares $ 5,559 $ 3,645  
 
Earnings per common share:
Basic $ 0.57 $ 0.37
Diluted $ 0.55 $ 0.37
 
Average Shares Outstanding:
Basic 9,736 9,726
Diluted 10,105 9,970
 
Financial Summary and Comparison      
First Defiance Financial Corp. (Unaudited)
Three Months Ended

March 31,

(dollars in thousands, except per share data)   2013   2012   % change
Summary of Operations
 
Tax-equivalent interest income (1) $ 18,885 $ 21,144 (10.7 )%
Interest expense 1,949 3,555 (45.2 )
Tax-equivalent net interest income (1) 16,936 17,589 (3.7 )
Provision for loan losses 425 3,503 (87.9 )
Tax-equivalent NII after provision for loan loss (1) 16,511 14,086 17.2
Investment Securities gains 53 43 23.3

Impairment losses on securities

- - NM
Non-interest income (excluding securities gains/losses) 8,909 8,376 6.4
Non-interest expense 17,199 16,259 5.8
Income taxes 2,306 1,703 35.4
Net Income 5,559 4,153 33.9
Dividends Declared on Preferred Shares - (462 ) (100.0 )
Accretion on Preferred Shares - (46 ) (100.0 )
Net Income Applicable to Common Shares 5,559 3,645 52.5
Tax equivalent adjustment (1)     409       390     4.9  
At Period End
Assets 2,039,411 2,142,264 (4.8 )
Earning assets 1,858,747 1,966,419 (5.5 )
Loans 1,507,008 1,473,955 2.2
Allowance for loan losses 26,459 28,833 (8.2 )
Deposits 1,656,348 1,671,370 (0.9 )
Stockholders’ equity     262,643       281,364     (6.7 )
Average Balances
Assets 2,027,906 2,080,502 (2.5 )
Earning assets 1,823,089 1,879,393 (3.0 )
Loans 1,500,222 1,781,710 (15.8 )
Deposits and interest-bearing liabilities 1,746,092 1,456,807 19.9
Deposits 1,650,772 1,610,275 2.5
Stockholders’ equity 259,625 279,848 (7.2 )
Stockholders’ equity / assets     12.80 %     13.45 %   (4.8 )
Per Common Share Data
Net Income
Basic $ 0.57 $ 0.37 54.1
Diluted 0.55 0.37 48.6
Dividends 0.10 0.05 100.0
Market Value:
High $ 23.75 $ 17.76 33.7
Low 18.42 14.41 27.8
Close 23.32 16.86 38.3
Common Book Value 26.80 25.06 7.0
Tangible Common Book Value 20.05 18.14 10.5
Shares outstanding, end of period (000)     9,766       9,728     0.4  
Performance Ratios (annualized)
Tax-equivalent net interest margin (1) 3.78 % 3.78 % 0.1
Return on average assets 1.11 % 0.80 % 38.5
Return on average equity 8.68 % 5.97 % 45.5
Efficiency ratio (2) 66.55 % 62.62 % 6.3
Effective tax rate 29.32 % 29.08 % 0.8
Dividend payout ratio (basic)     17.54 %     13.51 %   29.8  
 

(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)

Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains or losses, net.

NM

Percentage change not meaningful

 
Income from Mortgage Banking
   
Revenue from sales and servicing of mortgage loans consisted of the following:
 
Three Months Ended

March 31,

(dollars in thousands)   2013   2012
 
Gain from sale of mortgage loans $ 2,176 $ 2,544
Mortgage loan servicing revenue (expense):
Mortgage loan servicing revenue 870 844
Amortization of mortgage servicing rights (689 ) (864 )
Mortgage servicing rights valuation adjustments   473     (79 )
  654     (99 )
Total revenue from sale and servicing of mortgage loans $ 2,830   $ 2,445  
 
           
Yield Analysis
First Defiance Financial Corp.
Three Months Ended March 31,
(dollars in thousands)
2013 2012
Average Yield Average Yield
Balance Interest(1) Rate(2) Balance Interest(1) Rate(2)
Interest-earning assets:
Loans receivable $ 1,500,222 $ 16,814 4.55 % $ 1,456,807 $ 18,678 5.16 %
Securities 196,571 1,794 3.85 % 237,541 2,145 3.76 %
Interest Bearing Deposits 106,332 58 0.22 % 164,390 92 0.23 %
FHLB stock   19,964   219 4.45 %   20,655   229 4.46 %
Total interest-earning assets 1,823,089 18,885 4.22 % 1,879,393 21,144 4.54 %
Non-interest-earning assets   204,817   201,109
Total assets $ 2,027,906 $ 2,080,502
Deposits and Interest-bearing liabilities:
Interest bearing deposits $ 1,356,547 $ 1,647 0.49 % $ 1,365,021 $ 2,369 0.70 %
FHLB advances and other 12,788 90 2.85 % 81,834 751 3.69 %
Other Borrowings 46,396 60 0.52 % 53,403 104 0.78 %
Subordinated debentures   36,136   152 1.71 %   36,198   331 3.68 %
Total interest-bearing liabilities 1,451,867 1,949 0.54 % 1,536,456 3,555 0.93 %
Non-interest bearing deposits   294,225   - -   245,254   - -
Total including non-interest-bearing demand deposits 1,746,092 1,949 0.45 % 1,781,710 3,555 0.80 %
Other non-interest-bearing liabilities   22,189   18,944
Total liabilities 1,768,281 1,800,654
Stockholders' equity   259,625   279,848
Total liabilities and stockholders' equity $ 2,027,906   $ 2,080,502  
Net interest income; interest rate spread $ 16,936 3.68 % $ 17,589 3.61 %
Net interest margin (3) 3.78 % 3.78 %
Average interest-earning assets to average interest bearing liabilities 126 % 122 %
 

(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.

 
Selected Quarterly Information
First Defiance Financial Corp.
         
(dollars in thousands, except per share data)   1st Qtr 2013   4th Qtr 2012   3rd Qtr 2012   2nd Qtr 2012   1st Qtr 2012
Summary of Operations
Tax-equivalent interest income (1) $ 18,885 $ 19,993 $ 20,525 $ 20,935 $ 21,144
Interest expense 1,949 2,186 2,923 3,273 3,555
Tax-equivalent net interest income (1) 16,936 17,807 17,602 17,662 17,589
Provision for loan losses 425 2,618 705 4,097 3,503
Tax-equivalent NII after provision for loan losses (1) 16,511 15,189 16,897 13,565 14,086
Investment securities gains, net of impairment 53 1,606 103 382 43
Non-interest income (excluding securities gains/losses) 8,909 8,574 7,677 7,612 8,376
Non-interest expense 17,199 17,538 16,450 15,532 16,259
Income taxes 2,306 2,253 2,366 1,690 1,703
Net income 5,559 5,157 5,434 3,921 4,153
Dividends Declared on Preferred Shares - - (3 ) (435 ) (462 )
Accretion on Preferred Shares - - (8 ) (305 ) (46 )
Redemption on Preferred Shares - - 642 - -
Net Income Applicable to Common Shares 5,559 5,157 5,423 3,823 3,645
Tax equivalent adjustment (1)     409       421       427       416       390  
At Period End
Total assets $ 2,039,411 $ 2,046,948 $ 2,055,672 $ 2,067,616 $ 2,142,264
Earning assets 1,858,747 1,853,585 1,874,671 1,885,846 1,966,419
Loans 1,507,008 1,525,257 1,512,132 1,500,637 1,473,955
Allowance for loan losses 26,459 26,711 26,310 26,409 28,833
Deposits 1,656,348 1,667,472 1,609,350 1,613,611 1,671,370
Stockholders’ equity 262,643 258,128 255,136 249,870 281,364
Stockholders’ equity / assets 12.88 % 12.61 % 12.41 % 12.08 % 13.13 %
Goodwill     61,525       61,525       61,525       61,525       61,525  
Average Balances
Total assets $ 2,027,906 $ 2,023,890 $ 2,047,139 $ 2,102,675 $ 2,080,502
Earning assets 1,823,089 1,815,263 1,849,715 1,903,714 1,879,393
Loans 1,500,222 1,509,611 1,481,995 1,462,312 1,456,807
Deposits and interest-bearing liabilities 1,746,092 1,744,274 1,774,312 1,800,036 1,781,710
Deposits 1,650,772 1,633,432 1,605,749 1,629,094 1,610,275
Stockholders’ equity 259,625 256,304 251,592 281,031 279,848
Stockholders’ equity / assets     12.80 %     12.66 %     12.29 %     13.37 %     13.45 %
Per Common Share Data
Net Income:
Basic $ 0.57 $ 0.53 $ 0.56 $ 0.39 $ 0.37
Diluted 0.55 0.52 0.54 0.38 0.37
Dividends 0.10 0.05 0.05 0.05 0.05
Market Value:
High $ 23.75 $ 19.38 $ 18.06 $ 17.46 $ 17.76
Low 18.42 15.75 15.80 15.23 14.41
Close 23.32 19.19 17.26 17.12 16.86
Common Book Value 26.80 26.44 26.13 25.49 25.06
Shares outstanding, end of period (in thousands)     9,766       9,729       9,729       9,729       9,728  
Performance Ratios (annualized)
Tax-equivalent net interest margin (1) 3.78 % 3.92 % 3.80 % 3.75 % 3.78 %
Return on average assets 1.11 % 1.01 % 1.06 % 0.75 % 0.80 %
Return on average equity 8.68 % 8.00 % 8.59 % 5.61 % 5.97 %
Efficiency ratio (2) 66.55 % 66.48 % 65.07 % 61.45 % 62.62 %
Effective tax rate 29.32 % 30.40 % 30.33 % 30.12 % 29.08 %
Common dividend payout ratio (basic)     17.54 %     9.43 %     8.93 %     12.82 %     13.51 %
 

(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)

Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains, net.

 
Selected Quarterly Information
First Defiance Financial Corp.
         
(dollars in thousands, except per share data)   1st Qtr 2013   4th Qtr 2012   3rd Qtr 2012   2nd Qtr 2012   1st Qtr 2012
Loan Portfolio Composition
One to four family residential real estate $ 197,675 $ 200,826 $ 210,053 $ 210,520 $ 202,132
Construction 33,398 37,788 31,428 22,923 36,362
Commercial real estate 802,098 797,385 792,351 775,526 790,168
Commercial 365,551 383,817 365,510 372,266 326,904
Consumer finance 15,549 15,936 16,785 17,127 17,647
Home equity and improvement   106,524       108,718       111,563       112,427       114,891  
Total loans 1,520,795 1,544,470 1,527,690 1,510,789 1,488,104
Less:
Loans in process 13,084 18,478 14,831 9,439 13,430
Deferred loan origination fees 703 735 727 713 719
Allowance for loan loss   26,459       26,711       26,310       26,409       28,833  
Net Loans $ 1,480,549     $ 1,498,546     $ 1,485,822     $ 1,474,228     $ 1,445,122  
                     
Allowance for loan loss activity
Beginning allowance 26,711 26,310 26,409 28,833 $ 33,254
Provision for loan losses 425 2,618 705 4,097 3,503
Credit loss charge-offs:
One to four family residential real estate 206 976 217 584 738
Commercial real estate 266 593 780 5,448 4,496
Commercial 205 541 355 486 2,666
Consumer finance 46 59 19 14 41
Home equity and improvement   272       497       203       254       211  
Total charge-offs 995 2,666 1,574 6,786 8,152
Total recoveries   318       449       770       265       228  
Net charge-offs (recoveries)   677       2,217       804       6,521       7,924  
Ending allowance $ 26,459     $ 26,711     $ 26,310     $ 26,409     $ 28,833  
                     
Credit Quality
Total non-performing loans (1) $ 35,283 $ 32,570 $ 37,803 $ 41,702 $ 45,351
Real estate owned (REO)   4,313       3,805       2,843       3,538       3,408  
Total non-performing assets (2) $ 39,596     $ 36,375     $ 40,646     $ 45,240     $ 48,759  
Net charge-offs 677 2,217 804 6,521 7,924
 
Restructured loans, accruing (3) 27,981 28,203 4,305 3,581 3,820
 
Allowance for loan losses / loans 1.76 % 1.75 % 1.74 % 1.76 % 1.96 %
Allowance for loan losses / non-performing assets 66.82 % 73.43 % 64.73 % 58.38 % 59.13 %
Allowance for loan losses / non-performing loans 74.99 % 82.01 % 69.60 % 63.33 % 63.58 %
Non-performing assets / loans plus REO 2.62 % 2.38 % 2.68 % 3.01 % 3.30 %
Non-performing assets / total assets 1.94 % 1.78 % 1.98 % 2.19 % 2.28 %
Net charge-offs / average loans (annualized) 0.18 % 0.59 % 0.22 % 1.78 % 2.18 %
                     
Deposit Balances
Non-interest-bearing demand deposits $ 291,765 $ 315,132 $ 271,305 $ 261,211 $ 265,716
Interest-bearing demand deposits and money market 681,061 664,857 636,510 628,760 665,889
Savings deposits 177,336 166,945 166,155 165,699 165,325
Retail time deposits less than $100,000 330,870 342,472 356,369 370,443 383,471
Retail time deposits greater than $100,000 173,379 176,029 176,725 180,594 183,420
National/Brokered time deposits   1,937       2,037       2,286       6,904       7,549  
Total deposits $ 1,656,348     $ 1,667,472     $ 1,609,350     $ 1,613,611     $ 1,671,370  
 

(1)

 

Non-performing loans consist of non-accrual loans.

(2)

Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof.

(3)

Accruing restructured loans are loans with known credit problems that are not contractually past due and therefore are not included in non-performing loans.

 
Loan Delinquency Information
First Defiance Financial Corp.
       
 
(dollars in thousands)   Total Balance   Current  

30 to 89 days
past due

 

Non Accrual
Loans

 
March 31, 2013                
One to four family residential real estate $ 197,675 $ 191,725 $ 1,787 $ 4,163
Construction 33,398 33,398 - -
Commercial real estate 802,098 776,138 1,076 24,884
Commercial 365,551 358,205 1,194 6,152
Consumer finance 15,549 15,429 120 -
Home equity and improvement   106,524     105,560     880     84
Total loans $ 1,520,795   $ 1,480,455   $ 5,057   $ 35,283
 
December 31, 2012                
One to four family residential real estate $ 200,826 $ 195,188 $ 2,036 $ 3,602
Construction 37,788 37,788 - -
Commercial real estate 797,385 773,170 1,125 23,090
Commercial 383,817 376,548 1,608 5,661
Consumer finance 15,936 15,701 235 -
Home equity and improvement   108,718     106,002     2,499     217
Total loans $ 1,544,470   $ 1,504,397   $ 7,503   $ 32,570
 
March 31, 2012                
One to four family residential real estate $ 202,132 $ 196,384 $ 1,865 $ 3,883
Construction 36,362 36,203 - 159
Commercial real estate 790,168 756,158 945 33,065
Commercial 326,904 318,111 1,175 7,618
Consumer finance 17,647 17,542 100 5
Home equity and improvement   114,891     113,078     1,192     621
Total loans $ 1,488,104   $ 1,437,476   $ 5,277   $ 45,351
 

Contacts

First Defiance Financial Corp.
William J. Small, Chairman, President and CEO, 419-782-5015
bsmall@first-fed.com

Release Summary

First Defiance Financial Corp. Announces 2013 First Quarter Earnings; Net Income of $5.6 million for 2013 first quarter, up from $4.2 million in the first quarter of 2012

Contacts

First Defiance Financial Corp.
William J. Small, Chairman, President and CEO, 419-782-5015
bsmall@first-fed.com