DEFIANCE, Ohio--(BUSINESS WIRE)--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 |
Non Accrual |
||||||||
| 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 | ||||
