DEFIANCE, Ohio--(BUSINESS WIRE)--First Defiance Financial Corp. (NASDAQ: FDEF) announced today that net income for the first quarter ended March 31, 2014 totaled $5.2 million, or $0.51 per diluted common share, compared to $5.6 million or $0.55 per diluted common share for the quarter ended March 31, 2013.
The first quarter 2014 results were negatively impacted by $786,000 ($511,000 after tax), or $0.05 per diluted common share, for costs to terminate the merger agreement with First Community Bank.
“Our earnings performance in the first quarter was solid, despite the impact of terminating our merger agreement,” said Donald P. Hileman, President, and Chief Executive Officer of First Defiance Financial Corp. “Our strong focus on the fundamentals coupled with our new business strategies enabled us to overcome the impact of a significant reduction in mortgage banking this past quarter.”
Credit Quality
Non-performing loans totaled $26.8 million at March 31, 2014, a decrease from $35.3 million at March 31, 2013. In addition, First Defiance had $6.0 million of real estate owned at March 31, 2014 compared to $4.3 million at March 31, 2013. Accruing troubled debt restructured loans were $26.7 million at March 31, 2014 compared with $28.0 million at March 31, 2013. For the first quarter of 2014, First Defiance recorded net charge-offs of $270,000, down from $677,000 in the first quarter of 2013 and down from the fourth quarter level of $1.5 million. The allowance for loan loss as a percentage of total loans was 1.58% at March 31, 2014 compared with 1.76% at March 31, 2013.
The first quarter results include expense for provision for loan losses of $103,000, compared with $425,000 for the same period in 2013 and $475,000 in the fourth quarter of 2013.
“Asset quality measures showed continued improvement from the prior quarter and clearly compared to a year ago. The low levels of charge offs and provision expense were both contributing factors in our results,” said Hileman. “We expect our asset quality to maintain positive trends as we go forward despite the mixed indicators in the economy.”
Net Interest Income up compared to first quarter 2013
Net interest income of $16.8 million in the first quarter of 2014 was up from $16.5 million in the first quarter of 2013. Net interest margin was 3.61% for the first quarter of 2014, flat with the fourth quarter 2013, but down from 3.78% in the first quarter of 2013. Yield on interest earning assets declined by 26 basis points, to 3.96% in the first quarter of 2014 from 4.22% in the first quarter of 2013. The cost of interest-bearing liabilities decreased by 9 basis points in the first quarter of 2014 to 0.45% from 0.54% in the first quarter of 2013.
“Our disciplined pricing strategies enabled us to maintain our net interest margin,” said Hileman. “While loan demand reflected some seasonal decline this past quarter, we still have a positive outlook for growth this year.”
Non-Interest Income down from first quarter 2013
First Defiance’s non-interest income for the first quarter of 2014 was $7.3 million compared with $9.0 million in the first quarter of 2013. Mortgage banking income decreased to $1.2 million in the first quarter of 2014, down from $2.8 million in the first quarter of 2013. The combination of higher interest rates and harsher seasonal conditions in the first quarter significantly reduced mortgage banking activity, particularly refinance volumes, compared to the first quarter last year. Gains from the sale of mortgage loans decreased in the first quarter of 2014 to $641,000 from $2.2 million in the first quarter of 2013. Mortgage loan servicing revenue was $905,000 in the first quarter of 2014, which was up slightly from $870,000 in the first quarter of 2013. The Company had a negative change in the valuation adjustment in mortgage servicing assets (“MSR”) of $7,000 in the first quarter of 2014 compared with a positive adjustment of $473,000 in the first quarter of 2013.
Income from the sale of insurance and investment products was $3.0 million for the first quarter of 2014, even with the first quarter of 2013. The first quarter typically includes contingent revenues, bonuses paid by insurance carriers when the Company achieves certain loss ratios or growth targets. In the first quarter of 2014, First Defiance’s insurance subsidiary, First Insurance Group, earned $878,000 of contingent income, compared to $944,000 during the first quarter of 2013.
Service fees and other charges were $2.3 million in the first quarter of 2014, down slightly from $2.4 million in the first quarter of 2013 and Trust Income was $278,000 in the first quarter of 2014 up from $206,000 in first quarter last year.
“While the slowdown in mortgage banking presented a challenge this past quarter, insurance and other fee income businesses performed well,” continued Mr. Hileman. “Importantly, we have seen a pickup in recent mortgage production which we foresee continuing into the second quarter.”
Non-Interest Expenses down from first quarter 2013
Total non-interest expense was $16.7 million in the first quarter of 2014, a decrease from $17.2 million in the first quarter of 2013.
Compensation and benefits decreased to $8.5 million in the first quarter of 2014 compared to $8.8 million in the first quarter of 2013. Accruals for bonus payments based on meeting performance targets were lower in the first quarter of 2014 compared to the first quarter of 2013. Other non-interest expense increased to $4.1 million in the first quarter of 2014 from $4.0 million in the first quarter of 2013. Included in the first quarter 2014 was a $786,000 cost of terminating the merger agreement with First Community Bank. Included in the first quarter of 2013 was an accrual for estimated secondary market buy-back losses of $581,000 compared to $25,000 in losses recorded in the first quarter of 2014.
Total Assets at $2.16 Billion
Total assets at March 31, 2014 were $2.16 billion compared to $2.14 billion at December 31, 2013 and $2.04 billion at March 31, 2013. Net loans receivable (excluding loans held for sale) were $1.54 billion at March 31, 2014 compared to $1.56 billion at December 31, 2013 and $1.48 billion at March 31, 2013. Total cash and cash equivalents were $211.2 million at March 31, 2014 compared with $179.3 million at December 31, 2013 and $156.3 million at March 31, 2013. Also, at March 31, 2014, goodwill and other intangible assets totaled $64.7 million compared to $65.0 million at December 31, 2013 and $65.9 million at March 31, 2013.
Total deposits at March 31, 2014 were $1.76 billion compared with $1.74 billion at December 31, 2013, and $1.66 billion at March 31, 2013. Non-interest bearing deposits at March 31, 2014 were $338.4 million compared to $348.9 million at December 31, 2013 and $291.8 million at March 31, 2013. Total stockholders’ equity was $274.9 million at March 31, 2014 compared to $272.1 million at December 31, 2013 and $262.6 million at March 31, 2013.
Termination of Merger Agreement
In a separate news release issued today, First Defiance and First Community Bank jointly announced the termination of the previously announced merger agreement. The companies mutually agreed to terminate the agreement after it became evident that completion of the merger would take significantly longer than originally expected.
First Defiance remains interested in expanding its business in adjacent markets and will explore mergers or acquisitions that meet its criteria.
Dividend to be Paid May 29
The Board of Directors declared a quarterly cash dividend of $0.15 per common share payable May 29, 2014 to shareholders of record at the close of business on May 22, 2014. The dividend represents an annual dividend of 2.20 percent based on the First Defiance common stock closing price on April 18, 2014. First Defiance has approximately 9,664,686 common shares outstanding.
Conference Call
First Defiance Financial Corp. will host a conference call at 11:00 a.m. (EDT) on Tuesday, April 22, 2014 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/fdef140422.html.
Audio replay of the Internet Webcast will be available at www.fdef.com until Monday, May 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 22, 2014 and this Annual Meeting will be an entirely virtual meeting meaning all shareholders will attend online. Following the meeting, the audio replay 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 32 full service branches and 42 ATM locations in northwest Ohio, southeast Michigan and northeast 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, 2013. 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 (Unaudited) | ||||||||
| First Defiance Financial Corp. | ||||||||
| March 31, | December 31, | |||||||
| (in thousands) | 2014 | 2013 | ||||||
| Assets | ||||||||
| Cash and cash equivalents | ||||||||
| Cash and amounts due from depository institutions | $ | 42,183 | $ | 36,318 | ||||
| Interest-bearing deposits | 169,000 | 143,000 | ||||||
| 211,183 |
|
179,318 | ||||||
| Securities |
|
|||||||
| Available-for sale, carried at fair value | 209,321 | 198,170 | ||||||
| Held-to-maturity, carried at amortized cost | 378 | 387 | ||||||
| 209,699 | 198,557 | |||||||
| Loans | 1,563,953 | 1,580,448 | ||||||
| Allowance for loan losses | (24,783 | ) | (24,950 | ) | ||||
| Loans, net | 1,539,170 | 1,555,498 | ||||||
| Loans held for sale | 8,771 | 9,120 | ||||||
| Mortgage servicing rights | 9,014 | 9,106 | ||||||
| Accrued interest receivable | 6,122 | 5,778 | ||||||
| Federal Home Loan Bank stock | 13,802 | 19,350 | ||||||
| Bank Owned Life Insurance | 46,934 | 42,715 | ||||||
| Office properties and equipment | 38,379 | 38,597 | ||||||
| Real estate and other assets held for sale | 6,028 | 5,859 | ||||||
| Goodwill | 61,525 | 61,525 | ||||||
| Core deposit and other intangibles | 3,208 | 3,497 | ||||||
| Deferred taxes | 92 | 565 | ||||||
| Other assets | 9,732 | 7,663 | ||||||
| Total Assets | $ | 2,163,659 | $ | 2,137,148 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Non-interest-bearing deposits | $ | 338,412 | $ | 348,943 | ||||
| Interest-bearing deposits | 1,422,205 | 1,386,849 | ||||||
| Total deposits | 1,760,617 | 1,735,792 | ||||||
| Advances from Federal Home Loan Bank | 22,278 | 22,520 | ||||||
| Notes payable and other interest-bearing liabilities | 48,939 | 51,919 | ||||||
| Subordinated debentures | 36,083 | 36,083 | ||||||
| Advance payments by borrowers for tax and insurance | 1,209 | 1,519 | ||||||
| Other liabilities | 19,656 | 17,168 | ||||||
| Total liabilities | 1,888,782 | 1,865,001 | ||||||
| Stockholders’ Equity | ||||||||
| Preferred stock | - | - | ||||||
| Common stock, net | 127 | 127 | ||||||
| Common stock warrant | 878 | 878 | ||||||
| Additional paid-in-capital | 136,142 | 136,403 | ||||||
| Accumulated other comprehensive income | 1,665 | 545 | ||||||
| Retained earnings | 186,001 | 182,290 | ||||||
| Treasury stock, at cost | (49,936 | ) | (48,096 | ) | ||||
| Total stockholders’ equity | 274,877 | 272,147 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 2,163,659 | $ | 2,137,148 | ||||
| Consolidated Statements of Income (Unaudited) | ||||||
| First Defiance Financial Corp. | ||||||
| Three Months Ended | ||||||
| March 31, | ||||||
| (in thousands, except per share amounts) | 2014 | 2013 | ||||
| Interest Income: | ||||||
| Loans | $ | 16,651 | $ | 16,796 | ||
| Investment securities | 1,527 | 1,403 | ||||
| Interest-bearing deposits | 101 | 58 | ||||
| FHLB stock dividends | 195 | 219 | ||||
| Total interest income | 18,474 | 18,476 | ||||
| Interest Expense: |
|
|||||
| Deposits | 1,358 | 1,647 | ||||
| FHLB advances and other | 133 | 90 | ||||
| Subordinated debentures | 146 | 152 | ||||
| Notes Payable | 41 | 60 | ||||
| Total interest expense | 1,678 | 1,949 | ||||
| Net interest income | 16,796 | 16,527 | ||||
| Provision for loan losses | 103 | 425 | ||||
| Net interest income after provision for loan losses | 16,693 | 16,102 | ||||
| Non-interest Income: | ||||||
| Service fees and other charges | 2,324 | 2,385 | ||||
| Mortgage banking income | 1,247 | 2,830 | ||||
| Gain on sale of non-mortgage loans | 3 | 15 | ||||
| Gain on sale of securities | - | 53 | ||||
| Insurance and investment sales commissions | 3,030 | 3,036 | ||||
| Trust income | 278 | 206 | ||||
| Income from Bank Owned Life Insurance | 219 | 229 | ||||
| Other non-interest income | 225 | 251 | ||||
| Total Non-interest Income | 7,326 | 9,005 | ||||
| Non-interest Expense: | ||||||
| Compensation and benefits | 8,472 | 8,798 | ||||
| Occupancy | 1,588 | 1,632 | ||||
| FDIC insurance premium | 385 | 656 | ||||
|
Financial Institutions tax |
495 | 629 | ||||
| Data processing | 1,365 | 1,181 | ||||
| Amortization of intangibles | 289 | 336 | ||||
| Other non-interest expense | 4,067 | 4,010 | ||||
| Total Non-interest Expense | 16,661 | 17,242 | ||||
| Income before income taxes | 7,358 | 7,865 | ||||
| Income taxes | 2,179 | 2,306 | ||||
| Net Income | $ | 5,179 | $ | 5,559 | ||
| Earnings per common share: | ||||||
| Basic | $ | 0.53 | $ | 0.57 | ||
| Diluted | $ | 0.51 | $ | 0.55 | ||
| Average Shares Outstanding: | ||||||
| Basic | 9,681 | 9,736 | ||||
| Diluted | 10,108 | 10,105 | ||||
|
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|||||||||||
| Financial Summary and Comparison (Unaudited) | |||||||||||
| First Defiance Financial Corp. | |||||||||||
| Three Months Ended | |||||||||||
|
March 31, |
|||||||||||
| (dollars in thousands, except per share data) | 2014 | 2013 | % change | ||||||||
| Summary of Operations | |||||||||||
| Tax-equivalent interest income (1) | $ | 18,900 | $ | 18,885 | 0.1 | % | |||||
| Interest expense | 1,678 | 1,949 | (13.9 | ) | |||||||
| Tax-equivalent net interest income (1) | 17,222 | 16,936 | 1.7 | ||||||||
| Provision for loan losses | 103 | 425 | (75.8 | ) | |||||||
| Tax-equivalent NII after provision for loan loss (1) | 17,119 | 16,511 | 3.7 | ||||||||
| Investment Securities gains | - | 53 | (100.0 | ) | |||||||
| Non-interest income (excluding securities gains/losses) | 7,326 | 8,952 | (18.2 | ) | |||||||
| Non-interest expense | 16,661 | 17,242 | (3.4 | ) | |||||||
| Income taxes | 2,179 | 2,306 | (5.5 | ) | |||||||
| Net Income | 5,179 | 5,559 | (6.8 | ) | |||||||
| Tax equivalent adjustment (1) | 426 | 409 | 4.2 | ||||||||
| At Period End | |||||||||||
| Assets | 2,163,659 | 2,039,411 | 6.1 | ||||||||
| Earning assets | 1,965,225 | 1,858,747 | 5.7 | ||||||||
| Loans | 1,563,953 | 1,507,008 | 3.8 | ||||||||
| Allowance for loan losses | 24,783 | 26,459 | (6.3 | ) | |||||||
| Deposits | 1,760,617 | 1,656,348 | 6.3 | ||||||||
| Stockholders’ equity | 274,877 | 262,643 | 4.7 | ||||||||
| Average Balances | |||||||||||
| Assets | 2,146,369 | 2,027,906 | 5.8 | ||||||||
| Earning assets | 1,937,145 | 1,823,089 | 6.3 | ||||||||
| Loans | 1,544,902 | 1,500,222 | 3.0 | ||||||||
| Deposits and interest-bearing liabilities | 1,852,322 | 1,746,092 | 6.1 | ||||||||
| Deposits | 1,741,237 | 1,650,772 | 5.5 | ||||||||
| Stockholders’ equity | 273,745 | 259,625 | 5.4 | ||||||||
| Stockholders’ equity / assets | 12.75 | % | 12.80 | % | (0.4 | ) | |||||
| Per Common Share Data | |||||||||||
| Net Income | |||||||||||
| Basic | $ | 0.53 | $ | 0.57 | (7.0 | ) | |||||
| Diluted | 0.51 | 0.55 | (7.3 | ) | |||||||
| Dividends | 0.15 | 0.10 | 50.0 | ||||||||
| Market Value: | |||||||||||
| High | $ | 28.23 | $ | 23.75 | 18.9 | ||||||
| Low | 24.24 | 18.42 | 31.6 | ||||||||
| Close | 27.12 | 23.32 | 16.3 | ||||||||
| Common Book Value | 28.38 | 26.80 | 5.9 | ||||||||
| Tangible Common Book Value | 21.68 | 20.05 | 8.1 | ||||||||
| Shares outstanding, end of period (000) | 9,653 | 9,766 | (1.2 | ) | |||||||
| Performance Ratios (annualized) | |||||||||||
| Tax-equivalent net interest margin (1) | 3.61 | % | 3.78 | % | (4.5 | ) | |||||
| Return on average assets | 0.98 | % | 1.11 | % | (12.0 | ) | |||||
| Return on average equity | 7.67 | % | 8.68 | % | (11.6 | ) | |||||
| Efficiency ratio (2) | 67.87 | % | 66.55 | % | 2.0 | ||||||
| Effective tax rate | 29.61 | % | 29.32 | % | 1.0 | ||||||
| Dividend payout ratio (basic) | 28.30 | % | 17.54 | % | 61.3 | ||||||
|
(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) | 2014 | 2013 | ||||||
| Gain from sale of mortgage loans | $ | 641 | $ | 2,176 | ||||
| Mortgage loan servicing revenue (expense): | ||||||||
| Mortgage loan servicing revenue | 905 | 870 | ||||||
| Amortization of mortgage servicing rights | (292 | ) | (689 | ) | ||||
| Mortgage servicing rights valuation adjustments | (7 | ) | 473 | |||||
| 606 | 654 | |||||||
| Total revenue from sale and servicing of mortgage loans | $ | 1,247 | $ | 2,830 | ||||
| Yield Analysis | ||||||||||||
| First Defiance Financial Corp. | ||||||||||||
| Three Months Ended March 31, | ||||||||||||
| (dollars in thousands) | ||||||||||||
| 2014 | 2013 | |||||||||||
| Average | Yield | Average | Yield | |||||||||
| Balance | Interest(1) | Rate(2) | Balance | Interest(1) | Rate(2) | |||||||
| Interest-earning assets: | ||||||||||||
| Loans receivable | $ 1,544,902 | $ 16,672 | 4.38% | $ 1,500,222 | $ 16,814 | 4.55% | ||||||
| Securities | 202,275 | 1,932 | 3.93% | 196,571 | 1,794 | 3.85% | ||||||
| Interest Bearing Deposits | 172,666 | 101 | 0.24% | 106,332 | 58 | 0.22% | ||||||
| FHLB stock | 17,302 | 195 | 4.57% | 19,964 | 219 | 4.45% | ||||||
| Total interest-earning assets | 1,937,145 | 18,900 | 3.96% | 1,823,089 | 18,885 | 4.22% | ||||||
| Non-interest-earning assets | 209,224 | 204,817 | ||||||||||
| Total assets | $ 2,146,369 | $ 2,027,906 | ||||||||||
| Deposits and Interest-bearing liabilities: | ||||||||||||
| Interest bearing deposits | $ 1,399,951 | $ 1,358 | 0.39% | $ 1,356,547 | $ 1,647 | 0.49% | ||||||
| FHLB advances and other | 22,363 | 133 | 2.41% | 12,788 | 90 | 2.85% | ||||||
| Subordinated debentures | 36,134 | 146 | 1.64% | 36,136 | 152 | 1.71% | ||||||
| Notes payable | 52,588 | 41 | 0.32% | 46,396 | 60 | 0.52% | ||||||
| Total interest-bearing liabilities | 1,511,036 | 1,678 | 0.45% | 1,451,867 | 1,949 | 0.54% | ||||||
| Non-interest bearing deposits | 341,286 | - | - | 294,225 | - | - | ||||||
| Total including non-interest-bearing demand deposits | 1,852,322 | 1,678 | 0.37% | 1,746,092 | 1,949 | 0.45% | ||||||
| Other non-interest-bearing liabilities | 20,302 | 22,189 | ||||||||||
| Total liabilities | 1,872,624 | 1,768,281 | ||||||||||
| Stockholders' equity | 273,745 | 259,625 | ||||||||||
| Total liabilities and stockholders' equity | $ 2,146,369 | $ 2,027,906 | ||||||||||
| Net interest income; interest rate spread | $ 17,222 | 3.51% | $ 16,936 | 3.68% | ||||||||
| Net interest margin (3) | 3.61% | 3.78% | ||||||||||
| Average interest-earning assets to average interest bearing liabilities | 128% | 126% | ||||||||||
|
(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%. |
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(2) |
Annualized |
|
|
(3) |
Net interest margin is net interest income divided by average interest-earning assets. |
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Selected Quarterly Information |
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| First Defiance Financial Corp. | ||||||||||||||||||||
| (dollars in thousands, except per share data) | 1st Qtr 2014 | 4th Qtr 2013 | 3rd Qtr 2013 | 2nd Qtr 2013 | 1st Qtr 2013 | |||||||||||||||
| Summary of Operations | ||||||||||||||||||||
| Tax-equivalent interest income (1) | $ | 18,900 | $ | 19,143 | $ | 19,242 | $ | 19,143 | $ | 18,885 | ||||||||||
| Interest expense | 1,678 | 1,728 | 1,680 | 1,814 | 1,949 | |||||||||||||||
| Tax-equivalent net interest income (1) | 17,222 | 17,415 | 17,562 | 17,329 | 16,936 | |||||||||||||||
| Provision for loan losses | 103 | 475 | 476 | 448 | 425 | |||||||||||||||
| Tax-equivalent NII after provision for loan losses (1) | 17,119 | 16,940 | 17,086 | 16,881 | 16,511 | |||||||||||||||
| Investment securities gains, net of impairment | - | (337 | ) | - | 44 | 53 | ||||||||||||||
| Non-interest income (excluding securities gains/losses) | 7,326 | 6,869 | 7,344 | 7,854 | 8,952 | |||||||||||||||
| Non-interest expense | 16,661 | 15,987 | 16,100 | 15,724 | 17,242 | |||||||||||||||
| Income taxes | 2,179 | 1,991 | 2,445 | 2,535 | 2,306 | |||||||||||||||
| Net income | 5,179 | 5,087 | 5,479 | 6,109 | 5,559 | |||||||||||||||
| Tax equivalent adjustment (1) | 426 | 406 | 406 | 411 | 409 | |||||||||||||||
| At Period End | ||||||||||||||||||||
| Total assets | $ | 2,163,659 | $ | 2,137,148 | $ | 2,058,430 | $ | 2,066,216 | $ | 2,039,411 | ||||||||||
| Earning assets | 1,965,225 | 1,950,475 | 1,863,546 | 1,873,351 | 1,858,747 | |||||||||||||||
| Loans | 1,563,953 | 1,580,448 | 1,561,279 | 1,562,666 | 1,507,008 | |||||||||||||||
| Allowance for loan losses | 24,783 | 24,950 | 25,964 | 26,270 | 26,459 | |||||||||||||||
| Deposits | 1,760,617 | 1,735,792 | 1,658,492 | 1,635,708 | 1,656,348 | |||||||||||||||
| Stockholders’ equity | 274,877 | 272,147 | 269,359 | 264,497 | 262,643 | |||||||||||||||
| Stockholders’ equity / assets | 12.70 | % | 12.73 | % | 13.09 | % | 12.80 | % | 12.88 | % | ||||||||||
| Goodwill | 61,525 | 61,525 | 61,525 | 61,525 | 61,525 | |||||||||||||||
| Average Balances | ||||||||||||||||||||
| Total assets | $ | 2,146,369 | $ | 2,124,109 | $ | 2,026,277 | $ | 2,030,707 | $ | 2,027,906 | ||||||||||
| Earning assets | 1,937,145 | 1,915,508 | 1,816,626 | 1,825,730 | 1,823,089 | |||||||||||||||
| Loans | 1,544,902 | 1,543,057 | 1,548,718 | 1,520,708 | 1,500,222 | |||||||||||||||
| Deposits and interest-bearing liabilities | 1,852,322 | 1,833,291 | 1,741,850 | 1,745,084 | 1,746,092 | |||||||||||||||
| Deposits | 1,741,237 | 1,719,319 | 1,632,712 | 1,644,777 | 1,650,772 | |||||||||||||||
| Stockholders’ equity | 273,745 | 270,856 | 265,488 | 264,293 | 259,625 | |||||||||||||||
| Stockholders’ equity / assets | 12.75 | % | 12.75 | % | 13.10 | % | 13.01 | % | 12.80 | % | ||||||||||
| Per Common Share Data | ||||||||||||||||||||
| Net Income: | ||||||||||||||||||||
| Basic | $ | 0.53 | $ | 0.52 | $ | 0.56 | $ | 0.63 | $ | 0.57 | ||||||||||
| Diluted | 0.51 | 0.50 | 0.54 | 0.60 | 0.55 | |||||||||||||||
| Dividends | 0.15 | 0.10 | 0.10 | 0.10 | 0.10 | |||||||||||||||
| Market Value: | ||||||||||||||||||||
| High | $ | 28.23 | $ | 27.25 | $ | 28.46 | $ | 23.75 | $ | 23.75 | ||||||||||
| Low | 24.24 | 23.31 | 22.49 | 20.80 | 18.42 | |||||||||||||||
| Close | 27.12 | 25.97 | 23.39 | 22.55 | 23.32 | |||||||||||||||
| Common Book Value | 28.38 | 27.91 | 27.44 | 26.97 | 26.80 | |||||||||||||||
| Shares outstanding, end of period (in thousands) | 9,653 | 9,720 | 9,785 | 9,776 | 9,766 | |||||||||||||||
| Performance Ratios (annualized) | ||||||||||||||||||||
| Tax-equivalent net interest margin (1) | 3.61 | % | 3.61 | % | 3.84 | % | 3.82 | % | 3.78 | % | ||||||||||
| Return on average assets | 0.98 | % | 0.95 | % | 1.07 | % | 1.21 | % | 1.11 | % | ||||||||||
| Return on average equity | 7.67 | % | 7.45 | % | 8.19 | % | 9.27 | % | 8.68 | % | ||||||||||
| Efficiency ratio (2) | 67.87 | % | 65.75 | % | 64.56 | % | 62.36 | % | 66.55 | % | ||||||||||
| Effective tax rate | 29.61 | % | 28.13 | % | 30.86 | % | 29.33 | % | 29.32 | % | ||||||||||
| Common dividend payout ratio (basic) | 28.30 | % | 19.23 | % | 17.86 | % | 15.87 | % | 17.54 | % | ||||||||||
|
(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 2014 | 4th Qtr 2013 | 3rd Qtr 2013 | 2nd Qtr 2013 | 1st Qtr 2013 | |||||||||||||||
| Loan Portfolio Composition | ||||||||||||||||||||
| One to four family residential real estate | $ | 196,940 | $ | 195,752 | $ | 191,984 | $ | 196,802 | $ | 197,675 | ||||||||||
| Construction | 82,049 | 86,058 | 59,567 | 41,519 | 33,398 | |||||||||||||||
| Commercial real estate | 809,071 | 819,618 | 821,115 | 820,412 | 802,098 | |||||||||||||||
| Commercial | 380,144 | 388,236 | 386,160 | 396,158 | 365,551 | |||||||||||||||
| Consumer finance | 16,346 | 16,902 | 16,659 | 16,817 | 15,549 | |||||||||||||||
| Home equity and improvement | 106,632 | 106,930 | 105,727 | 106,570 | 106,524 | |||||||||||||||
| Total loans | 1,591,182 | 1,613,496 | 1,581,212 | 1,578,278 | 1,520,795 | |||||||||||||||
| Less: | ||||||||||||||||||||
| Loans in process | 26,487 | 32,290 | 19,189 | 14,876 | 13,084 | |||||||||||||||
| Deferred loan origination fees | 742 | 758 | 744 | 736 | 703 | |||||||||||||||
| Allowance for loan loss | 24,783 | 24,950 | 25,964 | 26,270 | 26,459 | |||||||||||||||
| Net Loans | $ | 1,539,170 | $ | 1,555,498 | $ | 1,535,315 | $ | 1,536,396 | $ | 1,480,549 | ||||||||||
| Allowance for loan loss activity | ||||||||||||||||||||
| Beginning allowance | $ | 24,950 | $ | 25,964 | $ | 26,270 | $ | 26,459 | $ | 26,711 | ||||||||||
| Provision for loan losses | 103 | 475 | 476 | 448 | 425 | |||||||||||||||
| Credit loss charge-offs: | ||||||||||||||||||||
| One to four family residential real estate | 228 | 175 | 78 | 184 | 206 | |||||||||||||||
| Commercial real estate | 228 | 1,097 | 829 | 283 | 266 | |||||||||||||||
| Commercial | 525 | 670 | 39 | 316 | 205 | |||||||||||||||
| Consumer finance | 11 | 7 | 33 | 8 | 46 | |||||||||||||||
| Home equity and improvement | 184 | 144 | 170 | 170 | 272 | |||||||||||||||
| Total charge-offs | 1,176 | 2,093 | 1,149 | 961 | 995 | |||||||||||||||
| Total recoveries | 906 | 604 | 367 | 324 | 318 | |||||||||||||||
| Net charge-offs (recoveries) | 270 | 1,489 | 782 | 637 | 677 | |||||||||||||||
| Ending allowance | $ | 24,783 | $ | 24,950 | $ | 25,964 | $ | 26,270 | $ | 26,459 | ||||||||||
| Credit Quality | ||||||||||||||||||||
| Total non-performing loans (1) | $ | 26,774 | $ | 27,847 | $ | 30,512 | $ | 28,650 | $ | 35,283 | ||||||||||
| Real estate owned (REO) | 6,028 | 5,859 | 5,518 | 6,546 | 4,313 | |||||||||||||||
| Total non-performing assets (2) | $ | 32,802 | $ | 33,706 | $ | 36,030 | $ | 35,196 | $ | 39,596 | ||||||||||
| Net charge-offs | 270 | 1,489 | 782 | 637 | 677 | |||||||||||||||
| Restructured loans, accruing (3) | 26,654 | 27,630 | 28,010 | 28,732 | 27,981 | |||||||||||||||
| Allowance for loan losses / loans | 1.58 | % | 1.58 | % | 1.66 | % | 1.68 | % | 1.76 | % | ||||||||||
| Allowance for loan losses / non-performing assets | 75.55 | % | 74.02 | % | 72.06 | % | 74.64 | % | 66.82 | % | ||||||||||
| Allowance for loan losses / non-performing loans | 92.56 | % | 89.60 | % | 85.09 | % | 91.69 | % | 74.99 | % | ||||||||||
| Non-performing assets / loans plus REO | 2.09 | % | 2.12 | % | 2.30 | % | 2.24 | % | 2.62 | % | ||||||||||
| Non-performing assets / total assets | 1.52 | % | 1.58 | % | 1.75 | % | 1.70 | % | 1.94 | % | ||||||||||
| Net charge-offs / average loans (annualized) | 0.07 | % | 0.39 | % | 0.20 | % | 0.17 | % | 0.18 | % | ||||||||||
| Deposit Balances | ||||||||||||||||||||
| Non-interest-bearing demand deposits | $ | 338,412 | $ | 348,943 | $ | 300,891 | $ | 301,742 | $ | 291,765 | ||||||||||
| Interest-bearing demand deposits and money market | 740,783 | 715,939 | 681,987 | 659,249 | 681,061 | |||||||||||||||
| Savings deposits | 199,361 | 185,121 | 182,271 | 182,784 | 177,336 | |||||||||||||||
| Retail time deposits less than $100,000 | 309,758 | 313,335 | 318,317 | 321,422 | 330,870 | |||||||||||||||
| Retail time deposits greater than $100,000 | 172,303 | 172,454 | 175,026 | 168,573 | 173,379 | |||||||||||||||
| National/Brokered time deposits | - | - | - | 1,938 | 1,937 | |||||||||||||||
| Total deposits | $ | 1,760,617 | $ | 1,735,792 | $ | 1,658,492 | $ | 1,635,708 | $ | 1,656,348 | ||||||||||
|
(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. | ||||||||||||
| 30 to 89 days | Non Accrual | |||||||||||
| (dollars in thousands) | Total Balance | Current | past due | Loans | ||||||||
| March 31, 2014 | ||||||||||||
| One to four family residential real estate | $ | 196,940 | $ | 192,942 | $ | 1,024 | $ | 2,974 | ||||
| Construction | 82,049 | 82,049 | - | - | ||||||||
| Commercial real estate | 809,071 | 792,289 | 1,100 | 15,682 | ||||||||
| Commercial | 380,144 | 371,829 | 592 | 7,723 | ||||||||
| Consumer finance | 16,346 | 16,300 | 46 | - | ||||||||
| Home equity and improvement | 106,632 | 105,627 | 610 | 395 | ||||||||
| Total loans | $ | 1,591,182 | $ | 1,561,036 | $ | 3,372 | $ | 26,774 | ||||
| December 31, 2013 | ||||||||||||
| One to four family residential real estate | $ | 195,752 | $ | 190,854 | $ | 1,625 | $ | 3,273 | ||||
| Construction | 86,058 | 86,058 | - | - | ||||||||
| Commercial real estate | 819,618 | 803,218 | 566 | 15,834 | ||||||||
| Commercial | 388,236 | 379,889 | 20 | 8,327 | ||||||||
| Consumer finance | 16,902 | 16,771 | 131 | - | ||||||||
| Home equity and improvement | 106,930 | 105,211 | 1,306 | 413 | ||||||||
| Total loans | $ | 1,613,496 | $ | 1,582,001 | $ | 3,648 | $ | 27,847 | ||||
| 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 | ||||
